10-KPeriod: FY2008

REGENERON PHARMACEUTICALS, INC. Annual Report, Year Ended Dec 31, 2008

Filed February 26, 2009For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. (REGN) reported its 2008 fiscal year results, highlighting significant progress in its drug development pipeline and strategic collaborations. The company received FDA approval for its first commercial drug, ARCALYST® (rilonacept) Injection for Subcutaneous Use, for the treatment of Cryopyrin-Associated Periodic Syndromes (CAPS). This marks a crucial milestone, transitioning Regeneron towards becoming a commercial-stage biopharmaceutical company. Financially, Regeneron continued to invest heavily in research and development, which contributed to an operating loss for the year. However, revenue streams from key collaborations, particularly with sanofi-aventis and Bayer HealthCare, provided substantial funding for these R&D efforts. The company's cash position decreased year-over-year, primarily due to significant R&D spending and capital expenditures, alongside the repayment of convertible notes. Investors should monitor the progression of ARCALYST sales and the continued success of its strategic partnerships for future growth.

Financial Highlights

22 data points
Beta

Revenue

$238.46M

99.6% Gross Margin

Net Income

-$79.13M

-33.2% Net Margin

Cash & Equivalents

$247.80M

Free Cash Flow

-$89.09M

Financial Statements
Beta
Revenue$238.46M
Cost of Revenue$923K
Gross Profit$237.53M
R&D Expenses$274.90M
SG&A Expenses$48.88M
Operating Expenses$324.71M
Operating Income-$86.25M
Interest Expense$7.75M
Net Income-$79.13M

Key Highlights

  • 1Received FDA marketing approval for ARCALYST® (rilonacept) Injection for Subcutaneous Use, the company's first commercial drug product.
  • 2Generated significant contract research and development revenue, primarily from collaborations with sanofi-aventis ($153.97 million) and Bayer HealthCare ($31.2 million).
  • 3Invested heavily in research and development, with R&D expenses totaling $278.02 million, an increase from the prior year, reflecting continued pipeline investment.
  • 4Experienced a net loss of $82.71 million for the year ended December 31, 2008.
  • 5Ended the year with $247.8 million in cash and cash equivalents, a decrease from $498.9 million at the end of 2007, partly due to debt repayment.
  • 6The company repaid its entire $117.5 million of outstanding convertible senior subordinated notes upon maturity in October 2008.

Frequently Asked Questions

The FDA approval for ARCALYST® marks Regeneron's first commercial drug product, representing a major transition from a pure R&D company to one with a commercial offering. This approval is a critical step towards generating product sales revenue and validating the company's drug development capabilities.

Regeneron is primarily funding its substantial research and development expenses through revenue generated from its strategic collaborations with major pharmaceutical companies, notably sanofi-aventis and Bayer HealthCare. These agreements provide upfront payments, milestone payments, and cost reimbursements that support the company's innovation pipeline.

As of December 31, 2008, Regeneron had $247.8 million in cash and cash equivalents. The company repaid its $117.5 million in convertible senior subordinated notes upon their maturity in October 2008, reducing its long-term debt obligations. The decrease in cash from the previous year is largely attributed to R&D investments and capital expenditures.

Regeneron has historically incurred net losses due to significant investments in research and development. The company's strategy relies on advancing its pipeline and leveraging collaborations to fund operations. Future profitability will depend on the successful commercialization of ARCALYST, the progression of its pipeline candidates through clinical trials and regulatory approvals, and the continued success of its strategic partnerships.