10-QPeriod: Q1 FY2002

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q1 Ended Mar 31, 2002

Filed May 10, 2002For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. reported a net loss of $25.4 million for the first quarter ended March 31, 2002, an increase from the $13.0 million loss in the same period of 2001. This wider loss was driven by a significant increase in operating expenses, primarily in research and development, which rose to $25.5 million from $16.8 million year-over-year. Revenue also declined to $4.9 million from $6.3 million due to decreased contract research and manufacturing activities. The company's cash position decreased substantially, with cash and cash equivalents falling to $135.5 million from $247.4 million at the end of 2001. This was largely due to significant investments in marketable securities and capital expenditures. Despite the increased net loss and reduced cash balance, Regeneron continues to advance its pipeline, with key clinical programs like AXOKINE® progressing. The company anticipates substantial funding requirements and expects R&D expenses to increase by over 30% in 2002, aiming to manage operations through at least 2003 with existing resources while exploring potential future financing.

Key Highlights

  • 1Net loss widened to $25.4 million for Q1 2002 from $13.0 million in Q1 2001, primarily due to increased R&D spending.
  • 2Total revenues decreased to $4.9 million from $6.3 million year-over-year, impacted by lower contract research and manufacturing revenues.
  • 3Research and Development (R&D) expenses increased significantly to $25.5 million from $16.8 million, reflecting expanded clinical programs like the Phase III AXOKINE trial.
  • 4Cash and cash equivalents decreased to $135.5 million as of March 31, 2002, down from $247.4 million at December 31, 2001, due to investing activities and operating losses.
  • 5The company is advancing its pipeline with AXOKINE® in Phase III trials for obesity and IL1 Trap in Phase I for rheumatoid arthritis, with Phase II expected mid-2002.
  • 6Regeneron anticipates substantial funding needs for R&D and expects expenses to increase by over 30% in 2002.
  • 7The company has no off-balance sheet arrangements and no established banking arrangements for short-term financing as of the reporting date.

Frequently Asked Questions

In the first quarter of 2002, Regeneron reported a net loss of $25.4 million, an increase from $13.0 million in the same period of 2001. This widened loss was mainly due to a substantial rise in research and development expenses ($25.5 million in Q1 2002 vs. $16.8 million in Q1 2001) and a decrease in total revenues to $4.9 million from $6.3 million, reflecting lower contract research and manufacturing activity.

Regeneron's cash and cash equivalents decreased significantly to $135.5 million as of March 31, 2002, from $247.4 million at the end of 2001. This reduction was primarily due to net cash used in operating activities and significant investments in marketable securities and capital expenditures. The company expects to meet its operating needs through at least 2003 with existing resources but anticipates substantial future funding requirements for R&D.

The company is actively progressing several drug candidates. AXOKINE® is in Phase III clinical trials for obesity, with additional studies initiated in April 2002 to evaluate shorter dosing periods. The IL1 Trap, targeting rheumatoid arthritis, has shown positive preliminary results from its Phase I trial, with a Phase II study anticipated in mid-2002. Other programs like Pegylated AXOKINE, IL4/IL13 Trap, and VEGF Trap are in various stages of preclinical or early clinical development.

Regeneron continues to have collaborations with major companies. Research is ongoing with The Procter & Gamble Company in muscle diseases. A partnership with Amgen Inc. involves development rights for Neurotrophin-3 (NT-3), although development activities are currently paused. Regeneron retains 50% of commercialization rights in these collaborations. Revenues from contract manufacturing for Merck & Co., Inc. also contribute to the company's revenue stream.