10-QPeriod: Q1 FY2007

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q1 Ended Mar 31, 2007

Filed May 4, 2007For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. reported a net loss of $29.9 million for the first quarter of 2007, an increase from the $20.4 million net loss in the same period of 2006. Total revenues decreased to $15.8 million from $18.2 million year-over-year, primarily due to lower contract manufacturing revenue and a reduction in the recognition of deferred revenue from the sanofi-aventis collaboration. Operating expenses increased to $49.4 million from $39.9 million, largely driven by higher research and development spending and increased stock-based compensation expenses. The company's cash position and marketable securities remain substantial, with $515.0 million at the end of the quarter. Significant progress was noted in clinical programs, with the company preparing to submit a Biologics License Application for IL-1 Trap (rilonacept) for Cryopyrin-Associated Periodic Syndromes (CAPS) in Q2 2007 and positive preliminary data from the Phase 2 trial of VEGF Trap-Eye in wet Age-Related Macular Degeneration (AMD).

Key Highlights

  • 1Net loss widened to $29.9 million in Q1 2007 from $20.4 million in Q1 2006.
  • 2Total revenue decreased to $15.8 million from $18.2 million, mainly due to the expiration of the Merck contract manufacturing agreement and lower recognition of deferred revenue.
  • 3Research and development expenses increased significantly to $41.2 million, driven by higher clinical trial costs for VEGF Trap-Eye and IL-1 Trap, and increased stock-based compensation.
  • 4The company is preparing to submit a BLA for IL-1 Trap (rilonacept) for CAPS in Q2 2007.
  • 5Positive preliminary data from the Phase 2 trial of VEGF Trap-Eye in wet AMD showed statistically significant improvements in retinal thickness and visual acuity.
  • 6Regeneron entered into new non-exclusive license agreements with AstraZeneca and Astellas Pharma for its VelocImmune technology, receiving significant upfront payments.
  • 7Cash and marketable securities remained strong at $515.0 million as of March 31, 2007.

Frequently Asked Questions

In the first quarter of 2007, Regeneron reported a net loss of $29.9 million, an increase from the prior year's loss of $20.4 million. Revenues decreased due to the cessation of contract manufacturing and lower recognition of deferred revenue. However, the company has a strong cash position of $515.0 million and anticipates having sufficient capital through at least early 2010, assuming no significant changes in projected revenues or expenses.

Regeneron is making significant progress in its clinical pipeline. The company is preparing to file a Biologics License Application (BLA) for IL-1 Trap (rilonacept) for Cryopyrin-Associated Periodic Syndromes (CAPS) in the second quarter of 2007. Additionally, positive preliminary results from the Phase 2 trial of VEGF Trap-Eye for wet Age-Related Macular Degeneration (AMD) have been announced, with Phase 3 trials planned to commence soon.

The collaboration with sanofi-aventis for the VEGF Trap in oncology continues with Phase 2 studies underway and plans for Phase 3 trials. For the VEGF Trap-Eye, the collaboration with Bayer HealthCare is progressing, with Regeneron having received a significant upfront payment and sharing in development costs. Regeneron retains exclusive commercialization rights for VEGF Trap-Eye in the United States.

Regeneron entered into two significant non-exclusive license agreements for its VelocImmune technology. One with AstraZeneca and another with Astellas Pharma Inc., each involving substantial upfront payments and potential future payments and royalties. These agreements are expected to generate future revenue streams and validate Regeneron's technology platforms.