10-QPeriod: Q2 FY2010

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q2 Ended Jun 30, 2010

Filed July 28, 2010For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. reported a net loss of $25.5 million ($0.31 per share) for the second quarter ended June 30, 2010, an increase from the $14.9 million loss ($0.19 per share) in the same period of 2009. This widened loss was primarily driven by higher research and development (R&D) expenses, which rose to $124.5 million from $94.2 million year-over-year, largely due to expanded R&D activities related to the company's antibody collaboration with sanofi-aventis. Despite the increased loss, total revenues grew to $115.9 million from $90.0 million, bolstered by strong performance in collaboration revenues, particularly from sanofi-aventis. Net product sales for ARCALYST® increased to $5.2 million from $4.5 million. The company also announced positive results from its PRE-SURGE 1 Phase 3 study for ARCALYST® in gout flare prevention, a significant development for a key pipeline asset. Management believes current capital resources, including expected funding from collaborations, are sufficient to meet operating needs through at least 2013.

Financial Highlights

40 data points
Beta

Revenue

$115.89M

99.7% Gross Margin

Net Income

-$25.47M

-22.0% Net Margin

EPS (Diluted)

$-0.31

Total Assets

$790.64M

Cash & Equivalents

$112.00M

Free Cash Flow

-$11.85M

Financial Statements
Beta
Revenue$115.89M
Cost of Revenue$405K
Gross Profit$115.48M
R&D Expenses$124.53M
SG&A Expenses$14.68M
Operating Expenses$139.61M
Operating Income-$23.72M
Interest Expense$2.34M
Net Income-$25.47M
EPS (Basic)$-0.31

Key Highlights

  • 1Net loss increased to $25.5 million in Q2 2010 from $14.9 million in Q2 2009, primarily due to higher R&D expenses.
  • 2Total revenues grew to $115.9 million in Q2 2010 from $90.0 million in Q2 2009, driven by increased collaboration revenues, especially from sanofi-aventis.
  • 3ARCALYST® net product sales increased to $5.2 million in Q2 2010 from $4.5 million in Q2 2009.
  • 4Positive results from the PRE-SURGE 1 Phase 3 study for ARCALYST® in preventing gout flares were announced.
  • 5Research and Development expenses increased significantly to $124.5 million in Q2 2010 from $94.2 million in Q2 2009, reflecting expanded R&D activities.
  • 6The company extended its VelocImmune® technology license agreement with Astellas Pharma Inc. for a significant upfront payment.
  • 7Regeneron maintains a strong liquidity position, with $380.2 million in cash, cash equivalents, and marketable securities as of June 30, 2010.

Frequently Asked Questions

Regeneron reported a net loss of $25.5 million ($0.31 per share) for the quarter ended June 30, 2010, compared to a net loss of $14.9 million ($0.19 per share) for the same period in 2009. Total revenues increased to $115.9 million from $90.0 million, driven by higher collaboration revenues.

Key developments include positive results from the PRE-SURGE 1 Phase 3 study for ARCALYST® in gout flare prevention. Significant progress is also being made in Phase 3 trials for VEGF Trap-Eye for eye diseases and aflibercept (VEGF Trap) for oncology indications. Several early-stage antibody candidates are also in clinical development.

Regeneron's operations are funded through a combination of equity offerings, collaborator payments (particularly from sanofi-aventis and Bayer HealthCare), technology licensing agreements, product revenue from ARCALYST®, and investment income. The company believes its current capital resources and expected future funding from collaborations are sufficient to meet operating needs through at least 2013.

The extension of the non-exclusive license agreement with Astellas for Regeneron's VelocImmune® technology through June 2023 is significant as it includes a $165.0 million upfront payment and a further $130.0 million payment in June 2018, providing substantial non-dilutive capital for Regeneron.