10-QPeriod: Q3 FY2010

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q3 Ended Sep 30, 2010

Filed October 28, 2010For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. reported a net loss of $33.9 million for the third quarter of 2010, an increase from the $1.0 million net loss in the same period of 2009. This widened loss was primarily driven by a significant increase in research and development expenses. Total revenues for the quarter decreased to $106.0 million from $117.5 million year-over-year, impacted by lower collaboration revenue from Bayer HealthCare, partly offset by increased collaboration revenue from sanofi-aventis, driven by antibody research activities. The company continues to invest heavily in its robust pipeline, with a strong focus on its antibody collaboration with sanofi-aventis and its VEGF Trap-Eye program with Bayer HealthCare. Notably, Regeneron received a significant $165 million upfront payment in August 2010 from Astellas Pharma Inc. related to an extended technology licensing agreement. Despite the net loss, the company's liquidity remains strong, with cash, cash equivalents, and marketable securities totaling $520.4 million as of September 30, 2010, bolstered by a public offering of common stock in October 2010 that raised approximately $174.7 million.

Financial Highlights

40 data points
Beta

Revenue

$105.98M

99.6% Gross Margin

Net Income

-$33.88M

-32.0% Net Margin

EPS (Diluted)

$-0.41

Total Assets

$942.43M

Cash & Equivalents

$325.29M

Free Cash Flow

$161.50M

Financial Statements
Beta
Revenue$105.98M
Cost of Revenue$372K
Gross Profit$105.61M
R&D Expenses$122.04M
SG&A Expenses$15.66M
Operating Expenses$138.07M
Operating Income-$32.09M
Interest Expense$2.23M
Net Income-$33.88M
EPS (Basic)$-0.41

Key Highlights

  • 1Net loss increased to $33.9 million for Q3 2010 from $1.0 million in Q3 2009, primarily due to higher R&D expenses.
  • 2Total revenues decreased to $106.0 million in Q3 2010 from $117.5 million in Q3 2009, with collaboration revenue from Bayer HealthCare declining.
  • 3Significant upfront payment of $165 million received from Astellas Pharma Inc. in August 2010 for an extended technology licensing agreement.
  • 4Cash, cash equivalents, and marketable securities stood at $520.4 million as of September 30, 2010, indicating strong liquidity.
  • 5Completed a public offering of common stock in October 2010, raising approximately $174.7 million.
  • 6Continued substantial investment in R&D, particularly in the antibody collaboration with sanofi-aventis and the VEGF Trap-Eye program with Bayer HealthCare.
  • 7ARCALYST® net product sales for the first nine months of 2010 were $20.0 million, including $4.8 million of previously deferred sales, compared to $13.4 million in the same period of 2009.

Frequently Asked Questions

Regeneron reported a net loss of $33.9 million for the third quarter of 2010, compared to a net loss of $1.0 million in the same period of 2009. Total revenues decreased to $106.0 million from $117.5 million year-over-year. This performance was largely influenced by increased research and development expenses and a decrease in collaboration revenue from Bayer HealthCare.

Key developments include continued investment in the antibody collaboration with sanofi-aventis and the VEGF Trap-Eye program with Bayer HealthCare. A significant event was the receipt of a $165 million upfront payment from Astellas Pharma Inc. in August 2010 for an extended technology licensing agreement. Regeneron also reported positive Phase 3 data for ARCALYST® in gout flare prevention and advanced its VEGF Trap-Eye Phase 3 trials.

Regeneron maintained a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $520.4 million as of September 30, 2010. This was further strengthened by a public offering of common stock in October 2010, which generated approximately $174.7 million in net proceeds, intended for general corporate purposes.

For the nine months ended September 30, 2010, ARCALYST® net product sales were $20.0 million, which included $4.8 million of previously deferred net product sales recognized in the first quarter of 2010 due to sufficient historical data for estimating returns and rebates. This compares to $13.4 million in net product sales for the same period in 2009. At September 30, 2010, there was no deferred ARCALYST® net product sales revenue.