10-QPeriod: Q1 FY2011

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 3, 2011For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. reported a net loss of $43.4 million for the first quarter of 2011, an increase from the $30.5 million loss in the same period of 2010. This widening loss was driven by higher research and development (R&D) expenses and increased selling, general, and administrative (SG&A) costs. Total revenues grew to $112.2 million, up from $103.5 million in Q1 2010, primarily due to increased collaboration revenue from its partnerships with sanofi-aventis and Bayer HealthCare. The company continues to advance its late-stage pipeline, with significant progress noted in the regulatory submission for VEGF Trap-Eye and positive results from trials for ZALTRAP™ and ARCALYST®. Financially, Regeneron's cash, cash equivalents, and marketable securities stood at $607.6 million at the end of the quarter. The company utilized $10.6 million in cash from operations, but also saw positive cash flow from investing activities due to the net sale of marketable securities. Management expressed confidence in their ability to fund operations through at least 2013, supported by existing capital and expected reimbursements from collaborators, though substantial future funding requirements for R&D and potential commercialization remain.

Financial Highlights

43 data points
Beta

Revenue

$112.20M

99.7% Gross Margin

Net Income

-$43.45M

-38.7% Net Margin

EPS (Diluted)

$-0.49

Total Assets

$1.07B

Cash & Equivalents

$135.38M

Free Cash Flow

-$10.58M

Financial Statements
Beta
Revenue$112.20M
Cost of Revenue$382K
Gross Profit$111.82M
R&D Expenses$129.39M
SG&A Expenses$23.41M
Operating Expenses$153.19M
Operating Income-$40.98M
Interest Expense$3.72M
Net Income-$43.45M
EPS (Basic)$-0.49
EPS (Diluted)$-0.49
Shares Outstanding (Basic)89.16M
Shares Outstanding (Diluted)89.16M

Key Highlights

  • 1Net loss for Q1 2011 increased to $43.4 million ($0.49/share) from $30.5 million ($0.38/share) in Q1 2010, primarily due to higher R&D and SG&A expenses.
  • 2Total revenue increased to $112.2 million in Q1 2011 from $103.5 million in Q1 2010, driven by higher collaboration revenue from sanofi-aventis and Bayer HealthCare.
  • 3ARCALYST® net product sales were $4.4 million in Q1 2011, down from $9.9 million in Q1 2010 (which included $4.8 million of previously deferred sales).
  • 4Submitted a Biologics License Application (BLA) to the FDA for VEGF Trap-Eye for wet AMD, receiving Priority Review with a target decision date of August 20, 2011.
  • 5Reported positive Phase 3 results for ZALTRAP™ (aflibercept) in metastatic colorectal cancer (mCRC), with regulatory submissions planned for late 2011.
  • 6Positive Phase 3 results for ARCALYST® for gout flare prevention were announced, with a supplemental BLA submission planned for mid-2011.
  • 7Cash, cash equivalents, and marketable securities totaled $607.6 million as of March 31, 2011.

Frequently Asked Questions

Regeneron reported a net loss of $43.4 million ($0.49 per share) for the first quarter of 2011, compared to a net loss of $30.5 million ($0.38 per share) for the same period in 2010. Revenue increased to $112.2 million from $103.5 million, primarily due to higher collaboration revenues, while operating expenses increased from $132.4 million to $153.2 million.

Regeneron made significant progress in its late-stage pipeline. The company submitted a BLA for VEGF Trap-Eye for wet AMD, which received Priority Review from the FDA with a target decision date of August 20, 2011. Positive Phase 3 results were also reported for ZALTRAP™ in colorectal cancer, and for ARCALYST® in gout flare prevention, with regulatory submissions planned for both. Additionally, the company continues to advance several early-stage antibody candidates.

The collaboration with sanofi-aventis remains a significant revenue driver, contributing $85.3 million in revenue for the first quarter of 2011, up from $68.7 million in the prior year. This revenue includes reimbursement for R&D expenses and recognition of deferred revenue from upfront payments. The collaboration is advancing multiple antibody candidates and the ZALTRAP™ program, which has seen positive clinical trial results.

As of March 31, 2011, Regeneron held $607.6 million in cash, cash equivalents, and marketable securities. The company utilized $10.6 million in cash from operations but had positive cash flow from investing activities. Management believes its current resources and expected collaborator funding are sufficient to meet operating needs through at least 2013, although substantial future funding requirements for R&D and potential commercialization exist.