10-QPeriod: Q2 FY2011

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q2 Ended Jun 30, 2011

Filed July 28, 2011For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. (REGN) reported a net loss of $62.5 million ($0.69 per share) for the second quarter ended June 30, 2011, an increase from the $25.5 million ($0.31 per share) net loss in the same period of 2010. This wider loss was driven primarily by increased research and development (R&D) expenses and higher selling, general, and administrative (SG&A) costs, reflecting the company's ongoing investments in its extensive pipeline. Total revenues for the quarter were $107.8 million, a slight decrease from $115.9 million in Q2 2010, impacted by lower technology licensing revenue. Collaboration revenues from Sanofi and Bayer HealthCare remained robust, primarily driven by expense reimbursements for ongoing development programs. Notably, the company submitted a Biologics License Application (BLA) for EYLEATM for wet age-related macular degeneration (AMD) in February 2011, which received Priority Review with a target decision date in August 2011. Positive results were also reported for ZALTRAPTM in colorectal cancer and ARCALYST® for gout flares, with regulatory submissions planned. The company ended the quarter with $254.3 million in cash and cash equivalents and $55.4 million in marketable securities, reflecting significant cash burn but also substantial collaboration funding.

Financial Highlights

44 data points
Beta

Revenue

$107.81M

99.6% Gross Margin

Net Income

-$62.51M

-58.0% Net Margin

EPS (Diluted)

$-0.69

Total Assets

$1.05B

Cash & Equivalents

$254.31M

Free Cash Flow

-$34.05M

Financial Statements
Beta
Revenue$107.81M
Cost of Revenue$395K
Gross Profit$107.42M
R&D Expenses$143.15M
SG&A Expenses$24.59M
Operating Expenses$168.13M
Operating Income-$60.32M
Interest Expense$4.05M
Net Income-$62.51M
EPS (Basic)$-0.69
EPS (Diluted)$-0.69
Shares Outstanding (Basic)90.44M
Shares Outstanding (Diluted)90.44M

Key Highlights

  • 1Net loss widened to $62.5 million in Q2 2011 from $25.5 million in Q2 2010, primarily due to increased R&D and SG&A expenses.
  • 2Total revenues decreased slightly to $107.8 million in Q2 2011 from $115.9 million in Q2 2010, with lower technology licensing revenue being a key factor.
  • 3EYLEATM for wet AMD received Priority Review from the FDA with a target decision date of August 20, 2011; BLA submitted in February 2011.
  • 4Positive Phase 3 results for ZALTRAPTM in metastatic colorectal cancer announced, with regulatory submissions planned for H2 2011.
  • 5ARCALYST® net product sales for Q2 2011 were $5.0 million, slightly down from $5.2 million in Q2 2010.
  • 6Company ended Q2 2011 with $254.3 million in cash and cash equivalents and $55.4 million in marketable securities.
  • 7Significant increase in R&D expenses driven by ongoing clinical trials for EYLEATM, ZALTRAPTM, and other pipeline candidates.

Frequently Asked Questions

Regeneron reported a net loss of $62.5 million in Q2 2011, up from $25.5 million in Q2 2010, due to increased investments in research and development and SG&A. While revenues slightly decreased, collaboration revenue from Sanofi and Bayer HealthCare remained strong, offsetting some of the loss. The company has a significant cash balance, but its continued losses indicate a reliance on future revenue streams and potential need for additional funding.

EYLEATM for wet AMD is the most advanced, with a BLA submitted to the FDA and a target decision date in August 2011 under Priority Review. Positive Phase 3 results for ZALTRAPTM in colorectal cancer position it for regulatory submissions in H2 2011. ARCALYST® is also nearing a supplemental BLA submission for gout flare prevention.

These collaborations are crucial. Sanofi's funding for antibody discovery and ZALTRAPTM development provides significant revenue, primarily as expense reimbursements. Bayer HealthCare shares in the development costs for EYLEATM. These collaborations are essential for funding Regeneron's extensive R&D activities and mitigating the impact of its net losses.

ARCALYST® net product sales were $5.0 million in Q2 2011, a slight decrease from $5.2 million in Q2 2010. The company is pursuing a supplemental BLA for ARCALYST® for the prevention of gout flares, indicating efforts to expand its use beyond its current indication for Cryopyrin-Associated Periodic Syndromes (CAPS).