10-QPeriod: Q1 FY2016

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q1 Ended Mar 31, 2016

Filed May 5, 2016For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. (REGN) reported strong top-line growth in its first quarter 2016 filing, with total revenues increasing to $1.20 billion from $869.6 million in the prior year period. This substantial growth was primarily driven by a significant increase in net product sales, particularly from EYLEA, which saw U.S. sales rise to $780.9 million from $541.1 million in Q1 2015. Collaboration revenues from Sanofi and Bayer also showed healthy growth, indicating the continued strength of key partnerships. The company's net income more than doubled to $165.7 million, or $1.45 per diluted share, compared to $76.0 million, or $0.66 per diluted share, in the first quarter of 2015. This improved profitability reflects not only the robust revenue growth but also increased operating expenses, largely due to expanded research and development and commercialization activities. Despite increased R&D spending, the company's financial performance demonstrates a positive trajectory driven by its core products and expanding pipeline.

Financial Highlights

45 data points
Beta

Revenue

$1.20B

93.4% Gross Margin

Net Income

$181.38M

15.1% Net Margin

EPS (Diluted)

$1.59

Total Assets

$5.90B

Cash & Equivalents

$604.21M

Free Cash Flow

$44.99M

Financial Statements
Beta
Revenue$1.20B
Cost of Revenue$78.94M
Gross Profit$1.12B
R&D Expenses$470.11M
SG&A Expenses$289.68M
Operating Expenses$871.54M
Operating Income$329.31M
Net Income$181.38M
EPS (Basic)$1.74
EPS (Diluted)$1.59
Shares Outstanding (Basic)104.29M
Shares Outstanding (Diluted)114.23M

Key Highlights

  • 1Total revenues increased by approximately 38% year-over-year to $1.20 billion.
  • 2Net income more than doubled, reaching $165.7 million ($1.45 per diluted share) compared to $76.0 million ($0.66 per diluted share) in the prior year quarter.
  • 3EYLEA net product sales in the U.S. grew significantly, increasing by over 44% to $780.9 million.
  • 4Sanofi and Bayer collaboration revenues also saw substantial increases, contributing to overall top-line growth.
  • 5Research and development expenses rose significantly to $470.1 million, reflecting continued investment in the company's extensive pipeline.
  • 6The company ended the quarter with $604.2 million in cash and cash equivalents, and $800.2 million in marketable securities.
  • 7Significant progress was reported in key late-stage clinical programs, including dupilumab for atopic dermatitis and asthma.

Frequently Asked Questions

The primary driver of Regeneron's revenue growth was a significant increase in net product sales, particularly from EYLEA in the U.S., which saw sales rise by over 44% year-over-year. Stronger collaboration revenues from key partners like Sanofi and Bayer also contributed significantly to the overall revenue increase.

Regeneron's profitability significantly improved in Q1 2016. Net income more than doubled to $165.7 million, with diluted earnings per share rising to $1.45 from $76.0 million and $0.66, respectively, in the prior year period. This increase reflects strong revenue growth outpacing the rise in operating expenses.

Regeneron reported significant progress across its pipeline. Key highlights include positive top-line data from Phase 3 trials for dupilumab in atopic dermatitis, continued development for sarilumab in rheumatoid arthritis (with a BLA accepted for review by the FDA), and advancements in various other antibody-based programs targeting conditions like pain (fasinumab) and allergic/inflammatory diseases (dupilumab).

Research and development expenses increased substantially to $470.1 million from $343.1 million in the prior year's quarter. This increase reflects the company's continued heavy investment in its extensive clinical pipeline, including late-stage trials for dupilumab, sarilumab, and fasinumab, as well as early-stage research across various therapeutic areas.