10-QPeriod: Q2 FY2016

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q2 Ended Jun 30, 2016

Filed August 4, 2016For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. reported strong financial performance for the second quarter and first half of 2016, driven by significant growth in EYLEA net product sales. Total revenues increased year-over-year for both periods, with the first half of 2016 reaching $2.41 billion, up from $1.87 billion in the prior year. Net income also saw a substantial rise, reaching $377.6 million for the first half of 2016, compared to $270.7 million in the same period of 2015. The company's operating expenses increased due to expanded R&D and commercialization activities, including a notable rise in R&D expenses driven by new collaborations and expanded clinical trials. Despite increased spending, the company demonstrated robust top-line growth and improved profitability.

Financial Highlights

44 data points
Beta

Revenue

$1.21B

96.6% Gross Margin

Net Income

$196.22M

16.2% Net Margin

EPS (Diluted)

$1.69

Total Assets

$6.20B

Cash & Equivalents

$646.51M

Free Cash Flow

$399.50M

Financial Statements
Beta
Revenue$1.21B
Cost of Revenue$41.25M
Gross Profit$1.17B
R&D Expenses$559.93M
SG&A Expenses$292.04M
Operating Expenses$921.00M
Operating Income$291.63M
Net Income$196.22M
EPS (Basic)$1.88
EPS (Diluted)$1.69
Shares Outstanding (Basic)104.63M
Shares Outstanding (Diluted)116.23M

Key Highlights

  • 1Total revenues for the first half of 2016 increased by 29% to $2.41 billion, up from $1.87 billion in the first half of 2015.
  • 2Net income for the first half of 2016 grew by 40% to $377.6 million, or $3.24 per diluted share, compared to $270.7 million, or $2.35 per diluted share, in the first half of 2015.
  • 3EYLEA net product sales in the U.S. for the first half of 2016 increased by 35% to $1.61 billion, reflecting strong sales volume growth.
  • 4Sanofi collaboration revenue saw a modest increase for the first half of 2016 to $383.1 million, primarily driven by the immuno-oncology collaboration.
  • 5Bayer collaboration revenue significantly increased by 44% to $371.5 million for the first half of 2016, mainly due to higher net profit from EYLEA sales outside the U.S.
  • 6Research and Development expenses increased by 40% to $1.03 billion for the first half of 2016, reflecting investments in new collaborations (e.g., Intellia) and ongoing clinical programs.
  • 7Selling, general, and administrative expenses increased by 46% to $581.7 million for the first half of 2016, driven by increased commercialization activities and higher headcount.

Frequently Asked Questions

Regeneron's total revenues increased significantly by 29% to $2.41 billion for the first half of 2016, compared to $1.87 billion for the first half of 2015. This growth was primarily driven by strong net product sales of EYLEA and increased collaboration revenue from Bayer.

Net income saw substantial growth, increasing by 40% to $377.6 million for the first half of 2016, compared to $270.7 million in the first half of 2015. This translated to diluted earnings per share of $3.24, up from $2.35 in the prior year.

The primary driver of revenue growth was EYLEA, with U.S. net product sales increasing by 35% to $1.61 billion in the first half of 2016. Additionally, collaboration revenue from Bayer grew significantly, contributing to the overall revenue increase.

Research and Development expenses increased by 40% to $1.03 billion in the first half of 2016. This increase was attributed to expanded clinical trial activities, increased clinical manufacturing costs, and significant investments in new collaborations, such as the one with Intellia Therapeutics.