10-QPeriod: Q2 FY2017

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q2 Ended Jun 30, 2017

Filed August 3, 2017For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. (REGN) reported strong financial results for the second quarter and the first half of 2017, demonstrating significant revenue and net income growth compared to the prior year. Total revenues reached $1.47 billion for Q2 and $2.79 billion for H1 2017, driven by robust performance in net product sales and collaboration revenues from Sanofi and Bayer. Key drivers of this growth include strong demand for EYLEA in the U.S. and positive contributions from newly approved products like Dupixent and Kevzara. The company's strategic collaborations, particularly with Sanofi and Bayer, continue to be a significant factor in its financial success, with increasing collaboration revenues and reimbursements for research and development expenses. Despite ongoing legal proceedings, particularly related to Praluent, Regeneron's financial health appears robust, supported by a strong balance sheet and positive operating cash flows.

Financial Highlights

45 data points
Beta

Revenue

$1.47B

97.1% Gross Margin

Net Income

$387.70M

26.4% Net Margin

EPS (Diluted)

$3.34

Total Assets

$8.11B

Cash & Equivalents

$744.31M

Free Cash Flow

-$30.57M

Financial Statements
Beta
Revenue$1.47B
Cost of Revenue$42.13M
Gross Profit$1.43B
R&D Expenses$509.98M
SG&A Expenses$306.91M
Operating Expenses$919.80M
Operating Income$550.31M
Interest Expense$5.40M
Net Income$387.70M
EPS (Basic)$3.66
EPS (Diluted)$3.34
Shares Outstanding (Basic)106.03M
Shares Outstanding (Diluted)116.14M

Key Highlights

  • 1Total revenues increased by 21% to $1.47 billion for Q2 2017 and by 16% to $2.79 billion for H1 2017, compared to the same periods in 2016.
  • 2Net income surged by 98% to $387.7 million ($3.34 per diluted share) for Q2 2017 and by 69% to $636.7 million ($5.51 per diluted share) for H1 2017.
  • 3EYLEA net sales in the U.S. showed a healthy increase, contributing significantly to total revenue.
  • 4Sanofi collaboration revenue grew by 36% in Q2 and 13% in H1 2017, driven by antibody and immuno-oncology programs.
  • 5Bayer collaboration revenue increased by 9.7% in Q2 and 8.8% in H1 2017, primarily from EYLEA profits outside the U.S.
  • 6Significant progress was made with the launches of Dupixent and Kevzara, contributing to revenue growth.
  • 7The company ended the period with a strong cash position of $744.3 million in cash and cash equivalents and $1.59 billion in marketable securities.

Frequently Asked Questions

EYLEA continued to be a major revenue driver, with strong net sales in the U.S. Regeneron's collaborations with Sanofi and Bayer also showed significant growth in revenue, particularly from the antibody and immuno-oncology programs with Sanofi, and EYLEA profits outside the U.S. from Bayer. The recent launches of Dupixent and Kevzara also began contributing positively to revenue.

Total operating expenses remained relatively stable year-over-year for Q2, with a slight increase for H1. Research and development expenses saw a modest decrease for H1 2017 compared to H1 2016, while Selling, General, and Administrative expenses increased, likely due to commercialization efforts for new products and expansion activities.

The report details strong performance for the current period but does not explicitly provide forward-looking financial guidance for future quarters. However, the company anticipates continued increases in expenditures, particularly for research and development, and substantial commercialization costs for new products like Dupixent, Praluent, and Kevzara.

Yes, the report highlights ongoing patent infringement litigation, most notably concerning Praluent (alirocumab) with Amgen, which could impact commercialization. There are also legal proceedings related to Dupixent and shareholder derivative claims. The company acknowledges that the outcome of these proceedings is uncertain and could materially impact financial position, results of operations, and cash flows.