10-QPeriod: Q1 FY2019

REGENERON PHARMACEUTICALS, INC. Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 7, 2019For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. reported strong revenue growth for the first quarter of 2019, with total revenues reaching $1.71 billion, a 13.2% increase compared to the prior year period. This growth was primarily driven by a significant increase in U.S. net product sales of EYLEA and strong performance in collaboration revenues from Sanofi and Bayer. Net income for the quarter was $461.1 million, or $3.99 per diluted share, showing a slight decrease from the previous year's $478.0 million, or $4.16 per diluted share, impacted by higher operating expenses, particularly in research and development and selling, general, and administrative functions. The company continues to invest heavily in its robust pipeline, with R&D expenses increasing by approximately 28.7% year-over-year. Despite increased operating costs, Regeneron demonstrated solid operational cash flow generation, with cash flow from operating activities increasing significantly to $897.0 million. The company also maintained a strong liquidity position with $5.57 billion in financial assets at the end of the quarter, including cash and marketable securities.

Financial Highlights

42 data points
Beta

Revenue

$1.37B

Net Income

$461.10M

33.6% Net Margin

EPS (Diluted)

$3.99

Total Assets

$12.85B

Cash & Equivalents

$1.72B

Free Cash Flow

$897.00M

Financial Statements
Beta
Revenue$1.37B
R&D Expenses$486.10M
SG&A Expenses$291.10M
Operating Expenses$892.60M
Operating Income$480.00M
Interest Expense$7.70M
Net Income$461.10M
EPS (Basic)$4.23
EPS (Diluted)$3.99
Shares Outstanding (Basic)108.90M
Shares Outstanding (Diluted)115.50M

Key Highlights

  • 1Total revenues increased by 13.2% to $1.71 billion in Q1 2019.
  • 2U.S. Net product sales of EYLEA grew by 9.1% to $1.07 billion.
  • 3Sanofi and Bayer collaboration revenues collectively increased by 15.4% to $522.6 million.
  • 4Research and development expenses increased by 28.7% to $641.8 million.
  • 5Selling, general, and administrative expenses increased by 24.2% to $410.8 million.
  • 6Net income decreased slightly to $461.1 million from $478.0 million in the prior year.
  • 7Diluted earnings per share decreased to $3.99 from $4.16.
  • 8Cash flow from operating activities increased significantly by 45.2% to $897.0 million.

Frequently Asked Questions

Regeneron's revenue growth was primarily driven by a 9.1% increase in U.S. net product sales of EYLEA, reaching $1.07 billion. Additionally, collaboration revenues from Sanofi increased by 29.9% to $246.4 million, and collaboration revenues from Bayer increased by 11.4% to $276.2 million.

Operating expenses saw a significant increase in Q1 2019. Research and development expenses rose by 28.7% to $641.8 million, reflecting continued investment in the company's pipeline. Selling, general, and administrative expenses also increased by 24.2% to $410.8 million, primarily due to higher headcount and commercialization efforts.

Regeneron maintained a strong liquidity position with $5.57 billion in cash and marketable securities as of March 31, 2019. Cash flow from operating activities showed substantial improvement, increasing by 45.2% year-over-year to $897.0 million, indicating robust cash generation capabilities.

The filing mentions ongoing patent litigation, particularly concerning Praluent and Dupixent, with Amgen. These legal battles involve claims of patent infringement and validity challenges, the outcomes of which could impact the commercialization of these products. The company has recorded an accrual for loss contingencies related to the '124 Patent proceedings for Praluent, stating that the ultimate resolution is not expected to have a material impact on the financial statements.