8-KEarnings & ResultsMaterial AgreementsExhibits & Filings

REGENERON PHARMACEUTICALS, INC. 8-K Report, Material Agreement (Jul 29, 2010)

Filed July 29, 2010For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. announced a significant amendment to its non-exclusive license agreement with Astellas Pharma Inc. regarding Regeneron's VelocImmune® technology. The agreement, originally set to expire in June 2013, has been extended for an additional ten years, now running until June 2023. This extension is accompanied by substantial financial benefits for Regeneron, including an immediate $165 million up-front payment due in August 2010 and a further $130 million payment in June 2018, contingent on the agreement not being terminated. This deal provides Regeneron with significant near-term capital, enhancing its financial flexibility and supporting its ongoing research and development efforts. While Astellas is no longer obligated for prior annual payments, the extended term and substantial payments underscore Astellas' continued commitment to leveraging Regeneron's antibody discovery platform. Regeneron will also continue to receive mid-single digit royalties on any future product sales derived from this collaboration.

Key Highlights

  • 1Extended the VelocImmune® license agreement with Astellas Pharma Inc. by ten years, from June 2013 to June 2023.
  • 2Received a $165 million up-front payment from Astellas in August 2010.
  • 3Will receive a $130 million payment in June 2018, subject to agreement terms.
  • 4Astellas is released from $20 million annual payments due in June 2011 and June 2012.
  • 5Regeneron remains entitled to mid-single digit royalties on future product sales discovered using VelocImmune® technology by Astellas.
  • 6The amendment signifies continued strong commercial interest in Regeneron's VelocImmune® technology.
  • 7The filing also includes a press release on Q2 2010 financial and operating results (Exhibit 99.2).

Frequently Asked Questions

The primary financial impact is the receipt of a $165 million up-front payment in August 2010, followed by a $130 million payment in June 2018. This significantly boosts Regeneron's cash position and financial runway.

Regeneron will continue to receive mid-single digit royalties on any future sales of antibody products discovered by Astellas using the VelocImmune® technology, as per the original agreement terms. The extended agreement period increases the potential for future royalty streams.

Yes, Astellas has the right to terminate the agreement with 90 days' notice. If Astellas terminates, Regeneron may need to refund a portion of the Up-Front Payment or the Second Payment if termination occurs after June 2018. There are also specific limited circumstances, like a material breach by Regeneron, where termination could occur and lead to refund obligations.

The extension to 2023 demonstrates Astellas' long-term confidence in Regeneron's VelocImmune® technology. It provides a stable and extended period for Astellas to utilize the technology, potentially leading to more product development and increased future royalty opportunities for Regeneron.