8-K/ARegulation FD

REGENERON PHARMACEUTICALS, INC. 8-K/A Report, Regulation FD Disclosure (May 7, 2019)

Filed May 7, 2019For Securities:REGN

Summary

Regeneron Pharmaceuticals, Inc. (REGN) has filed an amendment to its May 7, 2019, 8-K filing primarily to correct previously issued financial guidance for the full year 2019. The amendment specifically revises the "GAAP Unreimbursed R&D" and "GAAP SG&A" figures, along with their corresponding GAAP-to-non-GAAP reconciliations. Key changes include an increase in the projected GAAP Unreimbursed R&D expense range from $1.855 billion–$2.000 billion to $2.280 billion–$2.400 billion. The GAAP SG&A guidance range has been slightly adjusted to $1.695 billion–$1.800 billion, from the previously stated $1.700 billion–$1.830 billion. Notably, the non-GAAP guidance for both R&D and SG&A remains unchanged, indicating that the revisions are attributable to items that are excluded in the non-GAAP calculations, such as an upfront payment related to license and collaboration agreements and litigation contingencies. The company also updated its GAAP effective tax rate guidance downwards.

Key Highlights

  • 1Amendment filed to correct 2019 financial guidance for GAAP Unreimbursed R&D and GAAP SG&A.
  • 2GAAP Unreimbursed R&D guidance increased significantly to $2.280 billion–$2.400 billion from $1.855 billion–$2.000 billion.
  • 3GAAP SG&A guidance revised to $1.695 billion–$1.800 billion from $1.700 billion–$1.830 billion.
  • 4Non-GAAP Unreimbursed R&D and Non-GAAP SG&A guidance remain unchanged, indicating revisions are due to non-GAAP reconciling items.
  • 5The reconciliation for GAAP Unreimbursed R&D now includes an additional $400 million adjustment for an upfront payment related to license and collaboration agreements.
  • 6GAAP effective tax rate guidance revised downwards to 11%–13% from 14%–16%.
  • 7Capital expenditure guidance remains consistent at $410 million–$475 million.

Frequently Asked Questions

Regeneron filed this amendment to correct errors in its previously issued 2019 financial guidance for GAAP Unreimbursed R&D and GAAP SG&A, as well as the related GAAP-to-non-GAAP reconciliations that were included in its first quarter 2019 earnings release.

The guidance for GAAP Unreimbursed R&D expenses for the full year 2019 has been increased to a range of $2.280 billion to $2.400 billion, up from the previously stated $1.855 billion to $2.000 billion. This increase is attributed to a new reconciliation item for an upfront payment related to license and collaboration agreements.

Yes, the changes are material as they represent a significant increase in projected R&D expenses and a slight adjustment to SG&A. However, the fact that the non-GAAP guidance remains unchanged suggests that the underlying operational performance metrics, as defined by the company's non-GAAP measures, are not affected by these revisions.

The filing indicates a downward revision of the GAAP effective tax rate guidance to 11%–13% from the previous 14%–16%. The specific reasons for this adjustment are not detailed in this particular filing, but it could be due to various factors affecting tax liabilities or credits.