Why did Regeneron's total revenue decline year over year if its key products are growing?

Total revenue fell 1% to $3.15 billion mainly because Ronapreve collaboration revenue dropped from $222 million to $0.5 million, and Regeneron does not expect further Ronapreve collaboration revenue. Excluding Ronapreve, revenue grew 7%. U.S. EYLEA sales also declined 16% due to market dynamics, lower volumes, and lower net prices, partially offset by Dupixent growth through the Sanofi collaboration.

How is the EYLEA HD launch performing?

EYLEA HD generated $200 million in U.S. net sales in its first reported quarter, and management described it as a strong quarter of uptake. It received approvals in the EU and Japan in January 2024, and a permanent J-code (J0177) became effective April 1, 2024, which should simplify Medicare Part B billing. Investors should note that total U.S. EYLEA franchise sales still fell 2%, so HD must continue to offset erosion of the original EYLEA product.

Why did EPS decline despite higher revenue?

Operating expenses rose sharply: GAAP R&D increased 13% to $1.25 billion and SG&A increased 15% to $689 million, driven by late-stage oncology, EYLEA HD commercialization, and international Libtayo expansion. Other income was also weaker due to $196 million in net unrealized losses on equity securities. Non-GAAP EPS, which excludes such items, declined 5% to $9.55.

What changed in full-year 2024 guidance and what does it mean for investors?

GAAP R&D guidance was raised to $4.92-5.17 billion and non-GAAP R&D to $4.40-4.60 billion, reflecting ongoing costs from the 2seventy bio acquisition. GAAP SG&A's low end was raised to $2.94 billion, capital expenditures were lowered to $780-880 million, and the GAAP effective tax rate was lowered to 7-9%. Gross margin and COCM guidance were unchanged. Guidance excludes any business development transactions not completed as of May 2, 2024.

How much capital is available for share repurchases, and what other capital allocation moves were announced?

Regeneron had $1.2 billion remaining under its existing program as of March 31, 2024, plus a new $3.0 billion authorization in April 2024, which has no time limit and can be discontinued at any time. In Q1 2024 the company repurchased $298 million of stock. Management said investing in innovation remains the top capital allocation priority. April deals included the acquisition of 2seventy bio's cell therapy pipeline for a $5 million upfront payment and a Mammoth Biosciences collaboration involving a $95 million preferred stock purchase and a $5 million upfront payment.

REGN 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.

Regeneron reported first quarter 2024 results on May 2, 2024, with total revenues of $3.15 billion^a, down 1% year over year, but up 7% excluding Ronapreve collaboration revenue that is not expected to recur.

The decline was driven mainly by lower U.S. EYLEA sales (down 16% to $1.20 billion^b), partly offset by the launch of EYLEA HD ($200 million in its first quarter on market). Growth engines were Dupixent (global sales recorded by Sanofi up 24% to $3.08 billion, flowing through Regeneron's profit share in Sanofi collaboration revenue) and Libtayo (global net sales up 45% to $264 million). Profitability declined: GAAP diluted EPS fell 13% to $6.27 and non-GAAP diluted EPS fell 5% to $9.55, reflecting higher R&D (up 13% GAAP) and SG&A (up 15% GAAP) spending to support launches and pipeline advancement, along with unrealized equity investment losses of $196 million.

Management highlighted a new $3.0 billion^c share repurchase authorization in April 2024, on top of $1.2 billion remaining under the prior program, signaling continued capital return alongside investment in innovation. Cash and marketable securities rose to $17.5 billion from $16.2 billion at year-end 2023, and free cash flow was $1.38 billion versus $1.19 billion a year earlier.

Full-year 2024 guidance was mixed: GAAP and non-GAAP R&D were raised, GAAP SG&A floor was raised, and capital expenditure guidance was lowered to $780^d-880 million; the 2seventy bio acquisition costs were incorporated into the R&D outlook. Key pipeline catalysts include the linvoseltamab BLA decision (target action date August 22, 2024) and the odronextamab complete response letters, which cited only trial enrollment status as an approvability issue.

02—Key points

Key Highlights

Total revenues were $3.15 billion (down 1% YoY; up 7% excluding Ronapreve), with Ronapreve collaboration revenue not expected to recur.
EYLEA franchise: U.S. EYLEA sales fell 16% to $1.20 billion, while EYLEA HD contributed $200 million in its initial quarter, leaving total U.S. EYLEA franchise sales down 2% to $1.40 billion.
Dupixent global net sales (recorded by Sanofi) rose 24% to $3.08 billion, boosting Regeneron's share of profits to $804 million, up from $637 million.
Libtayo global net sales grew 45% to $264 million; Praluent U.S. sales rose 75% to $70 million.
GAAP diluted EPS was $6.27 (down 13%) and non-GAAP diluted EPS was $9.55 (down 5%), with R&D up 13% (GAAP) and SG&A up 15% (GAAP).
A new $3.0 billion share repurchase program was authorized in April 2024, in addition to $1.2 billion remaining under the prior program; free cash flow was $1.38 billion.
Odronextamab received FDA complete response letters in March 2024 citing only trial enrollment status, while linvoseltamab has a priority review target action date of August 22, 2024.

03—Questions

Frequently Asked Questions

Why did Regeneron's total revenue decline year over year if its key products are growing?
Total revenue fell 1% to $3.15 billion mainly because Ronapreve collaboration revenue dropped from $222 million to $0.5 million, and Regeneron does not expect further Ronapreve collaboration revenue. Excluding Ronapreve, revenue grew 7%. U.S. EYLEA sales also declined 16% due to market dynamics, lower volumes, and lower net prices, partially offset by Dupixent growth through the Sanofi collaboration.
How is the EYLEA HD launch performing?
EYLEA HD generated $200 million in U.S. net sales in its first reported quarter, and management described it as a strong quarter of uptake. It received approvals in the EU and Japan in January 2024, and a permanent J-code (J0177) became effective April 1, 2024, which should simplify Medicare Part B billing. Investors should note that total U.S. EYLEA franchise sales still fell 2%, so HD must continue to offset erosion of the original EYLEA product.
Why did EPS decline despite higher revenue?
Operating expenses rose sharply: GAAP R&D increased 13% to $1.25 billion and SG&A increased 15% to $689 million, driven by late-stage oncology, EYLEA HD commercialization, and international Libtayo expansion. Other income was also weaker due to $196 million in net unrealized losses on equity securities. Non-GAAP EPS, which excludes such items, declined 5% to $9.55.
What changed in full-year 2024 guidance and what does it mean for investors?
GAAP R&D guidance was raised to $4.92-5.17 billion and non-GAAP R&D to $4.40-4.60 billion, reflecting ongoing costs from the 2seventy bio acquisition. GAAP SG&A's low end was raised to $2.94 billion, capital expenditures were lowered to $780-880 million, and the GAAP effective tax rate was lowered to 7-9%. Gross margin and COCM guidance were unchanged. Guidance excludes any business development transactions not completed as of May 2, 2024.
How much capital is available for share repurchases, and what other capital allocation moves were announced?
Regeneron had $1.2 billion remaining under its existing program as of March 31, 2024, plus a new $3.0 billion authorization in April 2024, which has no time limit and can be discontinued at any time. In Q1 2024 the company repurchased $298 million of stock. Management said investing in innovation remains the top capital allocation priority. April deals included the acquisition of 2seventy bio's cell therapy pipeline for a $5 million upfront payment and a Mammoth Biosciences collaboration involving a $95 million preferred stock purchase and a $5 million upfront payment.

04—Continue

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