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    REGN
    Earnings call· Dec 2024(Q4 FY24)

    REGENERON PHARMACEUTICALS, INC. REGN

    Feb 4, 2025 Source

    Executive summary

    Regeneron Q4 FY24 — Strong Dupixent Growth, EYLEA HD Uptake, and Pipeline Progress

    Regeneron concluded Q4 FY24 with robust financial performance, driven by strong growth in Dupixent and Libtayo, alongside increasing uptake of EYLEA HD. The company is strategically investing in its broad pipeline, with several key regulatory approvals and pivotal data readouts anticipated in 2025, while also enhancing shareholder returns through a new dividend and increased share repurchase authorization. Management expressed confidence in the long-term growth of the business and the innovative R&D engine.

    Highlights

    5

    • Total revenues grew 10% year-over-year to $3.8 billion in Q4 FY24.

    • Dupixent worldwide net sales grew 15% year-over-year to $3.7 billion in Q4 FY24.

    • Libtayo achieved blockbuster status with global net sales of $1.2 billion in FY24, with Q4 global net sales growing 50% year-over-year to $367 million.

    • EYLEA HD net sales reached $305 million in Q4 FY24 and $1.2 billion for the full year.

    • Initiation of a quarterly cash dividend program and an additional $3 billion share repurchase authorization, increasing total current buyback capacity to approximately $4.5 billion.

    Concerns

    3

    • EYLEA HD net sales in Q4 FY24 were affected by elevated wholesaler inventory levels at the end of Q3.

    • EYLEA net sales in Q4 FY24 were negatively impacted by elevated wholesale inventory levels, with this impact expected to continue into Q1 FY25.

    • Continued competitive pressure on EYLEA due to the recent launch of a biosimilar.

    Guidance & targets

    7
    CategoryTargetConfidence
    R&D expense
    $5 billion to $5.2 billion
    high materiality
    High
    SG&A expense
    $2.55 billion to $2.7 billion
    medium materiality
    High
    Gross margin on net product sales
    87% to 88%
    medium materiality
    High
    Costs of collaboration and manufacturing
    $1 billion to $1.15 billion
    medium materiality
    High
    Capital expenditures
    $850 million to $975 million
    medium materiality
    High
    Effective tax rate
    11% to 13%
    medium materiality
    High
    Sanofi development balance repayment
    Fully reimbursed
    high materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    EYLEA HD and EYLEA (US)
    Combined US net sales for EYLEA HD and EYLEA. Full-year growth achieved despite increasing competition.
    Anti-VEGF category share: 46% (Q4)Full-year net product sales growth: 1.4% (FY24)Full-year net product sales: $6 billion (FY24)
    		$1.5 billion———
    EYLEA HD (US)
    Q4 net sales were affected by elevated wholesaler inventory levels at the end of Q3. Focused on growing adoption in 2025 with anticipated label enhancements.
    Full-year net sales: $1.2 billion (FY24)Percentage of combined EYLEA HD and EYLEA net sales: 20%
    		$305 million———
    EYLEA (US)
    Primarily driven by persistent physician demand despite biosimilar launch. Wholesale inventory levels were elevated at the end of Q4, expected to negatively impact Q1 2025 net sales. Ongoing market dynamics will put downward pressure.
    		$1.2 billion———
    Libtayo (Global)
    Achieved blockbuster status in 2024. Strong performance based on growth in non-melanoma skin cancers and steady gains in lung cancer. Awaiting potential approval in high-risk adjuvant CSCC.
    Full-year global net sales: $1.2 billion (FY24)US net sales: $251 million (Q4)
    		$367 million50%——
    Dupixent (Worldwide)
    Exceptional results in type 2 inflammatory diseases, with increasing volume across all indications, age groups, and geographies. Strong uptake in recent US launches for eosinophilic esophagitis and prurigo nodularis.
    Patients on treatment: >1 millionBlockbuster indications (atopic dermatitis, asthma, nasal polyps): Each over $1 billion annual net sales
    		$3.7 billion15%——
    Dupixent (US)
    Growth driven by increased total prescriptions, including the recent COPD launch. Remains the leader in new-to-brand prescription share across all approved indications.
    Total prescriptions increase: 24%
    		$2.7 billion10%——
    EYLEA (ex-US, Bayer collaboration)
    Ex-US net sales of EYLEA and EYLEA 8 mg.
    		$888 million2% (constant currency)——

    Operational metrics

    16
    Sanofi collaboration revenue
    $1.2 billion
    Q4 FY24

    Driven by Dupixent growth and higher collaboration margins.

    Sanofi collaboration profits share growth
    18%YoY
    Q4 FY24

    Driven by volume growth for Dupixent and higher collaboration margins.

    Sanofi development balance
    $1.6 billionreduced by $175 million from Q3, $700 million from end of FY23
    end of FY24

    Expected to be fully reimbursed by the end of 2026.

    Bayer collaboration revenue
    $377 million
    Q4 FY24
    R&D expense
    $1.2 billionincrease YoY
    Q4 FY24

    Driven by costs to support advancement of Regeneron's broad clinical pipeline.

    SG&A expense
    $681 milliongrowth YoY
    Q4 FY24

    Growth primarily reflecting investments to support the launch of EYLEA HD and international expansion.

    Gross margin on net product sales
    86%up slightly YoY
    Q4 FY24
    Cash and marketable securities less debt
    $15.2 billion
    end of FY24
    Share repurchases executed
    $2.6 billion
    FY24
    Share repurchase authorization
    $3 billion
    additional

    Increased total capacity as of call date.

    Quarterly dividend per share
    $0.88
    quarterly

    Initiated by Board of Directors.

    Dupixent payer coverage (COPD)
    85%
    start of 2025

    For COPD indication.

    Dupixent payer coverage (COPD)
    90%
    start of 2025

    For COPD indication.

    Adjuvant CSCC patient estimate
    10,000
    current

    Estimated number of patients who may benefit from Libtayo in high-risk adjuvant CSCC.

    EYLEA HD and EYLEA anti-VEGF category share
    46%
    Q4 FY24

    Combined share of the total anti-VEGF category.

    EYLEA Q4 inventory impact
    $85 millionfavorable
    Q4 FY24

    Favorable impact due to higher wholesale inventory levels for EYLEA, partially offset by lower EYLEA HD inventory.

    Industry KPIs

    8
    MetricValueDetails
    Launch access metrics85%%
    Pipeline read out calendarMultiple pivotal or proof-of-concept data readouts
    Regulatory approvals filingsExpected regulatory approvals for 3 assets
    Therapeutic drug market share46%%
    Prescription volume new starts24%%
    Clinical trial efficacy safety data68% reduction%
    Collaboration milestone royalty revenue$1.2 billionUSD
    Cumulative patients uptake since launchOver 1 millionpatients

    Deals & partnerships

    1
    TruvetaStrategic collaboration to dramatically expand Regeneron's DNA sequence-linked health care database.

    Expected to include up to an additional 10 million individuals from Truveta's network of leading U.S. health system members, with the opportunity to generate both DNA sequence and proteomics information.

    Risks & headwinds

    3
    Competitive pressure on EYLEAOngoing

    Ongoing

    Mitigation: Strengthening the profile of EYLEA HD with label enhancements and prefilled syringe; prioritizing EYLEA HD uptake.

    Impact of biosimilar launch on EYLEAQ1 FY25 and beyond

    Negative impact on Q1 2025 net sales expected

    Mitigation: Focus on EYLEA HD uptake; recent legal victories against other biosimilar players may change market dynamics.

    Elevated wholesale inventory levels for EYLEAQ4 FY24, Q1 FY25

    Negatively impacted Q4 FY24 EYLEA HD sales, expected to negatively impact Q1 FY25 EYLEA sales

    Mitigation: Inventory absorption over the course of the quarter.

    What to watch in Q1 FY25

    5

    EYLEA HD uptake acceleration

    H2 2025
    Current$305M in Q4 FY24, affected by Q3 inventory
    TargetAccelerated uptake

    Why it matters

    EYLEA HD is positioned as the new standard of care, crucial for offsetting EYLEA's competitive pressure and driving future growth.

    we anticipate these enhancements will lead to acceleration in EYLEA HD uptake, starting in the second half of this year.

    Q&A highlights

    6

    Are consensus expectations for 7% annual sales erosion for the EYLEA franchise reasonable, given competitive pressures and EYLEA HD acceleration?

    Management does not provide guidance but highlighted EYLEA HD's potential as the new standard of care with upcoming label enhancements (prefilled syringe, RVO, dosing flexibility) to drive uptake. Acknowledged ongoing competitive pressure on EYLEA, including biosimilar impact, but noted a strong 46% anti-VEGF category share in Q4.

    “We do expect to see additional competitive pressure on EYLEA. Obviously there's a biosimilar in the market today, so that is a factor that needs to be considered as well, but overall we certainly believe we have a very strong position.”

    asked by Brian Abrahams · answered by Marion McCourt

    2 min read6 chapters

    Detailed Narrative

    01

    EYLEA HD Strategy and Market Position

    Regeneron is laser-focused on driving EYLEA HD adoption, leveraging anticipated label enhancements in 2025. These include a prefilled syringe, approval for retinal vein occlusion (RVO), and expanded dosing flexibility (every-4-week and up to every-24-week dosing). These advancements are expected to position EYLEA HD as the new standard of care in the anti-VEGF category, accelerating uptake in the second half of 2025, despite ongoing competitive pressures on EYLEA. EYLEA HD achieved $1.2 billion in net sales for FY24, representing 20% of combined EYLEA HD and EYLEA sales.

    02

    Dupixent Growth and Expansion

    Dupixent continues its strong performance with over 1 million patients globally across 7 approved indications, maintaining leadership in new-to-brand prescriptions in the U.S. Key growth drivers include further penetration in existing indications, the ongoing COPD launch (with broad payer coverage secured for 85% of commercial and 90% of Medicare patients), and potential 2025 launches in chronic spontaneous urticaria (CSU) and bullous pemphigoid. Dupixent worldwide net sales grew 15% year-over-year to $3.7 billion in Q4 FY24.

    03

    Oncology Pipeline Advancements

    The company expects regulatory approvals in 2025 for linvoseltamab (relapsed/refractory multiple myeloma), odronextamab (late-line follicular lymphoma), and Libtayo in high-risk adjuvant CSCC. Positive data for Libtayo in adjuvant CSCC demonstrated a 68% reduction in disease recurrence or death, contrasting with Keytruda's failure in the same setting. Pivotal data for the fianlimab/Libtayo combination in first-line metastatic melanoma are also anticipated in the second half of 2025, which could establish a new best-in-class activity.

    04

    Factor XI Program for Anticoagulation

    Regeneron is advancing two Factor XI antibodies, REGN7508 and REGN9933, into broad Phase III studies in 2025. This two-pronged approach aims to provide improved blood clot prevention with lower bleeding risk. Positive proof-of-concept data in venous thromboembolism prevention showed REGN7508 superior to enoxaparin and non-inferior to apixaban, while REGN9933 was numerically better than enoxaparin. This strategy offers tailored options for patients with varying anticoagulant needs and bleeding risks.

    05

    Obesity and Genetic Medicines

    The Phase II COURAGE study, investigating trevogrumab (with/without garetosmab) combined with semaglutide to improve weight loss quality in obese patients, is fully enrolled with data expected in H2 2025. The siRNA-plus-antibody approach for complement-mediated diseases is progressing, with pivotal results for generalized myasthenia gravis expected in H2 2025 and a Phase III for geographic atrophy initiated. Additionally, DB-OTO gene therapy for genetic hearing loss showed notable hearing increases in 10 of 11 treated children.

    06

    Capital Allocation Strategy

    Regeneron announced the initiation of a quarterly cash dividend program ($0.88 per share) and an additional $3 billion share repurchase authorization, bringing total capacity to $4.5 billion. These decisions reflect confidence in future cash flows and aim to balance capital returns while maintaining significant investment in R&D and business development. The dividend is intended to broaden the shareholder base without impacting the core strategy of heavy investment in the business and pipeline.

    AI-generated summary of the company’s earnings call. Not investment advice.