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TARRYTOWN, N.Y., Aug. 3, 2022 /PRNewswire/ -- Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced financial results for the second quarter of 2022 and provided a business update.
"The second quarter of 2022 was distinguished by record net product sales of EYLEA, Dupixent, and Libtayo, as well as multiple regulatory achievements for Dupixent, including U.S. approvals for atopic dermatitis among very young patients and for eosinophilic esophagitis in adults and adolescents, as well as European approval for pediatric asthma," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "In addition, we have continued to strengthen our oncology franchise, including through the purchase of worldwide rights to Libtayo as well as encouraging but preliminary anti-tumor activity observed at higher doses of our novel PSMAxCD28 costimulatory bispecific in combination with Libtayo for advanced metastatic castration-resistant prostate cancer."
Financial Highlights
($ in millions, except per share data) | Q2 2022 | Q2 2021 | % Change | |||
Total revenues | $ 2,857 | $ 5,139 | (44 %) | |||
GAAP net income | $ 852 | $ 3,099 | (73 %) | |||
GAAP net income per share - diluted | $ 7.47 | $ 27.97 | (73 %) | |||
Non-GAAP net income(a) | $ 1,127 | $ 2,895 | (61 %) | |||
Non-GAAP net income per share - diluted(a) | $ 9.77 | $ 25.80 | (62 %) |
"We are pleased with our second quarter 2022 financial performance, including 20% revenue growth when excluding contributions from REGEN-COV. This demonstrates the continued strength of our core business," said Robert E. Landry, Executive Vice President, Finance and Chief Financial Officer of Regeneron. "Additionally, we updated our full-year 2022 financial guidance primarily to reflect the recently completed acquisition of Libtayo global rights from Sanofi, a transaction that we believe will deliver significant shareholder value over time. In the second half of 2022, we look forward to advancing our pipeline with important clinical data readouts in oncology and ophthalmology as well as continued commercial execution and prudent capital allocation to drive value creation for shareholders."
Business Highlights
Key Pipeline ProgressRegeneron has approximately 35 product candidates in clinical development, including a number of marketed products for which it is investigating additional indications. Updates from the clinical pipeline include:
Dupixent® (dupilumab)
EYLEA® (aflibercept) Injection
REGN5678, a PSMAxCD28 costimulatory bispecific antibody
Antibodies to SARS-CoV-2 virus
REGN5381, an agonist antibody to NPR1
Corporate and Business Development Updates
Second Quarter 2022 Financial Results
Revenues
($ in millions) | Q2 2022 | Q2 2021 | % Change | |||
Net product sales in the United States: | ||||||
EYLEA | $ 1,621 | $ 1,425 | 14 % | |||
Libtayo** | 91 | 78 | 17 % | |||
Praluent® | 31 | 42 | (26 %) | |||
REGEN-COV® | — | 2,591 | (100 %) | |||
Evkeeza® | 11 | 2 | * | |||
Collaboration revenue: | ||||||
Sanofi | 678 | 438 | 55 % | |||
Bayer | 358 | 349 | 3 % | |||
Roche | 8 | 168 | (95 %) | |||
Other collaboration revenue | — | — | * | |||
Other revenue | 59 | 46 | 28 % | |||
Total revenues | $ 2,857 | $ 5,139 | (44 %) | |||
* Percentage not meaningful | ||||||
** Effective July 1, 2022, the Company will record global net product sales of Libtayo. | ||||||
Total revenues decreased by 44% to $2.857 billion in the second quarter of 2022, compared to $5.139 billion in the second quarter of 2021. Total revenues excluding REGEN-COV and Ronapreve(b) revenues for both periods increased by 20% to $2.849 billion in the second quarter of 2022, compared to the second quarter of 2021(a). There have been no sales of REGEN-COV in the United States during 2022 as the Company had completed its final deliveries of drug product under its agreements with the U.S. government as of December 31, 2021.
Sanofi collaboration revenue increased by 55% to $678 million in the second quarter of 2022, compared to the second quarter of 2021. This increase was primarily due to the Company's share of profits from commercialization of antibodies, which were $497 million in the second quarter of 2022, compared to $328 million in the second quarter of 2021. The change in the Company's share of profits from commercialization of antibodies was driven by higher Dupixent profits. Roche collaboration revenue decreased in the second quarter of 2022, compared to the second quarter of 2021, due to lower sales of Ronapreve.
Refer to Table 4 for a summary of collaboration revenue.
Operating Expenses
GAAP | % Change | Non-GAAP(a) | % Change | |||||||||
($ in millions) | Q2 2022 | Q2 2021 | Q2 2022 | Q2 2021 | ||||||||
Research and development (R&D) | $ 794 | $ 714 | 11 % | $ 690 | $ 643 | 7 % | ||||||
Acquired in-process research and development (IPR&D)** | $ 197 | $ — | 100 % | * | * | n/a | ||||||
Selling, general, and administrative (SG&A) | $ 476 | $ 415 | 15 % | $ 418 | $ 365 | 15 % | ||||||
Cost of goods sold (COGS) | $ 149 | $ 539 | (72 %) | $ 137 | $ 514 | (73 %) | ||||||
Cost of collaboration and contract manufacturing (COCM) | $ 148 | $ 154 | (4 %) | * | * | n/a | ||||||
Other operating (income) expense, net | $ (17) | $ (31) | (45 %) | * | * | n/a | ||||||
* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been recorded. | ||||||||||||
** Beginning with the first quarter of 2022, the Company added this new line item to its Statements of Operations, which includes IPR&D acquired in connection with asset acquisitions as well as up-front/opt-in payments related to license and collaboration agreements. Amounts recorded in this line would have historically been recorded to R&D. This change does not affect previously reported non-GAAP results for the three and six months ended June 30, 2021 as the Company recorded no such charges during either of these periods. | ||||||||||||
Other Financial Information
GAAP other income (expense) included the recognition of net unrealized losses on equity securities of $164 million in the second quarter of 2022, compared to $409 million of net unrealized gains in the second quarter of 2021.
In the second quarter of 2022, the Company's GAAP effective tax rate (ETR) was 11.5%, compared to 17.4% in the second quarter of 2021. The decrease in the GAAP ETR was primarily driven by the proportion of income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate, the impact of income earned in the United States during 2021 related to REGEN-COV, and, to a lesser extent, stock-based compensation. In the second quarter of 2022, the non-GAAP ETR was 13.6%, compared to 17.0% in the second quarter of 2021.
GAAP net income per diluted share was $7.47 in the second quarter of 2022, compared to $27.97 in the second quarter of 2021. Non-GAAP net income per diluted share was $9.77 in the second quarter of 2022, compared to $25.80 in the second quarter of 2021. A reconciliation of the Company's GAAP to non-GAAP results is included in Table 3 of this press release.
During the second quarter of 2022, the Company repurchased shares of common stock under its share repurchase program, and recorded the cost of the shares received, or $394 million, as Treasury Stock. As of June 30, 2022, $2.099 billion remained available for share repurchases under the program.
2022 Financial Guidance(d)
The Company's full year 2022 financial guidance consists of the following components (inclusive of updates made in connection with the Company's purchase of Sanofi's stake in Libtayo and acquisition of Checkmate Pharmaceuticals):
GAAP | Non-GAAP(a) | |||
R&D | $3.485 billion–$3.655 billion (previously $3.270 billion–$3.500 billion) | $3.100 billion–$3.240 billion (previously $2.900 billion–$3.100 billion) | ||
SG&A | $1.990 billion–$2.110 billion (previously $1.890 billion–$2.030 billion) | $1.740 billion–$1.840 billion (previously $1.650 billion–$1.770 billion) | ||
Gross margin on net product sales(e) | 90%–91% (previously 89%–91%) | 92%–93% (previously 90%–92%) | ||
COCM(f) | $710 million–$760 million (previously $750 million–$830 million) | * | ||
Other operating (income) expense, net | ($40) million–($60) million (previously ($60) million–($80) million) | * | ||
Capital expenditures | $620 million–$670 million (previously $630 million–$700 million) | * | ||
Effective tax rate | 12%–13%** (previously 11%–13%) | 13%–14%** (previously 12%–14%) | ||
* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been or are expected to be recorded. | ||||
** ETR guidance excludes the impact of the provision requiring capitalization and amortization of R&D expenses enacted as part of the Tax Cuts and Job Act (TCJA), as management's current expectation is it will be deferred or repealed by Congress in 2022. If this provision of the TCJA is not deferred or repealed, the Company would expect its ETR to be lower than the guidance disclosed herein. | ||||
A reconciliation of full year 2022 GAAP to non-GAAP financial guidance is included below:
Projected Range | ||||
($ in millions) | Low | High | ||
GAAP R&D | $ 3,485 | $ 3,655 | ||
Stock-based compensation expense | (370) | (400) | ||
Acquisition-related integration costs | (15) | (15) | ||
Non-GAAP R&D | $ 3,100 | $ 3,240 | ||
GAAP SG&A | $ 1,990 | $ 2,110 | ||
Stock-based compensation expense | (240) | (260) | ||
Acquisition-related integration costs | (10) | (10) | ||
Non-GAAP SG&A | $ 1,740 | $ 1,840 | ||
GAAP gross margin on net product sales | 90 % | 91 % | ||
Stock-based compensation expense | ||||
