The operator welcomes participants to the Regeneron Pharmaceuticals Third Quarter 2023 Earnings Conference Call and introduces the speakers. The call will be recorded and a transcript will be available later. The speakers include the President, Chief Executive Officer, Chief Scientific Officer, Executive Vice Presidents, and Chief Financial Officer. They will discuss forward-looking statements about Regeneron's products, collaborations, finances, and other matters. These statements are subject to risks and uncertainties.

Regeneron has disclosed material risks in its filings with the SEC, and does not plan to update forward-looking statements. They will discuss both GAAP and non-GAAP measures in their call, and provide a reconciliation of those measures. The President and CEO, Dr. Leonard Schleifer, highlights the company's strong quarter with double-digit revenue growth and progress in their R&D pipeline. He also mentions the launch of EYLEA HD and their plans for capital allocation.

The speaker will pass the call over to three other individuals who will discuss the company's pipeline, developments, commercial success, and financial results for the quarter. The launch of EYLEA HD has been successful, with $43 million in net product sales in the last six weeks of the quarter and strong demand and reorders. The company is also making progress with access and reimbursement for EYLEA HD. In the hematology oncology field, the company has made progress with their CD3 bispecific platform, with a BLA for odronextamab accepted by the FDA and a BLA for linvoseltamab set to be submitted next month. The company also reported a potential breakthrough for patients with profound congenital hearing loss.

The first patient in a clinical trial for a gene therapy designed to improve hearing in individuals with congenital hearing loss experienced positive results after six weeks. The company is hopeful that this therapy can be expanded to treat more common causes of hearing loss. The company also plans to continue investing in research and development, and has recently announced collaborations with other companies to explore new treatments. The company's focus is on generating long-term returns and delivering breakthroughs for patients.

The company presented positive two-year results for EYLEA HD at a recent conference, showing that the majority of patients were able to sustain vision and anatomic improvements with extended dosing intervals. This has the potential to become the new standard of care for wet AMD and DME. In their immunology and inflammation pipeline, their study for Dupixent in COPD met its primary and secondary endpoints, and a positive interim analysis of a Phase 3 study would allow for an sBLA submission. An interim analysis will be conducted later this year.

The company is making progress with their anti-IL-33 antibody, itepekimab, and is on track for potential regulatory submissions in 2025. They are also conducting studies on the combination of itepekimab and Dupixent for COPD treatment. In oncology, they are enrolling patients in a pivotal study for the combination of their LAG-3 antibody and Libtayo in first-line metastatic melanoma. They have also presented positive results from their Phase 2 trial of neoadjuvant Libtayo in resectable cutaneous squamous cell carcinoma and are conducting further studies in earlier stages of CSCC and other malignancies. They are also evaluating the combination of Libtayo and fianlimab in adjuvant melanoma and plan to initiate a study in the perioperative melanoma setting. The company's CD20xCD3 bispecific, odronextamab, has been accepted for review by regulatory authorities in relapsed/refractory follicular bone and diffuse large B-cell lymphoma.

The company has initiated a Phase 3 development program for odronextamab in follicular lymphoma and DLBCL, with data expected later this year. They are also on track to submit a regulatory application for linvoseltamab for multiple myeloma by the end of the year. The company is also planning to initiate a study of linvoseltamab with a co-stimulatory bispecific next year. In addition, the company is investigating bispecifics for solid tumors in combination with Libtayo and other modalities, with promising early data in advanced ovarian cancer. They are also exploring the use of ubamatamab in rare cancers that express high levels of MUC16.

The company is currently exploring multiple CD28 co-stimulatory bispecific antibodies in early clinical trials for solid tumors. They are also working on developing a PSMAxCD28 co-stimulatory bispecific for advanced prostate cancer and plan to combine it with other treatments. They will present initial data for their MUC16xCD28 costim in ovarian cancer and updated dose escalation data for their EGFRxCD28 costim in 2024. They will also begin enrolling patients in eight tumor-specific expansion cohorts for their genetic medicines, including neurological and muscle diseases. They have expanded their research collaboration with Intellia to include Regeneron's antibody target delivery technology.

The expanded collaboration aims to address a bottleneck in genetic medicines by developing a proprietary antibody directed AAV approach to deliver genetic payloads beyond the liver. The FDA has cleared a pivotal Phase 3 trial for NTLA-2001 for the treatment of ATTR amyloidosis with cardiomyopathy, making it the first in vivo CRISPR-based gene therapy to enter late stage clinical development in the United States. Alnylam has presented positive data for their Alzheimer's disease treatment and plans to initiate additional clinical programs for neurodegenerative diseases. Regeneron's first clinical program for genetic hearing loss, developed in collaboration with Decibel Therapeutics, has shown promising results in a child who received the treatment.

In the third quarter, Regeneron achieved $1.49 billion in total net sales in the U.S. They have seen positive early signals for their new product, EYLEA HD, and physicians are prescribing it for a range of patients. The company's commercial team is working to advance reimbursement and market access, with 100% of Medicare jurisdictions and many large payers already covering EYLEA HD. The coverage is outpacing recent competitive launches.

The company is on track to have a permanent J-Code for EYLEA by April 1, 2024, which will drive more uptake. Early reimbursement successes and positive physician experiences are being shared with the retina community, indicating that EYLEA HD will become the new standard of care. EYLEA remains the category leader with 45% anti-VEGF share for the quarter and over 70 million injections worldwide since launch. Dupixent global net sales grew 33% year-over-year, with more than 50,000 new patients in the U.S. alone and over 750,000 patients worldwide. In atopic dermatitis, Dupixent continues to see more than 20% growth six years post-launch.

The paragraph discusses the success and growth of Dupixent, a medication for type 2 inflammatory diseases. It highlights the confidence and adherence of physicians in prescribing Dupixent, as well as its differentiation from other medicines in the category. The drug is also expected to be approved for pediatric use and has shown promising results in various Phase 3 trials. Additionally, the paragraph mentions the success of Dupixent's partner, Sanofi, and the growth in sales for LIBTAYO, another medication.

In the third quarter, Regeneron saw strong growth in global sales driven by non-melanoma skin indications and increased utilization in lung cancer treatment. The company continues to expand access and usage in other countries following recent regulatory approvals. Prescribers are increasingly choosing Regeneron's drug LIBTAYO for their patients. Financially, the company performed well with a 15% increase in total revenues and a 4% increase in diluted net income per share. Collaboration revenue from Bayer and Sanofi also saw growth.

In the third quarter of 2023, the company's share of profits from Dupixent and KEVZARA increased by 57%, driven by Dupixent's volume growth and improved margins. However, reimbursements for manufacturing of commercial supplies from Sanofi declined due to a new manufacturing process. Other revenues also increased by 62%, including reimbursements from BARDA for COVID antibody development. Operating expenses also increased, with R&D growing by 17% and SG&A by 14%. The company also recorded acquired IP R&D expenses of $100 million and COCM of $212 million.

The fourth quarter of 2023 is expected to have the lowest COCM due to the transition to a higher yielding manufacturing process for Dupixent. Regeneron has generated $3 billion in free cash flow and has a strong balance sheet with $13 billion in cash and marketable securities. They have also announced and completed the acquisition of Decibel Therapeutics and continue to look for opportunities to utilize their financial position. There have been minor changes to the full year 2023 financial guidance and the preliminary outlook for 2024 includes continued improvements in profitability and a significant decrease in PRALUENT sales due to category and competitive pressures.

Regeneron is continuing to invest in their internal R&D pipeline in order to drive long-term growth. This will include advancing late stage programs, expanding collaborations, and making investments in their commercial business and G&A functions. They expect year-on-year R&D growth in 2024 to be in the mid-teens compared to 2023. With a strong financial position, they are able to make strategic investments for future growth. During the Q&A portion of the call, they will answer one question from each caller before moving on. The first question asked was about their capital allocation, as they currently have over $15 billion in cash and marketable securities on their balance sheet.

Bob Landry, a representative of Regeneron, acknowledges that interest rates are high, but the company is focused on using their capital wisely. They prioritize funding their pipeline progress and look for potential acquisitions that align with their goals and values. They have also been actively buying back their own stock at a good price, as they believe it is undervalued. While they are open to opportunities, they will only pursue ones that are the right fit for the company.

The speaker discusses the company's recent acquisitions and mentions their franchise fits in the business. They also mention a trial being done with Dupixent for ulcerative colitis, which is believed to be related to systemic inflammation. Biomarkers are being utilized to select patients for the trial. A question is then asked about the rationale behind the trial and if any markers are being used.

The speaker is a representative of a pharmaceutical company speaking about their decision to take an interim look at the effectiveness of their drug, Dupixent, in treating COPD. They are not able to provide details about the statistical methods used for the interim analysis, but they are working closely with another company, Sanofi, to make the process as efficient as possible. The speaker then addresses a question about the company's strategy and enthusiasm for their obesity assets, stating that they are excited about two approaches they are taking in this area.

The company has a unique collection of targets for obesity, including a new target discovered through their Regeneron Genetics Center. They are also developing a leptin receptor agonistic antibody. The field of obesity is currently dominated by GLP-1 agonists, which can cause muscle loss. The company is actively working on muscle preservation and growth agents and plans to study them in combination with existing weight loss agents. This could potentially improve the quality of weight loss and benefit patients. The company will be discussing their clinical trials in this area soon.

The company is pleased with the early sales of EYLEA HD and has received positive feedback on its effectiveness and safety. There have been switches from other anti-VEGF products, including EYLEA, and the company has a sampling program in place to allow physicians to try EYLEA HD. This has resulted in a high conversion rate to commercial orders. The company also provided an update on the biosimilar EYLEA litigation with Mylan.

The speaker, Leonard Schleifer, discusses a recent trial in West Virginia and the uncertainty surrounding its outcome. The next question is directed to Marion McCourt, who provides an update on the commercial dynamics for high dose EYLEA, including coverage and payment progress with Medicare fee for service, Medicare Advantage, and commercial payers. McCourt notes that EYLEA HD is being positioned consistently with other brands in the category and that some plans have a step edit or utilization management.

Regeneron's EYLEA HD is being positioned consistently with EYLEA and other brands, and there is no differentiation. The company received a CRL for their CSU drug, but is hopeful that their ongoing Study C will have consistent data and be viewed favorably by the FDA. They also have upcoming data at ASH for their cancer portfolio, specifically combination data for Libtayo.

The company has a large number of combination opportunities in the pipeline, with the first one being the combination of Libtayo and fianlimab, two checkpoint inhibitors. The company believes they have evidence for best-in-class activity with both agents separately and early stage clinical trials suggest a remarkable advance for patients when the two are combined. The company hopes to confirm this in a pivotal trial and if successful, it could open up opportunities in other cancers. Additionally, the company is also exploring combination opportunities with bispecifics, either with Libtayo or with each other.

The company has validated the potential of their individual agents, particularly in myeloma and follicular lymphoma. They are also excited about their costim bispecifics, but are working to address concerns about immune-mediated adverse events. Checkpoint combinations are expected to be available soon, while bispecifics are in the process of FDA approval. The company is trying to optimize the efficacy and safety profile for patients. The recent launch of EYLEA has been impacted by price, but the company expects this to stabilize in the future.

The speaker discusses the success and challenges of the EYLEA brand in a competitive market, noting its responsible pricing strategy and progress with EYLEA HD. The next question asks about the potential impact of newer mechanisms and life cycle management on the Dupixent franchise, to which the speaker responds by explaining how Dupixent addresses systemic inflammation and the Type 2 immune response.

The speaker explains that Dupixent is a unique drug because it controls the overactive immune response that causes diseases like atopic dermatitis and eosinophilic esophagitis. This makes it both effective and safe. Other drugs, like the OX40 approach, target different immune pathways that are important for fighting infections and cancer, making Dupixent stand out as the perfect drug for these conditions. It shuts down the unnecessary pathway that causes disease without affecting the body's ability to fight infections.

The speaker discusses the effectiveness and safety of Dupixent in reducing infections and treating various diseases. They explain that Dupixent is unique because it targets a specific part of the immune system, unlike other treatments which can have negative side effects. They also mention that over three-quarters of a million people have been treated with Dupixent and it has shown to be safe and effective, even in children as young as six months. The speaker also addresses a question about the potential impact of biosimilar ranibizumab on EYLEA sales during the quarter.

A number of high-volume clinics are seeing favorable margin opportunities from using more biosimilar ranibizumab, but it may be a transient impact. There is ongoing patent litigation for EYLEA, and the company expects exclusivity to expire in May. There has not been a notable impact on the market from the launch of Lucentis biosimilar. J&J had a successful first quarter with their myeloma bispecific, but they have a lot of control in the myeloma market. The company plans to launch their own bispecific next year.

The speaker discusses their strategy for competing in the late-stage market as a third to market drug. They believe their data shows potential for best-in-class differentiation in terms of efficacy, safety, and convenience. They also mention their plans for earlier lines of therapy and future combinations. Despite the large patient need, they are confident in their potential success in the market.

The speaker thanks George and the other participants for joining the conference call and showing interest in Regeneron. They apologize for not being able to answer all the questions in the queue, but the Investor Relations team is available for further inquiries. The call is now concluded and participants can disconnect.

This summary was generated with AI and may contain some inaccuracies.