Regeneron Pharmaceuticals, Inc. (REGN) Earnings Call Transcript & Summary

All right. Good morning, everyone. My name is Cory Kasimov, I'm the senior large-cap biotech analyst at JPMorgan. And it's my pleasure to introduce Regeneron, one of my favorite presentations every week at this conference. We have another 2 for one special with both CEO, Len Schleifer; and CSO, George Yancopoulos. And please note that following the presentation there is a breakout across the hall in the [Borgia ] rooms. With that, I'll turn it over first to Len. Thank you.

Thank you, Cory. I wish your favoritism would show up in your ratings. Anyways, no, it is good to be here. Let's see. Our favorite slide. You take a look at this. This is on our website. There's a lot of things I might say here that I might regret and this should cover some of those sins. It's fun to look back a decade ago, given that this is the beginning of the decade and to see where George and me and the rest of the gang of Regeneron were and how we've progressed over the course of the decade. Back then -- and by the way, when you look back over a decade, we try and send a message that this is a long-term business, and we are in it for the long term, which means we were here at the beginning of that decade, actually in the beginning of several decades before that. We had only one approved medicine. It was a small drug. It's sold only about $18 million a year. We had 7 drugs in development at the time, which led to, over the course of the decade, 5 of those 7 to become approved drugs, which is a pretty good hit rate. The other 2 are still potentially also going to become drugs. We've progressed from there to have now 18 novel drugs in clinical development and that $18 million in sales has turned into over $10 billion in product sales of all of the Regeneron discovered products. We were a relatively small company with just about 1,000 employees that grew to -- it has grown to 8,000 employees. We had lots of big ideas. Those ideas, many have been realized, but we've been investing in even bigger ones for the future to come and George will tell you something about that. One of the things on this slide I wanted to also contrast, but it made the cutting room floor, but I'm going to say it anyway. 10 years ago exactly to the day we were in a tiny little room with 6 people listening to us, so we're glad to be here today. If you take a look at the end of the decade, it wasn't just some early advances investing on our laurels. We had a pretty big year to end the decade with lots of regulatory approvals, including advancing in diabetic retinopathy, moving forward on our prefilled syringe. We've had lots of clinical advances. George is going to get into a lot of those. I'll call your attention to the fact that we have proved in principal some very important things in immuno-oncology. And we've got some exciting potential data coming forward that we're a little bit more optimistic about now for a monotherapy for our anti-PD-1 in lung because of the objective response data that we saw. We've been executing commercially. Today, we announced how the quarter ended -- how the year ended with $1.22 billion in sales for EYLEA, and we have not yet released the DUPIXENT number with Sanofi, that will be coming up when we give our quarterly report. Our revenue has grown. And I know at least one analyst said hell would freeze over before George and Len would use their money to buy back stock, but we actually started the stock buyback program. Our near-term growth drivers are still EYLEA, which is still growing, and we still think there's opportunity for expansion, more details in a few minutes. Our DUPIXENT, which we're working on, of course, with Sanofi, which we think is really changing so much about allergic diseases with multiple indications already and we hope more to come. And oncology, which I'm going to tell you about in a minute. Plus, we have quite a few other things in the pipeline outside of oncology that could drive near-term to midterm growth as well. If you take a look at EYLEA, you'll see that this is a product that keeps on growing. You're looking back over the course of a decade almost, the drug was launched in the end of 2011. So it's -- by some measures, it's a very mature product, but it's still generating double-digit 14% year-over-year growth for the year or 13% fourth quarter of '19 versus fourth quarter of '18, not driven by inventory, driven by true demand. So we're very pleased on how this drug is performing. And this growth occurred in the last quarter, notwithstanding yet another entry to the marketplace for some of the indications wet AMD. DUPIXENT is a flagship product that we are developing and commercializing with Sanofi. You can see that the drug is already annualizing at about a $2.4 billion run rate based on the third quarter. And you can see that the growth, if you look at this graph, the growth of new -- these are weekly new prescriptions, the dips are just holiday weeks, new prescriptions growing quite remarkably, sort of an inflection point occurred about 6 months or so ago, and it continues to grow and continues to perform. We are very excited. George will get into some of the more development we're doing for that molecule. We launched Libtayo, our anti-PD-1, for advanced cutaneous squamous cell carcinoma. And you can see as we started out, there were lots of other drugs that were being used, including another PD-1 that was being used off-label in that setting. And you can see within about a year, we've become the dominant player in terms of market share for advanced cutaneous squamous cell carcinoma. So this is a product that we think has now built a foundation for us in immuno-oncology, which we hope to move forward on. If you step back and say, where were we and where did we want to go about a year ago, I think George laid out for you his strategy for the company on how we were going to advance in oncology. And I'm very pleased to say we've sort of executed extremely well on that. Our PD-1, as I said, became the #1 drug in cutaneous squamous cell. We had promising data in our first-line non-small cell lung cancer monotherapy study. We've got an interim approach analysis that will be coming up later this year, which could lead to a filing if that is successful. We're encouraged but of course, we'll have to see. We're encouraged because of the objective response rate that George will review for you. Our bispecific program, the most important thing about that is not only do we have 2 drugs already that are looking good in specific diseases, our drug for non-Hodgkin's lymphoma and very early data, but our drug for myeloma, we have validated, clinically, the platform of our bispecifics, a very natural proprietary format. We can now roll out lots more bispecifics. In fact, you'll hear about that we have now started on a journey with a whole new class of bispecifics, our costim or costimulatory bispecifics, which was recently written up in the scientific literature just published last week. We continue to do business development across our portfolio. Our strategy is to maximize our opportunities and the partners that we work with by choosing partners that are like-minded, driven by science and where we can contribute technology know-how and they can contribute technology know-how, and you can -- you'll see a lot more of business development activity, and this is just some of the ones that are already ongoing. We have a lot coming up in terms of regulatory submissions, you can peruse this chart at your leisure, just call your attention once more to Libtayo, potentially this year or next, based on an interim analysis of our first-line non-small cell lung cancer, same thing between '21 and '22, our 1979, which is our bispecific for non-Hodgkin's lymphoma. So this is just our regulatory submissions. The pipeline is very full and quite robust. I just want to make a couple of more notes and then really turn it over to the heart of the presentation, we are looking forward to commercially expand a little bit outside our home base, the United States. And we think we can do that by leveraging our co-commercialization rights for DUPIXENT in a low-risk manner. We also heard feedback from our shareholders that we needed to simplify our relationship with Sanofi and allow us to focus on DUPIXENT. It's really been great. A short period of time, we've gotten to know Paul Hudson very well. He seems to be quite capable and quite focused on making DUPIXENT into a really mega blockbuster product. The DUPIXENT terms are unchanged, there's tremendous focus on executing on that between the companies and a lot of credit to Paul for bringing additional focus to this program. PRALUENT, KEVZARA will be simplified. We'll get the rights to PRALUENT in the U.S. and they'll get ex-U.S. PRALUENT and KEVZARA. This will result -- we had a lot of losses and a lot of difficulty, I think, for some of our shareholders to understand some of our financial statements. This will all be simplified now as -- and it should improve profitability by really not having to have 2 companies focusing on products that really aren't nearly as important as DUPIXENT, which really demands the attention of both of us. So in summary, over the last decade, we have transformed Regeneron into what we think of as a premier biopharmaceutical company. The end of the decade looked as promising -- looks as promising to us as the beginning of the last decade. We think that the momentum we have going forward really will serve us well, and I'm going to turn it over to George.

Thanks, Len. And as I hope you appreciated from Len's remarks, the big ideas we had before 2010 have led to the invention of breakthrough homegrown technologies, such as our Trap technology, our VelociGene, VelocImmune technologies that created the therapeutics such as EYLEA and DUPIXENT that fueled the explosive growth of the last decade. We believe VelociGene and VelocImmune will remain foundational technologies for the foreseeable future, serving important sources of new important therapeutics. For example, even in this age of CRISPR, VelociGene remains arguably the world's most powerful way to generate genetically humanized models for target discovery and validation, while VelocImmune remains arguably the most powerful turnkey solution to make fully human antibody therapeutics to any disease target. But at Regeneron, we pride ourselves on continuing to push the edge, and we haven't stood still and we believe that we've been busy inventing the next generation of technologies that are going to deliver the breakthrough therapeutics of the future. Over the last few years, we created the Regeneron Genetic Center, becoming one of the world's leaders in human sequencing with over 1 million individuals sequenced, all linked to detailed digital health records, resulting in one of the largest and most powerful big data sets in the health information space, allowing unparalleled connectability between genetic variation and disease association, and thus allowing us a whole new high throughput way of finding and validating drug targets. We've also created important new turnkey therapeutics approaches, such as with our new classes of bispecifics that Len mentioned that derive directly from our next-generation VelocImmune mouse. And we've also brought in turnkey new therapeutic approaches via important collaborations with synergistic partnerships, such as siRNA from Alnylam and others. And all of these provide a unique capability to combine and mix and match the right set of therapeutic solutions to any disease challenge. And in that respect, I just want to provide a few very recent examples of how we have utilized our VelociGene and VelocImmune technologies to deliver potentially important new therapeutics to patients who need them. As we just announced last week, on the left side of the slide, our potentially pivotal Phase II data showed that we had -- could almost entirely block abnormal new bone formation in this tragic orphan disease known as fibrodysplasia ossificans progressiva in which patients form a second bony skeleton that traps them in their own bodies, often leading to asphyxiation. It's a horrible disease. And this new approach could prove to be a potential godsend for these poor patients. In the middle panel, when BARDA asked the biopharma industry to step up and try to help with the Ebola crisis, Regeneron responded. We utilized our VelocImmune technology to produce a 3-antibody cocktail ready for the clinic in just 6 months. And the NIH, a few months ago, announced that the PALM study going on in the Congo was stopped early as our antibody cocktail proved superior for saving the lives of patients already infected with Ebola. This is not a vaccine, this is a potential cure. And on the right side, on a totally different level, our VelocImmune technology is so flexible, it was also able to provide a therapeutic antibody that seems to almost magically and dramatically reduce cat allergy, a problem for millions of Americans. So whether it's discovering a breakthrough to potentially halt progression in a tragic orphan disease or addressing an emerging infectious epidemic or impacting cat allergy, our VelociGene and VelocImmune approaches can provide solutions over and over again. And in this regard, this ability has delivered this deep and diverse pipeline across large and specialized therapeutic areas from eye disease to heart disease, to immune diseases and cancer. And while we could speak for hours on these programs, my remaining remarks today will focus on DUPIXENT and on oncology. The Regeneron approach has created a number of important medical breakthroughs, but perhaps one of the most profound ones is DUPIXENT. For decades, Regeneron scientists worked with and followed up the seminal findings of Bill Paul at the NIH with the belief that interleukin-4 and interleukin-13 might be the key mediators of so-called Type 2 inflammatory or allergic diseases. Many of them are listed on this slide, like asthma, atopic dermatitis and chronic rhinosinusitis with nasal polyps. We utilized our VelociGene and VelocImmune technologies to validate these targets to study and test them, and finally to invent DUPIXENT as a potential therapeutic. And remarkably, our clinical trials with DUPIXENT have proved the hypothesis that interleukin-4 and interleukin-13 are indeed the key drivers of multiple Type 2 allergic diseases. And thus, DUPIXENT has the opportunity to impact millions of people worldwide suffering from these allergic diseases. We believe the current approvals for DUPIXENT in atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyps are just the beginning. As Len showed, we are positively impacting the lives of thousands of patients with these diseases each and every day. But our efforts on DUPIXENT are far from over. We have several near-term opportunities in younger and earlier stages of these diseases, particularly atopic dermatitis and asthma as well as in new settings, such as eosinophilic esophagitis and chronic obstructive pulmonary disease. In longer term, we're excited about the potential in grass allergy, food allergy and a number of new potential indications where we are now starting Phase III studies. In summary, we believe DUPIXENT can do enormous good for so many people, and we're making tremendous strides trying to grow this pipeline and bring it to so many more patients. I'll end by updating you on our efforts in immuno-oncology, where we believe we have the potential to be a major player. At a higher level, our strategy is to compete, enhance and extend the power and potential benefit of our portfolio to patients with cancer. First, we think we have an opportunity to compete in the important PD-1 space with our recently approved anti-PD-1 antibody, Libtayo. However, as you know, even in so-called responsive patients or tumors, more than half the patients do not respond. So we are working on combinations of our PD-1 antibody with novel therapeutics to enhance responsiveness for these tumors. And finally, for the many cancers, such as breast, colon, pancreatic and prostate, with very limited responsiveness to checkpoint inhibition, we have a significant opportunity to enhance the benefits of immuno-oncology to more patients by studying Libtayo in combination with a number of our own novel products. As this slide schematizes, Libtayo is foundational to our approach and the power of various technologies allows us to layer on a series of combinatorial therapeutics, whether they be the more conventional VelocImmune-derived antibodies, so-called CD3 bispecifics, our new classes of bispecifics, including costimulatory bispecifics or cell and vaccine therapies we access through our strategic partnerships. We believe that these approaches could provide significant benefits for the many patients who still need more powerful ways of fighting their cancers. In terms of Libtayo, the third FDA-approved anti-PD-1, you heard from Len about how we impressively rapid-fashion by finding a previously unrealized cancer indication, squamous cell carcinoma of the skin, got this approved and now are making important head ground in fighting this disease in so many patients. As Len showed, we are off to a great start in this disease, and we are optimistic of the role Libtayo could play in lung cancer and other tumor types. We look forward to expanding the role of Libtayo in dermato-oncology by moving to earlier stages of squamous cell carcinoma, where we have already shown impressive data in the neoadjuvant setting. And in 2020, we expect pivotal trial data in a different skin disease, basal cell carcinoma. And we are really excited to extend out and compete in lung cancer. This year, we released preliminary monotherapy response data in patients with high PD-L1 expression, showing that Libtayo nearly doubled the response rate of standard chemotherapy, some of the most impressive lung cancer response data reported. We need to see how these results will translate to the full study population in terms of overall survival, but these early results are very encouraging in the context of other PD-1-directed treatment study results. Finally, we're in the early stages of exploring Libtayo in combination with our bispecific portfolio as well as other external technologies to enhance and extend the benefits of immuno-oncology to more patients with cancer. To give you some more details about our bispecific approach, which comes from our Veloci-Bi technology, which can create and manufacture bispecifics of almost any desired specificity, we use a next-generation VelocImmune mouse as a source of several distinct classes of bispecifics. And unlike any other bispecific approach, ours have no linkers, no artificial sequences, no mutations, they are manufactured using the same process such as regular antibodies with no special approaches required, and they exhibit similar pharmacokinetics to regular antibodies. This is truly a breakthrough approach for bispecifics, unlike any other in the industry. And we make several different classes of bispecifics, not only a CD3 class that brings a killer T cell to a tumor and activates so-called signal 1 in the T cell activation process, but a novel second class that we call costim bispecifics that activate a signal 2 that is normally required to optimize cell killing by T cells. And our bispecifics are beginning to deliver on their promise in the clinic. Just last month, we showed updated data for our CD20xCD3 program in non-Hodgkin's lymphoma as well as first-time data for our BCMAxCD3 program in multiple myeloma. The Regeneron 1979 bispecific continues to show incredible response rates of over 90% in late-stage follicular lymphoma patients with more than 3/4 of the patients achieving a complete response. And in aggressive diffuse large B-cell lymphoma, we are seeing deep responses in 50% to 70% of patients with or without prior CAR-T history. Again, these are incredible results with patients who have few therapeutic options remaining. We have initiated our potentially pivotal Phase II program with this bispecific, which starts with follicular lymphoma and will soon expand to multiple aggressive lymphomas, including diffuse large B-cell lymphoma. And our second BCMA bispecific for myeloma is in the early stages of dose escalation. We are already seeing encouraging responses, including responses that are resulting in so-called MRD negativity in patients who are refractory otherwise to other treatments. Not only do these results make us believe we will play an active role in the treatment of these diseases, but these results also serve as validation of our bispecific platform, a platform where we have multiple additional bispecifics that will enter the clinic over time. Our enthusiasm continues to grow for these new classes of bispecifics, particularly our costimulatory bispecific. Just last week, we published a paper in Science Translational Medicine, outlining the preclinical data that has us excited about the potential to combine these costimulatory bispecifics with our first-class of CD3 bispecifics as well as other potential combinations, including with Libtayo. The science publication demonstrates that these combination approaches can drive even more markedly enhanced T cell killing of tumors than just our CD3 bispecifics alone, which, as I've just shown you, have already shown on their own can have an impressive activity in human trials. We have dosed prostate cancer patients with our first CD28 costimulatory bispecific in combination with Libtayo, and we plan to advance additional CD28 costimulatory bispecifics into the clinic for other cancers this year, including in combination with our CD3 bispecifics. Earlier, I showed you our Regeneron pipeline. Here, we focus on just our immuno-oncology pipeline, deep, broad and diverse on its own. The combinatorial potential is unparalleled, and we look forward to bringing additional potential treatments into the pipeline this year. Again, our biological insights, our toolkit, our technologies, our abilities to mix and match and our combinatorial flexibility, we are uniquely positioned to solve these most challenging problems in the treatment of cancer. We'll have, as Len also mentioned, quite a few key milestones coming up over this coming year. But most important, we hope it's evident how passionate we are about our approach, our science and our proven track record to deliver powerful medical breakthroughs across a diverse set of diseases. And we hope that just like the big ideas we had before 2010 led to important new medicines that drove the last decade of explosive growth, we hope that the even bigger ideas of the last few years will bring even more benefit to more patients in need, driving even more growth. Thanks for your attention.

Right, so we'll get started. This is the general break out. Len, do you want to introduce the team and then we'll get started?

Sure. We have Justin Holko who is in charge of our Investor Relations group; we have -- everybody knows George Yancopoulos, our President and Chief Scientific Officer; Bob Landry, our Chief Financial Officer; Marion McCourt, Senior Vice President of Commercial; and Cory, the analyst. Okay. Justin?

Yes. So we'll be making some forward-looking statements today. Obviously, take a look at our SEC disclosures around the risks and such associated with those forward-looking statements as they may not all come true, but let's jump in.

If you could use the mic, we are webcasting this, that would be helpful. If not, we'll repeat it.

I'll start it off though. Maybe from a commercial point of view, you guys posted a good number for EYLEA today. It's early days, but there's new competition coming to the market. Can you talk through -- maybe, Marion, for you some of the early dynamics you're seeing there and how that's playing out relative to your expectations.

The question was the -- how is the launch of another competitor in this wet AMD space impacting our EYLEA? Go ahead, Marion.

Sure. Happy to comment. So first, I always like to comment that for EYLEA, since time of launch, 8 years ago, now we've participated in a competitive marketplace. And certainly, the track record of performance is really, really strong and stable. As everyone knows, the market is growing based on demographics and prevalence of diabetes. And certainly, we're really proud with the performance that we see from EYLEA. And I think we have a highly competitive profile. As to competitive dynamic, most important to the retinal specialists and injectors is the benefits to patients in terms of their visual acuity. That is the #1 element. But beyond that, there are really important things related to things like the safety profile of the product. So now with over 25 million injections and experience of EYLEA, it is a tall bar for any competitor, current competitor, future competitor. And I think our physicians are very conscious of that safety profile, dosing flexibility, reimbursement, breadth of indications. We also are really excited at the end of last year to launch the prefilled syringe, which is also a really important line extension for EYLEA.

And then can you speak to the prefilled syringe, that's actually my next question. What that might be in the context of the kind of commercial marketplace going forward?

Sure. So we've feathered in the supply of the prefilled syringe so that's -- Len is going to repeat the question.

Yes. I'm sorry. I was going to say, Cory, if you could use the mic, that would be great.

Let me take a pause so Cory can restate and then I can come back.

Go ahead. You can -- go on.

Okay. So this is related to our plan around the EYLEA prefilled syringe. Vials will still be available in the marketplace, but the prefilled syringe is connected with efficiency, convenience for offices in terms of having everything at the ready for injections and the patient flow, of course, for these physicians is really, really high. There's also the element of safety and sterility associated with the prefilled syringe. But we introduced supply towards the end of last year, we're working towards full market supply of the prefilled syringe by the end of the first quarter of this year and that will be a ramp. So for clarity, we probably brought in about 25% of market supply, and we'll continue to ramp that up as we get towards the end of the first quarter. The interest, the uptake and the feedback we've got has been very positive.

I stole Justin's seat, so I now have a microphone. You're also still innovating on this front. You have your high-dose formulation that you've moved into the clinic. You talk about what you're hoping to do there and maybe the time to when you can initially see some data?

George?

Yes. Well, as you said, I mean we have a number of programs. We've been working on innovation in this space for a very, very long time, participated in many efforts. As you know, obviously EYLEA sets a very, very high bar. And it's been very hard to top it. We have a high-dose formulation, which we hope that it's going to increase the number of patients who can effectively be treated with longer intervals, as you know, about half the patients in certain of the studies show that they can get by with a quarterly dosing. And we're going to see whether we can do substantially better than that with the high-dose formulation, but we have new forms of VEGF blockers as well as we're pursuing all sorts of gene therapy other than longer delivery approaches. But these are all going to face a high hurdle, as we mentioned, and it's going to be a long time, I think, before the safety and the efficacy profile of EYLEA is going to be surpassed.

Okay. And then last question I'll ask for now on the EYLEA front, kind of kill two birds with one stone here because I feel you have to have the obligatory political question asked at this conference, at least with the larger companies. So kind of just maybe for Len, latest thoughts on healthcare reform as we go into an election year and potential impact it could have, not just on EYLEA in the near to medium term in terms of Medicare Part B, but also kind of more broadly that potentially we have some sort of reform that impacts other areas of Regeneron's business.

Yes. So handicapping what's going to happen in Washington is not a highly reliable occupation. The only thing I would say is that we believe that -- or we hope that market-based solutions would be the way that the problem could be solved. It is clear. This is the United States of America. People should be able to have access to drugs. They shouldn't go bankrupt, they shouldn't have to choose between food and their insulin or not be able to take a drug that can prevent blindness. That's just unacceptable. That's why we have so much angst and rancor out there among the citizenry because people are right to say that it's -- the system isn't serving them as well as it could. On the other hand, we do have to protect innovation. We have to come up with solutions that don't destroy a system that is producing drugs right now at breakneck speed, making breakthroughs. Think about it. We take for granted that somebody who's going blind, has lost vision can get an injection in the eye and see again or read again or drive again or somebody we've had people with cancer who were told to get their affairs in order and they've taken Libtayo and they've returned to a normal productive life. We also need those advances. What's going to -- what the solutions are, it's hard to know. I think one thing that I can say is when the Democrats and the Republicans reached a compromise in the Senate committee, that, to me, is something I took a close look at and I think that was a really good step, which was basically to say, we must put a cap on what seniors can pay out of pocket. They have to be able to get their drugs without going bankrupt. So I do think there's opportunity for reform. We have to protect innovation, not a lot likely to happen in election year and my insights are not particularly better than anybody else's here.

So a question for Bob, I guess. I wanted to ask about the recent changes to the Sanofi collaboration. I guess, first of all, on behalf of my team, thank you for cleaning up the model and making that a little bit easier. But can you talk about the potential impact that this move has and what it means for the business going forward?

Sure. So those that have been on our conference call last couple of quarters, we have driven to profitability of the alliance. That happened in the second quarter of 2019, probably came a little quicker than people had expected. We told everyone we're going to get good leverage. We saw that in Q3, but a little bit of a backdrop to that had been KEVZARA and PRALUENT. And we working with Marion's team and with Bill Sibold, our Sanofi friends, we've been working hard in terms of trying to get that as efficient as possible. It was the recent announcement in mid-December, where Paul and Len came to an agreement where each of these assets are probably better in each person's hands from an efficiency point of view. So again, I'm very excited, as Len pointed up on the slide earlier today with regards to -- we do expect to get much better leverage. We expect to get increased profitability. And as Cory and Matt, who is also here on his team, we're going to be able to modify our accounting. So it's kind of an unintended circumstance. But to the good with regards to the ease of the accounting, with regards to how we currently manage the Sanofi alliance, we currently have revenues grossed up. We have expenses grossed up. It does create problems with regards to modeling, particularly generalists that are not in the stock all the time. So again, a nice added benefit is that we're going to look a lot cleaner going forward.

I will say, and to Paul Hudson, the new CEO of Sanofi's Credit, he came in, take a look -- took a look at their portfolio and also had an alliance and detail and said, "Listen, we've got a tiger by the tail, if you will, and DUPIXENT doing amazing things for patients already, we've got to focus all of our efforts, our intellect, our energy, our resources on DUPIXENT. We've got to grow it to serve all the potential patients that can potentially be served, and the numbers are staggering. The number of people with asthma, the number of people with really bad eczema, even the people with chronic rhinosinusitis and future indications such as allergies. We need to focus on that. We need to make sure that DUPIXENT gets our attention and our resources and credit him for coming in and sort of whipping that up into shape a little bit by saying, let's push the other ones into each other's sort of sole management and focus together on DUPIXENT, which is what we expect to do.

And then on the Sanofi front, just given that they're your largest shareholder as well, what steps can you take to make sure if they decide to change their ownership level that it doesn't have any sort of unnecessary, unwanted disruption in the market?

Right. So obviously, there's a self-correcting aspect of this because they can't sell all the stuff instantly and they are a large shareholder. So if they were to choose to sell, I think they'd sell in an efficient way. There are manner of sale and amount of sale restrictions. First of all, they're in a lockup that doesn't expire, I think, until the end of this year.

December 20, 2020.

Right. And then after it expires, there is substantial limitations on what kind of open market transactions. So given there, enlighten self-interest and given the contractual obligations, I think we're in pretty good shape right now.

And Cory, to that point, Regeneron has posted a summary of the investor agreement in order to help investors on our website, so I do encourage people to take a look at that to get better understanding.

Okay. And transitioning over to oncology, you've had a lot of news lately on the bispecific front, maybe to begin, George, your view of the profile of Regeneron 1979 relative to the other CD20xCD3s that are out there.

Well, I think the data speaks for themselves. I mean, first, the technology speaks for itself in that, as we mentioned, we have a very unique format. We have the only really natural bispecific format that's out there, that really comes directly from a genetically humanized immune system, that doesn't have any alterations, no linkers, no mutations, no artificial sequences, no artificial formats, and these things are manufactured and they behave like regular antibodies. And that explains why it's so relatively efficient for us to make and put quite a few of these into the clinic in rapid fashion. And as we see the data, how they're behaving in the clinic is really, really promising. It validates the platform as a whole, but I think it's also beginning to distinguish it. I think the fact that we're seeing such high response rates and complete response rates in the latest stage patients that have failed all other treatments and including seeing this in people who are post CAR-T, I think it speaks very well for the CD3 class of our bispecifics. And as we tried to summarize in our presentation, this is just the first class. We've now shown that we can combine the CD3 class of bispecifics with a whole assortment of other therapeutic classes. For example, costimulatory bispecifics. This novel class of bispecifics that provides the so-called signal 2, also with PD-1s, also with an assortment of others. So we think it's just the beginning, but it's a very, very exciting beginning because, once again, these are, on their own, demonstrating such substantial monotherapy activity in such late-stage patients, that it's a very exciting place to start to already be providing benefit and then to be able to, hopefully, relatively rapidly layer on additional combinations that are going to extend and enhance that benefit.

So to that end then, can you talk a little bit about the early clinical strategy with your costim bispecific platform. And to the extent you're able to discuss kind of the trial design or initial targets dosing that you're thinking about?

Right. Well, we've already announced our first costim is already in clinical trials, and it's in a setting that I referred to in the presentation, as we all know, checkpoint inhibition, that basic immuno-oncological approach has not proven to be effective in the vast majority of prostate cancer patients with very low response rates. We've shown in our preclinical studies that if we help the anti-PD-1 along by providing this activation signal, but an activation signal specific only to the prostate cancer, not to other cells in the body, you can actually enhance the immune responsiveness and immune reaction to those tumors. So what we've done, reproducibly, convincingly, many times with these class of reagents in preclinical models, we're now taking to the clinic and hoping that we see that sort of enhanced activity. So what we are imagining, what we're dreaming about and what we hope that the technology brings us is can you imagine if you could now activate PD-1 responsiveness in prostate cancer. And if that works, then we'll be able to rollout a whole series of these for all these other settings where PD-1s on their own don't work. And it's a really, I think, envious position to be in, where we have all the tools and the toolkit. We have what we think is one of the most exciting PD-1 molecules. Certainly, those class of molecules, the science now shows, the clinical trial data now shows that they're not all created equally, and there are some that have more or less effectiveness. And it's really in a good place to have a really good PD-1 and also to now have maybe the best bispec platform and to be combined in these. So if costims can activate PD-1 responses in previously nonresponsive I/O settings, obviously that's going to make such a difference for so many patients.

As the saying goes, you can tell people, but you can tell molecules apart by the company they're able to keep. We are expecting these molecules to really be able to keep good company with the whole portfolio.

All right, great. So we're down to about 5 minutes left. Any questions from the audience? Otherwise, I'll keep going. Shy group this year. All right. So on the I/O front, still outlook for Libtayo, can you set the stage for the upcoming lung cancer interim and is this type of data set that's sufficient to file and beyond just filing, what do you need to show to ensure you also get market share?

Well, in terms of the filing, we never want to speak for the agency, but based on our discussions and based upon precedent, we're looking at overall survival in a controlled study that is our PD-1 versus chemotherapy and where we will be able to show a benefit on overall survival, then I believe that we would have a strong regulatory package that should serve the basis of approval. How the data has to look, how it has to compare, cross-studies, et cetera, et cetera, is really difficult to tell. But we know that -- at least if you look at the objective response data whether it be in CSCC or in lung cancer and looking at cross-studies, which is always hard, we have very strong data, really strong data. So if this translates into a strong OS effect, overall survival, I don't think we're going to have that much trouble getting a good piece of an extremely large market.

And I think that, as we all know, over decades, there's been, in many cases, a disconnect between overall response rates and overall survival at the end of the studies. But there's been a lot of reviews and interest in the activity in the I/O field because these are long-acting agents in terms of their biological responses. And when you get a response, you have a -- historically, a high chance of having a long-term response in those patients. Reviews have been written that show that there's a very good correlation actually between response rates with these I/O agents and ultimately, how they behave in terms of overall survival. And so once again, it's an exciting position to be in to have some of the most impressive response rates that are reported and we're hoping like it has in the history of the field, if those correlate with overall survival, that's going to translate to an important benefit to patients.

Okay. And then...

When will you share the data from the eosinophilic esophagitis Phase II study that's rolled out?

When will we share the timing of the data with the eosinophilic esophagitis study? I think that was on one of the slides, I have to admit, I can't remember off the top of my head.

Yes. We typically don't give an exact time until the studies are completely enrolled, and we have a -- and when we expect the data to be locked down. But we do expect data this year on eosinophilic esophagitis. I might say that you probably haven't heard of it, but I'm not sure you ever heard of chronic rhinosinusitis with nasal polyps. That indication is going extremely well. It's taken off quite remarkably. A lot of the ENT people are using it for patients who have not have a cure after their first surgery. It's a very tough surgery. Nobody likes it, and we're seeing some amazing results there hearing back from the field. So EoE might be something similar.

Well, unfortunately, as we all know, allergic diseases are just proliferating at an astonishing rate. It's a whole new epidemic that didn't really even exist 50 years ago to the extent that exists now. EoE was a disease that wasn't even recognized probably 10 years ago or so. And now it's just the numbers of people are growing. It's becoming one of the major reasons, actually, for infants and children failing to thrive and it's becoming increasingly prevalent in the adult population as well. And it can end up being a pretty serious disease. So it's unfortunate that these diseases are so dramatically increasing in their prevalence, but at least, we're fortunate that we have now a therapeutic that's looking like it may be able to address a lot of these allergic diseases that are rearing almost epidemic proportions.

Okay. With that, we are down to the last 30 seconds. So I think we'll end it there. Thank you, guys, very much.

Thank you.