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

Good morning, and welcome to the 2020 Annual Shareholder Meeting of Regeneron Pharmaceuticals. I am Howard, your operator. At this time, I would like to turn the meeting over to Dr. Roy Vagelos, the Chairman of the Board.

Good morning, ladies and gentlemen, and welcome. It is 10:30 and time to call the Annual Meeting of Shareholders of Regeneron Pharmaceuticals to order. I'm Roy Vagelos, Chairman of the Board. I would like to welcome you to our first virtual-only annual meeting. We are utilizing this format due to concerns about the COVID-19 pandemic and in an effort to protect the health of our shareholders, employees and other meeting participants. We hope that you, your colleagues and your families remain safe and healthy. We will address Regeneron's efforts regarding COVID-19 shortly. In the event we encounter any technical difficulties that prevent us from continuing the meeting, we ask that you please stand by and allow us time to provide an update regarding the meeting. Participating in today's meeting are Dr. Len Schleifer, President and Chief Executive Officer and a member of the Board of Directors of Regeneron; and Joe LaRosa, Executive Vice President, General Counsel and Corporate Secretary and Secretary of this meeting. Also connected by audio this morning are other senior officers of Regeneron. Dr. George Yancopoulos, Co-Founder, President and Chief Scientific Officer. George is also a member of the company's Board of Directors; Bob Landry, Executive Vice President, Finance and Chief Financial Officer; Dr. Drew Murphy, Executive Vice President, Research; and Daniel Van Plew, Executive Vice President and General Manager, Industrial Operations and Product Supply. Other senior executives are also connected by audio and will be available for questions later in the proceedings. On behalf of the Board of Directors and the management of Regeneron, I want to thank you for your attendance at our annual meeting of shareholders and for solid return of proxies. Before we proceed, I will ask Mr. LaRosa to review a few housekeeping items and to submit the required proof of mailing and advise us as to whether the necessary quorum is present.

Thank you, Mr. Chairman. The meeting is being recorded and will be later available on the Investor Relations portion of our company website. Returning now to the business of the meeting. The agenda for today's meeting indicating the order in which we plan to deal with the business before us and the rules of conduct are posted on the virtual meeting website. As in prior years, this year, the company used notice and access method of providing proxy materials to shareholders via the Internet. Accordingly, the first order of business is the proof of the mailing of the notice of Internet availability of proxy materials for the annual meeting. I have an affidavit signed by Ms. Joanne Vogel, an employee of Broadridge Financial Solutions with respect to the mailing for the annual meeting, which commenced on April 24, 2020. Copies of the proxy statement and our 2019 Form 10-K are posted on the virtual meeting website. An inspector of election has been appointed. He is Mr. Thomas Tighe, an employee of Broadridge Financial Solutions. The inspector of elections has delivered a certificate to the effect that we have present, by proxy or in person, holders of record of Regeneron common stock and Class A stock representing a majority of the votes of all shares entitled to vote at this meeting. Therefore, we have a quorum present.

Thank you, Mr. LaRosa. As noted, a short list of rules of conduct of meeting has been made available. The business of the meeting is to allow shareholders of the company to vote on 4 matters set out in the agenda. After those matters have been voted upon, Dr. Schleifer will present a brief business overview of the company, and we will respond to questions from shareholders. In a moment, I will officially open the polls which will allow you to vote electronically if you have logged into this meeting as a shareholder. Please note that if you have already submitted your proxy, there's no need to vote during the meeting unless you would like to change your vote. Voting during the meeting will revoke your prior proxy. I declare the polls now open. The polls will close today following the presentation of the items of business. We're now ready to proceed to the items that you will vote on this morning. At this time, I'd like to introduce the directors, all of whom are connected by audio this morning. In addition to me, Dr. Schleifer and Dr. Yancopoulos, we have Bonnie Bassler, who has been a director since 2016; Mike Brown, who's been a director since 1991; Tony Coles, who has been a director since 2017; Joe Goldstein has been a director since 1991; Chris Poon has been director since 2010; Art Ryan has been a director since 2003; George Sing has been a director since 1988; Marc Tessier-Lavigne, who has been a director since 2011; and Huda Zoghbi, who has been a director since 2016. Mr. LaRosa, will you please outline the 4 items of business set out in the agenda?

Mr. Chairman, the first item of business is the election of 4 directors as Class II Directors to serve until the third annual meeting following their election and until a successor is duly elected and the election of one director as a Class III Director to serve until the next annual meeting following his election and until a successor is duly elected. The nominees for Class II Directors are Dr. Joe Goldstein, Ms. Chris Poon, Dr. Roy Vagelos; and Dr. Huda Zoghbi. And the nominee for Class III Director is Dr. Tony Coles. Each of the nominees is currently a member of the Board of Directors and has been duly nominated. The Board of Directors has recommended a vote for each of the nominees. The second item of business is the ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ended December 31, 2020. PricewaterhouseCoopers LLP now serves as the company's independent registered public accounting firm and has served in that role since 1988. A representative of that firm, who is with us by audio is Chris Mutter. Thank you for joining, Mr. Mutter. PricewaterhouseCoopers has been recommended and appointed by the Audit Committee of the Board of Directors to serve as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. The Board of Directors has directed that this appointment be submitted for ratification by the shareholders at this annual meeting and has recommended a vote for such ratification. The third item of business is the approval of the second amended and restated Regeneron 2014 long-term incentive plan as disclosed in the proxy statement. The Board of Directors has recommended a vote for approval of the plan. The fourth and final item of business is an advisory vote on the compensation of the company's named executive officers as disclosed in the proxy statement. The Board of Directors has recommended a vote on an advisory basis for approval of the compensation of our named executive officers.

Thank you, Mr. LaRosa. If any shareholder has a question relating to any of the proposals, please submit them using the virtual meeting website and identify yourself. As a reminder, there will be ample opportunity for general questions about the company later in the proceedings. If there are no questions, I will be closing the polls momentarily. Most of you have already voted by proxy and do not need to vote again at this time unless you wish to change your vote. However, if anyone would like to vote, please do so now. [Voting]

I declare the polls now closed. I would like to call on the inspector of election to report on the results of the voting.

Mr. Chairman, the results of the voting are as follows: with respect to the first item of business, the election of 4 Class II Directors for a term of 3 years, and the election of 1 Class III Director for a term of 1 year, all nominees have been elected by the affirmative vote of a majority of the votes cast in person or by proxy at this meeting. With respect to the second item of business, ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020, such appointment has been ratified by the affirmative vote of a majority of the votes cast in person or by proxy at this meeting. With respect to the third item of business, approval of the second amended and restated Regeneron 2014 Long-term Incentive Plan, such plan has been approved by the affirmative vote of a majority of the votes cast in person or by proxy at this meeting. With respect to the fourth and last item of business, approval on an advisory basis of the company's named executive officers as disclosed in the proxy statement, such compensation has been approved by the affirmative vote of a majority of the votes cast in person or by proxy at this meeting. My certificate as inspector of election will be executed and delivered to the Secretary of the meeting.

Thank you. Now Dr. Schleifer will provide an update on the company after which my colleagues and I will be glad to answer your questions.

Well, thanks very much, Dr. Vagelos, and welcome to our virtual presentation of the company's progress. If you take a look at Slide 2 for a moment, you'll see our requisite note regarding some of the forward-looking statements that we may make and our non-GAAP financial measures that we use and so you should familiarize yourself with the risks associated with our business; it is a risky business. As we move ahead to Slide 3, the end of last year marked the end of a decade, and I thought it's worthwhile that we take a look back and see how did your company do over the course of the decade. And from our perspective, it was a decade of innovation, value creation and transformation. At the beginning of the decade, we had 1 small FDA-approved medicine, and we now have 7 FDA-approved drugs. At the beginning of the decade, we had just slightly more than a half a dozen candidates in clinical development, now we're approaching 2 dozen novel candidates in clinical development. Our aggregate product sales by us and our partners was under $20 million at the beginning of the decade, it is now over $10 billion. We had 1,000 employees, and now we've grown to 8,000-plus employees. At the beginning of the decade, it's fair to say we had a lot of big ideas. And I think it's also fair to say that we had a lot of ideas realized, but we believe that there are even bigger ones on the way. So it's been quite a decade for the company. How has it been for our shareholders who are with us during the course of this decade? Well, I'm proud to say that we were the #8 best-performing stock in the S&P 500 over the course of the decade with a staggering total shareholder returns. At the beginning of the decade, our stock price, if I recall correctly, was around $25. And now there are days that our stock goes up $25 or down $25 in a day, but is now currently around $600, giving a rather remarkable return and once again, ranking us #8. But what about those who've just joined us recently? Well, I think there's hope for them, too. Since the beginning of this year, we are the #3 best-performing stock in the S&P 500. So I think this is the case where over the long term, when you create value and you focus on value creation, value gets delivered. If we can go to the next slide, please. So let's pause for a minute. Obviously, we're in the midst of a terrible pandemic and ask what is COVID-19, what kind of impact has it had on our business, and what have we done to respond. From a business point of view, we can say that our business has been very resilient and is, in fact, growing despite the pandemic. As expected, when the economy shuts down and people are under stay-at-home requirements for the good of themselves, their family and the country, that means that a lot of people aren't going to the doctors. And we did see a sharp decline in EYLEA U.S. sales at the end of the first quarter in late March and that continued on into the first part of April, but now we begin to see a strong rebound in demand by the end of April. Enrollment in our clinical trials is resuming as regions relax restrictions, so patients can get access to the trial centers. We're trying innovative ways to get people involved in our trials without -- with less requirement to come into medical centers. And so that is going to take some effort, but it's back on track and heading at least back to prepandemic ways. Our supply chain has really been completely stable with no interruption. At Regeneron, we feel uniquely positioned to combat with the COVID-19 pandemic. In fact, there are some who might say the company has been designed for such a pandemic because our technologies VelociSuite and other technologies and our track record for being able to do a rapid response against infectious diseases, such as Ebola, positions us extremely well to become a significant player in the COVID-19 battle. And I'll tell you a bit more about our antiviral antibody cocktail, the first such cocktail to begin clinical trials to treat SARS-CoV-2. In terms of our environment and the health of our employees and our communities, we are very focused on supporting our team. We've taken lots of approaches, and I'm proud to say that we have not had a significant outbreak of COVID-19, and our employees have taken seriously the steps they need to work at home when they can, but when they come to work, practice social distancing, wear masks, and proper sanitary steps, and that has served the company well. And so we've had no interruption, no large clusters in either our research or manufacturing operations. And we have -- are located in the epicenter -- in the actual epicenter of this pandemic in the United States in Westchester County. All of us who work at the company had friends who were affected. I had a friend who was in the hospital for 8 weeks, actually on a ventilator for 8 weeks, in the hospital for more than that. He managed to get out, thank goodness. And so we recognized that the communities around us needed our help, and we've tried to step up with providing technical assistance, financial assistance and so forth. Next slide, please. So I said our business is resilient. If you look across our key business segments, EYLEA, DUPIXENT, and oncology, we are continuing to grow. Some of our strategies in EYLEA such as diabetic eye diseases are more susceptible to people holding off coming to the doctor than, let's say, wet AMD. But in both cases, as I said, we've seen a very strong rebound. We've been able to maximize our prefilled syringe launch, which has gone extremely well. We're in the process of looking at high dose formulations. I think it is fair to say that the competition that everybody was afraid of did not really materialize in the way that people thought. So that franchise remains strong. And we are pursuing downstream down-the-years approaches such as gene therapy to try and stay a leader in this area. DUPIXENT has not only transformed the treatment of type 2 inflammatory diseases, but in the view of many experts in the area, it is serving to define type 2 inflammatory diseases. That is, if you have a type 2 inflammatory disease, most people would believe that DUPIXENT should be able to treat it if it truly is a type 2 inflammatory disease. And we're out to prove that scientifically. One cannot just treat these things without studies, tests, FDA and fund approvals, et cetera, but the science supports DUPIXENT as really transforming the treatment of type 2 inflammatory diseases. We're maximizing our launches in atopic dermatitis, in asthma, in chronic rhinosinusitis with nasal polyps, our recent approval in pediatric atopic dermatitis. We'll continue to explore asthma in the pediatric population. And we have a broad Phase III development program, including the addition now of our COPD efforts, which I'll mention in a minute. In Oncology, we have strived to become the best in class for immunotherapy treatments, and our strategy there is to compete, to enhance and to extend the benefits of immunotherapy to broader patient populations. It's important to understand that despite the dramatic benefits, and I'll show you some of the pictures that help you visualize the dramatic benefits of immunotherapy in cancer. The vast majority of people with cancer don't yet benefit. Either their cancer doesn't -- type of cancer doesn't respond significantly at all or if it is a cancer that responds frequently, only a minority of people with that cancer do respond. So there's a lot of opportunity to enhance and extend the benefits to broader patient populations. And our noncancer pipeline continues to grow with data coming up with fasinumab in osteoarthritis and the rest of the pipeline, which I'll show you graphically a little later. We can go to the next slide, please. So -- and I'm going to try and move along briefly because I can't see all of you cheering then I should keep going at length. So I'll try and pick up the pace a little bit, but -- and leave these -- make sure these slides are on our website that you can look at. But I can say, EYLEA has been a remarkable product almost for the entire decade. And to be such a large product with over $1 billion in quarterly sales in the United States alone to be growing at double-digit rates is rather quite striking. In the first quarter, we nearly did $2 billion. We were at $1.85 billion global sales of the product. And as I said, the COVID-19 impact has been limited. That we did see the shop sales decline in late March, early April, but a very encouraging demand rebound, which began in late April. Next slide, please. DUPIXENT really just continues to deliver. This we are developing -- this is a Regeneron discovery that we are developing, have developed with Sanofi and are commercializing with Sanofi. You can see the striking quarter-over-quarter growth and the total DUPIXENT prescriptions remain resilient. There was some significant impact with the new initiations for these types of diseases, while serious, not life-threatening. So new patients not getting to the doctors for new initiations in March and April. But now we're beginning to see that rebound in May. In late May, we had pediatric atopic dermatitis approved for 6-year olds and that launch is underway. And the auto injector, which we hope will be approved in a little over a week. Next slide, please. So we've told you over the years if those of you who've been coming to our shareholder meetings, that DUPIXENT really is a pipeline in a product. And if you look over this chart, you can see that we have many important approved indications, we have lots of near-term opportunities, and we are pursuing longer-term opportunities out there. And I think this next slide shows you some of the future indications we're looking at. Here's some recent positive eosinophilic esophagitis data. This is once again a type 2 inflammation of the esophagus. We were able to see almost a 70% reduction in disease symptoms compared to less than half of that for the placebo-treated people and a 60% reduction in the eosinophilic count in the esophagus. I believe this is the first time to see such a dramatic reduction by this type of agent in both the count of eosinophils, but in the symptoms themselves. Lowering the eosinophils is not sufficient here. This is a disease beyond just eosinophils. It's really a disease of type 2 inflammation, which is why I believe the DUPIXENT results were so dramatically positive. This is a serious progressive disease. And almost half of the patients in our study had to have prior dilation of their esophagus because they couldn't swallow and many had had needed steroid treatments. And the safety of DUPIXENT continues to be strong and consistent with our broad clinical and commercial experience. Next slide, please. Leaving DUPIXENT and turning to Libtayo. Libtayo has now become the leading treatment for advanced cutaneous squamous cell carcinoma in the United States, and so we're very proud of that. It's a new launch that -- we developed Libtayo with Sanofi, but this is a launch that was led by Regeneron in the U.S., a new space for us, shows that we can compete and you can compete with a combination of a strong commercial team and most importantly, I would have to say a good or a great molecule. That combination, I think, is hard to beat. Next slide, please. Where are we going with Libtayo? Well, once again, we want to lead in the space that we've sort of opened up in terms of cutaneous squamous cell carcinoma. So we've got additional studies ongoing there. Rather impressive response rate with objective response rates in over half the patients. We've also presented some exciting basal cell carcinoma data, and if you look across, you can see that the big area for immunotherapy in terms of the commercial opportunity and frankly, the number of patients affected is lung cancer, non-small cell lung cancer where we had what we think is extremely competitive data with a hazard ratio of 0.676 or in the modified intent to treat, I'll get to that in a minute, of 0.566. We believe that will support a strong regulatory package, which we will get in, in the second half of this year. We are looking at new combinations. You'll see some of that in our pipeline slides as we go forward. If you turn to the next slide, let's drill just a little bit deeper down into lung cancer. This was a large study. It was conducted around the globe, 700 participants and we had a striking survival benefit such that the study was considered overwhelmingly positive, which, therefore, when the study is overwhelmingly positive, you're allowed to stop it early, and that's exactly what was recommended to us, and that's what we did. We had a hazard ratio of 0.676. But if you look more carefully at the people who actually buy a validated assay, had greater than 50%, and this is a standard approach now in this field. You saw a remarkable hazard ratio for survival of 0.566 with a P of 0.0002 (sic) [ 0.002]. Once again, regulatory submissions, second half of this year. If you go to the next slide, for those of you who don't like to see medical slides, turn away, if you will, but this is an example of what this agent has been able to do. And the first time, we think, to demonstrate these clinically meaningful effects in advanced basal cell carcinoma and you can see this patient's disease, which really was truly eating away at his face and down into the tissues below in his ear. And you can see remarkably what happened when he was treated after progressing on the standard of care, vismodegib, he was given Libtayo and had a rather dramatic response. The response rate has been about 30%, and we think that should be sufficient for regulatory review, and we plan to submit that later this year. Next page. So Regeneron, I would have to say, it does something that nobody else has been able to do in this industry, led by our Co-Founder and our Chief Scientific Officer and President, George Yancopoulos. They have created the ability to be at the forefront of both biology and technology. There are lots of people who do good biology. I'm -- personally I'm biased. Your company's biology, I believe, is the standard for the best in the industry. And there are lots of people with good technology, but once again, I think that your company is at the forefront, the true bleeding edge of technology development. But I don't know of any other company, in my view, that does as well works at the intersection -- at the cutting-edge intersection of both biology medicine and technology. And these technologies, we are bringing to bear to cancer, and we brought them to bear for our approved drugs for Ebola treatment, you'll hear more about it in a minute, our COVID treatment, but we're also bringing them to bear on our oncology portfolio, the ability to create and manufacture these technogenious molecules that can really manipulate the immune system we're extremely proud of. You can take a look at this at your leisure. If you go to the next slide, you can see what these things do. They have remarkable results. These bispecifics, which can bring together immune cells to tumor cells and make the immune cells kill the tumor cells, and you see these dramatic responses, responses of up to 95% in follicular lymphoma, the refractory type, and 70% in relapsed/refractory diffuse large B-cell lymphoma, which is difficult to treat and even in those who have been treated by the new fancy approach and failed with the so-called cellular or CAR-T therapy, you see these dramatic responses with our bispecifics. We're also starting to see the same kinds of responses as we look at other bispecifics, such as with our BCMA in myeloma, and there's lots more -- many more of these to come. But we're not done with just using Libtayo or just using a bispecific or one of many bispecifics. If you go to the next slide, we are also looking to optimize the immune cells by bringing another signal that's required, this so-called costimulatory molecule, our CD28 bispecifics, which we think can really optimize the whole immune system to attack cancers that may not have been able to attack by immunotherapy, such as PD-1 in the past. This is extremely exciting. We're in the clinic with that, too early to talk about results yet, but we're very excited for the possibility that we really can begin to extend beyond simple PD-1 checkpoint inhibitors to address other cancers. Next slide. Okay. Let's turn the page, if you don't mind to what are we doing with our biologic and technologic capabilities to address this COVID problem. And here, I need to repeat for you a little basic immunology lesson, which I was given by our scientists. So I hope I get it right for you, but it's pretty straightforward, which is that the immunity that you get doing your lifetime is called adaptive immunity. It adapts to things in the environment. And there's a couple of types; there's both passive and active, and they both use antibodies. What are antibodies? They are the attack missiles, the attack missiles of the immune system that allows you to deal with things, primarily designed to deal with things like viruses. And so what is the difference between a passive immunity and active immunity? Well, the passive immunity is simply giving somebody antibodies. We provide you or your mother provides you in-utero or through mother's milk. You are provided these special missiles, these antiviral antibodies, and this is a well-known and well-established approach. The use of such an approach has really been recently innovated to go after infectious diseases, such as respiratory syncytial virus, another respiratory virus as well as Regeneron's Ebola therapy, which is a cocktail, and we'll get back to that in a minute, that saved the lives of people with Ebola. Fortunately, that really never made it as a global pandemic. It's a terrible disease, but knowing that we can treat something and we're bringing this product to countries in Africa that needed and this is under review at the FDA for approval. If you turn to the next slide, just one quick lesson. And maybe you can look at this at your leisure. A lot of people get confused, and I get the question a lot. We all get the question, well, how does Regeneron's antibody approach differ from the vaccine approach. And it's pretty simple. The vaccine approach is intending to mimic what happens when a person were to get an infection. So if you got an infection with a virus, your immunity would kick in and over a several-week period, you would generate these antibodies that would help you clear the infection. But sometimes, it's a race. Can you develop these antibodies fast enough before these viruses can kill you. And so what have people figured out, they figured out, well, maybe we can trick the immune system with a vaccine and get you to have this immunity that's ready to go, locked and loaded. So you don't have to build the missiles, put them in the missile launchers and get ready to kill something -- and in the meantime, you've been killed. The idea with a vaccine is to make you locked and loaded. How do we do that? Variety of ways, you give something that looks like the virus, a piece of protein, a virus that's been inactivated by heating, a virus particle that's coding one protein by some DNA. Lots of different approaches, but the basic concept is all the same, which is we are trying to trick the immune system to think that it's seeing a virus so that when it sees the real virus, it is locked and loaded and ready to go. There are a lot of issues, things can go wrong with vaccines. But when vaccines are proven safe, it's really one of the most effective ways to combat disease. Vaccines have really eliminated scourges in the past, such as small pox and polio. And I'm optimistic that vaccines will come through for this pandemic. It will still take time. It won't be effective for everybody, but the vaccine should have a role to play. And frankly, we at Regeneron are very proud, very proud of how the biopharmaceutical -- innovative biopharmaceutical industry has stepped up. So many people working on vaccines. But that's the vaccine side of the world. But even with a vaccine, not everybody is going to have the missiles locked and loaded, and so there is a way before we get a vaccine or if you don't respond well to a vaccine to potentially prevent you from getting the disease or even treating you is by giving you these missiles that we make the missiles, the body doesn't have to make them, we make them by fancy technology and we give them to you. You don't have to worry about all the details. That's why -- what your company takes care of. And Regeneron is certainly a leader, certainly a leader in the field of generating antibodies. And as I said, generating the cocktail of antibodies for Ebola turned out to be something that we think is extremely important. If you go to the next slide, there's some cartoons that shows you the virus in red in the top left panel and a healthy cell in blue. And this virus has these spikes that stick out, these red spikes, they have to lock on to the healthy cell. And if they lock on, they can be sucked inside the cell and do a lot of damage. If you want to stop that, what does the immune system do? Or what do our antibodies do? You bind to that spike and you don't let the virus hijack a lift inside to the cell. You basically are stopping this at the entry point. You don't let the virus even enter the cell. Now there's a bit of interesting discussion going on in the scientific literature, which you should know about. 2 very important papers have recently been accepted to be published by science by -- from the Regeneron Group, which I think not only validates our ability to get these really potent antibodies, but it shows the importance of taking this cocktail approach. The whole concept here that I want you to just take away is that what we've learned over the years, and we've learned this from AIDS treatments and other viral treatments, is that if you just give one antiviral, that virus will spontaneously mutate, and then the virus that's mutated may be resistant, and you can kill all the viruses of the first strain, but a whole new strain can come out. Well, what science has proven and now what these -- with other viruses, such as the AIDS virus, that a cocktail approach can prevent this mutant escape, if you will. And that's what these dramatically important papers show. I think they raise a legitimate question that people should ponder carefully as to whether monotherapy really makes any sense, that is whether single antibodies make any sense. The Regeneron team felt that the right thing to do, we had single antibodies, we could have gone in. They thought the right thing to do was to go with a cocktail so as to not have these new strains being selected for and now circulating and potentially doing problems. As you may have seen, we've started treatment. If you go to the next slide of our protocols, we have 4 different approaches. And the first couple, the ones on the top are underway, and we're excited to eventually enroll thousands of people in all these studies, and we hope to have hundreds of thousands of preventative doses available per month beginning at the end of the summer and potentially data around the same time that might suggest our approach does, in fact, make sense the way it did with Ebola. So fingers crossed. This is Regeneron's response. You could say that in some respects, your company was built in its immunology knowledge, it's medical knowledge and its technological capabilities. It was built to be the company to respond. We think there were other fine companies that are trying to do this. There'll be other approaches. We hope they take our scientific paper seriously and think about cocktail approaches. But we need many approaches because capacity will be limited. We will be limited probably with vaccine capacity, we'll be limited with antibody capacity. So we need as many people working on this. And frankly, this is not a time for the industry to be disparaged. It's frankly, a time for people to root for success. We're rooting for success at Regeneron, and of course, we're rooting for success anywhere it might come from, but this is a problem that our industry is built to solve, and I believe I'm optimistic it will be solved. If you go to the next slide, I just want to remind everybody that when this -- it seems like such a long time ago, but when this pandemic started and it really hit hard in March and April and we watched the daily -- many of us watched the daily news conferences. In our state, we were glued to the TV watching Governor Cuomo tell us, well, where is the curve? Is the curve bending? How many -- are we going to have enough room in the hospital? Everybody decided we have to take a kitchen sink approach to COVID-19. And what I mean by that is we look in the cabinet, what did we have? What did any company have that we might find a reason that could potentially treat this disease? KEVZARA was one of those things. It was tried by a Chinese group with a noncontrolled study. They touted is as very exciting, it became adapted even as standard of care. And we, of course, tried it. But I have to say, approaches that are not designed based on pathology and technology for us to solve a specific problem rarely do solve that problem. People were hopeful. We have not seen encouraging data yet in this area. We are waiting for our last set of data, which we're currently only treating patients on mechanical ventilation, critically ill patients. We continue to treat that group based on an independent data monitoring committee, a recent review. But that same review said that in patients who are critically ill but not on mechanical ventilation, KEVZARA actually showed no benefit and actually had more deaths than those not treated. So kitchen sink approaches, lots of talk, but when you get right down to it, you do good science, it's not a superlative cause for optimism there. We will finish that out, still perhaps hopeful, but not very hopeful. We're most optimistic about our well-designed, properly engineered approach, our Regeneron-COV2 cocktail program. Now very quickly, if you go to the next slide, you can study this at your leisure. You can see that when we -- for those of you who are still here, the end of this decade, you will see many of these things becoming important drugs, many more things filling up the pipeline, I hope. And if you can go to the 25th slide, you'll see some of the near-term milestones about what's -- where our regulatory submissions are over the next couple of years. Now if you turn over to a very important slide, which is our corporate responsibility slide. You can see Regeneron has always been a company that believes in doing well by doing good. And we're proud to be recognized as top employers by Science Magazine all the time as a leader in corporate responsibility, including our efforts led by Hala Mirza and her team in environmental sustainability ethics and being a great place to work. And we constantly win serious awards and serious competition because I think we do, do the right thing. Just this week, we were recognized as being part of the 50 Most Community-Minded Companies in America. That's a well-known award for companies, who have at least $1 billion in sales. That's a really tough group to be in the top 50, and we were not only in the top 50, but we were the #1 in the health care sector, and we're very proud of that. But we do recognize that there is much more to do. We will move by the protests and the message of racial and social injustice. And we're committed to ensuring that Regeneron does its part to support a diverse and inclusive society, both within Regeneron's walls and in our community and beyond. So you can be assured that we are looking at all of these issues, and we spend a great deal of time on trying to do well by doing good. Next slide, please. Our financial performance has been strong, strong enough that allowed us to recently compete -- complete the public offering of Sanofi's stake as well as a reacquisition of the stock that we had sold to them for $5 billion. They did well on that. But we did well. We bought it back at around $510 a share. And obviously, it's a lot higher than that now. But we did it because we had strong conviction in our business fundamentals, our future prospects and our valuation. It delivered immediate accretion and leverages our strong balance sheet. And frankly, we moved an overhang on our stock in terms of this stake, which had been stated by Sanofi that they needed to sell it to raise capital. So despite all that, we were able to execute that and frankly, have that absorbed extremely well by the market. But we do continue to have disciplined financial and operational management and think carefully about how we do our strategic business development. And I think you'll see some of the steps we've taken, such as simplifying our accounting presentation so that you can understand it better, doing important collaborations, getting PRALUENT back in the United States, all these steps to make the company's operating parameters stronger. Next slide, please. And finally, for those of you who are still paying attention, and if you'd like, you can take a look at how we reconcile our GAAP net income to our non-GAAP presentation. And with that, I am delighted to turn this presentation back over to our Chairman, Dr. Vagelos. Thank you.

Thanks, Len. I always wonder why you can't be a little more enthusiastic in discussing the results of the company. But I think you topped all years this evening today, terrific. The meeting is now open for questions. If you would like to ask a question, please submit your questions using the virtual meeting website and identify yourself. In order to conduct an orderly meeting, we ask that participants follow the rules cited in the rules of conduct. We intend to answer questions as time permits and in accordance with the rules of conduct.

Mr. Chairman, we have a question from the virtual meeting website. This question comes from Joseph Karas on behalf of the North Atlantic States Regional Council of Carpenters. I will read the question as presented by Mr. Karas. Mr. Chairman, the Carpenter Union Pension Funds have a collective ownership position of 257,400 shares of company common stock. As long-term shareholders, we appreciate the efforts of the company to address the difficulties faced by employees during the COVID-19 pandemic. At this meeting, both the named executive officers' executive compensation and an amendment of the long-term incentive plan have been voted upon. The use of stock options is a critical component of executive compensation and closely tied to the execution of the company's strategic business plan. The 4-year pro rata vesting schedules associated with the options are the shortest used for any form of equity grants. Could you please speak to the thinking associated with these schedules that could convey considerable long-term compensation value to an executive in a relatively short period of time?

Mr. Schleifer, could you handle that?

I'll be glad to. Well, first of all, thank you, Joseph, for your question. Thank you for your ongoing support as a shareholder. And let us say, we recognize how difficult this pandemic has been for the construction industry, and we hope that we will all be able to get back to business as usual and that your people can help rebuild the economy and frankly, the country. So thank you. In terms of your question, we look very carefully about our compensation practices. We spend a great deal of time trying to make sure that they are competitive, that they tie people to the success of the company, they reward people for the greater good. So it's not just everybody is focused on an individual, how they are. Everybody is, through these stock options, tied to how your company is doing. In terms of -- so we do find stock options to be a very strong compensation tool. It is true that sometimes it can generate wealth, but there are times that for 4 or 5 years, the stock doesn't move. And so sometimes it takes a little longer to generate wealth. But once again, we do try and match the interests of our shareholders, with our employees, so that people feel tied to the same long-term goals. In terms of the time period of vesting, we try and look carefully at industry practices. And currently, we believe that our vesting schedule is very consistent with almost all the industry practices, but we can look at that again. So thank you for your question, and good luck to your members.

Yes. Mr. Chairman, we have another question from the virtual meeting website. This question is from Kenneth Pariser, and the question is as written. What are the goals of continuing to develop pozelimab in PNH when eculizumab is currently approved? Are there clinical features of PNH that pozelimab addressed that current treatments do not adequately manage?

Dr. Schleifer, would you handle that?

Sure. Maybe my friend and colleague, Dr. Yancopoulos, if he's still on the line wants to handle that one.

Sure. I'm here. I've been fascinated by the presentation. And it's incredible to see it all put together on a few slides. All those years and decades of effort coming together. In terms of this, this is a great question. And as I'm sure all the shareholders know, in some cases, we have programs that are first-in-class. The first drug that can really make a difference, like DUPIXENT is a great example of such a drug that has changed an entire landscape for all these allergic diseases from asthma, atopic dermatitis and now you're hearing the possibilities in additional diseases and so forth. But another thing that we do is we also improve on current drugs if there are significant issues or problems or if we can improve the benefit to patients. EYLEA is an example of such an important drug that there were other drugs before that were not quite as beneficial to patients. And EYLEA really changed the lives of so many patients because it was such a substantial improvement. Well, we're hoping to do the same thing here. As you said, there's a mechanism for these patients who suffer from PNH or paroxysmal nocturnal hematuria, where literally there's lysis of red blood cells in your body, which, as you can imagine, leads to a variety of problems and so forth. And there is a drug that is quite, quite powerful in that regard. One of the problems is that drug has to be given by long intravenous infusion. And the patients are essentially required to take these regular intravenous infusions that take basically about a day of your life out every time you have the infusion to have it done. And so that's an issue, taking a day of your life to have the treatment, to go to a center, to have it done and so forth. And another issue is that this medicine doesn't totally control all of the patients who take it. So it blocks this lysis in the blood to a great degree. And in some patients, it blocks it satisfactorily and completely, but for substantial numbers of patients, it doesn't do a good-enough job. On top of that, this is a very expensive drug, and it's limited only to very small orphan populations because that's all the previous sponsor, because of their strategy in terms of how to price it and how to profit from it, have decided to limit the opportunities only to certain patients. Whereas we think that there's opportunities under a different strategy to maybe make it more broadly available to a variety of patients who have diseases outside this very rare PNH. So for all those reasons, we think that if you could come up with something that could be dosed much more easily and conveniently for patients and could do a much better job of controlling all of the patients instead of leaving some patients without satisfactory control of this lysis. And also, if you had a different strategy of how to make this available so that it could be available more broadly perhaps at a lower price. So for all those reasons, we think it's important for these patients, more broadly for society to have an alternative available. We've already shown that we can have pretty substantial control that seems potentially what we're looking for with what are called subcutaneous. So these could be self-administered, short, takes just a minute or so to inject yourself at home. The control might be better and it could allow more broad use outside of these indications. And moreover, we're not just developing a better antibody that can be given more easily, conveniently and control the disease better, but we're pioneering with our new collaboration with Alnylam that we're very excited and happy about. They have a whole new technology, not an antibody, but what they call an siRNA that literally can shut production of the problematic protein in the liver using a new whole genetics medicines approach. And that works to a degree, not so well on its own. But we believe that we can create now a first-in-class, once again, what we love to do most of all, a whole new way, a whole new mechanism of attacking the same target by combining both an antibody and an siRNA that might have the best of everything. It might make it easiest and most convenient for the patients. It might control the patients and the problems much more powerfully. And of course, it might allow us to have a whole different commercialization strategy that can make it more broadly available. So this -- we think this could end up being making a huge difference for patients, not only for this disease, but more broadly, and we think it could be a huge opportunity for the company.

Thank you, Dr. Yancopoulos. Other questions?

Mr. Chairman, no other questions have been submitted by shareholders.

If there are no other questions, the meeting stands adjourned. Thank you for attending today's meeting. I hope to see you next year.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.