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

Got it. That makes sense, actually. Maybe moving to the manufacturing side of it. And I think, Justin, you would recall as well that there was a -- there were quite a bit questions around how much capacity you have. And you did say that you have tens of thousands of capacity at that time for treatment and hundreds of thousand for vaccine approach. Now with the recent Roche collaboration, what it does to your capacity? And do you think it is enough to meet demand? Or do you -- should we expect more manufacturing collaborations going forward?

It's up, I guess. It's a great question. And obviously, BARDA is basically supporting us to use all of our existing American manufacturing capacity for the COVID antibodies. And so we're actually actively moving some of our products that are manufactured here in Rensselaer at our manufacturing facility. We're moving them to Ireland, so that we can have even more capacity here. And then what the Roche deal does is it allows us to expand by about 3.5 fold, the amount that we can make, and we will be focusing on supplying the U.S., and Roche will be focusing on supplying the ex-U.S. And depending on how robust the data is, if there's a lot of demand, then we will look for other ways to try to increase the supply through other potential partners.

Got it. One more question on the COVID side. So last night, we learned about AstraZeneca safety issue in one patient there. Just wanted to get your thoughts on because the approach is similarly -- your approach is also similarly trying to target the spike protein there. And there are quite a few approaches, which are kind of similar in that regard. So do you think it is related to spike protein? Or any other thoughts you have on that particular clinical hold there?

No. I don't think it's related to spike protein, per se. If you think about all of the vaccine trials going on in the world right now, and there's quite a few, and all of the other approaches, like our approach with antibodies, and so far, this is the only event like this that's been reported. And so we don't know if it's from their particular vaccine approach or whether it's just a random event that occurred that had nothing to do with the vaccine. And we anxiously look forward to their follow-up evaluation.

Got it. So you don't think spike protein is the reason there, and it is just one -- probably, like we have treated thousands of patients already with the...

Yes. Yes, tens of thousands.

Got it, got it. And so maybe is now moving into -- moving on to Dupi again. So scientifically, we have talked a lot about the rationale for targeting both IL-4 and 13 in atopic dermatitis. But still, we hear a lot of questions around potential competition from IL-13s, JAK inhibitors and even -- so not in atopic dermatitis, but in asthma, you could probably see TSLP as well. So mechanistically, if you think about those approaches versus the IL-4 and 13, what do you think about the potential competition for Dupi going forward in both atopic dermatitis and asthma?

Yes. Obviously, we carefully evaluate all potential competitors and follow them avidly. I think that we found a sweet spot where we, over decades of effort, found the key signaling pathway for the type 2 syndromes that really drives it from the top, and that's the IL-4 receptor responding to both IL-4 and IL-13. If you look at the IL-13s, they may have some activity. Some of them do, obviously, but it just doesn't appear to be as broad as it is for Dupixent. And in asthma, their FEV effects are not similarly as robust across the board. The IL-5s, yesterday, even Nucala came out and they didn't have very good data in a type 2 indication, so IL-5 blockade. There is the JAK I small molecules. I don't know if everybody knows that Regeneron was one of the early people involved, and me and George and others, in actually studying the whole cytokine receptor signaling pathways. JAKs and stats, we published some seminal papers back in the '90s, even before IL-13 was actually discovered, interestingly enough. But the thing about JAKs is that they're just not as specific. They have a broader number of cytokine receptors, family members that they actually respond to. And so it's not surprising that they have a larger panoply of effects than the specificity given by Dupixent. And I think that's what leads to them having black box warnings, and you have to do careful routine laboratory monitoring for the small molecule JAK Is that we don't have with Dupixent. The safety on Dupixent has really been fantastic. We have a 3-year safety data set now. There's no black box warning. There's no routine lab monitoring. It's been shown to reduce the risk of serious and severe infections, including skin infections, and we have an extensive pediatric program. And also just the ability for it to be active across a lot of different type 2 diseases means that patients who have multiple syndromes can have alleviation with Dupixent from many things that ail them and not just targeted at one of the possible problems that they have. So we're comfortable right now and very happy that we have Dupixent.

Got it. No, that makes sense, actually. Maybe staying on the commercial side of the business for one more question. So EYLEA is still growing, and it has been an unprecedented success in the therapeutic world. And you did make some attempts to further enhance the profile in life cycle management with PDGF and ANG2, but it seems like EYLEA is too good a drug to beat actually than kind of combinatory approach. At this point, do you -- like do you have any plans -- or do you think Regeneron as a company could invest further to come up with something that can prolong the life cycle of this product or your eye business? And what are you trying to do? Because Roche has a poor delivery in bispecifics there, and you are also one of the pioneers in bispecifics. Is there something you could try to do to elongate this franchise further?

Right. I mean, as evidenced by our trials to combine EYLEA with ANG-2 blockade or with PDGF receptor blockade, we continue to try to find ways to increase the high bar of efficacy of EYLEA alone. And even with very optimal antibodies, like the ANG-2 antibody was a very good antibody. We were one of -- we discovered ANG-2 in the first place, so we've been studying and working on it for a very long time. And it didn't show a big enough effect in a very robust study to actually make it worthwhile to block both. There's actually no rationale to have a bispecific antibody with one arm binding VEGF and the other arm binding ANG-2 because it prohibits you from doing individualized dosing. The only advantage is maybe just having to inject one protein and maybe a regulatory advantage of only -- not having to show the combination of -- the contribution of individual effects. But we continue to look at all things that might enhance EYLEA. Obviously, we're doing high-dose EYLEA to try to increase the duration or the response time interval that you have more patients that can go for longer intervals. So it's a big franchise for us. And obviously, we do a lot to try to look at anything we can to extend it.

Do you have any plans to think about the port delivery at all? Or do you think...

We haven't talked about anything with the port delivery, though.

Got it. Maybe moving to Libtayo. I mean, you had a nice win in April with non-small cell lung cancer data, showing very competitive data to KEYTRUDA. However, the question is commercial, and you have some sort of development plus commercial strategy where you plan to make it a backbone of your future therapies. Could you talk a little bit about how -- what is your strategy to actually compete in the I/O field with Libtayo as your -- as one big piece of the puzzle?

Right. Well, obviously, the PD-1, PD-L1 arena is huge. It's $25 billion and growing. And we have shown, as you mentioned, that Libtayo is very competitive. It's as good as anybody else's, and that lung cancer data was very satisfying to demonstrate that. And it actually gives us a lot of confidence moving forward in our efforts to use Libtayo as the foundational cornerstone in our I/O efforts. And so we can then confidently move forward and combine it with our bispecific antibodies or the co-stims that we're going to talk about or anything else that we have in the lab. Obviously, we're very good at making antibodies. So you can imagine that we have a large coffer of antibodies to choose from that we could combine with Libtayo. I think we believe that oncologists and other stakeholders want to have a choice in determining the appropriate pattern. And all of the effort in cSCC that we've had so far, I think, will spill over into lung cancer. So we have a competitive launch preparation underway, and we're going to share more details on that coming up.

Got it. One question we get always asked on I/O is that what is the max in this field. And obviously, high dose were tried and then the other agents were there, the latest one is TIGIT. Where do you think the space needs to go to maybe improve upon the responses that we have seen so far with the CTLA-4 or PD-1s because we have not been able to find the right dance partner.

Right. Obviously, we've done a lot of work across the board for a lot of different checkpoint combination targets. We watch TIGIT closely, obviously. So far, it doesn't look like there's been an impressive increase in activity when you block TIGIT at the same time. But we've talked about our strategy of compete, enhance and extend. So we think that, given the activity of Libtayo, we will be able to compete in the PD-1 alone market or PD-1 plus chemo. But unfortunately, even as good as the checkpoints are, there's a lot of patients that don't respond, and so everybody is looking for a way to enhance the responsiveness of different types of tumors. And one thing that we have is either combining it, as I mentioned, with bispecific -- CD3 bispecifics or the co-stimulatory bispecifics, which may be able to enhance the activity of existing T-cells that are already in the patient's body that are going to be unleashed with PD-1 blockade. And now you add in a co-stimulatory molecule to make those T-cells even more active. And then there's other tumors with limited response, and so we have novel combinations we're going to try to look at there. And so we're really excited about the future of all these bispecs, and there's even more in the labs that are coming down the line. And we also have the PiG antibodies, the Peptide-in-Groove. So we can make antibodies against the peptide in the groove of an MHC molecule, and that allows us to sample the inside of the cell. So in addition to being able to have the antibodies look at the outside of the cell, we can also potentially target mutant proteins that arise from inside the cell. So that's where we're going to go in the future.

Got it. Very helpful. And I'll probe further on that. But before that, there is an investor question on IL-33. It seems like investors have ignored off the recent data. Well, you try to combine it with -- but I mean -- so doctors have been more bullish in this question. Do you have any thoughts what are the next steps in gating factor for IL-33 here?

Right. Say -- can you say that again?

So IL-33, it seems like investors are ignoring the IL-33 after the recent data, but doctors have been a little bit more bullish than investors here according to this question. Can you talk a little bit about the next steps? And what are your thoughts on IL-33 and gating factors there?

Yes. I don't think we've really given much guidance about our future efforts in IL-33 at this point.

Yes. We're taking a look at some options perhaps in COPD in a Phase III setting, so more to come there, but quite early. We haven't seen it play out as well in diseases, like atopic dermatitis. And there was a little bit of a signal in asthma, so probably more to come on that. But I think just to go back to what Neil said earlier, it just shows what a remarkable drug that Dupixent is with regard -- it's able to really attack multiple diseases as it pertains to the type 2 diseases.

Got it. Well, that makes sense. Maybe a little bit -- a question -- big, broader question on the prioritization. I mean, you have a lot of early success stuff. You have 8 bispecifics in pipeline, 2 of them are co-stims, and then you have PiGs as well. So in terms of prioritization, is there a certain packing order, like this is the one you are going after first versus second versus other? PiGs are early, so probably they are further down the line.

Yes. I think it's a combination of 2 things. One is obviously how mature our preclinical data is for each of them. But Regeneron is a very data-driven place. We are driven by science. And so we make all the decisions on what to advance and which to prioritize based on science. And so we have really robust animal models where we can make essentially a human type of immune system in a mouse and study maybe better than other people can all of these immune modulators in mouse models. And so we use that as a -- obviously, as an important factor. And the beauty about our bispecifics platform is that we have a targeting arm and we have an effector arm, and we can mix and match them together. So each one will go with any other one with our bispecific technology, which gives us a huge potential array of off-the-shelf molecules to use as we go forward. And these bispecs really have great in vivo properties. They behave just like normal human antibodies, and we've never had any problem with them whatsoever. So we're very bullish on being able to use that platform, not only with the CD3 effector arm, but now with the CD28 effector arm, and there's a lot of other effector arms that we're looking at in the labs as well.

Got it. So in terms of bispecific effort, especially in cancers, it seems like there are quite a few players. Roche has one. There are other players out there. What do you think is going to be the point of differentiation? Or is there a need -- is there differentiation needed? Because these are -- these could address multiple indications eventually. But where do you think differentiation would come? And what do you think could make Regeneron one of the leaders in this field?

Right. We're very happy with the activity we've seen with our CD20xCD3 bispecific, Regeneron 1979. And so far, it looks like it has very robust activity compared to a lot of other data that's been published with CD20 bispecs. So granted these are not head-to-head studies, but to the best of our ability, we're comforted by that data, and we're excited about it. And we have other bispecs that are commenting along, like BCMA and CD3 as well. And so I think it's going to be a rich data set to be able to look at. We've also made a lot of progress in looking at how to safely dose the CD20xCD3. And so to avoid cytokine release syndrome, we've come up with a dosing protocol where we start at a lower dose and then dose escalate within a patient once they clear the lower doses because we see a lot of the cytokine release is lower. So I think, like most things, it's going to be differentiated based on efficacy and safety, but our molecules have really good biological properties in vivo. And we have the ability to, as I've said, do this mixing and matching. So we have different strengths of CD3 arms that we can put on to any other targeting molecule arm. So for some cases, you might want a strong CD3. In other cases, you might want a weaker CD3, depending on the targets. And so we have that option as an easy off-the-shelf offering as well.

Could you walk us through like what we are going to learn about the bispecific platform later this year, early next year? I think you have quite a few data sets coming up in the next 12 to 18 months?

Right. So the thing that's coming up soon would be ASH in December, and we're going to be sharing updates for CD20xCD3 and Phase I data in a variety of different lymphomas. We'll have the BCMAxCD3 that we'll be sharing an update of our first-in-human results with dose escalation and seeing if we can reproduce what we did with CD20 with the -- within patient dose escalation as well. So I think those would be the next things that we've talked about divulging.

Got it. And then one question, I mean, the age-old debate of like bispecifics versus CAR-T, where do you stand on that? Do you think CAR-Ts eventually go before bispecifics? Or do you think bispecific will always be an earlier line of treatment versus CAR-T?

Yes. I don't think we have enough data yet to really say for sure. Obviously, we have partnerships in -- with CAR-T companies as well, and we can actually use our antibody technology to help enhance their CARs to make new chimeric antigen receptors. Or we can put T-cell receptors that we can make in our mice as well into the CAR-T cells. So we remain very interested in them. The thing about CAR-Ts is it's just difficult to control them. And I think the one advantage that bispecs have is that you can better control like these early phases of dosing. And you don't have to precondition patients, you don't have to customize a CAR-T for each individual patient, and so the bispecs just seem like an immediate way to get a drug candidate into patients that could start helping them immediately. And so we think that with the ability to add a co-stimulatory molecule to the bispecs, that they're hopefully going to be very competitive, but I still think there could be a place for both approaches.

Got it. This is very helpful. And then maybe one question we get a lot is that, I don't know whether you agree with this sentiment, is that Regeneron has a lot in late-stage development with Dupi and Libtayo as well. And then you have a lot in early-stage pipeline. But the mid-stage pipeline, the Phase II assets, there could be a little bit more to add there. One, do you agree with the sentiment? And two, do you plan to in-license or partner some assets in the future, so that you can actually fill that gap, if there is the gap, if you think?

Right. Well, we don't look at our pipeline like that at all. I mean, we disagree with that sentiment. We think it's rich at all the stages. The earlier pipeline is rich with bispecifics and the co-stimulatory molecules, as you mentioned. But we also have mid-stage things. So we have Dupixent in other indications, such as peanut allergy or cat allergies and things like that. And the beauty there is that we know it's a proven drug, and so extending it to another important setting just seems like a higher probability of success than taking something -- an asset that doesn't have known efficacy. We have our anti-C5 antibody for PNH and other associated conditions, and we have the C20 in Phase II and the BCMAxCD3 bispecific, which should be expanding out soon. And so we do think there's a rich possibility. We've done some strategic partnerships around other technologies, such as with Alnylam and Bluebird and others, that we think their outlook on science is similar to ours and that we work together very well with them. And so we're very excited about advancing those as well.

Got it. Well, that makes sense. Maybe one last question. I know we're out of time now. It's amazing. We've covered a lot actually in a short period of time. How do you think about Regeneron as a company would look like in the next 5 years?

Yes. Well...

Citi's 20th Annual BioPharma Conference, we both are sitting here. We are sitting here and asking you same question. And we think...

Right. Yes. After being here 29 years, I don't think I've ever correctly predicted what we would look at 5 years in the future. But I still think that you're going to see Dupixent, which is just -- I worked on Dupixent for 25 years before it was actually approved, and so on the pathway and the targets and things like that. So it's just very satisfying to see how broadly it's active in type 2 diseases. And we think that it's going to just be -- has an incredibly bright future that will continue to build out over the next 5 years. EYLEA remains the best-in-class. And with an aging population, macular degeneration is actually increasing, unfortunately, over time. And we are very excited about our I/O possibilities in the future, with Libtayo as the foundation of cornerstone. And then we have all these new collaborations that we -- that I just mentioned a few minutes ago that are starting to bear fruit. That's going to be heading towards the clinic. And so we see a lot of strong growth drivers for the future, and I think it's our goal to maintain the culture that we have that got us here in the first place. So as we grow, we're maintaining that culture. We are actually bringing along a next-generation of young leaders, which are turning out to be great scientists and partners in what we do. And so I think we're just all very excited about the future.

Great. Thank you very much, Neil and Justin. Really appreciate it. I'm so sorry for the technical difficulties, but I think we've covered a lot of questions in that short period of time. Thank you very much.

Thank you, Mohit. Thanks, everyone, for dialing in.

Thank you, everyone. Have a great day. Thank you. Bye.