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

Excellent. And looking beyond the pandemic, what are some factors that you think could help contribute to even more growth even in this brand that is somewhat mature? I know you kind of pushed away some competition earlier this year because of their own safety issues, but how do you see the brand evolving in 2021 and 2022?

Sure. So I think our team is becoming very sophisticated in promotional platforms and clinical data because this is such a specialized audience that is now allowing us, Evan, to really accelerate brand performance by indication. So now for every indication, we are a market leader. The largest indications, of course, being wet AMD, which is just under 60% of our business. Diabetic eye disease and the other indications, being the remaining. I think that there's a tremendous opportunity to help diabetic patients as we go into the next recovered and hopefully a healthy world again. There's a lot of work that we're doing in terms of how do we apply technologies to diagnosis, and make certain that patients start to come into the care continuum potentially to be given EYLEA before they run into situations of vision loss that can't be recovered. So we have a lot of work to do, obviously, not only with the wet AMD population but these broader indications. Specifically, once again, I would point to the greatest growth opportunity being with patients with diabetic eye disease.

Excellent. Any other final comments on EYLEA? I know we always talk about it when we meet, but anything else before we move on to your growth brands and your oncology franchise?

I think our customers and retinal specialists, frankly, have done an absolutely amazing job in difficult times. And we've tried to be by their side to help to support their needs and to be good partners during these difficult times. But I think we approach EYLEA with great optimism. And to your question that I didn't get to in as deep a way related to competition, we always keep an eye on a competitive market and are performing really well in a competitive market today. In terms of future competition, they have a high bar to reach in terms of clinical data, safety and all the attributes that EYLEA brings forward with broad indications.

You have a very -- you have an ironclad PI when I look at it. So it is always encouraging when I see that. So moving to Dupixent. I want to congratulate you and your colleagues at Sanofi for reaching or exceeding $1 billion in sales in the quarter. That's quite the milestone. Looking ahead, what areas do you see -- what are kind of -- what areas or indications are going to drive the next leg of growth for Dupixent? What are you most excited about over the next 12 months for this brand?

Yes. Thank you, Evan. It's going to be a bit of a compounding because when I look at the existing indications in the market. And of course, I remember when I first talked with you and others, you were looking for an expansion of our commercial portfolio beyond EYLEA. So I'm very excited that today, Dupixent is now operating in that sphere of being a multibillion-dollar brand. We don't take any of that for granted. And we have a lot more work. I would still say we've only gotten -- just gotten started because there's tremendous unmet need in the atopic dermatitis population, both in the U.S. and abroad. We still have many adult patients that we haven't reached. And I think that the fact that we're adding in age groups with the adolescent launch, the pediatric launch but remember, we only just launched pediatrics and adolescents was a relatively recent launch as well. Similarly, in asthma, I think we've got a very, very nice competitive start. And in fact, in asthma, about 80% of our patients are biologic-naive. So we're performing well in the category competitively, but we're also growing the asthma biologics marketplace. But there, too, there's a lot more to be done. That's before I even get -- and the nasal polyps indication has probably been even a larger indication in terms of the opportunity that it presents for allergists and ENTs in treating these patients than we ever dream possible. We have patients coming on therapy. Some of whom have had surgery, many who haven't had surgery. And certainly, in these times of more limited surgeries for more elective or deemed somewhat more elective procedures, it's been a wonderful opportunity for Dupixent growth. That's just existing indications. As I look forward to your point of what's to come, that's where I'm getting into this comment of almost, think of this notion of tremendous opportunity with existing indications. And then secondarily, as we start to get into additional respiratory indications, both in asthma based on age groups, potentially COPD in the future, as we start looking at the host of skin indications where we're looking at additional opportunity and trials are ongoing. And then atop that, we even get into areas like eosinophilic esophagitis. So Type 2 disease and the manifest of Type 2 disease is very, very broad. And I think what's happening with Dupixent is we're seeing tremendous comfort in terms of rapid clinical results across indications, a pronounced safety profile. Ease of use is being extended with things like the recently launched prefilled pen for the 300-milligram dose. And I think as well, we've made a lot of progress on the payer and reimbursement front, so that it really is becoming a product that is large today. I'll never get ahead of ourselves. We've got a lot of work to do. But we obviously will take the product in terms of helping patients and giving prescribers an alternative to new heights over the next weeks, months and years. It's still a very young product.

Yes, exactly. Along those lines, one of the questions that I get a lot from my investor clients are, how do you position Dupixent with the potential launch of Pfizer's abrocitinib or Rinvoq in the atopic dermatitis space? I know safety is one of the key differentiators, but is there anything else we should be thinking about when it comes to an increasingly competitive atopic dermatitis treatment space?

Sure. And there is an aspect to competition always that's good in terms of people and products really being understood and at their best. There's an attention to the consumer and the patient population as well by having more discussions of a very important condition like atopic dermatitis. But I think when you start looking at what we know today, obviously, the products you mentioned aren't yet approved in atopic dermatitis. Some of them obviously weren't successful in other indications for Type 2 disease. These products are certainly different. They have a different clinical profile. They have a different safety profile. And I think that's where the importance of the choice is going to come in. We have a product in Dupixent with a range of ages that reassures when you start looking at indications for adolescents and for pediatric patients, that reassures prescribers that the product is safe. And now they have years of use. They get rapid results. They get relief for patients. Patients who are able to do things in their life that many of us just take for granted every day still have to bump that up against, if approved, a product that might be relegated to use after Dupixent, might be considered for certain niche subsets of patients. But I think what I hear from our key opinion leaders is that they have an excellent safe alternative. And obviously, even in the current times, the fact that Dupixent is not an immunosuppressant and has such a strong safety profile, doesn't have anything that would be concerning. When you start to go to the realm of products that are likely to carry black box warnings for very serious side effects, in a chronic condition, that really makes prescribers stop and, in some instances, has even been difficult as I know you're aware in trial enrollment for those products.

Yes, of course. Excellent. Well, I want to be conscious of our time and spend some time on the growing oncology franchises. I think that is very important for the next leg of growth in Regeneron, not that Dupixent isn't going to drive that, but your oncology franchise has performed -- we've had some really great data recently. So when I look at Libtayo, we have a nice indication, cutaneous squamous cell carcinoma. Now you have the BLAs and sBLAs in for both basal cell carcinoma and non-small cell lung cancer. How does Libtayo fit within a very crowded PD-1 space? I know the data you presented in the frontline setting was strong, but how do you position that when and if eventually approved next year?

So I still -- let me take it in 2 fronts. I'll take quickly, basal cell carcinoma, and then I want to go over and talk more to you about the possibility of an indication in lung cancer, where, obviously, there are a lot of competitors and there's a lot of thoughtfulness in terms of how we'll enter the market. In basal cell carcinoma, remember, for these patients with advanced disease, they're no longer candidates for surgery and radiation in a curative way. In these patients, we will obviously have an indication that's for second-line therapy after the hedgehog inhibitors. Keep in mind in this space that there haven't been many alternatives for patients. So we're very excited about this. We, obviously, have strong relationships in the oncology dermatology space. So this is going to be really an ideal indication to launch for the team, hopefully early next year, so we'll be ready. We're excited. And certainly, a ladder line therapy. But sadly, there are many patients who fail on hedgehog inhibitors, and in some instances, can't tolerate them either. As I go over to lung cancer, that's a different kind of indication, a different kind of competitive space. And what I'll say today is we're very confident in what we're seeing in the clinical data so far. And we'll have to wait and determine a little bit closer to the time of launch, some of the specific strategies. So I'm not going to go into a ton of detail today. But I will when the time is right. You can count on the fact, Evan, that we will be ready. And I think that -- I give credits to our oncology team, both our scientific colleagues, our clinical organization and now my commercial team. We've built a commercial team that can take this great science and bring it into the marketplace. And what I'm hearing time and time again from oncologists and others involved in taking care of patients is that sadly, we have about 200,000 patients diagnosed just in the U.S. each year. So there is a need for making therapeutic choices on a regular basis. And oncologists, in particular, obviously, other physicians who treat oncology, patients are consulting in their care, like radiologists. Payers are involved in some aspect, maybe not selecting care but talking about care alternatives. And the fact that choice exists and is extended by a product like Libtayo that has had a very strong start in a smaller indication like CSCC. I think it has made them very excited about that alternative in the future. We take nothing for granted. We know that there's some really important large companies that have been in this space. But we as a company have been no strangers to competition. So we look forward to have the opportunity to hopefully bring Libtayo into the marketplace, pending approvals, for lung and basal cell carcinoma. Hopefully, they will come around the same time. And we'll be ready with Sanofi as our alliance partner to bring these indications into the marketplace. So once again, we'll be seeking to do more in our collaboration with Sanofi than either company could ever do individually.

Well, hopefully, next year, when we're all in person, we can talk more about how your strategy is progressing. I'm really looking forward to that.

By this time next year, Evan, I'm sure hoping we're [indiscernible], and I'm also hoping we've been in working with our new [indiscernible].

I know. Exactly, exactly.

And by the way, those new indications, we've been very busy in these last many months because we have new indications, obviously, in the Dupixent space to be getting ready for. And as mentioned before, a lot of work with EYLEA. I also remind that we look forward to launching a product, a smaller product for rare disease, evinacumab, for patients with HOFH. So we have been busy in these virtual times, and ready.

You've been on a lot of Zoom calls, a lot of them, I'm sure.

Yes. I should be a Zoom expert by now.

Well, I know we're kind of hitting up time, but I do want to just touch on a few more things before we end. So when I think about Libtayo, it seems that this could be the backbone for many other investigational assets, and we talk a lot about the costim program. I'm not going to quiz you on the science here, but how do you kind of see Regeneron's oncology franchise evolving beyond just CSCC, basal cell carcinoma, lung? How important is Libtayo as the backbone in many more assets that could come to the market in the next couple of years?

Yes. Absolutely, Evan. It was always a foundational start to our oncology platform. It's not the only product we're very excited about, bispecifics and the costims and all we have. I think that we will see in the future emergence of other products that are equally exciting and then the combination use. But Libtayo is really, really important to us. And I think that early days in introducing Libtayo into the marketplace, we've created that foundation. I mean my team's job is always to take this exquisite science, get it to patients the way Regeneron operates in our very clinically based -- in fact, you should be able to quiz me on the science anytime. It's part of the gives and takes of being at Regeneron. But it is our job to make sure that we take each of our programs and each of our products, bring them into the marketplace very, very well. And then we build upon that with future indications and future products. But the core of your question is how important is Libtayo? Very. And there's a lot to come in our oncology space. It's another great example. We're not on $1 billion run rate like Dupixent yet, but it's another example of this is a core aspect of the Regeneron commercial platform that we're building in the marketplace. And we're really, really excited about it. We'll be very thoughtful, very deliberate in the steps that we're taking. Everything we do will be based on the science of the products, their clinical profiles, their differentiation in the marketplace. But I think we've got a very exciting business in oncology ahead.

Excellent. Well, we are out of time. I want to be mindful of your time, Justin, Simon and everyone else on the line. And I want to thank you very much for helping me kick off our virtual healthcare conference. I'm really looking forward to when we can all see each other in person and have a drink, hit a golf ball and just enjoy life as it was before the pandemic. So with that, I'm going to end the call here. Thank you so much, Marion, and thank you, Justin, for your time this morning. And we'll speak very soon.

Thank you so much, Evan. Be well. Stay safe, everybody. Bye now.

Thank you. You as well. Bye now.