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

Awesome. So great. So let's just talk about COPD a little bit. You have seen a very good traction in the beginning. In what inning we are in sport terminology at this point? So where -- I mean you launched last year. So like how much more -- like I know the growth has been really rapid there. But I mean it's a big market. So how are you thinking about this?

Of course, COPD is a big market. We launched as the only systemic biologic therapy in COPD. The uptake has been quite strong. We've also, I would say, what's very important in the COPD population. It's the 1 indication where there's not only a commercial population, but there's also the older Part D population. The payer and PBM coverage for COPD is quite strong. And certainly, we're still early just coming into a year plus of launch. So we continue to see uptake in the indication. But I would share with you, we've seen a steady growth. It's not like we had a lack of growth as we were getting payer coverage. I give a lot of praise to the team and frankly, to the payer community for recognize the importance of Dupixent in COPD as a game changer. It's actually really attractive to them because when COPD patients have exacerbations, they go in the hospital. They're not short stays, like so often with asthma patients, it's ER and you go home. COPD patients go in and they're usually hospitalized for a long period of time, not good for them, not good for their payers. So there's been a lot of uptake and recognition of the importance of Dupixent for COPD.

Got it. So you've got a very broad label there, right? I mean, the label is not restricting on EO as such. So do you see usage beyond the -- like below 300 as well here in the real world?

What I would share with you is that the level -- the 300 EO level is important. But when you look at the COPD patients that are the appropriate candidates for Dupixent therapy, when their pulmonologists often look into the history of their data, the patients do have history of EOs at this level. So we have not seen -- we've seen the importance of education. We've seen the importance of making sure prescribers and offices understand they need to look at the patient history, not what the EO level is on triple therapy or on corticosteroids, which naturally lowers it. But as long as the patient shows in their history, EOs at that level. So we have seen a lot of understanding, common test, common language for both the prescribing physicians and the payers.

Got it.

What I would say is most important to them is the remarkable efficacy they see with Dupixent. And candidly, it's not unlike when we launched into very different indication, but related specialty. When we launched into asthma, we were the fourth product coming into a crowded market. It's the efficacy, it's the safety. It was the results they got at Dupixent that is made the leading product in the category. Similarly, in COPD, it's not a problem if you have competition as long as your product performs better.

Right. That's for sure. Very helpful. Thank you for that. So let's just talk about some of the competition out there. So I mean we have the IL-13 out in the market. I mean none of them look better than Dupi, and they -- at best, they look similar to Dupi's clinical trial performance, but Dupi works really well in real world as well. So are you seeing them as a challenger? Or are they -- like you are not seeing them...

So I would say, as I was making the comment, we do look at competitors always to make sure that our teams are prepared, our teams are educated so that if a competitive product comes up, they know how to respond, how to educate. But as I've mentioned before, and we so often hear Dupixent is so often viewed first and best that growing the market because of competition coming in actually is quite favorable for patients. But certainly, the profile of Dupixent is one we all can feel very confident in based on the results that's produced in the market.

Got it. Very helpful. Another interesting readout last week from myasthenia gravis. So congratulations first of all. So again, now you have a task at your hand, right? So trying to understand -- like help us understand like how do you plan to position the product here? And I mean it is a crowded market, but then at the same time, it is a growing market as well. So how do you think about the market evolution? There's a C5, there is the FcRn. So how do you position yourself?

So I think first and foremost, as you mentioned, we were very excited with the clinical data. And certainly, we are looking forward to planning for and being ready for an approval and then a launch into the marketplace. The data suggests we've got a really nice opportunity in the C5 portion of the marketplace based on what we're seeing so far and obviously more work to be done within the clinical profile of efficacy, safety and very important, in this case, the dosing convenience. So certainly look forward to preparing for a launch in this really important area for GMT patients where, as we all know, there still remains so much unmet need.

Got it. Maybe I'll just highlight some of the clinical data that we reported. In terms of efficacy, the primary endpoint was the myasthenia gravis activities of daily living scale, where the cemdisiran, C5 siRNA monotherapy resulted in a 2.3 point placebo-adjusted improvement in that scale, which would be the best among all the C5s at week 26 and is competitive with even the FcRns at a different time point. But again, it's about the durability of this product and the convenience of the administration being a subcutaneous quarterly injection that ultimately will be self-administered, probably not at launch, but shortly thereafter, we intend to introduce a prefilled syringe for at-home or HCP administration. So this could be game changing, and you don't have the cycling on and cycling off of drug. You have sustained efficacy, and we look forward to presenting that data at an upcoming medical meeting where everyone can see the profound impact it has, not only over the duration of 26 weeks, but how quickly the onset is. So we're very excited about that as well.

Got it. So this is the sales force you do not have at this point, right? So this is something you will have to build up.

We will have to put together the commercialization footprint. We look forward to that and I would share with you, over the last many years now as our portfolio and our in-line brands have grown, obviously, EYLEA was long ago established for ophthalmology and then similar footprint, combined footprint and expertise for EYLEA HD. But think across Dupixent, we've built out dermatology, gastroenterology, pulmonology. I won't name them all. And certainly, you've also seen us build with success an oncology organization, now oncology and hematology. So we've deliberately in the commercial organization had talent Regeneron or brought talent into the organization that has had experience across multiple therapeutic areas and also internationally, so that we're at the ready and thrilled as we have the opportunities to bring in products for more therapeutic areas. We'll always build out the commercialization, not only the headquarter strategy execution team, but the customer-facing model that matches the needs of that product. In some places, we're able to take a portfolio approach like our market access payer teams, but then we'll also build specific to that specialty so we make sure we make the most meaningful impact. I'll share as an example, when we build out our oncology team, we had some Regeneron colleagues who had depth of oncology experience. So they were potentially very strong candidates for roles if they were interested. But then also, we brought in industry best. And fortunately, and I'm thrilled about this, we've had a lot of people who wanted to join Regeneron because of the reputation, because of the science, because of the culture of the company. So I would expect that, that will continue as we go into neurology and other therapeutic areas in the future.

Yes. Maybe last point on this. This is just the first of 3 potential indications with the C5 franchise. So we saw success in myasthenia gravis with not only the monotherapy, but also the combination of cemdisiran with pozelimab, which hit all of the primary and key secondary endpoints as well. The efficacy results weren't as impressive as cemdisiran monotherapy, but notwithstanding that, still showed it show efficacy. We have an ongoing Phase III study in PNH as well as in geographic atrophy. And in geographic atrophy, we're looking at both the combination as well as the siRNA monotherapy. So there's a lot more opportunity here. And when we looked at Street numbers for C5 in 2030, there were like $225 million. And today, myasthenia gravis is something like a $5 billion market and expected to double between now and 2030. So it's an exceedingly low bar for Regeneron, I think, even in just myasthenia gravis, to exceed that. And we're very excited about moving this forward and hopefully filing with the FDA by the first quarter of 2026.

Got it. Great. I mean -- awesome. So let's just talk about 2 last topics before we conclude. So LAG-3, you have interesting data coming up later this year. So I mean, the -- but you have a great LAG-3 and a great grade PD-1 here, but you're comparing it against a PD-1, which is also a good PD-1.. So can you talk a little bit about how you are thinking about what is meaningful here? And yes, just share the stage here?

Yes. So we have fianlimab, which is our LAG-3 antibody combined with LIBTAYO in an ongoing Phase III study in first-line advanced melanoma with pembrolizumab or KEYTRUDA as the comparable arm. KEYTRUDA, historically, at least in its label, has performed somewhere around 4 to 5 months of median PFS. We've seen some studies have a little more. Some studies have a little less. We don't really know what to expect from pembrolizumab beyond what the historical analogs are, and that would probably put us somewhere in the mid- to high single-digit months. Fianlimab plus LIBTAYO in 3 independent cohorts in Phase I when pooled had a median PFS of 24 months and a response rate in the upper 50s when pooled as opposed to response rates in the low 30s for pembrolizumab. So all of that is very encouraging. But of course, we need to get the results here. And I think for differentiation, you don't need to get into the 20s here. The bar kind of, I think, for us is somewhere in the low to mid-teens perhaps and anything above that would be exceedingly differentiated from the other approved advanced melanoma therapies in the market. We announced on our second quarter earnings call that we expect this data in late '25 or potentially early 2026 due to a slowing of events. This is an event-driven study, and we need a certain number of events in order to conduct the final analysis on progression-free survival. You can interpret a slowdown in event rate accrual in a couple of ways, whether it's outperformance by the comparable arm or whether patients that are responding to the active arm are having very long and durable responses, which is certainly what we hoped for. We'll get our answer in a few months. I don't know how else to -- I'll let you guys speculate on what that's going to look like, but we're very excited about fianlimab and LAG-3 in melanoma.

So uncertainty is the [satisfactory]. Awesome. So like this is very helpful. And then let's just up on ipilimumab here as well. What are the next steps here? I'm sure you have -- you've seen a lot more data now of the top line. And then there's a partner as well, so you have to think about that as well. So how do you think about that?

Yes, Sanofi have had a very hard look at the data. Just to refresh everyone's memory, we had a highly successful AERIFY-1 study, where there was a roughly 27% reduction in annualized exacerbation rate in former smokers. But in AERIFY-2, we had a very underwhelming result and one that did not meet statistical significance, mainly because we saw an attenuation of effect in the second half of the AERIFY-2 study. So we've been scratching our heads and looking very hard at what could have driven that. We have a few ideas, but I would say we're not ready to share them at this point. The next steps are for us to sit down with regulators, the FDA, the European regulators, other global regulatory authorities explain the data set and understand what potential next steps would need to be taken to have a filing that could be approvable. In the background, I'd say we are contemplating another Phase III study in terms of what that could look like, how to size it, how to power it, based on our learnings from AERIFY-1 and AERIFY-2. But no final decision on whether or not we're going to conduct that third Phase III has been made, and it will be a joint decision between Regeneron and Sanofi, but probably not until we have those discussions with regulators. I would expect this decision to be made certainly before the end of this year, but I don't have a more precise time line for you today, Mohit.

Got it. Very helpful. And one question on like you have a very strong balance sheet. And I mean, Regeneron is a very innovative company. any other company, people would be just clamoring for BD. But again, I'm sure you are getting those questions as well at this point. So has anything changed internally in terms of thought process around BD and use of cash in recent months, especially after itepekimab?

No. I mean I think one benefit we have at Regeneron is Len and George they founded the company and have a long-term vision for where we're going. And there's not going to be a knee-jerk reaction because the second half of one study failed. So we continue to have that long-term view, but we also don't have blinders on about the innovation that's going on in the rest of biotech and pharma. So I think we are -- we've always cast a pretty wide net. Historically, we have focused on earlier-stage opportunities and platforms that could complement our strengths in antibodies. I think we've seen a lot of good results from that, quite frankly, between this latest result with the C5 siRNA that we in-licensed from Alnylam to the ongoing gene editing -- TTR gene editing opportunity at Intellia in TTR cardiomyopathy. So we have a lot of, I think, successes to talk about with those earlier opportunities, but we also understand that there is sometimes a more of a focus on later stage 1, and we don't discount them because their past proof of concept. We just don't want to overpay for something that may not be truly differentiated. So we continue to look. We're very active, don't always see that activity because not all deals come to fruition. But trust me, there's a lot going on in the BD department at Regeneron.

Awesome. One last question I ask every year. One year down the line, I hope you are here. I hope I'm here. What would make you look back at the year and say it was a great year for us?

So I'll start. And of course, with Regeneron, I have so many choices, which is amazing, but I'll stay a little bit near-term focused. So I do think that the catalyst for EYLEA HD are very important, they're very near term. And we just recently have launched new indications in Dupixent and we have many. We will continue to make those perform well. We haven't talked about LIBTAYO today yet, but I do want to share that we thought the data for cutaneous squamous cell adjuvant therapy was very exciting and potentially an indication launch coming there next year. Beyond that, I would say Lynozific just launched in the marketplace for hematology patients, unique profile, efficacy, safety, we talked a little before. We're off to an early start just having launched within the last couple of months, but early days, strong indicators. And certainly, that is such a meaningful and large potential marketplace for the future.

And the next year for us, I think it's really about getting some of these regulatory issues fixed and hopefully, that can even happen in the next few months. But in addition to that, advancing the pipeline more broadly, whether it's fully launching the Factor XI program and an in thrombosis, the obesity program, we hope to launch with the in-licensed asset from Hanso. We look to read out the fiamlimab/LIBTAYO melanoma data as well as some maybe under the radar opportunities in allergy with birch and cat readouts coming in the near term. As well as in the genetic medicine division, where we have otoferlin, which is our hearing -- rare disease for a genetic hearing loss as well as some interesting opportunities in NASH and MASH. So all of those, we hope to have some more data on in the near term, along with the hem/onc opportunities where we're enrolling earlier-stage studies in really large categories. So overall, there's a lot going on at Regeneron.

I would add to Ryan's comment and then kind of going back to one of your comments from a commercialization standpoint, in all these areas, we already have existing experience or new indications. We would be thrilled for cardiometabolic obesity, certainly commercialization opportunity there. So whether a current therapeutic area or a future, we are very much prepared to bring that into the marketplace and successfully position ourselves for patients and our prescribers.

Awesome. On that high note, thank you very much. Really appreciate it.

Thank you everyone. Good to see you.

Good to see you too.