Welcome to the Regeneron Pharmaceuticals 4th Quarter 2018 Earnings Conference Call. My name is Paulette and I will operator for today's call. Please note that this I will now turn the call over to Mark Hudson, Senior Manager, Investor Relations. You may begin.
Thank you, Paulette. Good morning, and welcome to Regeneron Pharmaceuticals 4th quarter 2018 conference call. An archive of this webcast will be available on our website for 30 days under Events. Joining me on the call today are Doctor. Leonard Schleifer, Founder, President, Chief Executive Officer Doctor.
George Jankopoulos, Founding Scientist President and Chief Scientific Officer, Mayor McCourt, Senior Vice President, Head of Commercial and Bob Landry, Executive Vice President And Chief Financial Officer. After our prepared remarks, we'll open up the call for Q And A. I'd also like to remind you that remarks made on this call today include forward looking statements about Regeneron. Such statements may include, but are not limited to those related to Regeneron and its products and business financial forecast and guidance, development programs and related anticipated milestone, collaboration, finances, regulatory matters, intellectual property, pending litigation and competition. Each forward looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement.
A more complete description of these and other material risks can be found in Regeneron's filings with the United States Securities And Exchange Commission, or SEC, including its Form 10 K for the year ended December 31, 2018, which we are planning to file with the SEC tomorrow. Regeneron does not undertake any obligation to update publicly any forward looking statements whether as a result of new information, future events or otherwise. In addition, please note that the GAAP and non GAAP measures will be discussed in today's call. Information regarding our use of non GAAP financial measures and a reconciliation of those measures to GAAP is available on our financial results press release, which can be accessed on our website. The call concludes, Bob Landry, Jim Markowitz, and the IR team will be available to answer further questions.
With that, let me turn the call over to our President and Chief Executive Officer, Doctor. Len Schleifer.
Thank you, Mark, and good morning to everyone who has joined us on today's call and webcast. 2018 marked Regeneron's 30th year anniversary, and it was a remarkable year for the company. We are pleased with our pipeline progress, our commercial execution, and our financial results. And we remain true to our founding mission of inventing important new medicines for patients EYLEA, the market leading anti VEGF therapy approved across a range of retinal disease, continues to grow. 2018 U.
S. Net product sales were $4,080,000,000, an increase of 10% year over year, and 2018 global Eylea product sales totaled $6,700,000,000, an increase of 14% year over year. We continue to invest in retinal diseases and are pursuing new indications new formulations and new molecular entities. We have a PDUFA date in May for diabetic retinopathy without diabetic macular edema or DME, and our submission was based upon our phase 3 panorama trial in which we were able to reduce vision threatening complications of diabetes. In 2018, we made progress fulfilling Dupixent's pipeline in a product promise by showing efficacy in additional diseases and patient populations.
The clinical data continue to support our scientific hypothesis that Dupixent targets the molecular drivers of allergic and atopic diseases. In its first approved indication, adult atopic dermatitis, Dupixent is now annualizing above $1,000,000,000 in net product sales in the United States alone. George and Marion will provide more detail, but let me emphasize that we are still in the early stages of the Dupixent opportunity with hopefully many more launches in new diseases, geographies and age groups. Finally, despite the remarkable In the a comprehensive and differentiated strategy that George outlined for you at the JP Morgan Conference is already beginning to deliver on its potential. To bring the hope and promise of immuno oncology to many more patients.
In September 2018, Libtayo became the 3rd FDA approved PD-one antibody and the first FDA approved therapy for the treatment of advanced cutaneous squamous cell carcinoma. In December, at the 2018 American Society of Hematology Annual Meeting, or ASH, we presented new data for Regeneron 1979, our wholly owned CD20xCD3 bispecific, which we are advancing this year into potentially registrational studies. We simplified and amended our immuno oncology discovery agreement with our collaborator Sanofi. In the new agreement, we will continue to collaborate on Libtayo as well as our MUC16xCD3 and BCMAxCD3 bispecific antibody programs. For the rest of our immuno oncology programs including our co stimulatory bispecifics, Regeneron retains exclusive rights.
In summary, in 2018, we continued to build upon the foundation that we established over the last 30 years, which positions us for future continued success as an innovative biotechnology company. And as I said at JP Morgan, after 30 years, all of us at Regeneron feel that we are just getting started. With that, I will now turn the call over to George.
Thank you, Lynn, and good morning to everyone. I'd like to begin with our efforts to continue expand and optimize the benefit provided to patients by Eylea. As a reminder, in September of 2018, the FDA accepted our supplemental BLA for diabetic retinopathy with an action date of May 13, 2019. This potential label expansion to include patients with diabetic retinopathy without DME coupled with our existing approval in DME puts EYLEA on the forefront of treating diabetic eye diseases. Let me emphasize data from our Phase III PANORAMA study in diabetic retinopathy.
In addition to anatomic improvement, we have, for the first time, shown that Eylea can reduce vision threatening complications in people who have diabetic retinopathy. Contrary to the perception of some that diabetic retinopathy is a slowly evolving condition, Our panorama study demonstrated that patients with moderately severe or severe diabetic retinopathy may progress rapidly developing vision threatening complications or new onset DME. With more than 40% of the overall patient population, suffering from these events and more than 50% of the patients in the severe category, certainly showing the high risks that these patients are under. In the overall patient population, Eylea reduced these events by more than 75%. In patients with In any case, more complete data 52 week Phase III panoroma study will be presented in Androgenesis meeting on Saturday and has been submitted to the FDA.
It is remarkable that despite many attempts to improve upon the efficacy of VEGF blockade for retinal disease, based on the data we have seen, No other mechanism has proven more beneficial and no other drug in head to head pivotal trials has shown superior visual acuity outcomes compared to Eylea. But we aren't standing still. Our goal is to further advance the treatment of retinal diseases. Later this year, we will begin clinical development of a higher dose formulation of aflibercept to determine whether it can safely provide improved efficacy and longer lasting benefit. In addition, we are actively developing new molecular entities which we may advance into clinical trials as soon as this year.
And we are in the earlier stages of development for gene therapies and other novel approaches. I'd now like to turn to Dupixent. Our own clinical study support decades of basic science suggesting the target of Dupixent. That is interleukin-four interleukin-thirteen signaling is a fundamental driver of type 2 inflammation common to many allergic or atopic diseases. This scientific insight underlies the basis of why many believe Dupixent is a pipeline in a product.
Following our FDA approval for adult atopic dermatitis in 2017 and our approval in asthma at the end of last year, we are anticipating 3 important upcoming regulatory milestones for Dupixent. 1st, a decision by the FDA in adolescent atopic dermatitis. With an action date of March 13, 2019. 2nd, an EMA decision in the first half of the year on asthma, adults and adolescents, And third, potential FDA acceptance of the supplemental BLA for chronic rhinosinusitis with nasal polyposis based on 2 overwhelmingly positive Phase III studies. As Dupixent potentially expands into adolescence with atopic dermatitis, It is important to remember how serious and devastating this disease can be.
The teenage years are hard enough without debilitating skin condition that may impact self image sleep and the ability to concentrate in school. Most of the patients in our trials had disease covering over half their bodies. And patients have described the accompanying itch as similar to unrelenting poison ivy that never goes away. As measured by EZ score, Dupixent reduced the extent and severity of skin lesions by an average of 60 to 70 with significant improvements in other measures, including itch. Beyond this potential approval in adolescence, we hope to bring the benefit of Dupixent to even younger AD patients.
And this year, we expect to report results of the phase 2 trial in patients aged 6 to 11 years. Turning to Dupixent and asthma, We're anticipating approval in the EU and Japan later this year. The U. S. Asthma launch is underway and is particularly gratifying to see good early uptake among allergists.
Who have had prior experience using Dupixent for patients with atopic dermatitis. You will hear more about the asthma launch for Marion. It is widely appreciated for patients with serious allergic diseases. For example, in our adolescent atopic dermatitis trials, more than 50% had asthma as well, and more than 60% to 70% at another allergic condition, such as food, allergy, or inhaled allergies. Many believe that allergic are atopic diseases stomach condition driven by immune imbalance skewed to the Type 2 inflammation, which manifests our self to different degrees in different parts of the body in different patients.
Consistent with this viewpoint and with our own emerging clinical data, we're exploring multiple potential new allergic or atopic conditions for Dupixent. As I mentioned previously, we have a pending supplementary BLA for chronic rhinosinusitis with nasal polyposis. In addition, we have recently initiated Phase 23 study of dupilumab in patients and adolescents with eosinophilic esophagitis. A Phase 2 study in collaboration with Aimmune Therapeutics of dupilumab and peanut allergy, and we have completed enrollment in Phase 2 study for Golaris allergy. We'll update you in the future about new trials and new indications.
We view our interleukin-thirty three program as a potential complement to Dupixent. We are studying REGENERON 3500 our interleukin-thirty three antibody, both as monotherapy as well as in combination with Dupixent in several indications, including asthma, atopic dermatitis, and COPD. We will report results of the Phase 2 study in asthma in 2019. 2 Phase 2 studies in atopic dermatitis were recently initiated. An anti interleukin-thirty three monotherapy dose response study and a combination study with Dupixent.
While it is unlikely that interleukin-thirty three blockade own will provide the degree of benefit observed with Dupixent. Our program is designed to capture any potential incremental benefit that may result from the combination. Moving on now to our immuno oncology portfolio. We recently unveiled what we believe is a rash and comprehensive immuno oncology strategy with our PD-one antibody Libtayo at its foundation. In September 2018, Libtayo, the 3rd FDA approved anti PD-one became the 1st FDA approved treatment of any kind for advanced cutaneous squamous cell carcinoma or CSCC.
Outside the United States, the European Medicines Agency is reviewing our regulatory application and we expect a decision later this year. To maximize the substantial of Thai opportunity in dermato oncology, We will be commencing adjuvant studies in CSCC in the first half of twenty nineteen with neoadjuvant studies to follow. And we are studying Libtayo and other skin cancers where we believe it will have a benefit. Beyond dermatology, we consider non small cell lung cancer to be a major new potential indication for Libtayo. Our phase 3 program in non small cell lung cancer is building on the rapidly evolving treatment paradigm.
As we stated previously, we have doubled the size of our trial comparing libtayo monotherapy to chemotherapy in PD L1 high patients. Regarding combinations, we will be focusing our efforts in 1st line treatment on combination therapy of Libtayo with chemotherapy. The ongoing Phase III combination study is being amended to enroll non small cell lung cancer patients irrespective of histology and levels of PD L1 expression. And to randomize them to Libtayo plus chemotherapy or chemotherapy alone. Amazingly enough, despite years of effort in many pivotal trials, There's only 1 PD-one or PD L1 antibody approved as monotherapy in first line metastatic non small cell lung cancer.
If our ongoing trials succeed, we have the potential to be the Unfortunately, for patients, even in tumor settings with some response, the majority of patients still do not benefit from PD-one blockade. Moreover, a little benefit has been demonstrated with PD-one and PD L1 blockade or any other immunotherapy in many of the most common tumor types, such as prostate, pancreatic, colorectal and breast. This obviously is an important area of unmet need. As you heard me say recently, we are excited about our bispecific franchise and in particular, 2 classes, the CD3 bispecifics and the cost We believe that these bispecifics extend the benefits of immunotherapy in both immunoresponsive tumors as well as thus far immuno unresponsive tumor types. 3 of our CD3 bispecifics are already in the clinic with one of them showing impressive initial results as a monotherapy in very advanced late stage patients.
In December of 2018 at ASH, we presented the exciting data for REGN1979, our CD20xCD3 bispecific for B cell non Hodgkin pharma or NHL. At doses, we are considering for potentially pivotal trials, treatment of these patients with relapsed refractory follicular lymphoma resulted in a 100% objective response rate and an 80% complete response rates. 9 out of 10 patients maintained their response during treatment and the one patient who progressed did so in the setting of prolonged treatment interruption. At higher doses, we're also beginning to see increases in the response rates in the harder to treat relapsedrefractory diffuse large B cell lymphoma or DLBCL, and are approaching the level of response reported with CAR Ts. Based on our emerging data, in 2019, we are planning to initiate potentially pivotal studies with our CD20 by CD3 bispecific for 3rd line follicular lymphoma, as well as DLBCL.
Our second CD3 bispecific targets MUC16 for ovarian cancer. The MUC16 epitope that we target is the remaining nub of the membrane brown protein that when shed is known as CA125, the well known biomarker for ovarian cancer. And our BCMA by C3 bispecific antibody just entered clinical development for the treatment of multiple myeloma. We're encouraged by preliminary results of both CAR T as well as BiTEs targeting BCMA in multiple myeloma. And believe that our BCMA by C3 bispecific has a potential to be an important addition in this new area.
We recently announced that we are introducing to the clinic an entirely new class of bispecifics, which we term co stimulatory bispecifics. Compelling data in our animal models indicate that this new class of bispecific can enhance the anticancer benefit when combined with our PD-one antibody as well as with our CD3 class of bispecifics. This year, we will be introducing 2 of these costimulatory bispecifics into the clinic. We entered the field of immuno oncology with a long term and comprehensive opportunities enabled by the mixing and matching of our technology platforms and capabilities. There are settings like advanced cutaneous squamous cell carcinoma for Libtayo, and advanced relapsed refractory non Hodgkin's lymphoma for REGN1979, where our antibodies have demonstrated impressive single agent activity in clinical trials.
In many other settings, however, monotherapy is unlikely to be enough. This is where our combination strategy comes into play. And to supplement our internal efforts, we have collaboration with companies like Bluebird that have therapeutic modalities potentially synergistic with those that we have in house. Let me change gears now to Fasinumab, our antibody to nerve growth factor or NGF, the chronic pain from osteoarthritis of the hip or knee. I want to highlight two key points regarding our ongoing progress.
1st, as we reported in August, Fasinumab continued to show good efficacy in our latest Phase III study. At week 16, the study met both co primary endpoints and all key secondary endpoints. We believe that we may have identified the minimally effective dose that may mitigate treatment associated arthropathies in total joint replacement that have been observed at higher doses our D major safety concern of this class. With each day that goes by without safety signals, staffing the phase 3 studies, We are one step closer to bringing this drug to the many people who are now suffering and sometimes seek alternative trait needs such as opioids. I've given you just a few updates about some of the 7 Regeneron discovered drugs that are now approved and 16 additional drug candidates in our clinical pipeline.
We don't have time in our prepared remarks to discuss them all. We were happy to take questions during the Q And A. Before I close, I would like to highlight that the Regeneron Genetics Center has recently sequenced its 500,000 individual. On top of this major accomplishment, our goal is to sequence another half million people in 2019. These genetic sequences are all linked to detailed electronic medical records.
Along with our collaborators like Geisinger Health Systems and the UK BioManks, And with funding from our colleagues in the biopharmaceutical industry, we are amassing what may be the world's largest big data human sequencing resource. Which is making a significant contribution to our drug discovery and development efforts. With that, I'd like to turn the call over to Marion.
Thank you, George, and good morning, everyone. I'd like to start with Eylea. For the fourth quarter U. S. Eylea net product sales 11% year over year to $1,080,000,000.
And for the full year 2018, U. S. Eylea sales grew 10% to $4,080,000,000. Eylea's sales growth resulted from an increase in demand and not from price based on U. S.
Net product sales, EYLEA continues to be the market leader with 72% of the overall branded U. S. Anti VEGF market in the 4th quarter. We continue to see overall market physician preference for Eylea. Approximately 90 percent of patients across all payer segments can access Eylea as their first line of therapy.
Regeneron will continue to stay engaged with stakeholders in order to preserve physician choice and patient access to Eylea and its significant clinical benefits. Building on our leadership position in wet AMD and diabetic eye disease, we see a major growth opportunity for Eylea and diabetic retinopathy without DME. The PDUFA date for this new indication is May 13th. As a reminder, of the estimated 3,500,000 in the U. S.
With diabetic retinopathy without DME, approximately 1,000,000 individuals have moderately severe or severe disease, and are at greatest risk for progression and loss of vision. We believe the Panorama results that George described support early intervention with Eylea and may help evolve the clinical treatment paradigm. Disease education focused on the benefits of early treatment. We also remain on track to launch aylea pre filled syringe in 2019 pending regulatory approval. Turning now to Dupixent.
Global Net Product sales in the 4th quarter were $319,000,000 and in the U. S. Alone reached 259,000,000, representing 18% quarter over quarter growth and 89% year over year. Prescriber experience and depth continue to improve with approximately 14,000 healthcare providers, having prescribed Dupixent and over 46,000 patients have received therapy. There was a notable increase in Dupixent prescribing trends with weekly new to brand prescriptions or NBRx increasing to between 750 patients per week compared to approximately 500 to 600 per week in earlier quarters.
We attribute our robust 4th quarter performance to patients advertisement for atopic dermatitis and the asthma launch. On October 19th, the FDA approved Dupixent's 2nd major U. S. Indication, In moderate to severe asthma in patients aged twelve years older, with an acympanic phenotype or with oral corticosteroid dependent asthma. We expect a regulatory decision in the EU and Japan in the first half of this year.
3 months into the U. S. Asthma launch were purged by the early uptake in prescriber interest. Our goal is for Dupixent to be the preferred first line biologic for indicated patients with moderate to severe asthma. At this point in the launch, we estimate that over 2 thirds of Dupixent asthma patients are new to biologics.
Allergists and pulmonologists recognize the benefits of Dupixent's differentiated clinical profile As the first and only biologic, it targets 2 key cytokines central to type 2 inflammation. Dupixent is also differentiated on its efficacy and exacerbations in lung function, establish safety profile, and flexibility as the only asthma biologic to offer self or at home administration. In addition, we would like to emphasize familiarity with Dupixent for their atopic dermatitis patients. Currently, a majority of our prescriptions are coming from this specialty. We look forward to providing insight on the asthma launch in the coming months.
Additionally, we believe that substantial opportunity remains in atopic dermatitis to date despite the impressive market experience that I described, We expect further U. S. Growth if the FDA approves Dupixent in adolescence ages 12 to 17 on our March 11 PDUFA date. As a population. Further, we expect data from our pediatric study in atopic dermatitis, ages 6 to 11 in 2019.
I'd now like to turn to Libtayo, which was launched in the U. S. On October 1, as the first FDA approved treatment for patients metastatic cutaneous squamous cell carcinoma or locally advanced disease who are not candidates for curative surgery or curative radiation, In the EU, we expect a decision later in 2019. In the U. S, 4th quarter net product sales were $15,000,000, driven by SEC.
Engagement with the medical community remains very positive, especially with medical oncologists and most surgeons. We've quickly established broad market access and the reimbursement coverage for Libtayo with approximately 95% of total commercial Medicare and Medicaid lives covered. We believe that significant opportunities remain to increase tayo usage both for 1st line and second line treatment under our approved indication. As a reminder, CSCC is a life threatening condition responsible for an estimated 7000 U. S.
Deaths each year. Based on demographics, enhancements in patient identification and referrals, we expect the number of newly diagnosed patients to rise annually. Now to Praluent, global net product sales in the fourth quarter were $93,000,000, including $60,000,000 in the U. S. In 2018, we made strides to remove access and affordability barriers, and we continue to engage with key stakeholders to drive demand.
As a reminder, this As noted last quarter, we have submitted data from the Odyssey Outcomes trial to regulatory authorities in the EU and in the U. S. Earlier this week, we announced the positive CHMP opinion for the proposed indication in Europe. And in the U. S, the FDA target action date is April 28, 2019.
Moving to Kevzara. Global net product sales in the 4th quarter were $35,000,000, including $27,000,000 in the U. S. As demand improved. Within the IL-six subcutaneous class, Kevzara now has 38% of dispensed NBRx share and 23% of TRx share.
Kevzara has reimbursement coverage for 98 percent of U. S. Commercial lives with 79% of patients able to access Kevzara as either 1st line biologic or after failing 1 or 2 other biologic therapies. I'll now turn the call over to Bob.
Thank you, Marion, and good morning to everyone on the call today. Regeneron delivered record financial results during the fourth quarter of 2018 and completed a year of strong financial performance. For the fourth quarter, non GAAP diluted net income per share grew 31 percent to $6.84 on non GAAP net income dollars to $22.84 on non GAAP net income of $2,620,000,000. Total revenues were $1,930,000,000 for the 4th quarter and $6,710,000,000 for the full year 2018 which represented 22% growth versus 4th quarter 2017 14% growth versus full year 2017. For the fourth quarter of 2018, revenue growth continued to be driven by global sales of EYLEA and a significant increase in Sanofi collaboration revenue due to lower losses from the commercialization of antibodies and the recording of a cumulative catch up adjustment to revenue, principally due to the amendment of the amino oncology discovery and development agreement.
For the fourth quarter of 2018, global net product sales of Eylea were $1,800,000,000, an increase of 12% year over year. For the full year, global Eylea net product sales were $6,750,000,000, an increase of 14% year over year. In our reported US Eylea results, distributor inventory experienced a slight increase in the fourth quarter of 2018 as compared to the third quarter of 2018, yet remained within our normal 1 to 2 week targeted range. Ex U. S.
Eylea net product sales recorded by our collaborator, Bayer, were $724,000,000 for the fourth quarter of 2018, representing a 14% reported and an 18% operational or constant currency basis increase year over year. For the full year of 2018, ex U. S. Eylea net product sales were $2,670,000,000 and grew 20% on a reported basis and 18% on an operational basis as compared to the full year of 2017. Total Bayer collaboration revenue for the fourth quarter of 2018 was 302,000,000 of which $271,000,000 was derived from our share of net profits from EYLEA sales outside the U.
S. The 271,000,000 represents year over year reported growth of 17% compared to the fourth quarter of 2017 for full year 2018 total Bayer collaboration revenue was $1,080,000,000. Total Sanofi collaboration revenue 18 and $1,110,000,000 for the full year of 2018. The increase in Sanofi collaboration revenue in the fourth quarter full year 2018 versus the prior periods in 2017 was primarily due to increased spend and thus reimbursement for Libtayo clinical development activities lower losses associated with the commercialization of antibodies and the recording of a cumulative catch up adjustment to revenue of 149,000,000 primarily in connection with the amendment of the immuno oncology discovery and development agreement. Under the terms of the amended immuno oncology discovery and development agreement, sanofi paid the company $462,000,000, which included the reimbursement of fourth quarter 2018 Regeneron incurred research and development costs of $46,000,000, The prepayment
of
16 by CD3 in a termination payment. Revenue associated with the cumulative catch up is recorded in the reported in Table 4 of our press the commercialization of products under the antibody license and collaboration agreement with Sanofi, which compares favorably to a loss of 114,000,000 in the fourth quarter of 2017. But as anticipated, this quarter's loss was slightly higher than the $39,000,000 loss from the third quarter of 2018. The lower share loss versus the fourth quarter of 2017 was primarily attributable to higher global net product sales of Dupixent and to a lesser extent, Praluent in Kevzara, continued cost containment for Praluent, partly offset by an increase in Dupixent commercialization expenses to support the call, we continue to expect the Alliance's financial results to remain variable for the next few quarters as we incur launch expenses for new indications, including a potential label expansion for adolescent patients aged twelve to seventeen with atopic dermatitis and launches into new international markets. Turning now to expenses.
Non GAAP R and D expenses were $533,000,000 for the fourth quarter of 2018 1.9 $6,000,000,000 for full year 2018 as compared to $444,000,000 for the fourth quarter of 2017 $1,780,000,000 for the full year 2017. The fourth quarter 2018 increase in non GAAP R and D expense was the result of an increase in Libtayo clinical costs and higher overall R and D headcount and facilities related costs partly offset by a decrease in Dupixent and Praluent development costs. Our non GAAP unreimbursed R and D expense, which calculated as the total non compared to $265,000,000 for the fourth quarter 2017. The year over year increase was primarily driven by our share of higher immuno oncology clinical costs and R and D activities associated with the growing number of wholly owned programs. For year 2018, non GAAP unreimbursed R and D expense was 1 $22,000,000, our press release includes all the information required to calculate unreimbursed non GAAP R and D expense.
For 2019, we are reaffirming our previously provided guidance for non $71,000,000,000, the increase in our 2019 non GAAP unreimbursed R and D guidance as compared to full year 2018 is primarily attributable to higher clinical trial and manufacturing costs to support Regeneron's wholly owned programs, including 4 to 6 new molecules expected to be advanced into the clinic in 2019 and lower Sanofi reimbursement as a result of the amended immuno oncology discovery and development agreement. Next, Non GAAP SG and A expense was $411,000,000 for the fourth quarter of 2018 $1,360,000,000 for the full year 2018. As noted, On our November 2018 earnings call, we realized a higher SG and A spend level in the fourth quarter of 2018 as compared to the 1st 3 quarters of 2018 primarily due to incremental spend for Dupixent, including DTC in the US asthma launch, EYLEA, the launch of Libtayo, as well as higher contributions to independent not for profit patient assistant organizations. We reaffirm our previous 2019 guidance for non GAAP G and A expense to be in the range of $1,500,000,000 to $1,600,000,000. The increase in our guidance compared to full year 2018 is primarily driven by increased spend for Dupixent EYLEA and Libtayo.
Dupixent's increased spend will be focused on the recent U. S. Launch of asthma, the expected U. S. Launch in atopic dermatitis for adolescent patients and continued support for the atopic dermatitis indication for adults, including DTC.
2019 EYLEA spend increases will be focused on capitalizing on the potential new growth opportunity of EYLEA and diabetic retinopathy without DME as explained earlier by Marion and increased patient support programs. Sanofi reimbursement of Regeneron commercialization related expenses align on and found within Sanofi collaboration revenue was $127,000,000 for the fourth quarter of 2018 $426,000,000 for the full year of 2018. We reaffirm our full year 2019 guidance of Sanofi reimbursement of Regeneron commercialization related expenses to be in the range of $510,000,005 feet 1,000,000. Turning now to taxes. Our effective tax rate was negative 21% and positive 4% for the fourth quarter full year 2018, respectively, as compared to 69% 42% for the 4th quarter and full year 2017.
The effective tax rate for both the fourth quarter full year 2018 was positively impacted primarily by the implementation of the Tax Cut in Jobs Act and the sale of non inventory related assets between foreign subsidiaries that was finalized at the end of 2018. Remember, the 2017 effective tax rate was negatively impacted by the enactment of the Tax Cuts and Jobs Act as we had to write down certain deferred tax assets due to the lower federal tax rate. In the fourth quarter of 2018, we finalized our assessment of the re measurement of our net deferred tax asset due to the tax cuts in Jobs Act and elected to recognize deferred taxes for global intangible low tax income, commonly referred to as guilty. The net tax impact from both the re measurement of our net deferred tax asset and sale of non inventory related assets have been excluded from both fourth quarter full year 2018 non GAAP net income as outlined within Table 3 of our press release. We continue to monitor regulatory guidance under the Cuts and Jobs Act and changes in the global tax environment and will respond as appropriate to ensure our tax strategy is efficient and aligned with our business operations.
We are reaffirming our 2019 guidance for our effective tax rate to be in the range of 14% to 16% I want to remind you that as in prior years, we will have volatility from quarter to quarter in our tax rate due to the timing of deductions for stock based compensation. Turning next to cash flow in the December 31, 2018 balance sheet. Regeneron ended the fourth quarter of 2018 with cash and marketable securities of $4,600,000,000 and generated free cash flow in excess of $1,800,000,000 for full year 2018. We calculate free cash flow as the net cash provided by operating activities less capital expenditures. Our capital expenditures for the full year 2018 were $383,000,000.
We are reaffirming our previous 2019 capital expenditure guidance of between $410,000,000 $490,000,000. With that, I'd like to turn the call back to Mark
Thank you, Bob. That concludes our prepared remarks.
Question and answer you. And our first question comes from Ying Huang from Bank of America Merrill Lynch. Please go ahead.
Hi, good morning. Thanks for taking the questions and congrats on the quarter. First question on EYLEA. Obviously, you're waiting for FDA approval in diabetic retinopathy. Can you tell us whether you do think that's going to be a significant growth driver for 2019?
Or do you think we should Eylea, we should expect Eylea to grow at market growth rate? And then maybe you can comment on the net pricing trend in 2019 EYLEA as well. Secondly, can you talk about Dupixent's outlook? Do you believe the asthma indication will start to be a more important growth driver versus atopic dermatitis for 2019. Thank you.
Okay. So, thanks for the questions, Ying. On the issue of whether or not diabetic retinopathy, it's going to be a growth driver in 2019. I think that it will be in the early stages of the launch of that indication. It's going to take a lot of patient education because it's a paradigm shift.
So we don't give guidance, but from a general point of view, I think it's going to take some time to develop that market. Pricing trends. I'm not sure what you're getting at, whether you're talking about external forces or not, but our price has been marked very modestly impacted to the negative side based upon a slight discount that was provided across the board in 2018. In terms of asthma, Marion?
Yes, I'm happy to come in on asthma. So I gave you some information today on what is very early in the launch and favorable indicators as I look to your question though and asthma growth opportunity for the future, we do see that as very important. It's not the only Dupixent growth driver I also describe the atopic dermatitis growth opportunity in adults and with, with FDA approval potentially with adolescents this year. But back to your question on asthma, what's most interesting in these early stages of launch is the response that we're hearing from both allergists and pulmonologists to the differentiating profile of Dupixent, both in terms of its clinical efficacy, the established safety profile. And then also this very, very important factor of patients being able to self administer or at home administer That coupled with the fact that for some of these physicians, they're treating patients that have comorbidities, such as when other type 2 diseases her with asthma.
So again, it's very early days, but we feel good about the early launch. And I'll look forward to giving updates in the future. I'll also remind just in terms of size of patient population for asthma biologics, it's about 1,000,000 patients, but to date only about 100,000 patients have been treated, eligible asthma patients with biologics. So it is a market with tremendous opportunity.
Operator, next question. I'd like
to just add to Lynn's point in response to the contribution of diabetic retinopathy and market opportunity. I don't want to address the market opportunity specifically, but very importantly about, whether this should really be paradigm shifting and whether or not there should really be a new way of treating patients. And I think that looking at the data, physicians are going to have to make their decisions, but there's a lot of very important outcomes from our study. Number 1, as I already mentioned, that the rate of vision threatening complications and progression in people who have modern particularly severe noprilip or diabetic retinopathy is I think much higher than most people thought. Once people progress, treatment at that point, we know is probably not going to be as good as prevention.
And I think it's a very important question to now ask in terms of the physicians and the entire community Should we be working harder to prevent onset of disease and loss of vision that you may never get back? And in this particular case is a little bit of prevention, really worthwhile for the so many patients who are in such high risk. And I think that That's something that the community, I'm sure, is going to be debating strongly, especially when all of this data comes out and it is digested and is discussed.
Our next question comes from Chris Raymond from Piper Jaffray. Please go ahead.
Hey, thanks. Just maybe a couple of pipeline questions. So first just on the CD28 costimulatory bispecifics. IGG antibodies have had some challenges, I guess, in the solid tumor setting, due to the physiologic and physical properties of these tumors. So your bispecifics maintain an IgG like structure.
I guess, can you maybe talk about some of the properties of these antibodies that may allow for better tumor penetration, and how you're going to be maybe a little bit more descriptive of of that as we get into the clinic with these 2? And then also maybe, on your C5 antibody 39, 2018. I think in your press release, you talked about initiating a phase 2 trial in PNH, but Len, I think I heard you say last month in San Francisco that enrolling a switching study for meculizum that might be a challenge So maybe any color there as to the plans is this targeted at new patients or is there some other strategy? And maybe is there some other complement mediated disease that may sense as well? Thanks.
So, it's a highly competitive space. So, we're not going to get too much into our thinking on C5. But as we get down the road, I think our strategy will emerge. I'm going to let George of course deal with the CD28 question.
Yes. I think there is a whole field of pseudoscience that somehow seems to think that the problem with getting responses in solid tumors has something to do with antibodies not having access. Actually, if if one really looks, carefully and objectively at all the data, if anything, there's better access to the tumor will you blood vessels become actually more permeable and leaky and the levels of natural antibodies as well as administering antibodies is actually much higher in those settings. So that has nothing to do with our strategy or our approach. Our belief and I think that the overwhelming science argues that the lack of responsiveness has much more to do with very specific immune recognition issues And that's exactly what our co stems do.
They add another level of activation specifically targeted against the tumor, which will add to the immunotherapy benefits of either, for example, checkpoint inhibitors such as PD-one or the more conventional CD3 like bispecifics. So it's all about properly manipulating the immune environment to attack the tumor And the problems have really nothing to do with antibody access and whether you're using a full length antibody or something that's smaller. And certainly all you have to do to understand that is look at the performance of our CD3 bispecific compared to, for example, smaller bites. And that I think even cross study shows that the activities are really not at all limited by the size of the reagent and that's about it.
In the interest of time, I just want to, as a reminder, to ensure that we get to as many people as possible, if you could just limit the Q and A to one question at this time. Operator, can you please go to the next caller?
Our next question comes from Geoffrey Porges from SVB Leerink. Please go ahead.
Thank you very much. And congratulations both on the results and not being mentioned in the state of the union last night. I wonder if we could talk a little bit about the cadence through the year, Bob, your revenue and statement is notoriously hard to model. And you did have quite a few one time items, nonrecurring items in Q4. Could you give us a sense of how, we should be thinking about collaboration revenue through the year and whether we should expect there to be a step down in revenue in Q1 which is what we've heard of, about from many of your peers.
Thanks very much. You could also comment about the cadence of expenses through the year, just so we can try and get our models a little bit more in line with your outlook. Thanks.
Jeff, as you know, I mean, we don't get into that much specifics with regards to the quarterly division on expenses and on revenue. I will say which may not be so evident with regards to the fourth quarter for Sanofi 2018, right? I mean, We did call out the catch up adjustment that we're talking about as a result of amending the IO agreement. So I think that that's clear. But what I also think didn't get caught during the year is that we did terminate the IO, the, sorry, the antibody discovery agreement at the end of 2017.
So for each of my quarters in 2018, as it pertains to Sanofi, I was going up against the 2017 run rate that included $130,000,000 of the antibody discovery agreement that, I will not have to go up against in 2019. So when people saw the fourth quarter, sure, the one time catch up adjustment significant, but also I didn't go up against the 2017 fourth quarter Sanofi developed, antibody development because It had been exhausted by the third quarter of 2017. So again, a lot of maturations with regards to that. I don't see anything special with regards to, how we would break out expenses throughout the year. I mean, we don't have that much seasonal impact.
I have been reading the comments that you've said amongst our peers, I do not, express to have kind of the same, the same inkling that you've heard from them and that's what that that's been put out to the street on it.
Our next question comes from Terence Flynn from Goldman Sachs. Please go
Hi, thanks for taking the question. The first lens is I was just wondering now if the common period is closed, would be great to hear your latest thoughts on the Part B demonstration project, if you think the final version will include a provision for EE reference pricing. And if you can't answer that, would love to hear about insight on the Libtayo launch. Maybe just talk a little bit about more about the kind of breadth of prescribing? How many of your target accounts are already prescribing?
Where can that go over the course of the year? Thanks.
So I'll let Marion comment a minute on Libtayo. We'll give you your 2 questions since you guys are so convicted, on your opinions about us, with your real anticipate something has got to give regarding the international reference pricing situation because the public, the administration, myself personally, and a lot of people in the industry, I think feel, and Americans in general feel it's a bit unfair for America to produce all the drugs to its research and development ecosystem and finance it to its financial market place and then pay for it for its consumers and then have a very well heeled European companies get those drugs at a much lower price. The trouble is figuring out a system that can really balance that. And as I've said before, when you have biotechnology companies who have given away the European rights, there's no way to connect those 2 pricing. You can open it up all you want.
Where you have different people making pricing decisions. So I think the administration does get that. To the extent that This will force people to give them, as I said before, coverage. We'll see. Our sense is there's a little bit of, opposition to the way this has been proposed on the hill, but, we have to see how it all come washes out.
Marion, on and Libtayo launch.
Happy to come in on the Libtayo launch. 1st and foremost, incredibly important because Libtayo is the first product with the approval that I mentioned earlier this morning, for CSC patients with metastatic and advanced disease, where or previously, they didn't have a treatment therapy. So we've had great interest. To your question on targets of our activities, We've certainly seen, uptake in an appropriate way albeit early in the launch. From some of the most prestigious academic centers, and we see that on a geographic basis across the country.
Similarly, we're also seeing uptake, secondarily in more community, large hospital settings that have sophisticated oncology and also in some instances, move surgeons in their practice. I'd also comment that, as we look very carefully at the launch, I recorded today on 15,000,000 ex factory sales and mentioned that it is demand driven. This is not a product with a lot of inventory building. And what we are seeing is that each month we're showing progress in terms of demand for Libtayo. So early days, we're pleased.
The payer and access coverage, as I mentioned, went quickly and was very well managed by our team. So we feel very good about the launch of Libtayo. We're working very hard on
Everybody has their own metrics terms for how a launch is going. The one that I use is when an oncologist calls us up and tells us that he had a gentleman who had had a cutaneous squamous cell carcinoma had exhausted all possible treatments, including multiple rounds of surgery, maximum radiation therapy, other types of target in chemotherapy and was in the midst of a discussion and headed for hospice because the tumor had invaded from the skin deep into his jaw and then to the base of his skull, he wasn't able to eat, let alone smile, heading for hospice 2 days after the drug was approved. This oncologist had heard about our drug in a podcast, convinced the patient to try it. And 6 weeks later, the patient was home for the holidays with a big smile on his face. Those are the sorts of Anika to tell us that this launch is making a difference, and we'll go pretty well.
Our next question comes from Carter Gould from UBS. Please go ahead.
Good morning. Congrats on the quarter. Questions, I guess, for George or Len, on the bispecific on your CD20 by CD3, just wanted to kind of get your latest thoughts on dosing and specifically if you've nailed down the go forward doses with those pivotal studies, I recognize you're probably not going to give out those doses on the on this call, but just if you've nailed those down internally and or you're still waiting on some of the higher dose data? Thank you.
Well, I think as we've indicated and as we've shown in our presentations, in follicular lymphoma, the results are so impressive. We certainly think we're in the right dose range. And with the DLBCL, We are now getting the sort of activities that are starting to approach what one might be seeing with CAR T type therapies and so forth. So we certainly think we're in the right sort of dose range. And as we said, we anticipate being able to start pivotal studies in both of those settings this year.
Our next question comes from Geoff Meacham from Barclays. Please go ahead.
Good morning guys. Thanks a lot for the question. I appreciate it. Bigger picture question. So Libtayo opens up a new therapeutic area for you guys, but I wanted to ask you about the broader IO strategy if rational combos are the main basis, how much of an emphasis does Regeneron place on novel MOAs or targets versus evaluating targets that say pharma or others have explored?
I'm just trying to get a sense for differentiation in the oncology strategy. Thanks.
Well, I think that it's a mix of course, but as you can see from our whole new class of BICE cysics, the CD28s, we, I think, are leading a whole new approach that will allow for an hiring new group of combination opportunities and particularly as we try to explain the opportunity now activate immune responses and activate the ability of checkpoint inhibitors like the PD-1s to actually help in cancers that historically have not been viewed as immunoresponsive, which is, as you know, the vast majority of them. So we believe, and I think a lot of other people now believe that we have one of the most innovative and leading edge approaches to combination opportunities and that certainly having Libtayo as our foundational approach is only going to help these novel approaches, try to extend the benefit to many more patients in need.
And I would answer that, Jeff, that the, having the multiple approaches such as an approved PD-one, the CD20, CD3, the costims that George mentioned, and all the others, even some that others may have under one umbrella, one program, I think, is a very powerful and efficient way, to be able to move forward.
Operator, next question.
Our next question comes from Cory Kasimov from JP Morgan. Please go ahead.
Hey, good morning guys. Thanks for taking the question. I wanted to ask you about Dupixent and on the asthma side of things. Curious how you're thinking about kind of future biologic penetration in both the moderate and severe asthma patients kind of subpopulations with the entrance of Dupi and other biologics. I mean, to date, it's obviously been pretty modest for other biologics, even in the severe setting.
So I'm curious how you see that changing over time. Thanks.
So our label, Corey, as you know, includes both moderate and severe patients. It's not unusual that early in a launch, we'll probably tend to get some of the, the tougher patients. As I mentioned, we skew a little bit more towards biologic naive patients then switches at this point that have heard discussions of both and see evidence in the data of both. But on I think we'll have to give it a little bit more time I can give you profile that I've reviewed, in summary, the efficacy, the safety, the ease of use and the interest of the 2 major prescribing audiences of allergists and pulmonologists, suggests that we have an important indication and a significant opportunity ahead.
I think as Marion had mentioned it maybe in health prepared remarks, but if not, just to reemphasize, a large fraction of the allergists have had a great experience, with Dupi in atopic dermatitis, and they might make up a large fraction of the prescribers, not necessarily because they're treating patients with comorbid conditions, although I they can and that's in the label and they very well might. But the fact that they've had experience in another highly allergic disease has been so positive I think that that's having a nice halo effect for us, particularly amongst the allergists.
Well, and just like EYLEA has an opportunity to be really paradigm shift thing in terms of having the opportunity to really change the practice of how you treat a high risk diabetic retinopathy patients. I think Detixent, in asthma in particular, but in all of its settings has a real opportunity paradigm shifting because I think there's increasing appreciation that all of these so called allergic atopic disease are really systemic conditions. Where the body's immune system has gone awry and gone in the wrong direction. And the data is starting to build up that pixon is really addressing this systemic perturbation of the immune system. And as we accumulate more and more data, more and more clinical studies, in more and more indications.
This may become increasingly clear and increase the opportunity. This is really paradigm shifting where you can really change of the course of an immune system and how it's gone wrong by correcting it and correcting it in all of its manifestations not just in one tissue and one organ, which is how historically, medical community treats diseases. So I think in the long term Dupixent really has an opportunity very paradigm shifting in this space as well.
Our next question comes from Anand Butt from Guggenheim Securities. Please go ahead.
Maybe one detail. At this stage, are you able to break out the Dupixent asthma and atopic dermatitis and then the NBRx number, Marianne, the gave out, is that only for atopic dermatitis or is that a combined as my atrium number?
So the numbers that I gave you on NBRxs, those were combined numbers. And of course, the timing of the ASMA launch, for obviously covering the last couple of months of the year. I don't have specifics for you at this time of NBRx is broken out by indication, but as we move further into the launch window and have additional experience, we will would be able to give some additional insights on what the splits are starting to look like.
Operator, we'll take one more question.
And our last question comes from Robin Karnauskas from Citi. Please go ahead.
Question. I really appreciate it. So let me just take big picture on the picture since people are pretty comfortable there. Can you and I get a lot of questions actually $2 because it's becoming a bigger deal globally and in the United States. What is this trial center look like?
And how do you how does this market tend to evolve? Because this could be something that could have maybe a quicker uptake versus say asthma. Can you just give us some sense of that market can be the next place that you go after EOE?
Well, I don't know about the market opportunity. For us, it always starts with the science. And think that if you look at the science and it's relating to what I was just talking about before and how all these allergic conditions seem to reflect the systemic correlation of the, of the immune system. And interleukin-four and interleukin-thirteen seem to be the central drivers of the immune deviations that's leading to incredible uptake in allergic disease in general and food allergies in particular. And based on our preclinical studies and actually a lot of other signs as well.
These these 2 interleukins could be the central drivers in the whole process. And we believe that there's the possibility that we could be making a fundamental difference in the many patients who are suffering from food allergies. And we of course are in the midst of an important study with our collaborators at Aimmune to explore this. We think that the data from our grass allergy study will also be very relevant decensitization approaches, whether they're for food allergies or for aero allergens in some ways depend on the same sort of mechanisms. We believe Dupixent is right centrally key in those and we'll see what the data shows, because we have these ongoing studies.
And depending on the data, And if it seems to hold true to the science, it could be important opportunity for so many patients who are suffering from these problems.
So obviously from our point of view, from the market opportunity, We always like to focus on the most severe patients, which is why George mentioned that you go after perhaps peanut allergy first or maybe later you go after people who are children who have poly food allergies have a difficulty driving. We certainly are all aware of anecdotes of people on and who tell us they were allergic to this and they've been taking it for their atopic dermatitis and now they're not. Obviously, that could be wishful thinking, but it's the sort of thing that we wanna study, but I do agree you are correct in the severe polyallergic, poly food allergic individual, the uptake there could be quite strong. So that's going to become an increasing focus as we get through these initial trials that George referred to. Grass and Peanut, but plenty more to come.
Great. Operator, this concludes today's call. Thank you everyone for joining. Again, Bob Landry, Jay Markowitz, and the IR team is here to answer any further questions. Thank you.
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating and you may now disconnect.