Welcome to the Regeneron Pharmaceuticals First Quarter 2018 Earnings Conference Call. My name is Jason and I will be your operator. Also, please note this conference is being recorded. And I will now turn the call over to Manisha Narasimmon, Head of Investor Relations. You may begin.
Thank you, Jason. Good morning, and welcome to Regeneron Pharmaceuticals first quarter 2018 conference call. An archive of this webcast will be available on our website under Events for 30 days. Joining me on the call today are Doctor. Leonard Schleifer, Founder, President and Chief Executive Officer Doctor.
George Ann Kapolis, founding scientist, President and Chief Scientific Officer, Marion McCourt, Senior Vice President and Head of Commercial and Bob Landry, Senior Vice President And Chief Financial Officer. After our prepared remarks, we will open the call for Q and A. I would 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 milestones, collaborations, 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 Commissioner SEC including its Form 10Q for the quarter ended March 31, 2018, which will be filed with the SEC later today.
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 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 in our financial results press release, which can be accessed on our website. Once our call concludes, Bob Landry 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, Manisha. Good morning to everyone who has joined us on today's call and webcast. In my prepared remarks, I will focus on Regeneron's high level strategy. George will provide details on how R and D prowess enables and supports that strategy. Marion will update you on the status of our commercialization efforts, which will drive the realization of our strategy and Bob will recap our financial results.
Let me begin with Eylea. Eylea has been a very successful product, both in terms of how much value it bring to patients with vision threatening retinal diseases as well as how much value it brings to our business. Since approval in late 2011, Eylea has taken over as the market leading FDA approved anti VEGF agent for retinal diseases. More than 15,000,000 doses of EYLEA have been administered globally since launch. During the first quarter of 2018, global net sales of Eylea were $1,600,000,000.
Clearly, at the moment, Eylea is our most important product and naturally many of our shareholders have questions about the sustainability of that Lea franchise over the near and long term. We believe that while competition is expected in the anti VEGF space, around late 2019, the therapeutic profile of Eylea sets a very high bar and there are no products in late stage development to our knowledge that are likely to have substantially differentiated product profile from Eylea In addition, of diabetes. Capped opportunity in diabetic eye disease. That is why we are focused on expanding our indications in diabetic retinal diseases. Currently, Eylea is indicated for the treatment of diabetic macular edema, where we are the market leading branded anti VEGF supported by the NIH sponsored protocol T study.
Many diabetic patients can also suffer from eye disease without having diabetic macular edema. And much of this results from a condition called diabetic retinopathy without macular edema. Some of these patients are at high risk of suffering from catastrophic vision threatening complications. Later this year, we plan to submit an SBLA for approval in diabetic retinopathy without DME based upon the striking initial results that were observed with Eylea in the PANORAMA study at 6 months. We also look forward to longer term results to prevent vision threatening complications.
But the success of Eylea creates a challenge for Regeneron to diversify its revenue and profit base, I am pleased to say that we to invest heavily in our internal research capabilities rather than look externally for new products. Though we do strategically combine our research capabilities with partners such as Intelia, Alnylam and others to collaboratively create new product opportunities. So where do we stand? From a broad perspective, our strategy is working. We have 6 approved FDA medicines and 17 different product candidates in clinical development, all arising from our internal discovery efforts, But in terms of the specific near term evidence of success from this strategy, I would like to highlight two areas: allergic diseases and immuno oncology.
Our efforts to tackle allergic diseases began decades ago and resulted in Dupixent a true pipeline in a product. Dupixent is currently approved for adults with moderate to severe atopic dermatitis and the launch in the United States is going quite well. We and our collaborator Sanofi are in the midst of launching Dupixent for atopic dermatitis in the rest of the world, which represents another very significant opportunity. Moreover, we are in the process of completing trials that would support the expansion of Dupixent into adolescent and pediatric patients with atopic dermatitis, which once again is another substantial opportunity. But atopic dermatitis may be just the tip of the allergic iceberg because we are seeing strong clinical evidence that Dupixent is active in a number of different allergic or so called type 2 diseases, we believe there is a remarkably broad and deep pipeline within Dupixent itself, and we, along with our collaborator Sanofi, have committed the resources necessary to fully execute our development plan for Dupixent.
We anticipate regulatory approval in asthma later this year and have phase 3 trials underway in adolescent and pediatric patients with atopic dermatitis, pediatric patients with asthma as well as adults with nasal polyps. Top line data from the phase 3 nasal polyps study and the adolescent atopic dermatitis study are expected later this year. In addition, in the second half of this year, we plan to begin pivotal studies in COPD, another very large opportunity. We will also initiate a late stage program in eosinophilic esophagitis and a phase 2 program in peanut and grass allergies later this year. Finally, we will be studying the potential of combining our IL-three IL-thirty three antibody with Dupixent in several of these allergic or Type 2 indication In our view, the potential for the Dupixent pipeline is analogous to what happened when it was realized that the anti TNF were not just drugs, rheumatoid arthritis, but drugs for many different diseases involving over activity of type 1 immunity.
We believe that the evidence thus far is compelling that Dupixent is not just a drug for atopic dermatitis, but has the potential to address multiple other allergic or type 2 diseases. In short, we think that Dupixent may be able to bend the arc of allergic disease. Now, let's turn to another pillar our goal is to become a major player in this space and we believe that we have the science tools, technologies and most importantly, the product candidate to compete and win. Imido oncology has transformed the treatment of cancer and is turning out to be one of the largest commercial opportunities in the history of the biopharmaceutical industry. For example, the sales of anti PD-one antibodies across a number of cancers are currently at a $12,000,000,000 global annual run rate and still growing, driven in large part by use in non small cell lung cancer.
Our strategy in this important therapeutic area is proving to be spot on in terms of the selection of molecular targets, engineering of complex drug candidates, and the selection of the right initial disease states for development. In terms of targets, we chose PD-one over PD L1 and that turns out to be the right choice in our opinion based upon the available data. Moreover, we leveraged our Velasimune technology to select an excellent antibody and our clinical group selected a previously overlooked cancer cutaneous squamous cell carcinoma or CSCC. Simiplimab, our PD-one antibody, has produced breakthrough data in CSCC, and we are awaiting FDA action for this important indication. Response rates we have seen are amongst the highest reported for solid tumor and served as the basis for our breakthrough designation by the FDA.
While CSCC is a significant opportunity by itself, non small cell lung cancer is the largest indication where we are currently studying Our positive early data from a small cohort of patients with advanced non small cell lung cancer supports our decision to aggressively move forward in multiple settings of this disease. Our first line lung cancer study comparing cemiplimab monotherapy to chemotherapy is on track to complete enrollment around the end of this year or early next year. We expect cemiplimab to be the foundation of our immuno oncology efforts for years to come. Another component of our immuno oncology strategy is our bispecific platform. We are combining our biological and technical capabilities to build molecules that combine tumor targeting and effective functions.
Our CD20xCD3 bispecific antibody entirely owned by Regeneron is now making excellent progress in the clinic. You will hear more about this from Georgia than and at an upcoming medical meeting. Other bispecifics include MUC16 by CD3 and BCMA by CD3. Both of which we anticipate advancing into the clinic this year. Additional CD3 bispecifics are moving towards the clinic and over the course of this year, we will be giving you information about a new class of bispecific antibodies.
Much like Dupixent, We believe that cemiplimab has the potential to be a pipeline within a molecule and we believe our bispecific platform is able to produce a steady stream for combination treatments involving our PD-one antibody and our bispecific. So to recap, We believe Eylea has meaningful additional opportunity for continued growth. Our diversification strategy is clearly on track to deliver the full and we will continue to aggressively move
Thank you, Len, and a good morning to everyone. The first quarter of 2018 has been very busy and productive from an R and D perspective, and I will provide some of the key highlights. Beginning with EYLEA, we reported positive data from the Phase III PANORAMA study in diabetic retinopathy. In this study, at 24 weeks, 58% of patients receiving Eylea experienced a 2 step or greater improvement from baseline on the diabetic retinopathy severity scale, compared to 6% of patients receiving SAM injection with a P value of less than 0.0001. Nonian safety signals were observed.
Importantly, this was the first time that any therapy demonstrated the ability to reverse disease progression in a study specifically designed to evaluate patients with moderately severe to severe non proliferative diabetic retinopathy without diabetic macular edema. We will continue to evaluate these patients for longer durations to turbine whether Eylea treatment can prevent progression to neovascular vision threatening complications and also to diabetic macular edema. We expect to make a regulatory submission at the annual meeting of the American College of Cardiology, we reported positive data from the 18,000 patient cardiovascular outcome study of Praluent, which compared Praluent to maximally tolerated statins. These data show that PRASAN significantly reduced the risk of major adverse cardiovascular events or MACE in these high risk patients and was associated with the lower rate of all cause death. Safety was consistent with previous trials and no new safety issues were observed.
In a pre specified analysis, the patients with baseline LDL cholesterol levels at or above 100 milligrams per deciliter experienced a more pronounced benefit from Praluent, reducing the risk of MACE by 24% and the risk of death from coronary heart disease by 28%. In additional post hoc analyses of this pre specified group, Pralian was associated with a 29% lower risk of death from any cause. These results are consistent with the recently published meta analysis in the journal of the American Medical Association that showed an association between more intensive LDL cholesterol lowering and a greater reduction in the risk of total and cardiovascular mortality in patients who's based on LDL cholesterol was greater than 100 mgs per deciliter. We expect a regulatory submission to the FDA based on these data around the middle of for the treatment of uncontrolled asthma in adults and adolescents is currently under review by the FDA, with a PDUFA date in October. Detailed results from the Phase III Quest And Venture Asthma Studies will be presented at the upcoming meeting of the American Thoracic Society.
Our phase 3 study of asthma in the pediatric setting is currently underway. We also have 3 ongoing phase 3 studies of Dupixent in adolescent and pediatric atopic dermatitis. The first of these in adolescence between the ages of twelve and seventeen years old, is fully enrolled and we expect to report top line data shortly. 2 pediatric studies, 1 in children aged six to eleven years old, and the second in children aged 6 months five years old are currently enrolling. Based on the scientific pathway, we believe that dupilumab could be used in a variety of additional allergic or so called Type II immune conditions.
We expect to report top line data from 2 Phase III studies of dupilumab in nasal polyps later this year. We plan to initiate later this year a study in patients with comorbid conditions as well as our phase 3 programs of dupilumab in COPD and in eosinophilic esophagitis. We also plan to launch Phase 2 studies of dupilumab in Peanut and grass allergies in 2018. Let me remind you that the human genetic findings from our Regeneron Genetics center, together with our preclinical studies, support the hypothesis that blocking interleukin 33 might have additional benefits for some patients being treated with dupilumab in some of these diseases. A phase 2 study in asthma of Regeneron 3500, our fully human interleukin-thirty three antibody with and without dupilumab is enrolling patients.
We plan to initiate in the second half of this year, Phase 2 studies of IL-thirty three in atopic dermatitis and COPD. As you also heard from Lynn, one of the most important areas of our focus is the exciting field of immuno oncology, where we have multiple approaches towards harnessing the immune system to fight cancer found in an opportunities provided by our PD-one antibody and by our emerging portfolio of bispecific antibodies. Let me remind you that despite the excitement surrounding Early on, many thought that the PD-one pathway blockade would be commoditized with a prevailing view that there would be many equivalent agents approved. As it now stands, many believe that antibodies against PD-one are differentiated and more active than those against the PD-one PD L1 Ligand. Moreover, out of the 2 approved PD-one antibodies, only one has been approved as monotherapy in first line non small cell lung cancer.
Finally, the PD-one pathway has not demonstrated profound activity in many of the most prevalent cancer settings, including breast cancer, prostate, colorectal, pancreatic and others. And even in settings like lung cancer where the drug is active, most of the patients still do not respond. Obviously, there is much room provide much more benefit to many more patients in need. Later this year with the PDUFA date in October, we anticipate having the 3rd FDA approved PD-one antibody, cemiplimab, which would be the 1st approval in our comprehensive immuno oncology development program. In addition to monotherapy opportunities with cemiplimab, we believe cemiplimab will be the bedrock upon which we plan to build additional combination therapies.
We have reported positive data for cemiplimab in metastatic and locally advanced cutaneous squamous cell carcinoma, where we observed an overall response rate of around 47%, which is among the highest response rates seen in any solid malignancy to date with the PD-one antibody. Cutaneous squamous cell carcinoma will be the first indication for which we anticipate the approval of semipleglumab. At the upcoming annual ASCO meeting, We look forward to sharing with you additional data in patients with unresectable metastatic cutaneous squamous cell carcinoma. We will also be presenting activity and durability from our pivotal phase 2, cutaneous squamous cell carcinoma study. Importantly, we're also conducting studies in additional tumor types including first and second line non small cell lung cancer and cervical cancer.
As Len mentioned, 1st line non small cell lung cancer is one of the most exciting opportunities for PD-one blockade, but only one agent has demonstrated convincing monotherapy activity in this setting. Our program includes 3 key trials, which if successful, could position Symipilumab as a major competitor in this space. The first study is subimplant monotherapy versus chemotherapy in patients who express PD L1 of 50% or greater. This study is ongoing and we expect enrollment to be completed later this year or early next year. The second trial of cemiplimab in combination with chemotherapy with or without ipilimumab versus chemotherapy alone in patients with PD L1 expression of 50% or lower.
This study is currently enrolling. Cemiplimab in combination with ipilimumab with or without chemotherapy in patients with 50 percent or greater PD L1 expression, this study would also include a pembrolizumab comparator arm. We plan as well as opportunities to combine with cemiplimab. Our lead molecule of CD20xCD3 bispecific continues to progress in the clinic. We would like to remind you that this is a wholly owned molecule.
This molecule could compete in indications where CD20 antibodies such as rituximab are no longer efficacious, as well as where CD20 Ambuys are currently the standard of care. As we reported ASH last November, at doses of 5 milligrams or greater, we observed 50% response rates and almost 80% disease control rates in heavily pretreated rituximab refractory patients with non Hodgkin's lymphoma without any dose limiting toxicities. And thus, we were reporting that we were continuing to dose escalate our CD20 bispecific. At higher doses, we are now seeing encouraging signs of increased activities without any dose limiting toxicities, and we have not yet reached a maximally tolerated dose. We look forward to sharing more data at upcoming medical conference in the second half of this year.
We believe our bispecific platform has the potential to which are expected to enter We're also advancing a new classified specific antibodies and hope to share more with you about this new classified specifics later this year. Turning now to Fasinumab, our NGF antibody for pain. An independent data monitoring committee evaluated the ongoing safety efficacy of the clinical trials and recommended that the higher dose regimens be discontinued based on their risk benefit assessment and that the program continue with the lower dose regimens. We are modifying the studies accordingly. We're anticipating sharing top line results from the ongoing phase 3 study later this year.
In the interest of time, I will not talk about many of the remaining programs in our pipeline, addressing diseases ranging from an ultra rare condition such as fibrodysplasia Oscarcans progressibra to highly prevalent conditions involving muscle wasting and metabolic disorders. Please refer to our Form 10Q, which is a description of all of our clinical programs. I will now turn the call over to Mary.
Today. This is my first earnings call with Regeneron, and it is a privilege to be part of this wonderful team. I'd like to start with Eylea, global net sales in the first quarter were $1,600,000,000, EYLEA continues to be the market leading branded anti VEGF for retinal diseases in the United States, In the U. S, EYLEA net sales were $984,000,000, branded market increased slightly year over year. Based on the survey we conducted in the first quarter, we estimate that currently about 70% of U.
S. Out of the net sales come from wet AMD and about 25% from DME, with the balance coming from other smaller indications. With the aging of our population and the dramatic increase in the prevalence of diabetes, we expect significant future market growth. Looking ahead, we see 2 major opportunities to grow the Eylea franchise. The first is through additional indications, such as diabetic retinopathy, where we recently reported positive Phase III data from the PANORAMA study and expect to make a regulatory submission later this year.
If approved in diabetic retinopathy, we expect that Aliyah could be used in the full spectrum of patients with diabetic eye diseases. Secondly, diabetic eye diseases are dramatically under diagnosed and undertreated and even when treated, it is frequently with suboptimal therapy. This is true both for patients suffering from diabetic macular edema as well as from diabetic retinopathy. We expect that our increased provider and patient outreach and education could result in more patients with DME being diagnosed and receiving therapy in the near term and similarly impacts diabetic retinopathy following potential approval in this indication. There are also many ongoing efforts, both for academia and the industry to develop approaches to identify these patients before they go on to suffer catastrophic vision loss.
A further opportunity to strengthen the Eylea value proposition is through dosing flexibility. Eylea is currently approved for use on a monthly and every 8 week basis, and we have submitted an application to 2018. We recognize that each patient requires a tailored treatment regimen, and therefore, if it's every 12 week label a is approved, Eylea will be the only approved drug in wet AMD to have the flexibility to optimally treat patients regardless of whether they require fixed interval dosing of 4, 8 or 12 weeks. We remind you that our Phase III wet AMD studies patients were extended to the 12 week dosing interval only after they successfully met treatment goals and more frequent dosing intervals. Turning now to Dupixent.
Global Net sales in the first quarter of 2018 as recorded by our collaborator Sanofi were $131,000,000, with U. S. Net sales of $117,000,000 underlying demand continues to be strong with total prescriptions as well as the number of patients on treatment, up approximately 25% sequentially from the last quarter. Over 500 new patients were added each week during the quarter. Moreover, we consistently see high persistence rates with over 90% of patients getting their first refill.
And over the course of the 1st year, approximately 83% of patients who started Dupixent remained on therapy. Over 10,000 healthcare providers have prescribed Dupixent through the first quarter, and we're beginning to advance depth of prescribing among users with nearly half of these HCPs having prescribed Dupixent to 3 or more patients. Dupixent prescribers are highly satisfied, frequently referring to Dupixent as a drug that has been transformational to the lives of their patients and their treatment practice. We have recently commenced airing a National Disease State Awareness TV advertisement in order to increase awareness of atopic dermatitis and to encourage appropriate of the year. We have high expectations for Dupixent and are optimistic about continued growth in the U.
S. Market in adult atopic dermatitis and multiple planned launches throughout the world in this indication. In addition, we also anticipate meaningful opportunities for Dupixent in adolescent and pediatric atopic dermatitis, in adult and pediatric asthma and in other indications such as nasal polyps and a synophilic esophagitis U. S. Dupixent net sales in the first quarter were impacted by trade inventory movements and to a lesser extent, high patient assistance program costs, which are typical in the beginning of the year for specialty care products.
We believe that a much better metric for assessing the launch and product potential at this point is to look at the total growth of prescriptions and the increase in new patients added, both of which were increased by 25% sequentially quarter over quarter and the high persistent rates. As you heard from both Len and George, we've completed a regulatory submission for Dupixent in asthma indication with our anticipated FDA PDUFA date in October 2018. We, along our collaborator Sanofi are preparing for an anticipated launch in this indication later this year. Turning to Praluent, global met sales in the first quarter reported by our collaborator, Sanofi were $60,000,000. We're very pleased with the positive data from the cardiovascular outcome study, We've continued to work with payers to implement our new commercial strategy.
And just earlier this week, we announced a payer agreement in which Praluent was selected the exclusive PCSK9 inhibitor on the Express Scripts national preferred formulary. Regeneron incentive fee agreed to significantly reduce the net price preluant in return for straightforward access for appropriate patients and easing out of pocket costs. We continue to engage productively with several other payers. We plan to make a submission to regulatory authorities by midyear based on the cardiovascular outcomes data. Global Med sales of KENSARRA is recorded by our collaborator, Sanofi, were $12,000,000 in the first quarter.
Kazar is our IL-six hour antibody for rheumatoid arthritis. Although the RA market is crowded, it represents significant opportunity, and we believe that KEVZARA has a well differentiated product profile, most notably, the improvement in radiographic disease progression. We've been working with payers to secure improved access for Kevzara. Simultaneously, we continue to work on driving the breadth and depth of prescribing across all health care providers. In immune oncology, our team is moving full speed ahead and preparing for the potential U.
S. And EU approvals of our PD-one antibody cimiplimab as the first treatment the FDA accepted for priority review, our Biologics License Application for Cimiplimab and CSCC. With a PDUFA date in October 2018. A regulatory application in this indication has also been accepted by the European Medicines Agency and expected decision in the first half to ensure that we are ready to launch immediately following approval. Miflenab is a collaboration product with Sanofi, where in the U S, we'll be taking commercial lead and record sales.
In just three short years, we've gone from initiating our first immuno oncology clinical study to potentially having our first immuno oncology treatment approved. Ultimately, our efforts to advance nimlimab as quickly as possible come down to the significant unmet need facing patients, with advanced CSCC and our commitment to giving them an effective treatment option. CSCC is the 2nd most common skin cancer worldwide. It's estimated about 750,000 patients are diagnosed annually in the U. S, the vast majority of these patients, somewhere between 96% 98% are cured by surgery, Even so, this leaves thousands of patients with unmet need.
While estimates vary, they suggest that between 4000 to 8000 patients die annually. Today, there are no FDA or EMA approved treatments for advanced CSCC and these patients currently face a hard and long treatment journey. We look forward to sharing updated this June at ASCO. Among the accepted abstracts are a first look at our proof of concept data for cemiplimab in non small cell lung cancer and a trial in progress poster for our anti LAG-three candidate, Regeneron 3767, which is being studied as both a monotherapy and in combination with slipplimab. And with that, I turn the call to Bob.
Thanks, Marion, and good morning, everyone. During today's call, I'll discuss our first quarter 2018 financial performance and provide updates to our full year 2018 guidance line items. Regeneron's first quarter 2018 EPS of $4.67 per diluted share on non GAAP net income of 537,000,000 has established a solid start for the year. These results represent a 60% 59% year over year increase in our non GAAP diluted EPS and net excludes non cash share based compensation expense. And beginning in this quarter, the changes in fair value of equity investments recognized in accordance with company's recent adoption of Accounting Standard Update 20sixteen-one.
A full reconciliation of GAAP and non GAAP earnings is set forth in our earnings release which can be found on our website. Total revenues grew driven by continuing strength in our flagship Eylea franchise and higher contribution from commercialization of Dupixent. Partially offset by a lower revenue contribution from Sanofi in connection with the Discovery And Preclinical Development agreement that ended on December 31, 2017. EYLEA net product sales in the United States grew 15 percent to $984,000,000 compared with $854,000,000 net sales in the first quarter of 2017. U.
S. EYLEA distributor inventory experienced a modest increase as compared to the fourth quarter of 2017 yet remained within our normal 1 to 2 week targeted range. Additionally, U. S. EYLEA's gross to net percentage increased compared to first quarter 2017 due to slightly higher rebate provisions for government and commercial programs.
Ex U. S. E. Leannet product sales, which are recorded by our collaborator, Bayer, were $624,000,000 for the 3 months ended March 31, 2018, representing an 18% operational and 29% reported increase on a year over year basis. In the first quarter of 2018, Regeneron recognized $232,000,000 The U.
S. Compared to $175,000,000 in the first quarter of 2017. Total Bayer collaboration revenue was $248,000,000 quarter of 2018 as compared to $194,000,000 in the first quarter of 2017. Total Sanofi Collaboration revenue was $189,000,000 for the first quarter of 2018 compared with $210,000,000 for the first quarter of 2017. Sanofi collaboration revenue line item primarily consists of reimbursement of Regeneron incurred R and D expenses, reimbursement of Regeneron incurred commercialization related expenses in the recognition of deferred revenue from the immuno oncology upfront payments, partly offset by our share of losses in connection with the commercialization of antibodies.
A significant discovery and preclinical development agreement, we recorded $48,000,000 of revenue in the first quarter of 2017 related to reimbursements of our R and D expenses from this agreement as compared to no revenue this quarter. Offsetting this revenue decrease was higher Sanofi R and D reimbursement revenue associated with our increased investment in immuno oncology and a decrease in our share losses in connection with the commercialization of Epixent Praluent in Kevzara, which were a $75,000,000 loss in the first quarter of 2018 as compared to a loss of 108,000,000 in the first quarter of 2017. The lower share loss was primarily attributable to PIXENT's first quarter 2018 sales in comparison to no sales in the first quarter of 2017, given the late March 2017 U. S. Launch.
Global sales at Dupixent Prauant in Kevzara as recorded by our collaborator Sanofi for the first quarter of 2018 were to PIXEN 131,000,000 Prauant $60,000,000 in Kevzara 12,000,000 The split of U. S. And Rest of World net sales for these collaboration products is set out in our press release. In the first quarter of 2018, other revenue was 80 $6,000,000 versus $56,000,000 during the first quarter of 2017. This increase was primarily due to reimbursements from our collaborator, Teva, for the continued development of Fosinumab, our NGF antibody in the recognition of deferred revenue associated with this program from Teva in Mitsubishi Tanabe Pharma.
As a reminder, you can find a summary of the components of other revenue in the MD and A section of our 10 Q. Turning now to expenses. Non GAAP R and D expenses were $458,000,000 for the first quarter of 2018, as compared to $434,000,000 for the first quarter of 2017. The increase in non GAAP R and D expense was the result of the continued late stage clinical development for cemiplimab and fasinumab programs offset by lower clinical manufacturing costs. Our non GAAP unreimbursed R and D expense which is calculated as the total non GAAP R and D expense less R and D reimbursements from our collaborators was $278,000,000 for the 3 months ended March 31, 2018, compared to $188,000,000 for the 3 months ended March 31, 2017.
This increase was primarily driven by the expiration of the discovery clinical development agreement at the end of 2017 resulting in lower reimbursements received from Sanofi during the first quarter of 2018 offset by higher reimbursements received from includes the information required to calculate unreimbursed non GAAP R and D expense. We are tightening our full year 2018 guidance for non to be $1,230,000,000 to $1,310,000,000 from our previous guidance of $1,230,000,000 to 1,330,000,000 Next, non GAAP SG and A expense was $296,000,000 for 3 months ended March 31, 2017. As noted in our February 28 earnings call, we originally guided to higher SG and A this year compared 2017 due to the ongoing launches in Dupixent and Kevzara, an increase in EYLEA commercialization expense with an increased focus on diabetic eye disease as well as commercialization expenses in CSCC and dupilumab for asthma. Although we still expect higher non GAAP SG and A in comparison to full year 2017 for the reasons explained above due to lower first quarter 2018 G and A and Praluent commercial expenses and lower forecasted SG and A spend in the second half of the year Regeneron is tightening and lowering our full year 2018 non GAAP SG and A expense
to be
1.3 $25,000,000,000 to $1,395,000,000 from our previous guidance range of $1,350,000,000 to 1 $450,000,000. Sanofi reimbursement of Regeneron commercialization related expenses, a line item found within Sanofi collaboration revenue was $87,000,000 for the first quarter of 2018. We are tightening our full year 2018 guidance for reimbursement of Regeneron commercialization related expenses to be $450,000,000 to $485,000,000 from our previous guidance of $450,000,000 to $500,000,000. Turning now to taxes Our effective tax rate in the first quarter 2018 was 18% compared to 42% for the first quarter 2017. The difference was primarily by primarily driven by the enactment of the Tax Cuts and Jobs Act, which lowered the U.
S. Corporate tax rate as well as improved results from our international operations at compared to the first quarter of 2017. As we continue to assess the full impact of the Tax Cuts and Jobs Act, and await additional regulatory guidance, we now expect our full year 2018 effective 15% to 19%. Our first quarter 2018 effective tax rate was lower than the new U. S.
Federal statutory rate of 21% due to the new effective tax rate to Cuts and Jobs Act and variability of deductions for stock based compensation could impact our future effective tax rate. Now to cash flow and the balance sheet, we Generon ended the quarter of 2018 with cash and marketable securities of $3,400,000,000 and generated free cash flow in excess of $500,000,000 Our capital expenditures for the 3 months ended March 31, 2018 were $79,000,000. As a result of 1st quarter spend levels and a revised full year forecast, we are tightening our full year 2018 capital expenditure guidance to be $420,000,000 to $480,000,000 from our prior range of $420,000,000 to 500,000,000 Significant 2018 capital projects include the expansion of our manufacturing facilities in Rensselaer, New York and Limerick, Ireland, well as continued renovations and expansion of our laboratory space within our Tarrytown, New York facilities. With that, I would now like to turn the call back to Manisha.
Thank you, Bob. Operator, this concludes the prepared remarks. A portion of our call today, we would now like to open the call for Q and A.
Thank you. Session. And first, we have Ying Huang from Bank of America Merrill Lynch.
Hi, good morning. Thanks for taking my questions. So maybe Len and George, since you elaborated a little bit more about the PD-one plan, given the recent data from Merck's Keytruda and Bristol's Opdivo in first line non small cell lung cancer, How do you think your molecule would behave? Is it because you're designing the molecule in such a way that it's going to be more potent even than both? Or are you trying to explore a better combination strategy for PD Y?
And then quick one on fasinumab. Can you just elaborate a little more what causes the high dose to be dropped? Is it also the same side effects we see which is osteo necrosis? Thank you.
George, go ahead. Yes, this is George. Thanks for the question. I think that as we try to line up, it is really pretty sobering that despite all the excitement in advances with PD-one and PD L1s, in Right now, the most important setting and indication, where they seem to be active in terms of, the number of patients which is first line lung cancer. As we all know, the data from the PD L1s has been quite disappointing.
And even with Opdivo, if you actually look at the data, it by far fails to meet the bar of KEYTRUDA. So right now, unbelievably enough, there is only 1, in our opinion, clear leader in the first line lung cancer space. And what we try to explain is that we've designed a series of studies, which will test whether Our molecule is in that class, is in the class of KEYTRUDA. We do believe, as you said, that we have a great technology that has exceeded in the past in delivering some of the 1st and best in class molecules, this Velasimune technology. And On top of that, as we've already described, we have this very impressive and comforting data in the squamous cell carcinoma indication which has some of the best data ever described in solid tumor settings for a PD-one agent.
So these combined to give us a lot of hope that our first line cancer studies are going to deliver on the order of KEYTRUDA like data. Which would make us basically, a real major competitor in this space. So we are very excited about the opportunity and we're very hopeful that the molecule in the studies will come through. In terms of your second question about Vicinumab, as you already pointed out, there's a, this is a high risk, high reward program, as we've described in the past, it's pretty well demonstrated that the molecule has activity but it also has certain side effects. It's not osteonecrosis.
It's more defined as rapid progression of the osteoarthritis in some patients. And this is something that obviously has been seen with this class with our molecule before. And so what the independent data monitoring committee did was they obviously took an analysis to look at the benefit in the risk that is, the therapeutic benefit compared to their analysis of the risk coming from these rapidly progressive osteoarthritis events. And they decided that we should terminate the upper 2 doses and continue with the 2 lower doses. And so we are planning to modify the studies consistent with their recommendations.
I just wanted to add, Ying, that, I think, George said it and I said it, but it's worth saying again, is that the potential for combinations with our PD-one based upon, bispecifics that you're aware of, as well as the new class of bispecifics, that we'll talk to about later this year, in our proprietary models is pretty exciting for us. So, it's not only the monotherapy, although clearly the monotherapy is a huge opportunity as evidenced by the $12,000,000,000 run rate, the majority of which is a single, immuno oncology agent with or without chemotherapy in lung cancer.
Right. And when we use the term monotherapy, we should sort of We're almost bundling monotherapy and traditional therapies like chemotherapy because as we described, many of our studies are combination with existing therapies. And as Len said, we also have these new combination approaches that we're excited about.
Gold from UBS.
Good morning. Thanks for taking the question. Obviously, a lot of focus on Dupixent after your partner reported last week you maybe just give a little bit more detail on the commercial dynamics you're seeing namely persistence on therapy? And I guess for Marion, whether how we should be thinking about IMS data as being of the trends you're seeing in the market's market landscape? Thank you.
Right. I'll let Marion answer that question, but I we don't get as bogged down as you do in trying to predict the exact quarter sales. We're looking at the metrics as Marion said, is how is the launch going? And I'll let Mary in, reinforce, sir, earlier comments.
Sure. So let me take, Carter the persistence question first. And as I mentioned in two pieces, both very, very encouraging signs on persistence. First is that we see patients 90% of the time get refills after their first script. So that was one metric that I gave.
The second one I gave was looking over a longer period of time of persistence, and that was over the course of time since launch patients on therapy over that duration at 83%. So 2 metrics both quite encouraging. I think the other comment, as you're talking about some of the other data metrics that we would say is that What we're seeing in terms of demand and performance on the product is, including the NBRx profile, is very consistent with our long term growth project for Dupixent. So we're on pace, as I mentioned, with the NBRx number or new patient scripts on a weekly basis at about 500 per week through the quarter, that's 2000 new patients a month getting their prescription filled for Dupixent, and we see that as a very strong growth signal. Certainly, we're going to work to continue to, advance performance, but, but we see that demand going very well at this stage.
We should just reinforce that once you just try to look across other agents, at what the persistent rates are over the course of the year, these numbers are really, quite impressive and speak to the need and how satisfied patients are with the treatment.
Next question please.
We have Terence Flynn from Goldman Sachs.
Hi, thanks for taking the question. Maybe as we think about your immuno oncology strategy, when might we see some initial combo data and really is the big push here on the bispecifics? Or are you looking at other approaches as well? And then the second part of that is you guys have had a somewhat disruptive approach pricing of your drugs? Is that how we should think about, cemiplimab as well?
Thanks.
Well, maybe George will take the first part and then I'll take the second part. But, so this is George. Yeah, we're obviously very excited about this sort of dual opportunity of cemiplimab and of our bispecifics, both individually and in combination. But as you also just pointed out, with cemiplimab, we have just with that a sort of dual approach of combining with a series of more traditional agents as I describe traditional chemotherapeutic agents, other checkpoint inhibitors, including others and our own, as well as things, for example, that we're collaborating with other people, such as certain types of vaccines and so forth. So that's one whole set of combination opportunities with cemiplimab.
We have the bispecifics, which by themselves can be used individually or with existing therapies, but also combinations with the cemiplimab. And we, I think, have already announced that we have already started dosing patients with our first bispecific and PD-one in combination. And we hope that we'll be seeing data and be reporting on that as well. But The very exciting aspect of this for us is every one of our bispecifics can be evaluated individually, but also we believe in combination with cemiplimab and other checkpoint inhibitors, as well as with other agents and as well as with this new class of bispecifics that Len mentioned, we will be disclosing over the course of the year.
And in terms of price tariffs, obviously, and if you're thinking about trying to model our opportunity, both in CSCC and how we'll compete elsewhere, first of all, I might just say in CSCC, you have to think about the fact that, there's a reasonable sized patient population, although it's hard to know because there been an approved treatment for advanced disease. And also, you should go back and look at our data. We can remind you later that we have very long duration of therapy, and many patients still on drug as of the last update. So that plays. In terms of the actual price, we like the price towards value.
These are, I think high value molecules to patients, and, we'll let you know what we come out with when we do. Question please.
We have Jeffrey Porges from Leerink Partners.
Thanks very much. And Lynn, the question is, could you address some of what are now shibboleths of Regeneron. Things like no long term guidance, no buybacks or dividends, no price increases, no product acquisitions, Given the fact that the company's lost more than 40 percent of its value over the last year, are you and the board reconsidering any of these sacred cows?
So let's take it one by one. I'm going to try to write them down. You said product acquisitions. What else did you say, Jeff?
Price increase is buybacks or dividends, long term growth?
Slow down. Slow down. I can't write that, but price increases, buybacks. Go ahead.
Buybacks or dividends, long term guidance.
Guidance. Okay. So let's go let's take the easy ones. We have, 6 approved drugs and 17 in the clinic. We have what I think of as, one of the most prolific, R and D engines in the industry, and we are not nearly as desperate, as other companies are to fill up gaps in the pipeline.
So it would be sort of senseless for us to compete in a market where people are dramatically overpaying. And we have a tremendous pipeline these for us to leverage the capabilities that we do with what other companies can do in some very exciting spaces. We're working on But in terms of just going out and buying a Phase III molecule that treats Parkinson's disease by some small molecule mechanism, would just make no sense for us.
And I think as Len mentioned, intellia and Alnylam are very interesting examples where we are, as Len said, leveraging our internal research capabilities with something that somebody else brings to the table, which we believe is very synergistic.
In terms of guidance, we try and give guidance where the knowledge is asymmetric. But we don't think, Jeff, to be frank, it's our job try and guess things that we don't have any more information about than you guys have. And we also don't want to spend a lot of the of our internal team's intellectual horsepower, trying to guess what a given number of patients will be. That's kind of why you guys are overpaid. You're supposed to make those guesses.
So we don't have, Bob gives a lot of guidance on things that you don't have information about. There was a ton of it in there, but to give you product guidance and make guesses, I don't know. We don't want to get in that game because that's not what, really the game that the board is in or the company. In terms of price increases, this is not an environment. Where you can take price increases easily.
We have felt that, growing by price increases is not our strategy. We'd rather grow by by fundamental increase in the penetration or diversity of patients that can be on our approved drugs or bring new drugs to market. Taking small price increases consistent with inflation or medical inflation is perfectly reasonable, but we don't want to be the undoing of the industry, where there's so much energy towards us, and there's so much potential for bad government action, egregious price increases are not a strategy we think are worth the point. In terms of capital allocation, I can assure you that the financial team and the board looks at this on a regular basis. We're well aware of all the data.
We're data driven. We know what you can do with dividends, with buybacks, with acquisitions, with bolt on acquisitions, with interim discovery, with partner discovery, keep money in the bank. We've got them all and we study them all. And, I think we'll tell you about them. As our strategy does or does not involve.
I think that covers your list.
We have Matthew Harrison from Morgan Stanley.
Hey, good morning. Thanks for taking the question. I guess if I could just ask, a couple of the underlying trends on Eylea for the quarter. You talked about DME growth again. I mean, Can you just describe how you see that market growing and if that market's growing faster or slower than the AMD market still And then, just talk a little bit about, I mean, in past first quarters, you've seen some underlying dynamics either from patients finding it harder to get to the doctor or things like that due to weather.
Maybe you could just describe if there are any of those issues in the quarter.
It's always hard to know, we had a good quarter with Eylea, despite the fact that there was some transient, concern about intraocular inflammation, which based on our monitoring now is returned to background levels. And we don't seem to have had any significant impact on the business there, which we're pleased with. The product grew year over a year, I don't think we've really yet made the big push in diabetes, because cause we have a good approval for DME, and that patients do kind of get to the doctor, although there are lots that don't, but we're looking to get the a broader indication for diabetic retinopathy. And then in constant with that, have a much bigger push to get patients to the doctor, hopefully to have their diabetic eye disease treated. We do see, so we haven't seen a big growth yet in diabetes but we still see it.
I should emphasize that we, while I said that AMD is well penetrated, it's still growing by demographics. And we're seeing an overall growth in the AMD market because more and more people are living longer. And so there are more and more people getting age related macular degeneration.
Okay. Operator, next question please.
We have Phil Nadeau from Cowen and Company. Hi,
good morning.
Thanks for taking my questions. Maybe to follow-up on those questions, 2 longer term questions on EYLEA. The first on non proliferative diabetic retinopathy, in theory, it's a large market, although our consultants say it may be hard to get anti VEGF adoption there. So can you talk about your plans to change the standard of care and in particular any patient populations within that larger group that would be most susceptible to anti VEGF therapy? And then second, on the competition you alluded to in your prepared remarks, we did see some new data from brolocizumab this week.
Could you, could you give us your perspectives on that data?
Yes. So in the diabetic retinopathy, the needle mover from the people we talk to, will be not simply or only the important thing improving the diabetic retinopathy, but to prevent the onset of vision threatening diabetic retinopathy, the vision threatening complications is sight threatening. We're going to be able to look at those data from a panorama study later this year. But I do think that this is like any other market. I mean, if you go back, I remember our chairman, Roy Vadulis, told me that when he launched, the first statin the cardiologist told them, well, there's no real need for a statin.
We can control all that with diet and exercise. And And that was the prevailing view. So there is work that you have to do to change the practice of medicine based on data. It doesn't happen overnight. Takes really strong data, a really strong commercial effort.
We're really excited how Marion has integrated so quickly into the organization. She's taken that on as something that's really important to us. So we're looking forward over the years to come to have success in that area. There was a recent approval by the FDA, by a small company of a, of a untethered device that is a device that could diagnose diabetic retinopathy and whether or not you should urgently see a retinal specialist merely by, that could sit in a drug store. It could sit in your general practice office.
It could sit in your ophthalmologist. It could sit with the optometrists. And it's been approved. It doesn't need a doctor. Administered.
You just take a non dilated picture of the retina. And so, and they found sort of striking data, which, the FDA approved the drug on. And I think more to come about how underdiagnosed this condition is when you have a powerful and broad screening. And there were a lot of other efforts just to do the exact same thing in terms of machine learning or as you call it, artificial intelligence. So we think that when you have a treatment and we have the broad label, then you can start to push at the front end of the people who could really benefit I think there's a lot of them.
In terms of the RTH data, didn't see very much new there. What I heard about was that, I think it was in the mid-80s percentile of those people who went on to the 12 week data, could stay on that 12 week data. But at the end of the day, you can slice this data up any which way you want. Still getting about 50 odd percent of people who can go to every 12 weeks. And based on and they haven't identified, people, because if you look carefully, the people who don't succeed at 12 weeks are the ones that lost, I think a significant amount of vision was one of the criteria.
So, I think we have to see how all that plays out, what the label really looks like. And certainly, we wish them luck because We do, because I know they're listening to what I say, so good luck to them. But I, but I also would, say that if something comes along, it can help patients that's okay with us. Eylea is a high bar and people should be chasing that. We hope for years to come.
George wanted to add one thing. Yes, I
wanted to expand on one thing that Lend said And, Phil, you referred to the fact that in some ways, doctors are perhaps a little cautious about treating patients with diabetic retinopathy and they have views on that. I think one key aspect of the studies that we're undertaking right now sort of like what we did with Craluent is to define the patients who are at the highest risk a vision threatening complications. So you might imagine that everybody, patients and doctors would be much more interested in using a very effective preventative therapy if they knew they had a very, very high risk of having a catastrophic event that could cost them their vision. So part of the aspect of our studies is not only to show that we're effective at preventing these events, but identifying the segment of the population that is at highest need for needing such a therapy because they are at such a high risk.
Operator, next question please.
Next we have Cory Kasimov from JP Morgan.
Hey, good morning guys. Thanks for taking my question. Wanted to ask about how we should be thinking with regards to the reimbursement landscape with PCSK9s going forward. Should we expect more exclusive contracts with payer similar to the one announced with ESI and maybe more broadly along those lines? Are you getting a sense of how payers are thinking about the best way to define a high risk patient population that would benefit most from Praluent?
Thanks.
So this is obviously a highly competitive space. There's another PCSK9 inhibitor out there, obviously. So we can't sort of peel back too much. But we are excited about the fact that there is a possibility, to improve the access, make it easy for patients to get the prescription that the doctor writes, that it will be approved and make it so the patients can afford it. We also, the 3rd pillar of all that, which I don't want to get lost, is we want to make sure that there's some a profit left for it.
So it's a delicate, a competitive marketplace. That's about all we can say, out there, but we're working, we're working hard to get
of time. This will be our last question, but we will be available to answer questions following this call. So please send me an email and we'll set some time up for a follow-up call.
We have Geoff Meacham from Barclays.
Hello?
Hello. We didn't hear you. Well, let me ask the question for Jeff. That was a great quarter, Lynn. Thanks very much for all that and it's fairly self explanatory.
All right. I think that wraps it up.
Operator, that concludes our call today.
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating and you may now disconnect.