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Morgan Stanley 22nd Annual Global Healthcare Conference

Sep 4, 2024

Terence Flynn
Analyst, Morgan Stanley

Great. Thanks for joining us, everybody. I'm Terence Flynn, the U.S. Biopharm analyst at Morgan Stanley. We are pleased to be hosting Regeneron today. I'll just read my disclosures, and then I'll turn it over to Ryan to read his disclosures. Please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. And again, pleased to be hosting Chris Fenimore, the company's CFO, and Ryan Crowe, Head of Investor Relations.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Thanks, Terence. Great to be back at Morgan Stanley. I'll just briefly go through our forward-looking statement. I'd like to remind you that remarks made today may include forward-looking statements about Regeneron, and each forward-looking statement is subject to risks and uncertainties that could cause actual resulting events to differ materially from those projected in such statements. A description of material risks and uncertainties can be found in Regeneron's SEC filings. Regeneron does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, Terence?

Terence Flynn
Analyst, Morgan Stanley

Thanks, Ryan. You win the award for longest disclosures today.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Wow!

Terence Flynn
Analyst, Morgan Stanley

Chris, I thought we'd start, you know, first with you. It's been about a year since you were announced as the company's CFO. Maybe just talk to us about your top three priorities here since assuming that position, and what you're focused on going forward.

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

Sure. Thanks, Terence, and as Ryan said, thank you for having us. We're excited to be here. So it's been roughly a year since it was announced that I'd be the CFO. I've only been in the seat since the first week of February, so a little more than six months at this point. You know, my predecessor, Bob Landry, was in the seat for about a decade, and really set up the, you know, the finance function and me stepping into that role in a phenomenal fashion. So, there's really not a heck of a lot I need to do in terms of what Bob left me with, and he sort of turned over the keys and, you know, to the seat in very good shape.

In terms of, you know, priorities, for me personally, one thing is I wanna make sure I'm out with the investment community, meeting the sell side and buy side analysts. You know, we started a sort of trend of trying to be as transparent as we can from a disclosure perspective. So anytime that we see there are things that are material that the street needs to be aware of, I will continue with that, of making sure that we're as transparent as possible. We get a lot of questions, you know, shifting the capital allocation, about the balance sheet and our cash balance. So I'm laser focused on, you know, executing on our capital allocation strategy. We have three pillars of our capital allocation strategy.

Most recently, in April, as you look at that, one of the third pillar of our capital allocation strategy is repurchasing our shares. We basically got a reauthorization of an additional $3 billion of capacity for our share repurchases, which, you know, obviously goes a long way in terms of anchoring on that portion of our capital allocation strategy. And then the last piece I'm focused on is obviously making sure we're managing our investments wisely and efficiently on a number of fronts. So if you look at what we have coming up in terms of commercial launches, we've got a launch for COPD that'll be forthcoming. We've got launches for our hematology programs that will be upcoming, so making sure we're doing that in the most efficient way possible.

Obviously, on the R&D front, we've got multiple shots on goal, and just managing the investments that we're making, and making sure we're doing those in a prudent fashion.

Terence Flynn
Analyst, Morgan Stanley

Yeah. Okay, great. You know, this is more on the strategy side, but I think Regeneron, at least in the, you know, large cap universe, you're still one of the few companies that doesn't give revenue guidance on an annual basis. Just any thoughts on that now that you're in the CFO's hot seat, in terms of kind of the pros and cons, and would you make that change at some point in the future?

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

Yeah, I, I've been at the company over twenty years, so if you look at the launch of, you know, EYLEA, and then obviously DUPIXENT that followed and many of the other products, our philosophy is not to provide revenue guidance. The rationale behind that is, where there's information asymmetry, we want to be as transparent as possible when but when there's a lot of access to data that allows analysts to effectively, you know, model out what the top line looks like, we rely on those data sources to obviously allow the street to utilize that to build their models.

With that being said, you know, we obviously watch where consensus is, and if we think there's any disconnects where, you know, we might be versus versus where the street is, we'll, you know, do our best to, as I said, be as transparent as possible along those lines. One area where we might not necessarily give formal revenue guidance, but in areas where it's not necessarily product revenue related, but it might be related to Sanofi collaboration revenue or other revenue, we will, you know, take those opportunities, 'cause those are areas where there probably is some information asymmetry and be a little more forthcoming with either the level of what we might expect or the timing of what we might expect.

Terence Flynn
Analyst, Morgan Stanley

Yeah. Okay, great. You know, you alluded to this in your opening remarks just on capital allocation, and, you know, cash has been building on the balance sheet. I know the preference has been internal investment, obviously a lot on the pipeline, on the R&D side, and also select business and development, more earlier stage. And talking to, you know, Len and George, historically, it's always platforms where maybe you guys don't have as big of a presence. And so I guess the big picture question first is just, at some point, would you consider a dividend? And then, how do you think about, you know, a starting point for any kind of payout ratio?

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

Yeah, so we, if you look at last year, we did a pretty exhaustive analysis, brought in some outside advisors to help us, analyze whether or not it makes sense to initiate a dividend at that point. We concluded that 2023, 2024 was not the right time. You know, with that being said, we've spoken publicly about the Sanofi development balance is a possible inflection point, which we've communicated. We expect to have fully paid down by the end of 2026. That might be an opportune time to initiate a dividend. So we'll have to wait and see, and we'll continue to evaluate it.

In terms of payout ratio and what that level might be, we really haven't given it much thought, so I think it's a little too premature to comment. Yep.

Terence Flynn
Analyst, Morgan Stanley

Okay. In terms of the, you know, business development front, from a framework, anything that's, you know, shifting or changing in terms of, you know, some of those comments I made before in terms of how you're approaching that, and what are you seeing out there right now from kind of like a partnership appetite perspective?

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

Yeah, I mean, we have a very active business development group. They're, you know, regularly out there, talking with other companies. You know, from a strategic perspective, they sit down with Len, and they sit down with George, look at areas where we might be interested, where there might be opportunities for us. To your point, we look at opportunities where the technologies are, you know, complementary or synergistic with things that we have, and we think it will allow us to do more things in terms of investing in our R&D pipeline. The decision at that point is whether or not we, you know, enter into a traditional collaboration, or we decide that it makes more sense to own the asset or the platform.

Historically, you know, we have not done much on the outright M&A front. We've done some fairly modest acquisitions. We've done three of them now, and just, you know, the first one was roughly, I think, two or three years ago, so we're relatively new to the M&A space. But that doesn't mean we, we won't be more active in the future. It really depends on what the opportunity looks like. We clearly, with the balance sheet that we have, have tremendous flexibility, so we don't necessarily feel that we have any constraints in terms of size or at least, you know, the size that we might necessarily play in. We don't necessarily have an interest in single product types of opportunities.

We think that space is, you know, relatively competitive, and we're better suited, you know, finding, as I said, opportunities where there's a little more depth and breadth that can bring longer term value to shareholders.

Terence Flynn
Analyst, Morgan Stanley

Okay. Got it. And what's the opportunity set look like right now? I guess, more on the partnership front. I mean, obviously, some of the, you know, small cap biotech companies, the financing window's been pretty tight. Does that create an opportunity for you guys to find more partnerships right now, or is it more kind of need dependent?

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

I mean, it depends. To your point, there are companies that have had troubles raising capital, and they knock on the door and say, "Hey, are you interested?" And we look at those opportunities. But we're clearly driven by where we think is the... You know, what makes the most sense for us and not necessarily what makes the most sense for the other party in terms of timing of a transaction or even entering into a transaction. So it's hard to say what we're interested in. We're just constantly out there looking and evaluating.

Terence Flynn
Analyst, Morgan Stanley

Okay. Okay, great. Maybe just moving on to some of the products now. Maybe just any update on progress with high-dose EYLEA conversion in the U.S.? I guess, you know, as we step back, you know, very attractive product profile, a space you guys know very well. So I guess, you know, is there a reason why you couldn't get over 90% conversion from low dose as you think over the longer term?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Maybe I'll jump in since Chris has been talking a lot lately, so first, let me say this: The launch of EYLEA HD is not about just converting from EYLEA to HD. It's about really becoming the new standard of care in the category. Of course, the category right now, the biggest player is EYLEA, and that's the primary source of business for HD, and I think the conversion so far has been going well. But we're not satisfied with only converting from EYLEA to HD. We certainly have been focusing on other branded products as well as compounded Avastin, and over time, we do anticipate EYLEA HD becoming the largest player.

We're not ready to make a target and put a target out there in terms of conversion of EYLEA to HD, but we are confident in the product's profile. We know that the prescribers like it, and as patients' dosing interval extends, they're going to like it. We're very happy with the launch so far. It's been about a year, and last quarter, we did just over $300 million, so we're excited to build from there.

Terence Flynn
Analyst, Morgan Stanley

Largest player, is that when you think about both branded and unbranded, so more on volume, when we think about largest player on a volume basis?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Yeah. I mean, our share of the market between EYLEA and EYLEA HD was 45% of the category as of Q2 of last year of 2024. So that is... And EYLEA is obviously much larger than EYLEA HD at this time. I'd say probably around 40% of the market at that Q2 time point. But EYLEA HD continues to build not only from EYLEA conversions, but from other brand products such as Avastin and others.

Terence Flynn
Analyst, Morgan Stanley

Yep. And what, how do you think about the, you know, maybe coverage dynamics? I mean, that's, that's one question we get in terms of, like, the, you know, fail first on Avastin. I mean, is that likely to remain steady state here, or are there any other changes as we think about twenty twenty-five that we need to consider?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

I don't think so. Right now, the way the coverage works, around 40%-45% of the anti-VEGF category is managed by, it's basically Medicare Part B standard beneficiaries, and there's no managed formulary for those patients, so they have first line access to EYLEA or EYLEA HD. The other, call it 50%-55% of the market is nearly evenly split between commercial and managed Medicare, and a lot of those formularies do require a single-step edit, oftentimes through compounded Avastin. But that's a very normal treatment algorithm that our prescribers are very familiar with. Oftentimes, a patient on their first visit will come in, they'll be diagnosed, they'll receive Avastin, a compounded Avastin at that time, and then legwork around reimbursement will take place over the ensuing couple of weeks.

They'll come back, hopefully have authorization to receive EYLEA or EYLEA HD, and they'll begin that regimen. So I think, you know, not really anything changing there. We're very pleased to have over 80% coverage for EYLEA HD a year into the launch, which is an excellent coverage outcome for the access team.

Terence Flynn
Analyst, Morgan Stanley

Yep. And maybe just remind us on the prefilled syringe. I know that's something else that, you know, helped accelerate the launch of low-dose EYLEA. I know Vabysmo has one. They might already have it out in the market. You guys are working on it, but what's the timeframe there?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

We, we mentioned this on our earnings call. Our, our timeline for EYLEA HD prefilled syringe is to launch in early twenty twenty-five. Certainly, we, we see a lot of... Over 90% of EYLEA usage comes from the prefilled syringe, so we know that it's certainly preferred by prescribers. I think it helps with their, their throughput of patients. You know, they don't need staff to prepare it, so it's, it's clearly, preferred. The Vabysmo prefilled syringe, is launched, I think is basically happening right now. We did see that their prefilled syringe does require a filter needle, which would be the first time for that because of non-visible particulate. So it'll be interesting to see how prescribers react to that requirement. Our, our goal is to bring a prefilled syringe that would not require a filter needle.

Terence Flynn
Analyst, Morgan Stanley

So is that more, it's like an incremental step or cost, or what's the hurdle to the filter needle? It's more the perception of safety, which of those?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

I think that's it. There's a perception of safety, and you must use the filter needle provided in the kit. If you don't, then you're putting patients at risk, and there's potential for that filter needle to become non-sterile, and then the prefilled syringe is not usable. So there's some potential roadblocks or hang-ups to the launch there.

Terence Flynn
Analyst, Morgan Stanley

Okay. Okay, we'll stay tuned. I guess the other question we get is around high dose formulation, you know, such as in EYLEA, how that'll be treated under IRA. And so as you think about that dynamic, maybe any considerations to think about? Obviously, we had the first round, but that was only for the Part D drugs. Part B is next up in a couple of years, but how does the company see this playing out? You know, it's maybe one of the bigger picture questions we get oftentimes.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Yeah. Certainly a question we get quite a bit, too. But unfortunately, you know, CMS has not been very forthcoming with how they're going to interpret the statute for Part B drugs. We still lack guidance in how the law will be implemented for Part D drugs, Part B drugs. We obviously have the guidance on Part D. The selection process has taken place. The negotiation outcome has been announced, and we'll see those prices implemented in January. But we are at least two years behind for Part B drugs, and therefore don't have great clarity into how CMS will handle it.

If we are to use Part D as our guide for Part B, we would expect that should there be any biosimilars for any aflibercept product, including EYLEA or EYLEA HD, that all products using that same active moiety would be excluded from the negotiation process. But once again, we need that clarity from CMS, from their guidance, to make a more certain claim there. And we look forward to that, but we have no- we've not received any timeframe for when to expect it from them.

Terence Flynn
Analyst, Morgan Stanley

So, no, even, like, bookends in terms of when we might hear something from them? You had to take a guess.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

My expectation is that it will follow a similar timeframe to Part D. They put out the Part D guidance six months ahead of the selection date for Part D drugs. The first Part B selection date is February first of 2026. So if we back out six months from there, we're talking around this time next year.

Terence Flynn
Analyst, Morgan Stanley

Okay. So Morgan Stanley Conference 2025.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Put on my question list now.

Terence Flynn
Analyst, Morgan Stanley

We'll see. We'll see.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

We'd love to get it earlier.

Terence Flynn
Analyst, Morgan Stanley

Yeah. Okay. And then what... You know, just again, to close the loop on that before we go to Dupixent, remind us of what is the earliest a low-dose biosimilar could enter the US market right now?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

So we have a judgment against Biocon that is asserted after a trial where we asserted a formulation patent for EYLEA. There are other biosimilar manufacturers that we have also sued, who are awaiting their trial and are currently enjoined from launching their product. We have another injunction decision pending against Amgen, which we expect a decision to come in the coming weeks. And there's another defendant has entered the litigation very recently, Sandoz, whose biosimilar aflibercept was approved last month, and we recently initiated litigation with them. So in total, there are six companies that we are trying to keep off the market by asserting this intellectual property for the formulation of the '865 patent, which expires in June of 2027 . So we have...

You know, we believe that it will be the first opportunity for a biosimilar to come to market, and we will defend our IP against all of these other biosimilar players.

Terence Flynn
Analyst, Morgan Stanley

Okay, great. Moving on to, to Dupixent, again, you know, one of the, the other important growth drivers here of, of the company. I think, you know, the breadth of label has, has been a big part of the story here. And so maybe as we think about, you know, the indications, you could just kinda give us an overview of, like, relative size, I'm assuming atopic derm is still at the top because that was the first indication, but as you go through some of these other indications, maybe, you know, how do those stack up as we think about the opportunity set here?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

You're right, atopic dermatitis is definitely the majority of sales for Dupixent. But if you look at both NBRXs and TRXs, the other indications outside of AD, MBRXs are roughly 40%, and TRXs are roughly 30, 33%, say a third. So obviously, getting a lot of traction in these other indications outside of AD. If you look at the three indications of basically AD, asthma, and nasal polyposis, we classify those as basically being at blockbuster status, each of those indications. So you know, sizable performance out there in the market. Two of the more recent launches, so if you look at eosinophilic esophagitis, there's about 90,000 patients in the addressable population.

You know, to date, for the launch, we've had about 30,000 MBRXs, so quite a significant, you know, penetration in that marketplace. And then, prurigo nodularis, we've seen about 18,000 MBRXs to date with the launch, and, I mean, that addressable population is about 75,000 patients. So again, sizable penetration. And then obviously, with COPD coming up next, you know, in the U.S. alone, we think the target population is roughly 300,000 subjects in the U.S. So, you know, clearly, as we describe Dupixent, it's a brand that's got multiple brands within a single brand.

Terence Flynn
Analyst, Morgan Stanley

Yep. Okay, maybe we can unpack a little bit of this. Atopic derm, you know, a question we get is just there's obviously other competitors potentially coming here, lebrikizumab, the OX40s. You know, Rinvoq is, has been relegated to second line setting, given the label. But just, you know, how do you think about maintaining that kind of first line position, given some of these other biologics that could be coming to the market in atopic derm?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

I think for Dupixent, it's been on the market now for seven years. And for a while, it was the only approved biologic for atopic dermatitis, and it has a very large share of the market, but it's very underpenetrated. So as new products come to market, we think that will help to grow the pie, so to speak, and as they continue to promote behind these brands, these competitive brands, Dupixent will be the outsized beneficiary of that. I think at the last check, the adult penetration in atopic derm was only around 20% in the US. And when you look across all age groups in the US, penetration is somewhere in the low- to mid-teens%. So a lot of patients have not even come to be addressed with Dupixent, and we think there's a lot of opportunity there.

And competition, as Marion McCourt, our Chief Commercial Officer, likes to say, "will make us stronger." We're certainly prepared for these competitive entrants, not only from lebrikizumab, but from the OX40s and from the IL-31s that are all seeking to come to market. We believe that Dupixent's efficacy and safety profile has been proven. It is the first choice among dermatologists, and I don't see that changing with any of these new agents.

Terence Flynn
Analyst, Morgan Stanley

Does that become disruptive from a pricing standpoint at all, or again, because you guys have the breadth of label, that really gives you an advantage in terms of that formulary positioning.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

I don't think it'll have a dramatic impact on price. These new competitors are gonna fight for share and probably do some things with price, but I don't think Dupixent needs to get into that game.

Terence Flynn
Analyst, Morgan Stanley

Okay, got it. The other obviously, you know, interesting area that people are focused on is COPD. You know, you alluded to this, Chris, you have a PDUFA date later this month. Maybe just talk to us high level about some of the commercial preparations and anything different about the ramp in this indication versus some of the other, you know, disease areas we've been watching, atopic derm, asthma, nasal polyps, that should be... make us more optimistic about a quicker ramp, or we should have a more measured view of kind of that trajectory out of the gates in COPD.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Yeah. I think that the data with over 30% reduction in annualized exacerbation rates across two studies, a pre-bronchodilator FEV1 improvement among patients is very compelling to prescribers, and I know that there's a lot of enthusiasm in the KOL communities to get access to this drug. You know, we're working with the FDA on our pending application there, and we're working towards a decision by the September twenty-seventh PDUFA date. I think with this population, it is primarily an older population, and it will fall into Medicare Part D if they're over the age of 65, and that's not the payer mix of most of the other indications for Dupixent.

So upon approval, we'll need to go through the contracting, payer process, but over time, as we get those formulary positions in place, I think we'll have a very meaningful and exciting launch on our hands. The sales force is certainly ready. Us and Sanofi have been partnering on how to position the drug in the market, and now we're just waiting for a decision by the FDA.

Terence Flynn
Analyst, Morgan Stanley

Yep. In that contracting process, can you just remind us, like, is that a six-month process, approximately, longer than that, shorter?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

It always kind of depends, but I think we're looking at it in terms of a few months.

Terence Flynn
Analyst, Morgan Stanley

Few months. Okay, got it. Okay, great, and then the other one is geographic basis. Anything like U.S. versus ex-U.S. that's notable about COPD, or you know, nothing to call out?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

No, I think that there's. You know, in the US, we've identified around three hundred thousand patients that would be eligible for Dupixent treatment, and that would be patients with eosinophils at an elevated level above three hundred cells per microliter, and it would encompass both former smokers and current smokers. In the G7, which would include Europe and Japan and Canada, I think there's around five hundred thousand in total. So the US, EU, and Japan would be around five hundred thousand in total. I think China is another big opportunity that will be primarily handled by Sanofi, but obviously a large population there and with air quality issues.

Terence Flynn
Analyst, Morgan Stanley

Yeah. Okay, great. You know, the other question is just the, you know, the margin profile of the Dupixent JV, so Chris, this is probably more one for you. There's obviously some incremental spend on the COPD launch that we're just talking about. Directionally, how should we think about that margin opportunity on the, on the JV here with COPD coming online?

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

Sure. So, I mean, if you look at COPD in particular, we clearly, with the asthma indication, have a respiratory sales force that's out there. With that being said, we wanna make sure, both Sanofi and ourselves, that we're resourcing the launch properly and putting some incremental resources behind the launch to ensure success. So there'll be some incremental investment on that front, with it, but at the same time, getting some synergies with the respiratory sales force that we have in place. If you look at the margins on the Sanofi collaboration and as you called it, the JV, there has been some opportunities over the past couple of years to see some margin improvements. Originally, we phased in a new manufacturing process, which, you know, significantly impacted COGS.

That was largely phased in, I would say, by the end of last year. We continue with Sanofi to phase it in in some other markets over the course of 2024 and 2025. But for the most part, a lot of that benefit was already realized last year and will come through a little bit this year as well. If you look beyond that, as the product you know continues to grow and we get past the COPD launch and the launches are more mature, we are. You know, we definitely expect to get additional leverage as the expense base kinda more normalizes and revenue continues to grow.

Terence Flynn
Analyst, Morgan Stanley

Yeah. Okay. Okay, great. And then the last one on Dupixent before we go to some of the pipeline is, you know, a question we get somewhat frequently, is just IP and how to think about that. Obviously, you know, we've seen the EYLEA strategy and how that's played out. Maybe just any high-level commentary on how to think about Dupixent IP in the U.S.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

I'll take that one. I'm not an attorney, but I've been handling all the patent questions, so I'll just keep going.

Terence Flynn
Analyst, Morgan Stanley

Full disclaimer.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

The composition of matter patent, which is typically the strongest patent in a patent estate, is for dupilumab, expires in March of 2031. Now, we have several other pending and issued patents that span formulations, methods of treatment using dupilumab, and even manufacturing, that reach into the early to mid-2040s, and we're certainly going to assert those and defend those patents, though we would expect them to be litigated. So we'll have to see on their defensibility and whether or not they can be upheld, and whether or not the biosimilars infringe them. So I think March of 2031 is probably the earliest potential entry, but we are very focused on trying to defend all of this IP and extending the period of U.S. exclusivity beyond that.

In Europe, we have a little bit longer runway. I think the supplemental protection certificates for dupilumab there expire in March of twenty thirty-three, so a couple of years beyond the U.S. exclusivity window for the composition of matter patent. And then, in Japan, it's even beyond that, October of twenty thirty-four. So we have a pretty long time to really build Dupixent into and let it realize its full potential and address as many patients as possible.

Terence Flynn
Analyst, Morgan Stanley

Okay, great. Maybe just in the last few minutes, shifting over to the pipeline. I think one of the near-term datasets is your LAG-3 in combination with Libtayo, phase 2 data for lung cancer. Again, maybe just high level, the design of those two trials, and then how much data we're actually gonna get from this initial cut versus maybe another more mature cut down the road.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Yeah, it's a great question. Certainly, a readout that I'm excited about. And, you know, we've shown a lot of early data in melanoma which looks very promising for the combination of fianlimab and Libtayo in that advanced melanoma setting. This will be a more substantive readout in a different solid tumor, lung cancer. We're enrolling two phase 2/3 studies. The first study is in an all-comers population, and we'll look at the combination of fianlimab, cemiplimab, and chemotherapy versus cemiplimab plus chemo. And we'll... The second study will just look at patients that are greater than 50% expression of PD-1, PD-L1, and that is gonna leave the chemo piece will fall off of those two arms.

The phase 2 cohorts for each study are gonna be 150 patients. So at the end of towards the end of this year, November, December timeframe, I'd expect us to take a look at the objective response rates for each of these populations that we're studying. I think it's gonna be like kind of an interim phase II. We're certainly not gonna get much in the way of a read on PFS, and certainly not for overall survival, but it will give us an indication about whether patients are responding at a greater rate when we add in LAG-3 to these more established regimens in lung cancer. So we're excited about the potential there, along with other solid tumors for the fianlimab franchise.

Terence Flynn
Analyst, Morgan Stanley

And is that, is this data gonna be enough to make a phase III go, no-go? Is that the trigger to expand into phase III, or do you need to see that PFS OS data to then pull the trigger on expanding into the phase III portion? Or how does that work?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

I think the goal would be to get that answer with this interim phase II readout, and then continue to follow those patients longer, while potentially launching a phase III in parallel. But we'll have to see. If there's some degree of uncertainty there, we may decide to wait to pull the trigger on the phase III start. We're also interested in watching and seeing the magnitude of the treatment effect from the Bristol LAG-3 data that we expect them to present at ESMO. We noticed that they've initiated a phase III study in patients expressing between 1% and 49% of PD-L1. So, that is apparently a population that they saw a signal in. We'll be looking for a similar signal across our studies as well.

Terence Flynn
Analyst, Morgan Stanley

Yeah. Do you guys... But are you more confident in that population, or you're still confident in just the all-comer population?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

I don't think that we have a view on confidence at this point.

Terence Flynn
Analyst, Morgan Stanley

Okay.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

We ran a very small phase I study of 15 patients, so this is really gonna dictate whether or not we have a future in lung cancer or not.

Terence Flynn
Analyst, Morgan Stanley

Okay, maybe just last minute, linvoseltumab, you know, you have the CRL just next, BCMA for multiple myeloma, for those that don't know. Maybe just next steps here, post the CRL that we got in August.

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

Sure. So on our Q2 call, which happened in early August, we basically communicated to the investment community that based on discussions with the FDA at the time, that we thought it was likely there would be a delay. That happened. We got a CRL, as you said, on August twentieth. It was related to a third-party fill finish manufacturer that had some pre-approval inspection findings on another company's product, but that then prevented their ability to approve the product at the PDUFA date. Based on our conversations with the FDA, they said a re-inspection is required. That inspection has been scheduled, and we expect to have it resolved in the coming months.

This third party has basically told us that they believe all the findings have been resolved, so it's really up to the FDA when they come in for that re-inspection, to agree with that third party's findings.

Terence Flynn
Analyst, Morgan Stanley

And then how long post that would the action be? Like, is there anything else procedurally you guys need to do as Regeneron, or it's just getting that inspection clearance, and then the FDA would act on your application?

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

I think we'll, I think there are a few additional steps beyond that, but I don't know that there's anything that necessarily is problematic with it. It's all just part of the process of getting a drug approved with the FDA.

Terence Flynn
Analyst, Morgan Stanley

Okay, and does this impact at all, like, any of the commercial plans or anything, or is it just kind of pushed out a little bit? But anything like steps you're taking to kind of mitigate that delay?

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

The team is in place, and they're ready to go.

Terence Flynn
Analyst, Morgan Stanley

Yeah.

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

So once we get the approval, we'll be able to hit the ground running.

Terence Flynn
Analyst, Morgan Stanley

Okay. All right. Well, thank you so much, Chris, Ryan. Really appreciate the time today.

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Thank you.

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

Thanks, Terence

Ryan Crowe
Head of Investor Relations, Regeneron Pharmaceuticals

Thanks.

Terence Flynn
Analyst, Morgan Stanley

Thank you.

Christopher Fenimore
CFO, Regeneron Pharmaceuticals

Yeah, appreciate it.

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