Welcome to the Regeneron Pharmaceuticals Fourth Quarter 2020 Earnings Call. My name is Michelle and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

Thank you, Michelle. Good morning, good afternoon and good evening to everyone listening to the call today. Thank you for your interest in Regeneron Pharmaceuticals, and welcome to the fourth quarter 2020 conference call. An archive of this webcast will be available on our website. Joining me on the call today are Dr. Leonard Schleifer, Founder, President and Chief Executive Officer; Dr. George Yancopoulos, Co-Founder, President and Chief Scientific Officer; Marion McCourt, Executive Vice President and Head of Commercial; Bob Landry, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will open the call for Q&A. I would also like to remind you that remarks made on today's call 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 forecasts and guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement issues, intellectual property, pending litigation, other proceedings and competition. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in Regeneron's filings with the United States Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2020, which we're planning to file with the SEC on Monday. Regeneron does not undertake any obligation to update 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 on 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 Investor Relations team will be available to answer further questions. With that, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer.

Thank you, Justin, and thanks to everyone joining on today's call. 2020 was a devastating year for so many individuals and their families who succumbed to COVID-19. At Regeneron, we have done all we can to be part of the solution, and we'll spend quite a bit of time today trying to inform you of our efforts.

Thank you, Len. With the world still in the throes of the COVID-19 pandemic, I will start with our efforts on REGEN-COV, our antibody cocktail targeting the SARS-CoV-2 virus. Over the last few months, we have achieved several important milestones. On November 21, our antibody cocktail received FDA emergency use authorization for recently diagnosed, mild-to-moderate COVID-19 in high-risk patients. The EUA was granted based on the initial results in patients from our large study in the non-hospitalized setting.

Thank you, George. We ended 2020 with positive momentum across our commercial portfolio as our core products, EYLEA, Dupixent and Libtayo, delivered strong performance in the fourth quarter. Our 2020 results coupled with near-term launch opportunities position us for continued diversified growth in 2021. Beginning with EYLEA, fourth quarter global net sales grew 10% year-over-year to $2.2 billion. As we reported last month, US EYLEA net sales grew 10% year-over-year to $1.34 billion, the highest reported net sales since EYLEA's launch. EYLEA again outperformed the category with share gains from both branded and unbranded competition. EYLEA's share of the branded category approached 75% for the quarter and EYLEA remains the number one prescribed anti-VEGF therapy overall in wet AMD and diabetic eye disease. While volume in the overall anti-VEGF category declined in 2020, EYLEA was the only product in the category to grow. Patient volumes are now normalizing. EYLEA sets a high bar on efficacy, safety, dosing flexibility, and real-world experience for current and future competition. The anti-VEGF category continues to be supported by the aging population and increasing prevalence of diabetes. Realizing the full potential in diabetic eye disease remains a key initiative, representing a significant growth opportunity for EYLEA and is largely unpenetrated. We intend to initiate a direct-to-consumer campaign to create awareness for patients on the importance of vision care as part of managing their diabetes. In summary, EYLEA had an impressive quarter and we remain confident in its outlook. Next, we recorded $146 million for our antibody cocktail, REGEN-COV, in the fourth quarter. Where appropriate, we are deploying commercial efforts under the EUA to improve availability for this important treatment against COVID-19 for at-risk patients. We are engaging with all stakeholders to reduce bottlenecks and drive utilization rates higher. Regeneron is working to educate stakeholders, including patients, on the urgency to treat at-risk non-hospitalized patients within 10 days of receiving a positive COVID-19 diagnosis. Initiatives to reduce administrative burden and direct patients to treatment centers are beginning to yield encouraging results. Physicians using REGEN-COV are providing very positive feedback on treatment results. Let me also briefly discuss another new medicine, evinacumab, brand name Evkeeza. We're prepared for the February 11 PDUFA date for Evkeeza for the treatment of HoFH, a rare disease that affects approximately 1,300 patients in the US. There's high unmet need for these patients with this rare genetic condition as they struggle to keep their LDL cholesterol levels under control. These patients face an increased risk of premature heart disease as early as their teenage years. We are leveraging our cardio-metabolic expertise and existing commercial platform to drive uptake in this rare disease category. Turning now to Libtayo, for the fourth quarter, global net sales grew to $97 million. In the US, net sales were $74 million, driven by steady volume growth in advanced CSCC. We are nearing the potential approval of two additional indications for Libtayo in basal cell carcinoma and non-small cell lung cancer, both of which received priority reviews and have upcoming PDUFA dates. Our teams are eager and ready to launch once approved. For basal cell carcinoma, there are no FDA approved treatment options once a patient progresses on or becomes intolerant to hedgehog inhibitors. Just as we did with CSCC, we will work to establish Libtayo as the standard of care in appropriate BCC patients. We also look forward to competing in non-small cell lung cancer, where there's a large opportunity among patients with PD-L1 expressions at least 50%. Libtayo has a favorable product profile and a growing majority of treatment centers and oncologists have experience using Libtayo in their CSCC patients. Physicians' preferred choice and recent market research shows that nearly two-thirds of physicians are highly motivated to evaluate Libtayo for their lung cancer patients if approved. Additionally, we've built a highly experienced commercialization team with significant launch experience with this class. If approved, we aim to rapidly increase market awareness of Libtayo as a compelling new anti-PD-1 monotherapy treatment option. Finally, moving to Dupixent, global net sales in the fourth quarter were $1.17 billion, representing 56% growth compared to the prior year. In the US, broad-based growth across all approved indications contributed to net sales of $926 million. We continue to see strong prescription trends across all approved indications. And weekly new patient shares have recently eclipsed pre-pandemic levels. Atopic dermatitis, the largest indication, is a significant growth driver on Dupixent's rapid onset, proven efficacy, and well-established safety profile. Physicians continued to expand prescribing across both moderate and severe disease and in younger populations where safety is paramount. Despite the impressive launch growth trajectory, there remains significant opportunity as only a small percentage of the over 2 million biologic eligible patients in the US have been unprescribed Dupixent. Our initiatives aim to grow new patient starts as there is substantial opportunity for many more patients to benefit and support patients already on Dupixent to continue their treatment. Moving to asthma, Dupixent is performing well in this competitive market based on its clinical efficacy and safety profile, which is compelling and differentiated to prescribers. Our market expansion efforts supporting HCPs and patients, including DTC, continue to have a meaningful impact on new initiations, and launch preparations are underway in the pediatric asthma setting. For chronic rhinosinusitis with nasal polyps, we see healthy demand and continued strong prescribing trends among ENTs and allergists. Dupixent is core to our diversified growth strategy where there remains substantial opportunity for future expansion. In closing, we ended 2020 with momentum, delivering strong performance across our business. With several near-term launches ahead, we have important opportunities to strengthen our thriving commercial portfolio and capitalize on growth.

Thanks, Marion. And good morning and good afternoon, everybody. My comments today on financial results and outlook will be on a non-GAAP basis where applicable. For the fourth quarter of 2020, Regeneron delivered again double-digit broad-based top and bottom line growth. Our revenue streams continue to diversify with significant growth contributions from Dupixent and REGEN-COV, as we invest in our best-in-class pipeline for sustained future growth. For the fourth quarter, total revenue grew 30% year-over-year to $2.4 billion, driven by growth in US EYLEA sales, higher collaboration revenues from our partners, Sanofi and Bayer, and sales of our REGEN-COV antibody cocktail. Diluted net income per share grew 27% year-over-year to $9.53 on net income of $1.1 billion. Since Marion discussed our US EYLEA results, I will start with our Bayer and Sanofi collaborations. Starting with the Bayer collaboration. Ex-US EYLEA net product sales reported to us by Bayer were $859 million for the fourth quarter of 2020, representing growth of 10% on a reported basis compared to the prior year. Total Bayer collaboration revenue was $361 million, of which we recorded $335 million for our share of net profits from EYLEA sales outside the US. Total Sanofi collaboration revenue was $317 million in the fourth quarter. Our share of the profits from the commercialization of non-IO antibodies was $230 million, which compares favorably to profits of $104 million in the prior year. This growth was primarily driven by higher Dupixent profits. Other revenue increased to $123 million in the fourth quarter of 2020 compared to $96 million in the prior year. The primary driver is the recognition of $42 million from the US government associated with reimbursements of REGEN-COV development. As we said on the third quarter call, this line item continues to trend lower due to the wind down of development reimbursements from the US government. In 2021, we expect to record approximately half of the $557 million recorded in other revenue for full-year 2020. Moving on to our operating expenses, and starting with R&D. R&D increased 50% year-over-year to $675 million, primarily due to continued clinical development costs for our REGEN-COV antibody cocktail and higher headcount to support our expanding pipeline. Next, SG&A expense increased 22% year-over-year to $381 million. The year-over-year increase was largely driven by increased headcount launch preparations for Libtayo and continued investments for growth in EYLEA. Cost of goods sold increased 79% from the prior year from $93 million to $166 million due to sales of REGEN-COV and Praluent in the US. Cost of collaboration and contract manufacturing was $174 million compared to $113 million in the fourth quarter of 2019, primarily due to increased sales of Dupixent. Additionally, in other operating income and expense, we recorded $145 million of income in the fourth quarter of 2020. This includes approximately $100 million of income related to higher recognition of upfront and milestone payments previously received from our collaborators with Sanofi, Teva, and Mitsubishi Tanabe. Finally, in other income and expense, we recorded $2 million of expense compared to $25 million of income in the fourth quarter of 2019. This is driven by interest expense related to our $2 billion debt issuance in August 2020 and lower investment returns on our existing cash and marketable securities. Turning now to taxes. The effective tax rate was 7.7% in the fourth quarter of 2020 compared to 10.6% in the fourth quarter of 2019. Shifting now to cash flow and the balance sheet. For the full year 2020, Regeneron generated $2 billion in free cash flow and ended the year with cash and marketable securities, less long-term debt, of $4.7 billion. We also exhausted our inaugural $1 billion share repurchase program in the fourth quarter. As a result of our strong balance sheet and confidence in the growth trajectory of our business, we are announcing a new board authorized share repurchase program of $1.5 billion. This program is consistent with our capital allocation priorities of funding our broad R&D pipeline, investing in enabling and synergizing R&D business development opportunities, and returning cash to our shareholders. With this new authorization, we will continue to be opportunistic buyers where we see dislocation between our stock price and our intrinsic valuation. Having reviewed our fourth quarter performance, I'd like to take some time to discuss the 2021 financial outlook. Starting with R&D guidance. We forecast our 2021 R&D expense to be in the range of $2.7 billion to $2.85 billion. We are continuing to advance programs in our diverse R&D portfolio with up to 7 INDs to enter the clinic in 2021, of which six were discovered in-house. This is in addition to INDs that entered the clinic in 2020, which George mentioned. Included in our R&D guidance and based on current plans, we expect to spend between $275 million and $350 million on the REGEN-COV development program. We expect most of this REGEN-COV spend to occur in the first half of the year. Next, we forecast our 2021 SG&A expense to be in the range of $1.5 billion to $1.63 billion. We continue to invest in multiple launches in 2021, including two new indications for Libtayo and efforts for REGEN-COV. Also, as you heard from Marion, this increased spending will also be driven by a DTC campaign for EYLEA as we continue to see significant growth opportunity in diabetic eye disease. Next, we expect our 2021 product gross margin on a percentage of net product sales that we record to be between 87% and 89%. We expect 2021 cost of collaboration manufacturing to be in the range of $670 million to $750 million, driven by continued growth in our Dupixent franchise. We forecast 2021 operating income and expense to be income of $150 million to $175 million. Finally, we expect our 2021 non-GAAP tax rate to be in the range of 12% to 14%, inclusive of REGEN-COV sales in the US, which are taxed at the US statutory rate. I'd also like to review our current supply agreements with the US government for REGEN-COV. We expect to recognize the remainder of the $466 million initial US government contract in the first quarter of 2021. We also announced last month a new agreement with the US government for additional doses of REGEN-COV. Right now, we expect to deliver approximately 750,000 doses by the agreed delivery date of June 30 of this year at the contracted price of $2,100 per dose, with the vast majority of these deliveries occurring in the second quarter. As George mentioned earlier, we are evaluating a lower 1.2 gram dose for REGEN-COV. Should this lower treatment dose receive emergency use authorization or approval from the FDA, we aim to deliver up to 1.25 million doses by June 30, which is the maximum quantity that is authorized for purchase by the US government under the supply agreement. Importantly, if the lower dose is approved, the pricing per dose does not change. Our ability to fulfill these finished doses is predicated on continued success in the manufacture of bulk product and access to third-party finished capacity, which is under heavy demand from COVID-19 vaccine manufacturers. In conclusion, we are well positioned for significant growth with durable core products, multiple near-term launches, and specialized growth opportunities, while investing in our R&D engine to drive sustainable long-term growth.

Thank you, Bob. Michelle, that concludes our prepared remarks. We'd now like to open the call for Q&A. We have more than 20 callers in the queue today. So, to ensure that we are able to address as many of these questions as possible, we are only going to answer one question from each caller before moving to the next. So, please do limit yourself to that one question. Please go ahead, Michelle.

Our first question comes from Chris Raymond with Piper Sandler.

This question is on REGEN-COV. So, I heard Marion's prepared remarks around working to iron out some of the reported logistical and, arguably, financial barriers that have been talked about so much in the real world setting. But I'm guessing, with the development path being as compressed as it was, your commercial support is probably playing catch up a bit here. But can you maybe talk a little bit about – more specifically what you guys feel needs to be worked on the most? Is it education of physicians? Is it the logistical issues? What kind of support – any color there in terms of what exactly you need to do to sort of smooth things out would be great.

Marion can give you more details. But the way we look at it, we need to do work at all parts of the funnel, the top end of the funnel being getting physicians to actually prescribe the product for the appropriate patients and as well as at the bottom end of the funnel which gets quite narrow in some places allowing people to easily get administered the product once the physician wants to treat the patient. And there's been a lot of progress on both ends there. On the bottom end of the funnel, there have been best practices emerging where people have linked directly medical record algorithms to positive patients, asking their doctor if they want to get a consult to administer the cocktail, and they've administered lots and lots of doses of monoclonal antibodies and these best practices are emerging around the country. On the top end, there is still some skepticism that the data is incomplete, that the data isn't robust enough. And we certainly would agree that we don't have the normal data standards that you might have for a full FDA approval, but we remind everybody that we are in the midst of a pandemic where hundreds of thousands of people are going to die and have died. And sometimes, one has to look at the totality of the evidence and make decisions in that regard. So, we continue on the top end education and the logistics on the bottom end.

Chris, I would just add that, as Len pointed out, we continue to work with all of our stakeholders to improve in all dimensions, top level; and at the local level, it is not a traditional commercialization. Under the emergency use authorization, we're working very closely with the government in helping stakeholders with education. The efforts of our medical affairs team in the marketplace has been paramount, our trade and market access group, our policy and government teams. So, we have a lot of work to do. But we are making progress. And I do think that's very, very encouraging. Most encouraging of all is when we talk to the physicians and KOLs that have used REGEN-COV, they report positive results. And some at this point, some facilities have used antibodies and our antibody cocktail to treat hundreds and thousands of patients. So, the best practices are growing, and we're trying to appropriately accelerate that learning.

Our next question comes from Cory Kasimov with JPMorgan.

On Dupixent, given the time on market and the broad favorable feedback everyone seems to get on the product, why do you believe it's only penetrated roughly 6% in the US for atopic dermatitis? And what do you think is the key here over the next year or two to unlocking a lot more? Thank you.

Let me take a stab, Cory, on that. I think that for patients with atopic dermatitis, there had been so little for so long that, over the course of several years now where Dupixent has been in the marketplace, the amazing efficacy, the safety profile, and the convenience of use is something that has required a lot of market education and a lot of market understanding. And across the approved indications that we have in the US today, there are about 2.2 million eligible patients and only about 6% are getting treatment today. So, while favorable results in the understanding of Dupixent with dermatologists, allergists, all of our prescribers and obviously, in asthma, now with pulmonologists and allergists, for nasal polyps with ENTs as well, this is a remarkable alternative across Type 2 disease for approved indications today. But there's a lot of unmet need, and obviously, the future indications will take us into new populations and new prescribers.

I also think there's a lot of education that needs to be done, because obviously there's a long legacy in which people believe that drugs that you might take by mouth, things like JAK inhibitors or things like steroids are not as serious drugs as drugs that you take by injection or biologics. And I think that most people – or most sophisticated people are beginning to realize now that it's the biologics, particularly a drug like Dupixent which is more targeted, more natural, and less prone to an assortment of both on-target and off-target toxicities. And so, people think, a pill, it's less serious. And I think we have to do a lot of education to explain that these biologics are actually more targeted, more natural, they can be a lot safer. And though they're more powerful, you don't have to think of them as more serious in a negative way. So, I think there's a huge legacy of thinking of things like that, but the emerging data that's coming out now is going to help, I think, with these points that, if you're suffering from a disease like atopic dermatitis, you want to be on a natural approach, targeted biological, something that has an exquisite safety profile, like Dupixent.

Our next question comes from Terence Flynn with Goldman Sachs.

Thanks, again, for all the work on the COVID front. Really appreciate all the effort. I know you guys have been working hard there. Just a question for George. You mentioned the efficacy signals you're seeing with your MUC16 bispecific in ovarian cancer. Just wondering if you can elaborate a little bit more there. Is that a RECIST response? Is it CA-125 or maybe another biomarker? And then, on the safety front, anything initially you can share there as well? Thank you.

I can tell you when I say efficacy, it relates to both RECIST and CA-125 measures. I don't think that we have given any specifics on that, and we're waiting for an appropriate medical venue in which to present the data, but we are pretty excited about the preliminary evidence of activity. And as I said, we'll be giving all the details at an upcoming scientific meeting.

Our next question comes from Geoffrey Porges with SVB Leerink.

George, a couple of questions on the – allergy related. You sound quite excited about the allergy programs now. And just wondering if you could tell us a little bit about the path forward for peanut allergy and whether you think this will ultimately be a maintenance treatment for a significant population. Thanks.

I think that we're very excited about our entire allergy portfolio because we really think we have a collection of powerful, but also groundbreaking new approaches. So, as we all know, so many people, millions in the United States, are taking, for example, multiple shots weekly to try to get desensitized or undergo these very long prolonged oral approaches and so forth, often with unsatisfying results even after years of therapy. So, I think it's exciting as we announced that we were able to demonstrate a significant improvement in the amount of peanut tolerization that could occur in conjunction with a new oral desensitization approach. And we think that this is going to prove to be generalizable across the board to many of these desensitization approaches where we hope that Dupixent will aid in making patients more desensitized, maybe able to tolerate these regimens better, as well as maybe improve more quickly. And that's only one component of our allergy program. We're equally excited about a somewhat unrelated effort. We're the first people who are moving into the clinic antibodies that directly bind and neutralize allergens. I for one don't understand why this hasn't been done before. But our data, some of which we have, talked about publicly and even published, and some of it we will be presenting at upcoming meetings show that these are very powerful approaches. From the first injection, almost immediately, at the first time measures, we're getting the sorts of improvements that you see across studies resulting after years of desensitization therapy. And we're talking about two of the most important allergies, which are both associated with asthma, in which settings because of safety concerns, desensitization approaches are not indicated. That is cat allergy and birch allergy. The results are really striking. We think this is an entirely new way to fight allergy, one in which you can almost see the benefit immediately. Once again, it's a very natural and biologic and targeted approach. There are millions of people who are affected by these, and I think many of them having – many of them in my family, I can tell you that they would – if we can really continue to show the sort of safety and efficacy that the initial studies are showing, I think a lot of people would welcome the opportunity to take a shot and have immediate benefit in terms of their serious allergies. And it's an entirely new approach. And all of these things are synergistic, of course. We can imagine many ways in which we can be combining and mixing and matching various parts of our portfolio, including things like Dupixent and these anti-allergens, but with other approaches as well. So, we really think that we may be at the dawn of a whole new era of biologics approach to treating allergy, which I think can really change everything for so many people. And we know that, according to the CDC, allergic diseases are now approaching and increasing in epidemic proportions. So, there's a real need out there. And there's a real need for totally new approaches. And so we're very excited about them.

Our next question comes from Ronny Gal with Bernstein.

Question around the plan for non-small cell lung cancer. With you guys being so close to the launch, I was wondering if you could tell us a little bit more about your launch plans. It seems that you'll have to use some sort of a targeting approach and segmentation to see where you will be able to penetrate the market given you're coming in late. Can you share a little bit more about it? Kind of like what range of upside do we expect from this market? What would you be happy with?

I want to just make one comment about that we're coming in late, and then say that we probably won't answer our launch plans. We have to get our final label. And we certainly don't want to tip off any of our competitors of what we're up to. But we're spending a lot of time obviously thinking about that. But let me just address one comment you made, which was that, you said coming in late. I remember, it may have been you, but it probably was somebody else who asked this question, why were we even bothering with Libtayo in non-small cell lung cancer because by the time you get it approved, there'll be 10 others that are there. And I remember George answering that question saying, well, he's not so sure that there'll be 10 others, all antibodies aren't created equal, plus it would be a foundation for the rest of our business. And that wisdom has really panned out because if you look almost every day, there's another failure of a PD-L1 or an inferior PD-1 that doesn't combine right, all sorts of things. And there really is only one right now, one gold standard, which is Keytruda. And obviously, we don't have any head-to-head data. But when you look at our data, it's really impressive data. And so, we think that we should remind everybody that the questions that we got 5 or 10 years ago, why bother have sort of panned out more the way George had anticipated, rather than maybe everybody else had. As far as specific launch plans, we'll ask you to stay tuned because we're working hard at preparing.

Our next question comes from Kennen MacKay with RBC Capital Markets.

What a year indeed! Maybe a question on EYLEA. Len, a couple of years ago, you got it completely right on some of the emerging competition not being as big a risk as myself and some of the Street had anticipated would be. Just would love to get your perspective on some of the new data from the Ang2 and sort of how you're thinking about some of the evolving competition there again, given you're certainly right in the path?

I think George touched on it, but let me deal specifically as best we can for the product you referenced from Roche, which is a combination of anti-VEGF and anti-Ang2. I might start out by saying we have the greatest respect for Roche Genentech, the group, we partner with them in our COVID global efforts, and we watch them really establish the anti-VEGF class with Lucentis. So, we have tremendous respect for them. But I think when it comes to Ang2, history has a very important lesson here, in that I was with George, I remember it, we were tracking – I was with George when one of his colleagues, they were working so hard to identify, purify and clone and sequence this really important molecule that was seemed to be a critical player in blood vessel formation and development, et cetera. And maybe the only real other critical factor other than VEGF. So, George and his group discovered this molecule, and nobody would like to see it bear fruit in terms of a treatment. But the data that we have just don't support that. Our data, we look very carefully, we could not find the benefit of adding Ang2 to the amazing effects that you get with a highly potent anti-VEGF compound, such as EYLEA. So, when we look at the data you refer to, we haven't seen all their data and we'll look for it, but from what they've disclosed, some ways in the 40s-percent to be able to get to a 16-week regimen is what George referred to as exactly what EYLEA gets in the ALTAIR study. So, we don't see so far any evidence – we'll look at the data – that there's anything more there than high-dose anti-VEGF therapy, higher than Lucentis on a molar basis. And so, we'll have to wait and see. But one has to remember, though, so that safety, George mentioned, we have 30 million injections under our belt, that's a tremendous safety database. And you can see what happens that there's been a reminder out there just how important the safety side of this is. So, we'll see. We have great respect for them. But we don't see any data right now to suggest Ang2 blockade is playing any differentiated role, if any role at all. I don't know, George, the discover of Ang2, you want to comment further?

Just very quickly. As Len said, we discovered the entire family of the angiopoietins. And we obviously made the first and we think the best antibodies against these factors. We tried them in combination studies. I think there is no evidence at all from any of the faricimab data that there's any additional benefit vis-à-vis mechanism of action of the combined blockade of the angiopoietin. Two, I think that it's sort of a regulatory trick to try to create a differentiated molecule, put both activities within one. We think it's a better, more convincing, frankly, safer approach to actually test both blocking agents separately, rather than combining them in one molecule when there's no benefit other than pure regulatory tricks for combining them into one molecule. The way we think that the data looks right now, it looks as if this is merely high-dose Lucentis. And the data that they've at least reported to date suggests similar data to what we see right now currently with EYLEA. As Len mentioned, we have studies that show that up to 40% of patients can achieve 16-week dosing. I think the important add-on to it is, of course – is that we have our upcoming studies with high-dose EYLEA. So, basically, what people are doing are they're taking carbon molecules which didn't fare as well, and they're high dosing them. Okay? We're taking EYLEA and we're high dosing it. And it's already starting at a place where its duration and its efficacy and its safety seem to be leading with really no evidence that the competition has anything significantly different. But now, we're testing the higher dose to see whether we can make EYLEA even better while still delivering the same safety and efficacy. So, we're pretty excited about that. And as we said, we see there's no evidence that any of the competitors are providing anything different at this point.

Our next question comes from Evan Seigerman with Credit Suisse.

Thanks for all the work on the COVID-19 antibody. So I'm looking at REGN1979. Assuming that the trial resumes near term, what do you really need to demonstrate in this Phase II, potentially pivotal file for submission next year? I believe you kind of highlighted that earlier in the year.

I think that, basically, what we have to do is just continue to see the efficacy and build on the duration that we've seen, while continuing to also decrease any of the safety concerns and so forth. But I think the data, as it stands right now, would be very supportive of an approval as long as we can confirm it in larger numbers. And importantly, build on the already very impressive duration with some responses exceeding the year timeframes. So, we're very excited about it. Obviously, there's always concerns and hurdles we have to get over. But assuming that we can get past them and we can resume enrollment and continue with the study, we hope that the data as it matures and accrues will continue to support that it's an important option that these patients could have.

Our next question comes from Yaron Werber with Cowen.

George, maybe just for you, you're all very excited about the costim strategy. We'll get data at some point in the late this year or next year. But how do you – when you're thinking about costim with a CD-28 and also hitting the CD-3 axis or the bispecific, how would that work? If you could just give us a preview.

Just in terms of the costim, so as we've shown in some very high profile papers in Science and Science Translational, basically, nature uses to activate T cells to do their job, particularly, for example, to kill cells. They need signal 1 through the T cell receptor itself, which is a CD-3 as an important component of that. But they also need signal 2, which some people refer to as a costimulatory signal. And so, by combining bispecifics that involve CD-3 engagement and bispecifics that involve CD-28 or costimulatory engagement, you're simultaneously activating both signal 1 and signal 2. And we have shown rather compellingly in preclinical models that this really accentuates and really dramatically increases the ability of T cells to kill the target itself. Let me also remind you that the PD-1 and other checkpoint inhibitors provide a break. So, you have signal 1 and signal 2, which are driving the cells to kill. And then, you can have a brake signal that acts through checkpoints, such as PD-1. So, combining all three or combining them in pairwise fashion, in animal models, shows that you can just increase the amount of tumor killing that you get as compared with having just one of the approaches. So, we're just trying to understand what nature does and how nature optimizes the process and then mimic it with these natural approaches to biologics that can activate in a targeted fashion only on the tumor target cells, depending on how well the targeting is, signal 1, signal 2, while releasing the brake. So, the preclinical data is pretty compelling. And we can only hope that we approach it with what we're going to see in the clinic. And we do think that, over the next year, it's going to be very interesting to see how these dose escalation trials play out.

Our next question comes from Matthew Luchini with BMO Capital.

I wanted to quickly come back to EYLEA competitive dynamics and just try to understand a little bit what your internal kind of market research is indicating about physicians' willingness to even really consider new drugs. In other words, maybe you could share a little bit of your perspective on what impact the brolucizumab experience last year has had on their willingness to step away from a proven agent like EYLEA.

I'm happy to take it. I'll start with where you ended. I do think that the experience of the Novartis launch reset the table on the importance of safety. And frankly, never assuming safety or assuming efficacy for any category, let alone when you're injecting into someone's eye and seeking to save their vision. We look at the competitive dynamic, as you know, very, very thoroughly. And I do think that EYLEA during this period of time, the last couple of years, but certainly during the pandemic, the characteristics of the breath of indications, experience, the ability to treat and extend, now in a prefilled syringe for efficiency and throughput in the offices, and this remarkable safety and efficacy profile make it an incredibly compelling choice for retinal specialists and injectors. We, obviously, even within our own portfolio, look to improvements, like the EYLEA high dose for the future, the ability to treat and extend even further. But obviously, we've very deliberately with our scientific team set very, very high bar for competition.

I think that vision is so important. We all know it, we all treasure it. Okay? And I think that there's, hopefully, a new – a realization once again about how important it is and how a catastrophic event that causes permanent loss of vision can be so catastrophic and so damning. And I think that when you have such a safe and effective agent, with such an experience, one really has to take into consideration the risks, the potential catastrophic risks of trying new approaches, unknown safety risks with the potential catastrophic risk.

Our next question comes from Mohit Bansal with Citigroup.

Congrats on the progress. In our conversations with experts, doctors did talk about the potential use of Dupixent in milder patients, given the safety. So, to that end, do you need to do a clinical trial to get there? Or do you think it is already happening to some extent at dermatologists' offices? Thank you.

The profile today for Dupixent treatment is for patients with moderate to severe disease, both in atopic dermatitis and also for patients that require biologic asthma treatment. I'll let team members talk about additional clinical work to that component. But that is our focus of the population. As we discussed earlier, in the US alone, we probably have about 2.2 million eligible patients, just on the indications where we have approval today. But to your comment, what I hear about time and time again from our physician prescribers and key opinion leaders is the remarkable safety profile based on a very specific mechanism of action. And that confidence in being able to treat not only adults, now the younger age groups where we have indications, for example, in atopic dermatitis, not only for adolescence but on pediatric patients down to six years of age.

I think it's a great question and it reflects back on this issue about penetration and so forth. It didn't take much market research to know how Dupixent was initially being used or how most drugs are used. Though it was approved, for example, in the moderate to severe population in atopic dermatitis, all physicians initially started with their toughest, their hardest, their most serious patients before then gradually going backwards in the treatment paradigm. And that is one of the reasons why we're only penetrating about 6% of the moderate to severe population. So, I think that gradually, with more confidence, they're going to treat people who are on the more moderate side of things. That said, I think the point that – the efficacy profile, but also the mechanism of action, the fact that you are probably in the long term may be benefiting the patient in terms of slowing or preventing the ultimate atopic marks that occur in so many patients demands that we figure out a way to take this product to earlier patients. Those will, however, require additional studies. We're trying to figure out the best way to do it. But I for one do think that, for example, many more patients with much milder asthma or other milder forms of Type 2 disease that we know in many patients is just going to get worse over time. We owe these patients – we have to figure out through a clinical program, how to do the right studies, how to convince the FDA and how to move this treatment back towards these earlier patients.

Thanks everyone for joining the call. Thank you for hanging in there a little longer than normal. Bob Landry and the investor relations team will be around after the call. We hope you enjoy your weekend. Please stay safe.

Ladies and gentlemen, this does conclude the program. You may now disconnect. Everyone, have a great day.