Good day, and thank you for standing by. Welcome to the Regeneron Pharmaceuticals Third Quarter Earnings Conference Call. I would now like to hand the conference over to your speaker today, Justin Holko, Vice President of Investor Relations. Please go ahead. Thank you, Didi. Good morning, good afternoon, and good evening to everyone listening around the globe. Thank you for your interest in Regeneron Pharmaceuticals, and welcome to the Third Quarter 2021 Conference Call. An archive of this webcast will be available on our website. Joining me today on the call 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; and 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 forecast and guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement issues, intellectual property, pending litigation and 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-Q for the period ended September 30, 2021, which we filed with the SEC earlier today. 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 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, Dr. Len Schleifer.

Thank you, Justin. And before I begin my remarks, let me just note that this may be Justin's last call, it may not be, at least in the position of IR. He is making a transition. He has decided he wants to make the news, not just report and explain the news, and he is moving over to our commercial organization. So we're very excited, but we're not letting him go until his replacement is fully in place. So you may hear more from Justin in this role, or you may not. Justin has done a remarkable job. He is quick to point out to me that when he joined the company, the stock was only around $300. And now he says it's significantly higher. Justin, we thank you for your great service. Turning to our business, we delivered another strong performance in the third quarter, marked by significant double-digit top and bottom line growth and continued operating leverage. This was made possible by the truly exceptional execution by our colleagues across the entire company from R&D to production, commercial and support teams, despite the challenges imposed by the COVID-19 pandemic. Our core business of EYLEA, Dupixent, and Libtayo all contributed solid underlying growth. Additionally, we secured a third supply agreement with the United States government for REGEN-COV, our investigational antibody cocktail for treating and preventing COVID-19 in certain populations, with initial deliveries fueling additional growth momentum in the quarter. In R&D, our broad and growing pipeline, which now includes more than 30 clinical stage candidates with many more expected to enter the clinic in short order, continues to advance new innovations to secure our long-term growth potential. Importantly, our pipeline continues to be largely composed of internal innovation. However, it is increasingly supplemented by external relationships that bring in novel modalities, including CRISPR and siRNA, creating unique treatment options and combination approaches as George will outline momentarily. In the third quarter, beginning with EYLEA, global net sales of EYLEA were $2.4 billion, growing 15% compared to the prior year. U.S. EYLEA sales grew 12%, reflecting recovery of the anti-VEGF category and share gains as the leading anti-VEGF treatment for retinal diseases. We see the strength of EYLEA as an opportunity for steady growth continuing despite potential upcoming competition, from which we currently do not see any disruptive or game-changing new entrants to the anti-VEGF space for treating retinal diseases. Dupixent continues to perform remarkably in delivering commercially and clinically across a wide spectrum of type 2 inflammatory diseases. In the third quarter, global net sales grew 55% to $1.7 billion. Growth contributions from inside and outside the United States continued to improve operating leverage in our alliance with Sanofi. Moreover, we announced positive results from four Phase III registrational studies in recent months, one in very young children with atopic dermatitis, and three in the potential new indications of eosinophilic esophagitis, prurigo nodularis, and chronic spontaneous urticaria. In October, the FDA expanded our asthma label to include children aged 6 to 11, a testament to not only the efficacy but also the safety of Dupixent in the chronic treatment of type 2 inflammatory diseases. With several other disease opportunities in clinical development, such as COPD, the expansion possibilities are significant for this remarkable medicine that is already changing the lives of hundreds of thousands of patients. In Oncology, Libtayo global net sales were $120 million and grew 24%. Despite the challenges imposed on the Oncology market by COVID-19, we are working hard as the leader in cutaneous squamous cell carcinoma and progressing in our basal cell carcinoma and lung cancer launches. We are also preparing for a potential launch in 2022 in the much larger opportunity of Libtayo combined with chemotherapy in non-small cell lung cancer. REGEN-COV continues to grow in importance with increased utilization in the treatment of COVID-19. The FDA has accepted under priority review our biologic license application for the treatment and prophylaxis of COVID-19 in certain patients. We are also on review to expand the emergency use authorization for REGEN-COV in certain hospitalized patients and for pre-exposure prophylaxis. Outside of the United States, our antibody cocktail has received full approval in Japan, is conditionally approved in Australia and the U.K., and has emergency or temporary pandemic authorizations currently in place in more than 40 other countries. REGEN-COV has the potential for a broad range of prevention and treatment applications from pre-exposure prophylaxis to treatment of infected hospitalized patients. Given the anticipation of new COVID infections over time, increased utilization of REGEN-COV in appropriate cases, and the need for prophylaxis in immunocompromised individuals, we anticipate an ongoing role for REGEN-COV. If global demand warrants, we have the capacity to produce between 4 million to 5 million 1.2-gram doses in 2022, excluding any further supply contributions from Roche. To conclude, as we close out 2021, our growth momentum is strong, and our outlook for continued growth fueled by the breadth and depth of our pipeline is bright. Now I will turn the call over to George.

Thank you, Len. I'll pick up where you left off with the REGEN-COV story. As Len mentioned, our robust COVID-19 development program involving more than 25,000 people to date has provided compelling evidence that REGEN-COV has the potential to be used for various prevention and treatment applications, from pre-exposure prophylaxis to treating hospitalized patients. In the United States, REGEN-COV is currently authorized under an EUA and is also being reviewed for full FDA approval for the treatment and prevention of COVID-19 in certain patients with an action date of April 13, 2022. At Regeneron, we all appreciate that widespread vaccination is the best way to broadly protect as many people as possible from COVID-19. However, recent research also reveals some important gaps in coverage provided by the vaccines, leaving some individuals uniquely vulnerable, particularly the several million immunocompromised people in the United States alone who remain prisoners of the pandemic. First, many of the immunocompromised population respond sub-optimally or not at all to vaccination, even after booster shots. Second, breakthrough infections in the general population still occur after vaccination, meaning that immunocompromised people will continue to be at risk of encountering infected individuals even within a highly vaccinated population. Therefore, we believe that REGEN-COV could be of particular importance for these immunocompromised individuals who remain unprotected and are also at highest risk for developing the most severe COVID-19 disease. This includes people with certain hematologic cancers, for example, lymphomas, leukemias, and myeloma, and people who take certain immunosuppressive medicines for diseases such as multiple sclerosis, rheumatoid arthritis, organ transplant recipients, and those with primary immunodeficiencies. In the United States, Regeneron submitted data and a request to the FDA to expand the existing emergency use authorization of REGEN-COV to include chronic prevention back in April. Further reflecting Regeneron's commitment to the immunocompromised, we recently began a significant trial to optimize REGEN-COV prophylaxis in this population, including an evaluation of extended dosing. Our current REGEN-COV cocktail retains potent activity against all known variants of interest, including the Delta variant. However, the virus continues to mutate and evolve. As we have previously discussed, we are advancing a novel anti-spike protein antibody cocktail into clinical development. We have done so proactively in the case of a novel innovative antibody cocktail that retains potency against new potential variants as required in the future. Moving to Ophthalmology, we reported encouraging top-line data of high-dose aflibercept in the Phase II CANDELA study in wet AMD. The small proof-of-concept study met its primary efficacy endpoint, with a higher proportion of patients in the 8-milligram aflibercept group having no retinal fluid compared to patients treated with the currently approved 2-milligram EYLEA dose at week 16. There were no safety signals observed in the comparison to the currently approved EYLEA 2-milligram dose. Two large Phase III trials in wet AMD and DME, evaluating the high dose of aflibercept in dosing intervals of every 12 weeks and every 16 weeks, are fully enrolled and are expected to report results in the second half of 2022. These Phase III data will be crucial to understanding overall efficacy, safety, and convenience of high-dose aflibercept. Moving on to Dupixent, the remarkable clinical success of Dupixent across so many different allergic or type 2 inflammatory diseases validates our early and long-standing hypothesis that these conditions are all driven by overactivation of the same fundamental immunologic pathway, which is the interleukin-4 and interleukin-13 pathway, that is effectively blocked by Dupixent. Whether the disease manifests as asthma or chronic rhinosinusitis with nasal polyps in the airways, atopic dermatitis or prurigo nodularis in the skin, or eosinophilic esophagitis in the GI tract, our clinical data have demonstrated an important impact of Dupixent on these many conditions that initially did not seem related. In only the past few months, Dupixent demonstrated positive results in four separate pivotal studies. This is a tremendous accomplishment stemming from the vision and dedication of our team, and it's great news for patients suffering from these type 2 inflammatory diseases. In a recent Phase III trial in atopic dermatitis in infants and children as young as 6 months of age, Dupixent met all primary and secondary endpoints, as well as a lower observed rate of skin infections in the Dupixent group compared to placebo. Detailed results from this trial will be presented at a future medical meeting, and data will be submitted to the FDA by the end of this year. These data reinforce the well-established efficacy and safety profile of Dupixent, with over half a million patients treated to date. We also reported recent Phase III data with Dupixent in eosinophilic esophagitis or EoE, a progressive disease that damages the esophagus and impairs the ability to swallow. More than one-third of the patients in our trial had manifestations of this disease so severe that they previously had to undergo endoscopic dilation of the esophagus for symptomatic relief. In our study, patients taking weekly Dupixent had an approximate 24-point improvement on the zero to 84 dysphagia symptom questionnaire, representing a 64% improvement compared to a 14-point improvement for placebo. This update reinforced previously reported Phase III results, for which the 52-week follow-up results were recently presented at the United European Gastroenterology Week Virtual 2021 Congress. Completion of our regulatory filing for EoE in adolescents and adults is planned for early 2022. We also recently reported positive results for Dupixent from our Phase III trial in yet another inflammatory skin condition known as prurigo nodularis, an underdiagnosed disease characterized by extreme itch and skin nodules. The trial met its primary and all key secondary endpoints in comparison to placebo, including a reduction in itch from baseline at 12 and 24 weeks, achieving clear skin and improvement in quality of life. A second trial in prurigo nodularis is fully enrolled and is expected to read out in the first half of 2022, with regulatory submissions planned for the same year. If all these exciting Phase III data lead to regulatory approvals, Dupixent would be approved for six different allergic or type 2 inflammatory disease indications, including patients as young as 6 months. Moving to Libtayo in Oncology, positive Phase III data of Libtayo in combination with chemotherapy in first-line advanced non-small cell lung cancer were presented at the ESMO 2021 meeting. These data mark Libtayo as one of only two PD-1 or PD-L1 inhibitors to demonstrate positive Phase III results in first-line non-small cell lung cancer, irrespective of histology, both as monotherapy and in combination with chemotherapy. These Libtayo studies were conducted in a patient population that included difficult-to-treat disease characteristics that reflect everyday clinical practice. We are rapidly progressing toward regulatory submission for the Libtayo chemotherapy combination across histologies and PD-L1 expression levels, which could unlock an opportunity to help a larger population of lung cancer patients. Turning to Hematology, at the upcoming American Society of Hematology Annual Meeting for ASH, we will provide updates to our developing Hematology portfolio. The nodal presentation we will provide will be a data update for our potentially registrational first-in-human trial of REGN5458, our BCMA by CD3 bispecific antibody tested in patients with heavily pretreated multiple myeloma. REGN5458 has the potential to be a major advance in the treatment of patients who have failed several prior lines of therapy, but the potential utility of our BCMA-targeted bispecific is not limited to this patient population. We will discuss our data and further development plans at our virtual ASH Investor event scheduled for Monday, December 13, regarding odronextamab or CD20 by CD3 bispecific. We are pleased with our recruitment in our potentially pivotal trial since the partial clinical hold was lifted earlier this year. Exploration of subcutaneous formulations of odronextamab is on track to start by the end of this year. We are planning to initiate broader Phase III programs in 2022. Our bispecific development program for solid tumors is progressing with our unique approaches, including the MUC16xCD3 bispecific as monotherapy in ovarian cancer, as well as in combination with Libtayo or with our MUC16xCD28 costim. In addition, we expect to have initial data with our PSMAxCD28 costim in patients with prostate cancer in 2022. We are also excited about our EGFRxCD28 costim clinical program across multiple EGF-high cancer settings, including lung cancer, as well as our clinical stage METxMET bispecific and our METxMET antibody drug conjugate, presenting a new frontier for Regeneron into the realm of drug conjugates linked to our potentially best-in-class bispecific antibodies. In conclusion for Oncology, we are approaching an important new phase for Regeneron. We have several novel Phase I/II programs in clinical development, with more expected in the coming months. We also have large Phase III studies planned, such as our LAG-3 Libtayo for first-line advanced melanoma against the pembrolizumab monotherapy comparator, as well as large registrational programs for our Hematology/Oncology bispecifics. We're excited about the potential that these important investments in our portfolio may bring to patients. I would like to conclude with our Regeneron genetics medicines in our collaboration updates. We are uniquely positioned to combine products of our established biologics portfolio and emerging findings from our genetics medicine efforts. As part of our collaboration with Alnylam, we are looking forward to multiple updates on our C5 program. As we already mentioned during the ASH meeting, we will show first-in-human data for our C5 antibody, pozelimab, in combination with the C5 inhibiting siRNA, cemdisiran. We will present initial results in healthy volunteers, which supports the development of this first-of-its-kind combination of an antibody and an siRNA therapeutic. Early data on siRNA monotherapy mediated C5 did not achieve complete terminal complement blockade, which is necessary for adequate disease control in PNH or paroxysmal nocturnal hemoglobinuria. Adding the antibody specific for the same target protein could provide patients with a lower dose therapy and a more convenient extended dosing regimen, while providing more complete C5 inhibition, resulting in better efficacy and less breakthrough hemolysis. We have also recently initiated a Phase III study testing the C5 antibody and siRNA combination in myasthenia gravis. For PNH, starting next year, we are planning to test our combo in both naïve and switch patients against standard of care therapies, including ravulizumab and eculizumab. This study has the potential to show a true benefit of the combination approach for the treatment of this disease. Also in collaboration with Alnylam, some of our initial genetic target discoveries are reaching the stage of clinical readouts for nonalcoholic steatohepatitis or NASH, a disease where finding compelling treatment options has been difficult. We're using the siRNA approach to silence the gene we identified as a potential target. Recall, we discovered that people with a protective HSD17B13 gene variant have a 30% to 70% lower odds of chronic liver disease. Our collaborator, Alnylam, will show initial healthy volunteer safety data for the Alnylam HSD, the HSD17B13 targeting siRNA at their upcoming R&D Day later this month. Finally, in October, the Regeneron Genetics Center published a manuscript in nature, which highlighted the achievement of sequencing almost 0.5 million exomes from the U.K. Biobank database. This nature paper for the first time describes rare variants of genes that could be potential drug targets for diseases such as hypertension, diabetes, asthma, and others. And with that, I will turn the call over to Marion.

Thank you, George. Our third-quarter business performance demonstrates the strength of our commercial portfolio. We are executing well on our in-line brands and are maximizing opportunities for diversified and sustainable growth through ongoing launches. First, I will highlight recent achievements with REGEN-COV, our COVID-19 antibody cocktail, which is available in the U.S. under emergency use authorization by the FDA. In the third quarter, U.S. net sales were $677 million, primarily based on the initial deliveries of our third government agreement, which was announced in mid-September. Demand for REGEN-COV accelerated sharply over the third quarter as this promising treatment option continues to help fight the surge in COVID-19 cases. REGEN-COV is increasingly seen as the standard of care for outpatient treatment and post-exposure prophylaxis in appropriate patients. Our field educators continue to support key stakeholders in health care systems at administration sites. While COVID-19 cases have thankfully decreased over the last several weeks, demand for REGEN-COV remains high, with many patients receiving treatment. REGEN-COV has broad therapeutic applications in current and potential future integrations across the spectrum of disease from pre-exposure prevention to hospitalization. We look forward to the FDA's decision on our application for full approval expected in April of 2022. Beyond REGEN-COV, we delivered strong growth from our core business in the third quarter. Starting with EYLEA, third-quarter global net sales grew 15% year-over-year to more than $2.4 billion. In the U.S., net sales grew 12% year-over-year to nearly $1.5 billion, based on category recovery and EYLEA's competitor share gains. EYLEA secured nearly 50% of the overall category and over 75% of the branded category based on our overall platform of efficacy, safety, and convenience. There are positive early indicators from our unbranded direct-to-consumer campaign that educates patients with diabetic eye disease on the importance of vision care. Retina specialists have applauded our efforts encouraging diabetic patients to seek treatment to prevent irreversible vision loss. EYLEA's competitive profile, coupled with favorable underlying demographic trends, gives us confidence in Regeneron's ongoing leadership position in retinal diseases. Turning to Libtayo, global net sales were $120 million. In the U.S., net sales reached $78 million, despite continued COVID impacts on new patient starts. With new indication launches at early stages, the vast majority of sales came from advanced cutaneous squamous cell carcinoma or CSCC, where Libtayo is the number one systemic treatment. Building on our success in CSCC, we are quickly establishing Libtayo as standard of care in advanced basal cell carcinoma for patients in the second-line setting or where a Hedgehog inhibitor is not appropriate. In lung cancer, we are working to secure physician experience with Libtayo as a competitive monotherapy treatment option. We look forward to the potential chemotherapy combination approval, which would unlock the much larger group of first-line patients eligible for anti-PD-1. Briefly turning to Evkeeza, which is now being used to treat more patients than the prior standard of care, we continue to see initiations in both switch and new-to-category patients, illustrating how our innovative patient identification efforts can be used to support those with HoFH and, in the future, other rare diseases. And finally, Dupixent, in the third quarter, global net sales grew 55% year-over-year to $1.7 billion, and U.S. net sales grew 48% to $1.3 billion. This growth was driven across all approved indications, with new patient starts above pre-COVID levels. In atopic dermatitis, prescribing trends are strong across the spectrum of moderate-to-severe disease, including adolescent and pediatric patients. Dupixent continues to capture market growth based on its well-established efficacy and safety, breadth of current indications, and unmatched physician and patient experience. There continues to be substantial potential growth in atopic dermatitis, including in children as young as 6 months, and more broadly in Dermatology with new potential indications of chronic spontaneous urticaria and prurigo nodularis. In respiratory disease, Dupixent continues to surpass recent competitive biologic launches. In asthma, we see ongoing potential to differentiate Dupixent through its competitive profile and label expansion as the market recovers from COVID when asthma-related emergency room visits were down nearly 50%. Our launch in pediatric asthma is underway, extending this treatment option to 75,000 children in the U.S. who suffer from this often debilitating disease. Dupixent's label was also recently updated to include an additional marker of type 2 inflammation called pheno, which extends the eligible population beyond those with high eosinophilic levels. In addition, Dupixent can be prescribed for steroid-dependent asthma regardless of eosinophilic levels. In nasal polyps, we continue to see growth with Dupixent leading the market despite new competition. Dupixent continues to be the preferred choice of ENTs and allergists regardless of prior surgery. In summary, our commercial team continues to deliver strong growth across the portfolio with differentiated brands, ongoing and potential future launches, and we remain on track for long-term growth. Now, I'll turn the call over to Bob.

Thank you, Marion. My comments today on Regeneron's financial results and outlook will be on a non-GAAP basis where applicable. In the third quarter, Regeneron once again delivered strong top and bottom line growth on increasingly diversified revenue streams, with contributions from REGEN-COV in our robust core business. For the third quarter, total revenues grew 51% year-over-year to $3.5 billion. Total diluted net income per share grew 84% year-over-year to $15.37, on net income of $1.8 billion. Excluding revenues related to the COVID-19 antibody cocktail, total revenues grew 18% versus the prior year. Starting with REGEN-COV, in the third quarter, we recognized $677 million of U.S. net sales, which consist largely of the initial deliveries of approximately 300,000 doses to the U.S. government under the new 1.4 million dose contract as announced in September. Our collaborator, Roche, reported sales of the COVID-19 antibody cocktail known as Ronapreve outside the U.S. In accordance with our Roche agreement, as a true-up payment for global profits, we recorded an additional $127 million as Roche collaboration revenue. In the fourth quarter, we expect to deliver approximately 800,000 doses of REGEN-COV in the U.S., out of which Roche will supply approximately half of these doses. We will record all REGEN-COV U.S. net product sales. Given the mix of manufactured product supply to the market by Roche and Regeneron, the true-up payment for global profits is expected to result in no Roche collaboration revenues in the fourth quarter. The remaining doses from the U.S. government contract are expected to be delivered in the first quarter of 2022. I will now move to our Bayer collaboration. Ex-U.S. EYLEA net product sales reported to us by Bayer were $931 million for the third quarter of 2021, representing growth of 19% on a reported basis and 18% on a constant currency basis. Total Bayer collaboration revenue was $365 million, of which we recorded $351 million for our share of net profits from EYLEA sales outside the U.S. Total Sanofi collaboration revenue was $582 million in the third quarter of 2021. Our share of the profits from the commercialization of Dupixent and Kevzara was $387 million, which compares favorably to our share of profits of $213 million in the prior year. We also recognized a $50 million sales milestone payment related to the achievement of $1.5 billion of ex-U.S. sales for the collaboration on a rolling 12-month basis. Moving on to operating expenses. R&D decreased slightly to $592 million, primarily due to lower spending on REGEN-COV development as compared to the third quarter of 2020. Next, SG&A expenses increased 34% year-over-year to $391 million, primarily due to costs related to growth initiatives for EYLEA and higher headcount. Cost of goods sold increased versus the prior year from $122 million to $224 million, primarily due to REGEN-COV manufacturing costs. Cost of collaboration manufacturing increased 50% year-over-year to $214 million, driven by higher production to support the growing Dupixent sales. Finally, the effective tax rate was 10.8% in the third quarter of 2021. Shifting to cash flow and the balance sheet. Year-to-date, Regeneron has generated $4.3 billion in free cash flow and ended the quarter with cash and marketable securities less debt of $8.7 billion. We continued to utilize our strong balance sheet in accordance with our capital allocation priorities of investing in internal R&D, funding strategic external R&D partnerships, and returning cash to shareholders. Accordingly, in the third quarter, we repurchased approximately $191 million of our shares. To conclude, I'd like to provide select updates to our 2021 guidance. A complete summary of our latest full-year guidance is available in our press release published earlier this morning. We're updating our 2021 gross margin guidance to be approximately 88%. This estimate is inclusive of an expected payment to Roche as a true-up of global profits for the COVID-19 antibody cocktail, which will be reported as cost of goods sold. As a result, we expect our gross margin percentage in the fourth quarter to be the lowest of the year. We are also updating our 2021 R&D guidance to be in the range of $2.55 billion to $2.6 billion. The change to the guidance range is related to updated phasing of expenses and lower spending on REGEN-COV. Looking ahead, we will continue to make investments into both our commercial business and our broad pipeline for long-term growth. In particular, we expect to advance critically important development programs in 2022, including the late-stage studies for the LAG-3 Libtayo combo, BCMA by CD3, and C5 along with branded comparators, as George mentioned earlier, in advancing programs with our collaborators. In conclusion, we're pleased with the third quarter as we invest in our robust pipeline to drive sustained long-term growth. I will now turn the call back to Justin.

Thank you, Bob. Didi, that concludes our prepared remarks. We'd now like to open the call for Q&A. Please go ahead, Didi.

Our first question comes from Geoff Porges of SVB Leerink.

Congratulations on the really remarkable results and the outlook. George, perhaps I could ask you about the costims. We've been wondering when we're going to see the first data for the CD28 costims. Could you clarify exactly what we should expect to see next year? And from which combinations? And then just related to that, just these coming up, and there's a lot of discussion about 4-1BB. Could you clarify why you chose to pursue CD28 for your costims rather than 4-1BB?

Yes. As we indicated, we'll be hopefully providing data in the coming year, and it all depends on how the trials progress. Obviously, one has to deal with combination trials where one is dose escalating. And so those are what are limiting getting to effective doses and so forth. In terms of the choices, it all depended on the science. Our various studies preclinically and in humanized animal models have shown that it made the most sense to initiate our efforts with the CD28 costim approach.

Our next question comes from Chris Raymond of Piper Sandler.

I guess maybe more of a macro question. I know the ink is hardly even dry, I guess, on some of the prescription drug pricing framework negotiations and the write-up that's a company that from Congress. But this is something I'm sure you guys are watching closely. And obviously, any changes to Medicare Part B are potentially impactful to your business. Just any thoughts here on the impact to EYLEA, especially when considering the cap on out-of-pocket spending that's been proposed and discussed?

So Chris, you're right. The ink isn't dry. Some of the bill has been written in disappearing ink, and some is in changing ink, but it's hard to get a fix on it. I would say, as I understand the bill and based on the most recent update, the cap on expenditures is limited to Part D. As in David, drugs, it would not affect Part B. I think I've got that right. As I said, the ink is really not dry. I will say that, generally speaking, it is quite remarkable, just from my personal perspective, that the industry that is most responsible for getting the country and the world out of the pandemic in as best shape as we can is the source of such great attack. But fortunately, I think that some rational heads have prevailed and the most draconian ideas have been written in that disappearing ink.

Our next question comes from Yaron Werber of Cowen and Company.

Congrats to the team on a great quarter. Really just a quick one actually on the pozelimab and cemdisiran combo. I'd already mentioned some potential combo treatment studies, PNH and MG. Again, some of the other C5s, really kind of wanted to ask a little bit about how you're thinking about real-world use of this one. I know there's a lot of movement in especially the MG space. Is this something that we should expect to compete maybe more with Soliris? Or are you thinking a little bit further up the line against IVIG or some of the FcRns? Just kind of want to get your thoughts there.

Yes. I mean we are hoping that this is going to turn out to be the best-in-class in terms of efficacy and also in terms of convenience for these disease categories. So yes, we're thinking about and depending on how the landscape evolves, that could be the opportunity that we would be going after.

Our next question comes from Josh Schimmer of Evercore ISI.

For the high-dose aflibercept Phase III studies, what signals are you looking for a potential filing as OCD sickness benefit alone insufficient to move forward? Is that going to be under a new BLA or an SBLA? And as such, how do you think that would fall under proposed drug pricing legislation and whether it would reset the clock for that product?

Yes. I'll comment on the regulatory assets and George can comment maybe on the design aspects. But at the moment, we don't think this would be a new BLA; this would likely be an SBLA, George?

Yes. Basically, as you said, we're looking, of course, to look at differences in terms of anatomic improvements, but the trial is a non-inferiority study. Where we're going to be testing is whether patients that are being treated at a dramatically increased interval do as well as regular dose EYLEA had at an 8-week interval. So it's going to depend on hopefully seeing that substantially higher numbers of patients being able to be treated at extended dose intervals compared to the 2-milligram dose while achieving similar visual acuity effects.

Our next question comes from Carter Gould of Barclays.

Excellent results, guys. I wanted to ask on REGN14256, I guess, the new running partner for imdevimab. And if development was really in response to a specific shift you're seeing in the variants or lower efficacy? Or if you were looking to optimize on other domains? And I guess, in responding to that, could you also address kind of your expectations for running studies, conducting studies with, I guess, a lower background rate of hospitalization?

Yes, all good and somewhat complicated questions. Right now, obviously, as we've said, our cocktail remains active against all the known variants of concern that have emerged and created issues for other antibodies and so forth. However, we want to be prepared. So we're creating a complementary cocktail that, if ever variants arise that would raise problems for our current cocktail, we would have a complementary cocktail that, the way we designed it, would hopefully be unaffected by the same types of mutations. So it's to be prepared for that possibility that, as the virus continues to evolve, we might need a cocktail that might not be sensitive to the same mutations as the first cocktail. But the current cocktail is still active against the variants of concern. Yes, there's a lot of questions in terms of how to design the study, where to do it, depending on rates of hospitalization and rates of infection. So these are the complications that we've had to navigate throughout this pandemic, as you might remember. And throughout this pandemic, we have managed to carry out the largest COVID-19 program for treatment and for prevention using antibodies. We hope that all the knowledge that we gained from learning how to navigate changing, fluctuating infection rates and hospitalization rates and so forth, we can continue to take advantage of that and continue to carry out our program efficiently and as quickly as possible.

Yes. Let me just add to that and emphasize what George has said in his earlier remarks, which is that a lot of what we see as the big future need is in the pre-exposure prophylaxis. And that pre-exposure prophylaxis is likely not to go away because of the ongoing infections, the breakthrough infections that still occur in fully vaccinated people. Mind you, with the orals coming, we'll see whether they actually get to the United States. They do have some safety and efficacy issues as a class so far. They have not demonstrated comparable core study comparisons, notwithstanding the kind of efficacy that monoclonals have delivered, nor have they satisfied so many people's satisfaction, the safety concerns around using ImmunoGen perhaps okay for short term. But when you're getting into longer-term prophylaxis of the immunocompromised, which is where George mentioned, we have a lot of work ongoing. It's really important to remember that we expect to have our molecules should be able to be given quite less frequently, I think, one might expect because you're looking at a prophylaxis mode. We think that they should, based on the evidence we have, deliver really rather remarkable efficacy in that setting, as they already have in the non-immunocompromised. So as the market transitions to a prophylaxis mode, we see an ongoing demand and need, which we're preparing to meet for monoclonal cocktail therapy.

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

First, let me say to Len that I got your commentary towards political or rather governmental purchases of the REGEN-COV antibody cocktail. Thank you for being the voice of science and reason here. Maybe for my question, I have actually really admired your BD strategy, which shows a lot of awareness recognizing areas of expertise, but also limitations and looking to be in partnerships and licensing to outsource the latter. I was wondering what you're really interested in now on the BD front, if there are any technologies that are jumping out as additional areas of opportunity for the company? And then sort of partial to that, whether you are at all interested in this newly emerging field of protein degradation and protein degraders as Oncology targets?

George should take this. He's been the architect of the scientific underpinnings of our BD strategy and having a remarkable vision to be able to integrate that with our core expertise.

Well, yes, I think if we were looking to get into new technologies and have new relationships, I don't think we would be telling you about them at this time.

Our next question comes from Ronny Gal of Alliance Bernstein.

So following on the last question, can you comment a little bit about when we can see your first kind of CRISPR-based technology in a trial that you run coming into the clinic? Will it be in 2022 or 2023? And then with this full additional company, should we expect the R&D cost to continue to rise roughly at the rate they've historically been?

Okay. I'll remind you that I believe we announced last quarter, our first CRISPR results, which were the first obtained by anybody in history in terms of using a systemic CRISPR-based therapy to actually modify genes within human beings. It was an incredibly successful study that we conducted in collaboration with Intellia. It was the first-ever systemic investigational CRISPR-based gene knockout approach. We showed that a single dose of this CRISPR-based therapy led to very dramatic and dose-dependent reductions in the target protein coming from the target gene. I think that the world viewed this as incredibly exciting data. I believe we announced it in June of 2021. I think it's just the beginning of a very large program. We have about 20 preclinical programs now under evaluation that will be rolling out in terms of going into the clinic and producing clinical results over the next couple of years.

And Ronny, let me punctuate, right? So we'll give kind of guidance in our fourth quarter earnings in early February. I will tell you, if you look at our kind of run rate this year, R&D relative to 2020, we're coming out at roughly a 7% increase if you take the midpoint of my guidance. And I guess my word of caution is a lot of that's heavy REGEN-COV in 2020. So we're going up against the big REGEN-COV number in 2020, as compared to what we incurred in 2021. So that 7% is, I'd say, artificially light compared to where we're going to eventually end up and we do give that guidance. So I just want to make sure people are not doing same year run rates as they're seeing in 2021.

Our next question comes from Matthew Harrison of Morgan Stanley.

This is Charlie on for Matthew. Can you please comment on the Libtayo activities and the commercial dynamics given the relatively modest kind of quarter-to-quarter growth?

Sure, Charlie. This is Marion. Let me take that. First off, we have great ambition, of course, for Libtayo. As I mentioned, the bulk of our sales today are from our launch of cutaneous squamous cell carcinoma. Understandably, our more recent launches have brought us again into derm with basal cell carcinoma, where Libtayo is very quickly becoming the standard of care for appropriate patients based on its clinical profile and based on, obviously, patients unfortunately failing with hedgehog inhibitors, which also can be really difficult to tolerate. So we're very pleased with how that launch is going. Most important, however, is our lung launch. The initial launch we had in monotherapy is understandably for a smaller target group of patients. We do believe, however, though, the experience that physicians are gaining with Libtayo in first-line monotherapy treatment is very, very important and bodes well for when we hopefully have the larger indication approved for chemo combo. As many of you are aware, this is a much larger population of patients, perhaps 4- to 5-fold more patients, and we certainly look forward to potentially being able to launch that larger indication in lung.

Our next question comes from Robyn Karnauskas of Truist.

I was wondering if you can satisfy a little bit of my curiosity about the news flow coming out of your Intellia partnership. I guess the first question I'd ask is in the event that they'll be hosting next year in the first quarter, how much durability data might we get for TTR? And then, George, you mentioned the additional indication over the next few years that you'll be going into. When are we going to be hearing about those? Would we hear about a lot of them in the beginning of the year or would we hear about them over the course of the year? I know Intellia is of huge investor interest as well as mine.

I wonder if we shouldn't give Intellia the opportunity to give that kind of guidance, Robyn.

I'm sure that might be the approach.

Our next question comes from Alethia Young of Cantor.

Congratulations on the quarter. I have a question regarding the strong AOE data for Dupixent. Can you share your thoughts on the market opportunity in this area? Additionally, what is the diagnosis landscape like, and how might you be able to expand your reach?

Sure. So we're very excited about the possibility of launching Dupixent also for eosinophilic esophagitis. As George was describing, there's tremendous unmet need in the marketplace in patients who truly are suffering and often end up in the emergency room with difficult procedures to try to remedy for the short-term, some of the difficult symptoms they have. The size of the patient population for those who are undergoing recurrent treatment is about 48,000. And then, obviously, there are patients who are entering the system beyond that. But probably just as a starter number, that 48,000 to 50,000 who have failed multiple treatments is the core group. And then we will extend beyond that to probably about another 150,000 patients with EoE, who also have the need for treatment. But the failure group, obviously, of 50,000 is the most severe.

Didi, we have time for two more quick questions.

Our next question is from Esther Rajavelu of UBS.

I have one on EYLEA, perhaps a multipart question. Can you give us some details on use among diabetics versus nondiabetic patients? And is the uptake among diabetics type to more consistent use among treated patients? Or are you onboarding new diabetics? And lastly, anything you can share on NPDR versus diabetic macular edema patients would be helpful as well.

Sure. Let me give you a little bit of background and some characterization. Certainly, our indications for diabetic eye disease are the fastest growing in terms of new patients proportionately coming into the treatment paradigm. We also see growth in the diabetes treatment population for EYLEA opposite, for example, wet AMD. So now our wet AMD treatment is under 60% of the total utilization of EYLEA in the U.S. marketplace. The specific growth on diabetic eye disease by indication, it's difficult to give you the exact breakdown, but we are very optimistic on even the early efforts we see in the market, based on our new unbranded direct-to-consumer TV campaign, which is really educating diabetic patients broadly on the importance of having their vision checked, making sure it's part of the regular check-in as patients with diabetes have other areas that they standardly review and make sure of their care. Eye disease has often been neglected with very disastrous situations of vision loss that can't be corrected. So we see that as a really important area and one that will fuel diabetic eye disease treatment broadly. But even today, and before we embarked upon that program, we see it as a high growth indication.

Didi, we have time for one more question.

Our last question comes from Yatin Suneja of Guggenheim Partners.

Congratulations on a strong quarter. Could you discuss the efforts related to other CNS or Neurology applications, specifically regarding monotherapy or combinations? Additionally, regarding the siRNA approach, is there potential for it to be used in the eye, and what is the long-term vision for that?

Yes, we're not going to say too much about your first question. But in terms of your second question, absolutely. And so when we establish this relationship with Alnylam in terms of using siRNA, it was actually directed towards three separate areas. So really it was three separate collaborations. The one in the first that we thought that we'd be moving the most rapidly into the clinic and that has turned out to be the case was with liver targets, both more conventional targets like the C5, but also targets that were coming from our own pipeline like the HSD target that we talked about. And those are all moving forward in what we think is a very exciting fashion as we've discussed. Another key area that you just opened up, which is still preclinically, but we're hoping to eventually move into the clinic is targeting the eye targets with siRNAs. And that's really a very important area for us, and it was a very important separate part of the entire Alnylam collaboration. And the third really critical foundational part of our collaboration with Alnylam involved using siRNAs to target the brain. And that's also moving forward in a very exciting fashion, and we'll be talking a lot more about that going forward. So really, it's a three-pillar program: liver targets, eye targets, and CNS targets. We're very excited and moving forward on all of them. And as we had guided early on, the first set of targets, of course, would be in the liver, and then we'd be moving into the other two areas as rapidly as possible.

Thank you, everyone. That will conclude our call. Bob Landry and the IR team will be available today to answer any additional questions you may have. Thanks, everyone, and stay safe. Goodbye.

This concludes today's conference call. Thank you for participating, and you may now disconnect.