Conference Transcript - REGN 2026-09-09

Mohit Bansal, Analyst — Wells Fargo

Welcome, welcome, welcome. My name is Mohit Bansal. I'm one of the biotech and pharma analysts here at Wells Fargo, and I have the pleasure to start the day with the Regenron management team, fifth year in a row. My five years at Wells Fargo, Regenron has come here every year.

Ryan Crowe, Head of Investor Relations

So with us, we have Marion McCourt, the chief commercial officer of the company, and Ryan Crow, head of IR at the company. so I'll give the podium to Ryan to talk about some yeah I'll take it yeah I appreciate you having us Mohit five years it's flown by a lot of successes that we've been able to report at this very conference and excited to be back so thank you thank you before we begin I just need to make a couple of forward looking statement disclaimers I would 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 results in events of different material from those projected in such statements description of material risks and uncertainties can be found in regenerons 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 i'll just make a couple of opening comments and then we'll get to your questions mohit um going back to the the second quarter earnings uh report that we had In late July, I think we had a really strong financial performance that was driven by exceptional commercial execution, double-digit growth on the top and bottom lines, driven by ILEA HD's outstanding performance in the U.S., DuPixent really setting a new high watermark globally in terms of revenues, as well as LibTayo. In fact, all three hit all-time high for quarterly sales for a quarter. Additionally, in the end of the second quarter, we finished repaying the Santa Fe development balance. So going forward, we will be able to record our full share of the profits from Dupixen and Kevzara as part of our Santa Fe collaboration revenues. So that should give us a little uplift going forward, and we're excited to finally get to that point. Looking ahead, for the rest of 2026, we have some exciting pipeline catalysts, mainly around on the C5 franchise. We have a Bidufidate for semdiceran monotherapy for generalized myasthenia gravis, which is in November, huge and growing market, and we think we have a differentiated product there and are looking forward to hopefully launching that by the end of this year. We also have a pivotal data readout in proximal PNH, which is another area where we're gonna evaluate the combination of Pazelumab and Semdiceran head-to-head against Eculizumab or Soliris. And then we also have an interim readout for geographic atrophy that's looking at the combination that I just mentioned as well as Semdiceran monotherapy. This will be kind of a peek at the data that will inform next steps for that program. We're currently enrolling a pivotal cohort and this could inform powering as well as whether one arm performs better than another and perhaps we can move forward with just two arms as opposed to three in our pivotal study. We also expect to have approval for the ILEA HD pre-filled syringe before the end of this year. And we're working with multiple contract manufacturers on issues related to their facilities as opposed to the product. So we hope that they can resolve them and the FDA can ultimately sign off on our application to get this important delivery mechanism into the market. We're also reporting some early data in the metabolic portfolio, the siRNAs that we have been working on in MASH, as well as for an antibody that targets the NPR1 receptor and antagonizes it for post-orstatic tachycardia syndrome, or POTS. Those are earlier stage programs, but we're excited about both. We also anticipate initiating our pivotal studies for obesity and in type 2 diabetes with Ola-Terepitide, which we in-licensed from HANSO last year. And then finally, I think we're also working towards hopefully expanding our collaboration with Sanofi to go beyond Dupixin and potentially other assets. So I'm sure we'll talk about a lot of these. I'll leave it there, and we'll jump into Mohit's questions.

Mohit Bansal, Analyst — Wells Fargo

Awesome. Thank you very much for this intro. Really appreciate it. So I think the broader question that I want to ask is that Regeneron in the last five years or so, it's becoming like a multi-franchise company, not just from the top line point of view. Now with the Sanofi profit realization, we are seeing that even for the bottom line, it is not as much dependent on ILEA as it was in the past. So given that, I mean, when you look like longer term, what do you think investors still underappreciate in the general story, investors including me as well? So like we would love to understand that.

Ryan Crowe, Head of Investor Relations

Maybe I'll start and I'll let Marian certainly jump in. I'm sure she'll have some thoughts on this. But honestly, it comes back to the pipeline. And I mentioned a few of the programs that we think are fundamentally undervalued in the C5 franchise alone. we see relatively modest expectations at peak year sales for this myasthenia gravis opportunity I don't think there's anything in models for GA admittedly that's a higher risk program but we'll see what we have in a few months here he monk with our BCMA by specific Linos if it which is currently approved in late line settings but we're rapidly advancing it into earlier line settings this is a forty billion dollar therapeutic area that we fully intend to take some share and especially in the earlier stages, and in precursor conditions, where we have some advantages in terms of how we're developing our antibody. Factor 11, another really large category in anticoagulation. We think we have two differentiated antibodies that can address the disease without increasing, with various diseases, without increasing the risk of bleeding, which would be an advance from where the factor Xa's currently are able to do. I think another one that's really under the radar, I think is is our genetics database and when you think about AI in biotech I think you know large language models I think most believe are going to be relatively commoditized over the years and there's gonna be a convergence in how differentiated they are I think that right now maybe you have some advantages for one versus another but over time those are likely to converge what's going to win an AI in our view is proprietary data sets and Regeneron's been working for the last 12 years to build the biggest genetics database in the world that's all linked to electronic health records and now we're beginning to layer in proteomics so that we can have even more information about human biology and human genetics to help inform how to not only find new targets to address disease but also how to manage costs in the system for disease so all these things are things we're working on in the background that certainly hasn't really been fully appreciated if appreciated at all by analysts and investors. So we're looking forward to advancing all those efforts and maybe a few that Marion has in mind as well.

Marion McCourt

Sure. And I just would add to that. And good morning, everyone. Ryan describes the scientific platform, which is so exciting for our future. And whether you talk about the application of the Regeneron Genetic Center or therapeutic areas that will launch in hopefully in the future, cardiometabolic, obesity, thrombosis, neurology, additional indications in hematology, I just would remind everyone if I go back with you, you know, five years, ten years at Regeneron, when we were the, you know, ILEA company only, in every therapeutic area we've entered, whether immunology, oncology, rare disease, certainly still in ophthalmology, our teams have been able to prepare the market through commercialization of medical affairs, but then also execute our launches by indication in highly competitive categories, also creating categories where we're first to market, like atopic dermatitis. So we'll bring the power of that commercialization ability to our scientific platform for the future. And I'm very pleased to report to you, from my perspective, that commercialization ability gets stronger every year. And I would point to the recent results we shared with you in the most recent quarter, the last several quarters, and what we intend to do in the future to demonstrate that. So exciting times at Regeneron, powered by our science.

Mohit Bansal, Analyst — Wells Fargo

Yeah, commercial, we definitely, all of us underappreciated in the last couple of quarters, so you've done an amazing job here. And then similarly for Semi-Soran, like no one really thought that it would be such a success. So kudos to you. So let's just talk a little bit about Aylea here, HD, because we saw a strong quarter in the second quarter. There seems to be a little bit delayed uptake or inflection in this franchise. like the product has been on the market for three years but we got label expansion last year but then all of a sudden second quarter it went to double digits so can you talk a little bit about what actually clicked with physicians all of a sudden and obviously there was a lot of work behind that but talk a little bit about that.

Marion McCourt

Very happy to move so I'll you know I'll remind everyone that we talked a lot about the importance of the label enhancements to include Q4 weekly dosing, the RVO indication, and also durability with every 20-week dosing, obviously that being the most recent enhancement. But the Q4 weekly dosing and RVO occurred towards the end of November. There is some time where you need to make sure that the payer updates have taken place. So certainly the results that we saw in the first half of the year and into the second quarter were a result of that label enhancement. At the same time, though, I would also share with you the physician experience that they're seeing with ILEA HD is very positive, very good. They're coming to see it as the product that truly has greatest durability in the category, a product that they can use now cross indications. RVO, obviously, is about 20% of the market. ILEA has been the standard of care. Very quickly, we're seeing a lot of switch patients to ILEA HD and RVO. And in fact, across the entire anti-VEGF category, more switches are going to ILEA HD than any other product. We're also getting a share of naive patients, but obviously that's the smaller, about 10% of the overall market at any given point in time. So overall strong performance, we still have a lot of work to do. It's a highly competitive market. You know, certainly we're conscious of additional potential biosimilar to the ILEA 2 milligram program, but I think we've got a very strong profile on ILEE HD pleased with the performance and obviously also looking forward to the label enhancement of pre-filled syringe.

Mohit Bansal, Analyst — Wells Fargo

Got it. So like how what are the coming like favorite question on the pre-filled syringe like where where are you right now on this and then how should investors think about one the timing of this and two the importance of this at this point.

Ryan Crowe, Head of Investor Relations

I'll maybe start with the the timing and kind of where we are and that Mary can talk about the impact it might have in the market we don't have much of an update to provide today we continue to work with multiple contract manufacturers on rectifying some of the issues the FDA has identified in their facilities so until they are fixed you know we're not gonna be able to be approved but we believe we're still on track for an approval by the end of this year at one or more of those CMOs and And certainly, I think that will be helpful to commercial efforts that Marion can now talk about.

Marion McCourt

Thanks, Ryan. And I just would add maybe a couple points that I missed is with ILEA HD, proud to report that it is the innovative branded product growing more than any other in the category. In addition, we were able to report to you in the second quarter that ILEA HD makes up 60% of our overall Regeneron franchise sales. That's up from about 50% the quarter before. So it's an example of where you see ILEA HD truly making a mark.

Mohit Bansal, Analyst — Wells Fargo

Got it. So second quarter was crucial in the sense that now people do understand that the HD's growth is kind of overcoming whatever decline you are going to face in standard-dose ILEA. The remaining question is how should we think about the durability of the franchise in the face of new biosimilars coming? and where are you in terms of RVO patients turning over to like what percentage have turned over to HDA versus like how much it is left right now?

Marion McCourt

So I don't think we've given exact percentages Ryan will add to my answer but when it comes to switch patients because ILEA is a bigger product more of our switch patients come from ILEA second source of business will be switches from forisimab where physicians aren't seeing the durability or they're seeing not the clinical types of results they'd hope to or they think they can do better with ilea hd we see switches from avastin for obvious reasons we see switches from biosimilar too right um so it's really across the board the benefit of wanting to go to an improved product for better clinical results safety and durability that ilea hd achieves obviously a highly competitive market so our

Ryan Crowe, Head of Investor Relations

execution is paramount we have a highly respected team in the marketplace that's been really important to us um so we've got a lot of work to do but i think we're uh we're making nice progress i think the only thing i would add is that i the the flibricep two milligram segment i believe is separate and distinct from that of ilea hd um while there are biosimilars and more to come in the two milligram segment ILEA HD stands alone on its durability profile and I think you know there will there will be switches to biosimilar two milligram of flibriceps that still that remains a good opportunity for switching to ILEA HD over time so just because a patient may switch out of branded ILEA to a biosimilar does not make them a great candidate to eventually switch to HD and that'll be part of our strategy got it you know I'll make a quick comment to characterize the market.

Marion McCourt

I think retina specialists across practices, large, medium, and small, are really sophisticated in terms of their ability of managing their practice, making sure that they get to choose the drug they want for their patients. They're very aggressive in terms of making sure that they have the opportunity to control treatment of patients, product selection. And of course, I mean, they're treating blinding eye disease. They're injecting and one die, very important decisions go into how they elect to treat their patients.

Mohit Bansal, Analyst — Wells Fargo

Got it, very helpful. So now turning to the other product, small product you have, Dupixent. So it's already at 24 billion dollar annualized run rate, multiple indications, probably close to one of the biggest products on the market, like Ketuda, these obesity drugs, and Dupixent now. so what so how much more so but again like you pointed out in your prepared remarks at earning colleague there is still the the penetration is still not very high in the some of those markets so how do you think about the next leg of growth is it earlier patient is it like early lines of use or continued penetration like how should we think about where where would you grow next so I would encourage thinking that

Marion McCourt

depicts and as to your point you know such a large product easily top five in the world it was number four last year something of that sort but um across indications we are still under penetrated even in atopic dermatitis we approach the high teens so there's a lot of opportunity for additional patients to come to marketplace and you know if roughly atopic dermatitis is about half the patient population for Dupixen, the other really large indications, whether biologic asthma, COPD, synophilic esophagitis, as you know, across nine indications, some more recently launched like CSU, we have such tremendous unmet potential, benefit of, as the KOLs always point out to me, first and best in category, but also because we treat type 2 disease, patients with comorbidities or patients with a single type 2 inflammation are being helped in a way that other products can't. And, you know, often patients that have, as an example, COPD, they've often had a touch of asthma. Patients with atopic dermatitis, it's not uncommon for them to have had another type 2 comorbidity. We treat to the indication and the specialist, so we're now the leading biologic across Allergists, dermatologists, pulmonologists, there's so many categories where Dupixen is now the leading biologic product in practice, but certainly we have a lot of opportunity because of unmet need in the market, whether it's because of geographies where we've launched more recently, indications where we've just launched, age groups as well. We treat patients, obviously, up into their later years with COPD and progenodularis, bolus pemboid, so many indications, but also it's reassuring to hear the safety to patients as young as six months in atopic dermatitis or patients as young as a one-year-old in esinophilic esophagitis. So we create this opportunity for multiple patient types and really tremendous opportunity for future growth. Having said that, Depixen is a big product today, so that the, obviously, the percentage churn on growth has to be considered based on the size of the product and size of the brand today.

Mohit Bansal, Analyst — Wells Fargo

Got it. Helpful. So, I mean, at least talking to KOLs and experts, basically, like the safety is the main reason, like the clean safety for a map is one of the salient points for Depixen, and it works really well. And safety, and I would add it there too, it's overall safety, multiple indications, but not an immunosuppressant is incredibly important in the market today as well because that creates a whole host of concerns for potential unwanted effects in the future. got it so so the question I was getting to was basically for years it was like considered it is considered a durable franchise and it is a durable franchise but at the same time this emergence of YTE drugs like longer acting and all that they're not necessarily better but they are probably longer acting so how do you see a challenge from a drug theoretical challenge from a drug which is YTE and not better versus something which is slightly better for whatever magical clinical reason but like how do you think about that?

Marion McCourt

So I think you know we always have to be really cautious and very thoughtful about competitive entries. We do a lot to prepare our field teams both commercial and medical for education on competitive products so we're in a better position to talk about the unique differentiation of Depixen, the safety, the experience in market, over 1.5 million patients treated, it really is a tremendous product in terms of what Dupixen has created and the remarkable results for patients. Having said that, competitors coming into the market have actually helped educate populations to seek treatment from their specialists. That probably helps Dupixen quite a lot as well because we do have such unmet need. So certainly there's a thoughtfulness on products coming in that, you know, potentially have aspects of durability or other elements. Having said that, it's really hard to compete with Depixen based on the track record, the history, payer coverage, ease of use. And the convenience of dosing hasn't been difficult for patients to give those, you know, injections, you know, every two weeks or in the case of EOE on a weekly basis. because the results are so spectacular. You know, think of EOE. These are patients, children and adults, who have not been able to enjoy normal meals. You know, there's a nutritional aspect to that. There's a social aspect to that. It really is difficult, even for children going to school. It changes the world for these patients when whether they're skinned, they're breathing, they're eating, pick the indication has been improved to a point where they can participate more normally in the world.

Mohit Bansal, Analyst — Wells Fargo

Got it. Now, it makes sense. And then also it is approved in multiple indications they kind of coexist as well. It's not like someone has one indication. Some people may have multiple diseases as well. Very helpful. So let's just talk a little bit about Sanofi collaboration. So in the past, you talked about the new collaboration framework should evolve to reflect where both companies are today, not in 2007, right?

Ryan Crowe, Head of Investor Relations

So how you are thinking about, like what are the principles for rules of engagement going forward so to speak so how would you think about that you know I think Mohit the the guiding principle for any potential broadening of our alliance is going to be what you know it was almost 20 years ago when we signed the original deal it's about developing and commercializing life-changing drugs for patients and delivering value for shareholders so that is the core the crux of the entire discussion we're having. I think, you know, we're coming at it at an angle with open minds, mutual respect, and a reset of the relationship. So I think we're working towards something, but it's hard to predict when or what that will look like in terms of, you know, what we want versus what they want. I prefer to keep that between the companies at this point. But I can promise you that it's certainly something that's a high priority for both sides. And we think it makes a lot of sense you know we've had a lot of success not only developing depiction now with nine approved indications the crime and now in being used by over a million and a half patients globally today in active use we've also you know are annualizing as you said at 24 billion dollars I don't think either of those could have been achieved by either company alone right though the one plus one equals three I think certainly applies for this collaboration. I think expanding it has strategic rationale for both sides, and now it's a matter of working out the details.

Marion McCourt

Yeah, I would echo Ryan's comments that, you know, together we've done remarkable things with Depixent, both companies, tremendous results with the co-commercialization of Depixent. For the future, it would be amazing. I think there's a great dialogue going on between our senior leaders, obviously new CEO at Sanofi, encouraging comments you heard on their most recent earnings call and from Len and you know if we can come to an agreement that makes sense for both companies potentially we can do more great things together.

Ryan Crowe, Head of Investor Relations

Got it so I mean mechanistically for this collaboration I'll force subunit is already part of the collaboration and that's a super doopey so if you take that forward you do you have to renegotiate at all or you can just take it forward without any any new renegotiation so yeah that's a that's a great question there are we're working on multiple you know long-acting antibodies within the aisle aisle for aisle 13 axis the lead antibody is one that we own full rights to the aisle 13 long-acting antibody currently being dosed in healthy volunteers hopefully moving to patients with atopic dermatitis very soon. That one we hope to have advanced to potentially phase 3 as early as end of next year or early 2028, putting us into the mix for potential approval around the end of the decade, maybe in 2031. You mentioned soupy-doopy, the long-acting antibody that targets the IL-4 receptor alpha. That is a very important receptor because it is already covered by the agreement to your point we're still in pre-clinical development work there expect to advance it to be clinic ready by end of year or in early 27 and in order to advance it into the clinic we would need to work with sanofi so that's where we need to have some discussions with them about how to move that forward we also have a long-acting il4 log end blocker as well as an IL-4 by IL-13 bispecific, expect both of those to reach the clinic sometime next year and are obviously working as quickly as we can on all of these in various development. And we have various development plans for each so that we can begin to advance care for patients with these disparate diseases.

Mohit Bansal, Analyst — Wells Fargo

Got it. I do want to talk about some different. So your purify is approaching here. Neuro is a new area for you. So one... with the like is there specific things you are looking for in the label that would help you as a commercial team or and then beyond that i mean this is a market where az alexion they are far entrenched so how do you what do you what pro what is the proof what is the what are the attributes of the product that will actually help you uh go deep in that market delighted to come in so um it really has been exciting to build out the neurology business unit obviously not the first business unit you've seen us build out over the last handful of years.

Marion McCourt

We do have a number of individuals who had prior experience in neurology, some of the leading companies at Regeneron. And then in addition, we've had some really strong external talent with neurology experience and expertise joined the company recently. So not only our headquarter team, but our field teams are being deployed and will be launch ready. Look forward to Pidufa date towards the second half of November you know in terms of overall attributes of some discernment and the label we hope to achieve will be one that you know certainly gives us an opportunity to be competitive in this market based on efficacy of product safety of product convenience of dosing you know established efficacy profile so that patients truly have the type of coverage and durability in product that they need to have. Mycena Gravis, obviously, a multibillion-dollar marketplace today, growing rapidly. We've done a lot of assessment and understanding of competitive products in the marketplace today, recognizing as we launch there'll probably be about nine products in market, two leading products from AZ, and also with VivGuard in market from Argenix, products that have been highly successful but there's always room for potential differentiation improvement you know not only for existing patients who might be looking for different aspects of treatment and are switch candidates or potentially in naive patients coming into the marketplace as well.

Mohit Bansal, Analyst — Wells Fargo

Got it. I also want to touch upon the obesity franchise so you have a really good molecule with NGLPGIP though I think it is probably more of a question of commercial execution than the clinical side of things. You've done an amazing job by combining or co-formulating these two completely different modalities, so to speak. But when you think about commercially, being four or later to market, but having a PCSK9 plus approach, how do you think it resonating with both primary care as well as the, like primary care is treating most of the, using GLP-1s right now, so how do you think about this approach here?

Marion McCourt

So maybe let Ryan start on some of the clinical rationale, and then I would be delighted to talk about combination product in the market to address obesity and cardiovascular disease with highly effective Asians at the same time.

Ryan Crowe, Head of Investor Relations

Got it. Yeah, so we in-licensed in 2025 a peptide called Olatarepatide from a Chinese company called Hanso. We own the global ex-China rights to that, and we're starting to see data be reported from HANSO, that certainly supports a profile that resembles that of the approved agents in terms of weight loss and potentially differentiation on GI tolerability. So we think we have a sound backbone and we'll be, as I mentioned earlier, launching our pivotal studies in obesity as well as in obese patients with type 2 diabetes before the end of this year. The co-formulation work with prilin has been underway. way. We are currently running a clinical trial of a weekly dose for prylent. Prylent's currently a biweekly subcutaneous injection. We'll have to move that to weekly so you can co-administer. And then we're going to have a co-administered, or I'm sorry, a co-formulated drug at all titration levels, which is another complexity to this program, but one we feel is important to bring to market um so the the clinical program is on track i think our view on the market is you better bring something more to the table than like one or two percentage points on weight loss so whether it's potentially better gi tolerability or whether it's a dramatic reduction in ldls which we've already seen demonstrated with prowlent we think that's important to winning share in this highly competitive market i'll let marion talk more about the commercial dynamics as she sees them Sure.

Marion McCourt

So you, you know, you have the opportunity to combine weight loss, which for most patients, they want to look better, they want to feel better. But at the same time doing that, becoming more healthy, they could be neglecting their heart health entirely. And it could be that the elevated lipids, frankly, are more serious than the weight. And I think for physicians, whether cardiologists or primary care or internal medicine, they're very conscious that a leading cause of cardiovascular death is a result often from elevated lipids and other comorbidities. If you had the opportunity to easily, within the same injection, to address both, why not affect looking good and being healthier at the same time? It's not a difficult message to understand we're in a unique position with probably went as a product to bring it into that kind of a combination therapy and truly think that that would be an opportunity for the future in the window of time where we potentially would have an approval and be able to be able to launch.

Mohit Bansal, Analyst — Wells Fargo

Got it very helpful. I have a lot more questions but we have three minutes so so have to talk about BD given the cash position here. So what is the message here? It does seem like you are more open to this or equally open. How would you characterize this at this point?

Ryan Crowe, Head of Investor Relations

I think we've always been open. But I would say that our approach to capital allocation remains consistent, where internal investments are always going to be the priority. We have a very healthy balance sheet and cash position that is growing. And we need to be able to deploy that to where we think we can get good value and something that we can leverage our different capabilities, whether it's clinical development, commercialization, leaning on genetics to inform our decision-making, manufacturing, you name it. We want to be able to add something to an asset and create value that way. We've been involved in many competitive processes over the last year or two. just haven't been willing to pay the most okay so I think you know we continue to look be very active in terms of evaluating various opportunities across the biotech ecosystem and so I think you know over time if we can find a deal that makes sense for our shareholders and for our company we will certainly do it we have the the financial capability to do that the flexibility to do that and I expect us to do that over time.

Mohit Bansal, Analyst — Wells Fargo

Got it. Very helpful. And Marion, so one year from now, I ask this question, I'm probably, you are used to it now. So, 2027, Wells Fargo Conference, same days, 8th to 10th September, but this time it is Wednesday to Friday. That's a good plug, Mo. So we are sitting here, hopefully, both of us, and what would make you look back at the year and say it was a great year for us?

Marion McCourt

So look forward to being here. It'll be six years to your comment at the opening that we've been here. And, you know, I think I think it'll be continuation of the inline product performance you've seen from Regeneron so far this year across our ophthalmology, immunology, oncology, hematology, you know, rare disease portfolio. And then on top of that, you know, really look forward to some launches, look forward to a pre-filled syringe launch for ILEA HD, very much look forward to the neurology launch potentially with an approval for some discerin and myasthenia gravis, you know, look forward to upcoming clinical data that we'll be reading out. And, you know, certainly continuing to make sure that we bring science through our medicines to patients in a way that Regeneron has come to uphold the values and the spirit of our organization, the culture we've created, the partnership with our stakeholders to do great things in the marketplace and continue the strong performance you've seen.

Mohit Bansal, Analyst — Wells Fargo

Awesome. On that high note, thank you very much and all the best. Thank you, Mohit.

Marion McCourt

Thanks, everybody. Great to see you today.