UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Securities Exchange Act of 1934
|
Date of Report (Date of earliest event reported): July
29, 2010 (July 28,
2010)
|
| REGENERON PHARMACEUTICALS, INC. |
| (Exact Name of Registrant as Specified in Charter) |
| New York | 000-19034 | 13-3444607 | ||||||||
| (State or other jurisdiction of | (Commission File No.) | (I.R.S. Employer Identification No.) | ||||||||
| Incorporation) | ||||||||||
| 777 Old Saw Mill River Road, Tarrytown, New York 10591-6707 |
| (Address of principal executive offices, including zip code) |
| (914) 347-7000 | ||
| (Registrant's telephone number, including area code) | ||
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
| c | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
| c | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
| c | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
| c | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On July 28, 2010, Regeneron Pharmaceuticals,
Inc. (“Regeneron”) and Astellas Pharma Inc. (“Astellas”) announced that they had
agreed to extend the terms of a March 30, 2007 non-exclusive license agreement,
under which Astellas licensed certain rights to use Regeneron’s VelocImmune®
technology to discover human monoclonal antibodies. The agreement, which was to
expire in June 2013, was extended for ten years, to June 2023. Under the terms
of the amended agreement, Astellas will make a $165 million up-front payment to
Regeneron in August 2010 (the “Up-Front Payment”). In addition, Astellas will
make a $130 million payment to Regeneron in June 2018 (the “Second Payment”),
unless the agreement is terminated prior to that date. Astellas is no longer
required to make $20 million annual payments to Regeneron in June 2011 or June
2012.
Astellas has the right to terminate the
agreement at any time by providing 90 days advance written notice to Regeneron.
Under certain limited circumstances, such as a material breach of the agreement
by Regeneron, Astellas may terminate the agreement and receive a refund of a
portion of the Up-Front Payment or, if such termination occurs after June 2018,
the Second Payment. As per the terms of the original March 30, 2007 license
agreement, Regeneron is entitled to receive a mid-single digit royalty on any
future sales of antibody products discovered by Astellas using Regeneron’s
VelocImmune technology.
A copy of the press release announcing the
amended agreement is furnished as Exhibit 99.1 to this Form 8-K.
Item 2.02 Results of Operations and Financial Condition.
On July 28, 2010, Regeneron
Pharmaceuticals, Inc. issued a press release announcing its financial and
operating results for the quarter ended June 30, 2010. The press release is
being furnished to the Securities and Exchange Commission pursuant to Item 2.02
of Form 8-K and is attached as Exhibit 99.2 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| 99.1 | Press Release dated April 28, 2010 Announcing Extension of March 30, 2007 VelocImmune® License Agreement with Astellas Pharma Inc. | |
| 99.2 | Press Release dated April 28, 2010 Announcing Financial and Operating Results for the Quarter Ended June 30, 2010 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
| Date: July 29, 2010 | REGENERON PHARMACEUTICALS, INC. | ||
| By: | /s/ Stuart Kolinski | ||
| Name: Stuart Kolinski | |||
| Title: Senior Vice President and General Counsel | |||
Exhibit Index
| Number | Description | ||
| 99.1 | Press Release dated April 28, 2010 Announcing Extension of March 30, 2007 VelocImmune® License Agreement with Astellas Pharma Inc. | ||
| 99.2 | Press Release dated April 28, 2010 Announcing Financial and Operating Results for the Quarter ended June 30, 2010. | ||
Exhibit 99.1
FOR IMMEDIATE
RELEASE
| Press Release |
Astellas to Pay $295 Million to
Extend License of Regeneron’s
VelocImmune® Antibody Technology through 2023
VelocImmune® Antibody Technology through 2023
Tarrytown, NY and Tokyo, Japan –
(July 28, 2010) – Regeneron Pharmaceuticals, Inc.
(“Regeneron”; Nasdaq: REGN) and Astellas
Pharma Inc. (“Astellas”; Headquarters: Tokyo, Japan; President & CEO:
Masafumi Nogimori) announced today that Astellas has extended through 2023 the
non-exclusive license agreement that allows Astellas to utilize Regeneron’s
VelocImmune® technology in its internal research programs
to discover fully human monoclonal antibody product candidates.
Astellas will pay $165
million upfront and another $130 million in June 2018 unless it terminates the
agreement prior to that date. Upon commercialization of any antibody products
discovered utilizing VelocImmune,
Astellas will pay a mid-single-digit royalty on product sales.
In March 2007, Astellas
and Regeneron entered into a six-year VelocImmune license
agreement pursuant to which Astellas made license payments of $20 million per
year in 2007 through 2010. This amendment supersedes the original agreement and
as such, Astellas will no longer make annual license payments in 2011 and 2012.
Approximately 20 monoclonal antibody projects using VelocImmune
technology are ongoing at Astellas and Agensys, Inc., a U.S. affiliate of
Astellas.
“VelocImmune is the
centerpiece of Regeneron’s suite of technologies for the discovery and
development of fully human monoclonal antibodies,” said George D. Yancopoulos,
M.D., Ph.D., President of Regeneron Research Laboratories and Regeneron's Chief
Scientific Officer. “We are pleased that Astellas, a company with a clear
strategic commitment to developing therapeutic antibodies, has elected to
continue to utilize the VelocImmune
platform for its internal
development programs.”
“We are excited about
this extension of the license agreement with Regeneron,” said Shinichi
Tsukamoto, Ph.D., Astellas’ Senior Vice President, Drug Discovery Research. “As
described in our recently announced mid-term management plan toward FY2014,
Astellas is putting the highest strategic priority on the development of
antibody drugs, and VelocImmune will
continue to be the indispensable
technology for our antibody drug development program.”
VelocImmune
Regeneron’s VelocImmune technology offers the potential to increase dramatically the speed and efficiency of discovering fully-human, therapeutic monoclonal antibodies. The VelocImmune platform generates fully human monoclonal antibodies (hMAbs) to address clinically relevant targets of therapeutic interest. The VelocImmune mouse, unlike other hMAb mice, mounts a robust immune response that is virtually indistinguishable from that of a wild type mouse, resulting in a reliable and efficient platform for discovering fully human monoclonal antibodies.
Regeneron’s VelocImmune technology offers the potential to increase dramatically the speed and efficiency of discovering fully-human, therapeutic monoclonal antibodies. The VelocImmune platform generates fully human monoclonal antibodies (hMAbs) to address clinically relevant targets of therapeutic interest. The VelocImmune mouse, unlike other hMAb mice, mounts a robust immune response that is virtually indistinguishable from that of a wild type mouse, resulting in a reliable and efficient platform for discovering fully human monoclonal antibodies.
About Astellas
Astellas Pharma Inc., located in Tokyo, Japan, is a pharmaceutical company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. Astellas has approximately 15,000 employees worldwide. The organization is committed to becoming a global category leader by rapidly establishing a business model in urology, immunology & infectious diseases, neuroscience, DM complications & metabolic diseases and oncology. Astellas has discovered a treatment for over-active bladder (OAB), Vesicare® (solifenacin succinate) and an immunosuppressant, Prograf® (tacrolimus), which have enabled Astellas to become an established leader in both Urology and Transplant. For more information on Astellas Pharma Inc., please visit Astellas’ website at http://www.astellas.com/en.
Astellas Pharma Inc., located in Tokyo, Japan, is a pharmaceutical company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. Astellas has approximately 15,000 employees worldwide. The organization is committed to becoming a global category leader by rapidly establishing a business model in urology, immunology & infectious diseases, neuroscience, DM complications & metabolic diseases and oncology. Astellas has discovered a treatment for over-active bladder (OAB), Vesicare® (solifenacin succinate) and an immunosuppressant, Prograf® (tacrolimus), which have enabled Astellas to become an established leader in both Urology and Transplant. For more information on Astellas Pharma Inc., please visit Astellas’ website at http://www.astellas.com/en.
About Regeneron
Pharmaceuticals
Regeneron is a fully integrated biopharmaceutical company that discovers, develops, and commercializes medicines for the treatment of serious medical conditions. In addition to ARCALYST® (rilonacept) Injection for Subcutaneous Use, its first commercialized product, Regeneron has therapeutic candidates in Phase 3 clinical trials for the potential treatment of gout, diseases of the eye (wet age-related macular degeneration and central retinal vein occlusion), and certain cancers. Additional therapeutic candidates developed from proprietary Regeneron technologies for creating fully human monoclonal antibodies are in earlier stage development programs in rheumatoid arthritis and other inflammatory conditions, pain, cholesterol reduction, allergic and immune conditions and cancer. Additional information about Regeneron and recent news releases are available on Regeneron's web site at www.regeneron.com.
Regeneron is a fully integrated biopharmaceutical company that discovers, develops, and commercializes medicines for the treatment of serious medical conditions. In addition to ARCALYST® (rilonacept) Injection for Subcutaneous Use, its first commercialized product, Regeneron has therapeutic candidates in Phase 3 clinical trials for the potential treatment of gout, diseases of the eye (wet age-related macular degeneration and central retinal vein occlusion), and certain cancers. Additional therapeutic candidates developed from proprietary Regeneron technologies for creating fully human monoclonal antibodies are in earlier stage development programs in rheumatoid arthritis and other inflammatory conditions, pain, cholesterol reduction, allergic and immune conditions and cancer. Additional information about Regeneron and recent news releases are available on Regeneron's web site at www.regeneron.com.
This news release
includes forward-looking statements about Regeneron and its products,
development programs, finances, and business, all of which involve a number of
risks and uncertainties. These include, among others, risks and timing
associated with preclinical and clinical development of Regeneron's drug
candidates, determinations by regulatory and administrative governmental
authorities which may delay or restrict Regeneron's ability to continue to
develop or commercialize its product and drug candidates, competing drugs that
are superior to Regeneron's product and drug candidates, uncertainty of market
acceptance of Regeneron's product and drug candidates, unanticipated expenses,
the availability and cost of capital, the costs of developing, producing, and
selling products, the potential for any license or collaboration agreement,
including Regeneron's agreements with Astellas, the sanofi-aventis Group and
Bayer HealthCare, to be canceled or terminated without any product success, and
risks associated with third party intellectual property. 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 (SEC),
including its Form 10-K for the year ended December 31, 2009 and Form 10-Q for
the quarter ended March 31, 2010. Regeneron does not undertake any obligation to
update publicly any forward-looking statement, whether as a result of new
information, future events, or otherwise, unless required by law.
###
| Contact Information: | |
| Astellas | |
| Corporate Communications | |
| Tel: +81-3-3244-3201 Fax: +81-3-5201-7473 | |
| http://www.astellas.com/en | |
| Regeneron | |
| Michael Aberman, M.D. | Peter Dworkin |
| Investor Relations | Corporate Communications |
| 914.345.7799 | 914.345.7640 |
| michael.aberman@regeneron.com | peter.dworkin@regeneron.com |
Exhibit 99.2
For Immediate
Release
| Press Release |
Regeneron Reports Second Quarter
2010 Financial and Operating Results
Tarrytown, New York (July 28,
2010) -- Regeneron
Pharmaceuticals, Inc. (Nasdaq: REGN) today announced
financial and operating results for the second quarter of 2010. The Company
reported a net loss of $25.5 million, or $0.31 per share (basic and diluted),
for the second quarter of 2010 compared with a net loss of $14.9 million, or
$0.19 per share (basic and diluted), for the second quarter of 2009. The Company
reported a net loss of $56.0 million, or $0.69 per share (basic and diluted),
for the six months ended June 30, 2010 compared with a net loss of $30.3
million, or $0.38 per share (basic and diluted), for the same period in 2009.
Regeneron and Astellas
Pharma Inc. announced today that Astellas has extended through 2023 the
non-exclusive license agreement that allows Astellas to utilize Regeneron’s
VelocImmune® technology in its internal research programs
to discover fully human monoclonal antibody product candidates. Astellas will
pay $165.0 million up-front and another $130.0 million in June 2018 unless it
terminates the agreement prior to that date. Upon commercialization of any
antibody products discovered utilizing VelocImmune®, Astellas will pay the Company a
mid-single-digit royalty on product sales.
At June 30, 2010, cash,
restricted cash, and marketable securities totaled $380.2 million compared with
$390.0 million at December 31, 2009. The Company currently estimates that
year-end 2010 cash, restricted cash, and marketable securities, including the
$165.0 million payment from Astellas, will total $425 - $445 million.
Current Business Highlights
ARCALYST®
(rilonacept) – CAPS
Net product sales of ARCALYST® Injection for Subcutaneous Use in the second quarter of 2010 were $5.2 million, compared to $4.5 million during the same period of 2009. The Company recognized $15.0 million of net product sales during the first six months of 2010, which included $10.2 million of ARCALYST® net product sales made during the first half of 2010 and $4.8 million of previously deferred net product sales, as described below under “Financial Results.” In the first six months of 2009, the Company recognized $8.4 million of ARCALYST® net product sales.
Net product sales of ARCALYST® Injection for Subcutaneous Use in the second quarter of 2010 were $5.2 million, compared to $4.5 million during the same period of 2009. The Company recognized $15.0 million of net product sales during the first six months of 2010, which included $10.2 million of ARCALYST® net product sales made during the first half of 2010 and $4.8 million of previously deferred net product sales, as described below under “Financial Results.” In the first six months of 2009, the Company recognized $8.4 million of ARCALYST® net product sales.
ARCALYST® is available for prescription in the United
States for the treatment of Cryopyrin-Associated Periodic Syndromes (CAPS),
including Familial Cold Auto-inflammatory Syndrome (FCAS) and Muckle-Wells
Syndrome (MWS) in adults and children 12 and older. ARCALYST® is a fusion protein that blocks the cytokine
interleukin-1 (IL-1). CAPS is a group of rare, inherited, auto-inflammatory
conditions characterized by life-long, recurrent symptoms of rash, fever/chills,
joint pain, eye redness/pain, and fatigue.
ARCALYST® (rilonacept)
– Gout
ARCALYST® is in a Phase 3 clinical development program for the prevention of gout flares in patients initiating uric acid-lowering therapy. In June 2010, the Company announced that a Phase 3 study (called PRE-SURGE 1) in gout patients initiating allopurinol therapy to lower their uric acid levels showed that ARCALYST® prevented gout attacks, as measured by the primary study endpoint of the number of gout flares per patient over the 16 week treatment period. Patients who received ARCALYST® at a weekly, self-administered, subcutaneous dose of 160 milligrams (mg) had an 80% decrease in mean number of gout flares compared to the placebo group over the 16 week treatment period (0.21 flares vs. 1.06 flares, p<0.0001). Patients who received ARCALYST® at a weekly dose of 80 mg had a 73% decrease compared to the placebo group (0.29 flares vs. 1.06 flares, p<0.0001).
ARCALYST® is in a Phase 3 clinical development program for the prevention of gout flares in patients initiating uric acid-lowering therapy. In June 2010, the Company announced that a Phase 3 study (called PRE-SURGE 1) in gout patients initiating allopurinol therapy to lower their uric acid levels showed that ARCALYST® prevented gout attacks, as measured by the primary study endpoint of the number of gout flares per patient over the 16 week treatment period. Patients who received ARCALYST® at a weekly, self-administered, subcutaneous dose of 160 milligrams (mg) had an 80% decrease in mean number of gout flares compared to the placebo group over the 16 week treatment period (0.21 flares vs. 1.06 flares, p<0.0001). Patients who received ARCALYST® at a weekly dose of 80 mg had a 73% decrease compared to the placebo group (0.29 flares vs. 1.06 flares, p<0.0001).
All secondary endpoints
of the study were highly positive (p<0.001 vs. placebo). Among these
secondary endpoints, treatment with ARCALYST® reduced the proportion of patients who
experienced two or more flares during the study period by up to 88% (3.7% with
ARCALYST® 160 mg, 5.0% with ARCALYST® 80 mg, and 31.6% with placebo, p<0.0001).
In addition, treatment with ARCALYST® reduced the proportion of patients who
experienced at least one gout flare during the study period by up to 65% (16.3%
with ARCALYST® 160 mg, 18.8% with, ARCALYST® 80 mg, and 46.8% with placebo,
p<0.001).
A total of 241 patients
were randomized in PRE-SURGE 1, a North America-based double-blind,
placebo-controlled study. ARCALYST® was generally well tolerated with no reported
drug-related serious adverse events. Injection site reaction, generally
considered mild, was the most commonly reported adverse event with ARCALYST®.
In addition, in June
2010, the Company reported results from a placebo-controlled, Phase 3 study
(called SURGE) in patients presenting with an acute gout flare. The results of
this study showed that there was no significant benefit from combining
ARCALYST® with indomethacin (a non-steroidal
anti-inflammatory drug considered the standard of care), as measured by the
primary study endpoint of the average intensity of gout pain from 24 to 72 hours
after initiation of treatment. Patients treated with indomethacin alone
experienced an average reduction in patient-reported pain scores (0 to 4 Likert
scale where 0 represents no pain and 4 represents extreme pain) of 1.40 points
from baseline compared to an average reduction of 1.55 points from baseline in
patients treated with both indomethacin and ARCALYST® (p=0.33). Patients who received ARCALYST® alone experienced an average pain reduction
of 0.69 points. Treatment with ARCALYST® was generally well tolerated with no reported
drug-related serious adverse events. The most commonly reported adverse event
with ARCALYST® was
headache.
There are two ongoing
studies in the Phase 3 program with ARCALYST® in the prevention of gout flares in patients
initiating uric acid-lowering therapy. The global PRE-SURGE 2 study, which has a
similar trial design as PRE-SURGE 1, is evaluating the number of gout flares per
patient over the first 16 weeks of initiation of allopurinol therapy. The global
RE-SURGE study is evaluating the safety of ARCALYST® versus placebo over 16 weeks in patients who
are at risk for gout flares because they are taking uric acid-lowering drug
treatment. PRE-SURGE 2 is fully enrolled and RE-SURGE is over 90% enrolled. Data
from both studies are expected in early 2011. Regeneron owns worldwide rights to
ARCALYST®.
VEGF Trap-Eye – Ophthalmologic
Diseases
VEGF Trap-Eye is a specially purified and formulated form of VEGF Trap, which is being developed for use in the intraocular treatment of retinal diseases. VEGF Trap-Eye blocks vascular endothelial growth factor A (VEGF-A), a secreted protein which promotes the growth of blood vessels. It also binds other mediators of angiogenesis, including VEGF-B and Placental Growth Factor (PlGF). VEGF Trap-Eye is being developed by Regeneron in collaboration with Bayer HealthCare. Bayer HealthCare has rights to market VEGF Trap-Eye outside the United States, where the companies will share equally in profits from any future sales of VEGF Trap-Eye. Regeneron maintains exclusive rights to VEGF Trap-Eye in the United States.
VEGF Trap-Eye is a specially purified and formulated form of VEGF Trap, which is being developed for use in the intraocular treatment of retinal diseases. VEGF Trap-Eye blocks vascular endothelial growth factor A (VEGF-A), a secreted protein which promotes the growth of blood vessels. It also binds other mediators of angiogenesis, including VEGF-B and Placental Growth Factor (PlGF). VEGF Trap-Eye is being developed by Regeneron in collaboration with Bayer HealthCare. Bayer HealthCare has rights to market VEGF Trap-Eye outside the United States, where the companies will share equally in profits from any future sales of VEGF Trap-Eye. Regeneron maintains exclusive rights to VEGF Trap-Eye in the United States.
Two Phase 3 studies
(VIEW 1 and VIEW 2) evaluating VEGF Trap-Eye (aflibercept iso-osmotic
ophthalmic) in patients with the neovascular form of age-related macular
degeneration (wet AMD) are fully enrolled, and initial data from these studies
are expected in the fourth quarter of 2010. In addition, Regeneron and Bayer
HealthCare are conducting two Phase 3 studies (COPERNICUS and GALILEO) in
central retinal vein occlusion (CRVO). COPERNICUS is fully enrolled and GALILEO
is over 90% enrolled. Initial data are anticipated from both studies in early
2011.
In February 2010,
Regeneron and Bayer HealthCare announced results of a Phase 2 study (called DA
VINCI) in patients with clinically significant diabetic macular edema (DME). In
the study, VEGF Trap-Eye achieved the primary study endpoint of a statistically
significant improvement in visual acuity over 24 weeks compared to focal laser
therapy, the standard of care in DME. VEGF Trap-Eye was generally
well-tolerated, and no ocular or non-ocular drug-related serious adverse events
were reported. Following the initial 24 weeks of treatment, patients continue to
be treated for another 24 weeks on the same dosing regimens. Initial one-year
results will be available later in 2010.
Aflibercept (VEGF Trap) –
Oncology
Aflibercept (VEGF Trap) is being developed worldwide by Regeneron and its collaborator, sanofi-aventis, for the potential treatment of solid tumors. Three randomized, double-blind, Phase 3 trials, all of which are fully enrolled, are evaluating combinations of standard chemotherapy regimens with either aflibercept or placebo for the treatment of cancer. One trial (called VELOUR) is evaluating aflibercept as a 2nd-line treatment for metastatic colorectal cancer in combination with FOLFIRI (folinic acid [leucovorin], 5-fluorouracil, and irinotecan). A second trial (VITAL) is evaluating aflibercept as a 2nd-line treatment for locally advanced or metastatic non-small cell lung cancer in combination with docetaxel. The third trial (VENICE) is evaluating aflibercept as a 1st-line treatment for metastatic castration-resistant prostate cancer in combination with docetaxel/prednisone. Based on projected event rates, an interim analysis of VELOUR is expected to be conducted by an independent statistician and reviewed by an Independent Data Monitoring Committee (IDMC) in the second half of 2010. An IDMC is a body of independent clinical and statistical experts that meets periodically to evaluate data from the studies. Final results from the VITAL study are anticipated in the first half of 2011 and from the VELOUR study in the second half of 2011. Based on projected event rates, an interim analysis of VENICE is expected to be reviewed by an IDMC in mid-2011, with final results anticipated in 2012.
Aflibercept (VEGF Trap) is being developed worldwide by Regeneron and its collaborator, sanofi-aventis, for the potential treatment of solid tumors. Three randomized, double-blind, Phase 3 trials, all of which are fully enrolled, are evaluating combinations of standard chemotherapy regimens with either aflibercept or placebo for the treatment of cancer. One trial (called VELOUR) is evaluating aflibercept as a 2nd-line treatment for metastatic colorectal cancer in combination with FOLFIRI (folinic acid [leucovorin], 5-fluorouracil, and irinotecan). A second trial (VITAL) is evaluating aflibercept as a 2nd-line treatment for locally advanced or metastatic non-small cell lung cancer in combination with docetaxel. The third trial (VENICE) is evaluating aflibercept as a 1st-line treatment for metastatic castration-resistant prostate cancer in combination with docetaxel/prednisone. Based on projected event rates, an interim analysis of VELOUR is expected to be conducted by an independent statistician and reviewed by an Independent Data Monitoring Committee (IDMC) in the second half of 2010. An IDMC is a body of independent clinical and statistical experts that meets periodically to evaluate data from the studies. Final results from the VITAL study are anticipated in the first half of 2011 and from the VELOUR study in the second half of 2011. Based on projected event rates, an interim analysis of VENICE is expected to be reviewed by an IDMC in mid-2011, with final results anticipated in 2012.
In addition, a
randomized Phase 2 study (AFFIRM) is evaluating aflibercept as a 1st-line treatment for metastatic colorectal
cancer in combination with FOLFOX (folinic acid [leucovorin], 5-fluorouracil,
and oxaliplatin). The AFFIRM study is fully enrolled, and initial data are
anticipated in the second half of 2011.
Monoclonal Antibodies
Since 2007, Regeneron and sanofi-aventis have collaborated on the discovery, development, and commercialization of fully human monoclonal antibodies generated by Regeneron using its VelocImmune® technology. During the fourth quarter of 2009, Regeneron and sanofi-aventis expanded and extended their collaboration with the objective to advance an average of four to five antibodies into clinical development each year between 2010 and 2017. There are five antibody candidates currently in clinical development under the collaboration:
Since 2007, Regeneron and sanofi-aventis have collaborated on the discovery, development, and commercialization of fully human monoclonal antibodies generated by Regeneron using its VelocImmune® technology. During the fourth quarter of 2009, Regeneron and sanofi-aventis expanded and extended their collaboration with the objective to advance an average of four to five antibodies into clinical development each year between 2010 and 2017. There are five antibody candidates currently in clinical development under the collaboration:
REGN727, an antibody to PCSK9, a novel target for LDL
cholesterol reduction, is in Phase 1 studies using both intravenous and
subcutaneous routes of administration. In May 2010, the Company announced that
in an interim efficacy analysis of a dose-escalating, randomized, double-blind,
placebo-controlled, Phase 1 trial in healthy volunteers, REGN727 achieved
substantial, dose dependent decreases of LDL (bad) cholesterol. Each dosing
cohort consisted of six treated and two placebo patients. In July 2010, the
Company presented additional data from the Phase 1 program. At the highest
intravenous doses tested, a single dose of REGN727 achieved a greater than 60%
maximum mean reduction of LDL cholesterol from baseline that lasted for more
than one month. At the highest subcutaneous doses tested, a single dose of
REGN727 achieved a greater than 60% maximum mean reduction of LDL cholesterol
from baseline that lasted for more than two weeks. No serious adverse events and
no dose limiting toxicities have been reported. Dose escalation is ongoing in
both studies.
In July 2010, the
Company also presented the results of an interim efficacy analysis of a dose
escalating, randomized, double-blind, placebo-controlled Phase 1 trial of
subcutaneously delivered REGN727 in hyperlipidemic patients (familial
hypercholesterolemia and non-familial hypercholesterolemia) on stable doses of
statins whose LDL levels were greater than 100 milligrams per deciliter (mg/dL).
At the highest dose tested to-date, in eleven patients, a single dose of REGN727
achieved an approximately 40% maximum mean reduction of LDL cholesterol from
baseline. No serious adverse events and no dose limiting toxicities have been
reported. Dose escalation in this study is ongoing.
REGN88, an antibody to
the interleukin-6 receptor (IL-6R), has completed Phase 1 studies, the results
of which were presented at the annual meeting of the European League Against
Rheumatism (EULAR) in June 2010. REGN88 was well tolerated by patients with
rheumatoid arthritis, and no dose limiting toxicities were reported. Treatment
with REGN88 resulted in dose-related reductions in biomarkers of inflammation. A
Phase 2/3 study of REGN88 in rheumatoid arthritis and a Phase 2 study in
ankylosing spondylitis, a form of arthritis that primarily affects the spine,
are enrolling patients.
REGN421, an antibody to Delta-like ligand-4 (Dll4), a
novel anti-angiogenesis target, is in a Phase 1 study in patients with advanced
malignancies.
REGN668, an antibody to the interleukin-4 receptor
(IL-4R), a target for allergic and immune conditions, has completed Phase 1
testing in healthy volunteers and will be entering a Phase 2 study in patients
with atopic dermatitis in the second half of 2010.
REGN475, an antibody to nerve growth factor (NGF), is
being evaluated in Phase 2 studies in osteoarthritis of the knee and other pain
indications. In May 2010, the Company announced an interim efficacy analysis of
a randomized, double-blind, four-arm, placebo-controlled Phase 2 trial in 217
patients with osteoarthritis of the knee. In July 2010, the Company presented
additional results from this trial through 16 weeks. The primary endpoint of
this study is safety, and REGN475 was generally well tolerated. Serious
treatment emergent adverse events were rare. The most frequent adverse events
reported among patients receiving REGN475 included sensory abnormalities,
arthralgias, hyper/hypo-reflexia, peripheral edema, and injection site
reactions.
In the first interim
efficacy analysis, REGN475 demonstrated significant improvements at the two
highest doses tested as compared to placebo in average walking pain scores over
8 weeks following a single intravenous infusion (p<0.01). In July 2010, the
Company reported that REGN475
demonstrated significant improvements at the two highest doses tested as
compared to placebo in average walking pain scores over 16 weeks following a second intravenous infusion
at week 8 (p<0.01). Pain was
measured by the Numeric Rating Scale (NRS), as well as the Western Ontario and
McMaster Osteoarthritis Index (WOMAC) pain and function
subscales.
At the request of the
FDA, another pharmaceutical company has suspended its anti-NGF antibody clinical
program in osteoarthritis and certain other chronic pain indications. Regeneron
has responded to FDA requests for information about patients in the Company’s
REGN475 clinical trials. REGN475 is currently not on clinical hold, and the
Company’s Phase 2 trials in patients with vertebral fracture pain and chronic
pancreatitis pain are ongoing. The Company’s Phase 2 trial in osteoarthritis of
the knee has been completed. The Company will update its plans for REGN475
following feedback from the FDA.
REGN910: Regeneron plans to
file an Investigational New Drug Application for a sixth antibody candidate,
REGN910, an antibody to Angiopoietin-2, a novel anti-angiogenesis target, by the
end of 2010.
Financial Results
Cash and Marketable
Securities
At June 30, 2010, cash, restricted cash, and marketable securities totaled $380.2 million compared with $390.0 million at December 31, 2009. During the first half of 2010, the Company received $47.5 million from its landlord in connection with tenant improvement costs for new laboratory and office facilities that the Company leases in Tarrytown, New York. In addition, the Company received $20.0 million annual technology licensing payments from each of AstraZeneca and Astellas during the first six months of 2010, as described below.
At June 30, 2010, cash, restricted cash, and marketable securities totaled $380.2 million compared with $390.0 million at December 31, 2009. During the first half of 2010, the Company received $47.5 million from its landlord in connection with tenant improvement costs for new laboratory and office facilities that the Company leases in Tarrytown, New York. In addition, the Company received $20.0 million annual technology licensing payments from each of AstraZeneca and Astellas during the first six months of 2010, as described below.
Revenues
Total revenues increased to $115.9 million in the second quarter of 2010 from $90.0 million in the same quarter of 2009 and increased to $219.4 million for the first half of 2010 from $165.0 million for the same period of 2009. The Company’s revenue was comprised of collaboration revenue, technology licensing revenue, net product sales, and contract research and other revenue.
Total revenues increased to $115.9 million in the second quarter of 2010 from $90.0 million in the same quarter of 2009 and increased to $219.4 million for the first half of 2010 from $165.0 million for the same period of 2009. The Company’s revenue was comprised of collaboration revenue, technology licensing revenue, net product sales, and contract research and other revenue.
Collaboration Revenue
Collaboration revenue relates to the Company’s aflibercept and antibody collaborations with sanofi-aventis and the Company’s VEGF Trap-Eye collaboration with Bayer HealthCare. Collaboration revenue for the three and six months ended June 30, 2010 and 2009 consisted of the following:
Collaboration revenue relates to the Company’s aflibercept and antibody collaborations with sanofi-aventis and the Company’s VEGF Trap-Eye collaboration with Bayer HealthCare. Collaboration revenue for the three and six months ended June 30, 2010 and 2009 consisted of the following:
| Three months ended | Six months ended | |||||||
| June 30, | June 30, | |||||||
| (In millions) | 2010 | 2009 | 2010 | 2009 | ||||
| Collaboration revenue | ||||||||
| Sanofi-aventis | $ 84.9 | $ 60.7 | $ 153.6 | $ 110.4 | ||||
| Bayer HealthCare | 13.7 | 12.8 | 26.7 | 22.8 | ||||
| Total collaboration revenue | $ 98.6 | $ 73.5 | $ 180.3 | $ 133.2 | ||||
For the three and six
months ended June 30, 2010 and 2009, collaboration revenue from sanofi-aventis
consisted of the following:
| Three months ended | Six months ended | ||||||
| June 30, | June 30, | ||||||
| (In millions) | 2010 | 2009 | 2010 | 2009 | |||
| Aflibercept: | |||||||
| Regeneron expense reimbursement | $ 3.8 | $ 9.2 | $ 8.7 | $ 14.6 | |||
| Recognition of deferred revenue related to up-front payments | 2.5 | 2.5 | 5.0 | 5.0 | |||
| Total aflibercept | 6.3 | 11.7 | 13.7 | 19.6 | |||
| Antibody: | |||||||
| Regeneron expense reimbursement | 76.4 | 45.7 | 135.8 | 84.1 | |||
| Recognition of deferred revenue related to up-front and other | |||||||
| payments | 1.8 | 2.6 | 3.3 | 5.3 | |||
| Recognition of revenue related to VelociGene® agreement | 0.4 | 0.7 | 0.8 | 1.4 | |||
| Total antibody | 78.6 | 49.0 | 139.9 | 90.8 | |||
| Total sanofi-aventis collaboration revenue | $ 84.9 | $ 60.7 | $ 153.6 | $ 110.4 | |||
Sanofi-aventis’
reimbursement of Regeneron’s aflibercept expenses decreased for the three and
six months ended June 30, 2010, compared to 2009, due to lower costs related to
manufacturing aflibercept clinical supplies as well as a decrease in internal
research activities. Sanofi-aventis also incurs aflibercept development expenses
directly, including costs related to the Phase 3 clinical trials sanofi-aventis
is overseeing.
Sanofi-aventis’
reimbursement of Regeneron’s expenses under the antibody collaboration increased
for the three and six months ended June 30, 2010, compared to the same periods
in 2009, due to an increase in research activities under the companies’ expanded
collaboration, as described above, and increases in development activities for
antibody candidates in clinical development.
For the three and six
months ended June 30, 2010 and 2009, collaboration revenue from Bayer HealthCare
consisted of the following:
| Three months ended | Six months ended | ||||||
| June 30, | June 30, | ||||||
| (In millions) | 2010 | 2009 | 2010 | 2009 | |||
| Cost-sharing of Regeneron VEGF Trap-Eye development | |||||||
| expenses | $ 11.2 | $ 10.4 | $ 21.8 | $ 17.9 | |||
| Recognition of deferred revenue related to up-front and | |||||||
| milestone payments | 2.5 | 2.4 | 4.9 | 4.9 | |||
| Total Bayer HealthCare collaboration revenue | $ 13.7 | $ 12.8 | $ 26.7 | $ 22.8 | |||
In periods when the
Company recognizes VEGF Trap-Eye development expenses that the Company incurs
under the collaboration with Bayer HealthCare, the Company also recognizes, as
collaboration revenue, the portion of those VEGF Trap-Eye development
expenses that is reimbursable by Bayer HealthCare. Cost-sharing of the
Company’s VEGF Trap-Eye development expenses with Bayer HealthCare increased for
the three and six months ended June 30, 2010, compared to the same period in
2009, due to higher costs incurred by the Company in connection with the
collaboration’s clinical development programs in wet AMD, DME, and CRVO. In 2010
and 2009, development expenses incurred by Regeneron and Bayer HealthCare under
the VEGF Trap-Eye global development plan were shared equally.
Technology Licensing Revenue
Regeneron has entered into non-exclusive license agreements with AstraZeneca and Astellas that allow those companies to utilize VelocImmune® technology in their internal research programs to discover human monoclonal antibodies. To date, the Company has received four $20.0 million annual, non-refundable payments from each of AstraZeneca and Astellas under these agreements. Upon receipt, these payments are deferred and recognized as revenue ratably over the ensuing year of each agreement.
Regeneron has entered into non-exclusive license agreements with AstraZeneca and Astellas that allow those companies to utilize VelocImmune® technology in their internal research programs to discover human monoclonal antibodies. To date, the Company has received four $20.0 million annual, non-refundable payments from each of AstraZeneca and Astellas under these agreements. Upon receipt, these payments are deferred and recognized as revenue ratably over the ensuing year of each agreement.
Net Product Sales
Revenue and deferred revenue from product sales are recorded net of applicable provisions for prompt pay discounts, product returns, estimated rebates payable under governmental programs (including Medicaid), distributor fees, and other sales-related costs. The Company had limited historical return experience for ARCALYST® (rilonacept) beginning with initial sales in 2008 through the end of 2009; therefore, ARCALYST® net product sales were deferred until the right of return no longer existed and rebates could be reasonably estimated. Effective in the first quarter of 2010, the Company determined that it had accumulated sufficient historical data to reasonably estimate both product returns and rebates of ARCALYST®. As a result, $4.8 million of previously deferred ARCALYST® net product sales were recognized as revenue in the first quarter of 2010.
Revenue and deferred revenue from product sales are recorded net of applicable provisions for prompt pay discounts, product returns, estimated rebates payable under governmental programs (including Medicaid), distributor fees, and other sales-related costs. The Company had limited historical return experience for ARCALYST® (rilonacept) beginning with initial sales in 2008 through the end of 2009; therefore, ARCALYST® net product sales were deferred until the right of return no longer existed and rebates could be reasonably estimated. Effective in the first quarter of 2010, the Company determined that it had accumulated sufficient historical data to reasonably estimate both product returns and rebates of ARCALYST®. As a result, $4.8 million of previously deferred ARCALYST® net product sales were recognized as revenue in the first quarter of 2010.
ARCALYST® net product sales totaled $5.2 million and
$4.5 million for the three months ended June 30, 2010 and 2009, respectively,
and $15.0 million and $8.4 million for the six months ended June 30, 2010 and
2009, respectively. ARCALYST® net product sales during the first six months
of 2010 included $10.2 million of net product sales made during this period and
$4.8 million of previously deferred net product sales, as described above. There
was no deferred ARCALYST® net product sales revenue at June 30, 2010.
At June 30, 2009, deferred ARCALYST® net product sales revenue was $4.9
million.
Expenses
Total operating expenses for the second quarter of 2010 were $139.6 million, 31 percent higher than the same period in 2009, and $272.0 million for the first six months of 2010, 37 percent higher than the same period in 2009. Average headcount increased to 1,214 in the second quarter of 2010 from 966 in the same period of 2009 and increased to 1,151 for the first half of 2010 from 952 in the same period of 2009, due primarily to the Company’s expanding research and development activities, principally in connection with the sanofi-aventis antibody collaboration. Operating expenses included non-cash compensation expense related to employee stock option and restricted stock awards of $8.7 million in the second quarter of 2010 and $17.5 million for the first six months of 2010, compared with $7.4 million and $15.1 million, respectively, for the same periods of 2009.
Total operating expenses for the second quarter of 2010 were $139.6 million, 31 percent higher than the same period in 2009, and $272.0 million for the first six months of 2010, 37 percent higher than the same period in 2009. Average headcount increased to 1,214 in the second quarter of 2010 from 966 in the same period of 2009 and increased to 1,151 for the first half of 2010 from 952 in the same period of 2009, due primarily to the Company’s expanding research and development activities, principally in connection with the sanofi-aventis antibody collaboration. Operating expenses included non-cash compensation expense related to employee stock option and restricted stock awards of $8.7 million in the second quarter of 2010 and $17.5 million for the first six months of 2010, compared with $7.4 million and $15.1 million, respectively, for the same periods of 2009.
Research and development
(R&D) expenses increased to $124.5 million in the second quarter of 2010
from $94.2 million in the comparable quarter of 2009 and to $242.0 million in
the first six months of 2010 from $174.5 million in the same period of 2009. In
the second quarter and first half of 2010, the Company incurred higher R&D
costs, primarily related to additional R&D headcount and clinical
development costs, manufacturing clinical supplies, and research and other
development activities associated with the Company’s monoclonal antibody
programs. In addition, R&D expenses include cost-sharing of Bayer
HealthCare’s VEGF Trap-Eye development expenses, which increased in the second quarter and first half of 2010 compared to the
same periods in 2009, primarily due to higher costs in connection with the Phase
3 VEGF Trap-Eye studies being conducted by Bayer HealthCare.
Selling, general, and
administrative (SG&A) expenses increased to $14.7 million in the second
quarter of 2010 from $11.7 million in the comparable quarter of 2009, and to
$28.9 million in the first six months of 2010 from $23.1 million in the same
period of 2009. In the second quarter and first half of 2010, the Company
incurred higher SG&A compensation expense due primarily to additional
headcount, higher Non-cash Compensation Expense, and higher recruitment
costs.
Other Income and
Expense
Investment income decreased to $0.6 million in the second quarter of 2010 from $1.3 million in the comparable quarter of 2009 and to $1.0 million in the first six months of 2010 compared to $3.1 million in the same period of 2009. The decrease in investment income was primarily due to lower balances of, and lower yields on, cash and marketable securities in 2010 compared to 2009.
Investment income decreased to $0.6 million in the second quarter of 2010 from $1.3 million in the comparable quarter of 2009 and to $1.0 million in the first six months of 2010 compared to $3.1 million in the same period of 2009. The decrease in investment income was primarily due to lower balances of, and lower yields on, cash and marketable securities in 2010 compared to 2009.
Interest expense of $2.3
million in the second quarter of 2010 and $4.4 million in the first six months
of 2010 was attributable to the imputed interest portion of the Company’s
payments to its landlord to lease newly constructed laboratory and office
facilities in Tarrytown, New York. These payments commenced in the third quarter
of 2009.
About Regeneron Pharmaceuticals
Regeneron is a fully integrated biopharmaceutical company that discovers, develops, and commercializes medicines for the treatment of serious medical conditions. In addition to ARCALYST® (rilonacept) Injection for Subcutaneous Use, its first commercialized product, Regeneron has therapeutic candidates in Phase 3 clinical trials for the potential treatment of gout, diseases of the eye (wet age-related macular degeneration and central retinal vein occlusion), and certain cancers. Additional therapeutic candidates developed from proprietary Regeneron technologies for creating fully human monoclonal antibodies are in earlier stage development programs in rheumatoid arthritis and other inflammatory conditions, pain, cholesterol reduction, allergic and immune conditions, and cancer. Additional information about Regeneron and recent news releases are available on Regeneron’s web site at www.regeneron.com.
Regeneron is a fully integrated biopharmaceutical company that discovers, develops, and commercializes medicines for the treatment of serious medical conditions. In addition to ARCALYST® (rilonacept) Injection for Subcutaneous Use, its first commercialized product, Regeneron has therapeutic candidates in Phase 3 clinical trials for the potential treatment of gout, diseases of the eye (wet age-related macular degeneration and central retinal vein occlusion), and certain cancers. Additional therapeutic candidates developed from proprietary Regeneron technologies for creating fully human monoclonal antibodies are in earlier stage development programs in rheumatoid arthritis and other inflammatory conditions, pain, cholesterol reduction, allergic and immune conditions, and cancer. Additional information about Regeneron and recent news releases are available on Regeneron’s web site at www.regeneron.com.
This news release
discusses historical information and includes forward-looking statements about
Regeneron and its products, development programs, finances, and business, all of
which involve a number of risks and uncertainties. These include, among others,
risks and timing associated with preclinical and clinical development of
Regeneron’s drug candidates, determinations by regulatory and administrative
governmental authorities which may delay or restrict Regeneron’s ability to
continue to develop or commercialize its product and drug candidates, competing
drugs that are superior to Regeneron’s product and drug candidates, uncertainty
of market acceptance of Regeneron’s product and drug candidates, unanticipated
expenses, the availability and cost of capital, the costs of developing,
producing, and selling products, the potential for any collaboration agreement,
including Regeneron’s agreements with the sanofi-aventis Group and Bayer
HealthCare, to be canceled or terminated without any product success, and risks
associated with third party intellectual property. 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 (SEC), including its Form 10-K
for the year ended December 31, 2009 and Form 10-Q for the quarter ended June
30, 2010. Regeneron does not undertake any obligation to update publicly any
forward-looking statement, whether as a result of new information, future
events, or otherwise, unless required by law.
###
| Contacts Information: | |
| Michael Aberman, M.D. | Peter Dworkin |
| Investor Relations | Corporate Communications |
| 914.345.7799 | 914.345.7640 |
| michael.aberman@regeneron.com | peter.dworkin@regeneron.com |
REGENERON PHARMACEUTICALS,
INC.
CONDENSED BALANCE SHEETS
(Unaudited)
(In thousands)
(In thousands)
| June 30, | December 31, | |||
| 2010 | 2009 | |||
| ASSETS | ||||
| Cash, restricted cash, and marketable securities | $ 380,202 | $ 390,010 | ||
| Receivables | 95,196 | 65,568 | ||
| Property, plant, and equipment, net | 292,329 | 259,676 | ||
| Other assets | 22,914 | 25,948 | ||
| Total assets | $ 790,641 | $ 741,202 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Accounts payable, accrued expenses, and other liabilities | $ 62,574 | $ 52,990 | ||
| Deferred revenue | 199,044 | 182,428 | ||
| Facility lease obligations | 157,807 | 109,022 | ||
| Stockholders' equity | 371,216 | 396,762 | ||
| Total liabilities and stockholders' equity | $ 790,641 | $ 741,202 | ||
REGENERON
PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
| For the three months | For the six months | |||||||||||
| ended June 30, | ended June 30, | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| Revenues | ||||||||||||
| Collaboration revenue | $ 98,576 | $ 73,578 | $ 180,334 | $ 133,186 | ||||||||
| Technology licensing | 10,037 | 10,000 | 20,075 | 20,000 | ||||||||
| Net product sales | 5,197 | 4,500 | 15,049 | 8,391 | ||||||||
| Contract research and other | 2,076 | 1,954 | 3,962 | 3,436 | ||||||||
| 115,886 | 90,032 | 219,420 | 165,013 | |||||||||
| Expenses | ||||||||||||
| Research and development | 124,526 | 94,231 | 241,997 | 174,538 | ||||||||
| Selling, general, and administrative | 14,679 | 11,632 | 28,902 | 23,052 | ||||||||
| Cost of goods sold | 405 | 435 | 1,122 | 827 | ||||||||
| 139,610 | 106,298 | 272,021 | 198,417 | |||||||||
| Loss from operations | (23,724 | ) | (16,266 | ) | (52,601 | ) | (33,404 | ) | ||||
| Other income (expense) | ||||||||||||
| Investment income | 592 | 1,328 | 1,031 | 3,078 | ||||||||
| Interest expense | (2,342 | ) | (4,426 | ) | ||||||||
| (1,750 | ) | 1,328 | (3,395 | ) | 3,078 | |||||||
| Net loss | $ (25,474 | ) | $ (14,938 | ) | $ (55,996 | ) | $ (30,326 | ) | ||||
| Net loss per share amounts, basic and diluted | $ (0.31 | ) | $ (0.19 | ) | $ (0.69 | ) | $ (0.38) | |||||
| Weighted average shares outstanding, basic and diluted | 81,492 | 79,626 | 81,330 | 79,562 | ||||||||