FORM 10-Q
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(Mark One)
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(X)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
September 30, 2015
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OR
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( )
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
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For the transition period from __________ to __________
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Commission File Number
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0-19034
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New York
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13-3444607
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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777 Old Saw Mill River Road, Tarrytown, New York
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10591-6707
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(Address of principal executive offices)
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(Zip Code)
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Yes
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X
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No
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Yes
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X
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No
|
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Large accelerated filer
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X
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Accelerated filer
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Non-accelerated filer
|
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(Do not check if a smaller reporting company)
|
Smaller reporting company
|
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Yes
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|
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No
|
X
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Class of Common Stock
|
|
Number of Shares
|
Class A Stock, $.001 par value
|
|
1,913,776
|
Common Stock, $.001 par value
|
|
102,151,256
|
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Page Numbers
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"ARCALYST
®
", "EYLEA
®
", "ZALTRAP
®
", "
VelocImmune
®
", "
VelociGene
®
", "
VelociMouse
®
", "
VelociMab
®
", and "
VelociSuite
®
" are trademarks of Regeneron Pharmaceuticals, Inc. Trademarks and trade names of other companies appearing in this report are, to the knowledge of Regeneron Pharmaceuticals, Inc., the property of their respective owners.
|
|
September 30,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
654,587
|
|
|
$
|
648,719
|
|
Marketable securities
|
241,055
|
|
|
251,761
|
|
||
Accounts receivable - trade, net
|
1,088,207
|
|
|
739,379
|
|
||
Accounts receivable from Sanofi
|
199,117
|
|
|
111,510
|
|
||
Accounts receivable from Bayer HealthCare
|
151,991
|
|
|
125,483
|
|
||
Inventories
|
190,668
|
|
|
128,861
|
|
||
Deferred tax assets
|
60,521
|
|
|
46,179
|
|
||
Prepaid expenses and other current assets
|
89,494
|
|
|
79,046
|
|
||
Total current assets
|
2,675,640
|
|
|
2,130,938
|
|
||
|
|
|
|
||||
Marketable securities
|
681,326
|
|
|
460,154
|
|
||
Property, plant, and equipment, at cost, net of accumulated depreciation and amortization
|
1,475,123
|
|
|
974,309
|
|
||
Deferred tax assets
|
346,243
|
|
|
269,237
|
|
||
Other assets
|
4,583
|
|
|
3,034
|
|
||
Total assets
|
$
|
5,182,915
|
|
|
$
|
3,837,672
|
|
|
|
|
|
||||
LIABILITIES and STOCKHOLDERS' EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
577,428
|
|
|
$
|
483,489
|
|
Deferred revenue from Sanofi, current portion
|
100,908
|
|
|
15,927
|
|
||
Deferred revenue - other, current portion
|
54,148
|
|
|
58,098
|
|
||
Other current liabilities
|
2,506
|
|
|
97,146
|
|
||
Total current liabilities
|
734,990
|
|
|
654,660
|
|
||
|
|
|
|
||||
Deferred revenue from Sanofi
|
599,339
|
|
|
62,819
|
|
||
Deferred revenue - other
|
78,942
|
|
|
72,430
|
|
||
Facility lease obligations
|
364,144
|
|
|
310,938
|
|
||
Convertible senior notes
|
30,723
|
|
|
146,773
|
|
||
Other long-term liabilities
|
77,910
|
|
|
39,801
|
|
||
Total liabilities
|
1,886,048
|
|
|
1,287,421
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $.01 par value; 30,000,000 shares authorized; issued and outstanding - none
|
—
|
|
|
—
|
|
||
Class A Stock, convertible, $.001 par value; 40,000,000 shares authorized; shares issued and outstanding - 1,914,776 in 2015 and 1,973,368 in 2014
|
2
|
|
|
2
|
|
||
Common Stock, $.001 par value; 320,000,000 shares authorized; shares issued - 105,572,737 in 2015 and 102,475,154 in 2014
|
106
|
|
|
102
|
|
||
Additional paid-in capital
|
2,880,109
|
|
|
2,450,782
|
|
||
Retained earnings
|
697,706
|
|
|
216,644
|
|
||
Accumulated other comprehensive income
|
7,721
|
|
|
52,251
|
|
||
Treasury stock, at cost; 3,437,000 shares in 2015 and 2,017,732 in 2014
|
(288,777
|
)
|
|
(169,530
|
)
|
||
Total stockholders' equity
|
3,296,867
|
|
|
2,550,251
|
|
||
Total liabilities and stockholders' equity
|
$
|
5,182,915
|
|
|
$
|
3,837,672
|
|
|
|
|
|
||||
The accompanying notes are an integral part of the financial statements.
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Statements of Operations
|
|
|
|
|
|
|
|
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net product sales
|
|
$
|
737,562
|
|
|
$
|
448,844
|
|
|
$
|
1,939,954
|
|
|
$
|
1,229,244
|
|
Sanofi collaboration revenue
|
|
224,735
|
|
|
132,925
|
|
|
593,201
|
|
|
406,028
|
|
||||
Bayer HealthCare collaboration revenue
|
|
157,596
|
|
|
135,853
|
|
|
415,679
|
|
|
358,460
|
|
||||
Technology licensing and other revenue
|
|
17,529
|
|
|
8,166
|
|
|
56,817
|
|
|
23,496
|
|
||||
|
|
1,137,422
|
|
|
725,788
|
|
|
3,005,651
|
|
|
2,017,228
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
|
425,924
|
|
|
337,728
|
|
|
1,159,367
|
|
|
919,608
|
|
||||
Selling, general, and administrative
|
|
209,993
|
|
|
144,003
|
|
|
543,572
|
|
|
343,960
|
|
||||
Cost of goods sold
|
|
67,199
|
|
|
33,655
|
|
|
170,624
|
|
|
91,073
|
|
||||
Cost of collaboration and contract manufacturing
|
|
41,884
|
|
|
21,938
|
|
|
111,254
|
|
|
54,471
|
|
||||
|
|
745,000
|
|
|
537,324
|
|
|
1,984,817
|
|
|
1,409,112
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
392,422
|
|
|
188,464
|
|
|
1,020,834
|
|
|
608,116
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Investment and other income
|
|
2,603
|
|
|
2,591
|
|
|
4,533
|
|
|
5,205
|
|
||||
Interest expense
|
|
(1,715
|
)
|
|
(9,232
|
)
|
|
(10,632
|
)
|
|
(31,022
|
)
|
||||
Loss on extinguishment of debt
|
|
(21
|
)
|
|
—
|
|
|
(16,927
|
)
|
|
(10,787
|
)
|
||||
|
|
867
|
|
|
(6,641
|
)
|
|
(23,026
|
)
|
|
(36,604
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
|
393,289
|
|
|
181,823
|
|
|
997,808
|
|
|
571,512
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
|
(182,891
|
)
|
|
(98,448
|
)
|
|
(516,746
|
)
|
|
(323,481
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
210,398
|
|
|
$
|
83,375
|
|
|
$
|
481,062
|
|
|
$
|
248,031
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share - basic
|
|
$
|
2.04
|
|
|
$
|
0.83
|
|
|
$
|
4.68
|
|
|
$
|
2.47
|
|
Net income per share - diluted
|
|
$
|
1.82
|
|
|
$
|
0.73
|
|
|
$
|
4.18
|
|
|
$
|
2.19
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding - basic
|
|
103,348
|
|
|
100,796
|
|
|
102,825
|
|
|
100,325
|
|
||||
Weighted average shares outstanding - diluted
|
|
115,944
|
|
|
117,423
|
|
|
115,144
|
|
|
113,203
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
210,398
|
|
|
$
|
83,375
|
|
|
$
|
481,062
|
|
|
$
|
248,031
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized (loss) gain on marketable securities, net of tax
|
|
(11,432
|
)
|
|
22,632
|
|
|
(44,530
|
)
|
|
28,083
|
|
||||
Comprehensive income
|
|
$
|
198,966
|
|
|
$
|
106,007
|
|
|
$
|
436,532
|
|
|
$
|
276,114
|
|
|
|
|
|
|
|
|
|
|
||||||||
The accompanying notes are an integral part of the financial statements.
|
|
|
Nine Months Ended
September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
481,062
|
|
|
$
|
248,031
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
51,999
|
|
|
38,551
|
|
||
Non-cash compensation expense
|
|
300,657
|
|
|
208,732
|
|
||
Loss on extinguishment of debt
|
|
16,927
|
|
|
10,787
|
|
||
Other non-cash charges and expenses, net
|
|
33,197
|
|
|
28,473
|
|
||
Deferred taxes
|
|
(65,975
|
)
|
|
(34,161
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
(Increase) decrease in Sanofi, Bayer HealthCare, and trade accounts receivable
|
|
(462,943
|
)
|
|
53,642
|
|
||
Increase in inventories
|
|
(81,459
|
)
|
|
(50,917
|
)
|
||
Increase in prepaid expenses and other assets
|
|
(13,223
|
)
|
|
(28,850
|
)
|
||
Increase in deferred revenue
|
|
624,063
|
|
|
3,466
|
|
||
Increase in accounts payable, accrued expenses, and other liabilities
|
|
164,652
|
|
|
76,506
|
|
||
Total adjustments
|
|
567,895
|
|
|
306,229
|
|
||
Net cash provided by operating activities
|
|
1,048,957
|
|
|
554,260
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of marketable securities
|
|
(550,142
|
)
|
|
(478,436
|
)
|
||
Sales or maturities of marketable securities
|
|
265,995
|
|
|
216,478
|
|
||
Capital expenditures
|
|
(500,154
|
)
|
|
(215,464
|
)
|
||
Net cash used in investing activities
|
|
(784,301
|
)
|
|
(477,422
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds (payments) in connection with facility and capital lease obligations
|
|
26,405
|
|
|
(810
|
)
|
||
Repayments of convertible senior notes
|
|
(146,007
|
)
|
|
(61,125
|
)
|
||
Payments in connection with reduction of outstanding warrants
|
|
(523,487
|
)
|
|
(143,041
|
)
|
||
Proceeds from issuance of Common Stock
|
|
150,423
|
|
|
80,804
|
|
||
Payments in connection with Common Stock tendered for employee tax obligations
|
|
(71,673
|
)
|
|
(175,866
|
)
|
||
Excess tax benefit from stock-based compensation
|
|
305,551
|
|
|
334,146
|
|
||
Net cash (used in) provided by financing activities
|
|
(258,788
|
)
|
|
34,108
|
|
||
|
|
|
|
|
||||
Net increase in cash and cash equivalents
|
|
5,868
|
|
|
110,946
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
|
648,719
|
|
|
535,608
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
|
$
|
654,587
|
|
|
$
|
646,554
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of the financial statements.
|
|
Rebates &
Chargebacks
|
|
Distribution-
Related
Fees
|
|
Other Sales-
Related
Deductions
|
|
Total
|
||||||||
Balance as of December 31, 2014
|
$
|
3,083
|
|
|
$
|
21,166
|
|
|
$
|
532
|
|
|
$
|
24,781
|
|
Provision related to current period sales
|
41,290
|
|
|
88,049
|
|
|
6,024
|
|
|
135,363
|
|
||||
Credits/payments
|
(38,011
|
)
|
|
(71,007
|
)
|
|
(6,052
|
)
|
|
(115,070
|
)
|
||||
Balance as of September 30, 2015
|
$
|
6,362
|
|
|
$
|
38,208
|
|
|
$
|
504
|
|
|
$
|
45,074
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2013
|
$
|
4,400
|
|
|
$
|
19,663
|
|
|
$
|
538
|
|
|
$
|
24,601
|
|
Provision related to current period sales
|
23,265
|
|
|
53,689
|
|
|
1,202
|
|
|
78,156
|
|
||||
Credits/payments
|
(23,873
|
)
|
|
(54,878
|
)
|
|
(1,211
|
)
|
|
(79,962
|
)
|
||||
Balance as of September 30, 2014
|
$
|
3,792
|
|
|
$
|
18,474
|
|
|
$
|
529
|
|
|
$
|
22,795
|
|
|
|
Three Months Ended
September 30,
|
||||||
Sanofi Collaboration Revenue
|
|
2015
|
|
2014
|
||||
Antibody:
|
|
|
|
|
||||
Reimbursement of Regeneron research and development expenses
|
|
$
|
205,114
|
|
|
$
|
140,497
|
|
Reimbursement of Regeneron commercialization-related expenses
|
|
53,341
|
|
|
1,688
|
|
||
Regeneron's share of losses in connection with commercialization of antibodies
|
|
(74,865
|
)
|
|
(12,830
|
)
|
||
Other
|
|
2,561
|
|
|
2,561
|
|
||
Total Antibody
|
|
186,151
|
|
|
131,916
|
|
||
Immuno-oncology:
|
|
|
|
|
||||
Reimbursement of Regeneron research and development expenses
|
|
18,584
|
|
|
—
|
|
||
Other
|
|
20,000
|
|
|
—
|
|
||
Total Immuno-oncology
|
|
38,584
|
|
|
—
|
|
||
ZALTRAP
®
:
|
|
|
|
|
||||
Regeneron's share of losses in connection with commercialization of ZALTRAP
|
|
—
|
|
|
(1,008
|
)
|
||
Reimbursement of Regeneron research and development expenses
|
|
—
|
|
|
1,261
|
|
||
Other
|
|
—
|
|
|
756
|
|
||
Total ZALTRAP
|
|
—
|
|
|
1,009
|
|
||
|
|
$
|
224,735
|
|
|
$
|
132,925
|
|
|
|
Nine Months Ended
September 30,
|
||||||
Sanofi Collaboration Revenue
|
|
2015
|
|
2014
|
||||
Antibody:
|
|
|
|
|
||||
Reimbursement of Regeneron research and development expenses
|
|
$
|
585,450
|
|
|
$
|
405,212
|
|
Reimbursement of Regeneron commercialization-related expenses
|
|
89,145
|
|
|
7,062
|
|
||
Regeneron's share of losses in connection with commercialization of antibodies
|
|
(143,583
|
)
|
|
(17,125
|
)
|
||
Other
|
|
7,683
|
|
|
7,683
|
|
||
Total Antibody
|
|
538,695
|
|
|
402,832
|
|
||
Immuno-oncology:
|
|
|
|
|
||||
Reimbursement of Regeneron research and development expenses
|
|
18,584
|
|
|
—
|
|
||
Other
|
|
20,000
|
|
|
—
|
|
||
Total Immuno-oncology
|
|
38,584
|
|
|
—
|
|
||
ZALTRAP:
|
|
|
|
|
||||
Regeneron's share of losses in connection with commercialization of ZALTRAP
|
|
—
|
|
|
(4,912
|
)
|
||
Reimbursement of Regeneron research and development expenses
|
|
686
|
|
|
3,691
|
|
||
Other
|
|
15,236
|
|
|
4,417
|
|
||
Total ZALTRAP
|
|
15,922
|
|
|
3,196
|
|
||
|
|
$
|
593,201
|
|
|
$
|
406,028
|
|
|
|
Three Months Ended
September 30,
|
||||||
Bayer HealthCare Collaboration Revenue
|
|
2015
|
|
2014
|
||||
EYLEA:
|
|
|
|
|
||||
Regeneron's net profit in connection with commercialization of EYLEA outside the United States
|
|
$
|
130,510
|
|
|
$
|
85,351
|
|
Sales milestones
|
|
—
|
|
|
30,000
|
|
||
Cost-sharing of Regeneron EYLEA development expenses
|
|
1,827
|
|
|
4,394
|
|
||
Other
|
|
21,155
|
|
|
12,745
|
|
||
Total EYLEA
|
|
153,492
|
|
|
132,490
|
|
||
PDGFR-beta antibody:
|
|
|
|
|
||||
Cost-sharing of REGN2176-3 development expenses
|
|
1,508
|
|
|
518
|
|
||
Other
|
|
2,596
|
|
|
2,845
|
|
||
Total PDGFR-beta
|
|
4,104
|
|
|
3,363
|
|
||
|
|
$
|
157,596
|
|
|
$
|
135,853
|
|
|
|
Nine Months Ended
September 30,
|
||||||
Bayer HealthCare Collaboration Revenue
|
|
2015
|
|
2014
|
||||
EYLEA:
|
|
|
|
|
||||
Regeneron's net profit in connection with commercialization of EYLEA outside the United States
|
|
$
|
326,567
|
|
|
$
|
213,291
|
|
Sales milestones
|
|
15,000
|
|
|
75,000
|
|
||
Cost-sharing of Regeneron EYLEA development expenses
|
|
6,948
|
|
|
26,235
|
|
||
Other
|
|
50,685
|
|
|
34,490
|
|
||
Total EYLEA
|
|
399,200
|
|
|
349,016
|
|
||
PDGFR-beta antibody:
|
|
|
|
|
||||
Cost-sharing of REGN2176-3 development expenses
|
|
8,688
|
|
|
1,657
|
|
||
Other
|
|
7,791
|
|
|
7,787
|
|
||
Total PDGFR-beta
|
|
16,479
|
|
|
9,444
|
|
||
|
|
$
|
415,679
|
|
|
$
|
358,460
|
|
|
December 31, 2014
|
||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||
Balance Sheet Data:
|
|
|
|
|
|
||||||
Deferred tax assets (noncurrent)
|
$
|
266,869
|
|
|
$
|
22,152
|
|
|
$
|
289,021
|
|
Total assets
|
3,871,827
|
|
|
22,152
|
|
|
3,893,979
|
|
|||
Additional paid-in capital
|
2,404,118
|
|
|
60,890
|
|
|
2,465,008
|
|
|||
Retained earnings
|
255,382
|
|
|
(38,738
|
)
|
|
216,644
|
|
|||
Total stockholders' equity
|
2,542,325
|
|
|
22,152
|
|
|
2,564,477
|
|
|||
Total liabilities and stockholders' equity
|
3,871,827
|
|
|
22,152
|
|
|
3,893,979
|
|
|
Three Months Ended
September 30, 2014
|
|
Nine Months Ended
September 30, 2014
|
||||||||||||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general, and administrative
|
$
|
149,748
|
|
|
$
|
(5,745
|
)
|
|
$
|
144,003
|
|
|
$
|
361,012
|
|
|
$
|
(17,052
|
)
|
|
$
|
343,960
|
|
Total operating expenses
|
543,069
|
|
|
(5,745
|
)
|
|
537,324
|
|
|
1,426,164
|
|
|
(17,052
|
)
|
|
1,409,112
|
|
||||||
Income from operations
|
182,719
|
|
|
5,745
|
|
|
188,464
|
|
|
591,064
|
|
|
17,052
|
|
|
608,116
|
|
||||||
Income before income taxes
|
176,078
|
|
|
5,745
|
|
|
181,823
|
|
|
554,460
|
|
|
17,052
|
|
|
571,512
|
|
||||||
Income tax expense
|
96,358
|
|
|
2,090
|
|
|
98,448
|
|
|
316,562
|
|
|
6,919
|
|
|
323,481
|
|
||||||
Net income
|
79,720
|
|
|
3,655
|
|
|
83,375
|
|
|
237,898
|
|
|
10,133
|
|
|
248,031
|
|
||||||
Net income per share - basic
|
$
|
0.79
|
|
|
$
|
0.04
|
|
|
$
|
0.83
|
|
|
$
|
2.37
|
|
|
$
|
0.10
|
|
|
$
|
2.47
|
|
Net income per share - diluted
|
$
|
0.70
|
|
|
$
|
0.03
|
|
|
$
|
0.73
|
|
|
$
|
2.10
|
|
|
$
|
0.09
|
|
|
$
|
2.19
|
|
|
Nine Months Ended
September 30, 2014
|
||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||
Consolidated Statement of Cash Flows Data:
|
|
|
|
|
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
237,898
|
|
|
$
|
10,133
|
|
|
$
|
248,031
|
|
Non-cash compensation expense
|
225,784
|
|
|
(17,052
|
)
|
|
208,732
|
|
|||
Deferred taxes
|
(50,466
|
)
|
|
6,919
|
|
|
(43,547
|
)
|
|
Three Months Ended
December 31, 2014
|
|
Year Ended
December 31, 2014
|
||||||||||||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general, and administrative
|
$
|
143,743
|
|
|
$
|
31,564
|
|
|
$
|
175,307
|
|
|
$
|
504,755
|
|
|
$
|
14,512
|
|
|
$
|
519,267
|
|
Total operating expenses
|
554,962
|
|
|
31,564
|
|
|
586,526
|
|
|
1,981,126
|
|
|
14,512
|
|
|
1,995,638
|
|
||||||
Income from operations
|
247,367
|
|
|
(31,564
|
)
|
|
215,803
|
|
|
838,431
|
|
|
(14,512
|
)
|
|
823,919
|
|
||||||
Income before income taxes
|
221,287
|
|
|
(31,564
|
)
|
|
189,723
|
|
|
775,747
|
|
|
(14,512
|
)
|
|
761,235
|
|
||||||
Income tax expense
|
111,111
|
|
|
(11,483
|
)
|
|
99,628
|
|
|
427,673
|
|
|
(4,564
|
)
|
|
423,109
|
|
||||||
Net income
|
110,176
|
|
|
(20,081
|
)
|
|
90,095
|
|
|
348,074
|
|
|
(9,948
|
)
|
|
338,126
|
|
||||||
Net income per share - basic
|
$
|
1.09
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.89
|
|
|
$
|
3.46
|
|
|
$
|
(0.10
|
)
|
|
$
|
3.36
|
|
Net income per share - diluted
|
$
|
0.96
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.78
|
|
|
$
|
3.07
|
|
|
$
|
(0.09
|
)
|
|
$
|
2.98
|
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Net income - basic
|
|
$
|
210,398
|
|
|
$
|
83,375
|
|
Effective of dilutive securities:
|
|
|
|
|
||||
Convertible senior notes - interest expense related to contractual coupon interest rate and amortization of discount and note issuance costs
|
|
145
|
|
|
2,803
|
|
||
Net income - diluted
|
|
$
|
210,543
|
|
|
$
|
86,178
|
|
|
|
|
|
|
||||
(Shares in thousands)
|
|
|
|
|
||||
Weighted average shares - basic
|
|
103,348
|
|
|
100,796
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Stock options
|
|
9,632
|
|
|
9,377
|
|
||
Restricted stock
|
|
481
|
|
|
430
|
|
||
Convertible senior notes
|
|
308
|
|
|
4,033
|
|
||
Warrants
|
|
2,175
|
|
|
2,787
|
|
||
Dilutive potential shares
|
|
12,596
|
|
|
16,627
|
|
||
Weighted average shares - diluted
|
|
115,944
|
|
|
117,423
|
|
||
|
|
|
|
|
||||
Net income per share - basic
|
|
$
|
2.04
|
|
|
$
|
0.83
|
|
Net income per share - diluted
|
|
$
|
1.82
|
|
|
$
|
0.73
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Net income - basic and diluted
|
|
$
|
481,062
|
|
|
$
|
248,031
|
|
|
|
|
|
|
||||
(Shares in thousands)
|
|
|
|
|
||||
Weighted average shares - basic
|
|
102,825
|
|
|
100,325
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Stock options
|
|
9,449
|
|
|
9,515
|
|
||
Restricted stock
|
|
475
|
|
|
413
|
|
||
Warrants
|
|
2,395
|
|
|
2,950
|
|
||
Dilutive potential shares
|
|
12,319
|
|
|
12,878
|
|
||
Weighted average shares - diluted
|
|
115,144
|
|
|
113,203
|
|
||
|
|
|
|
|
||||
Net income per share - basic
|
|
$
|
4.68
|
|
|
$
|
2.47
|
|
Net income per share - diluted
|
|
$
|
4.18
|
|
|
$
|
2.19
|
|
|
|
Three Months Ended September 30,
|
||||
(Shares in thousands)
|
|
2015
|
|
2014
|
||
Stock options
|
|
594
|
|
|
1,277
|
|
|
|
Nine Months Ended September 30,
|
||||
(Shares in thousands)
|
|
2015
|
|
2014
|
||
Stock options
|
|
3,388
|
|
|
3,741
|
|
Convertible senior notes
|
|
1,253
|
|
|
4,483
|
|
|
|
Amortized
|
|
Unrealized
|
|
Fair
|
||||||||||
As of September 30, 2015
|
|
Cost Basis
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
Unrestricted
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
812,137
|
|
|
$
|
805
|
|
|
$
|
(988
|
)
|
|
$
|
811,954
|
|
U.S. government and government agency obligations
|
|
54,963
|
|
|
155
|
|
|
(3
|
)
|
|
55,115
|
|
||||
Municipal bonds
|
|
27,741
|
|
|
27
|
|
|
(3
|
)
|
|
27,765
|
|
||||
Equity securities
|
|
17,005
|
|
|
10,635
|
|
|
(93
|
)
|
|
27,547
|
|
||||
|
|
$
|
911,846
|
|
|
$
|
11,622
|
|
|
$
|
(1,087
|
)
|
|
$
|
922,381
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Unrestricted
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
548,832
|
|
|
$
|
136
|
|
|
$
|
(1,462
|
)
|
|
$
|
547,506
|
|
U.S. government and government agency obligations
|
|
28,596
|
|
|
3
|
|
|
(46
|
)
|
|
28,553
|
|
||||
Municipal bonds
|
|
37,044
|
|
|
37
|
|
|
(43
|
)
|
|
37,038
|
|
||||
Equity securities
|
|
2,005
|
|
|
5,374
|
|
|
—
|
|
|
7,379
|
|
||||
|
|
616,477
|
|
|
5,550
|
|
|
(1,551
|
)
|
|
620,476
|
|
||||
Restricted
|
|
|
|
|
|
|
|
|
|
|||||||
Equity securities
|
|
15,000
|
|
|
76,439
|
|
|
—
|
|
|
91,439
|
|
||||
|
|
$
|
631,477
|
|
|
$
|
81,989
|
|
|
$
|
(1,551
|
)
|
|
$
|
711,915
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Maturities within one year
|
|
$
|
241,055
|
|
|
$
|
251,761
|
|
Maturities after one year through five years
|
|
653,779
|
|
|
360,208
|
|
||
Maturities after five years through ten years
|
|
—
|
|
|
1,128
|
|
||
|
|
$
|
894,834
|
|
|
$
|
613,097
|
|
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
As of September 30, 2015
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Corporate bonds
|
$
|
373,513
|
|
|
$
|
(960
|
)
|
|
$
|
27,779
|
|
|
$
|
(28
|
)
|
|
$
|
401,292
|
|
|
$
|
(988
|
)
|
U.S. government and government agency obligations
|
2,809
|
|
|
(2
|
)
|
|
2,504
|
|
|
(1
|
)
|
|
5,313
|
|
|
(3
|
)
|
||||||
Municipal bonds
|
4,658
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
4,658
|
|
|
(3
|
)
|
||||||
Equity securities
|
14,907
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
14,907
|
|
|
(93
|
)
|
||||||
|
$
|
395,887
|
|
|
$
|
(1,058
|
)
|
|
$
|
30,283
|
|
|
$
|
(29
|
)
|
|
$
|
426,170
|
|
|
$
|
(1,087
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate bonds
|
$
|
390,613
|
|
|
$
|
(1,462
|
)
|
|
—
|
|
|
—
|
|
|
$
|
390,613
|
|
|
$
|
(1,462
|
)
|
||
U.S. government and government agency obligations
|
25,549
|
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
25,549
|
|
|
(46
|
)
|
||||||
Municipal bonds
|
10,779
|
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
10,779
|
|
|
(43
|
)
|
||||||
|
$
|
426,941
|
|
|
$
|
(1,551
|
)
|
|
—
|
|
|
—
|
|
|
$
|
426,941
|
|
|
$
|
(1,551
|
)
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||
As of September 30, 2015
|
Fair Value
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
||||||
Available-for-sale marketable securities:
|
|
|
|
|
|
||||||
Unrestricted
|
|
|
|
|
|
||||||
Corporate bonds
|
$
|
811,954
|
|
|
—
|
|
|
$
|
811,954
|
|
|
U.S. government and government agency obligations
|
55,115
|
|
|
—
|
|
|
55,115
|
|
|||
Municipal bonds
|
27,765
|
|
|
—
|
|
|
27,765
|
|
|||
Equity securities
|
27,547
|
|
|
$
|
27,547
|
|
|
—
|
|
||
|
$
|
922,381
|
|
|
$
|
27,547
|
|
|
$
|
894,834
|
|
|
|
|
|
|
|
||||||
As of December 31, 2014
|
|
|
|
|
|
||||||
Available-for-sale marketable securities:
|
|
|
|
|
|
||||||
Unrestricted
|
|
|
|
|
|
||||||
Corporate bonds
|
$
|
547,506
|
|
|
—
|
|
|
$
|
547,506
|
|
|
U.S. government and government agency obligations
|
28,553
|
|
|
—
|
|
|
28,553
|
|
|||
Municipal bonds
|
37,038
|
|
|
—
|
|
|
37,038
|
|
|||
Equity securities
|
7,379
|
|
|
$
|
7,379
|
|
|
—
|
|
||
|
620,476
|
|
|
7,379
|
|
|
613,097
|
|
|||
Restricted
|
|
|
|
|
|
||||||
Equity securities
|
91,439
|
|
|
—
|
|
|
91,439
|
|
|||
|
$
|
711,915
|
|
|
$
|
7,379
|
|
|
$
|
704,536
|
|
|
September 30,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
Raw materials
|
$
|
34,983
|
|
|
$
|
10,923
|
|
Work-in-process
|
110,616
|
|
|
73,519
|
|
||
Finished goods
|
12,513
|
|
|
10,768
|
|
||
Deferred costs
|
32,556
|
|
|
33,651
|
|
||
|
$
|
190,668
|
|
|
$
|
128,861
|
|
|
September 30,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
Accounts payable
|
$
|
106,917
|
|
|
$
|
99,508
|
|
Accrued payroll and related costs
|
120,933
|
|
|
92,778
|
|
||
Accrued clinical trial expense
|
62,569
|
|
|
41,555
|
|
||
Accrued sales-related charges, deductions, and royalties
|
160,941
|
|
|
133,085
|
|
||
Other accrued expenses and liabilities
|
126,068
|
|
|
116,563
|
|
||
|
$
|
577,428
|
|
|
$
|
483,489
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
EYLEA (aflibercept) Injection
, known in the scientific literature as VEGF Trap-Eye, is available in the United States, European Union (EU), Japan, and certain other countries outside the United States for the treatment of neovascular age-related macular degeneration (wet AMD), diabetic macular edema (DME), macular edema following central retinal vein occlusion (CRVO), and macular edema following retinal vein occlusion (RVO), which includes macular edema following branch retinal vein occlusion (BRVO). EYLEA is also available in Japan and the EU for the treatment of myopic choroidal neovascularization (mCNV) and in the United States for the treatment of diabetic retinopathy in patients with DME. Bayer HealthCare has additional regulatory applications for EYLEA for the treatment of wet AMD, macular edema secondary to CRVO and BRVO, DME, and mCNV pending in other countries. We are collaborating with Bayer HealthCare on the global development and commercialization of EYLEA outside the United States.
|
•
|
Praluent (alirocumab) Injection
, which is available in the United States for the treatment of adults with heterozygous familial hypercholesterolemia or clinical atherosclerotic cardiovascular disease (ASCVD), who require additional lowering of LDL cholesterol. In September 2015, the European Commission granted marketing authorization of Praluent for the treatment of adult patients with primary hypercholesterolemia (heterozygous familial hypercholesterolemia (HeFH) and non-familial) or mixed dyslipidemia as an adjunct to diet: (a) in combination with a statin, or statin with other lipid-lowering therapies in patients unable to reach their LDL-cholesterol goals with the maximally-tolerated statin, or (b) alone or in combination with other lipid-lowering therapies for patients who are statin intolerant, or for whom a statin is contraindicated. The effect of Praluent on cardiovascular morbidity and mortality has not been determined. We are collaborating with Sanofi on the global development and commercialization of Praluent.
|
•
|
ARCALYST
®
(rilonacept) Injection for Subcutaneous Use
, which is available 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 years and older.
|
Trap-based Clinical Programs
|
|
EYLEA
|
|
In Phase 3 clinical development for the treatment of Neovascular Glaucoma (NVG) (in Japan) in collaboration with Bayer HealthCare. As described below, aflibercept is also being studied in combination with (i) an antibody to Platelet Derived Growth Factor Receptor Beta (PDGFR-beta), and (ii) an antibody to angiopoietin-2 (Ang2).
|
|
Antibody-based Clinical Programs in Collaboration with Sanofi
|
|
Praluent
|
|
Antibody to PCSK9. In Phase 3 clinical development for LDL cholesterol reduction and for the prevention of cardiovascular events. In the third quarter of 2015, the U.S. Food and Drug Administration (FDA) approved Praluent as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with heterozygous familial hypercholesterolemia or clinical ASCVD, who require additional lowering of LDL cholesterol. In the third quarter of 2015, the European Commission granted marketing authorization for Praluent for the treatment of LDL cholesterol in certain adult patients with hypercholesterolemia. The effect of Praluent on cardiovascular morbidity and mortality has not been determined.
|
|
Sarilumab (REGN88)
|
|
Antibody to the interleukin-6 receptor (IL-6R). In clinical development in rheumatoid arthritis (Phase 3) and non-infectious uveitis (Phase 2).
|
|
Dupilumab (REGN668)
|
|
Antibody to the interleukin-4 receptor (IL-4R) alpha subunit. In clinical development in atopic dermatitis in adults (Phase 3), atopic dermatitis in children (Phase 2), asthma (Phase 3), nasal polyps in patients who also have chronic sinusitis (NPwCS) (Phase 2), and eosinophilic esophagitis (EoE) (Phase 2).
|
|
REGN2222
|
|
Antibody to the Respiratory Syncytial Virus-F (RSV-F) protein. Phase 3 clinical study in RSV initiated in the second quarter of 2015. In the fourth quarter of 2014, Sanofi provided notice to Regeneron that it had elected not to continue co-development of REGN2222 effective December 2015, and will be entitled to receive royalties on any future sales of the product candidate.
|
|
REGN2810
|
|
Antibody to programmed cell death protein 1 (PD-1). Phase 1 clinical study in advanced malignancies initiated in the first quarter of 2015.
|
|
Antibody-based Clinical Program in Collaboration with Bayer HealthCare
|
|
REGN2176-3
|
|
Combination product comprised of an antibody to PDGFR-beta co-formulated with aflibercept for intravitreal injection for use in ophthalmology. Phase 2 clinical study for the treatment of wet AMD initiated in the second quarter of 2015.
|
|
Antibody-based Clinical Program in Collaboration with Mitsubishi Tanabe Pharma
|
|
Fasinumab (REGN475)
*
|
|
Antibody to Nerve Growth Factor (NGF). Phase 2b/3 study in pain due to osteoarthritis initiated in the second quarter of 2015; currently on partial clinical hold by the FDA limiting duration of trials in osteoarthritis to 16 weeks.
|
|
Antibody-based Clinical Programs Developing Independently
|
|
Evinacumab (REGN1500)
*
|
|
Antibody to Angptl-3. Phase 2 clinical study for the treatment of dyslipidemia in homozygous familial hypercholesterolemia initiated in the first quarter of 2015. Partial clinical hold that excluded women of childbearing potential was lifted by the FDA in the third quarter of 2015.
|
|
REGN1033
*
|
|
Antibody to myostatin (GDF8). In Phase 2 clinical development in skeletal muscle disorders. In the second quarter of 2015, Sanofi provided notice to Regeneron that it had elected not to continue co-development of REGN1033.
|
|
REGN1908-1909
*
|
|
Antibody to Feld1 in Phase 1/Phase 2 clinical development against allergic disease.
|
|
REGN1193
*
|
|
Antibody to glucagon receptor (GCGR). In Phase 1 clinical development.
|
|
REGN1979
|
|
Bispecific antibody against CD20 and CD3. In Phase 1 clinical development for Non-Hodgkin's Lymphoma and Chronic Lymphocytic Leukemia.
|
|
REGN910-3
**
|
|
Combination product comprised of an antibody to Ang2 co-formulated with aflibercept for intravitreal injection for use in ophthalmology. In Phase 1 clinical development for the treatment of wet AMD and DME.
|
*
Sanofi did not opt-in to or elected not to continue to co-develop the product candidate. Under the terms of our agreement, Sanofi is entitled to receive a mid-single digit royalty on future sales of the product candidate.
|
||||
**
We acquired from Sanofi full exclusive rights to antibodies targeting the Ang2 receptor and ligand in ophthalmology, which were previously included in our antibody collaboration with Sanofi. Under the terms of our agreement, Sanofi is entitled to receive a potential development milestone and royalties on any future sales of the product candidate.
|