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                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

         (Mark One)

               (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         For the fiscal year ended      December 31, 1997

             ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         For the transition period from           to

                         Commission File Number 0-19034

                         REGENERON PHARMACEUTICALS, INC.
             (Exact name of registrant as specified in its charter)

             New York                               13-3444607
 (State or other jurisdiction of          (I.R.S. Employer Identification No  )
  incorporation or organization)

          777 Old Saw Mill River Road, Tarrytown, New York 10591-6707
               (Address of principal executive offices) (Zip code)

                                 (914) 347-7000
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

                                      None
                                (Title of Class)

           Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock - par value $.001 per share
                                (Title of Class)

            Preferred Share Purchase Rights expiring October 18, 2006
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to

such filing requirements for the past 90 days. Yes x No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.

At March 13, 1998, the aggregate market value of voting stock held by
non-affiliates of the Registrant totaled approximately $248,523,670 based on
the last sale price as reported by The Nasdaq Stock Market.

Indicate the number of shares outstanding of each of Registrant's classes of
common stock as of March 13, 1998:

Class of Common Stock                         Number of Shares
- ---------------------                         ----------------
Class A Stock, $.001 par value                    4,115,542
Common Stock, $.001 par value                    26,812,062

                     DOCUMENTS INCORPORATED BY REFERENCE:

     The Registrant's definitive proxy statement to be filed in connection
with solicitation of proxies for its Annual Meeting of Shareholders to be held
on June 12, 1998, is incorporated by reference into Part III of this Form
10-K. Exhibit index is located on pages 32 to 34 of this filing.



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                                    PART I


Item 1.  Business

General

         Regeneron Pharmaceuticals, Inc. ("Regeneron" or the "Company") is a
leader in the application of molecular and cell biology to discover novel
potential therapeutics for human medical conditions and is seeking to develop
and commercialize these discoveries. The Company is applying its technological
expertise in protein growth factors, their receptors, and their mechanisms of
action to the discovery and development of protein-based drugs and orally
active, small molecule drugs.

         The Company is pursuing research and development programs in the 
following areas:

   o AXOKINE(TM), a second generation ciliary neurotrophic factor, for the
     treatment of obesity (and diseases related to obesity such as Type II
     diabetes), retinal diseases, and other conditions,

   o Brain-derived neurotrophic factor ("BDNF") for the treatment of
     amyotrophic lateral sclerosis ("ALS," commonly known as Lou Gehrig's
     disease),

   o Neurotrophin-3 ("NT-3") for the treatment of enteric neuropathies
     (constipating conditions),

   o Angiopoietins, a new family of ligands (and their receptors, called the
     TIE family of receptors) that appears to regulate blood vessel formation,
     or angiogenesis,

   o Protein antagonists for cytokines such as interleukin-4 ("IL-4") and
     interleukin-6 ("IL-6") as potential treatment for inflammatory diseases,
     allergic disorders, and cancer,

   o Noggin, a naturally occurring protein, for potential use in treating
     abnormal bone formation and related diseases and conditions,

   o Muscle atrophy, based on a receptor (called MuSK) of the tyrosine kinase
     type that is specifically expressed in skeletal muscle  and a protein
     ligand (agrin) for this receptor, and

   o Research programs to discover orally active, small molecule-based drugs,
     some of which may mimic or antagonize protein- or receptor-based drug
     candidates that the Company is developing.

         In May 1997, the Company entered into a ten-year collaboration
agreement with The Procter & Gamble Company ("Procter & Gamble") to discover,
develop, and commercialize pharmaceutical products (the "P&G Agreement"), as
well as a securities purchase agreement and other related agreements. The P&G
Agreement expanded and superseded a collaboration agreement that the Company
and Procter & Gamble Pharmaceuticals, Inc. entered into in December 1996

jointly to develop drugs for skeletal muscle injury and atrophy. Procter &
Gamble agreed over the first five years of the various agreements to purchase
up to $60.0 million in Regeneron equity and provide up to $94.7 million in
support of Regeneron's research efforts related to the collaboration. Pursuant
to these agreements, in June 1997, Procter & Gamble purchased 4.35 million
shares of Regeneron Common Stock at $9.87 per share for a total of $42.9
million and received five year warrants to purchase an additional 1.45 million
shares of Regeneron stock at $9.87 per share. This purchase was in addition to
a $10.0 million purchase of 800,000 shares of Regeneron Common Stock at $12.50
per share that was completed in March 1997 pursuant to the December 1996 
agreement.

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         In September 1997, the Company and Procter & Gamble expanded the P&G
Agreement to include AXOKINE and related molecules (delivered systemically), and
agreed to develop AXOKINE initially to treat obesity associated with Type II
diabetes. Procter & Gamble agreed to pay the Company as much as $15.0 million in
additional funding, partly subject to achieving certain milestones related to
AXOKINE. Of the $15.0 million, $2.5 million was paid in September 1997 and
another $2.5 million was paid in December 1997.

        
         The Company is also independently developing AXOKINE for use in
treating degenerative retinal diseases. Subject to completion of appropriate
preclinical experiments and regulatory approval, the Company plans to commence a
Phase I clinical study of AXOKINE to treat retinitis pigmenosa in late 1998 or
early 1999. 

         In January 1997, Amgen Inc. ("Amgen") and Regeneron announced that
the Phase III clinical trial of BDNF delivered subcutaneously, conducted on
behalf of Amgen-Regeneron Partners (a general partnership equally owned by
Regeneron and Amgen), did not demonstrate clinical efficacy in patients with
amyotrophic lateral sclerosis. The trial confirmed the safety and tolerability 
of BDNF seen in earlier trials but showed no statistically significant 
difference in breathing capacity or survival between treatment and placebo
groups, as measured by the trial's predetermined end points. The failure of that
trial to achieve its primary end points had a materially adverse effect on the
price of the Company's Common Stock (which declined more than 50% immediately
after the announcement of the results of the trial). After the Phase III
clinical trial results were announced, the Company retained independent experts
in clinical neurology, as well as independent statisticians, to conduct further
examinations of the data. This review by the Company and the outside experts
indicated that a retrospectively-defined subset of ALS patients in the trial may
have received a survival benefit from BDNF treatment. The panels recommended,
among other things, that additional clinical investigations of subcutaneous BDNF
for ALS should be undertaken.

         BDNF is currently being developed by Amgen-Regeneron Partners for
potential use in treating ALS through two routes of administration:
intrathecal (infusion into the spinal fluid through an implanted pump) and
subcutaneous (injection under the skin). An intrathecal study in ALS patients
is ongoing. Subcutaneous studies conducted by Regeneron on behalf of the
partnership began in the first quarter of 1998. The current and planned future
BDNF subcutaneous studies are intended to test whether the survival benefit
seen in the retrospective analysis of the Phase III clinical trial can be

confirmed through appropriate prospective trials. In addition, Sumitomo
Pharmaceuticals Co., Ltd. ("Sumitomo Pharmaceuticals"), the Company's
collaborator in the development of BDNF in Japan, has informed the Company
that it will begin to conduct a Phase I safety assessment of BDNF delivered
subcutaneously to normal volunteers in March 1998. Sumitomo Pharmaceuticals is
initially developing BDNF to treat ALS.

         Amgen-Regeneron Partners' clinical development of NT-3 is currently
focused on enteric neuropathies. The enteric nervous system is a complex
collection of nerves that control the function of the gastrointestinal system,
including gastrointestinal motility. Amgen-Regeneron Partners has conducted
clinical studies of NT-3 in normal volunteers and patients suffering
peripheral neuropathies associated with diabetes. These studies indicated,
among other things, that NT-3 is safe and well tolerated at a variety of doses
in patients and that, at certain doses, NT-3 causes increased gastrointestinal
motility. Based on these results and discussions with gastrointestinal
experts, Regeneron, on behalf of Amgen-Regeneron Partners, plans to commence
by mid-1998 the first of a series of small Phase II clinical studies of NT-3
in enteric neuropathies. The initial study is expected to include patients
suffering from severe idiopathic constipation. Later studies may be in
patients who suffer from constipation associated with Parkinson's disease,
spinal cord injury, use of opiate pain-killers, and other conditions.

         Amgen-Regeneron Partners is not planning to pursue additional trials
of BDNF and NT-3 in peripheral neuropathy at the present time, because the
results of earlier studies were not sufficiently promising.

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         The Company has not received revenue from the sale of any commercial
product and has incurred losses in each year since inception of operations in
1988. As of December 31, 1997, the Company had an accumulated deficit of
$168.6 million. To date, the Company has received revenues from its licensees
and collaborators for research and development efforts, from Merck & Co.
("Merck") for contract manufacturing, and from investment income. There can be
no assurance that such revenue will continue or to what extent, if any, the
Company's expenses incurred in connection with its work on BDNF or NT-3 or other
programs will be reimbursed by its licensees or collaborators. In the absence of
revenues from commercial product sales or other sources (the amount, timing,
nature, or source of which can not be predicted), the Company's losses will
continue as the Company conducts its research and development activities. The
Company's activities may expand over time and may require additional resources,
and the Company's operating losses may be substantial over at least the next
several years. The Company's losses may fluctuate from quarter to quarter and
will depend, among other factors, on the timing of certain expenses and on the
progress of the Company's research and development efforts. There can be no
assurance that the Company will ever have an approved product or achieve
significant revenues or profitable operations. To date, Regeneron has not
received any revenues from the commercial sale of products and does not expect
to receive any such revenues for at least several years.

         The Company has incurred negative cash flow from operations in each
year since its inception. The Company expects that the funding requirements
for its activities will remain substantial and could increase significantly
if, among other things, its development or clinical trial programs are
successful or its research is expanded. In addition, the Company is required
to provide capital from time to time to fund and remain equal partners with
Amgen in Amgen-Regeneron Partners. The Company's aggregate capital
contribution to Amgen-Regeneron Partners from the partnership's inception in
June 1993 through December 31, 1997 was $45.2 million. The Company expects
that its capital contributions in 1998 will total approximately $5.7 million.
These contributions could increase or decrease, depending upon (among other
things) the results of preclinical and clinical studies of BDNF and NT-3. In
addition, the amount needed to fund the Company's operations will also depend
on other factors, including the potential future need to expand the Company's
professional and support staff and facilities to support new areas of research
and development, competitive products, the success of the Company's research
and development programs, the status of patent and other intellectual property
right developments, and the extent and success of any collaborative research
arrangements. The Company believes that its existing capital resources will
enable it to meet operating needs for at least several years. No assurance can
be given that there will be no change in projected revenues or expenses that
would lead to the Company's capital being consumed significantly before such
time.

         Most drug research and development programs fail. A small minority of
all research and development programs ultimately result in commercially
successful drugs; it is not possible to predict whether any program will
succeed until it actually produces a drug that is commercially marketed for a
significant period of time. The Company is attempting to develop drugs for
human therapeutic use and no assurance can be made that any of the Company's

research and development activities will be successful or that any of the
Company's current or future potential product candidates will be
commercialized. 

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The Company's Programs

         AXOKINE. AXOKINE is Regeneron's patented second generation ciliary
neurotrophic factor, discovered based on the Company's work with ciliary
neurotrophic factor ("CNTF"). Preclinical data indicate that AXOKINE is more
potent than CNTF and has other pharmaceutical advantages compared to CNTF.

         Regeneron in collaboration with Procter & Gamble is exploring the use
of AXOKINE to treat obesity and the complications associated with obesity such
as Type II diabetes. Body weight is determined by the competing balance of
food intake and energy expenditure. A major advance in understanding the
complex biological processes that regulate body weight was the identification
of leptin, a protein hormone that is secreted by fat cells that plays a
criticial role in signaling the brain to decrease food intake. Preclinical
experiments demonstrate that leptin deficiency or dysfunction of the receptor
that recognizes leptin results in the development of both obesity and diabetes.
These findings prompted the idea that human obesity and Type II diabetes could
be treated with replacement therapy. However, investigation of rodent models of
obesity and diabetes revealed that the obese rodents have appropriately high
levels of circulating leptin, but appear to be in some way resistant to sensing
leptin's weight-reducing signal. Later human studies confirmed that a majority
of obese people have high circulating leptin levels, suggesting that resistance
to leptin's action may be an important factor in these patients. An alternative
to using leptin to treat obesity might therefore be to use a different molecule,
such as AXOKINE or CNTF, to activate the same signaling pathways as does leptin,
thereby circumventing leptin resistance.

         AXOKINE and CNTF are structurally related to leptin, and the
signaling components of the AXOKINE/CNTF receptor are the closest homologs to
the leptin receptor. Detailed comparisons of CNTF and leptin have revealed
that they activate the same intracellular signaling pathways. The regions of
the hypothalamus that are thought to be critical for mediating the weight
reducing effects of leptin also bear AXOKINE/CNTF receptors and respond to
CNTF and leptin in an analogous fashion. The discovery of leptin and the
similarity of CNTF and leptin signaling in the hypothalamus provide a
rationale explaining the clinical observation that human patients injected
with CNTF lose weight. Consistent with the parallel between CNTF and leptin,
recent experiments in mice with diet-induced obesity revealed that
administration of CNTF was more effective than leptin at causing the animals
to lose weight. CNTF may cause weight loss by circumventing leptin resistance
by binding to the CNTF receptor in the hypothalamus and, like leptin,
stimulating the signaling pathways that suppress food intake and lower body
weight.

         The Company is also independently developing AXOKINE for use in

treating degenerative retinal diseases. Subject to completion of appropriate
preclinical experiments and regulatory approval, the Company plans to commence a
Phase I clinical study of AXOKINE to treat retinitis pigmentosa in late 1998 or
early 1999. The Company is also collaborating with Medtronic, Inc. ("Medtronic")
to attempt to develop AXOKINE for delivery via infusion or injection to the
central nervous system for the treatment of Huntington's disease.

         BDNF. Brain-derived neurotrophic factor is a naturally occurring
human protein. During 1995 and 1996, Amgen conducted, on behalf of
Amgen-Regeneron Partners, a Phase III BDNF clinical trial to treat ALS. This
study involved 1,135 patients, with each patient scheduled to receive
subcutaneous treatment for nine months. ALS is a disease that attacks motor
neurons, those nerve cells that cause muscles to contract. Degeneration of
these neurons causes muscle weakness, leading to death due to

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respiratory insufficiency. ALS afflicts adults primarily between the ages of
40 and 70 years old; average survival is three to five years following
diagnosis. It is estimated that approximately 25,000 people in the United
States have ALS. In January 1997, the Company and Amgen announced that the
Phase III study failed to demonstrate clinical efficacy.

         As described earlier, BDNF is currently being tested in humans by
Amgen-Regeneron Partners for potential use in treating ALS through two routes
of administration: intrathecal (infusion into the spinal fluid through an
implanted pump) and subcutaneous (injection under the skin).

         NT-3. Neurotrophin-3 is a naturally occurring human protein.
Amgen-Regeneron Partners' clinical development of NT-3 is currently focused on
enteric neuropathies. This development program is described earlier. Amgen and
Regeneron are developing NT-3 in the United States under a license from Takeda
Chemical Industries, Ltd. ("Takeda").

         Angiogenesis. A plentiful blood supply is required to nourish every
tissue and organ of the body. Diseases such as diabetes and atherosclerosis
wreak their havoc, in part, by damaging the blood vessels (arteries, veins,
and capillaries). The decreased blood flow that results from such diseases can
result in non-healing skin ulcers and gangrene, painful limbs that cannot
tolerate exercise, loss of vision, and heart attacks. Building new blood
vessels is a process known as angiogenesis. Angiogenesis is required for
normal growth and development and may be limiting in tissue repair or ischemic
states. Thus, new blood vessels are required for tissue repair, and
enhancement of blood vessel growth may aid in improving circulation to
ischemic limbs and heart tissue suffering from atherosclerotic disease, in
healing of skin ulcers or other chronic wounds, and in establishing tissue
grafts. Angiogenesis is also aberrantly involved in many disease processes.
Abnormal blood vessel growth is required for the growth and metastasis of
tumors, can lead to blindness when it occurs in and obscures the retina, and
seems to accompany an assortment of inflammatory processes. Depending on the
clinical situation, positively or negatively regulating blood vessel growth
could have important therapeutic benefits.


         Regeneron and others have identified a new family of receptors in the
tyrosine kinase class that appear critical for normal blood vessel formation
and perhaps abnormal vascularization as well. Through its ligand discovery
program, Regeneron has cloned and received patents for a new family of
naturally occurring protein ligands, collectively termed the "Angiopoietins,"
specific to these blood vessel receptors. The Angiopoietins include naturally
occurring positive and negative regulators of angiogenesis, as described in
significant scientific manuscripts published within the last year. The
Angiopoietin program is in the early stage of discovery research, currently
focusing on defining potential clinical applications of this family of
receptors and their ligands and their applicability to either enhance or block
blood vessel growth. Another factor long known to act specifically on blood
vessels, vascular endothelial growth factor ("VEGF"), is undergoing extensive
characterization for its clinical potential at other companies and at many
academic institutions and may be competitive or synergistic to Regeneron's
ligands.

         Cytokine Agonists and Antagonists. Regeneron's widely-cited research
on the CNTF class of neurotrophic factors led to the discovery that CNTF,
although it is a neurotrophic factor, belongs to the "superfamily" of factors
referred to as cytokines. This superfamily includes factors such as
erythropoietin, thrombopoietin, granulocyte-colony stimulating factor, and the
interleukins ("ILs"). Research at Regeneron has led to proprietary insights
into the receptors and signal transduction mechanisms used by the 

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entire cytokine superfamily and to novel approaches to develop both agonists
and antagonists for a variety of cytokines. Regeneron's scientists have
created protein-based antagonists for IL-1, IL-4, and IL-6 that are more
potent than previously described antagonists, allowing lower levels of these
antagonists to be used; moreover, these antagonists are comprised entirely of
natural human-derived sequences, and thus would not be expected to induce an
immune reaction in humans (although no assurance can be given since none have
yet been tested in humans). These cytokine antagonists are termed ligand
traps. Because pathological levels of IL-1, IL-4, and IL-6 seem to contribute
to a variety of disease states, these ligand traps have the potential to be
important therapeutic agents. Antagonists for IL-4 may be therapeutically
useful in an assortment of allergy and asthma-related disease situations in
which IL-4 is thought to play a contributory role and in a variety of
vaccination settings in which blocking IL-4 may help elicit more of the
desired type of immune response to the vaccine. Both IL-1 and IL-6 are
referred to as pro-inflammatory cytokines and have been implicated in the
pathophysiology of a wide variety of human disease conditions ranging from
inflammatory disorders, such as rheumatoid arthritis and sepsis, to cachexia
(wasting). IL-6, in particular, is also implicated in the pathology and
progression of multiple myeloma, certain solid tumors, AIDS, lymphomas (both
AIDS-related and non-AIDS-related), osteoporosis, and other conditions.

         The Company's research regarding protein-based cytokine antagonists
currently includes molecular and cellular research to improve or modify the
Company's ligand trap technology, process development efforts to produce

experimental quantities of the ligand traps, and early stage in vivo and in
vitro studies to further understand and demonstrate the efficacy of the ligand
traps. The Company is also developing similar high-affinity antagonists to
other cytokines.

         The Company has also entered into a substantial collaborative effort
with Pharmacopeia,Inc. ("Pharmacopeia") to use the Company's proprietary
technology and insights concerning cytokine receptors and their signaling,
together with the proprietary combinatorial-chemistry based small molecule
libraries and high-throughput screening technology provided by Pharmacopeia, for
the discovery of small molecule agonists and antagonists of a variety of members
of the cytokine superfamily. The objective of these collaborative efforts is to
discover small molecule mimics of protein therapeutics such as erythropoietin or
granulocyte-colony stimulating factor, as well as to discover small molecule
antagonists of interleukins such as IL-1, IL-4, and IL-6.

         Abnormal Bone Growth and Related Disorders. In collaboration with
scientists at the University of California at San Francisco, the Company has
discovered human proteins that are natural inhibitors of the proteins that
regulate bone formation, known as the bone morphogenic proteins ("BMPs"). The
first such natural regulator, termed "Noggin," is the most potent antagonist
of BMP function yet described. In addition to their apparent roles in normal
bone formation, the BMPs also appear to be involved in disease situations in
which they promote abnormal bone growth. One particularly devastating example
is provided by the very rare disease known as Fibrodysplasia Ossificans
Progressiva ("FOP"), in which patients grow an abnormal "second skeleton" that
essentially locks them in place, preventing any movement. As reported in the
New England Journal of Medicine, BMPs appear to play a causative role in this
disease. Since Noggin is a potent blocker of the BMPs implicated in FOP, it
offers hope as a therapeutic agent in this devastating disease. In addition,
there are other less devastating but far more common situations in which BMPs
may be causing pathological bone growth and in which Noggin or other negative
regulators may be therapeutically useful. This includes hip replacement
surgery where abnormal bone growth can ruin the surgical outcome.

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         In addition, the Company is working to discover and develop
antagonists of Noggin, which may in some settings allow for promotion of BMP
function, but only where the BMP is normally being blocked by Noggin, to
promote bone growth.

         The Company's research concerning regulators of bone growth includes
molecular and cellular research to improve or modify the Company's existing
regulators, process development efforts to produce experimental quantities of
these agents, and early stage in vivo and in vitro studies to further
understand and demonstrate the efficacy of the agents.  The Company is also 
attempting to discover more such regulators.

         Muscle Atrophy and Related Disorders. Muscle atrophy occurs in many
neuromuscular diseases and also when muscle is unused, as often occurs during
prolonged hospital stays and during convalescence. Currently, physicians have

few options to prescribe for patients with muscle atrophy or other muscle
conditions which afflict millions of patients globally. Thus, a factor that
might have beneficial effects on skeletal muscle could have significant
clinical benefit. The Company has identified a receptor of the tyrosine kinase
type termed MuSK that is specifically expressed in skeletal muscle. This
receptor is dramatically increased upon muscle injury or disuse. A naturally
occurring protein ligand for this receptor, termed agrin, has also been
identified at Regeneron. The muscle program is currently focused on conducting
in vivo and in vitro experiments with the objective of demonstrating and
further understanding the role of the muscle-specific receptor and the
activities of its ligand. Recent studies have revealed that this
receptor/ligand pair is absolutely required for the normal formation of the
connection between nerves and muscle. This work by Regeneron scientists gained
attention and formed the basis of the 1996 collaborative venture between the
Company and Procter & Gamble. This collaboration is exploring the potential of
agrin and MuSK in muscle disease and also attempting to identify new orally
active, small-molecule drug candidates in this therapeutic arena by leveraging
the molecular expertise of the Company with the complementary expertise in
chemical libraries and high-throughput screening of Procter & Gamble.

         Orphan Receptor and Growth Factor Research. The therapeutic utility
of many growth factors depends, in part, on the exquisite specificity of their
actions. This specificity is determined largely by the limited distribution of
receptors for these factors on the target cells of interest. Using proprietary
technology initially developed for the discovery and characterization of
neurotrophic factors and their receptors, the Company has discovered new
receptors and their associated factors that act on particular cell populations
of potentially important clinical interest. These cell populations include not
only additional subsets of neurons but non-neuronal cells, such as the
endothelial cells that constitute blood vessels, and skeletal muscle cells.
The Company's technology involves molecular biological as well as
"bioinformatics" approaches to identify and clone protein molecules that
appear to be receptors expressed on clinically relevant target cells for
unknown protein factors (hence their designation "orphan receptors"). The
Company has also obtained licenses and established collaborations for
additional orphan receptors, including licenses from the Salk Institute for
Biological Studies. The Company's technology includes approaches that allow
for the identification and molecular cloning of protein factors that bind to
the orphan receptors. Furthermore, the Company's technology allows for the
development of derivatives of the receptors and their factors, which can allow
for modified agonistic or antagonistic properties that may prove to be
therapeutically useful.

         Other Research and Development. Regeneron has assembled scientists
with a variety of complementary skills and experience and operates its own
facilities to conduct a broad-based research, preclinical, and clinical
development program. Substantially all 

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of the Company's operating expenditures to date have related to the discovery
and development of drug product candidates and the purchase and renovation of

facilities and equipment to produce product candidates. One focus of the
Company's research is factors that control the survival, optimal function, and
regeneration of neurons. Specific areas of this research have included
neuronal cell culture, animal models for human neurological disorders,
molecular cloning and gene regulation, monoclonal antibodies, protein
purification and analysis, and high-level expression of recombinant proteins.
As Regeneron's scientific efforts lead to potentially promising new
directions, both outside of recombinant protein therapies (into orally active,
small molecule pharmaceuticals) and outside of treatments for neurological and
neurodegenerative conditions (into, for example, potential programs in cancer,
inflammation, and muscle disease), the Company will require additional
internal expertise or external collaborations in areas in which it currently
does not have substantial resources and personnel.

Research Collaboration and Licensing Agreements

         To augment its research programs, Regeneron has entered into a
variety of collaborative research agreements and sponsored research agreements
with researchers and universities. Under these agreements, the Company
typically receives certain proprietary rights to inventions or discoveries
that arise as a result of the research. In addition, the Company has entered
into significant collaborative agreements with Amgen to develop, manufacture,
and market BDNF and NT-3, with Glaxo Wellcome plc ("Glaxo") to discover and
develop small molecule-based treatments for neurodegenerative diseases, with
Sumitomo Pharmaceuticals to develop BDNF for commercialization in Japan, with
Procter & Gamble to discover, develop, and market protein- and small
molecule-based pharmaceuticals (including AXOKINE for, among other indications,
obesity), with Pharmacopeia to discover, develop, and market small
molecule-based pharmaceuticals, and with Medtronic to develop and market AXOKINE
delivered via infusion directly to the central nervous system.

         Agreement With Amgen Inc. In August 1990, Regeneron and Amgen entered
into a collaboration agreement (the "Amgen Agreement") and Amgen agreed to
provide $25.0 million of product development funding for BDNF and NT-3 payable
in five annual installments. The final such payment was made by Amgen in the
second quarter of 1995. In conjunction with entering into the Amgen Agreement,
Amgen made a $15.0 million equity investment in the Company. From inception of
the Amgen Agreement through December 31, 1997, the Company received contract
research and development payments totaling $41.1 million directly from Amgen
or from Amgen-Regeneron Partners. Amgen has also agreed to pay to the Company
a total of $13.0 million of research progress payments, $1.0 million of which
was paid on the signing of the Amgen Agreement, $1.0 million of which was paid
in July 1993 on the filing by Amgen of the IND application for BDNF, and $1.0
million of which was paid in September 1994 on the filing by Amgen of the IND
application for NT-3. The remaining $10.0 million, which is divided equally
between BDNF and NT-3, will be paid upon the achievement of certain further
milestones in respect of each compound. There can be no assurance that any
additional research progress payments will be made.

         Under the Amgen Agreement, following preclinical development, Amgen
and the Company will attempt to develop and, if such effort is successful,
commercialize, market, and distribute BDNF and NT-3 drug products in the
United States through Amgen-Regeneron Partners. Amgen-Regeneron Partners is
governed by a six member Joint Management Committee composed of three members

each from Regeneron and Amgen. The Joint Management Committee determines
annually, in advance, the capital 

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requirements for Amgen-Regeneron Partners and approves a budget and product
plan for each product under development. To maintain an equal interest in
Amgen-Regeneron Partners, Amgen and Regeneron are obligated to make equal
capital contributions to the partnership (such capital contributions exclude
Amgen's product development funding obligation described above). Such capital
contributions may be substantial. Amgen has the duty to direct and conduct
clinical trials of BDNF and NT-3 in the United States in accordance with an
annual product plan and budget that is approved by the Joint Management
Committee; the Joint Management Committee has approved an annual product plan 
and budget that authorizes Regeneron to direct and conduct clinical trials of
BDNF and NT-3. Amgen is also responsible for the preparation of protocols with
respect to such trials. Amgen has the primary responsibility to develop
manufacturing processes for, and to manufacture, BDNF and NT-3 on behalf of
Amgen-Regeneron Partners. Assuming equal capital contributions to
Amgen-Regeneron Partners, Regeneron and Amgen share any profits or losses of
Amgen-Regeneron Partners equally.

         The development and commercialization of BDNF and NT-3 outside of the
United States, Japan, China, and certain other Pacific Rim countries will be
conducted solely by Amgen through a license from the Company and, with respect
to NT-3, from Takeda (under a license agreement between Amgen/Regeneron,
Genentech, and Takeda). In return, the Company will receive royalty payments
based on Amgen's net sales of any products in the licensed territory. In the
licensed territory, Amgen is solely responsible for funding clinical
development and related costs of the licensed products, as well as costs of
their commercial exploitation, and will have sole discretion with respect to
all such development, manufacturing, and marketing of the products and sole
responsibility for filing applications for regulatory approvals.

         At the time it entered into the Amgen Agreement, Amgen agreed that
until the earlier of August 2010 or termination of the Amgen Agreement, it
will not take any steps or assist any third party to take steps to acquire
control of the Company, whether by acquisition of capital stock, proxy
contest, tender offer, merger, sale of assets, or voting agreements, except
under certain circumstances.

         Agreement With Glaxo Wellcome plc. In July 1993, the Company and
Glaxo entered into an agreement (the "Glaxo Agreement") to conduct collaborative
research with the objective of identifying neurotrophin-related small molecules
that could be useful for the treatment of neurological and psychiatric diseases,
including central nervous system diseases such as Alzheimer's disease and
Parkinson's disease, neuropsychiatric diseases and conditions such as pain and
depression, and eye diseases. This research is directed by a joint management
committee comprised of three Glaxo and three Regeneron appointees. The
collaborative research focuses on utilizing a molecular understanding of the
mechanism of action of the neurotrophin family of neurotrophic factors as a
basis for discovery of lead compounds. In addition, the identification of genes

involved in synapse formation and the control of neuronal cell death in model
systems will be analyzed to identify lead compounds for drug development. If
such lead compounds are identified, Glaxo will have the authority to determine
whether to conduct exploratory development. Following exploratory preclinical
and initial clinical development, which will be funded by Glaxo, further
clinical development will be conducted under the direction of Glaxo and will be
jointly funded by Glaxo and the Company. Glaxo has also agreed to pay the
Company certain milestone payments, none of which have been paid. If Glaxo
determines not to conduct exploratory development and in certain other
circumstances, Regeneron has certain rights to obtain such compounds for its own
development and commercialization.

                                      10


<PAGE>

         Under the Glaxo Agreement, if the Company contributes equally with
Glaxo to the costs of the development effort described above, the Company will
be entitled to require that any resulting products be commercialized by one or
more joint ventures formed by Glaxo and Regeneron. The Company will have the
right to contribute up to 50% of the capital of each such joint venture. Glaxo
will be responsible for the manufacture and supply of products to each such
joint venture entity pursuant to an agreed upon transfer price formula and
other terms and conditions. Glaxo and Regeneron will receive payments from
each such joint venture based on their respective capital contributions and
will receive equal royalty payments based on net sales.

         In connection with the Glaxo Agreement, Glaxo purchased 500,000
shares of Common Stock for $10.0 million. Glaxo also obtained certain
piggyback registration rights (exercisable after the collaboration terminates)
and agreed that until the earlier of July 1998 or the termination of the
collaboration agreement it will not take any steps or assist any third party
to take steps to acquire control of the Company, whether by acquisition of
capital stock, proxy contest, tender offer, merger, sale of assets, or voting
agreements, except under certain circumstances.

         Agreement With Sumitomo Pharmaceuticals Company, Ltd. In June 1994,
the Company and Sumitomo Pharmaceuticals entered into an agreement for the
research, development, and commercialization of BDNF in Japan. Under the terms
of the agreement, Sumitomo Pharmaceuticals will pay up to $40.0 million to
Regeneron, including $25.0 million in research payments, (all of which
Regeneron had received by December 31, 1997) and up to $15.0 million in
progress payments payable upon achievement of certain development milestones.
No progress payments have been made to date; a $5.0 million payment will become
payable in 1998 when Sumitomo Pharmaceuticals is expected to begin a Phase I
safety study in Japan. In addition, Sumitomo Pharmaceuticals agreed to reimburse
Regeneron for its activities in developing manufacturing processes for BDNF and
supplying BDNF and other research materials to Sumitomo Pharmaceuticals. Such
manufacturing revenue totaled $7.6 million in 1997, $8.5 million in 1996, and
$7.0 million in 1995. The agreement may be terminated by Sumitomo
Pharmaceuticals at its discretion; such termination would result in the
reversion to Regeneron of all rights to BDNF in Japan.

         Agreement With Sumitomo Chemical Company, Limited. In connection with
a $4.4 million equity investment made by Sumitomo Chemical Company, Limited
("Sumitomo Chemical") in March 1989, the Company granted Sumitomo Chemical a
limited right of first negotiation to license up to three of the product
candidates the Company decides to commercialize in Japan on financial and
commercial terms as may be offered by the Company. The Company's collaborative
agreement with Sumitomo Pharmaceuticals, an affiliate of Sumitomo Chemical, to
develop BDNF in Japan, described above, is the first of such license
agreements. In connection with its equity investment, Sumitomo Chemical paid
the Company an additional $5.6 million, representing a deposit for
reimbursable costs and expenses in product research and development. All
available technology development contract revenue was recognized by the end of
1992. The Company is obligated periodically to inform and, if requested, to
meet with Sumitomo Chemical management about its progress in research and
development.

         Agreement With Medtronic, Inc. In June 1996, the Company entered into
a worldwide exclusive joint development agreement with Medtronic to
collaborate on the research and development of a family of therapeutics for
central nervous system diseases and disorders using experimental Regeneron
compounds and Medtronic delivery systems. The initial target of the Medtronic
collaboration is the development of AXOKINE for the potential treatment
of Huntington's disease, using Medtronic's implantable pump or other delivery
system to infuse or otherwise directly deliver AXOKINE into the

                                      11


<PAGE>

central nervous system. Under the agreement, the Company will pay Medtronic
defined royalties based on sales of AXOKINE delivered to the central nervous
system using a Medtronic delivery device. In addition, Medtronic purchased
from the Company 460,500 shares of Common Stock for $10.0 million. The
purchase price included five-year warrants to purchase an additional 107,400
shares of Common Stock at an exercise price of $21.72 per share. Medtronic
also obtained certain piggyback registration rights and agreed that until the
later of the termination of the collaboration agreement or five years from the
date of the agreement, it will not take any steps or assist any third party to
take steps to acquire control of the Company, whether by acquisition of
capital stock, proxy contest, tender offer, merger, sale of assets, or voting
agreements, except under certain circumstances.

         Agreement With Pharmacopeia, Inc. In October 1996, Regeneron and
Pharmacopeia entered into an agreement (the "Pharmacopeia Agreement") to
collaborate exclusively in a series of research programs the objective of which
is to discover novel small molecule, orally active therapeutics that are
agonists, antagonists, or mimics of a broad range of cytokines and growth
factors. Subject to the ability of either or both parties to opt-out of such
efforts, any potential product candidate that may emerge from this joint
research will be jointly developed by Regeneron and Pharmacopeia, with each
party sharing equally in the costs of such efforts and in any profits that may
derived from such potential products. The Pharmacopeia Agreement provided for no
financial payments by either party, subject to the mutual obligation to use
reasonable efforts to discover lead compounds for future development.


         Agreement with The Procter & Gamble Company. In May 1997, the Company
entered into a ten-year collaboration agreement with Procter & Gamble to
discover, develop, and commercialize pharmaceutical products, as well as a
securities purchase agreement and other related agreements. The P&G Agreement
expanded and superseded a collaboration agreement that the Company and Procter &
Gamble Pharmaceuticals, Inc. entered into in December 1996 to develop drugs for
skeletal muscle injury and atrophy. Procter & Gamble agreed over the first five
years of the various agreements to purchase up to $60.0 million in Regeneron
equity and provide up to $94.7 million in support of Regeneron's research
efforts related to the collaboration. Pursuant to these agreements, in June
1997, Procter & Gamble purchased 4.35 million shares of Regeneron Common Stock
at $9.87 per share for a total of $42.9 million and received five year warrants
to purchase an additional 1.45 million shares of Regeneron stock at $9.87 per
share. This purchase was in addition to a $10.0 million purchase of 800,000
shares of Regeneron Common Stock at $12.50 per share that was completed in March
1997 pursuant to the December 1996 agreement.

         In September 1997, the Company and Procter & Gamble expanded the P&G
Agreement to include AXOKINE and related molecules (delivered systemically),
and agreed to develop AXOKINE initially to treat obesity associated with Type
II diabetes. Procter & Gamble agreed to pay the Company as much as $15.0
million in additional funding, partly subject to achieving certain milestones
related to AXOKINE. Of the $15.0 million, $2.5 million was paid in September
1997 and another $2.5 million was paid in December 1997.

         Any drugs that may result from the collaboration will be jointly
developed and marketed, with the parties equally sharing development costs and
profits. Either party may terminate collaborative research after five years,
subject to reversion of certain rights to Regeneron. Regeneron contributed its
technologies and intellectual property relating to a broad set of its programs
and activities, as well as future research programs and activities, to
the collaboration. Excluded from the collaboration were the Company's

                                      12


<PAGE>

neurotrophic factor and cytokine research programs, which will continue to be
developed independent of the P&G collaboration, including Regeneron's
collaborative activities with Amgen, Glaxo, Medtronic, Pharmacopeia, Sumitomo
Pharmaceuticals, and Sumitomo Chemicals. In addition to the potential
development of protein-based therapeutics, the collaboration will seek to
discover and develop small molecule, orally active therapeutics useful in the
treatment of muscle diseases and conditions.

         Procter & Gamble also obtained certain piggyback registration rights
(exercisable after the collaboration terminates) and agreed that until the
earlier of December 2001 or the termination of the collaboration agreement it
will not take any steps or assist any third party to take steps to acquire
control of the Company, whether by acquisition of capital stock, proxy
contest, tender offer, merger, sale of assets, or voting agreements, except
under certain circumstances.


         Other Agreements. The Company also has agreements with individual
researchers and universities to conduct sponsored research and development
programs. The goal of such agreements is to extend the Company's capabilities
and to acquire proprietary rights to the results of sponsored research. The
Company is a party to a number of sponsored research agreements which include
grants to the Company of exclusive licenses to certain discoveries and
technologies developed at, among other places, the Max Planck Institute
(covering the field of neurotrophic factors, including work done at the Max
Planck Institute on BDNF, NT-3, and other substances), and the University of
California at San Francisco (covering the use of neurotrophic factors and
other recombinant proteins to treat degenerative conditions of the eye).

         In addition to these sponsored research agreements, the Company
(individually or in partnership with Amgen pursuant to the Amgen Agreement or
Procter & Gamble pursuant to the P&G Agreement) provides resource material and
information that relate to its product candidates and research programs to
over 400 investigators at private and public institutions throughout the
world. Regeneron supplies materials and know-how to these investigators on a
confidential basis in exchange for access to additional research and ownership
of certain proprietary rights resulting from the work of the investigators.

          There can be no assurance that any of these agreements will result
in work that will have commercial potential or other useful benefit to the
Company, or that, if any such work has useful benefit to the Company, the
Company will be able to protect its proprietary position adequately to realize
any possible commercial benefit.

Manufacturing

         The Company completed construction of a manufacturing facility in
1992 in Tarrytown, New York. This facility, which was designed to comply with
FDA current good manufacturing practices ("GMP"), is intended to produce
preclinical and clinical supplies of compounds. Depending on the dosage of its
drugs, the facility could also produce either bulk compounds or the final
dosage form of certain product candidates.

         In 1993, the Company purchased its Rensselaer, New York manufacturing
facility, which is being used to produce BDNF for use by Sumitomo
Pharmaceuticals and will be used to produce vaccine intermediate material for
Merck. The Company may use the facility to produce other product candidates
and materials in the future.

         Among the conditions for regulatory marketing approval of a drug is
the requirement that the prospective manufacturer's quality control and
manufacturing procedures conform to the GMP regulations of the health
authority. In complying with

                                      13


<PAGE>

standards set forth in these regulations, manufacturers must continue to
expend time, money, and effort in the area of production and quality control
to ensure full technical compliance. Manufacturing establishments, both

foreign and domestic, are also subject to inspections by or under the
authority of the FDA and by other federal, state, and local agencies.

Competition

         There is substantial competition in the biotechnology industry. Many
of the Company's competitors have substantially greater research, preclinical
and clinical product development, and  manufacturing capabilities and financial,
marketing, and human resources than Regeneron. Smaller companies may also
prove to be significant competitors, particularly as a result of acquiring or
discovering patentable inventions or as a result of collaborative arrangements
with large pharmaceutical companies or their acquisition by large pharmaceutical
companies. The Company's agreements with larger, better established
pharmaceutical companies are intended to secure for the Company the benefits of
such a collaboration with more experienced pharmaceutical firms. Technological
development and discoveries may require companies to change their research and
development efforts. Competitors with greater resources than the Company may
have the financial and technological flexibility to respond to such needed
changes better than the Company.

         Even if BDNF or NT-3 is shown to be safe and effective to treat ALS
or other conditions, other companies have developed or are developing drugs
for the treatment of the same or similar conditions. For example, the FDA has
approved the application of Rhone-Poulenc Rorer to market riluzole (under the
tradename Rilutek), an orally administered drug, to treat ALS in the United
States, and Rhone-Poulenc Rorer has filed applications for approval and gained
approval in other countries. More broadly, Regeneron is engaged in an intensely
competitive field. Amgen and the Company are direct competitors in the field of
neurotrophic factors and possibly other fields. Other potential competitors
include Genentech, Inc. ("Genentech") which is developing nerve growth factor
("NGF") to treat peripheral neuropathies and pain, is a co-licensee under the
Amgen/Regeneron NT-3 license with Takeda, and may be developing other
neurotrophic factors, and Cephalon, Inc. ("Cephalon"), which is developing, in
collaboration with Chiron Corporation, insulin-like growth factor ("IGF-1" trade
named Myotrophin(TM)) and other compounds for the treatment of ALS, peripheral
neuropathies, and other conditions. Amgen, Genentech, Cephalon, and others have
filed patent applications and obtained issued patents relating to neurotrophic
factors, or have announced that they are actively pursuing preclinical or
clinical development programs in the area of neurotrophic factors. Cephalon has
announced that, based on the results of its Phase III clinical studies with
IGF-1 to treat ALS, it has filed and intends to file applications for approval
to market IGF-1 to treat ALS in the United States and other countries. Amgen and
Genentech have separately also announced research and development of glial
cell-line derived neurotrophic factor ("GDNF") for the treatment of ALS,
Parkinson's disease, and other conditions. Other companies have developed or are
developing drugs based on technology other than neurotrophic factors for the
treatment of diseases and injuries relating to the nervous system (including
ALS). The Company is also aware that several pharmaceutical companies are
conducting clinical trials in ALS with drugs which, like riluzole, are orally
administered.

                                      14



<PAGE>

         A number of corporate and academic competitors are involved in the
discovery and development of novel therapeutics using tyrosine kinase
receptors, orphan receptors, and compounds that are the focus of other
research or development programs now being conducted by the Company. These
competitors include Amgen, Genentech, and others. Many firms are engaged in
research and development in the areas of cytokines, interleukins,
angiogenesis, and muscle conditions. There is, in addition, substantial
competition in the discovery and development of treatments for obesity and
obesity-related morbidities, including Type II diabetes, as well as
established and emerging prescription and over-the-counter treatments for
these conditions. Amgen and a number of other pharmaceutical companies are
developing leptin and related molecules; clinical trials of leptin are
currently under way. The treatment of constipating conditions is highly
competitive, with a number of companies providing over-the-counter remedies
and other competitors attempting to discover and develop improved
over-the-counter or prescription treatments. Every pharmaceutical company and
many biotechnology companies are engaged in attempting to discover and develop
small-molecule based therapeutics, similar in at least certain respects to
Regeneron's programs with Glaxo, Pharmacopeia, and Procter & Gamble. In these
and related areas, intellectual property rights have been sought and certain
rights have been granted to competitors and potential competitors of the
Company, and the Company may be at a substantial competitive disadvantage in
such areas as a result of, among other things, the Company's lack of experience,
trained personnel, and expertise.

         If a competitor announces a successful clinical study involving a
product that may be competitive with one of the Company's product candidates
or an approval by a regulatory agency of the marketing of a competitive
product, such announcement may have a material adverse effect on the
operations or future prospects of the Company or the price of its Common
Stock.

         The Company also competes with academic institutions, governmental
agencies, and other public or private research organizations which continue to
conduct research, seek patent protection, and establish collaborative
arrangements for the development and marketing of products that would provide
royalties for use of their technology. These institutions are becoming more
active in seeking patent protection and licensing arrangements to collect
royalties for use of the technology that they have developed. Products
developed in such a manner may compete directly with any products developed by
the Company. The Company also competes with others in acquiring technology
from such institutions, agencies, and organizations.

         The relative speed with which Regeneron can develop safe and
effective product candidates, complete clinical testing and approval
processes, and supply commercial quantities of the product to the market will
have an important impact on the Company's competitive position. Competition
among product candidates approved for sale may be based on efficacy, safety,
reliability, availability, price, patent position, and other factors.

Patents, Trademarks, and Trade Secrets


         The Company's success depends, in part, on its ability to obtain
patents, maintain trade secret protection, and operate without infringing on
the proprietary rights of third parties. The Company's policy is to file
patent applications to protect technology, inventions, and improvements that
are considered important to the development of its business. The Company has
been granted a number of U.S. patents and is the exclusive or nonexclusive
licensee of a number of additional U.S. patents and patent applications. The
Company also relies upon trade secrets, know-how, and continuing technological

                                      15


<PAGE>

innovation to develop and maintain its competitive position. The Company or
its licensers or collaborators have filed patent applications on products and
processes relating to neurotrophic factors and other technologies and
inventions in the United States and in certain foreign countries. The Company
intends to file additional patent applications, when appropriate, relating to
improvements in its technologies and other specific products and processes.
The Company plans to aggressively prosecute, enforce, and defend its patents
and other proprietary technology.

         The patent positions of biotechnology firms, including the Company,
are generally uncertain and involve complex legal and factual questions. No
predictions can be made regarding the breadth, validity, or enforceability of
claims allowed in these types of patents. The Company does not know whether
any of its pending applications will result in the issuance of any patents or
if any currently issued patents or any patents issued in the future will
provide significant proprietary protection or will be circumvented or
invalidated or will infringe on the rights of others.

         Competitors have filed applications for, or have been issued, patents
and may obtain additional patents and proprietary rights related to products
or processes competitive with those of the Company. Accordingly, there can be
no assurance that the Company's patent applications will result in patents
being issued in addition to those described above or that, if issued, the
patents will afford protection against competitors with similar technology;
nor can there be any assurance that others will not obtain patents that the
Company will need to license or circumvent. The Company is aware that one
patent has issued in the United States and patent applications in certain
foreign countries were filed by Amgen and others for the production of
neurotrophic factor proteins, and that a U.S. patent has issued to Genentech
on processes relating to NGF. The Company is further aware that patent
applications have been filed in the United States and certain foreign
countries by Takeda, Amgen, and, the Company believes, Genentech on products
and processes relating to NT-3. The Company has received a co-exclusive
license to NT-3 as a result of a worldwide licensing agreement between
Amgen/Regeneron, Takeda, and Genentech. In November 1994, Genentech was issued
a U.S. patent relating to the nucleic acids encoding NT-4/5 and methods for
its recombinant production. Other patent filings by these companies or others
may be competitive with the Company's patent claims or may cause, if valid and
issued in the United States or a foreign jurisdiction, substantial commercial
difficulties or additional expenses or delays to the Company's operations or
commercial activities or may require the Company to cease certain development

or commercial activities altogether. The Company cannot predict whether its or
its competitors' patent applications will result in valid patents being
issued.

         The Company expects that expenses related to the filing, prosecution,
defense, and enforcement of patent and other intellectual property claims will
continue to be substantial as a result of patent filings and prosecutions in the
United States and foreign countries. The Company is currently involved in
interference proceedings in the Patent and Trademark Office between Regeneron's
patent applications and patents relating to CNTF issued to Synergen, Inc.
("Synergen"). Amgen acquired all outstanding shares of Synergen in 1994. In 
March 1998, the Company and Amgen entered into an agreement not to sue each
other which, among other things, resolved their patent interference and related
opposition and other patent proceedings relating to CNTF and AXOKINE. The
Company also granted Amgen a license to use CNTF and second generation CNTFs
other than AXOKINE to treat retinal degenerative conditions. Neither party will
pay royalties or make other payments to the other party in consideration of this
agreement.

                                      16



<PAGE>

Government Regulation

         Regulation by government authorities in the United States and foreign
countries is a significant factor in the research, development, manufacture,
and marketing of the Company's product candidates. All of the Company's
product candidates will require regulatory approval before they can be
commercialized. In particular, human therapeutic products are subject to
rigorous preclinical and clinical trials and other premarket approval
requirements by the FDA and foreign authorities. Many aspects of the structure
and substance of the FDA and foreign pharmaceutical regulatory practices have
been reformed during recent years, and continued reform is under consideration
in a number of forums. The ultimate outcome and impact of such reforms and
potential reforms cannot be reasonably predicted.

         Clinical trials are conducted in accordance with certain standards
under protocols that detail the objectives of the study, the parameters to be
used to monitor safety, and the efficacy criteria to be evaluated. Each
protocol must be submitted to the FDA. The phases of clinical studies may
overlap. The designation of a clinical trial as being of a particular phase is
not necessarily indicative that such a trial will be sufficient to satisfy the
parameters of a particular phase, and a clinical trial may contain elements of
more than one phase notwithstanding the designation of the trial as being of a
particular phase. No assurance can be given that the results of preclinical
studies or early stage clinical trials will predict long-term safety or
efficacy of the Company's compounds when they are tested or used more broadly
in humans. Various federal and state statutes and regulations also govern or
influence the research, manufacture, safety, labeling, storage, recordkeeping,
marketing, transport, or other aspects of such products. The lengthy process
of seeking these approvals and the compliance with applicable statutes and
regulations require the expenditure of substantial resources. Any failure by

the Company or its collaborators or licensees to obtain, or any delay in
obtaining, regulatory approvals could adversely affect the marketing of any
products developed by the Company and its ability to receive product or
royalty revenue.

         In addition to the foregoing, the Company's present and future
business will be subject to regulation under the United States Atomic Energy
Act, the Clean Air Act, the Clean Water Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the National Environmental Policy
Act, the Toxic Substances Control Act, and the Resource Conservation and
Recovery Act, national restrictions, and other present and potential future
local, state, federal, and foreign regulations.

Employees

         As of December 31, 1997, the Company had 270 full-time employees, 63
of whom hold a Ph.D. and/or M.D. degree. Of the full-time employees, 160 are
engaged in or directly support research and development. The Company believes
that it has been highly successful in attracting skilled and experienced
personnel; however, competition for such personnel is intense. None of the
Company's personnel are covered by collective bargaining agreements, and
management considers its relations with its employees to be good.

                                       17



<PAGE>


I
tem 2.  Properties

         Regeneron conducts its research, development, manufacturing, and
administrative activities at its own facilities. The Company currently leases
approximately 121,000 square feet of office, laboratory, and manufacturing
space in Tarrytown, New York. The current monthly base rental charge is
$224,825, with increases based upon increases in taxes and operating expenses.
The lease for this facility expires on June 30, 1998, and the Company has
exercised an option to renew the lease for the first of two additional
five-year periods. The Company owns the Rensselaer facility, consisting of two
buildings totaling approximately 104,000 square feet of research,
manufacturing, office, and warehouse space.

         As the Company's activities expand, additional space may be required.
The Company plans to lease approximately 10,000 square feet of additional
space in Tarrytown. In the future, the Company may locate, lease, operate, or
purchase additional facilities in which to conduct expanded research and
development activities and manufacturing and commercial operations.


Item 3.  Legal Proceedings

         In March 1998, the Company and Amgen entered into an agreement not to
sue each other which, among other things, resolved their patent interference
and related opposition and other patent proceedings relating to CNTF and
AXOKINE. The Company also granted Amgen a license to use CNTF and second
generation CNTFs other than AXOKINE to treat retinal degenerative conditions.

Neither party will pay royalties or make other payments to the other party in
consideration of this agreement. In addition to patent interference
proceedings declared by the United States Patent and Trademark Office, the
Company from time to time has been subject to legal claims arising in
connection with its business. While the ultimate results of the proceedings
and claims cannot be predicted with certainty, at December 31, 1997, there
were no asserted claims against the Company which, in the opinion of
management, if adversely decided, would have a material adverse effect on the
Company's financial position and results of operations.


Item 4.  Submission of Matters to a Vote of Security Holders

         None.

                                      18


<PAGE>

Executive Officers of the Registrant

         Listed below are the executive officers of the Company as of March
13, 1998. There are no family relationships between any of the executive
officers and there is no arrangement or understanding between any executive
officer and any other person pursuant to which the executive officer was
selected. At the annual meeting of the Board of Directors, which follows the
Annual Meeting of Shareholders, executive officers are elected by the Board to
hold office for one year and until their respective successors are elected and
qualified, or until their earlier resignation or removal.

         Information with regard to the directors of the Company, including
that of the following executive officers who are directors, is incorporated by
reference to Regeneron Pharmaceuticals, Inc. Proxy Statement to be filed in
connection with solicitation of proxies for its Annual Meeting of Shareholders
to be held on June 12, 1998.


<TABLE>
<CAPTION>

Name                                                  Age       Position
- ----                                                  ---       --------
<S>                                                  <C>       <C> 

Leonard S. Schleifer, M.D., Ph.D.                     45        Chief  Executive  Officer,  President,  and
                                                                founder of the Company

George D. Yancopoulos, M.D., Ph.D.                    38        Senior Vice President,  Research, and Chief
                                                                Scientific Officer

Jesse M. Cedarbaum, M.D.                              46        Vice President, Clinical Affairs

Murray A. Goldberg                                    53        Vice President,  Finance &  Administration,
                                                                Chief Financial Officer, and Treasurer

Stephen L. Holst                                      56        Vice  President,   Quality   Assurance  and

                                                                Regulatory Affairs

Gail M. Kempler, Ph.D.                                43        Vice President,  Intellectual  Property and
                                                                Associate General Counsel

Paul Lubetkin                                         47        Vice  President,   General   Counsel,   and
                                                                Secretary

Randall G. Rupp, Ph.D.                                50        Vice President,  Manufacturing  and Process
                                                                Science

Neil Stahl, Ph.D.                                     41        Vice President, Biomolecular Science

David M. Valenzuela, Ph.D.                            47        Vice President, Genomics and Bioinformatics

Beverly C. Dubs                                       43        Controller and Assistant Treasurer
</TABLE>


                                      19


<PAGE>


                                    PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         The Common Stock of Regeneron is quoted on The Nasdaq Stock Market
under the symbol "REGN." The Company's Class A Stock, par value $.001 per
share, is not publicly quoted or traded.

         The following table sets forth, for the periods indicated, the range
of high and low bid quotations for the Common Stock as reported by The Nasdaq
Stock Market. The bid prices reflect inter-dealer quotations without retail
mark-ups, mark-downs, or commissions and do not necessarily represent actual
transactions.

                                              High            Low
                                              ----            ---

 1996

          First Quarter...................   $16.625       $11.375
          Second Quarter..................    19.75         11.75
          Third Quarter...................    20.50         13.25
          Fourth Quarter..................    24.50         14.875

 1997

          First Quarter...................    21.00          7.50
          Second Quarter..................    12.875         6.125
          Third Quarter...................    11.625         8.75
          Fourth Quarter..................    12.938         8.00

         As of March 13, 1998, there were approximately 931 holders of record

of the Company's Common Stock and 84 holders of record of the Company's Class
A Stock. The closing bid price for the Common Stock on that date was $8.8125

         The Company has never paid cash dividends and does not anticipate
paying any in the foreseeable future. In addition, under the terms of certain
debt agreements, the Company is not permitted to declare or pay cash dividends
to its shareholders.

                                      20


<PAGE>


Item 6.  Selected Financial Data

     The selected financial data set forth below for the years ended December
31, 1997, 1996, and 1995 and at December 31, 1997 and 1996 are derived from and
should be read in conjunction with the audited financial statements of the
Company, including the notes thereto, included elsewhere in this report. The
selected financial data for the years ended December 31, 1994 and 1993 and at
December 31, 1995, 1994, and 1993 are derived from audited financial statements
of the Company not included in this report.

     The Company has never paid cash dividends and does not anticipate paying
any in the foreseeable future. In addition, under the terms of certain debt
agreements, the Company is not permitted to declare or pay cash dividends to its
shareholders.



<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                       -------------------------------------------------------------------------------------
                                           1997                 1996             1995             1994             1993
                                       ------------------ ---------------- ----------------- --------------- ---------------
<S>                                    <C>                <C>              <C>               <C>             <C>

Statement of Operations Data

Revenues
     Contract research and development       $17,399,646      $17,302,473       $23,247,002     $19,606,292      $6,092,319
     Investment income                         6,241,845        4,360,065         2,997,180       2,585,465       3,463,902
     Research progress payments                5,000,000                                          1,000,000       1,000,000
     Contract manufacturing                    4,458,196        2,451,424         1,140,321
                                       ------------------ ---------------- ----------------- --------------- ---------------
                                              33,099,687       24,113,962        27,384,503      23,191,757      10,556,221
                                       ------------------ ---------------- ----------------- --------------- ---------------

Expenses
     Research and development                 27,770,166       28,268,798        23,310,088      30,874,437      36,755,883
     Loss in Amgen-Regeneron Partners          3,402,900       14,250,239        13,804,777       9,794,237       3,511,346
     General and administrative                5,764,969        5,879,975         5,764,397       7,529,136       6,025,921
     Depreciation and amortization             4,389,113        6,083,845         5,885,699       4,245,686       3,101,055
     Contract manufacturing                    2,617,070        1,115,259            72,059
     Interest                                    734,334          939,624         1,204,757       1,403,001       1,045,953
     Other                                                                          850,000
                                       ------------------ ---------------- ----------------- --------------- ---------------
                                              44,678,552       56,537,740        50,891,777      53,846,497      50,440,158
                                       ------------------ ---------------- ----------------- --------------- ---------------
Net loss                                    ($11,578,865)    ($32,423,778)     ($23,507,274)   ($30,654,740)   ($39,883,937)
                                       ================== ================ ================= =============== ===============

Net loss per share, basic and diluted             ($0.40)          ($1.33)           ($1.19)         ($1.62)         ($2.41)
                                       ================== ================ ================= =============== ===============
</TABLE>




<TABLE>
<CAPTION>
                                                                      At December 31, 
                                  -------------------------------------------------------------------------------------------
Balance Sheet Data                       1997             1996              1995             1994                1993
                                  ------------------ ---------------- ----------------- --------------- ---------------------
<S>                               <C>                <C>              <C>               <C>             <C>
Cash, cash equivalents,
     and marketable securities         $128,040,539     $ 97,027,766       $59,622,010     $60,215,256          $ 88,281,194
Working capital                          88,952,526       72,960,217        36,254,422      34,040,342            78,738,906
Total assets                            168,380,034      137,581,854        93,811,345      94,235,806           117,579,418
Capital lease obligations and 
     note payable, long-term 
     portion                              3,752,104        5,148,097         5,977,866       9,249,471             5,911,876
Stockholders' equity                    138,896,874      106,930,999        67,856,449      67,070,567            98,388,159
</TABLE>



                                       21



<PAGE>


Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

General

         Overview. The discussion below contains forward-looking statements
that involve risks and uncertainties relating to the future financial
performance of Regeneron Pharmaceuticals, Inc. ("Regeneron" or the "Company")
and actual events or results may differ materially. These statements concern,
among other things, the possible therapeutic applications of the Company's
product candidates and research programs, the timing and nature of the
Company's clinical and research programs now underway or planned, a variety of
items described herein and in the footnotes to the Company's financial
statements (including the useful life of assets, the anticipated length of
agreements, and other matters), and the future uses of capital and financial
needs of the Company. These statements are made by the Company based on
management's current beliefs and judgment. In evaluating such statements,
stockholders and potential investors should specifically consider the various
factors identified under the caption "Factors That May Affect Future Operating
Results" which could cause actual results to differ materially from those
indicated by such forward-looking statements.

         Regeneron is a New York corporation founded in 1988. It is a leader
in the application of molecular and cell biology to the search for novel human
therapeutics. The Company uses its expertise in growth factors and their
mechanisms of action to discover and develop protein-based and small molecule
drugs for the treatment of neurological, inflammatory, and muscle diseases, as
well as abnormal bone growth, obesity, cancer, and angiogenesis.
Amgen-Regeneron Partners, the partnership equally owned by Amgen Inc.
("Amgen") and Regeneron, is conducting human clinical studies of Regeneron's
brain-derived neurotrophic factor ("BDNF") and neurotrophin-3 ("NT-3"). The
Company has a number of research collaborations, including a broad-based,
long-term agreement with The Procter & Gamble Company ("Procter & Gamble").

         In January 1997, Amgen and Regeneron announced that the Phase III
clinical trial of BDNF delivered subcutaneously did not demonstrate clinical
efficacy in patients with amyotrophic lateral sclerosis ("ALS", commonly known
as Lou Gehrig's disease). The trial confirmed the safety and tolerability of
BDNF seen in earlier trials but showed no statistically significant difference
in breathing capacity or survival between treatment and placebo groups, as
measured by the trial's predetermined end points. The failure of that trial to
achieve its primary end points had a materially adverse effect on the price of
the Company's Common Stock (which declined more than 50% immediately after the
announcement of the results of the trial). After the Phase III clinical trial
results were announced, the Company retained independent experts in clinical
neurology, as well as independent statisticians, to conduct further examinations
of the data. This review by the Company and the outside panels indicated that a
retrospectively-defined subset of ALS patients in the trial may have received a
survival benefit from BDNF treatment. The panels recommended, among other
things, that additional preclinical and clinical investigations of subcutaneous
BDNF for ALS should be undertaken.


         BDNF is currently being developed by Amgen-Regeneron Partners for
potential use in treating ALS through two routes of administration:
intrathecal (infusion into the spinal fluid through an implanted pump) and
subcutaneous (injection under the skin). An intrathecal study in ALS patients
is ongoing. Subcutaneous studies conducted by Regeneron on behalf of the
partnership began in the first quarter of 1998. The current and planned future
BDNF subcutaneous studies are intended to test whether the survival

                                      22


<PAGE>

benefit seen in the retrospective analysis of the Phase III clinical trial can
be confirmed through appropriate prospective trials. In addition, Sumitomo
Pharmaceuticals Co., Ltd. ("Sumitomo Pharmaceuticals"), the Company's
collaborator in the development of BDNF in Japan, has informed the Company
that it will begin to conduct a Phase I safety assessment of BDNF delivered
subcutaneously to normal volunteers in March 1998. Sumitomo Pharmaceuticals is
initially developing BDNF to treat ALS.

         While intrathecal delivery may be more successful in delivering BDNF
to certain motor neurons (the nerve cells that degenerate in ALS), it is not
known whether intrathecal delivery will prove any more successful in
demonstrating safety and utility in patients with ALS than the subcutaneous
delivery used in the Phase III clinical trial that failed to achieve its
primary end points. The new clinical studies of BDNF delivered subcutaneously
for the treatment of ALS are also based on retrospective analyses of that
Phase III clinical trial. If these or subsequent trials fail to demonstrate
that BDNF is safe and effective in the treatment of ALS, that failure could
have a materially adverse effect on the Company, the price of the Company's
Common Stock, and the Company's ability to raise additional capital.

         Amgen-Regeneron Partners' clinical development of NT-3 is currently
focused on enteric neuropathies. The enteric nervous system is a complex
collection of nerves that control the function of the gastrointestinal system,
including gastrointestinal motility. Amgen-Regeneron Partners has conducted
clinical studies of NT-3 in normal volunteers and patients suffering
peripheral neuropathies associated with diabetes. These studies indicated,
among other things, that NT-3 is safe and well tolerated at a variety of doses
in patients and that, at certain doses, NT-3 causes increased gastrointestinal
motility. Based on these results and discussions with gastrointestinal experts,
Regeneron, on behalf of Amgen-Regeneron Partners, plans to commence by mid-1998
the first of a series of small Phase II clinical studies of NT-3 in enteric
neuropathies. The initial study is expected to include patients suffering from
severe idiopathic constipation. Later studies may be in patients who suffer from
constipation associated with Parkinson's disease, spinal cord injury, use of
opiate pain-killers, and other conditions.

         No assurance can be given that extended administration of NT-3 will
be safe or effective. The Phase I study of NT-3 in normal human volunteers
that concluded in 1995 was a short term (seven day) treatment study, while the
planned NT-3 clinical studies involve longer treatment. The treatment of
various constipating conditions may present additional clinical trial risks in
light of the complex and not wholly understood mechanisms of action that lead

to the conditions, the concurrent use of other drugs to treat the underlying
illnesses as well as the gastrointestinal condition, the potential difficulty
of designing and achieving significant clinical end points, and other factors.
No assurance can be given that these or any other studies of NT-3 will be
successful or that NT-3 will be commercialized.

         Amgen-Regeneron Partners is not planning to pursue additional trials
of BDNF and NT-3 in peripheral neuropathy at the present time, because the
results of earlier studies were not sufficiently promising.

         The results of the Company's and its collaborators' past activities
in connection with the research and development of BDNF and NT-3 do not
necessarily predict the results or success of future activities including, but
not limited to, any additional preclinical or clinical studies of BDNF or
NT-3. The Company cannot predict whether, when, or under what conditions BDNF
or NT-3 will be shown to be safe or effective to treat any human condition or
be approved for marketing by any regulatory agency. The delay or failure of
current or future studies to demonstrate the safety or efficacy of BDNF

                                      23


<PAGE>

or NT-3 to treat human conditions or to be approved for marketing could have a
material adverse impact on the Company.

         In May 1997, the Company entered into a ten-year collaboration
agreement (the "P&G Agreement") with Procter & Gamble to discover, develop, and
commercialize pharmaceutical products, as well as a securities purchase
agreement and other related agreements. The P&G Agreement expanded and
superseded a collaboration agreement that the companies entered into in December
1996 jointly to develop drugs for skeletal muscle injury and atrophy. Procter &
Gamble agreed over the first five years of the various agreements to purchase up
to $60.0 million in Regeneron equity and provide up to $94.7 million in support
of Regeneron's research efforts related to the collaboration. Pursuant to these
agreements, in June 1997, Procter & Gamble purchased 4.35 million shares of
Regeneron Common Stock at $9.87 per share for a total of $42.9 million and
received five year warrants to purchase an additional 1.45 million shares of
Regeneron stock at $9.87 per share. This purchase was in addition to a $10.0
million purchase of 800,000 shares of Regeneron Common Stock at $12.50 per share
that was completed in March 1997 pursuant to the December 1996 agreement.

         In September 1997, the Company and Procter & Gamble expanded the P&G
Agreement to include AXOKINE(TM) second generation ciliary neurotrophic factor
and related molecules (delivered systemically), and agreed to develop AXOKINE
initially to treat obesity associated with Type II diabetes. Procter & Gamble
agreed to pay the Company as much as $15.0 million in additional funding, partly
subject to achieving certain milestones related to AXOKINE. Of the $15.0
million, $2.5 million was paid in September 1997 and another $2.5 million was
paid in December 1997.

         To date, Regeneron has not received any revenues from the commercial
sale of products and may never receive such revenues. Before such revenues can
be realized, the Company (or its collaborators) must overcome a number of

hurdles which include successfully completing its research and development
efforts and obtaining regulatory approval from the United States Food and Drug
Administration ("FDA") or regulatory authorities in other countries. In
addition, the biotechnology and pharmaceutical industries are rapidly evolving
and highly competitive, and new developments may render the Company's products
and technologies noncompetitive and obsolete.

         From inception on January 8, 1988 through December 31, 1997,
Regeneron has a cumulative loss of $168.6 million. In the absence of revenues
from commercial product sales or other sources (the amount, timing, nature, or
source of which cannot be predicted), the Company's losses will continue as
the Company conducts its research and development activities. The Company's
activities may expand over time and may require additional resources, and the
Company's operating losses may be substantial over at least the next several
years. The Company's losses may fluctuate from quarter to quarter and will
depend, among other factors, on the timing of certain expenses and on the
progress of the Company's research and development efforts.

Results of Operations

         Years Ended December 31, 1997 and 1996. The Company's total revenue
increased to $33.1 million in 1997 from $24.1 million in 1996. Contract
research and development revenue was $17.4 million in 1997 and $17.3 million
in 1996, as revenue received from Procter & Gamble in connection with the P&G
Agreement offset lower revenue from Amgen-Regeneron Partners and Sumitomo
Pharmaceuticals. Research progress payments in 1997 of $5.0 million were
received from Procter & Gamble in connection with the September 1997 amendment
to the P&G Agreement related to 

                                      24


<PAGE>

AXOKINE. Investment income in 1997 increased to $6.2 million from $4.4 million
in 1996, due primarily to higher levels of interest-bearing investments
resulting from the proceeds from the private placements of equity securities
with Amgen, Medtronic,Inc. ("Medtronic"), and Procter & Gamble in 1996 and 1997.
Contract manufacturing revenue related to the Company's 1995 manufacturing
agreement (the "Merck Agreement") with Merck & Co., Inc. ("Merck") increased to
$4.5 million in 1997 from $2.5 million in 1996 as a result of increased activity
in preparation for manufacturing a product for Merck at the Company's Rensselaer
facility.

         The Company's total operating expenses decreased to $44.7 million in
1997 from $56.5 million in 1996. Research and development expenses declined to
$27.8 million in 1997 from $28.3 million in 1996 as less BDNF was produced for
clinical use by Sumitomo Pharmaceuticals in 1997. Loss in Amgen-Regeneron
Partners in 1997 decreased to $3.4 million from $14.3 million in 1996,
reflecting lower expenses after completion of the Phase III BDNF subcutaneous
clinical trial in 1996.

         General and administrative expenses were $5.8 million in 1997 and
$5.9 million in 1996. Depreciation and amortization expense decreased to $4.4
million in 1997 from $6.1 million in 1996, as certain laboratory equipment

became fully depreciated and capitalized patent costs were fully amortized in
1996. Contract manufacturing expenses are direct expenses related to the Merck
Agreement and are reimbursed by Merck. These expenses increased to $2.6
million in 1997 from $1.1 million in 1996, primarily from increased services
performed by the Company. Interest expense was $0.7 million in 1997 and $0.9
million in 1996.

           The Company's net loss in 1997 was $11.6 million, or $0.40 per
share (basic and diluted), compared to a net loss of $32.4 million, or $1.33
per share share (basic and diluted), in 1996.

         Years Ended December 31, 1996 and 1995. The Company's total revenue
decreased to $24.1 million in 1996 from $27.4 in 1995. Contract research and
development revenue decreased to $17.3 million in 1996 from $23.2 million in
1995, as lower revenue was earned from both Sumitomo Pharmaceuticals (because
of a non-recurring contract research payment of $5.4 million in 1995) and
Amgen-Regeneron Partners (because of less spending on preclinical research
conducted by Regeneron). During 1995, the Company entered into the Merck
Agreement and contract manufacturing revenue in 1996 and 1995 related to this
agreement aggregated $2.5 million and $1.1 million, respectively. Investment
income for 1996 increased to $4.4 million from $3.0 million in 1995, primarily
due to increased levels of interest-bearing investments resulting from the
sale by the Company of equity securities in a public offering in November 1995
and in private placements to Amgen, Medtronic, and Procter & Gamble in 1996.

         The Company's total operating expenses increased to $56.5 million in
1996 from $50.9 million in 1995. Research and development expenses increased
to $28.3 million in 1996 from $23.3 million in 1995, primarily due to costs
related to the Company's preclinical research programs and increased activity
on behalf of Sumitomo Pharmaceuticals. Loss in Amgen-Regeneron Partners
increased to $14.3 million in 1996 from $13.8 million in 1995, primarily due
to increased costs related to clinical trials and other activities conducted
by Amgen on behalf of the partnership.

                                      25


<PAGE>

         General and administrative expenses were $5.9 million in 1996 and $5.8
million in 1995. Depreciation and amortization expense increased to $6.1
million in 1996 from $5.9 million in 1995 as additional equipment was
purchased and capitalized. Contract manufacturing expenses of $1.1 million in
1996 were direct expenses related to contract manufacturing for Merck.
Interest expense decreased to $0.9 million in 1996 from $1.2 million in 1995,
resulting from the expiration of capital leases during 1995 and 1996. Other
expenses of $0.9 million in 1995 related to recognition of the Company's
contribution to the settlement of shareholder class action litigation.

         The Company's net loss in 1996 was $32.4 million, or $1.33 per share
(basic and diluted), compared to a net loss of $23.5 million, or $1.19 per
share (basic and diluted), in 1995.

Liquidity and Capital Resources


         Since its inception in 1988, the Company has financed its operations
primarily through private placements and public offerings of its equity
securities, revenue earned under the several agreements between the Company
and Amgen, Sumitomo Chemical Company, Ltd., Sumitomo Pharmaceuticals, Merck,
and Procter & Gamble, and investment income.

         In May 1997, the Company and Procter & Gamble entered into the P&G
Agreement. Procter & Gamble agreed over the first five years of the P&G
Agreement to purchase up to $60.0 million in Regeneron equity and provide up
to $94.7 million in support of Regeneron's research efforts related to the
collaboration. During the second five years of the P&G Agreement, the
companies will share all research costs equally. Clinical testing and
commercialization expenses for jointly developed products will be shared
equally throughout the ten years of the collaboration. The companies expect
jointly to develop and market worldwide any products resulting from the
collaboration and share equally in profits. Either company may terminate the
P&G Agreement at the end of five years with at least one year prior notice or
earlier in the event of a default (as defined in the P&G Agreement). In June
1997, Procter & Gamble completed the purchase of 4.35 million shares of
Regeneron Common Stock at $9.87 per share for a total of $42.9 million and
received five year warrants to purchase an additional 1.45 million shares of
Regeneron stock at $9.87 per share. This purchase was in addition to a $10.0
million purchase of 800,000 shares of Regeneron Common Stock at $12.50 per share
that was completed in March 1997 pursuant to a December 1996 stock purchase
agreement. In September 1997, the Company and Procter & Gamble expanded the P&G
Agreement to include AXOKINE and related molecules (delivered systemically), and
agreed to develop AXOKINE initially to treat obesity associated with Type II
diabetes. Procter & Gamble agreed to pay the Company as much as $15.0 million in
additional funding, partly subject to achieving certain milestones related to
AXOKINE. Of the $15.0 million, $2.5 million was paid in September 1997 and
another $2.5 million was paid in December 1997.

         In connection with the Company's agreement to collaborate with
Sumitomo Pharmaceuticals in the research and development of BDNF in Japan,
Sumitomo Pharmaceuticals has paid the Company $25.0 million through December
1997. In addition, the Company is being reimbursed in connection with
supplying Sumitomo Pharmaceuticals with BDNF for preclinical and clinical use.

         The Company's activities relating to BDNF and NT-3, as agreed upon by
Amgen and Regeneron, are being reimbursed by Amgen-Regeneron Partners, and the
Company recognizes such reimbursement as revenue. The funding of
Amgen-Regeneron Partners

                                      26


<PAGE>

is through capital contributions from Amgen and Regeneron, who must make equal
payments in order to maintain equal ownership and equal sharing of any profits
or losses from the partnership. The Company has made capital contributions
totaling approximately $45.2 million to Amgen-Regeneron Partners from the
partnership's inception in June 1993 through December 31, 1997. The Company
expects that its capital contributions in 1998 will total $5.7 million for the
full year, of which $1.4 million has been funded through March 1998. These

contributions could increase or decrease, depending upon the cost of
Amgen-Regeneron Partners' conducting additional BDNF and NT-3 studies and the
outcomes of those and other ongoing studies.

         From its inception in January 1988 through December 31, 1997, the
Company invested approximately $56.3 million in property, plant, and
equipment. This includes $16.8 million to acquire and renovate the Rensselaer
facility, $6.4 million of completed construction at the facility, and $7.7
million of construction in progress related to the modification of the
facility in connection with the Merck Agreement. In connection with the
purchase and renovation of the Rensselaer facility, the Company obtained
financing of $2.0 million from the New York State Urban Development
Corporation, of which $1.7 million is outstanding. Under the terms of such
financing, the Company is not permitted to declare or pay dividends to its
stockholders.

         During 1996, the Company entered into a series of new leasing
agreements (the "New Lease Line") which provided up to $4.0 million to finance
equipment acquisitions and certain building improvements, as defined
(collectively, the "Equipment"). The Company may utilize the New Lease Line in
increments ("leases"). Lease terms are for four years after which the Company
is required to purchase the Equipment at defined amounts. Certain of the
leases may be renewed for eight months at defined monthly payments after which
the Company will own the Equipment. At December 31, 1997, the Company had
available approximately $0.3 million of the New Lease Line.

          The Company expects that expenses related to the filing,
prosecution, defense, and enforcement of patent and other intellectual property,
claims will continue to be substantial as a result of patent filings and
prosecutions in the United States and foreign countries. The Company is
currently involved in interference proceedings in the Patent and Trademark
Office between Regeneron's patent applications and patents relating to ciliary
neurotrophic factor ("CNTF") issued to Synergen, Inc.("Synergen"). Amgen
acquired all outstanding shares of Synergen in 1994. In March 1998, the Company
and Amgen entered into a covenant not to sue each other which, among other
things, resolved their patent interference and related opposition and other
patent proceedings relating to CNTF and AXOKINE. The Company also granted Amgen
a license to use CNTF and second generation CNTFs other than AXOKINE to treat
retinal degenerative conditions. Neither party will pay royalties or make other
payments to the other party in consideration of this agreement.

         As of December 31, 1997, the Company had no established banking
arrangements through which it could obtain short-term financing or a line of
credit. Additional funds may be raised through, among other things, the
issuance of additional securities, other financing arrangements, and future
collaboration agreements. No assurance can be given that additional financing
will be available or, if available, that it will be available on acceptable
terms. In addition, the Company estimates that through mid-2002 it could
receive additional payments from Proctor & Gamble in the form of research
funding, milestones, and equity purchases of as much as $100 million or more.

         At December 31, 1997, the Company had $128.0 million in cash, cash
equivalents, and marketable securities.


                                      27



<PAGE>

         The Company expects to incur substantial funding requirements for,
among other things, research and development activities (including preclinical
and clinical testing), validation of manufacturing facilities, and the
acquisition of equipment. The Company expects to incur ongoing funding
requirements for capital contributions to Amgen-Regeneron Partners to support
the continued development and clinical trials of BDNF and NT-3. The amount
needed to fund operations will also depend on other factors, including the
status of competitive products, the success of the Company's research and
development programs, the status of patents and other intellectual property
rights developments, and the continuation, extent, and success of any
collaborative research programs (including those with Amgen and Procter &
Gamble). The Company believes that its existing capital resources will enable
it to meet operating needs for at least several years. No assurance
can be given that there will be no change in projected revenues or expenses,
that would lead to the Company's capital being consumed significantly before
such time.

Factors That May Affect Future Operating Results

         Regeneron cautions stockholders and potential investors that the
following important factors, among others, in some cases have affected, and in
the future could affect, Regeneron's actual results and could cause
Regeneron's actual results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, Regeneron. The statements
under this caption are intended to serve as cautionary statements within the
meaning of the Private Securities Litigation Reform Act of 1995. The following
information is not intended to limit in any way the characterization of other
statements or information under other captions as cautionary statements for
such purpose:

o         Delay, difficulty, or failure of the Company's research and
          development programs to produce product candidates that are
          scientifically or commercially appropriate for further
          development by the Company or others.

o         Cancellation or termination of material collaborative or licensing
          agreements (including in particular, but not limited to, those with
          Procter & Gamble and Amgen) and the resulting loss of research or
          other funding could have a material adverse effect on the Company
          and its operations. A change of control of one or more of the
          Company's material collaborators or licensees could also have a
          material adverse effect on the Company.

o         Delay, difficulty, or failure in obtaining regulatory approval
          (including approval of its facilities for production) for the
          Company's products (including vaccine intermediate for Merck),
          including delays or difficulties in development because of
          insufficient proof of safety or efficacy.


o         Increased and irregular costs of development, manufacture,
          regulatory approval, sales, and marketing associated with the
          introduction of products in the late stage of development.

o         Competitive or market factors that may cause use of the Company's
          products to be limited or otherwise fail to achieve broad
          acceptance.

                                      28


<PAGE>

o         The ability to obtain, maintain, and prosecute intellectual property
          rights, and the cost of acquiring in-process technology and other
          intellectual property rights, either by license, collaboration, or
          purchase of another entity.

o         Difficulties or high costs of obtaining adequate financing to meet
          the Company's obligations under its collaboration and licensing
          agreements or to fund 50 percent of the cost of developing product
          candidates in order to retain 50 percent of the commercialization
          rights.

o         Amount and rate of growth of Regeneron's general and administrative
          expenses, and the impact of unusual or infrequent charges resulting
          from Regeneron's ongoing evaluation of its business strategies and
          organizational structure.

o         Failure of corporate partners to develop or commercialize
          successfully the Company's products or to retain and expand the
          markets served by the commercial collaborations; conflicts of
          interest, priorities, and commercial strategies which may arise
          between the Company and such corporate partners.

o         Delays or difficulties in developing and acquiring production
          technology and technical and managerial personnel to manufacture
          novel biotechnology products in commercial quantities at reasonable
          costs and in compliance with applicable quality assurance and
          environmental regulations and governmental permitting requirements.

o         Difficulties in obtaining key raw materials and supplies for the
          manufacture of the Company's product candidates.

o         The costs and other effects of legal and administrative cases and
          proceedings (whether civil, such as product- or employment-related,
          or environmental, or criminal); settlements and investigations;
          developments or assertions by or against Regeneron relating to
          intellectual property rights and licenses; the issuance and use of
          patents and proprietary technology by Regeneron and its competitors,
          including the possible negative effect on the Company's ability to
          develop, manufacture, and sell its products in circumstances where
          it is unable to obtain licenses to patents which may be required for
          such products.


o         Underutilization of the Company's existing or new manufacturing
          facilities or of any facility expansions, resulting in
          inefficiencies and higher costs; start-up costs, inefficiencies,
          delays, and increased depreciation costs in connection with the
          start of production in new plants and expansions.

o         Health care reform, including reductions or changes in reimbursement
          available for prescription medications or other reforms.

o         The ability to attract and retain key personnel. As Regeneron's
          scientific efforts lead to potentially promising new directions,
          both outside of recombinant protein therapies (into orally active,
          small molecule pharmaceuticals) and outside of treatments for
          neurological and neurodegenerative conditions (into, for example,
          potential programs in obesity, diabetes, cancer, inflammation,
          muscle disease, bone growth disorders, and angiogenesis), the
          Company will require additional internal

                                      29


<PAGE>

          expertise or external collaborations in areas in which it currently
          does not have substantial resources and personnel.

         The Company is evaluating the need to modify its computer systems and
software to properly handle information and transactions relating to the year
2000. Presently the Company believes that with modifications to some existing
sofware, the year 2000 issue can be mitigated. The Company plans to complete
the year 2000 project not later than December 31, 1998, and does not expect
the cost of such modifications to be material.

Impact of the Adoption of Recently Issued Accounting Standards

         The Financial Accounting Standards Board (the "FASB") issued
Financial Accounting Standard No. 130, Reporting Comprehensive Income ("SFAS
130") in June 1997. Comprehensive Income represents the change in net assets
of a business enterprise as a result of nonowner transactions. Management does
not believe that the future adoption of SFAS 130 will have a material effect
on the Company's financial position and results of operations. The Company
will adopt SFAS 130 for the year ending December 31, 1998.

         Also in June 1997, the FASB issued Financial Accounting Standard No.
131, Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"). SFAS 131 requires that a business enterprise report certain
information about operating segments, products and services, geographic areas
of operation, and major customers in complete sets of financial statements and
in condensed financial statements for interim periods. The Company is required
to adopt this standard for the year ending December 31, 1998 and is currently
evaluating the impact of the standard.

         In February 1998, the FASB issued Financial Accounting Standard No.
132, Employers' Disclosures about Pensions and Other Postretirement Benefits.
This statement modifies financial statement disclosures related to pension and

other postretirement plans, and will not have an effect on the Company's
financial position or results of operations, and is effective for periods
beginning after December 15, 1997.

                                      30



<PAGE>


I
tem 8.  Financial Statements and Supplementary Data

         The financial statements of the Company required by this item are
included herein as exhibits and listed under Item 14.(A)1.


Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

         Not applicable.


                                   PART III


Item 10.  Directors and Officers of the Registrant

         Information with respect to directors and executive officers is
incorporated by reference to the material captioned "Election of Directors,"
"Executive Officers of the Registrant," and "Compliance with Section 16(b) of
the Securities Exchange Act of 1934" in the Regeneron Pharmaceuticals, Inc.
Proxy Statement to be filed in connection with solicitation of proxies for its
Annual Meeting of Shareholders to be held on June 12, 1998.


Item 11.  Executive Compensation

         The information called for by this item is incorporated by reference
to the material captioned "Executive Compensation" and "Election of Directors"
in the Regeneron Pharmaceuticals, Inc. Proxy Statement to be filed in
connection with solicitation of proxies for its Annual Meeting of Shareholders
to be held on June 12, 1998.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The information called for by this item is incorporated by reference
to the material captioned "Security Ownership of Management" and "Security
Ownership of Certain Beneficial Owners" in the Regeneron Pharmaceuticals, Inc.
Proxy Statement to be filed in connection with solicitation of proxies for its
Annual Meeting of Shareholders to be held on June 12, 1998.


Item 13.  Certain Relationships and Related Transactions

         The information called for by this item is incorporated by reference
to the material captioned "Certain Relationships and Related Transactions" in
the Regeneron Pharmaceuticals, Inc. Proxy Statement to be filed in connection
with solicitation of proxies for its Annual Meeting of Shareholders to be held
on June 12, 1998.


                                      31



<PAGE>


PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(A)       1. Financial Statements

          The financials statements filed as part of this report are listed on
          the Index to Financial Statements on page F-1.

          2. Financial Statement Schedules

          All schedules for which provision is made in the applicable
          accounting regulations of the Securities and Exchange Commission are
          not required under the related instructions or are inapplicable and
          therefore have been omitted.

          3. Exhibits

Exhibit
Number    Description
- ------    -----------

3.1  (a)  - Restated Certificate of Incorporation of Regeneron 
          Pharmaceuticals, Inc. as at June 21, 1991. 

3.2       - By-Laws of the Company, currently in effect (amended as of January
          22, 1995). 

10.1 (b)* - Technology Development Agreement dated as of March 20, 1989, 
          between the Company and Sumitomo Chemical Company, Limited.

10.2 (b)* - Neurotrophic Factor Agreement (License Agreement) dated as of
          May 10, 1988, between the Company and Max Planck Institute fur
          Psychiatrie.

10.3 (b)* - Collaboration Agreement, dated August 31, 1990, between the
          Company and Amgen Inc.

10.4 (b)  - 1990 Amended and Restated Long-Term Incentive Plan. 

10.5 (c)* - License Agreement dated as of October 7, 1992, between the
          Company and The Regents of the University of California.

10.6 (d)* - Collaboration Agreement dated as of July 22, 1993, between the
          Company and Glaxo Group Limited. 

10.7 (e)* - Research and Development Agreement dated as of June 2, 1994,
          between the Company and Sumitomo Pharmaceuticals Company, Ltd.


10.8 (f)* - Manufacturing Agreement dated as of September 18, 1995, between
          the Company and Merck & Co., Inc. 

10.9 (g)  - Stock and Warrant Purchase Agreement dated as of April 15, 1996,
          between the Company and Amgen Inc.

10.10(g)  - Warrant Agreement dated as of April 15, 1996, between the Company
          and Amgen Inc.

10.11(g)  - Registration Rights Agreement dated as of April 15, 1996, between
          the Company and Amgen Inc.

10.12(g)  - Stock and Warrant Purchase Agreement dated as of June 27, 1996,
          between the Company and Medtronic, Inc.

10.13(g)  - Warrant Agreement dated as of June 27, 1996, between the Company
          and Medtronic, Inc. 

10.14(g)  - Registration Rights Agreement dated as of June 27, 1996, between
          the Company and Medtronic, Inc. 

10.15(g)  - Assignment and Assumption Agreement dated as of June 27, 1996,
          between the Company and Medtronic, Inc.

10.16(h)  - Certificate of Amendment of the Restated Certificate of
          Incorporation of Regeneron Pharmaceuticals, Inc., as at October 18,
          1996.

10.17(i)  - Rights Agreement, dated as of September 20, 1996, between
          Regeneron Pharmaceuticals, Inc. and ChaseMellon Shareholder Services
          L.L.C., as Rights Agent, including the form of Rights Certificate as
          Exhibit B thereto.

10.18(j)  - Stock Purchase Agreement dated as of December 11, 1996, between
          the Company and Procter & Gamble Pharmaceuticals, Inc.

10.19(j)  - Registration Rights Agreement dated as of December 11, 1996,
          between the Company and Procter & Gamble Pharmaceuticals, Inc.

                                      32


<PAGE>

10.20(k)  - Securities Purchase Agreement dated as of May 13, 1997, between the
          Company and The Procter & Gamble Company.

10.21(k)  - Warrant Agreement dated as of May 13, 1997, between the Company and
          The Procter & Gamble Company.

10.22(k)  - Registration Rights Agreement dated as of May 13, 1997, between the
          Company and The Procter & Gamble Company.

10.23(k)* - Multi-Project Collaboration Agreement dates as of May 13, 1997,
          between the Company and The Procter & Gamble Company.


10.24(l)* - First Amendment to the Multi-Project Collaboration Agreement
          dated May 13, 1997, between the Company and The Procter & Gamble
          Company, dated as of September 29, 1997.

10.25     - Employment Agreement, dated as of February 12, 1997 between the
          Company and Leonard S. Schleifer, M.D., Ph.D.

23.1      - Consent of Coopers & Lybrand L.L.P. 

23.2      - Consent of Ernst & Young LLP, Independent Auditors. 

24        - Power of Attorney.

27        - Financial Statement Data for year ending December 31, 1997, also
          Amended Financial Statement Data for quarters ending September 30,
          1997, June 30, 1997 and March 31, 1997, for year ending December 31,
          1996, and for quarters ending September 30, 1996 and June 30, 1996.
- ------------------------------------------------------------------------------
Description:

     (a)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended June 30,1991, filed
          August 13, 1991.

     (b)  Incorporated by reference from the Company's registration statement
          on Form S-1 (file number 33-39043).

     (c)  Incorporated by reference from the Form 10-K for Regeneron
          Pharmaceuticals, Inc. for the fiscal year ended December 31, 1992,
          filed March 30, 1993.

     (d)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended June 30,1993, filed July
          22, 1993.

     (e)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended September 30, 1994,
          filed November 14, 1994.

     (f)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended September 30, 1995,
          filed November 14, 1995.

     (g)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended June 30, 1996, filed
          August 14, 1996.

     (h)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended September 30, 1996,
          filed November 5, 1996.

     (i)  Incorporated by reference from the Form 8-A for Regeneron
          Pharmaceuticals, Inc. filed October 15, 1996.


     (j)  Incorporated by reference from the Form 10-K for Regeneron
          Pharmaceuticals, Inc. for the fiscal year ended December 31, 1996,
          filed March 26, 1997.

     (k)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended June 30, 1997, filed
          August 12, 1997.

     (l)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended September 30, 1997,
          filed November 10, 1997.

                                      33


<PAGE>

     *    Portions of this document have been omitted and filed separately
          with the Commission pursuant to requests for confidential treatment
          pursuant to Rule 24b-2.

(B)       Reports on Form 8-K

          (1) On January 14, 1997, the Company filed a report on Form 8-K
          regarding the fact that the Company issued a press release on
          January 10, 1997 entitled "BDNF Phase 3 Trial Does Not Demonstrate
          Efficacy" and a press release on January 14, 1997 entitled
          "Regeneron Announces Clinical, Scientific, Financial Plans for the
          Future," copies of which were included as exhibits to that filing.

          (2) On May 13, 1997, the Company filed a report on Form 8-K regarding
          the fact that the Company issued a press release entitled "Procter &
          Gamble and Regeneron Form 10-Year Research Collaboration to
          Discover, Develop Pharmaceutical Products," a copy of which was
          included as an exhibit to that filing.

                                      34



<PAGE>


                                   SIGNATURE

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:   New York, New York
         March 24, 1998

                         REGENERON PHARMACEUTICALS, INC.

                         By:   /s/  LEONARD S. SCHLEIFER
                               -----------------------------------------
                                   Leonard S. Schleifer, M.D., Ph.D.
                                   President and Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person on behalf of the
registrant in the capacities indicated on March 24, 1998.


<TABLE>
<CAPTION>
              Signature                                            Title
              ---------                                            -----
<S>                                             <C>    
     /s/   LEONARD S. SCHLEIFER,                President, Chief Executive Officer, and
     -------------------------------------
           Leonard S. Schleifer, M.D., Ph.D.    Director

     /s/   MURRAY A. GOLDBERG                   Vice President, Finance & Administration,
     -------------------------------------      Chief Financial Officer, and
           Murray A. Goldberg                   Treasurer (Principal Financial Officer)
                                                

     /s/   BEVERLY C. DUBS                      Controller and Assistant Treasurer
     -------------------------------------      (Chief Accounting Officer)
           Beverly C. Dubs                      

                         *                      Chairman of the Board
     -------------------------------------
           P. Roy Vagelos, M.D.

                         *                      Director
     -------------------------------------
           Charles A. Baker

                         *                      Director
     -------------------------------------
           Michael S. Brown, M.D.

                         *                      Director
     -------------------------------------

           Alfred G. Gilman, M.D., Ph.D.

                         *                      Director
     -------------------------------------
           Joseph L. Goldstein, M.D.

                         *                      Director
     -------------------------------------
           Fred A. Middleton

                         *                      Director
     -------------------------------------
           Eric M. Shooter, Ph.D.

                         *                      Director
     -------------------------------------
           George L. Sing

*By     /s/PAUL LUBETKIN
     -------------------------------------
           Paul Lubetkin
          (Attorney-in-Fact)
</TABLE>



                                      35


<PAGE>

                        REGENERON PHARMACEUTICALS, INC.


                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                                                  Page
                                                                                                 Numbers
                                                                                                 -------
<S>                                                                                            <C>
Regeneron Pharmaceuticals, Inc.                                                                  

     Report of Independent Accountants                                                             F-2

     Balance Sheets at December 31, 1997 and 1996                                                  F-3

     Statements of Operations for the years ended December 31, 1997, 1996, and 1995                F-4

     Statements of Stockholders' Equity for the years ended December 31, 1997, 1996,
          and 1995                                                                                 F-5

     Statements of Cash Flows for the years ended December 31, 1997, 1996, and 1995                F-6

     Notes to Financial Statements                                                             F-7 to F-19

Amgen-Regeneron Partners

     Report of Ernst & Young LLP, Independent Auditors                                            F-21

     Balance Sheets at December 31, 1997 and 1996                                                 F-22

     Statements of Operations for the years ended December 31, 1997, 1996, and 1995               F-23

     Statements of Changes in Partners' Capital for the years ended December 31, 1997,
         1996, and 1995                                                                           F-24

     Statements of Cash Flows for the years ended December 31, 1997, 1996, and 1995               F-25

     Notes to Financial Statements                                                             F-26 to F-28

</TABLE>


                                      F-1


<PAGE>


                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Regeneron Pharmaceuticals, Inc.:

         We have audited the accompanying balance sheets of REGENERON
PHARMACEUTICALS, INC. (the "Company") as of December 31, 1997 and 1996 and
the related statements of operations, stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Amgen-Regeneron
Partners (the "Partnership"), an entity which is fifty percent owned by the
Company, as of December 31, 1997 and 1996 or for each of the three years in
the period ended December 31, 1997. The Company's investment in the
Partnership is accounted for in accordance with the equity method of
accounting and constitutes less than one percent of the Company's total assets
at December 31, 1997 and 1996. For the years ended December 31, 1997, 1996, and
1995, the Company recorded its pro rata share of the Partnership's net loss of
approximately $3.4 million, $14.3 million, and $13.8 million, respectively.
The Partnership's financial statements were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
amounts included for the Partnership, is based solely on the report of the
other auditors.

         We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report of
the other auditors provide a reasonable basis for our opinion.

         In our opinion, based on our audits and the report of the other
auditors, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of December 31,
1997 and 1996, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.

                                                    COOPERS & LYBRAND L.L.P.

New York, New York
February 10, 1998,


                                      F-2




<PAGE>

                        REGENERON PHARMACEUTICALS, INC.
                                BALANCE SHEETS
                          December 31, 1997 and 1996



<TABLE>
<CAPTION>


                                        ASSETS                                            1997                 1996
                                                                                          ----                 ----
Current assets
<S>                                                                                  <C>                  <C>          
    Cash and cash equivalents                                                        $  28,921,366        $  34,475,060
    Marketable securities                                                               63,601,504           45,587,404
    Receivable due from The Procter & Gamble Company                                     2,402,500
    Receivable due from Sumitomo Pharmaceuticals Company, Ltd.                           2,114,978            2,072,455
    Receivable due from Merck & Co., Inc.                                                1,706,879            1,816,056
    Receivable due from Amgen-Regeneron Partners                                           356,500              446,269
    Prepaid expenses and other current assets                                              536,425              611,435
                                                                                     -------------        -------------
       Total current assets                                                             99,640,152           85,008,679

Marketable securities                                                                   35,517,669           16,965,302
Investment in Amgen-Regeneron Partners                                                     364,400            1,205,299
Property, plant and equipment, at cost, net of accumulated depreciation
    and amortization                                                                    32,712,670           34,297,843
Other assets                                                                               145,143              104,731
                                                                                     -------------        -------------
       Total assets                                                                  $ 168,380,034        $ 137,581,854
                                                                                     =============        =============
</TABLE>




<TABLE>
<CAPTION>

                     LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
<S>                                                                                  <C>                  <C>          
    Accounts payable and accrued expenses                                            $   4,662,961        $   4,357,145
    Capital lease obligations, current portion                                           1,769,803            3,505,221
    Note payable, current portion                                                           73,298               77,684
    Deferred revenue, current portion                                                    4,181,564            4,108,412
                                                                                     -------------        -------------
       Total current liabilities                                                        10,687,626           12,048,462

Capital lease obligations                                                                2,077,319            3,400,015
Note payable                                                                             1,674,785            1,748,082
Other liabilities                                                                          242,122              183,426

Deferred revenue                                                                        14,801,308           13,270,870


Commitments and contingencies

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;
         4,117,540 shares issued and outstanding in 1997
         4,355,994 shares issued and outstanding in 1996                                     4,118                4,356
   Common Stock, $.001 par value; 60,000,000 shares authorized;
        26,804,941 shares issued and outstanding in 1997
        21,319,896 shares issued and outstanding in 1996                                    26,805               21,320
    Additional paid-in capital                                                         308,108,687          264,742,236
    Unearned compensation                                                                 (720,000)          (1,080,000)
    Accumulated deficit                                                               (168,607,977)        (157,029,112)
    Net unrealized gain on marketable securities                                            85,241              272,199
                                                                                     -------------        -------------
       Total stockholders' equity                                                      138,896,874          106,930,999
                                                                                     -------------        -------------
       Total liabilities and stockholders' equity                                    $ 168,380,034        $ 137,581,854
                                                                                     =============        =============
</TABLE>


                                  
   The accompanying notes are an integral part of the financial statements.

===============================================================================

                                   F-3



<PAGE>
                        REGENERON PHARMACEUTICALS, INC.
                           STATEMENTS OF OPERATIONS
             for the years ended December 31, 1997, 1996, and 1995




<TABLE>
<CAPTION>


                                                   1997                1996                1995
                                              ------------        ------------        ------------
<S>                                           <C>                 <C>                 <C>         
Revenues
      Contract research and development       $ 17,399,646        $ 17,302,473        $ 23,247,002
      Investment income                          6,241,845           4,360,065           2,997,180
      Research progress payments                 5,000,000
      Contract manufacturing                     4,458,196           2,451,424           1,140,321
                                              ------------        ------------        ------------
                                                33,099,687          24,113,962          27,384,503
                                              ------------        ------------        ------------


Expenses
      Research and development                  27,770,166          28,268,798          23,310,088
      Loss in Amgen-Regeneron Partners           3,402,900          14,250,239          13,804,777
      General and administrative                 5,764,969           5,879,975           5,764,397
      Depreciation and amortization              4,389,113           6,083,845           5,885,699
      Contract manufacturing                     2,617,070           1,115,259              72,059
      Interest                                     734,334             939,624           1,204,757
      Other                                                                                850,000
                                              ------------        ------------        ------------
                                                44,678,552          56,537,740          50,891,777
                                              ------------        ------------        ------------

Net loss                                      ($11,578,865)       ($32,423,778)       ($23,507,274)
                                              ============        ============        ============

Net loss per share, basic and diluted               ($0.40)             ($1.33)             ($1.19)
                                              ============        ============        ============
</TABLE>




   The accompanying notes are an integral part of the financial statements.

===============================================================================

                                      F-4




<PAGE>

                         REGENERON PHARMACEUTICALS, INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY
              for the years ended December 31, 1997, 1996, and 1995
  

<TABLE>
<CAPTION>
                                                         Net Unrealized
                                                            Class A Stock                Common Stock             Additional
                                                 -----------------------------   ------------------------------    Paid-in
                                                     Shares           Amount        Shares           Amount        Capital
                                                 ----------------  -----------   ---------------   ------------  ----------------

<S>                                              <C>               <C>           <C>               <C>           <C>
Balance, December 31, 1994                             5,625,965       $5,626        13,270,087        $13,270      $168,912,745

Issuance of Common Stock for cash of
     $300,000 and services to be rendered                                               600,000            600         2,099,400
Amortization of unearned compensation
Issuance of Common Stock in a public
     offering at $10.50 per share                                                     2,300,000          2,300        24,147,700
Cost associated with issuance of
     equity securities                                                                                                (1,895,961)
Issuance of Common Stock in connection
     with exercise of stock options                                                      73,300             73           330,257
Conversion of Class A Stock to
     Common Stock                                       (222,042)        (222)          222,042            222
Purchase of treasury stock
Net loss, 1995
Change in net unrealized gain (loss)
     on marketable securities
                                                 ----------------  -----------  ----------------   ------------  ----------------
         Balance, December 31, 1995                    5,403,923        5,404        16,465,429         16,465       193,594,141

Issuance of Common Stock for settlement of
     an obligation                                                                      153,017            153         1,999,847
Amortization of unearned compensation
Issuance of equity securities to Amgen                                                3,000,000          3,000        47,997,000
Issuance of equity securities to Medtronic                                              460,500            461         9,999,539
Amounts received in connection with the Stock
     Purchase Agreement with Procter & Gamble                                                                         10,000,000
Cost associated with issuance of
     equity securities                                                                                                  (205,025)
Issuance of Common Stock in connection
     with exercise of stock options                                                     210,094            210         1,356,884
Conversion of Class A Stock to
     Common Stock                                     (1,030,856)      (1,031)        1,030,856          1,031
Retirement of treasury stock                             (17,073)         (17)                                              (150)
Net loss, 1996 
Change in net unrealized gain (loss)
     on marketable securities
                                                 -----------------------------------------------------------------------------------


         Balance, December 31, 1996                    4,355,994        4,356        21,319,896         21,320       264,742,236

Amortization of unearned compensation
Shares issued to Procter & Gamble in connection
     with the 1996 Stock Purchase Agreement                                             800,000
Issuance of equity securities to Procter & Gamble                                     4,350,000          5,150        42,929,350
Cost associated with issuance of
     equity securities                                                                                                   (31,082)
Issuance of Common Stock in connection
     with exercise of stock options                                                      96,591             97           468,183
Conversion of Class A Stock to
     Common Stock                                       (238,454)        (238)          238,454            238
Net loss, 1997
Change in net unrealized gain (loss)
     on marketable securities                                                                                                       

                                                 ===================================================================================
         Balance, December 31, 1997                    4,117,540       $4,118        26,804,941        $26,805      $308,108,687    
                                                 ===================================================================================
</TABLE>



<TABLE>
<CAPTION>
                                                
                                                                                         Net Unrealized            Class A Stock   
                                                                                         Gain (Loss) on          Held in Treasury  
                                              Unearned              Accumulated            Marketable       -----------------------
                                            Compensation              Deficit              Securities          Shares        Amount
                                          -------------------   --------------------   ------------------   ------------  ---------

<S>                                                                <C>                      <C>               <C>            <C>   
Balance, December 31, 1994                                         ($101,098,060)           ($762,852)        16,559         ($162)

Issuance of Common Stock for cash of
     $300,000 and services to be rendered     ($1,800,000)                                                                         
Amortization of unearned compensation             360,000                                                                          
Issuance of Common Stock in a public
     offering at $10.50 per share                                                                                                  
Cost associated with issuance of
     equity securities                                                                                                             
Issuance of Common Stock in connection
     with exercise of stock options                                                                                                
Conversion of Class A Stock to
     Common Stock                         
Purchase of treasury stock                                                                                       514            (5)
Net loss, 1995                                                       (23,507,274)                                                  
Change in net unrealized gain (loss)
     on marketable securities                                                               1,048,792                              

                                          ----------------   --------------------   ------------------   ------------  ------------
         Balance, December 31, 1995            (1,440,000)          (124,605,334)             285,940         17,073          (167)

Issuance of Common Stock for settlement
of an obligation                                                                                                                 

Amortization of unearned compensation             360,000                                                                          
Issuance of equity securities to Amgen                                                                                             
Issuance of equity securities to Medtronic                                                                                         
Amounts received in connection with the 
Stock Purchase Agreement with Procter & 
Gamble                                                                                        
Cost associated with issuance of
     equity securities                                                                                                             
Issuance of Common Stock in connection
     with exercise of stock options                                                                                                
Conversion of Class A Stock to
     Common Stock                         
Retirement of treasury stock                                                                                 (17,073)          167
Net loss, 1996                                                       (32,423,778)                                                  
Change in net unrealized gain (loss)
     on marketable securities                                                                 (13,741)                             
                                          -----------------------------------------------------------------------------------------

         Balance, December 31, 1996            (1,080,000)          (157,029,112)             272,199         -             -      

Amortization of unearned compensation             360,000                                                                          
Shares issued to Procter & Gamble in 
     connection with the 1996 Stock 
     Purchase Agreement     
Amounts received in connection with 
the Stock Purchase Agreement with Procter & 
     Gamble                                                                                        
Cost associated with issuance of
equity securities                                                                                                               
Issuance of Common Stock in connection
     with exercise of stock options                                                                                                
Conversion of Class A Stock to
     Common Stock                         
Net loss, 1997                                                       (11,578,865)                                                  
Change in net unrealized gain (loss)
     on marketable securities                                                                (186,958)                             

                                          =========================================================================================
         Balance, December 31, 1997             ($720,000)         ($168,607,977)             $85,241         -             -      
                                          =========================================================================================
</TABLE>




<TABLE>
<CAPTION>

                                                      Total
                                                  Stockholders'
                                                     Equity
                                                ---------------

<S>                                                <C>        
Balance, December 31, 1994                         $67,070,567


Issuance of Common Stock for cash of
     $300,000 and services to be rendered              300,000
Amortization of unearned compensation                  360,000
Issuance of Common Stock in a public
     offering at $10.50 per share                   24,150,000
Cost associated with issuance of
     equity securities                              (1,895,961)
Issuance of Common Stock in connection
     with exercise of stock options                    330,330
Conversion of Class A Stock to
     Common Stock                               
Purchase of treasury stock                                  (5)
Net loss, 1995                                     (23,507,274)
Change in net unrealized gain (loss)
     on marketable securities                        1,048,792
                                                ---------------
         Balance, December 31, 1995                 67,856,449

Issuance of Common Stock for settlement of
     an obligation                                   2,000,000
Amortization of unearned compensation                  360,000
Issuance of equity securities to Amgen              48,000,000
Issuance of equity securities to Medtronic          10,000,000
Amounts received in connection with the Stock
     Purchase Agreement with Procter & Gamble       10,000,000
Cost associated with issuance of
     equity securities                                (205,025)
Issuance of Common Stock in connection
     with exercise of stock options                  1,357,094
Conversion of Class A Stock to
     Common Stock                               
Retirement of treasury stock                    
Net loss, 1996                                     (32,423,778)
Change in net unrealized gain (loss)
     on marketable securities                          (13,741)
                                                ---------------

         Balance, December 31, 1996                106,930,999

Amortization of unearned compensation                  360,000
Shares issued to Procter & Gamble in connection
     with the 1996 Stock Purchase Agreement     
Amounts received in connection with the Stock
     Purchase Agreement with Procter & Gamble       42,934,500
Cost associated with issuance of
     equity securities                                 (31,082)
Issuance of Common Stock in connection
     with exercise of stock options                    468,280
Conversion of Class A Stock to
     Common Stock                               
Net loss, 1997                                     (11,578,865)
Change in net unrealized gain (loss)
     on marketable securities                         (186,958)


                                                ===============
         Balance, December 31, 1997               $138,896,874
                                                ===============
</TABLE>



    The accompanying notes are an integral part of the financial statements.


                                      F-5


<PAGE>

                        REGENERON PHARMACEUTICALS, INC.
                           STATEMENTS OF CASH FLOWS
             for the years ended December 31, 1997, 1996, and 1995
               Increase (Decrease) in Cash and Cash Equivalents


<TABLE>
<CAPTION>

                                                                                 1997              1996                1995
                                                                                 ----              ----                ----
<S>                                                                         <C>                <C>                 <C>

Cash flows from operating activities
   Net loss                                                                 ($ 11,578,865)     ($ 32,423,778)      ($ 23,507,274)
                                                                            -------------      -------------       -------------
   Adjustments to reconcile net loss to net cash
     used in operating activities
      Loss in Amgen-Regeneron Partners                                          3,402,900         14,250,239          13,804,777
      Depreciation and amortization                                             4,389,113          6,083,845           5,905,791
      Amortization of lease incentive                                                                                    (50,300)
      Stock issued in consideration for services rendered                         360,000            360,000             360,000
      Changes in assets and liabilities
        Increase in amounts due from The Procter & Gamble Company              (2,402,500)
        Increase in amounts due from Sumitomo Pharmaceuticals Co., Ltd.           (42,523)          (323,393)         (1,749,062)
        Decrease (increase) in amounts due from Merck & Co., Inc.                 109,177         (1,544,426)           (271,630)
        Decrease in amounts due from Amgen-Regeneron Partners                      89,769            222,721             324,664
        Increase in investment in Amgen-Regeneron Partners                     (2,562,001)       (14,182,000)        (13,422,000)
        Decrease in prepaid expenses and other assets                              34,598            356,353              26,182
        Increase in deferred revenue                                            1,603,590          7,286,992             842,288
        Increase (decrease) in accounts payable, accrued expenses,
           and other liabilities                                                  518,449           (368,427)           (502,203)
                                                                            -------------      -------------       -------------
                  Total adjustments                                             5,500,572         12,141,904           5,268,507
                                                                            -------------      -------------       -------------
           Net cash used in operating activities                               (6,078,293)       (20,281,874)        (18,238,767)
                                                                            -------------      -------------       -------------

Cash flows from investing activities
   Purchases of marketable securities                                        (112,611,029)       (74,606,782)        (28,084,233)
   Sales of marketable securities                                              75,857,604         38,926,319          38,816,383
   Capital expenditures                                                        (2,145,569)        (8,622,133)         (3,342,040)
                                                                            -------------      -------------       -------------
           Net cash (used in) provided by investing activities                (38,898,994)       (44,302,596)          7,390,110
                                                                            -------------      -------------       -------------

Cash flows from financing activities
   Net proceeds from the issuance of stock                                     43,371,698         69,963,916          23,222,522
   Principal payments on note payable                                             (77,683)           (83,444)            (90,790)
   Capital lease payments                                                      (3,870,422)        (3,556,968)         (3,192,958)
   Purchase of treasury stock                                                                                                 (5)
                                                                            -------------      -------------       -------------
           Net cash provided by financing activities                           39,423,593         66,323,504          19,938,769

                                                                            -------------      -------------       -------------

           Net (decrease) increase in cash and cash equivalents                (5,553,694)         1,739,034           9,090,112

Cash and cash equivalents at beginning of period                               34,475,060         32,736,026          23,645,914
                                                                            -------------      -------------       -------------

           Cash and cash equivalents at end of period                       $  28,921,366      $  34,475,060       $  32,736,026
                                                                            =============      =============       =============


Supplemental disclosure of cash flow information
   Cash paid for interest                                                   $     675,640      $     859,572       $   1,101,383
                                                                            =============      =============       =============
</TABLE>




   The accompanying notes are an integral part of the financial statements.

===============================================================================

                                      F-6



<PAGE>
                        REGENERON PHARMACEUTICALS, INC.

                         NOTES TO FINANCIAL STATEMENTS
             for the years ended December 31, 1997, 1996, and 1995


1.  Organization and Business

         Regeneron Pharmaceuticals, Inc. (the "Company" or "Regeneron") was
incorporated in January 1988 in the State of New York. The Company is engaged
in research and development programs to discover and commercialize
therapeutics to treat human disorders and conditions. The Company's facilities
are located in New York. The Company's business is subject to certain risks
including, but not limited to uncertainties relating to conducting
pharmaceutical research, obtaining regulatory approvals, commercializing
products, and obtaining and enforcing patents.


2.  Summary of Significant Accounting Policies

         Property, Plant, and Equipment
         Property, plant, and equipment are stated at cost. Depreciation is
provided on a straight-line basis over the estimated useful lives of the
assets. Expenditures for maintenance and repairs which do not materially
extend the useful lives of the assets are charged to expense as incurred. The
cost and accumulated depreciation or amortization of assets retired or sold
are removed from the respective accounts, and any gain or loss is recognized
in operations. The estimated useful lives of property, plant, and equipment
are as follows:

                  Building and improvements                   30 years
                  Leasehold improvements                      Life of lease
                  Laboratory and computer equipment           3-5 years
                  Furniture and fixtures                      5 years

         Cash and Cash Equivalents
         For purposes of the statement of cash flows and the balance sheet,
the Company considers all highly liquid debt instruments with a maturity of
three months or less when purchased to be cash equivalents. The carrying
amount reported in the balance sheet for cash and cash equivalents
approximates its fair value.

         Revenue Recognition
         Revenue from contract research and development and contract
manufacturing is recognized as the related services are performed by the
Company, provided the collection of the resulting receivable is probable. In
situations where the Company receives payments in advance of the performance
of services, such amounts are deferred and recognized as revenue as the
related services are performed. Interest income, which is included in
investment income, is recognized as earned. Research progress payments are
received from collaborators upon the Company's achievement of defined
milestones. Such payments are recognized as revenue when the milestone has
been achieved and there are no additional services to be provided or costs to
be incurred by the Company.


         Net  Loss Per Share
         For the year ended December 31, 1997, the Company  adopted  Statement 
of Financial Accounting Standards No. 128, Earnings per Share ("SFAS No.
128"). As required by SFAS No. 128, the prior years' loss per share data have
been restated to conform to the provisions of SFAS No. 128; however, the
impact of the restatement was not material.

         Net loss per share, basic and diluted, is computed on the basis of
the net loss for the period divided by the weighted average number of shares
of Common Stock and Class A Stock outstanding during the period. The diluted
net loss per share for all periods presented excludes the number of shares
issuable upon exercise of outstanding stock options and warrants since such
inclusion would be anti-dilutive. Disclosures required by the SFAS No. 128
have been included in Note 14.

         Income Taxes
         The Company recognizes deferred tax liabilities and assets for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined on the basis of the difference between
the tax basis of assets and liabilities and their respective financial
reporting amounts ("temporary differences") at enacted tax rates in effect for
the years in which the differences are expected to reverse.

         Concentrations of Credit Risk
         Financial instruments which potentially subject the Company to
concentrations of credit risk consist of cash, cash equivalents, marketable
securities, and receivables from The Procter & Gamble Company, Amgen-Regeneron
Partners, Sumitomo Pharmaceuticals Company, Ltd., and Merck & Co., Inc. The
Company generally invests its excess cash in

                                     F-7

<PAGE>

                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)

obligations of the U.S. government and its agencies, bank deposits, and
investment grade debt securities issued by corporations, governments, and
financial institutions. The Company has established guidelines that relate to
credit quality, diversification, and maturity and that limit exposure to any
one issue of securities.

         Risks and Uncertainties
         The Company has had no product sales and there is no assurance that
the Company's research and development efforts will be successful, that the
Company will ever have commercially approved products, or that the Company
will achieve significant sales of any such products. The Company has incurred
net losses and negative cash flows from operations since its inception, and
revenues to date have been limited to payments for research from four
collaborators and for contract manufacturing from one pharmaceutical company
and investment income (see Notes 8 and 9). In addition, the Company operates
in an environment of rapid change in technology and is dependent upon the

services of its employees, consultants, and collaborators.

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

         Stock-based Employee Compensation
         The accompanying financial position and results of operations of the
Company have been prepared in accordance with APB Opinion No. 25, Accounting
for Stock Issued to Employees ("APB No. 25"). Under APB No. 25, generally, no
compensation expense is recognized in the accompanying financial statements in
connection with the awarding of stock option grants to employees provided
that, as of the grant date, all terms associated with the award are fixed and
the quoted market price of the Company's stock, as of the grant date, is equal
to or less than the amount an employee must pay to acquire the stock as
defined.

          Disclosures required by Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123"), including
pro forma operating results had the Company prepared its financial statements
in accordance with the fair value based method of accounting for stock-based
compensation, have been included in Note 10.

          Impact of the Adoption of Recently Issued Accounting Standards
          The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
No. 130") in June 1997. Comprehensive income represents the change in net
assets of a business enterprise as a result of nonowner transactions.
Management does not believe that the future adoption of SFAS No. 130 will have
a material effect on the Company's financial position and results of
operations. The Company will adopt SFAS No. 130 for the year ending December
31, 1998.

          Also in June, 1997 the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No. 131, Disclosures about Segments
of an Enterprise and Related Information ("SFAS No. 131"). SFAS No. 131 requires
that a business enterprise report certain information about operating segments,
products and services, geographic areas of operation, and major customers. The
Company is required to adopt this standard for the year ending December 31, 1998
and is currently evaluating the impact of the standard.

         In February 1998, the FASB issued Financial Accounting Standard No.
132, Employers' Disclosures about Pensions and Other Postretirement Benefits.
This statement modifies financial statement disclosures related to pension and
other postretirement plans, and will not have an effect on the Company's
financial position or results of operations, and is effective for periods
beginning after December 15, 1997.

         Statement of Cash Flows
         Supplemental disclosure of noncash investing and financing
activities:

         Capital lease obligations of approximately $0.8 million, $2.9

million, and $0.4 million were incurred when the Company acquired new
equipment in 1997, 1996, and 1995, respectively.

         During January 1995, the Company issued 600,000 restricted shares of
Common Stock ("Restricted Shares"), in consideration for $0.3 million and
services to be rendered, in connection with an agreement with the Chairman of
the Board of Directors. The difference between the fair market value of the
Common Stock on the date the agreement was signed and the purchase price of
the Restricted Shares was $1.8 million which the Company is recognizing as
compensation expense on a pro rata basis over five years as the restriction on
the Restricted Shares lapses.

                                     F-8


<PAGE>
                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


         Included in accounts payable and accrued expenses at December 31,
1997 and 1996 were approximately $0.6 million and $0.8 million of capital
expenditures, respectively. Included in accounts payable and accrued expenses
at December 31, 1995 were $1.1 million of capital expenditures and $0.3
million of costs incurred in connection with the Company's sale of Common
Stock.

          Reclassifications
          Certain reclassifications have been made to the financial statements
for 1996 and 1995 to conform with the current year's presentation.


3.  Marketable  Securities

         The Company considers its marketable securities to be
"available-for-sale," as defined by Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities, and, accordingly, unrealized holding gains and losses are excluded
from operations and reported as a net amount in a separate component of
stockholders' equity.

         The following tables summarize the amortized cost basis of marketable
securities, the aggregate fair value of marketable securities, and gross
unrealized holding gains and losses at December 31, 1997 and 1996:


<TABLE>
<CAPTION>

                                                                                          Unrealized Holding
                                               Amortized        Fair               ----------------------------------
At December 31, 1997                           Cost Basis       Value              Gains        (Losses)          Net
- --------------------                           ----------       -----              -----        --------          ---
<S>                                             <C>            <C>               <C>           <C>             <C>
Maturities within one year
   Corporate debt securities                    $52,471,211    $52,503,692       $ 34,402      $ (1,921)        $32,481

   U.S. Government securities                    11,096,794     11,097,812          4,812        (3,794)          1,018
                                                 ----------     ----------          -----        -------          -----
                                                 63,568,005     63,601,504         39,214        (5,715)         33,499
                                                 ----------     ----------         ------        -------         ------
Maturities between one and three years
   Corporate debt securities                      5,028,511      5,025,997            732        (3,246)        (2,514)
   U.S. Government securities                    30,437,416     30,491,672         67,305       (13,049)         54,256
                                                 ----------     ----------         ------       --------         ------
                                                 35,465,927     35,517,669         68,037       (16,295)         51,742
                                                 ----------     ----------         ------       --------         ------
                                                $99,033,932    $99,119,173       $107,251      $(22,010)        $85,241
                                                ===========    ===========       ========      =========        =======
At December 31, 1996
Maturities within one year
   Corporate debt securities                     $7,120,080     $7,145,700       $ 28,363       $(2,743)        $25,620
   U.S. Government securities                    38,205,193     38,441,704        257,096       (20,585)        236,511
                                                 ----------     ----------        -------       --------        -------
                                                 45,325,273     45,587,404        285,459       (23,328)        262,131
                                                 ----------     ----------        -------       --------        -------
Maturities between one and three years
   Corporate debt securities                     10,982,405     10,994,489         16,411        (4,327)         12,084
   U.S. Government securities                     5,972,829      5,970,813         26,253       (28,269)        (2,016)
                                                  ---------      ---------         ------       --------        -------
                                                 16,955,234     16,965,302         42,664       (32,596)         10,068
                                                 ----------     ----------         ------       --------         ------
                                                $62,280,507    $62,552,706       $328,123      $(55,924)       $272,199
                                                ===========    ===========       ========      =========       ========
</TABLE>


         Realized gains and losses are included as a component of investment
income. For the years ended December 31, 1997, 1996, and 1995, gross realized
gains and losses were not significant. In computing realized gains and losses,
the Company computes the cost of its investments on a specific identification
basis. Such cost includes the direct costs to acquire the securities, adjusted
for the amortization of any discount or premium. The fair value of marketable
securities has been estimated based on quoted market prices.

                                     F-9


<PAGE>
                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)

4.  Property, Plant, and Equipment

         Property, plant, and equipment as of December 31, 1997 and 1996
consist of the following:

<TABLE>
<CAPTION>

                                                                  1997                 1996
                                                                  ----                 ----
<S>                                                            <C>                  <C>


Land                                                           $   474,501          $   474,501
Building and improvements                                       22,744,414           22,573,914
Leasehold improvements                                           6,179,722            6,165,487
Construction in progress                                         7,679,226            6,131,873
Laboratory equipment                                            17,779,017           17,248,902
Furniture, fixtures, and computer equipment                      1,448,685              906,948
                                                               ------------         ------------
                                                                56,305,565           53,501,625
Less, accumulated depreciation and amortization                (23,592,895)         (19,203,782)
                                                               ------------         ------------
                                                               $32,712,670          $34,297,843
                                                               ============         ============
</TABLE>


         Depreciation and amortization expense on property, plant, and
equipment amounted to approximately $4.4 million, $4.8 million, and $4.6
million, for the years ended December 31, 1997, 1996, and 1995, respectively.

5.  Accounts Payable and Accrued Expenses

         Accounts payable and accrued expenses as of December 31, 1997 and
1996 consist of the following:

<TABLE>
<CAPTION>

                                                                    1997               1996
                                                                    ----               ----
<S>                                                            <C>                  <C>

Accounts payable                                               $ 2,947,143          $ 2,178,308
Accrued payroll and related costs                                  653,574            1,047,812
Accrued clinical trial expense                                     319,500              319,500
Accrued expenses, other                                            392,456              389,062
Deferred compensation                                              350,288              422,463
                                                               -----------          -----------
                                                               $ 4,662,961          $ 4,357,145
                                                               ===========          ===========
</TABLE>


6.  Stockholders' Equity

         The Company's Amended Certificate of Incorporation (the "Amendments")
provides for the issuance of up to 40 million shares of Class A Stock, par
value $0.001 per share, and 60 million shares of Common Stock, par value
$0.001 per share. Each share of Class A Stock is convertible, at any time, at
the option of the holder into shares of Common Stock on a share-for-share
basis and holders of Class A Stock have rights and privileges identical to
Common Stockholders except that Class A Stockholders are entitled to ten votes
per share while Common Stockholders are entitled to one vote per share. Class
A Stock may only be transferred to specified Permitted Transferees, as
defined. The Amendments also provide for the Company's Board of Directors (the
"Board") to issue preferred stock, par value $.01 per share, authorized 30
million shares, in series, with rights, privileges, and qualifications of each
series determined by the Board.


         During January 1995, the Company entered into an agreement with the
Chairman of the Board. As partial consideration for services to be rendered,
the agreement provided for the Company to sell the Chairman 600,000 restricted
shares of Common Stock ("Restricted Shares"), in consideration for $0.3
million, and to grant 285,000 stock options. The Restricted Shares are
nontransferable with such restriction lapsing ratably over a five year period.
In accordance with generally accepted accounting principles, the Company is
recognizing compensation expense for the difference between the fair market
value of the Common Stock on the date the agreement was signed and the
purchase price of the Restricted Shares on a pro rata basis over five years as
the restriction on the Restricted Shares lapses. The unamortized balance of
unearned compensation at December 31, 1997 (approximately $0.7 million) has
been included as a reduction to stockholders' equity. For the years ended
December 31, 1997, 1996, and 1995, the Company recognized compensation expense
of approximately $0.4 million in each year. The stock options, which have been
issued under the Company's Amended and Restated 1990 Long-Term Incentive Plan,
entitle the holder to purchase an equal number of shares of Common Stock at a
per share price of $3.50, the fair market value of the Common Stock on the
date of grant. The options vest over a five year period.

                                     F-10


<PAGE>
                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


         During September 1996, the Company announced that it adopted a
Shareholder Rights Plan in which Rights were distributed as a dividend at the
rate of one Right for each share of Common Stock and Class A Stock
(collectively, "Stock") held by shareholders of record as of the close of
business on October 18, 1996. Each Right initially entitles the registered
holder to buy a unit ("Unit") consisting of one-one thousandth of a share of
Series A Junior Participating Preferred Stock ("A Preferred Stock") at a
purchase price of $120 per Unit (the "Purchase Price"). Initially the Rights
were attached to all Stock certificates representing shares then outstanding,
and no separate Rights certificate were distributed. The Rights will separate
from the Stock and a "distribution date" will occur upon the earlier of (i)
ten days after a public announcement that a person or group of affiliated or
associated persons, excluding certain defined persons, (an "Acquiring Person")
has acquired, or has obtained the right to acquire, beneficial ownership of
20% or more of the outstanding shares of Stock or (ii) ten business days
following the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 20% or more of such
outstanding shares of Stock. The Rights are not exercisable unless a
distribution date occurs and will expire at the close of business on October
18, 2006 unless earlier redeemed by the Company, subject to certain defined
restrictions, for $.01 per Right. In the event that an Acquiring Person
becomes the beneficial owner of 20% or more of the then outstanding shares of
Stock (unless such acquisition is made pursuant to a tender or exchange offer
for all outstanding shares of the Company, at a price determined by a majority
of the independent directors of the Company who are not representatives,
nominees, affiliates, associates of an Acquiring Person to be fair and

otherwise in the best interest of the Company and its shareholders after
receiving advice from one or more investment banking firms), each Right will
entitle the holder to purchase, at the Right's then current exercise price,
common shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value twice the Right's Exercise Price.
The Right's Exercise Price is the Purchase Price times the number of shares of
Common Stock associated with each Right (initially, one). Upon the occurrence
of any such events, the Rights held by an Acquiring Person become null and
void. In certain circumstances, a Right entitles the holder to receive, upon
exercise, shares of common stock of an acquiring company having a value equal
to two times the Right's Exercise Price.

         As a result of the Shareholder Rights Plan, the Company's Board
designated 100,000 shares of preferred stock as A Preferred Stock. The A
Preferred Stock has certain preferences, as defined.

         In November 1996, the Company's Board authorized the retirement of
17,073 shares of Class A Stock which had been held as treasury shares. The
retired shares have the status of authorized but unissued stock and retain the
classification of Class A Stock.


7.  Commitments and Contingencies

         a.  Operating Leases
         The Company leases laboratory and office space under an operating
lease agreement. In 1997, the Company extended the lease agreement for a
five-year period commencing in July 1998. The lease, as amended, provides for
base rent plus additional rental charges for utilities, increases in taxes and
operating expenses, as defined. The Company has a renewal option to extend the
lease for an additional five years.

         The Company leases certain laboratory and office equipment under
operating leases which expire at various times through 2000. Operating leases
entered into with one lessor contain a negative covenant agreement which
requires, among other things, that the Company maintain certain levels of
minimum cash, net worth, and other financial ratios, as defined.

         At December 31, 1997, the future minimum noncancelable lease
commitments under operating leases were as follows:

                  Laboratory and
 December 31,     Office Space     Equipment        Total
 ------------     --------------   ---------        -----
     1998         $2,697,900       $157,200      $2,855,100
     1999          2,697,900         59,800       2,757,700
     2000          2,857,000         52,200       2,909,200
     2001          2,936,500              0       2,936,500
     2002          2,936,500              0       2,936,500
  Thereafter       1,468,200              0       1,468,200
                 -----------       --------     -----------
                 $15,594,000       $269,200     $15,863,200
                 ===========       ========     ===========


                                     F-11


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


         Rent expense under operating leases was:

                                              
Year Ending       Laboratory and
December 31,      Office Space     Equipment        Total
- ------------      ------------     ---------        -----
   1997         $2,711,250         $459,027      $3,170,277
   1996          2,738,226          669,300       3,407,526
   1995          2,715,294          921,269       3,636,563

         b.  Capital Leases
         The Company leases equipment under noncancelable capital leases.
Lease terms range from four to five years after which the Company is required
to purchase the equipment at amounts defined by the agreements, or the leases
will automatically be extended for one additional year at defined monthly
payments. The leases, as amended, have various financial covenants which
include minimum levels of liquid assets (as defined) of $30.0 million and
tangible net worth (as defined) of $35.0 million.

         The Company has a leasing facility (the "Lease Line") which is
available to finance equipment acquisitions and certain building improvements,
as defined, (collectively, the "Equipment"). The Company may utilize the Lease
Line in increments. Lease terms are for four years after which the Company is
required to purchase the Equipment at defined amounts. Certain of the leases
will be renewed for eight months at defined monthly payments after which the
Company will own the Equipment. At December 1997, the Company had available
approximately $0.3 million of the Lease Line.

         As of December 31, 1997, minimum rental payments under all capital
leases, including payments to acquire leased equipment, were as follows:

                                                        Minimum
Year Ending December 31,                            Rental Payments
- ------------------------                            ---------------
         1998                                        $ 2,060,145
         1999                                          1,102,212
         2000                                          1,064,354
         2001                                            146,643
                                                     -----------
                                                       4,373,354
Less, amounts representing interest                     (526,232)
                                                     -----------
Present value of net minimum capital lease payments  $ 3,847,122
                                                     ===========

         Leased equipment and building improvements in property, plant, and

equipment was approximately $18.3 million and $17.5 million at December 31,
1997 and 1996, respectively; related accumulated depreciation was
approximately $14.7 million and $12.0 million for the same respective periods.

         c.   Note Payable
         The Company borrowed $2.0 million from the New York State Urban
Development Corporation ("NYS UDC"). The terms of the note provide for monthly
payments of principal and interest through December 2014. Outstanding
borrowings accrue interest at an effective interest rate of approximately
6.3%. The note is collateralized by a first mortgage on the Company's land,
building, and improvements in Rensselaer, New York (book value at December 31,
1997 was approximately $28.7 million). The note also has various financial
covenants which include a minimum ratio of current assets over current
liabilities, as defined, and a minimum level of tangible net worth, as
defined, of $35.0 million. In addition, the Company is not permitted to
declare or pay dividends to its stockholders. The provisions of the note
require the Company to meet certain defined levels of employment; otherwise,
the interest rate on outstanding borrowings will increase to 2.0% above the
prime rate (as defined) until the defined levels of employment are attained.
As of January 1, 1997 and 1998, the Company had not met the defined levels of
employment and, accordingly, the interest rate charged on outstanding
borrowings was scheduled to increase to 2.0% above the prime rate effective
March 1, 1997. However, the NYS UDC waived such increase for the fiscal year
1997. The Company has requested a waiver for 1998. The estimated fair value of
the Company's note payable to the NYS UDC at December 31, 1997 was
approximately $2.1 million. The fair value was estimated based on the current
rate offered to the Company for debt with similar terms.

                                     F-12


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


         Principal payments under the note during each of the next five years,
and thereafter, are as follows:

                1998          $   73,298
                1999              70,128
                2000              68,064
                2001              67,042
                2002              67,037
          Thereafter           1,402,514
                              ----------
                              $1,748,083
                              ==========

         d.  Research Collaboration and Licensing Agreements
         As part of the Company's research and development efforts, the
Company enters into research collaboration and licensing agreements
("Agreements") with related and unrelated scientific collaborators,
universities, or consultants (collectively, the "Scientists"). These

Agreements contain varying terms and provisions which include fees to be paid
by the Company, services to be provided by the Scientists, and ownership
rights to certain proprietary technology developed under the Agreements. Some
of the Agreements contain provisions which require the Company to pay
royalties to the Scientists, as defined, in the event the Company sells or
licenses any proprietary products developed under the respective Agreements.

         Certain Agreements, where the Company is required to pay fees,
provide for the Company, upon 30 to 90-day written notice, to terminate such
Agreements. During the three years ended December 31, 1997, the Company
incurred expenses related to these Agreements of approximately $0.3 million,
$0.5 million, and $0.5 million, respectively.

         e.  Deferred Compensation
         The Company has entered into compensation agreements with certain
employees and outside consultants. These agreements require the Company to
make certain payments in the future, as defined by the respective agreements.
The Company provides for such expenditures over the employment/service period.
Such accrual amounted to approximately $0.4 million at both December 31, 1997
and 1996.

8.  Collaboration Agreements

         a.  Amgen Inc.
         In August 1990, the Company entered into a collaboration agreement
(the "Amgen Agreement") with Amgen Inc. ("Amgen") to develop and attempt to
commercialize two proprietary products (BDNF and NT-3, individually the
"Product," collectively the "Products"). The Amgen Agreement, among other
things, provides for Amgen to fund defined amounts ("Minimum Annual Funding")
of development costs of the Products and for Amgen and the Company to form a
partnership ("Amgen-Regeneron Partners" or the "Partnership") to complete the
development and to commercialize the Products after a defined level of
development has occurred. In June 1993, the Partnership commenced operations,
with Amgen and the Company holding equal ownership interests (subject to
adjustment for any future inequities in capital contributions, as defined).
The Partnership is the exclusive distributor of Products in the United States,
and Amgen has received a license from the Company to market the Products
outside the United States and outside Japan and certain Pacific Rim countries.
The Company accounts for its investment in the Partnership in accordance with
the equity method of accounting. Since the Partnership's inception, the
Company has contributed capital to the Partnership of approximately $45.2
million. In 1997, 1996, and 1995, the Company recognized its share of the
Partnership net loss in the amounts of approximately $3.4 million, $14.3
million, and $13.8 million, respectively, which represents 50% of the total
Partnership net loss, after first allocating certain defined amounts to Amgen
($2.5 million for 1995), as defined in the Partnership agreement. As of
December 31, 1997, the Company continues to be an equal partner in the
Partnership.

         Payments from Amgen with respect to its Minimum Annual Funding
obligation and from the Partnership in connection with services provided to
the Partnership, are recognized as contract research and development revenue
as earned. Such revenue for the years ended December 31, 1997, 1996, and 1995
totaled approximately $1.5 million, $5.8 million, and $7.8 million,

respectively. Contract research and development payments received in advance
are deferred and recognized as revenue when the related services are
performed. In addition, the Amgen Agreement contains a provision whereby the
Company will receive defined amounts ("Research Progress Payments") from Amgen
when each Product reaches certain levels of development.

         Selected financial data of the Partnership as of December 31, 1997
and 1996, and for the years ended December 31, 1997, 1996 and 1995, are as
follows:
                                     F-13



<PAGE>
                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)

<TABLE>
<CAPTION>

   Balance Sheet Data
                                                                                 1997                      1996
                                                                                 ----                      ----
<S>                                                                          <C>                        <C>
               Cash                                                           $2,552,000                $14,640,000
               Accounts  payable and accrued  expenses  due to
                   partners  (1)                                               1,824,000                 12,230,000
               Partners' capital accounts
                        Amgen                                                    364,000                  1,205,000
                        The Company                                              364,000                  1,205,000
</TABLE>

               (1)  Includes approximately $0.4 million due the Company at 
                    December 31, 1997 and 1996.


<TABLE>
<CAPTION>

   Statement of Operations Data
                                                                      1997                 1996                   1995
                                                                      ----                 ----                   ----
<S>                                                            <C>                    <C>                    <C>
                   Total revenue                                   $310,000               $750,000               $387,000
                   Total expenses (2)                            (7,116,000)           (29,250,000)           (30,497,000)
                                                                -----------           ------------           ------------
                   Net loss                                     ($6,806,000)          ($28,500,000)          ($30,110,000)
                                                                ===========           ============           ============
</TABLE>


               (2) Includes approximately $1.5 million, $5.8 million, and $7.0
               million related to services provided by the Company for the years
               ended December 31, 1997, 1996, and 1995, respectively.

         During 1990, Amgen purchased 767,656 shares of Series D convertible
preferred stock for $15.0 million. Such shares converted into 788,766 shares
of Class A Stock in April 1991 at the time of the Company's initial public
offering. During April 1996, Amgen purchased from the Company 3 million shares
of Common Stock and 700,000 warrants for $48.0 million. The warrants have an
exercise price of $16 per share, are fully exercisable, expire on April 15,
2001, and are subject to anti-dilution provisions, and other defined
adjustments.

         b.  Sumitomo Pharmaceuticals Company, Ltd.
         In June 1994, the Company entered into a research and development
agreement with Sumitomo Pharmaceuticals Company, Ltd. ("Sumitomo
Pharmaceuticals") to collaborate in the research and development of BDNF in
Japan. Sumitomo Pharmaceuticals paid the Company $13.0 million in June 1994
and agreed to pay $3.0 million annually on each January 1 from 1995 to 1998
(inclusive) for research payments. The research payments from Sumitomo

Pharmaceuticals are recognized as contract research and development revenue
over a twelve month period. The Company recognized contract research and
development revenue with respect to research payments of approximately $3.0
million, $3.0 million, and $8.4 million for the years ended December 31,
1997, 1996, and 1995, respectively. Research payments from Sumitomo
Pharmaceuticals that are received in advance are deferred and recognized as
revenue when the related services are performed. At December 31, 1997 and
1996, there were $3.0 million of such amounts. In addition, Sumitomo
Pharmaceuticals reimburses the Company for its activities in developing
manufacturing processes for BDNF and supplying BDNF and other research
materials to Sumitomo Pharmaceuticals ("manufacturing payments"). Such
manufacturing payments, which are included in contract research and
development revenue, totaled approximately $7.6 million, $8.5 million, and
$7.0 million in 1997, 1996, and 1995, respectively.

         During 1989, Sumitomo Chemical Co., Ltd., an affiliate of Sumitomo
Pharmaceuticals, entered into a stock purchase agreement whereby it purchased,
for $4.4 million, 885,062 shares of Class C Preferred Stock. Such shares
converted into 909,401 shares of Class A Stock in April 1991 at the time of
the Company's initial public offering.

         c.  Glaxo Wellcome plc
         During 1993, the Company entered into a collaborative research
agreement with Glaxo Wellcome plc ("Glaxo"). Products that are developed by
the joint efforts of Glaxo and the Company will be commercialized by one or
more equally owned joint ventures. Glaxo also purchased 500,000 shares of the
Company's Common Stock at a price of $20 per share.

                                     F-14

<PAGE>

                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


         d.  Medtronic, Inc.
         During June 1996, the Company and Medtronic, Inc. ("Medtronic")
entered into a worldwide exclusive joint development agreement (the "Medtronic
Agreement") to collaborate on research and development of therapeutics for
central nervous system diseases and disorders using experimental Regeneron
compounds and Medtronic delivery systems. The Medtronic Agreement, among other
things, provides for the Company and Medtronic to fund development costs and
supply amounts of drug and delivery systems, respectively. In addition,
Medtronic is required to make payments to Regeneron if certain clinical
milestones are achieved and the Company is required to pay royalties to
Medtronic based upon net sales of any drug developed under the collaboration.
The Medtronic Agreement may be terminated by written agreement of both
parties, by either party if certain regulatory approvals have not been
obtained within specified time periods, or by either party under certain other
conditions.

         In addition during June, 1996, Medtronic purchased from the
Company 460,500 shares of Common Stock and 107,400 warrants for $10.0 million.
The warrants have an exercise price of $21.72 per share, are fully

exercisable, expire on June 26, 2001, and are subject to anti-dilution
provisions and other defined adjustments.

         e.  The Procter & Gamble Company
         During December 1996, the Company entered into a collaboration
agreement with Procter & Gamble Pharmaceuticals, Inc. ("P&G Pharmaceuticals")
to jointly discover and develop therapeutics ("compound") for muscle diseases
and disorders (the "1996 Agreement"). As part of the 1996 Agreement, P&G
Pharmaceuticals agreed to provide, for a minimum of three years, minimum
annual research funding to the Company of $3.75 million. At December 31, 1996,
deferred revenue-current portion included $0.9 million of prepaid research
funding. P&G Pharmaceuticals had the option to fund additional amounts and had
the right to terminate the agreement after three years. As of December 31,
1997, there was no prepaid research funding. In the event that a compound is
discovered and developed to certain defined levels (but not before the third
anniversary of the agreement), P&G Pharmaceuticals and the Company had agreed
to negotiate, in good faith, an agreement whereby they would jointly complete
the development and commercialization of the compound. In addition, during
December 1996, the Company and P&G Pharmaceuticals entered into a Stock
Purchase Agreement whereby P&G Pharmaceuticals paid $10.0 million in December
1996 and in March 1997 received 800,000 shares of restricted Common Stock.

         In May 1997, the Company entered into a ten-year multi-project
collaboration agreement with The Procter & Gamble Company ("P&G") to discover,
develop, and commercialize pharmaceutical products (the "P&G Agreement"), as
well as a securities purchase agreement and other agreements. P&G agreed over
the first five years of the various agreements to purchase up to $60.0 million
in Regeneron equity and provide up to $94.7 million in support of Regeneron's
research efforts related to the collaboration. In June 1997, P&G completed the
purchase of 4.35 million shares of the Company's Common Stock at $9.87 per
share for a total of $42.9 million and received five year warrants to purchase
an additional 1.45 million shares of the Company's stock at $9.87 per share.
The P&G Agreement expanded and superceded the 1996 Agreement.

         During the second five years of the P&G Agreement, the companies will
share all research costs equally. Clinical testing and commercialization
expenses for jointly developed products will be shared equally throughout the
ten years of the collaboration. P&G will have rights to the Company's current
technology (other than certain neurotrophic factors and cytokines), which is
expected to have application in cardiovascular, bone, muscle, arthritis, and
other disease areas. P&G will also have rights to new technology developed by
the Company as a result of the collaboration. The companies expect jointly to
develop and market worldwide any products resulting from the collaboration and
share equally in profits. Either company may terminate the P&G Agreement at
the end of five years with at least one year prior notice or earlier in the
event of default.

         In September 1997, the Company and P&G amended the P&G Agreement to
include AXOKINE(TM) second generation ciliary neurotrophic factor and related
molecules, and agreed initially to develop AXOKINE to treat obesity associated
with Type II diabetes. P&G agreed to pay the Company as much as $15.0 million in
additional funding, partly subject to achieving certain milestones related to
AXOKINE. The Company received $2.5 million in September 1997 and an additional
$2.5 million in December 1997 upon the achievement of defined milestones. Such

amounts are included in research progress payments in 1997.

         Contract research and development revenue related to the P&G
Agreement was $5.2 million in 1997. At December 31, 1997, the P&G contract
research revenue receivable was $2.4 million.

                                     F-15


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


9.    Manufacturing Agreement

         During 1995, the Company entered into a long-term manufacturing
agreement with Merck & Co., Inc. (the "Merck Agreement") to produce an
intermediate (the "Intermediate") for a Merck pediatric vaccine at the
Company's Rensselaer, New York facility. The Company agreed to modify portions
of its facility for manufacture of the Intermediate and to assist Merck in
securing regulatory approval for such manufacture in the Company's facility.
Once the facility is able to produce Intermediate, the Merck Agreement calls
for the Company to manufacture Intermediate for Merck for six years (the
"Production Period"), with certain minimum order quantities each year. The
Merck Agreement is expected to extend into 2004 and may be terminated at any
time by Merck upon the payment by Merck of a termination fee.

         Merck agreed to reimburse the Company for the capital costs to modify
the facility ("Capital Costs") and for the cost of Company activities
performed on behalf of Merck prior to the Production Period ("Internal
Costs"). Merck also agreed to pay an annual facility fee (the "Facility Fee")
of $1.0 million beginning March 1995, subject to annual adjustment for
inflation. During the Production Period, Merck agreed to reimburse the Company
for certain manufacturing costs and pay the Company a variable fee based on
the quantity of Intermediate supplied to Merck. These payments are recognized
as contract manufacturing revenue as follows: (i) payments for Internal Costs
are recognized as the activities are performed, (ii) the Facility Fee is
recognized over the period to which it relates, (iii) payments for Capital
Costs are being deferred and will be recognized over the Production Period,
and (iv) payments related to the manufacture of Intermediate during the
Production Period will be recognized as Intermediate is accepted by Merck.

         For the years ended December 31, 1997, 1996, and 1995, contract
manufacturing revenue includes approximately $1.1 million, $1.0 million, and
$0.8 million of Facility Fee, respectively, and $3.4 million, $1.4 million, and
$0.3 million of Internal Costs, respectively. At December 31, 1997 and 1996,
deferred revenue-current portion included $0.2 million of Facility Fee and
deferred revenue-long-term portion included $14.8 million and $13.3 million of
Capital Costs, respectively.


10.  Incentive and Stock Purchase Plans


         a.  Long-Term Incentive Plan
         During 1990, the Company established the Regeneron Pharmaceuticals,
Inc. 1990 Long-Term Incentive Plan ("Incentive Plan"). The Incentive Plan, as
amended, provides for a maximum of 5,400,000 shares of Common Stock for
awards. Salaried employees who are officers or who are employed in an
executive, administrative, or professional capacity, and nonemployees,
including consultants and members of the Scientific Advisory Board or Board of
Directors, may receive awards as determined by a committee of independent
directors ("Committee"). Awards generally vest on a pro rata basis over a
three or five year period and have a term of ten years. The awards under the
Incentive Plan include: (a) Restricted Share Rights, (b) Incentive Stock
Rights, (c) Stock Options, (d) Stock Appreciation Rights, and (e) Performance
Unit Rights.

         Restricted Share Rights ("RSR") are awards in which participants in
the Incentive Plan are awarded the right to purchase shares of Common Stock at
a price determined by the Committee. Such shares are nontransferable for a
period determined by the Committee ("vesting period") and, should employment
terminate as defined by the Incentive Plan, the ownership of the shares will
be transferred to the Company in consideration of amounts paid to acquire such
shares. The holder of the RSR has the right to vote and receive dividends
during the vesting period.

         Incentive Stock Rights ("ISR") are awards in which participants are
awarded by the Committee the right to receive shares of Common Stock, at no
cost to the participant, in consideration of services performed subject to a
vesting period as determined by the Committee. Holders of ISRs have the right
to receive cash payments from the Company at the same time and in the same
amounts as the holders of Common Stock.

         Stock Options are awards in which participants receive the right to
purchase shares of Common Stock at prices determined by the Committee. The
options vest to the employees over a period of time determined by the
Committee.

         Stock Appreciation Rights ("SAR") may be issued by the Committee in
connection with stock options and allow the option holder to receive Common
Stock (or cash if the Board of Directors elects to do so) equal in value to
the difference between the fair market value of the Common Stock at the
exercise date and the stock option price. Should a participant exercise a SAR,
an equivalent number of stock options will be canceled. SARs have a vesting
period similar to that of stock options.

                                     F-16


<PAGE>
                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)

         Performance Unit Rights are awards which the Committee may issue
alone or grant in conjunction with related stock options. Such awards entitle
the holder to receive common stock, cash, or a combination of both at no cost
to the participant upon specific performance objectives being achieved and
other conditions being met, as defined by the Incentive Plan.


         The Incentive Plan contains provision for immediate vesting of awards
upon a change in control of the Company, as defined.

         The Company may incur charges to operations in connection with these
awards.

         Transactions involving stock option awards during 1995, 1996, and
1997 are summarized in the table below. Option exercise prices were equal to
the market price of the Company's Common Stock on the date of grant. The total
number of options exercisable at December 31, 1995, 1996, and 1997 was
635,233, 943,118, and 1,496,149, respectively, with weighted average exercise
prices of $8.57, $7.45, and $7.37, respectively. As of December 31, 1997,
shares available for future grants amounted to 1,397,849 .


<TABLE>
<CAPTION>
                                                                            Number of           Weighted Average
                                                                             Shares             Exercise Price
                                                                             ------             ----------------
<S>                                                                        <C>                      <C>

    Stock options outstanding at December 31, 1994                         2,009,673                 $6.36

    1995:    Stock options granted                                           852,744                 $5.26
                 Stock options canceled                                     (117,340)                $4.48
                 Stock options exercised                                     (73,300)                $4.22
                                                                           ----------
                 Stock options outstanding at December 31, 1995            2,671,777                 $6.15

    1996:    Stock options granted                                           658,827                $13.14
                 Stock options canceled                                     (198,643)               $11.17
                 Stock options exercised                                    (210,094)                $6.46
                                                                           ----------
                 Stock options outstanding at December 31, 1996            2,921,867                 $7.36

    1997:    Stock options granted  (1)                                    1,016,310                $10.65
                 Stock options canceled  (1)                                (225,150)               $12.80
                 Stock options exercised                                     (96,591)                $4.85
                                                                           ----------
                 Stock options outstanding at December 31, 1997            3,616,436                 $8.00
                                                                           ==========
</TABLE>


     (1) On February 1, 1997, certain Company employees who had previously
         been granted 110,550 stock options on January 1, 1997 under the
         Incentive Plan at an exercise price of $15.625 per share (the fair
         market value on the date of grant) received new grants which canceled
         their prior grants and awarded the same number of options on the same
         vesting schedule that governed their original grants at an exercise
         price of $9.50 per share (the fair market value on the date of the
         repricing). The repricing program was determined, in accordance with
         the terms of the Incentive Plan, by the Committee.


         The following table summarizes stock option information as of
December 31, 1997:


<TABLE>
<CAPTION>
                                        Options Outstanding                                 Options Exercisable
                                        -------------------                                 -------------------
                                          Weighted Average
      Range of Exercise        Number        Remaining          Weighted Average        Number       Weighted Average
            Prices          Outstanding   Contractual Life       Exercise Price       Exercisable     Exercise Price
            ------          -----------   ----------------       --------------       -----------     --------------
<S>                        <C>           <C>                   <C>                   <C>            <C>

      $3.00 to $4.25          1,407,277         6.6                   $4.01                815,428         $4.06
      $4.38 to $10.25           993,944         7.9                   $8.06                232,652         $6.77
      $10.38 to $15.50        1,118,083         7.7                  $12.14                396,563        $13.20
      $15.56 to $23.06           97,132         6.7                  $17.66                 51,506        $17.76
                              ---------                                                  ---------
      $3.00 to $23.06         3,616,436         7.3                   $8.00              1,496,149         $7.37
                              =========                                                  =========
</TABLE>

         The following table summarizes the pro forma operating results of the
Company had compensation costs for the Incentive Plan been determined in
accordance with the fair value based method of accounting for stock based
compensation as prescribed by SFAS No. 123. Since option grants awarded during
1997, 1996, and 1995 vest over several years and 

                                     F-17


<PAGE>
                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)

additional awards are expected to be issued in the future, the pro forma
results shown below are not likely to be representative of the effects on
future years of the application of the fair value based method.


<TABLE>
<CAPTION>
                                            1997                  1996                  1995
                                            ----                  ----                  ----
<S>                                     <C>                   <C>                   <C>

  Pro forma net loss                    ($15,637,837)         ($35,368,272)         ($24,700,788)
                                        =============         =============         =============
  Pro forma net loss per share,
  basic and diluted                           ($0.54)               ($1.40)               ($1.22)
                                        =============         =============         =============
</TABLE>


         For the purpose of the above pro forma calculation, the fair value of
each option granted from the Incentive Plan during 1997, 1996, and 1995 was
estimated on the date of grant using the Black-Scholes option pricing model.
The weighted-average fair value of the options granted during 1997, 1996, and

1995 was $7.84, $9.67, and $3.94, respectively. The following assumptions were
used in computing the fair value of option grants during 1997, 1996, and 1995:
expected volatility of 85%, expected lives of 3 years after vesting, and zero
dividend yield for 1997, 1996 and 1995; risk-free interest rates of
5.79%-6.47% in 1997, 5.46%-6.92% in 1996, and 5.53%-7.15% in 1995.

         b.  Executive Stock Purchase Plan
         In 1989, the Company adopted an Executive Stock Purchase Plan (the
"Plan") under which 1,027,500 shares of Class A Stock were reserved for
restricted stock awards. The Plan provides for the compensation committee of
the Board of Directors to award employees, directors, consultants, and other
individuals ("Plan participants") who render service to the Company the right
to purchase Class A Stock at a price set by the compensation committee. The
Plan provides for the vesting of shares as determined by the compensation
committee and, should the Company's relationship with a Plan participant
terminate before all shares are vested, unvested shares will be repurchased by
the Company at a price per share equal to the original amount paid by the Plan
participant. During 1989 and 1990, a total of 983,254 shares were issued and
as of December 31, 1997, there were 44,246 shares available for future grants
under the Plan.

11.  Employee Savings Plan

         The Company, during 1993, adopted the provisions of the Regeneron
Pharmaceuticals, Inc. 401(k) Savings Plan (the "Savings Plan"). The terms of
the Savings Plan provide for employees who have met defined service
requirements to participate in the Savings Plan by electing to contribute to
the Savings Plan a percentage of their compensation to be set aside to pay
their future retirement benefits, as defined. The Savings Plan provides for
the Company to make discretionary contributions, as defined. To date, the
Company has made no contributions to the Savings Plan.

12.  Income Taxes

         There is no provision (benefit) for federal or state income taxes,
since the Company has incurred operating losses since inception and has
established a valuation allowance equal to the total deferred tax asset.

         The tax effect of temporary differences, net operating loss
carry-forwards, and research and experimental tax credit carry-forwards as of
December 31, 1997 and 1996 was as follows:

<TABLE>
<CAPTION>
                                                                        1997              1996
                                                                        ----              ----
<S>                                                                  <C>              <C>

        Deferred tax assets
          Net operating loss carry-forward                           $60,209,000      $53,390,000
          Fixed assets                                                 1,848,000        2,261,000
          Deferred revenue                                             6,195,000        7,957,000
          Research and experimental tax credit carry-forward           4,800,000        4,501,000
          Other                                                        1,268,000        1,265,000
          Valuation allowance                                        (74,320,000)     (69,374,000)

                                                                     ------------     ------------
                                                                              --               --
                                                                     ============     ============
</TABLE>

         As of December 31, 1997, the Company had available for tax purposes
unused net operating loss carry-forwards of approximately $145.4 million which
will expire in various years from 2003 to 2012. The Company's research and
experimental tax credit carry-forwards expire in various years from 2003 to
2012.

                                     F-18



<PAGE>

                       REGENERON PHARMACEUTICALS, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


13.  Litigation

         In 1995, the Company settled a securities class action lawsuit
against the Company and two individuals. As part of the settlement, the
Company issued 153,017 shares of the Company's Common Stock in January 1996.
The total cost to the Company of the settlement, before legal expenses and
after reimbursement from the Company's insurance providers, was approximately
$0.9 million.

         The Company, from time to time, has been subject to legal claims
arising in connection with its business. While the ultimate results of the
claims cannot be predicted with certainty, at December 31, 1997, there were
no asserted claims against the Company which, in the opinion of management, if
adversely decided, would have a material adverse effect on the Company's
financial position and results of operations.


14.   Net Loss  Per Share

The Company's basic net loss per share amounts have been computed by dividing
net loss by the weighted average number of Common and Class A shares
outstanding. For the years ended December 31, 1997, 1996, and 1995, the
Company reported net losses and, therefore, no common stock equivalents were
included in the computation of diluted net loss per share since such inclusion
would have been antidilutive. The calculations of basic and diluted loss per
share are as follows:


<TABLE>
<CAPTION>

                                            Net Loss                         Shares                        Per Share
                                           (Numerator)                   (Denominator)                      Amount
                                           -----------                   -------------                      ------
<S>                                       <C>                              <C>                              <C>

1997:
       Basic and Diluted                  ($11,578,865)                    28,702,075                       ($0.40)

1996:
       Basic and Diluted                  ($32,423,778)                    24,463,516                       ($1.33)

1995:
       Basic and Diluted                  ($23,507,274)                    19,768,466                       ($1.19)

</TABLE>



Options and warrants which have been excluded from the diluted per share

amounts because their effect would have been antidilutive include the
following:


<TABLE>
<CAPTION>


                                             1997                          1996                          1995
                                             ----                          ----                          ----



                                                Weighted                      Weighted                       Weighted
                                                 Average                       Average                       Average
                                 Number      Exercise Price     Number     Exercise Price     Number      Exercise Price
                                 ------      --------------     ------     --------------     ------      --------------
<S>                             <C>              <C>           <C>             <C>           <C>             <C>
Options and warrants with
exercise prices below the 
average fair market value 
of the Company's Common Stock
for the respective year         3,737,724         $7.17        3,531,585        $8.78        2,158,764        $4.47

Options and warrants with 
exercise prices above the
average fair market value 
of the Company's Common Stock
for the respective year         2,136,112        $14.04          203,682       $19.85          513,013
                                ---------                        -------                       -------
                                                                                                             $13.13
                                5,873,836                      3,735,267                     2,671,777
                                =========                      =========                     =========

</TABLE>


                                     F-19



<PAGE>

                           AMGEN-REGENERON PARTNERS

                             FINANCIAL STATEMENTS

                         Year ended December 31, 1997
                                     with
                        Report of Independent Auditors


                                     F-20



<PAGE>



               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS



The Partners
Amgen-Regeneron Partners


We have audited the accompanying balance sheets of Amgen-Regeneron Partners, a
Delaware general partnership, as of December 31, 1997 and 1996, and the
related statements of operations, changes in partners' capital, and cash flows
for each of the three years in the period ended December 31, 1997. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Amgen-Regeneron Partners at
December 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.




Los Angeles, California
February 10, 1998



                                     F-21



<PAGE>


                           AMGEN-REGENERON PARTNERS

                                BALANCE SHEETS

                          December 31, 1997 and 1996

                                (In thousands)


<TABLE>
<CAPTION>

                                                                                     1997              1996
                                                                                   --------           ------
                                   ASSETS

<S>                                                                                 <C>               <C>    
Total current assets - cash and cash equivalents...........................         $2,552            $14,640
                                                                                    ======            =======


                      LIABILITIES AND PARTNERS' CAPITAL

Total current liabilities - accounts payable and accrued
     expenses due to partners..............................................         $1,824            $12,230
                                                                                    ------            -------

Partners' capital:
     Capital Accounts A:
         Amgen    .........................................................            364              1,205
         Regeneron.........................................................            364              1,205
     Capital Account B - Amgen.............................................              -                  -
                                                                               -----------      -------------
              Total partners' capital......................................            728              2,410
                                                                                  --------          ---------

                  Total liabilities and partners' capital..................         $2,552            $14,640
                                                                                    ======            =======
</TABLE>



                            See accompanying notes.

                                     F-22



<PAGE>


                           AMGEN-REGENERON PARTNERS

                           STATEMENTS OF OPERATIONS

                 Years ended December 31, 1997, 1996 and 1995

                                (In thousands)


<TABLE>
<CAPTION>


                                                                     1997             1996              1995
                                                                    ------           ------            -----
<S>                                                                <C>              <C>             <C>       
Revenues:
     Interest income......................................         $    310         $     750       $      387
                                                                   --------         ---------       ----------

         Total revenues...................................              310               750              387
                                                                  ---------        ----------       ----------

Expenses:
     Research and development performed
         by partners......................................            7,078            29,069           30,363
     General and administrative...........................               38               181              134
                                                                 ----------       -----------      -----------

         Total expenses...................................            7,116            29,250           30,497
                                                                   --------         ---------        ---------

Net loss..................................................          $(6,806)         $(28,500)        $(30,110)
                                                                    =======          ========         ========
</TABLE>



                            See accompanying notes.


                                     F-23



<PAGE>


                           AMGEN-REGENERON PARTNERS

                  STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

                 Years ended December 31, 1997, 1996 and 1995

                                (In thousands)


<TABLE>
<CAPTION>

                                                       Amgen Capital                Regeneron Capital
                                                 ------------------------           -----------------
                                                   Account A       Account B              Account A
                                                   ---------       ---------              ---------
<S>                                               <C>           <C>                      <C>      
Balance at December 31, 1994.................     $   1,656     $        -               $   1,656

Capital contributions........................        13,422          2,500                  13,422

Net loss ....................................       (13,805)        (2,500)                (13,805)
                                                  ---------       --------               ---------

Balance at December 31, 1995.................         1,273              -                   1,273

Capital contributions........................        14,182              -                  14,182

Net loss ....................................       (14,250)             -                 (14,250)
                                                  ---------    ------------              ---------

Balance at December 31, 1996.................         1,205              -                   1,205

Capital contributions........................         2,562              -                   2,562

Net loss ....................................        (3,403)             -                  (3,403)
                                                 ----------    ------------             ----------

Balance at December 31, 1997.................    $      364    $         -              $      364
                                                 ==========    ===========              ==========
</TABLE>


                            See accompanying notes.


                                     F-24



<PAGE>


                           AMGEN-REGENERON PARTNERS

                           STATEMENTS OF CASH FLOWS

                 Years ended December 31, 1997, 1996 and 1995

                                (In thousands)


<TABLE>
<CAPTION>

                                                                       1997              1996                1995
                                                                   ----------        -----------          ----------
<S>                                                                <C>                 <C>                  <C>      
Cash flows from operating activities:
     Net loss ..............................................       $  (6,806)          $(28,500)            $(30,110)
     (Decrease) increase in accounts payable and
         accrued expenses...................................         (10,406)            (2,722)               7,895
                                                                   ----------        -----------          ----------

              Net cash used in operating activities.........         (17,212)           (31,222)             (22,215)

Cash flows from financing activities - capital 
  contributions ...........................................
                                                                       5,124             28,364               29,344
                                                                  ----------          ---------            ---------

(Decrease) increase in cash and cash equivalents............         (12,088)            (2,858)               7,129

Cash and cash equivalents at beginning of period............          14,640             17,498               10,369
                                                                   ---------          ---------            ---------

Cash and cash equivalents at end of period..................       $   2,552           $ 14,640             $ 17,498
                                                                   =========           ========             ========
</TABLE>



                            See accompanying notes.


                                     F-25



<PAGE>



1.       Summary of significant accounting policies

     Business and organization

         Amgen-Regeneron Partners (the "Partnership"), a general partnership,
was formed on June 21, 1991, under the laws of the State of Delaware between
Amgen Inc. ("Amgen") and Regeneron Pharmaceuticals, Inc. ("Regeneron"). The
Partnership was formed to develop and commercialize in the United States BDNF
and NT-3 ("Products") for human pharmaceutical use, in conformity with a
Collaboration Agreement (Note 3).

         In January 1997, Amgen and Regeneron announced the Phase 3 clinical
trial of BDNF did not demonstrate clinical efficacy in patients with
amyotrophic lateral sclerosis ("ALS"), commonly known as Lou Gehrig's Disease.
The trial was designed to evaluate the effects of subcutaneous delivery of
BDNF for ALS. On behalf of the Partnership, Amgen and Regeneron continue to
investigate intrathecal and subcutaneous delivery of BDNF for ALS.

         Under the Collaboration Agreement, Amgen will be primarily
responsible for the manufacture and commercialization of the Products in the
United States if successfully developed by the Partnership. Amgen's costs in
connection with such activities will be reimbursed at agreed to rates. Unless
terminated earlier, the Partnership will continue in effect, with respect to
each Product, until the later of the expiration of the last United States
patent of each Product or fifteen years from the date on which each Product
was approved for sale in the United States.

         A Joint Management Committee (the "Committee") is responsible for the
overall management of the business and affairs of the Partnership as well as
activities performed under the Collaboration Agreement. Each partner has
appointed three representatives to the Committee. One additional
representative may be appointed by a partner if the balance of their Capital
Account A becomes more than twice the amount of the balance of the other
partner's Capital Account A (Note 2).

     Cash equivalents

         The Partnership considers only those investments which are highly
liquid, readily convertible to cash and which mature within three months of
the date of purchase as cash equivalents. At December 31, 1997 and 1996, cash
and cash equivalents consisted of a single interest bearing money market
account.



                                     F-26



<PAGE>


     Research and development

         Research and development costs are expensed as incurred.

     Income taxes

         The Partnership's financial statements do not include a provision
(credit) for income taxes. Income taxes, if any, are the liability of the
individual partners.

     Use of estimates

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.


2.       Capital contributions, allocation of profits and losses and cash 
         distributions

         Capital contributions are recorded in the Capital Account A of each
partner, except for contributions related to the product development funding
obligation discussed below. Capital Account A contributions are generally made
quarterly in advance based upon capital calls made by the Committee pursuant
to projected cash requirements of the Partnership. Cash distributions and
profits or losses, except for that portion due to expenses related to the
product development funding obligation, are allocated to each partner in
proportion to their respective Capital Account A contributions.

         Prior to 1996, pursuant to Amgen's product development funding
obligation to Regeneron under the Collaboration Agreement (Note 3), Amgen made
stated quarterly cash contributions to the Partnership which were credited to
Amgen's Capital Account B. Such funds were then used to satisfy the
Partnership's obligation to Regeneron for performing specified research and
development activities on behalf of the Partnership. The expenses related to
such activities were allocated to Amgen's Capital Account B.


3.       Collaboration Agreement

         In August 1990, Amgen and Regeneron entered into a Collaboration
Agreement to develop and commercialize BDNF and NT-3, compounds for which
Regeneron possesses substantial scientific, technical and proprietary
information. Each party has agreed to perform research and development on the
Products under product development programs approved by the Committee. Upon
Amgen's notification in writing to Regeneron that the preparation of an
Investigational New Drug Application for each Product should commence, the
licenses granted by the partners to the Partnership for the underlying
technologies, discussed below, became effective on a Product-by-Product basis.
Also, upon such notification, further research and development of the Products
under the licenses became the obligation of the Partnership. These licenses
grant the Partnership an exclusive, royalty-free right to develop, make, have
made, use, sell and distribute each Product for human pharmaceutical use in

the United States. The Partnership has, in turn, granted to Amgen and
Regeneron exclusive, royalty-free sublicenses for the underlying technologies
to the extent necessary to fulfill their obligations under the Collaboration
Agreement. These sublicenses became effective at the same time the related
licenses granted the Partnership became effective.

                                      F-27


<PAGE>


          Pursuant to the terms of the Collaboration Agreement, Amgen and
Regeneron conduct certain research and development activities on behalf of the
Partnership, including contracting with third parties to conduct clinical
trials. Amgen also provides on behalf of the Partnership certain quantities of
materials, primarily for clinical testing. Amgen and Regeneron are paid for
such services and materials at amounts approved by the Committee. During the
years ended December 31, 1997, 1996 and 1995, the Partnership incurred
expenses (including accrued expenses) of $5,561,000, $23,191,000 and
$23,392,000, respectively, from Amgen and $1,517,000, $5,878,000 and
$4,471,000, respectively, from Regeneron for such services and materials.
These amounts are included in research and development expense in the
accompanying statements of operations. In addition, certain other costs
associated with the development of the Products have been incurred by the
partners but not charged to the Partnership or reflected in the accompanying
financial statements. At December 31, 1997, accounts payable and accrued
expenses due to partners was composed of $616,000 of accounts payable and
$851,000 of accrued clinical costs due to Amgen and $357,000 of accounts
payable due to Regeneron. At December 31, 1996, accounts payable and accrued
expenses due to partners was composed of $7,307,000 of accounts payable and
$4,451,000 of accrued clinical costs due to Amgen and $472,000 of accounts
payable due to Regeneron.

         The Collaboration Agreement obligated Amgen to fund a portion of the
product development costs incurred by Regeneron at specified rates. This
funding obligation of $2,500,000 per year for each Product terminated in
August 1995. Payments were due quarterly in advance. The related amounts for
each Product were paid by Amgen directly to Regeneron until the licenses with
respect to the Products became effective. Thereafter, Amgen contributed such
amounts to the Partnership, and the Partnership remitted the amounts to
Regeneron in consideration of certain research and development activities
performed by Regeneron on behalf of the Partnership. Research and development
expense for the year ended December 31, 1995 included $2,500,000 of costs
incurred under this funding obligation.


                                      F-28



<PAGE>


 
                           EXHIBIT INDEX
              -----------------------------------------
Exhibit
Number    Description
- ------    -----------

3.1  (a)  - Restated Certificate of Incorporation of Regeneron 
          Pharmaceuticals, Inc. as at June 21, 1991. 

3.2       - By-Laws of the Company, currently in effect (amended as of January
          22, 1995). 

10.1 (b)* - Technology Development Agreement dated as of March 20, 1989, 
          between the Company and Sumitomo Chemical Company, Limited.

10.2 (b)* - Neurotrophic Factor Agreement (License Agreement) dated as of
          May 10, 1988, between the Company and Max Planck Institute fur
          Psychiatrie.

10.3 (b)* - Collaboration Agreement dated August 31, 1990, between the
          Company and Amgen Inc.

10.4 (b)  - 1990 Amended and Restated Long-Term Incentive Plan. 

10.5 (c)* - License Agreement dated as of October 7, 1992, between the
          Company and The Regents of the University of California.

10.6 (d)* - Collaboration Agreement dated as of July 22, 1993, between the
          Company and Glaxo Group Limited. 

10.7 (e)* - Research and Development Agreement dated as of June 2, 1994,
          between the Company and Sumitomo Pharmaceuticals Company, Ltd.

10.8 (f)* - Manufacturing Agreement dated as of September 18, 1995, between
          the Company and Merck & Co., Inc. 

10.9 (g)  - Stock and Warrant Purchase Agreement dated as of April 15, 1996,
          between the Company and Amgen Inc.

10.10(g)  - Warrant Agreement dated as of April 15, 1996, between the Company
          and Amgen Inc.

10.11(g)  - Registration Rights Agreement dated as of April 15, 1996, between
          the Company and Amgen Inc.

10.12(g)  - Stock and Warrant Purchase Agreement dated as of June 27, 1996,
          between the Company and Medtronic, Inc.

10.13(g)  - Warrant Agreement dated as of June 27, 1996, between the Company
          and Medtronic, Inc. 

10.14(g)  - Registration Rights Agreement dated as of June 27, 1996, between

          the Company and Medtronic, Inc. 

10.15(g)  - Assignment and Assumption Agreement dated as of June 27, 1996,
          between the Company and Medtronic, Inc.

10.16(h)  - Certificate of Amendment of the Restated Certificate of
          Incorporation of Regeneron Pharmaceuticals, Inc., as at October 18,
          1996.

10.17(i)  - Rights Agreement, dated as of September 20, 1996, between
          Regeneron Pharmaceuticals, Inc. and ChaseMellon Shareholder Services
          L.L.C., as Rights Agent, including the form of Rights Certificate as
          Exhibit B thereto.

10.18(j)  - Stock Purchase Agreement dated as of December 11, 1996, between
          the Company and Procter & Gamble Pharmaceuticals, Inc.

10.19(j)  - Registration Rights Agreement dated as of December 11, 1996,
          between the Company and Procter & Gamble Pharmaceuticals, Inc.

10.20(k)  - Securities Purchase Agreement dated as of May 13, 1997, between the
          Company and The Procter & Gamble Company.

10.21(k)  - Warrant Agreement dated as of May 13, 1997, between the Company and
          The Procter & Gamble Company.

10.22(k)  - Registration Rights Agreement dated as of May 13, 1997, between the
          Company and The Procter & Gamble Company.

10.23(k)* - Multi-Project Collaboration Agreement dates as of May 13, 1997,
          between the Company and The Procter & Gamble Company.

10.24(l)* - First Amendment to the Multi-Project Collaboration Agreement
          dated May 13, 1997 between the Company and The Procter & Gamble
          Company, dated as of September 29, 1997.

10.25     - Employment Agreement, dated as of February 12, 1997 between the
          Company and Leonard S. Schleifer, M.D., Ph.D.

23.1      - Consent of Coopers & Lybrand L.L.P. 

23.2      - Consent of Ernst & Young LLP, Independent Auditors. 

24        - Power of Attorney. 

27        - Financial Statement Data for year ending December 31, 1997, also
          Amended Financial Statement Data for quarters ending September 30,
          1997, June 30, 1997 and March 31, 1997, for year ending December 31,
          1996, and for quarters ending September 30, 1996 and June 30, 1996.
- ------------------------------------------------------------------------------
Description:

     (a)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended June 30,1991, filed

          August 13, 1991.

     (b)  Incorporated by reference from the Company's registration statement
          on Form S-1 (file number 33-39043).

     (c)  Incorporated by reference from the Form 10-K for Regeneron
          Pharmaceuticals, Inc. for the fiscal year ended December 31, 1992,
          filed March 30, 1993.

     (d)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended June 30,1993, filed July
          22, 1993.

     (e)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended September 30, 1994,
          filed November 14, 1994.

     (f)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended September 30, 1995,
          filed November 14, 1995.

     (g)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended June 30, 1996, filed
          August 14, 1996.

     (h)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended September 30, 1996,
          filed November 5, 1996.

     (i)  Incorporated by reference from the Form 8-A for Regeneron
          Pharmaceuticals, Inc. filed October 15, 1996.

     (j)  Incorporated by reference from the Form 10-K for Regeneron
          Pharmaceuticals, Inc. for the fiscal year ended December 31, 1996,
          filed March 26, 1997.

     (k)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended June 30, 1997, filed
          August 12, 1997.

     (l)  Incorporated by reference from the Form 10-Q for Regeneron
          Pharmaceuticals, Inc. for the quarter ended September 30, 1997,
          filed November 10, 1997.






<PAGE>

                                                                 Exhibit 10.25
                                                                 -------------
February 12, 1998

Leonard S. Schleifer, M.D., Ph.D.
President and Chief Executive Officer,
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707

Dear Len:

                  As you know, the Board of Directors has had under
consideration a new employment agreement with you, to replace and update the
agreement dated September 14, 1993 between Regeneron Pharmaceuticals, Inc.
("Regeneron" or the "Company") and you. The compensation obligations of the
Company under this agreement (the "Agreement") will be reduced by any amounts
actually paid by any affiliate, subsidiary, and related entity controlled by
or under common control with the Company ("Related Entity").


         1.       Employment.
                  ----------
                  (a) You will continue to serve, during the Employment Term,
as President and Chief Executive Officer of the Company with the customary
responsibilities and authority of such positions and in accordance with the
Company's By-Laws. You will report directly and only to the Board of
Directors. If elected, you will also continue to serve as a Director of the
Company. The Company shall during the Employment Term recommend and propose
you as a Director of the Company and any Related Entity and, if the current
Chairman of the Board
 of Directors at any time ceases to serve as such, as
Chairman of the Board of Directors. To the extent you are not elected Chief
Executive Officer of any Related Entity, such Chief Executive Officer shall
report to you.

                  (b) During the Employment Term, you shall devote
substantially all of your business time and attention to the performance of
your duties for the Company and serve the Company diligently and to the best
of your ability. You may, however, perform teaching, consulting, patient care,
and other activities as you have done from time to time in the past, provided
that they do not materially conflict with the performance of your duties to
the Company. In addition, you may manage your personal investments and be
involved in civic and charitable activities so long as such activities do not
materially interfere with your providing services hereunder. During the
Employment Term, you shall not serve as a member of a board of directors of
any other for-profit corporation (other than a Related Entity) without the
prior written consent of the Board of Directors (which consent shall not be
unreasonably withheld). In no event will the provisions of this Agreement in
any way modify, alter, reduce, or limit the fiduciary obligations you owe to
the Company as an officer and Director of the Company.

         2. Term. Except for earlier termination as provided in paragraph 4

hereof, your employment under this Agreement (the "Employment Term") shall be
for an initial term commencing on the date hereof and ending on December 31,
2002 (the "Initial Term"). Unless notice is given of an intent not to extend
the Initial Term or any extension thereof, by you or by the Company on at
least ninety (90) days prior written notice, the Employment Term shall be
deemed as of such 90th day to have been extended and continue until the end of
the following calendar year unless otherwise terminated as provided in
paragraph 4 hereof.

                                       1

<PAGE>

         3. Compensation/Benefits.
            ---------------------

                  (a) During the Employment Term, you will receive base salary
at an annual rate of not less than $410,000, paid currently at periodic
intervals in accordance with the Company's payroll practices for salaried
employees. Adjustments in your base salary during the term of this Agreement
(which shall thereafter be your "Base Salary") may be effected from time to
time upon the recommendation of the Compensation Committee and the approval of
the Board of Directors based upon an annual review by the Compensation
Committee, but your Base Salary, once increased, shall in no event be
decreased; provided, however, that in the event there is a general reduction
of compensation applicable to senior executives generally, nothing herein
shall preclude the Board of Director's ability to reduce your Base Salary
consistent with this reduction. You shall also participate in and be the
beneficiary of any cash bonus payments, stock option and other equity
programs, incentive programs, pension plans, profit sharing plans and other
benefit programs and fringe benefit programs implemented by the Company and
otherwise available to executive officers, nonindependent directors, and
employees of the Company, at a level commensurate with your position, in
accordance with the terms and conditions of such programs.

                  (b) You have separately entered into one or more stock
purchase agreements and stock option award agreements with the Company. With
the sole exception of the provisions herein, regarding acceleration of vesting
of such stock options, nothing in this Agreement will effect any term or
provision of any stock purchase or stock option award agreement you have
entered into or will enter into with the Company under any stock purchase or
incentive plan of the Company.

                  (c) The Company will during the Employment Term maintain
insurance on your life in the amount of $1,000,000 payable to such beneficiary
as you designate. You may change the designated beneficiary of this policy at
any time. The Company will not borrow against or otherwise encumber the policy
or proceeds thereof. The Company will also during the Employment Term maintain
for your benefit a long term disability policy that will pay you at least 65
percent of your Base Salary during such period as you are unable for physical
or mental reasons to perform the responsibilities of your current position
with such benefits commencing no later than six (6) months after incurrence of
the disability.

                  (d) During the Employment Term, the Company will pay for or
will reimburse the reasonable costs of your medical malpractice insurance and

all customary, ordinary, and necessary business expenses incurred by you in
the performance of your duties (including expenses related to your automobile
or other equipment you customarily and normally use in connection with the
performance of your duties to the Company), provided that you present such
vouchers, receipts, or other documentation as are required by the regular
procedures of the Company for the reimbursement of such expenses.

                  (e) Upon executing this Agreement, the Company shall pay you
an amount in a lump sum equal to the difference between the salary that you
have been paid to date at an annual rate of $387,000 and the salary that you
would have received to date had your Base Salary been increased to $410,000
effective January 1, 1998.

                  (f) You shall be entitled to at least four (4) weeks of
vacation per year, which vacation may be taken at such times as you elect with
due regard to the needs of the Company.

                  (g) The Company has, in connection with the Agreement,
granted to you a nonqualified stock option to purchase 160,000 common shares
at a per share exercise price equal to the fair market value of the shares at
the time of grant for a term of ten (10) years and in accordance with the
Company's 1990 Long Term Incentive Plan. The grant provides that such option
shall become exercisable ratably over a five (5) year period with 20 percent
vesting on each of the second through sixth anniversary of the grant date with
acceleration as otherwise provided 

                                       2


<PAGE>

herein. During the Employment Term, the Company may, but shall be under no
further obligation to, grant you options in addition to the options already
granted to you. You acknowledge that you are aware that the current intent of
the Compensation Committee is not to grant you any additional stock options in
1998 or 1999. The stock options to purchase common shares previously granted to
you shall remain outstanding, and in effect, in accordance with their respective
terms.

                  (h) The Company will pay, or will reimburse the reasonable
costs of, any legal, accounting or other professional services you incur in
connection with your tax preparation and financial planning to a maximum of
$10,000 per year, including, without limitation, a tax gross-up reimbursement
so long as the total direct reimbursement and tax gross-up reimbursement is no
more than $10,000 per year.

         4. Termination. Except as otherwise provided in paragraph 2, the
Employment Term shall end upon the earliest of the following to occur:

                  (a)      Your death.

                  (b) Upon a vote of the Board of Directors and notice to you
of termination as a result of your Permanent Disability. Permanent Disability

means your inability, by reason of any physical or mental impairment, to
substantially perform the significant aspects of your regular duties as
contemplated by this Agreement and which inability is reasonably contemplated
to continue for at least one (1) year from its incurrence and at least ninety
(90) days from the date of such vote. Any question as to the existence,
extent, or potentiality of your Permanent Disability shall be determined by a
qualified independent physician selected by you (or, if you are unable to make
such selection, by an adult member of your immediate family), and reasonably
acceptable to the Company. Such physician's written determination of your
Permanent Disability shall, upon delivery to the Company, be final and
conclusive for purposes of this Agreement; provided, however, that no such
determination shall be final and conclusive with respect to any disability
coverage under paragraph 3(c).

                  (c) Your Involuntary Termination, as set forth in paragraph
                      6 below.

                  (d) Your Removal for Cause, as set forth in paragraph 7(a)
                      below.

                  (e) Your voluntary termination after June 30, 2001 (other
than termination on account of death, Permanent Disability or termination by
you for Good Reason) upon ninety (90) days prior written notice; provided,
however, that the Company may waive such notice requirement in a written
waiver delivered to you.

         5.       Death and Disability.
                  --------------------

                  (a) If the Employment Term terminates by reason of your
death or your Permanent Disability as provided in paragraph 4, then, except as
provided in this paragraph 5(a), no further compensation will become payable
to you under this Agreement, other than any unpaid Base Salary, earned but
unpaid bonuses, the pro rata portion of incentive compensation earned for
services rendered through the date of your death or Permanent Disability and
any deferred compensation (collectively "Entitlements"). Entitlements shall be
calculated and paid as set forth in subparagraph (b) below. In addition,
should you die or incur a Permanent Disability on or after the expiration of
the six (6) month period beginning on the date of any option grant made to
you, all such options shall accelerate and become fully vested and immediately
exercisable. Except as provided in paragraph 12(c), in the event of your
termination on account of your Permanent Disability, the Company shall pay you
100% of your Base Salary reduced by any insurance or other payments made under
policies or plans paid for or maintained by the Company and shall continue to
provide you and your eligible dependents with the medical and dental care
benefit 

                                       3


<PAGE>

coverage and life insurance at a level of coverage comparable to the coverage in
effect for you at the time of your termination on account of Permanent
Disability upon the same terms and conditions (except for the requirement of

your continued employment) for a period of eighteen (18) months following your
date of termination.

                  (b) Earned but unpaid bonus shall mean any declared but
unpaid bonus for any prior bonus period and, if the bonus for the current
bonus period is other than totally discretionary, a pro rata portion of the
calculated bonus for the bonus period based on days in the bonus period prior
to termination of your services compared to total days in the bonus period.
Any incentive compensation shall be deemed earned and shall be paid based on
actual results during the measuring period and a pro rata measurement of the
days in the incentive period prior to termination of your services compared to
total days in the incentive period. Each Entitlement shall be promptly paid
after the amount thereof is determined. Any deferred compensation shall be
paid in accordance with the terms of the applicable plan.

         6.       Involuntary Termination.
                  -----------------------

                  (a) Involuntary Termination shall mean either your
termination by the Company in accordance with paragraph (b) hereof, or your
resignation in accordance with paragraph (c) hereof.

                  (b)      Termination By The Company Without Cause:
                           ----------------------------------------

                  Your termination by the Company shall be considered to be
"without cause" if (i) you are terminated or dismissed, for reasons other than
your death, Permanent Disability or "Removal for Cause", as President or Chief
Executive Officer, unless you have previously consented in writing to such
removal or dismissal (which consent may be given or withheld in your sole
discretion); provided, however, that your termination or dismissal as
President shall not be a Termination by the Company without Cause if the
person appointed President reports to you, or (ii) prior to your sixty-fifth
(65th) birthday, the Company gives notice of termination of the Employment
Term pursuant to paragraph 2 hereof.

                  (c)      Termination By You For Good Reason:
                           ----------------------------------

                  Your resignation shall be considered to be for Good Reason
if you resign as President and Chief Executive Officer (whether or not you
resign as a Director and, if Chairman of the Board, as Chairman of the Board)
upon ninety (90) days prior written notice within ninety (90) days after the
occurrence of one of the following events: (i) your removal, dismissal or
failure to be re-elected as President or Chief Executive Officer (other than
on account of your termination for some other reason) or a de jure or de facto
material reduction in your duties, title, responsibilities, authority, status,
or reporting responsibilities (other than in connection with the appointment
of a Chief Operating Officer or President who reports to you), unless you have
previously consented in writing to such removal, dismissal or reduction (which
consent may be given or withheld in your sole discretion); (ii) the failure to
elect you, or your removal, dismissal or failure to be re-elected, as Chairman
of the Board if the current Chairman of the Board ceases to serve as such;
(iii) the failure of the Company to pay to you any amounts due under this

Agreement within ten (10) days after the later of its due date or your written
demand for payment of such amount; (iv) any material breach by the Company of
any provision of this Agreement which is not cured within thirty (30)days
after your giving of written notice of such breach to the Company; (v) one
year after a Change of Control, as defined in Exhibit A hereto, to the extent
you are employed hereunder at that time; or (vi) the relocation of the
Company's principal executive office more than fifty (50) miles from the
current location.

                  (d) Upon an Involuntary Termination, you will become
entitled to the benefits specified in paragraph 8 of this Agreement. In
addition, you will be entitled to your Entitlements as calculated and paid in
accordance with paragraph 5(b) above.

                                       4


<PAGE>

         7.       Removal For Cause.
                  -----------------

                  (a) Removal for Cause shall mean the termination of your
duties as President, Chief Executive Officer and, if you are then serving in
such capacity, Chairman of the Board, effected by the Board of Directors of
the Company (after a Board of Directors meeting for which you had at least ten
(10) days prior written notice and at which you had the opportunity to have
counsel present to represent you in connection with issues concerning your
removal for cause) by reason of any one or more of the following which
individually or in the aggregate has a material adverse effect on the
aggregate business or affairs of the Company and any Related Entity:

                  (i) your gross neglect of your duties, your willful and
continuing refusal to perform your duties (other than, in any such case,
because of a reasonably documented mental or physical illness), your refusal
to obey any lawful order of the Board of Directors, or any material breach by
you of any provision of paragraphs 11 or 12 of this Agreement, which, in any
of the foregoing events, continues for more than thirty (30) days following
your receipt of written notice from the Board of Directors that describes such
breach or other event;

                  (ii) your willful misconduct with respect to the business or
affairs of the Company or of any Related Entity;

                  (iii) your conviction of, or your plea of nolo contendere
to, a misdemeanor involving embezzlement or fraud or other offense involving
money or other property of the Company (other than a good faith dispute over
expense account items), any criminal violation of the Securities Act of 1933
or the Securities Exchange Act of 1934, or any felony, provided your rights of
appeal with respect to such matter have either lapsed or been exercised;

                  (b) Upon your Removal for Cause, the Company will only be
required to pay you any unpaid Base Salary earned by you pursuant to paragraph
3 for services rendered through the date of such removal, any bonus which has
been declared but is unpaid as of the date of such removal and, in accordance
with the terms of any plan, any deferred compensation. In such case, no
amounts will be payable to you under paragraph 8 of this Agreement for any
reason whatsoever.

                  (c) In the event of your voluntary termination in accordance
with paragraph 4(e), you shall receive the same amounts as if you were Removed
for Cause.

         8.       Severance Benefits.
                  ------------------

                  (a) Subject to paragraphs 8(c), 8(f) and 12(c), upon an
Involuntary Termination, you will become entitled to the following severance
benefits:

                  (i)      The Company will continue to pay you your Base Salary

for a period of fifteen (15) months.

                  (ii) Unless you become eligible for comparable coverage
under another company's plans or programs, the Company shall continue to
provide you and your eligible dependents, upon the same terms and conditions
(except for the requirement of your continued employment), with the medical
and dental care benefit coverage and life insurance at a level of coverage
comparable to the coverage in effect for you at the time of your Involuntary
Termination for the eighteen (18) month period following your Involuntary
Termination.

                  (b) Subject to paragraph 8(c), the exercisable portion of
all stock options granted to you shall increase by the greater of: (i) the
percentage that such exercisable portion would have increased had your
employment not terminated in the twelve (12) month period 

                                       5


<PAGE>

following your Involuntary Termination, or (ii) 50% of the portion of the option
that is unexercisable on the date of your Involuntary Termination.

                  (c) Notwithstanding paragraphs 8(a) and 8(b), upon your
Involuntary Termination (other than solely pursuant to paragraph 6(c)(v)
above) within three (3) years after a Change of Control, as defined in Exhibit
A hereto, or within three (3) months prior thereto in anticipation of a Change
of Control, you will become entitled to the following severance benefits,
subject to the application of paragraph 9 below, in lieu of the amounts under
paragraphs 8(a) and 8(b) above:

                  (i) The Company will make a lump sum payment to you within
ten (10) days after such termination of an amount equal to two (2) times your
Base Salary in effect (or, if improperly reduced, required to be in effect) at
the time of your Involuntary Termination.

                  (ii) Any base salary, bonus, vacation pay or other
compensation accrued or earned under law or in accordance with the Company's
policies applicable to you but not yet paid and any incurred but unreimbursed
business expenses for the period prior to termination shall be payable in
accordance with the Company's policies and the terms of the applicable plan.

                  (iii) Until you and your dependents become eligible for
comparable coverage under another company's plans or programs, the Company
shall continue to provide you and your eligible dependents, upon the same
terms and conditions (except for the requirement of your continued
employment), with the medical and dental care benefit coverage and life
insurance at a level of coverage comparable to the coverage in effect for you
at the time of your Involuntary Termination for the twenty-four (24) month
period following your Involuntary Termination.

                  (iv) All stock options, whether heretofore or hereafter,
granted to you shall become fully vested and immediately exercisable and, if
the basis was an action in anticipation of the Change of Control, the option

shall remain exercisable (unless the original terms would otherwise end) at
least through the Change of Control.

                  (d) Each of your outstanding loans from the Company will
become due and payable in accordance with their existing terms and provisions,
and none of these loans will be forgiven or otherwise canceled in whole or in
part.

                  (e) The Company agrees that if your employment with the
Company is terminated during the Employment Term for any reason whatsoever,
you are not required to seek other employment or to attempt in any way to
reduce any amounts payable to you by the Company pursuant to this Agreement.
Further, the amount of any payment or benefit provided for in this Agreement
shall not be reduced by any compensation earned by you or benefit provided to
you as the result of employment by another employer or otherwise.

                  (f) In the event that you have received or commenced receipt
of any payments or other rights under paragraphs 5(a), 8(a) or 8(b) you shall
not be entitled to any additional payments or rights under paragraphs 5(a),
8(a), 8(b), or 8(c) with respect to any subsequent occurrence which might
otherwise give rise to such payments or rights under such paragraphs, except
as specifically provided with regard to paragraph 8(c).

                  (g) Payments under paragraph 8(c)(iii) may, at the
discretion of the Company, be made by continuing your participation in the
applicable plan, in the case of medical benefits, by paying the applicable
COBRA premium for you and your dependents, or by covering you and your
dependents under substitute arrangements, provided that, to the extent you
incur tax that you would not have incurred as an active employee as a result
of the aforementioned coverage or the benefits provided thereunder, you shall
receive from the Company an additional payment in the 

                                       6


<PAGE>

amount necessary so that you will have no additional cost for receiving such
items or any additional payment.

         9. Excise Tax. Notwithstanding anything else herein, to the extent
you would be subject to an excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), on the amounts and benefits
provided hereunder and such other amounts or benefits you received or receive
from the Company or are otherwise required to be included in the calculation
of parachute payments for purposes of Sections 280G and 4999 of the Code, the
amounts and benefits provided under this Agreement will be automatically
reduced to an amount that, when combined with such other amounts and benefits
required to be so included, equals the product of 2.99 multiplied by your
"base amount" (as determined in accordance with Sections 280G and 4999 of the
Code by the Company's certified public accountants unless the Company and you
mutually agree to the appointment of an independent certified public
accounting firm), such that you are not subject to the excise tax under
Section 4999 of the Code. Any cash payments shall first be cutback (with such
cutback being made first of the last cash amounts due to you hereunder) prior

to any cutback of benefits or acceleration of vesting hereunder.

         10. Proprietary Information and Inventions. You understand and
             --------------------------------------
             acknowledge that:

                  (a) The Company is and will be engaged in a continuous
program of research, design, development, production, and marketing with
respect to its business.

                  (b) Your employment by the Company creates a relationship of
confidence and trust between the Company and you with respect to certain
information relating to the business and affairs of the Company or applicable
to the business of any client, customer, consultant, partner, external
collaborator, or service provider of the Company, which may be made known to
you by the Company or by any client, customer, consultant, partner, external
collaborator, or service provider of the Company, or learned by you during the
period of your affiliation with the Company.

                  (c) The Company will possess information created,
discovered, or developed by, or otherwise become known to, the Company
(including, without limitation, information created, discovered, developed, or
made known to you during the Employment Term) or in which property rights have
been or may be assigned or otherwise conveyed to the Company (whether or not
the information has commercial value in the business in which the Company is
or proposes to be engaged) and is treated by the Company as confidential. All
this information is "Proprietary Information", which includes, but is not
limited to, systems, processes, formulae, data, functional specifications,
computer software, programs and displays, know-how, improvements, discoveries,
inventions, developments, designs, techniques, marketing plans, strategies,
forecasts, new and proposed products, unpublished financial statements,
budgets, projections, licenses, prices, costs, and customer, external
collaborator, partner, client, and supplier lists, and any and all
intellectual properties. The foregoing, however, shall not cover information
generally known in the industry or which hereafter become generally known in
the industry.

         11.      Ownership of Proprietary Information and Inventions.
                  ---------------------------------------------------

                  (a) All Proprietary Information shall be the sole property
of the Company and its assigns, and the Company and its assigns will be the
sole owners of all inventions, patents, copyrights, trademarks, and other 
rights in connection therewith. You hereby assign to the Company any right you
may have or acquire in such Proprietary Information. At all times, you will keep
in strictest confidence and trust all Proprietary Information and you will not
use or disclose any Proprietary Information without the written consent of the
Company.

                                       7


<PAGE>


                  (b) If your employment with the Company is terminated for
any reason, you will deliver to the Company all documents, notes, drawings,
specifications, computer software, data, inventions, organisms, and other
materials of any nature pertaining to any Proprietary Information, and will
not take any of the foregoing, or any reproduction of any of the foregoing,
that is embodied in any tangible medium of expression. This shall not limit
you from retaining your personal phone directories and rolodexes.

                  (c) You will promptly disclose to the Company (or any
persons designated by it) all discoveries, developments, designs,
improvements, inventions, formulae, processes, techniques, computer software,
strategies, know-how, and data, whether or not patentable or registrable under
copyright or similar statutes, made or conceived or reduced to practice or
learned by you, either alone or jointly with others, during your employment by
the Company, which result from carrying out your responsibilities to the
Company, or result from the use of premises or property owned, leased, or
contracted for by the Company (all such discoveries, developments, designs,
improvements, inventions, formulae, processes, techniques, computer software,
know-how, and data are referred to in this Agreement as Inventions). You will
also promptly disclose to the Company, and the Company agrees to receive all
such disclosures in confidence, all other discoveries, developments, designs,
improvements, inventions, formulae, processes, techniques, computer software,
strategies, know-how, and data, whether or not patentable or registrable under
copyright or similar statutes, made or conceived or reduced to practice or
learned by you, either alone or jointly with others, during your employment by
the Company for the purpose of determining whether they are Inventions, as
that term is used in this Agreement. At all times during your employment by
the Company you will use your reasonable business efforts to avoid conflicts
of interest involving potential rights and claims of the Company and of third
parties to Inventions, including those that might arise by virtue of your
affiliation with a university or other medical institution concurrently with
your employment by the Company and will take all action reasonably necessary
and or desirable to minimize the probability of any such conflicts of interest
and to maximize the likelihood that any Inventions made, conceived or
developed or reduced to practice by you (alone or jointly with others) during
your employment by the Company and which reasonably relate to the business of
the Company will be and become the sole, unencumbered property of the Company,
and no other third party (including, without limitation, any such university
or other institution with whom you may also be affiliated) will have any
rights thereto and that any such conflicts of interest be resolved in favor of
the Company.

                  (d) All Inventions shall be the sole property of the Company
and its assigns, and the Company and its assigns shall be the sole owner of all
patents, copyrights, trademarks, and other rights in connection therewith. You
hereby assign to the Company any rights you may have or acquire in such
Inventions. You will assist the Company in every proper way as to all such
Inventions (but at the Company's expense) to obtain and from time to time
enforce patents, copyrights, trademarks, and other rights and protections on and
enforcing such Inventions, as the Company may desire, together with any
assignments thereof to the Company or persons designated by it. Your obligation
to assist the Company in obtaining and enforcing patents, copyrights,
trademarks, and other rights and protections relating to such Inventions in any
and all countries shall continue beyond the Employment Term.

If the Company is unable, after reasonable effort, to secure your signature on
any document or documents needed to apply for or prosecute any patent,
copyright, or other right or protection relating to an Invention, for any
other reason whatsoever, you hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as your agent and
attorney-in-fact, to act for and on your behalf to execute and file any such
application or applications and to do all other lawfully permitted acts to
further the prosecution and issuance of patents, copyrights, or similar
protections thereon with the same legal force and effect as if executed by you
and you hereby ratify, affirm, and approve all such lawfully permitted acts
accordingly.

         12. Restricted Covenant. (a) You are aware that the services you
perform for the Company are of a special, unique character. You also
acknowledge your possession and future possession of Proprietary Information
and the highly competitive nature of the business of the 

                                       8

<PAGE>

Company. Accordingly, you agree that, for the consideration set forth in this
Agreement, you will not, without the written permission of the Company pursuant
to Board of Directors authorization, during your employment under this Agreement
and for a period of six (6) months thereafter, (i) directly or indirectly engage
or become interested or involved in any Competitive Business (as defined in
paragraph (b)), whether such engagement, interest, or involvement shall be as an
employer, officer, director, owner shareholder, employee, partner, consultant,
or in any other capacity or relationship; provided, however, that this shall not
preclude a passive investment of less than one (1%) of the stock of any publicly
traded company; (ii) materially assist others in engaging in any Competitive
Business in the manner described in the foregoing clause (i); or (iii) induce
employees of the Company or its affiliates or subsidiaries to terminate their
employment with the Company or its affiliates or subsidiaries or engage in any
Competitive Business; provided, further, that this shall also not preclude you
from providing investment banking services to or on behalf of an entity after
your termination of employment that might otherwise be a Competitive Business so
long as such services are to arrange a purchase, sale or other business
combination for or with such entity or to arrange financing for such entity
(including, without limitation, obtaining a bank loan for such entity or
participating in the sale of the debt or equity securities of such entity).


                  You understand that this provision is not meant to prevent
you from earning a living or fostering your career. It does intend, however,
to prevent Competitive Businesses from gaining any unfair advantage from your
knowledge of Proprietary Information. You understand that by making any other
employer aware of this provision, that employer can take such action as to
avoid your breach of this provision and to indemnify you in the event of a
breach.

                  (b)      The term "Competitive Business" means and includes:

                  For the period commencing on the date of this Agreement
and ending on the date of your termination of employment any business or

activity that is substantially the same as any business or activity of the
Company as conducted by the Company or any Related Entity during such period;
and

                  (c) For the period thereafter, any business or activity
described in paragraph (i) above to the extent that on the date of your
termination of employment such business or activity represents at least 10% of
the research and development budget of the Company for the fiscal year in
which your termination occurs; provided, however, that any business or
activity of the Company shall be deemed to have been conducted by the Company
at the time of your termination of employment if the Company has undertaken
steps to commence such business or activity prior to your termination of
employment. If after your termination on account of your Permanent Disability
or Involuntary Termination, you perform services that would violate this
paragraph 12 (if such services were performed during the six (6) month period
following your termination of employment), prior to a Change of Control, all
amounts payable and benefits provided pursuant to paragraphs 5(a), 6 or 8
thereafter, if any, shall cease and be forfeited immediately, regardless of
whether such service is performed before or after the expiration of six (6)
months following your termination of employment unless you cease and desist
from such violation within ten (10) days after your receipt of written notice
of such violation from the Board of Directors.

         13. Litigation Support. Subject to your other commitments, following
the Employment Term, you shall make yourself reasonably available to cooperate
(but only truthfully) with the Company and provide information as to matters
which you were personally involved, or have information on, while you were an
officer of the Company and which are or become the subject of litigation or
other dispute.

                                       9

<PAGE>

         14.      General Provisions.
                  ------------------

                  (a) Death. Should you die before receipt of any or all
severance payments to which you became entitled under paragraph 8, then the
balance of the payments to which you are entitled shall continue to paid in
accordance with the terms hereof to the executors or administrators of your
estate.

                  (b) General Creditor Status. The amounts to which you may
become entitled hereunder shall be paid, when due, from the general assets of
the Company, and no trust fund, escrow arrangements, or other segregated
account shall be established as a funding vehicle for such payment.
Accordingly, your right (or the right of the executors or administrators of
your estate) to receive such benefits shall at all times be that of a general
creditor of the Company and shall have no priority over the claims of other
general creditors.

                  (c) Indemnification. During the Employment Term and
thereafter, the Company shall indemnify you and hold you harmless to the
fullest extent permitted by law against any judgments, fines, amounts paid in

settlement and reasonable expenses (including reasonable attorneys' fees), and
advance amounts necessary to pay the foregoing at the earliest time and to the
fullest extent permitted by law, in connection with any claim, action or
proceeding (whether civil or criminal) against you as a result of you serving
as an officer or Director of the Company or in any capacity at the request of
the Company in or with regard to any other entity, employee benefit plan or
enterprise. This indemnification is in addition to and not in lieu of any
other indemnification rights you may otherwise have.

                  (d) Remedies. Your obligations under paragraphs 11 or 12 of
this Agreement will survive termination of your employment by the Company. You
acknowledge that a remedy at law for any breach or threatened breach of such
provisions would be inadequate and therefore agree that the Company may be
entitled to injunctive relief, in addition to the remedy available under
paragraph 12(c) hereof, and any other available rights and remedies in case of
any such breach or threatened breach; provided, however, that nothing
contained in this subparagraph (d) will be construed as prohibiting the
Company from pursuing any other remedies available for any such breach or
threatened breach.

                  (e) Interpretation. This Agreement shall be interpreted
under the laws of the State of New York without regard to conflict of law
provisions.

                  (f) Notices. Any notice which a party is required or may
desire to give under this Agreement will be given by personal delivery, air
courier, or registered or certified mail, return receipt requested, addressed
to you at the address of record with the Company and addressed to the
Secretary of the Company at its principal office, or at such other place as
either party may from time to time designate in writing given as aforesaid.
The date of delivery of any notice or communication will be deemed to be (i)
the date of delivery thereof, in the case of personal delivery; (ii) the day
after the date when dispatched, in the case of air courier; and (iii) on the
date of receipt, in the case of mailing.

                  (g) Waivers. If either party shall waive any breach of any
provision of this Agreement, he or it will not thereby be deemed to have waived
any preceding or succeeding breach of the same or any other provision of this
Agreement.

                  (h) Headings. The paragraph headings of this Agreement are for
convenience only and will not be deemed to effect the meaning of the Agreement.

                  (i) Superseding. This Agreement supersedes all prior
agreements between you and the Company relating to the subject of your

                                       10

<PAGE>

personal services and severance benefits, including the letter agreement dated
September 14, 1993, which is hereby terminated. The provisions of this
Agreement may only be amended by written instrument signed by you and a member
of the Board of Directors.


                  (j) No Guarantee of Employment or Service. Nothing in this
Agreement is intended to provide you with any right to continue in the service
of the Company for any period of specific duration, nor, except as
specifically provided herein, to provide the Company with any right to require
you to continue in the service of the Company.

                  (k) Amendment or Termination. This Agreement may not be
amended or terminated orally, but only by a writing executed by the party to
be charged.

                  (l) Assignment. None of the benefits to which you may become
entitled hereunder may be assigned, transferred, pledged, or otherwise
encumbered by you, and to the maximum extent permissible under law, such
benefits will not be subject to the claims of your creditors or to levy,
attachment, execution, or other legal process. This Agreement shall be binding
upon and inure to the benefit of the Company, its successors and permitted
assigns and your executors and heirs, provided that the Company may not assign
the Agreement except in connection with a sale of all or substantially all of
its assets and then only if said acquiror assumes in a writing delivered to
you the obligations of the Company hereunder.

                  (m) Costs of Collection. In the event either party collects
any part or all of the payments provided for hereunder or otherwise
successfully enforces the terms of this Agreement by or through a lawyer or
lawyers, the losing party shall pay all costs of such collection or
enforcement, including reasonable legal fees and other fees and expenses which
the successful party may incur plus interest ("Costs"); provided, however,
that the Company shall not be entitled to recover any Costs from you unless an
arbitrator determines that your action to recover any payment or to enforce
the terms of this Agreement was not grounded on a reasonable good faith
interpretation of the Agreement or that the action was undertaken for the
primary purpose of harassing the Company. Interest shall be calculated at the
prime rate as announced from time to time by Citibank, N.A. on all or any part
of any amount to be paid to you hereunder that is not paid when due. The prime
rate for each calendar quarter shall be the prime rate in effect on the first
day of the calendar quarter.

                  (n) Arbitration. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in New York, New York, in
accordance with the rules of the American Arbitration Association then in
effect, and judgement may be entered on the arbitrators' award in any court
having jurisdiction. The Company shall pay all costs of the American
Arbitrator Association and the arbitrator. The decision upon arbitration shall
be final and binding upon both you and the Company. Notwithstanding the
foregoing, you shall be entitled to seek specific performance from a court of
your right to be paid until the date of termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement and
the Company shall have the right to obtain injunctive relief from a court
pursuant to subparagraph (d) above.

         Please indicate your acceptance by signing the enclosed copy of this
letter and returning it to the Company.


                                       11

<PAGE>

                                            Very truly yours, 
                                            REGENERON PHARMACEUTICALS, INC.


                                             /s/ P. Roy Vagelos
                                            ---------------------------------

                                            Chairman of the Compensation
                                            Committee of the Board of Directors




AGREED TO AND ACCEPTED BY:

LEONARD S. SCHLEIFER, M.D., Ph.D.

Signature:    /s/ Leonard S. Schleifer
           --------------------------------
Dated:   February 12, 1998


                                       12


<PAGE>

                                   EXHIBIT A
                                   ---------

         Change of Control.  For purposes of this Agreement, "Change of Control"
shall be deemed to have occurred if:

(i)   any person (as defined in Section 3(a)(9) of the Securities Exchange Act
      of 1934, as amended (the "Exchange Act") and as used in Sections 13(d) and
      14(d)thereof)) (which includes any "group" as defined in Section 13(d)(3)
      of the Exchange Act, other than a member of the Excluded Group (as
      hereinafter defined)), excluding the Company, any Related Entity, any
      employee benefit plan sponsored or maintained by the Company or any
      Related Entity (including any trustee of any such plan acting in his
      capacity as trustee), and any "group" (as defined in Section 13(d)(3) of
      the Exchange Act) of which you are a part (collectively, the "Excluded
      Group"), becomes the beneficial owner of shares of the Company having at
      least 33_% of the total number of votes that may be cast for the election
      of directors of the Company;

(ii)  the shareholders of the Company approve any merger or other business
      combination of the Company, sale of all or substantially all of the
      Company's assets or combination of the foregoing transactions (a
      "Transaction"), other than (a) a Transaction involving only the Excluded
      Group, or (b) a Transaction immediately following which the shareholders
      of the Company immediately prior to the Transaction continue to have a
      majority of the voting power in the resulting entity (excluding for this
      purpose any shareholder owning directly or indirectly more than 10% of the
      shares of the other company involved in the Transaction); or

(iii) within any twenty-four (24) month period beginning on or after the date
      hereof, the persons who were directors of the Company immediately before
      the beginning of such period (the "Incumbent Directors") cease (for any
      reason other than death or disability) to constitute at least a majority
      of the Board of Directors or the board of directors of any successor to
      the Company, provided that, any director who was not a director as of the
      date hereof shall be deemed to be an Incumbent Director if such director
      was elected to the Board of Directors by, or on the recommendation of or
      with the approval of, at least two- thirds of the directors who then
      qualified as Incumbent Directors either actually or by prior operation of
      the foregoing unless such election, recommendation or approval was the
      result of any actual or threatened election contest of the type
      contemplated by Regulation 14a-11 promulgated under the Exchange Act or
      any successor provision. Notwithstanding the foregoing, no Change of
      Control of the Company shall be deemed to have occurred for purposes of
      this Agreement by reason of any actions or events in which you participate
      in a capacity other than your capacity as an executive or director of the
      Company.





<PAGE>

                                                              Exhibit 23.1


                      CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statements of
Regeneron Pharmaceuticals, Inc. on Form S-8 (File Nos. 33-50480, 33-85330,
33-97176, and 333-33891) of our report, which is based in part on the report
of other auditors, dated February 10, 1998, on our audits of the financial
statements of Regeneron Pharmaceuticals, Inc. as of December 31, 1997 and
1996, and for the years ended December 31, 1997, 1996 and 1995, which report
is included in this Annual Report on Form 10-K.

                                                     COOPERS & LYBRAND L.L.P.

New York, New York
March 25, 1998








<PAGE>

                                                                Exhibit 23.2


              CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-50480) pertaining to the Regeneron Pharmaceuticals, Inc. 1990
Long Term Incentive Plan and in the Registration Statements (Form S-8 No.
33-85330, Form S-8 No. 33-97176, and Form S-8 No. 333-33891) pertaining to the
Regeneron Pharmaceuticals, Inc. Amended and Restated 1990 Long Term Incentive
Plan of our report dated February 10, 1998, with respect to the financial
statements of Amgen-Regeneron Partners included in Regeneron Pharmaceuticals,
Inc.'s Annual Report (Form 10-K) for the year ended December 31, 1997.




                                                             ERNST & YOUNG LLP


Los Angeles, California
February 10, 1998








<PAGE>

                                                                    Exhibit 24


                               Power of Attorney



         KNOW ALL PERSONS BY THESE PRESENTS, that I the undersigned, a
director of Regeneron Pharmaceuticals, Inc., a New York corporation, do hereby
constitute and appoint Leonard S. Schleifer and Paul Lubetkin, and each of
them severally to be my true and lawful attorneys-in-fact and agents each
acting alone with full power of substitution and revocation, to sign my name
to~ the Regeneron Pharmaceuticals, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997 and any and all amendments to such Annual Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and I
hereby grant unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as full as to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, I have subscribed these presents as of March 11,
1998.


                                                          /s/ P. Roy Vagelos
                                                          P. Roy Vagelos, M.D.



<PAGE>

                               Power of Attorney


         KNOW ALL
 PERSONS BY THESE PRESENTS, that I the undersigned, a
director of Regeneron Pharmaceuticals, Inc., a New York corporation, do hereby
constitute and appoint Leonard S. Schleifer and Paul Lubetkin, and each of
them severally to be my true and lawful attorneys-in-fact and agents each
acting alone with full power of substitution and revocation, to sign my name
to~ the Regeneron Pharmaceuticals, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997 and any and all amendments to such Annual Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and I
hereby grant unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as full as to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, I have subscribed these presents as of March 11,
1997.


                                                    /s/ Charles A. Baker
                                                    Charles A. Baker



<PAGE>

                               Power of Attorney


         KNOW ALL PERSONS BY THESE PRESENTS, that I the undersigned, a
director of Regeneron Pharmaceuticals, Inc., a New York corporation, do hereby
constitute and appoint Leonard S. Schleifer and Paul Lubetkin, and each of
them severally to be my true and lawful attorneys-in-fact and agents each
acting alone with full power of substitution and revocation, to sign my name
to~ the Regeneron Pharmaceuticals, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997 and any and all amendments to such Annual Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and I
hereby grant unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as full as to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, I have subscribed these presents as of March 18,
1997.



                                                       /s/ Michael S. Brown
                                                       Michael S. Brown, M.D.


<PAGE>

                               Power of Attorney


         KNOW ALL PERSONS BY THESE PRESENTS, that I the undersigned, a
director of Regeneron Pharmaceuticals, Inc., a New York corporation, do hereby
constitute and appoint Leonard S. Schleifer and Paul Lubetkin, and each of
them severally to be my true and lawful attorneys-in-fact and agents each
acting alone with full power of substitution and revocation, to sign my name
to~ the Regeneron Pharmaceuticals, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997 and any and all amendments to such Annual Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and I
hereby grant unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as full as to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, I have subscribed these presents as of March 16,
1997.



                                                /s/ Alfred G. Gilman
                                                Alfred G. Gilman, M.D., Ph.D.



<PAGE>

                               Power of Attorney


         KNOW ALL PERSONS BY THESE PRESENTS, that I the undersigned, a
director of Regeneron Pharmaceuticals, Inc., a New York corporation, do hereby
constitute and appoint Leonard S. Schleifer and Paul Lubetkin, and each of
them severally to be my true and lawful attorneys-in-fact and agents each
acting alone with full power of substitution and revocation, to sign my name
to~ the Regeneron Pharmaceuticals, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997 and any and all amendments to such Annual Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and I
hereby grant unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as full as to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, I have subscribed these presents as of March 12,
1997.



                                               /s/ Joseph L. Goldstein
                                               Joseph L. Goldstein, M.D.


<PAGE>

                               Power of Attorney


         KNOW ALL PERSONS BY THESE PRESENTS, that I the undersigned, a
director of Regeneron Pharmaceuticals, Inc., a New York corporation, do hereby
constitute and appoint Leonard S. Schleifer and Paul Lubetkin, and each of
them severally to be my true and lawful attorneys-in-fact and agents each
acting alone with full power of substitution and revocation, to sign my name
to~ the Regeneron Pharmaceuticals, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997 and any and all amendments to such Annual Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and I
hereby grant unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as full as to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, I have subscribed these presents as of March 12,
1997.



                                                   /s/ Fred A. Middleton
                                                   Fred A. Middleton


<PAGE>

                               Power of Attorney

         KNOW ALL PERSONS BY THESE PRESENTS, that I the undersigned, a
director of Regeneron Pharmaceuticals, Inc., a New York corporation, do hereby
constitute and appoint Leonard S. Schleifer and Paul Lubetkin, and each of
them severally to be my true and lawful attorneys-in-fact and agents each
acting alone with full power of substitution and revocation, to sign my name
to~ the Regeneron Pharmaceuticals, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997 and any and all amendments to such Annual Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and I
hereby grant unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as full as to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, I have subscribed these presents as of March 11,
1997.


                                                      /s/ Eric M. Shooter
                                                      Eric M. Shooter, Ph.D.



<PAGE>
                               Power of Attorney


         KNOW ALL PERSONS BY THESE PRESENTS, that I the undersigned, a
director of Regeneron Pharmaceuticals, Inc., a New York corporation, do hereby
constitute and appoint Leonard S. Schleifer and Paul Lubetkin, and each of
them severally to be my true and lawful attorneys-in-fact and agents each
acting alone with full power of substitution and revocation, to sign my name
to~ the Regeneron Pharmaceuticals, Inc. Annual Report on Form 10-K for the
year ended December 31, 1997 and any and all amendments to such Annual Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and I
hereby grant unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as full as to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, I have subscribed these presents as of March 11,
1997.



                                                    /s/ George L. Sing
                                                       George L. Sing




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