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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, 1999

( ) 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 February 28, 2000, the aggregate market value of voting stock held by
non-affiliates of the Registrant totaled approximately $1,155,246,652 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 February 28, 2000:

        Class of Common Stock                         Number of Shares
        ---------------------                         ----------------
   Class A Stock, $.001 par value                        3,579,277
    Common Stock, $.001 par value                       28,160,357

                      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 9, 2000, is incorporated by reference into Part III of this Form 10-K.
Exhibit index is located on pages [ ] to [ ] of this filing.


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                                     PART I



Item 1.    Business

General

           Regeneron Pharmaceuticals, Inc. (Regeneron or the Company) is a
biopharmaceutical company that discovers, develops, and intends to commercialize
therapeutic drugs for the treatment of serious medical conditions. Expanding
from our initial focus on degenerative neurologic diseases, we have more
recently broadened our product pipeline to include drug candidates for the
treatment of obesity, rheumatoid arthritis, cancer, allergies, asthma, ischemia,
and other diseases and disorders.

           Our ability to discover and develop product candidates for such a
wide variety of serious medical conditions results from the leveraging of
several powerful technology platforms, many of which were developed or enhanced
by us. In contrast to basic genomics approaches, which attempt to identify every
gene in a cell or genome, we use Targeted Genomics(TM) and Functionomics(TM)
(functional cloning) technology platforms that are designed to discover
specific genes of therapeutic interest for a particular disease or cell type.
Using these approaches, we have discovered many new families of growth factors
and receptors, most of which are already protected by issued patents and which
have led to several product candidates. In cases in which the natural gene
product is itself not a product candidate, we utilize our Designer Protein
Therapeutics(TM) platform to genetically engineer product candidates with the
desired properties. This technology platform has already produced more than 10
patented proteins, several of which are in preclinical development.

           The sophisticated application of all of these technology platforms,
coupled with our biologic expertise in disease modeling, have allowed us to
discover drug candidates that address a wide variety of important medical needs.
Relative to many participants in the biotechnology and genomics industry, we are
well-positioned with three products in ongoing clinical trials and several
product candidates planned to enter clinical trials over the next one to two
years, including:

         o    AXOKINE(R) second generation ciliary neurotrophic factor: Acts on
              the brain region regulating food intake and energy expenditure.
              AXOKINE is being developed for the treatment of obesity and
              complications of obesity such as Type II diabetes, and is now
              in clinical trial.

         o    Cytokine Traps: Antagonists for cytokines such as interleukin-1
              (called IL-1), interleukin-4 (IL-4), interleukin-13 (IL-13), and
              interleukin-6 (IL-6). These cytokines are thought to play a major
              role in diseases such as rheumatoid arthritis and other
              inflammatory diseases, asthma, allergic disorders, and cancer.
              Cytokine Traps are potential treatments for these diseases, and at
              least one Cytokine Trap is expected to enter clinical trials by
              2001.

         o    VEGF Trap: An antagonist to Vascular Endothelial Growth Factor
              (called VEGF), which is required for the growth of blood vessels
              that are needed for tumors to grow. VEGF Trap is a potential
              treatment for cancer and is expected to enter clinical trial in
              2001.

         o    Angiopoietins: A new family of growth factors, discovered by us,
              that are specific for blood vessels and early hemopoietic stem
              cells. The Angiopoietins, and engineered forms of these growth
              factors that can act as activators and blockers, are in
              preclinical testing for promoting the growth of blood vessels (to
              provide blood flow in diseased hearts and other tissues that have
              lost their original blood supplies), for the blocking of blood
              vessel growth (for the treatment of cancers), for fixing leaky
              blood vessels (that cause swelling and edema in diseases such as
              stroke, diabetic retinopathy, and inflammatory diseases), and for
              promoting


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              the growth and mobilization of certain hemopoietic cells such as
              stem cells and platelets.

         o    Brain-derived neurotrophic factor, or BDNF: Promotes
              survival of the spinal cord neurons that die in amyotropic lateral
              sclerosis (or ALS, commonly known as Lou Gehrig's Disease), and is
              in clinical trial for ALS.

         o    Neurotrophin-3, or NT-3: Acts on the neurons of the intestinal
              tract and is in clinical trial for the treatment of constipating
              disorders.


Technology Platforms

         Regeneron's ability to discover and develop product candidates for a
wide variety of serious medical conditions results from the leveraging of
several powerful technology platforms, many of which were developed or enhanced
at the Company.

         Targeted Genomics and Bioinformatics. In contrast to basic genomics
approaches, which attempt to identify every gene in a cell or genome, Regeneron
uses Targeted Genomics approaches to identify specific genes likely to be of
therapeutic interest. Such approaches include homology cloning using
low-stringency hybridization approaches, homology cloning using degenerate
oligonucleotides in polymerase chain reaction-based amplification searches,
subtractive hybridization approaches, and bioinformatics-based algorithms that
search public genomic and expressed sequence tag (EST) databases for genes of
interest. These approaches have resulted in the discovery of a wide variety of
important genes useful for developing drugs in a diverse number of therapeutic
areas, including angiogenesis, cancer, muscle disorders, bone and cartilage
formation, fibrosis and inflammatory diseases. A particular focus of these
efforts is the identification of so-called orphan receptors, as described in the
next section.

         Functionomics: Orphan Receptor Technology and Functional Cloning of
Growth Factors for these Orphan Receptors. 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, described in the previous section on Targeted
Genomics and Bioinformatics, the Company has discovered new receptor proteins
specifically expressed 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, skeletal muscle cells, cartilage cells, and hemopoietic cells.
Because these novel receptor proteins initially have no defined growth factor
partner, they are termed orphan receptors. The Company has also obtained
licenses and established collaborations for additional orphan receptors,
including licenses from The Salk Institute for Biological Studies. Regeneron
scientists then define the growth factor-binding portion of the orphan receptor
and engineer it into an antibody-like reagent, termed a receptor-body. This
receptor-body is used to detect a source of the unknown growth factor and a
cDNA library is produced from this source. The millions of cDNAs in this library
are then introduced into millions of mammalian cells, and the rare cell that has
taken up the cDNA encoding the unknown growth factor is detected using the
receptor-body. The cell is then isolated and its cDNA amplified, allowing for
the molecular cloning of the unknown growth factor. These approaches have
allowed Regeneron scientists to clone growth factor families such as the
Angiopoietins and Ephrins.

         Designer Protein Therapeutics and Genetic Engineering. In cases in
which the natural gene product is itself not a product candidate, the Company
utilizes its Designer Protein Therapeutics platform to genetically engineer
product candidates with the desired properties. These technologies allow for the
development of derivatives of the growth factors and their receptors, which can


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allow for modified agonistic or antagonistic properties that may prove to be
therapeutically useful. Examples include the development of AXOKINE as a second
generation version of CNTF, and the development of Cytokine Traps and the VEGF
Trap. Traps are derivatives of the receptors for cytokines and VEGF, in which
the binding portions of two different receptor components are combined to form a
very high-affinity and fully human soluble antagonist. This technology platform
has already produced more than 10 patented proteins, several of which are in
preclinical development.

         Additional Regeneron Research and Development Capabilities. These
capabilities include molecular and cellular biology, protein chemistry,
transgenics and gene knockouts, disease modeling, viral gene delivery of
proteins, recombinant expression of proteins, and large-scale manufacturing of
recombinant proteins.


The Company's Programs

         AXOKINE. AXOKINE is Regeneron's patented second generation ciliary
neurotrophic factor, called CNTF. In an earlier clinical program, CNTF was
evaluated as a potential treatment for patients with ALS. It was discovered that
reduced appetite and weight loss were among the prominent adverse events in
these patients. (Other adverse events included cough, nausea, and development of
neutralizing antibodies.) Later preclinical studies with AXOKINE in animal
models of obesity confirmed the ability of AXOKINE to induce substantial weight
loss, preferentially of fat as opposed to lean body mass. AXOKINE is effective
in all obesity models studied to date, which include diet induced obesity and
genetic obesity rodent models (ob/ob and db/db mice), and causes marked weight
loss in lean animals.

         AXOKINE has similarities to and important differences from leptin, a
protein that is secreted by fat cells which another company is currently
evaluating in clinical trials in obese people. AXOKINE and leptin use similar
intracellular signaling pathways but signal through different, but closely
related, receptors; they interact with the CNTF and the leptin receptor,
respectively. AXOKINE causes weight loss comparable to leptin in ob/ob mice;
ob/ob mice are genetically obese mice which lack leptin but have the intact
leptin receptor. Leptin in pharmacological doses does not induce weight loss in
mice made obese with high fat/high calorie diet. In contrast, AXOKINE in this
model produces a 30 percent weight loss in three weeks without causing obvious
signs of toxicity.

         The vast majority of obese humans have intact leptin receptors and
increased serum leptin levels. Hence, human obesity does not appear to be a
leptin deficient state but, rather, a condition of leptin resistance. Based on
the animal studies, AXOKINE is anticipated to be pharmacologically active in
patients with obesity, despite their elevated leptin levels and leptin
resistance.

         Obesity is a major health problem in all developed countries. The
prevalence of obesity in the United States has increased substantially during
the past decade; according to the 1997 National Task Force on the Prevention and
Treatment of Obesity, one in three American adults is now considered overweight.
A 1998 National Institutes of Health report confirmed that obesity significantly
increases a number of health risks, including Type II diabetes. Type II diabetes
is estimated to affect more than 15 million people in the United States, with 80
to 90 percent of these people having obesity as a contributing factor to their
diabetes. Obesity-related conditions such as stroke and myocardial infarct are
estimated to contribute to 300,000 deaths yearly, ranking second only to smoking
as a cause of preventable death. Expenses and loss of income caused by obesity
have been estimated to reach $68 billion annually. Current treatment of obesity
consists of diet, exercise and other life-style changes, and a limited number of
drugs. The fact that the population overall is rapidly becoming more obese
testifies to the fact that treatment of obesity is difficult and characterized
by very high recidivism.


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         Regeneron is developing AXOKINE for the treatment of obesity and
complications of obesity such as non-insulin dependent diabetes mellitus (also
known as NIDDM or adult onset diabetes or Type II diabetes).

         In May 1997, the Company entered into a ten-year collaboration
agreement with The Proctor & Gamble Company (Proctor & Gamble) to discover,
develop and commercialize pharmaceutical products (the P&G 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 reimburse the Company for certain research and
development costs and pay the Company as much as $15.0 million in additional
funding, partly subject to achieving certain milestones related to AXOKINE, of
which a total of $10.0 million was paid in 1997 and 1998.

         In the first quarter of 1999, the Company and Procter & Gamble
commenced a Phase I clinical study to determine the safety of AXOKINE
administered subcutaneously for a short duration to mildly to moderately obese
healthy volunteers. In September 1999, Regeneron summarized preliminary, interim
results of the Phase I safety study. Patients received increasing doses of
AXOKINE (or placebo) administered subcutaneously in both single and multiple
dose regimens. The single dose study demonstrated that AXOKINE is well tolerated
at low doses. At higher single doses, nausea, vomiting, and herpes cold sores
were observed. Increased cold sores caused by herpes simplex virus, or HSV, were
also reported in previous clinical studies of ciliary neurotrophic factor (also
called CNTF), AXOKINE's parent molecule. As of the date of Regeneron's summary
of interim results, the multiple dose study (daily administration for 14 days)
had been conducted at doses that were well tolerated in the single dose part of
the study. Nine patients and four placebo patients had been completed with no
reports of nausea, cough, or herpes cold sores. The treated patients lost weight
and had decreased food (caloric) intake compared with those on placebo. One
patient in the multiple low dose group, who was HSV-positive prior to treatment
and had been previously diagnosed with Bell's palsy, had a recurrence of Bell's
palsy approximately two weeks after the patient's last administration of
AXOKINE.

         After examining the interim data from the Phase I study (including the
possibility that the market for AXOKINE might be limited to HSV-negative
patients) as part of an internal review of drug development programs and
budgets, Procter & Gamble decided to return to Regeneron the product rights to
AXOKINE. The Company and Procter & Gamble completed the Phase I study in
HSV-negative patients. Under certain circumstances, Procter & Gamble will
continue to be entitled to receive a small royalty on any sales of AXOKINE.

         At completion, the multiple dose study included a total of 27 patients
at four doses that were generally well tolerated in the single-dose part of the
study. Overall, the treated patients lost weight and had decreased food
(caloric) intake compared to those on placebo. At doses up to 2 mcg/kg/day in
patients, some of whom were HSV-positive and some of whom were HSV-negative, and
at doses above 2 mcg/k/day in patients, all of whom were HSV-negative, there
were no reports of vomiting or herpes cold sores. Some patients in the study
experienced a reversible and generally asymptomatic increase in pulse rate in a
dose-related fashion. As noted in the interim analysis, one patient in the 1
mcg/kg/day group who had been previously diagnosed with Bell's palsy had a
recurrence of Bell's palsy approximately two weeks after the patient's last
administration of AXOKINE. It is not known whether AXOKINE had any role in this
patient's recurrence of Bell's palsy, and the patient recovered. Bell's palsy is
a potentially permanently disfiguring condition but most often resolves
spontaneously within weeks. Many researchers believe that Bell's palsy may be
caused by HSV.

         Based on the final results of the Phase I study, Regeneron expects to
start in March 2000 a double- blind, placebo-controlled Phase II dose-ranging
trial to study the safety and efficacy of AXOKINE in severely obese patients.
The study will be conducted in approximately 175 obese patients at six centers
with patients treated for 90 days at doses up to 2 mcg/kg/day, i.e., doses that
were not associated with


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herpes cold sores in the Phase I trial. There will be no restriction as to a
subject's prior history of herpes cold sores. The Phase II study is designed to
confirm the weight loss observed in the Phase I trial and determine the lowest
effective well-tolerated dose. The Company also plans to collect additional data
in the study about the relationship of AXOKINE and reactivation of HSV, about
the effect of AXOKINE on pulse rate, and about the possible development of
neutralizing antibodies when AXOKINE is administered for a longer time.

         No assurance can be made regarding the timing or final result of the
Phase II study or the timing or result of any further clinical trial of AXOKINE.
Previous clinical studies of CNTF, the parent molecule of AXOKINE, in addition
to weight loss, resulted in the creation of neutralizing antibodies and adverse
events (side effects) in patients, including cough, nausea, malaise, and
increased herpes simplex cold sores. While certain aspects of the development of
AXOKINE have focused on attempting to avoid or minimize antibody production or
adverse events, no assurance may be given that these problems will be avoided or
minimized or that they will not lead to the failure, delay, or additional
difficulty in conducting AXOKINE clinical trials. We discuss the risks
associated with antibody development and adverse side effects in the section of
this report titled "Factors That May Affect Operating Results."

         During 1999, Regeneron and Procter & Gamble continued to collaborate in
research and development in the fields of angiogenesis, bone growth and related
areas, muscle injury and atrophy, and small molecule (orally active) drugs.
Procter & Gamble's decision to return to Regeneron product rights to AXOKINE has
no impact on the broader Procter & Gamble - Regeneron relationship.

         Cytokines Traps. 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 (or
ILs). Research at Regeneron has led to proprietary insights into the receptors
and signal transduction mechanisms used by the 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, IL-6, and a single antagonist that blocks both IL-4 and IL-13. These
antagonists 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 Cytokine Traps. Because pathological levels of IL-1, IL-4, IL-6, and
IL-13 seem to contribute to a variety of disease states, these Cytokine Traps
have the potential to be important therapeutic agents. The approach to treating
serious diseases by blocking the action of cytokines has been validated by
approved drugs for the treatment of rheumatoid arthritis.

         In animal models, Regeneron's IL-1 trap blocks the activity of IL-1.
IL-1 is a principal mediator of joint inflammation characteristic of rheumatoid
arthritis and is thought to be responsible for cartilage and bone damage close
to the joint. Over two million people (1% of the U.S. population) are estimated
to have rheumatoid arthritis; of these, 10% eventually become disabled. A
recently reported study by another company suggested that blocking IL-1 may be
an effective therapeutic strategy to treat rheumatoid arthritis. Regeneron's
IL-1 trap is expected to be 1000 times more potent than this molecule, based
upon preclinical studies. Antagonists for IL-4 and IL-13 may be therapeutically
useful in an assortment of allergy and asthma-related disease situations in
which IL-4 and IL-13 are thought to play a contributory role and in a variety of
vaccination settings in which blocking IL-4 and IL-13 may help elicit more of
the desired type of immune response to the vaccine. Regeneron has developed both
an IL-4 trap and an IL-4/13 trap which is a single molecule that can block both
interleukin-4 and interleukin-13. IL-6 has been 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.


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         The Company's research regarding protein-based cytokine antagonists
currently includes molecular and cellular research to improve or modify the
Company's Cytokine Trap technology, process development efforts to produce
experimental and clinical research quantities of the Cytokine Traps, and in vivo
and in vitro studies to further understand and demonstrate the efficacy of the
Cytokine Traps. The Company plans to commence a clinical study of one of its
Cytokine Traps this year and one next year. The Company has patents covering
additional Cytokine Traps for IL-2, IL-3, IL-5, IL-15, gamma-interferon,
transforming growth factor beta, and others, which are being pursued at the
research level.

         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 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, additional clinical development of BDNF for ALS was suggested based on,
among other things, retrospective analyses of the data from that study.

         BDNF is 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
constipation associated with conditions such as spinal cord injury, use of
narcotic analgesics, and severe idiopathic constipation. Amgen and Regeneron are
developing NT-3 in the United States under a license from Takeda Chemical
Industries, Ltd.

         Angiogenesis and Hemopoiesis. 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 destroying blood vessels
(arteries, veins and capillaries) and compromising blood flow. Decreases in
blood flow (known as ischemia) can result in non-healing skin ulcers and
gangrene, painful limbs that cannot tolerate exercise, loss of vision, and heart
attacks. In other cases, disease processes can damage blood vessels by breaking
down vessel walls, resulting in defective and leaky vessels. Leaking vessels can
lead to swelling and edema, as occurs in brain tumors, following ischemic
stroke, in diabetic retinopathy, and in arthritis and other inflammatory
diseases. Finally, some disease processes such as tumor growth depend on the
induction of new blood vessels.

         Depending on the clinical situation, positively or negatively
regulating blood vessel growth could have important therapeutic benefits, as
could the repair of damaged and leaky vessels. Thus, building new vessels, by a
process known as angiogenesis, can improve circulation to ischemic limbs and
heart, aid in healing of skin ulcers or other chronic wounds, and in
establishing tissue grafts. Reciprocally, blocking tumor-induced angiogenesis
can blunt tumor growth. In addition, repairing leaky vessels can reverse
swelling and edema.

         Vascular endothelial growth factor (VEGF) was the first growth factor
shown to be specific for blood vessels, by virtue of having its receptor
specifically expressed on blood vessel cells. Regeneron scientists have used
their Targeted Genomics and Functionomics technology platforms to discover a
second family of angiogenic growth factors, termed the Angiopoietins, and
received patents for members of this family. The Angiopoietins include
naturally occurring positive and negative regulators of angiogenesis, as
described in numerous scientific manuscripts published by Regeneron scientists
and


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their collaborators.

         To discover the Angiopoietins, Regeneron scientists exploited their
platform technologies. They first used Targeted Genomics approaches to identify
a new family of growth factor receptor proteins expressed on blood vessels.
These proteins were termed orphan receptors because their putative ligands had
not yet been identified. Regeneron scientists then used functional expression
cloning technologies (Functionomics) to discover the growth factors for these
orphan receptors, which they termed the Angiopoietins. Finally, they and their
collaborators performed an assortment of functional studies to define the
biologic roles of the Angiopoietins and their potential applications in disease
processes.

         These studies have revealed that VEGF and the Angiopoietins normally
function in a coordinated and collaborative manner during blood vessel growth.
Thus, the growth of new blood vessels to nourish ischemic tissue seemingly
requires use of both these agents. Second, Angiopoietin-1 seems to play a
critical role in stabilizing the vessel wall, and the use of this growth factor
has the ability to prevent or repair leaky vessels. In terms of blocking vessel
growth, both VEGF and Angiopoietin manipulation seem to be of value. Currently,
Regeneron has a highly potent VEGF antagonist, termed the VEGF-Trap, in
preclinical development as an anti-angiogenic agent for cancer. In addition,
Regeneron has Angiopoietin-1 and engineered designer versions in preclinical
studies aimed at evaluating its utility for blocking blood vessel leak, and for
growing blood vessels in ischemia. Finally, as part of its collaboration with
Procter & Gamble, the Company is developing animal models and high-throughput
screens and conducting medicinal chemistry efforts to develop small molecule
regulators of angiogenesis.

         Hemopoietic stem cells and blood vessel cells share a common precursor,
termed the hemangioblast. The receptors for the Angiopoietins are thus also
expressed on hemopoietic lineage cells. The Angiopoietins are in preclinical
studies for their abilities to promote growth and mobilization of hemopoietic
stem cells and megakaryocytes.

         Regeneron and others have identified a family of growth factors termed
the Ephrins and their receptors termed the Ephs. Members of this family have
specific roles in angiogenesis and hemopoiesis, which are being pursued in
preclinical studies.

         This work in angiogenesis and hemopoiesis is being conducted in
collaboration with scientists at Procter & Gamble as part of the P&G Agreement.

         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 muscle program is currently focused on conducting in vivo and in
vitro experiments with the objective of demonstrating and further understanding
the molecular mechanisms involved in muscle atrophy. This work is being
conducted in collaboration with scientists at Procter & Gamble as part of the
P&G Agreement.

         Other Early Stage Programs: Cartilage Growth Factor Receptor System and
Osteoarthritis, Collagen Receptors and Fibrosis, and G-Protein Coupled
Receptors. Osteoarthritis results from the wearing down of the articular
cartilage surfaces that cover joints. Thus, growth factors that specifically act
on cartilage cells could have utility in osteoarthritis. Using their platform
technologies that utilize Targeted Genomics to discover orphan receptors,
together with their functional biology capabilities, Regeneron scientists have
discovered a growth factor receptor system selectively expressed by cartilage
cells, termed Regeneron Orphan Receptor 2 (ROR2). Furthermore, Regeneron
scientists demonstrated that this growth factor receptor system is required for
normal cartilage development in mice as revealed by gene knockout technology. In
addition, together with collaborators, Regeneron scientists have demonstrated 
that mutations in this growth factor receptor system cause inherited defects in
cartilage development in humans.


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Thus, this growth factor receptor system is an exciting new target for cartilage
diseases such as osteoarthritis.

         Fibrotic diseases, such as cirrhosis, result from the excess production
of fibrous extracellular matrix by certain cell types that are inappropriately
activated in these diseases. Regeneron scientists and their collaborators
identified orphan receptors, termed Discoidin Domain Receptors 1 and 2 (DDR1 and
DDR2) that are expressed by the activated cell types in fibrotic disease.
Regeneron scientists have further shown that these receptors bind and are
activated by the fibrous matrix they produce. Thus, these receptors are
important new targets in fibrotic disease.

         The Company also has an intensive program to discover and characterize
G-Protein Coupled Receptors, which have historically been among the most useful
targets for pharmaceuticals.

         The work in these programs is being conducted in collaboration with
scientists at Procter & Gamble as part of the P&G Agreement.


Collaborative Relationships

         The Company conducts many of its programs in collaboration with Procter
& Gamble. In May 1997, the Company entered into a ten-year collaboration
agreement with Procter & Gamble to discover, develop and commercialize
pharmaceutical products. 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, of
which, as of December 31, 1999, Procter & Gamble had purchased $42.9 million (in
addition to a $10.0 million purchase of Regeneron Common Stock in March 1997
pursuant to the December 1996 agreement). In addition, Procter & Gamble agreed
over the first five years of the various agreements to provide up to $94.7
million in support of Regeneron's research efforts related to the collaboration,
of which the Company had received $24.0 million as of December 31, 1999.

         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 reimburse the Company for certain research
and development costs and pay the Company as much as $15.0 million in additional
funding, partly subject to achieving certain milestones related to AXOKINE, of
which a total of $10.0 million was paid in 1997 and 1998.

         In the first quarter of 1999, the Company and Procter & Gamble
commenced a Phase I clinical study to determine the safety of AXOKINE
administered subcutaneously for a short duration to mildly to moderately obese
healthy volunteers. In September 1999, Regeneron summarized preliminary, interim
results of the Phase I safety study. After examining the interim data from the
Phase I study (including the possibility that the market for AXOKINE might be
limited to herpes simplex virus (commonly called HSV) - negative patients) as
part of an internal review of drug development programs and budgets, Procter &
Gamble decided to return to Regeneron the product rights to AXOKINE. The Company
and Procter & Gamble completed the Phase I study in HSV - negative patients.
Based on the final results of the Phase I study, Regeneron expects to start in
March 2000, a double-blind, placebo-controlled Phase II dose-ranging trial to
study the safety and efficacy of AXOKINE in severely obese patients. Under
certain circumstances, Procter & Gamble will continue to be entitled to receive
a small royalty on any sales of AXOKINE.

         During 1999, Regeneron and Procter & Gamble continued to collaborate in
research and development in the fields of angiogenesis, cancer, bone growth and
related areas, muscle injury and atrophy, and small molecule (orally active)
drugs. The majority of Regeneron's scientific resources are


                                        9

<PAGE>


devoted to its collaborative activities with Procter & Gamble. Procter &
Gamble's decision to return to Regeneron product rights to AXOKINE has no impact
on the broader Procter & Gamble - Regeneron relationship.

         Regeneron continues to develop, independent of any corporate
collaboration, its proprietary Cytokine Traps for the potential treatment of
rheumatoid arthritis and other inflammatory diseases, asthma, and allergic
disorders.

         The Company and Amgen Inc., are conducting clinical trials of BDNF and
NT-3 on behalf of Amgen-Regeneron Partners, a general partnership owned equally
by Regeneron and Amgen. 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, supplied
by Medtronic, Inc.) and subcutaneous (injection under the skin). In the fourth
quarter of 1998, Amgen, on behalf of the partnership, began an intrathecal study
in more than 200 patients with ALS. Subcutaneous studies conducted by Regeneron
on behalf of the partnership began in the first quarter of 1998. The
subcutaneous studies are based on an analysis of the Amgen-Regeneron Partners
Phase III trial of BDNF for ALS that was completed in 1996. That trial failed to
achieve its predetermined end points, but subsequent analyses indicated that a
retrospectively-defined subset of ALS patients in the trial may have received a
survival benefit from BDNF treatment. A double-blind, placebo-controlled,
multi-center study of more than 300 ALS patients who will receive BDNF
subcutaneously began in August 1999.

         Regeneron and Sumitomo Pharmaceuticals Co., Ltd. are collaborating in
the development of BDNF in Japan, initially for the treatment of ALS. In March
1998, Sumitomo Pharmaceuticals commenced a Phase I safety assessment of BDNF
delivered subcutaneously to normal volunteers and signed a license agreement for
the development of BDNF in Japan. Pursuant to the license agreement, Sumitomo
Pharmaceuticals made a $5.0 million research progress payment (reduced by $0.5
million of Japanese withholding tax) to Regeneron in 1998 and will be required
to make additional payments upon the achievement of specified milestones.
Sumitomo Pharmaceuticals will also pay a royalty on sales of BDNF in Japan.

         Amgen-Regeneron Partners' clinical development of NT-3 is currently
focused on constipating conditions. In 1998, Regeneron, on behalf of
Amgen-Regeneron Partners, completed a small clinical study that included healthy
volunteers and patients suffering from severe idiopathic constipation, and began
additional exploratory studies that are continuing in 2000 in patients who
suffer from constipation associated with conditions such as spinal cord injury
and the use of narcotic analgesics. In February 2000, Regeneron initiated a
double-blind, placebo-controlled Phase II study in more than 100 patients with
functional constipation.

         From 1996 to 1999, Regeneron conducted research with Pharmacopoeia,
Inc. in the area of small molecule drugs. That collaboration agreement
terminated in the fourth quarter of 1999, in accordance with its terms.

         Additional information about the Company's agreements with Procter &
Gamble, Amgen, and Sumitomo Pharmaceuticals (among others) is provided below in
the section titled "Research Collaboration and Licensing Agreements."

Operating results

         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, 1999, the Company had an accumulated deficit of $200.3
million.

         To date, the Company has received revenues from its licensees and
collaborators for research and 


                                       10

<PAGE>



development efforts, from Merck & Co., Inc. 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, 1999 was $51.1 million. The Company expects that its capital
contributions in 2000 will total at least $4.5 million. These contributions
could increase or decrease, depending upon (among other things) the nature and
cost of ongoing and additional BDNF and NT-3 studies that Amgen-Regeneron
Partners may conduct and the outcomes of those studies. 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.

         A 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.


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 Sumitomo Pharmaceuticals to develop BDNF for commercialization in
Japan, and with Procter & Gamble to discover, develop, and market protein- and
small molecule-based pharmaceuticals.

         Agreement with The Procter & Gamble Company. In May 1997, the Company
entered into a 


                                       11

<PAGE>


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. 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. Procter & Gamble agreed over the first five years of the various
agreements to provide up to $94.7 million in support of Regeneron's research
efforts related to the collaboration, of which the Company had received $24.0
million as of December 31, 1999.

         In September 1997, the Company and Procter & Gamble expanded the P&G
Agreement to include AXOKINE and related molecules (delivered systematically),
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, $5.0 million was paid in 1997 and $5.0 million
was paid in 1998. The 1998 payment was made in connection with the companies'
execution of a development agreement for AXOKINE and other potential drug
candidates. In September 1999, Procter & Gamble returned to Regeneron the
product rights to AXOKINE. Under certain circumstances, Procter & Gamble will be
entitled to receive a small royalty on any sales of AXOKINE.

         Under the P&G Agreement any drugs that may result from the
collaboration will be jointly developed and marketed, with the parties equally
sharing development costs and profits. In addition, during the second five years
of the P&G Agreement, the companies will share all collaboration costs equally.
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 are the Company's neurotrophic
factor and cytokine research programs, which will continue to be developed
independent of the Procter & Gamble collaboration, including Regeneron's
collaborative activities with Amgen, 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.

         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, 1999, the Company has recognized
contract research and development revenue totaling $47.3 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


                                       12

<PAGE>


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 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 may, however, approve 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, Inc., 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 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 agreed to pay up to $40.0 million to
Regeneron, including $25.0 million in research payments (all of which Regeneron
has received) and up to $15.0 million in progress payments payable upon
achievement of certain development milestones, of which $5.0 million was
received (reduced by $0.5 million of Japanese withholding tax) in August 1998 in
connection with Sumitomo's initiating a Phase I safety study of BDNF 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 $0.1 million in 1999, $1.3 million in 1998, and $7.6 million in 1997.
The agreement may be terminated by Sumitomo Pharmaceuticals at its 


                                       13

<PAGE>


discretion; such termination would result in the reversion to Regeneron of all
rights to BDNF in Japan.

         Agreement with Sumitomo Chemical Company, Ltd. In connection with a
$4.4 million equity investment made by Sumitomo Chemical Company, Ltd. (or
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.

         Other Agreements. The Company has agreements with individual
researchers and universities to conduct sponsored research and development
programs. The goal of these 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).

         The Company has also collaborated with Glaxo Wellcome plc to discover
and develop small molecule-based treatments for neurodegenerative diseases. The
research term of the Glaxo collaboration has expired but was extended in 1998 by
mutual agreement to allow the parties to continue to pursue early stage research
in a limited area, the duration and outcome of which are uncertain.

         In addition to these sponsored research agreements, the Company
(individually or in partnership with Amgen pursuant to the Amgen Agreement or
with 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 maintains a manufacturing facility in Tarrytown, New York.
This facility, which was designed to comply with FDA current good manufacturing
practices (called 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 a vaccine intermediate for Merck. The 


                                       14

<PAGE>


Company may use the facility to produce other product candidates and materials 
in the future.

         In 1995, the Company entered into a long-term manufacturing agreement
with Merck (called, as amended, the Merck Agreement) to produce an intermediate
for a Merck pediatric vaccine at the Company'sRensselaer facility. The Company
agreed to modify portions of the facility for manufacture of the Merck
intermediate and to assist Merck in securing regulatory approval for such
manufacture in the Rensselaer facility. In December 1999, Regeneron announced
that the FDA had approved Regeneron as a contract manufacturer for the Merck
intermediate. Under the Merck Agreement, the Company will manufacture
intermediate for Merck for six years, with certain minimum order quantities each
year. The Merck Agreement is expected to extend to 2005 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 and for
the cost of Company activities performed on behalf of Merck prior to the start
of production. Merck also agreed to pay an annual facility fee of $1.0 million,
subject to annual adjustment for inflation, reimburse the Company for certain
manufacturing costs, pay the Company a variable fee based on the quantity of
intermediate supplied to Merck, and make certain additional payments. The
Company recognized contract manufacturing revenue related to the Merck Agreement
of $10.0 million in 1999, $9.1 million in 1998, and $4.5 million in 1997. There
can be no assurance that the Company will be able to manufacture the Merck
intermediate successfully for six years, or that Merck will not terminate the
Merck Agreement. Any of these events could have a severe negative impact on the
operations and financial condition of the Company.

         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 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 and
pharmaceutical industries. 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. 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. 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. 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.

         There is substantial competition in the discovery and development of
treatments for obesity and obesity-related morbidities, including Type II
diabetes, as well as established and cost-effective and emerging prescription
and over-the-counter treatments for these conditions. For example, Amgen and a
number of other pharmaceutical companies are developing leptin and related
molecules; clinical trials of leptin are currently underway. Many firms and
entities are engaged in research and development in the areas of cytokines,
interleukins, angiogenesis, and muscle conditions. Some of these competitors are
currently conducting advanced preclinical and clinical research programs in
these areas; these and other competitors may have established substantial
intellectual property and other competitive advantages. 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-


                                       15

<PAGE>


counter or prescription treatments. Many pharmaceutical and biotechnology
companies are attempting to discover and develop small-molecule based 
therapeutics, similar in at least certain respects to Regeneron's program with
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. 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, as well as many
others.

         More specifically and as an illustrative example of the foregoing, the
Company's efforts to develop treatments for neurological diseases and conditions
are being conducted in a highly competitive environment. 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, including Rhone-Poulenc Rorer and Sanofi Pharmaceuticals, Inc. Amgen
and the Company are direct competitors in the field of neurotrophic factors and
possibly other fields. Other potential competitors include Genentech and
Cephalon, Inc., which is in a collaboration with Chiron Corporation. 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. 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 are orally administered. The competitive
environment in which the Company is developing treatments for asthma or other
inflammatory conditions, obesity, diabetes, and other conditions could be
similarly described.

         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.


                                       16

<PAGE>


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 innovation to
develop and maintain its competitive position. The Company or its licensors 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. 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 and Takeda. 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 relevant 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. 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 and to provide a
simple mechanism for resolving their patent interference and related oppositions
and other patent proceedings relating to CNTF and AXOKINE without protracted
litigation. The Company also granted Amgen a license to use CNTF and second
generation CNTFs other than AXOKINE to treat retinal degenerative conditions.
Under this agreement, Amgen is free to develop CNTF or second generation CNTFs
for obesity, in competition with Regeneron's AXOKINE. Regeneron party will not
pay royalties or


                                       17

<PAGE>


make other payments to the other party in consideration of this agreement


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, record keeping, 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, 1999, the Company had 437 full-time employees, 82 of
whom hold a Ph.D. and/or M.D. degree. 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.



I
tem 2.  Properties

         Regeneron conducts its research, development, manufacturing, and
administrative activities at its own facilities. The Company currently leases
approximately 138,600 square feet of office, laboratory, and manufacturing space
in Tarrytown, New York. The current monthly base rental charge is $236,683 plus
additional rental charges for utilities, increases in taxes and operating
expenses, as defined. The lease for this facility expires on June 30, 2003, and
the Company has a renewal option to extend the lease for an additional five-year
period. The Company owns the Rensselaer facility, consisting of two buildings
totaling approximately 104,000 square feet of research, manufacturing, office,
and warehouse space.


                                       18

<PAGE>


         As the Company's activities expand, additional space may be required.
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 with respect to their activities relating to CNTF and AXOKINE.
The agreement also provides a simple mechanism for resolving their patent
interferences and related opposition and other patent proceedings relating to
CNTF and AXOKINE without protracted litigation. The Company also granted Amgen a
license to use CNTF and second generation CNTFs other than AXOKINE to treat
retinal degenerative conditions. Regeneron will not pay royalties or make other
payments to Amgen 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, 1999, 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.


Executive Officers of the Registrant

         Listed below are the executive officers of the Company as of March 3,
2000. 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 9, 2000.





                                       19

<PAGE>



<TABLE>
<CAPTION>
                  Name                     Age                Position
--------------------------------------------------------------------------------------------
<S>                                        <C>    <C>                                       
Leonard S. Schleifer, M.D., Ph.D.          47     Chief Executive Officer, President, and
                                                  founder of the Company

George D. Yancopoulos, M.D., Ph.D.         40     Senior Vice President, Research, and Chief
                                                  Scientific Officer

Jesse M. Cedarbaum, M.D.                   48     Vice President, Clinical Affairs

Murray A. Goldberg                         55     Vice President, Finance & Administration,
                                                  Chief Financial Officer, Treasurer, and
                                                  Assistant Secretary

Hans-Peter Guler, M.D.                     51     Vice President, Clinical Sciences

Stephen L. Holst                           58     Vice President, Quality Assurance and
                                                  Regulatory Affairs

Richard X. Horne                           49     Staff Vice President, Human Resources


William G. Roberts, M.D.                   42     Vice President, Regulatory Development


Randall G. Rupp, Ph.D.                     53     Vice President, Manufacturing and Process
                                                  Science

Joseph M. Sorrentino, Ph.D.                48     Vice President, Intellectual Property

Neil Stahl, Ph.D.                          43     Vice President, Preclinical Development and
                                                  Biomolecular Science

David M. Valenzuela, Ph.D.                 49     Vice President, Genomics and Bioinformatics

Douglas S. McCorkle                        43     Controller and Assistant Treasurer

Beverly C. Dubs                            45     Administrative Controller and Assistant
                                                  Treasurer
</TABLE>





                                     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.


                                       20

<PAGE>


         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
                                               ----             ---
              1998                           
                         First Quarter        $9.375          $7.000
                         Second Quarter       11.000           7.250
                         Third Quarter         9.656           5.750
                         Fourth Quarter        8.625           5.750
                                             
              1999                           
                         First Quarter       $10.125          $6.375
                         Second Quarter        8.250           5.375
                         Third Quarter         9.938           6.875
                         Fourth Quarter       13.000           6.500
                                 
          As of February 28, 2000, there were approximately 737 holders of
record of the Company's Common Stock and 74 holders of record of the Company's
Class A Stock. The closing bid price for the Common Stock on that date was
$45.125.

           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.



Item 6.    Selected Financial Data

           The selected financial data set forth below for the years ended
December 31, 1999, 1998, and 1997 and at December 31, 1999 and 1998 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, 1996 and 1995 and
December 31, 1997, 1996, and 1995 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.


                                       21

<PAGE>



<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                  ----------------------------------------------------------------------
                                                      1999          1998           1997           1996          1995
                                                  -----------   ------------    -----------    ----------   ------------

Statement of Operations Data                                      (in thousands, except per share data)

<S>                                               <C>           <C>             <C>            <C>          <C>    
Revenues
         Contract research and development            $24,539        $19,714        $17,400       $17,303        $23,247
         Research progress payments                                    9,500          5,000
         Contract manufacturing                         9,960          9,113          4,458         2,451          1,140
         Investment income                              5,207          6,866          6,242         4,360          2,997
                                                  -----------   ------------    -----------    ----------   ------------
                                                       39,706         45,193         33,100        24,114         27,384
                                                  -----------   ------------    -----------    ----------   ------------
Expenses
         Research and development                      44,940         37,047         27,770        28,269         23,310
         Loss in Amgen-Regeneron Partners               4,159          2,484          3,403        14,250         13,805
         General and administrative                     6,355          5,838          5,765         5,880          5,764
         Depreciation and amortization                  3,426          3,019          4,389         6,084          5,886
         Contract manufacturing                         3,612          5,002          2,617         1,115             72
         Interest                                         284            428            735           940          1,205
         Other                                                                                                       850
                                                  -----------   ------------    -----------    ----------   ------------
                                                       62,776         53,818         44,679        56,538         50,892
                                                  -----------   ------------    -----------    ----------   ------------
Net loss                                            ($23,070)       ($8,625)      ($11,579)     ($32,424)      ($23,508)
                                                  ===========   ============    ===========    ==========   ============

Net loss per share, basic and diluted                 ($0.74)        ($0.28)        ($0.40)       ($1.33)        ($1.19)
                                                  ===========   ============    ===========    ==========   ============


<CAPTION>
                                                                          At December 31,
                                                  ----------------------------------------------------------------------
                                                      1999          1998           1997           1996          1995
                                                  -----------   ------------    -----------    ----------   ------------

Balance Sheet Data                                                         (in thousands)
                                                                            ------------

<S>                                               <C>           <C>             <C>            <C>            <C>
Cash, cash equivalents,
    and marketable securities                     $93,599       $113,530        $128,041       $97,028        $59,622
Working capital                                    59,725         83,499          88,953        72,960         36,254
Total assets                                      136,999        156,915         168,380       137,582         93,811
Capital lease obligations and note
    payable, long-term portion                      2,731          3,066           3,752         5,148          5,978
Stockholders' equity                              109,532        131,227         138,897       106,931         67,856

</TABLE>




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. and actual events or results may differ
materially. These statements concern, among other things, the possible
therapeutic applications of Regeneron's product candidates and research
programs, the timing and nature 


                                       22

<PAGE>


of the clinical and research programs now underway or planned, a variety of
items described herein and in the footnotes to Regeneron'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 Regeneron.
These statements are made by Regeneron 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 Pharmaceuticals, Inc. (Regeneron or the Company) is a
biopharmaceutical company that discovers, develops, and intends to commercialize
therapeutic drugs for the treatment of serious medical conditions. Expanding
from our initial focus on degenerative neurologic diseases, we have more
recently broadened our product pipeline to include drug candidates for the
treatment of obesity, rheumatoid arthritis, cancer, allergies, asthma, ischemia,
and other diseases and disorders.

           Our ability to discover and develop product candidates for such a
wide variety of serious medical conditions results from the leveraging of
several powerful technology platforms, many of which were developed or enhanced
by us. In contrast to basic genomics approaches, which attempt to identify every
gene in a cell or genome, we use Targeted Genomics and Functionomics
(functional cloning) technology platforms that are designed to discover
specific genes of therapeutic interest for a particular disease or cell type.
Using these approaches, we have discovered many new families of growth factors
and receptors, most of which are already protected by issued patents, and which
have led to several product candidates. In cases in which the natural gene
product is itself not a product candidate, we utilize our Designer Protein
Therapeutics platform to genetically engineer product candidates with the
desired properties. This technology platform has already produced more than 10
patented proteins, several of which are in preclinical development.

           The sophisticated application of all of these technology platforms,
coupled with our biologic expertise in disease modeling, have allowed us to
discover drug candidates that address a wide variety of important medical needs.
Relative to many participants in the biotechnology and genomics industry, we are
well-positioned with three products in ongoing clinical trials and several 
product candidates planned to enter clinical trials over the next one to two 
years, including:

         o    AXOKINE(R) second generation ciliary neurotrophic factor: Acts on
              the brain region regulating food intake and energy expenditure.
              AXOKINE is being developed for the treatment of obesity and
              complications of obesity such as Type II diabetes, and is now
              in clinical trial.

         o    Cytokine Traps: Antagonists for cytokines such as interleukin-1
              (called IL-1), interleukin-4 (IL-4), interleukin-13 (IL-13), and
              interleukin-6 (IL-6). These cytokines are thought to play a major
              role in diseases such as rheumatoid arthritis and other
              inflammatory diseases, asthma, allergic disorders, and cancer.
              Cytokine Traps are potential treatments for these diseases, and at
              least one Cytokine Trap is expected to enter clinical trials by
              2001.

         o    VEGF Trap: An antagonist to Vascular Endothelial Growth Factor
              (called VEGF), which is required for the growth of blood vessels
              that are needed for tumors to grow. VEGF Trap is a potential
              treatment for cancer and is expected to enter clinical trial in
              2001.

         o    Angiopoietins: A new family of growth factors, discovered by us,
              that are specific for blood vessels and early hemopoietic stem
              cells. The Angiopoietins, and engineered forms of these growth
              factors that can act as activators and blockers, are in
              preclinical testing for promoting the growth of blood vessels (to
              provide blood flow in diseased hearts and other tissues that


                                       23

<PAGE>


              have lost their original blood supplies), for the blocking of
              blood vessel growth (for the treatment of cancers), for fixing
              leaky blood vessels (that cause swelling and edema in diseases
              such as stroke, diabetic retinopathy, and inflammatory diseases),
              and for promoting the growth and mobilization of certain
              hemopoietic cells such as stem cells and platelets.

         o    Brain-derived neurotrophic factor: Promotes survival of the spinal
              cord neurons that die in amyotropic lateral sclerosis (or ALS,
              commonly known as Lou Gehrig's Disease), and is in clinical trial
              for ALS.

         o    Neurotrophin-3, or NT-3: Acts on the neurons of the intestinal
              tract, and is in clinical trial for the treatment of constipating
              disorders.

         Regeneron has not received any revenues from the commercial sale of
products and may never receive such revenues. Before such revenues can be
realized, Regeneron (or its collaborators) must overcome a number of hurdles
which include successfully completing its research and development efforts and
obtaining regulatory approval from the 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
Regeneron's products and technologies noncompetitive or obsolete.

         From inception on January 8, 1988 through December 31, 1999, Regeneron
had a cumulative loss of $200.3 million. In the absence of revenues from
commercial product sales or other sources (the amount, timing, nature, or source
of which cannot be predicted), Regeneron's losses will continue as it 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. Regeneron'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 its research
and development efforts.


Results of Operations

         Years Ended December 31, 1999 and 1998. The Company's total revenue
decreased to $39.7 million in 1999 from $45.2 million in 1998, as higher
contract research and development revenue and higher contract manufacturing
revenue were more than offset by non-recurring research progress payments and
lower investment income. Contract research and development revenue increased to
$24.5 million in 1999 from $19.7 million in 1998, as revenue from Procter &
Gamble increased to $20.8 million in 1999 from $13.5 million in 1998. Effective
in the third quarter of 1999, research support under the P&G Agreement increased
from $1.1 million per quarter to $7.0 million per quarter. However, Procter &
Gamble payments related to AXOKINE research declined in 1999 as AXOKINE
progressed into clinical trials and because Procter & Gamble stopped funding
AXOKINE research in the third quarter of 1999 after it returned the product
rights to AXOKINE to the Company. Regeneron also earned nominal revenue in 1999
from its ongoing collaboration with Sumitomo Pharmaceuticals, compared to $4.3
million in 1998, as research payments under the Company's collaboration
agreement with Sumitomo Pharmaceuticals ended in 1998 and because the Company
did not supply any BDNF to Sumitomo Pharmaceuticals in 1999 for preclinical and
clinical use. In addition, in 1998 Regeneron received non-recurring research
progress payments totaling $9.5 million, consisting of $5.0 million from
Sumitomo Pharmaceuticals related to the development of BDNF in Japan (reduced by
$0.5 million of Japanese withholding tax) and $5.0 million from Procter & Gamble
in connection with the AXOKINE collaboration. Contract manufacturing revenue
related to the long-term manufacturing agreement with Merck & Co., Inc.
increased to $10.0 million in 1999, compared to $9.1 million in 1998, as a
result of increased activity in preparation for manufacturing an intermediate
for an existing Merck pediatric vaccine at the Company's Rensselaer, New York
facility. Investment income in 1999 decreased to $5.2 million from $6.9 million
in 1998 due mainly to lower levels


                                       24

<PAGE>


of interest-bearing investments as the Company funds its operations.

         The Company's total operating expenses increased to $62.8 million in
1999 from $53.8 million in 1998. Research and development expenses increased to
$44.9 million in 1999 from $37.0 million in 1998, primarily as a result of
higher staffing and increased activity in the Company's preclinical and clinical
research programs. The loss in Amgen-Regeneron Partners increased to $4.2
million in 1999 from $2.5 million in 1998 as a result of the partnership's
increased clinical trial activity on BDNF and NT-3. Research and development
expenses (including loss in Amgen-Regeneron Partners) were 78% of total
operating expenses in 1999, compared to 73% in 1998.

         General and administrative expenses increased to $6.4 million in 1999
from $5.8 million in 1998 due primarily to an increase in patent expenses
related to U.S. and foreign patent filings and higher administrative staffing.
Depreciation and amortization expense increased to $3.4 million in 1999 from
$3.0 million in 1998, resulting primarily from improvements made to the
Company's leased research facilities and offices in Tarrytown, New York.
Contract manufacturing expenses, which relate directly to the Merck Agreement,
decreased to $3.6 million in 1999 from $5.0 million in 1998. During the fourth
quarter of 1999, the United States Food and Drug Administration approved
Regeneron as a contract manufacturer for the Merck intermediate, and the Company
commenced commercial production and began capitalizing manufacturing costs into
inventory. This resulted in a decrease in contract manufacturing expenses, as
the Company discontinued the expensing of pre-commercial production costs and
began capitalizing inventory costs.

         The Company's net loss in 1999 was $23.1 million, or $0.74 per share
(basic and diluted), compared to a net loss of $8.6 million, or $0.28 per share
(basic and diluted), in 1998.

         Years Ended December 31, 1998 and 1997. The Company's total revenue
rose to $45.2 million in 1998 from $33.1 million in 1997, as contract research
and development revenue, research progress payments, contract manufacturing
revenue, and investment income all increased. Contract research and development
revenue increased to $19.7 million in 1998 from $17.4 million in 1997, as higher
revenue related to the P&G Agreement more than offset a decrease in revenue from
the Company's ongoing collaboration with Sumitomo Pharmaceuticals. In 1998,
research progress payments of $9.5 million consisted of a payment of $5.0
million from Sumitomo Pharmaceuticals related to the development of BDNF in
Japan (reduced by $0.5 million of Japanese withholding tax) and a payment of
$5.0 million from Procter & Gamble in connection with the AXOKINE collaboration.
In 1997, research progress payments of $5.0 million were received from Procter &
Gamble in connection with the September 1997 amendment to the P&G Agreement
related to AXOKINE. Contract manufacturing revenue related to the Merck
manufacturing agreement increased to $9.1 million in 1998 compared to $4.5
million in 1997 as a result of increased activity in preparation for
manufacturing a product for Merck at the Company's Rensselaer facility.
Investment income in 1998 increased to $6.9 million from $6.2 million in 1997,
due mainly to higher levels of interest-bearing investments resulting primarily
from the proceeds of a private placement of equity securities with Procter &
Gamble in June 1997.

         The Company's total operating expenses increased to $53.8 million in
1998 from $44.7 million in 1997. Research and development expenses increased to
$37.0 million in 1998 from $27.8 million in 1997, primarily as a result of
higher staffing and increased activity in the Company's preclinical and clinical
research programs. The loss in Amgen-Regeneron Partners decreased to $2.5
million in 1998 from $3.4 million in 1997, due to lower research and development
expenses by the Partnership. Research and development expenses (including loss
in Amgen-Regeneron Partners) were approximately 73% of total operating expenses
in 1998, compared to 70% in 1997.

         General and administrative expenses were $5.8 million in both 1998 and
1997. Depreciation and 


                                       25

<PAGE>


amortization expense decreased to $3.0 million in 1998 from $4.4 million in
1997, as certain laboratory equipment and leasehold improvements became fully
depreciated. Contract manufacturing expenses, which are expenses directly
related to the Merck Agreement and are reimbursed by Merck, increased to $5.0
million in 1998 from $2.6 million in 1997, primarily due to increased activity
in preparation for manufacturing a product for Merck. Interest expense decreased
to $0.4 million in 1998 from $0.7 million in 1997 as the amount of outstanding
obligations in connection with capital leases declined.

         The Company's net loss in 1998 was $8.6 million, or $0.28 per share
(basic and diluted), compared to a net loss of $11.6 million, or $0.40 per share
(basic and diluted), in 1997.


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 agreements between the Company and Amgen,
Sumitomo Chemical Company, Ltd., Sumitomo Pharmaceuticals, Merck, and Procter &
Gamble and investment income.

         In May 1997, Regeneron 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 (of which $42.9
million was purchased in June 1997) and provide up to $94.7 million in support
of Regeneron's research efforts related to the collaboration (of which $24.0
million was received through December 31, 1999). 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
generally 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 if a defined event of default occurs. 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 reimburse the Company for certain research and development costs and
made research progress payments to Regeneron of $5.0 million in both 1997 and
1998 in part due to the achievement of certain milestones related to AXOKINE.
During the third quarter of 1999, Procter & Gamble returned product rights to
AXOKINE to Regeneron and is not expected to make further payments to Regeneron
related to AXOKINE. The decision by Procter & Gamble to terminate the joint
development of AXOKINE has no effect on the broader ten-year collaborative P&G
Agreement under which, beginning in the third quarter of 1999, research support
from Procter & Gamble, aside from amounts related to AXOKINE, increased from
$1.1 million per quarter to at least $6.3 million per quarter through June 2002.

         In connection with Regeneron's agreement to collaborate with Sumitomo
Pharmaceuticals in the research and development of BDNF in Japan, Sumitomo
Pharmaceuticals paid the Company $25.0 million through December 1997. The
Company also received a $5.0 million research progress payment from Sumitomo
Pharmaceuticals (reduced by $0.5 million of Japanese withholding tax) in August
1998. In addition, Sumitomo Pharmaceuticals has paid the Company $27.6 million
through December 31, 1999 in connection with supplying BDNF for preclinical and
clinical use. Regeneron did not supply any BDNF to Sumitomo Pharmaceuticals in
1999. During the fourth quarter of 1999, Regeneron commenced production of BDNF
and began capitalizing manufacturing costs into inventory. The Company resumed
supplying BDNF to Sumitomo Pharmaceuticals in the first quarter of 2000.

         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 


                                       26

<PAGE>


revenue. The funding of Amgen-Regeneron Partners 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 $51.1 million
to Amgen-Regeneron Partners from the partnership's inception in June 1993
through December 31, 1999. These contributions could increase or decrease,
depending upon (among other things) the nature and cost of BDNF and NT-3 studies
that Amgen-Regeneron Partners may conduct and the outcomes of those studies.

         From its inception in January 1988 through December 31, 1999, the
Company invested approximately $65.3 million in property, plant, and equipment.
This includes $16.8 million to acquire and renovate the Rensselaer facility and
an additional $14.1 million to complete construction at the facility pursuant to
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 $1.6 million is outstanding.
Under the terms of this UDC financing, the Company is not permitted to declare
or pay dividends on its equity securities.

         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. 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, provided a simple mechanism for resolving their patent interference and
related patent proceedings relating to CNTF and AXOKINE without protracted
litigation. The Company also granted Amgen a license to use CNTF and second
generation CNTFs other than AXOKINE to treat retinal degenerative conditions.
Regeneron will not pay royalties or make other payments to the other party in
consideration of this agreement.

         As of December 31, 1999, 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 Procter & Gamble in the form of research funding and
equity purchases of as much as $90 million or more.

         At December 31, 1999, the Company had $93.6 million in cash, cash
equivalents, and marketable securities. 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. Through 2000, the Company expects further increases in
the level of quarterly research and development expenses as the Company
continues to add staff and increases its clinical activity. 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 under its current strategy its existing capital resources will
enable it to meet operating needs for 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.


                                       27

<PAGE>


Future Impact of Recently Issued Accounting Standards

         Management believes that the future adoption of recently issued
accounting standards will not have a material impact on the Company's financial
statements, except that the Company is currently evaluating the future impact
that Staff Accounting Bulletin 101, "Revenue Recognition", issued in December
1999 by the Securities and Exchange Commission, will have on its financial
statements.


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 of a clinical trial of any of the
              Company's product candidates. A clinical trial can fail or be
              delayed as a result of many causes, including, among others,
              failure of the product candidate to demonstrate safety or
              efficacy, the development of serious or life- threatening adverse
              events (side effects) caused by or connected with exposure to the
              product candidate, and the failure of clinical investigators,
              trial monitors and other consultants, or trial subjects to comply
              with the trial plan or protocol.

        o     In addition to the safety, efficacy, manufacturing, and regulatory
              hurdles faced by Regeneron's drug candidates, the administration
              of recombinant proteins frequently causes an immune response,
              resulting in the creation of antibodies against the therapeutic
              protein. The antibodies can have no effect or can totally
              neutralize the effectiveness of the protein, or require that
              higher doses be used to obtain a therapeutic effect. In some
              cases, the antibody can cross react with the patient's own
              proteins, resulting in an "auto-immune type" disease. Whether
              antibodies will be created can often not be predicted from
              preclinical experiments and their appearance is often delayed, so
              that there can be no assurance that neutralizing antibodies will
              not be created at a later date -- in some cases even after pivotal
              clinical trials have been successfully completed. Patients who
              have been treated with AXOKINE, BDNF, and NT-3 have developed
              antibodies, though we have no information that indicates that
              these antibodies are neutralizing antibodies.


                                       28

<PAGE>


         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.

         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 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 Regeneron and its 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.


                                       29

<PAGE>


         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 and into conditions or
diseases outside of Regeneron's current areas of experience and expertise, the
Company will require additional internal expertise or external collaborations in
areas in which it currently does not have substantial resources and personnel.


Year 2000

         The Company has evaluated its operations to determine the impact, if
any, that Year 2000 problems might have. The Year 2000 problem results from
computer programs and devices that do not differentiate between the year 1900
and the year 2000 because they were written using two digits rather than four to
define the applicable year. Accordingly, computer systems that have
time-sensitive calculations may not properly recognize the year 2000. Like many
corporations, Regeneron has no previous experience with an issue like the Year
2000 problem.

         The Company appointed a Year 2000 task force with representatives from
each department of the Company and retained independent consultants and experts
to facilitate its review. The Company's Year 2000 review included its computer
systems and software, embedded systems in non-computer equipment, and vendor
operations. The Company identified the following three principal areas of
potential computer systems exposure at Regeneron to the Year 2000 problem, in
addition to third party issues which are discussed elsewhere:

        o     Process control, instruments, and environmental monitoring and
              control systems: these types of systems are used in the Company's
              manufacturing and research and development processes, among other
              operations. These generally are systems, devices, and instruments
              which use date functionality and generate, send, receive, or
              manipulate date-stamped data and signals. These systems may be
              found in data acquisition/processing software, laboratory
              instrumentation, and other equipment with embedded code, for
              example. These devices and instruments may be controlled by
              installed software, firmware, or other embedded control
              algorithms.

         o    Servers, desktops, and infrastructure: these generally are desktop
              computers (Macintosh and PCs) and server computer equipment,
              telecommunications, local area networks, wide area networks, and
              include system hardware, firmware, installed commercial
              application software, e- mail, and video teleconferencing, for
              example.

         o    Custom applications and business systems: these generally are
              applications purchased from an external vendor. These systems
              include applications developed or purchased by a functional area
              on computer systems located within Regeneron's corporate
              departments and operated by departmental personnel, such as
              Regeneron's core business systems (including financial systems)
              and personnel management systems.

         The Company has completed an analysis of its computer systems. This
analysis did not reveal material Year 2000 problems related to such embedded
systems.

         Prior to December 31, 1999, the Company completed a survey and analysis
of its vendors who support critical business processes to determine their level
of readiness with respect to Year 2000 issues. While many vendors indicated that
they believed they were Year 2000 compliant, others stated that they could not
represent that they had achieved compliance or guarantee the efficacy of their
remediation efforts. Many vendors stated that the problem was too complex for
such a claim to have legitimacy; that efforts to solve Year 2000 problems were
merely in the nature of risk mitigation; and that success in such


                                       30

<PAGE>


efforts would be measured, with hindsight, by the minimization of the level of
technical failures and by the prompt identification and repair of failures.
Since December 31, 1999, the Company has not experienced Year 2000 issues with
its vendors who support critical business processes.

         The analysis of the Company's embedded systems and the information
collected regarding vendor readiness were used to formulate a contingency plan
with respect to reasonably identifiable items of equipment and materials that
are critical to the Company's operations. This contingency plan is still in
effect and would be utilized if any problems were to arise during the Year 2000
or beyond. No assurance can be made that the Company's computer systems and
software, embedded systems in non-computer equipment, and vendors will not
experience any problems in the future related to Year 2000 issues. The failure
of certain third parties (such as Procter & Gamble, Amgen, Sumitomo
Pharmaceuticals, Merck, vendors and utility and communications companies) to
operate in a normal and customary manner and to maintain Year 2000 compliance
(or to assure that their vendors and suppliers are Year 2000 compliant) could
have a material adverse effect on the operations and financial condition of
Regeneron. It is possible that Regeneron could be adversely affected by the
failure of other third parties to be Year 2000 compliant even though these third
parties do not directly conduct business with Regeneron. It is not possible to
guarantee that the Company's Year 2000 contingency plan would succeed or be
timely.

         Prior to December 31, 1999, Regeneron developed a "most reasonably
likely worst case Year 2000 scenario" and identified the principal risks to
Regeneron. In developing this scenario, Regeneron assumed, among other things,
that any Year 2000 disruptions were likely to be of limited duration (and that
extended material Year 2000-related disruptions could not be reasonably guarded
against based on the resources and nature of operations of the Company). The
Company implemented contingency plans to protect certain key Regeneron assets in
the event of a failure of electrical power for a limited duration or
unanticipated failure of certain essential equipment. The risks that Year 2000
problems could have presented to the Company include, without limitation,
disruption, delay, or cessation of manufacturing or other operations, including
operations that are subject to regulatory compliance, and loss of research and
manufacturing material and experiments that are difficult, costly, or impossible
to replace.

         As of December 31, 1999, total expenditures incurred related to the
Company's Year 2000 efforts, including, without limitation, back-up generators,
computer system upgrades, remediation, and new computer systems, internal staff
costs and outside consulting fees are $0.4 million, primarily for capital
expenditures. Future projected expenditures related to the Company's Year 2000
program are not expected to be significant. The Company has not experienced any
problems as a result of Year 2000 concerns.

         The statements concerning the Year 2000 problem which are not
historical facts are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements. There can be no guarantee that any estimates or
other forward-looking statements will be achieved and actual results could
differ significantly from those planned or contemplated.



I
tem 7A. Quantitative and Qualitative Disclosure About Market Risk.

         The Company's earnings and cash flows are subject to fluctuations due
to changes in interest rates primarily from its investment of available cash
balances in investment grade corporate and U.S. government securities. The
Company does not believe it is materially exposed to changes in interest rates.
Under its current policies the Company does not use interest rate derivative
instruments to manage exposure to interest rate changes.


                                       31

<PAGE>



Item 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 9, 2000.



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 9, 2000.



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 9, 2000.



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 9, 2000.



                                     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.


                                       32

<PAGE>


         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


<TABLE>
<CAPTION>
         Exhibit
         Number      Description
         ------      -----------
<S>                  <C>     <C> 
          3.1        (a)     - Restated Certificate of Incorporation of Regeneron Pharmaceuticals,
                               Inc. as of June 21, 1991.
          3.2                - By-Laws of the Company, currently in effect (amended as of January
                               22, 1995).
         10.1        (b)     - Certificate of Amendment of the Restated Certificate of Incorporation
                               of Regeneron Pharmaceuticals, Inc., as of October 18, 1996.
         10.2        (c)*    - Technology Development Agreement dated as of March 20, 1989, 
                               between the Company and Sumitomo Chemical Company, Limited.
         10.3        (c)*    - Neurotrophic Factor Agreement (License Agreement) dated as of 
                               May 10, 1988, between the Company and Max Planck Institute fur
                               Psychiatric.
         10.4        (c)*    - Collaboration Agreement dated August 31, 1990, between the Company 
                               and Amgen Inc.
         10.5        (c)     - 1990 Amended and Restated Long-Term Incentive Plan.
         10.6        (d)*    - License Agreement dated as of October 7, 1992, between the Company and 
                               The Regents of the University of California.
         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)     - Warrant Agreement dated as of April 15, 1996, between the Company 
                               and Amgen Inc.
         10.10       (g)     - Registration Rights Agreement dated as of April 15, 1996, between the
                               Company and Amgen Inc.
         10.11       (g)     - Warrant Agreement dated as of June 27, 1996, between the Company
                               and Medtronic, Inc.
         10.12       (g)     - Registration Rights Agreement dated as of June 27, 1996, between the
                               Company and Medtronic, Inc.
         10.13       (h)     - Rights Agreement, dated as of September 20, 1996, between Regeneron 
                               Pharmaceuticals, Inc.  and ChaseMellon Shareholder Services LLC, as 
                               Rights Agent, including the form of Rights  Certificate as Exhibit B 
                               thereto.
         10.14       (i)     - Stock Purchase Agreement dated as of December 11, 1996, between the 
                               Company and Procter & Gamble Pharmaceuticals, Inc.
         10.15       (i)     - Registration Rights Agreement dated as of December 11, 1996, between
                               the Company and Procter & Gamble Pharmaceuticals, Inc.
         10.16       (j)     - Securities Purchase Agreement dated as of May 13, 1997, between the
                               Company and The Procter & Gamble Company.

</TABLE>



                                       33

<PAGE>



<TABLE>
<S>                  <C>      <C> 
         10.17       (j)      - Warrant Agreement dated as of May 13, 1997, between the Company and 
                                The Procter & Gamble Company.
         10.18       (j)      - Registration Rights Agreement dated as of May 13, 1997, between the
                                Company and The Procter & Gamble Company.
         10.19       (j)*     - Multi-Project Collaboration Agreement dated as of May 13, 1997, 
                                between the Company and The Procter & Gamble Company.
         10.20       (k)*     - 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.
         10.21       (l)      - Employment Agreement, dated as of February 12, 1998 between the
                                Company and Leonard S. Schleifer, M.D., Ph.D.
         23.1                 - Consent of PricewaterhouseCoopers LLP
         23.2                 - Consent of Ernst & Young LLP, Independent Auditors.
         24                   - Power of Attorney.
         27                   - Financial Statement Data for year ending December 31, 1999.

</TABLE>


--------------------------------------------------------------------------------
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 Form 10-Q for Regeneron
Pharmaceuticals, Inc. for the quarter ended September 30, 1996, filed November
5, 1996.

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

         (d) Incorporated by reference from the Form 10-K for Regeneron
Pharmaceuticals, Inc. for the fiscal year ended December 31, 1992, filed March
30, 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 8-A for Regeneron
Pharmaceuticals, Inc. filed October 15, 1996.

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

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

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


                                       34

<PAGE>


         (l) Incorporated by reference from the Form 10-K for Regeneron
Pharmaceuticals, Inc. for the fiscal year ended December 31, 1997, filed March
26, 1998.


          *   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

         None.


                                       35

<PAGE>

                         REGENERON PHARMACEUTICALS, INC.
                          INDEX TO FINANCIAL STATEMENTS



<TABLE>
<CAPTION>
                                                                                            Page
Regeneron Pharmaceuticals, Inc.                                                            Numbers
                                                                                           -------
<S>                                                                                       <C>
      Report of Independent Accountants                                                      F-2

      Balance Sheets at December 31, 1999 and 1998                                           F-3

      Statements of Operations for the years ended
      December 31, 1999, 1998,  and 1997                                                     F-4

      Statements of Stockholders' Equity for the years
      ended December 31, 1999, 1998, and 1997                                                F-5

      Statements of Cash Flows for the years ended
      December 31, 1999, 1998, and 1997                                                      F-6

      Notes to Financial Statements                                                      F-7 to F-23


Amgen-Regeneron Partners

      Report of Ernst & Young LLP, Independent Auditors                                     F-24

      Balance Sheets at December 31, 1999 and 1998                                          F-25

      Statements of Operations for the years ended
      December 31, 1999, 1998, and 1997                                                     F-26

      Statements of Changes in Partners' Capital for the
      years ended December 31, 1999,  1998, and 1997                                        F-27

      Statements of Cash Flows for the years ended
      December 31, 1999, 1998, and 1997                                                     F-28

      Notes to Financial Statements                                                     F-29 to F-32

</TABLE>


                                       F-1


<PAGE>



                      REPORT OF INDEPENDENT ACCOUNTANTS


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

      In our opinion, based upon our audits and the report of other auditors,
the accompanying balance sheets and the related statements of operations,
stockholders' equity and cash flows present fairly, in all material respects,
the financial position of Regeneron Pharmaceuticals, Inc. (the "Company") at
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999, in conformity
with generally accepted accounting principles in the United States. 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, 1999 and 1998 and for each of the three years in the
period ended December 31, 1999. The Company's investment in the Partnership is
accounted for in accordance with the equity method of accounting and constitutes
less than two percent of the Company's liabilities at December 31, 1999 and less
than two percent of the Company's assets at December 31, 1998. For the years
ended December 31, 1999, 1998 and 1997, the Company recorded its pro rata share
of the Partnership's net loss of approximately $4.2 million, $2.5 million, and
$3.4 million, respectively. The Partnership's financial statements were audited
by other auditors whose report thereon has been furnished to us, and our opinion
expressed herein, 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 of these statements in accordance with generally accepted auditing
standards in the United States which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits and the report of other auditors provide a reasonable basis for the
opinion expressed above.


                                                     PricewaterhouseCoopers LLP

New York, New York
February 8, 2000


                                       F-2


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.
                                BALANCE SHEETS
                          December 31, 1999 and 1998
                      (In thousands, except share data)


<TABLE>
<CAPTION>
              
                                ASSETS                                      1999            1998
                                                                      ------------    -------------
<S>                                                                   <C>             <C>
Current assets
    Cash and cash equivalents                                              $23,697          $19,757
    Marketable securities                                                   42,463           66,022
    Receivable due from The Procter & Gamble Company                                          3,169
    Receivable due from Merck & Co., Inc.                                                     1,665
    Receivable due from Amgen-Regeneron Partners                               473              709
    Receivable due from Sumitomo Pharmaceuticals Company, Ltd.                 151              167
    Prepaid expenses and other current assets                                1,708            1,216
    Inventory                                                                4,552              196
                                                                      ------------    -------------
       Total current assets                                                 73,044           92,901
Marketable securities                                                       27,439           27,751
Investment in Amgen-Regeneron Partners                                                        3,091
Property, plant, and equipment, at cost, net of 
    accumulated depreciation and amortization                               36,298           33,019
Other assets                                                                   218              153
                                                                      ------------    -------------
       Total assets                                                       $136,999         $156,915
                                                                      ============    =============

                     LIABILITIES and STOCKHOLDERS' EQUITY

Current liabilities
    Accounts payable and accrued expenses                                   $6,551           $5,551
    Deferred revenue, current portion                                        4,686            2,735
    Due to Merck & Co., Inc.                                                   334
    Obligation due to Amgen-Regeneron Partners                                 300
    Capital lease obligations, current portion                               1,380            1,051
    Note payable, current portion                                               68               65
                                                                      ------------    -------------
       Total current liabilities                                            13,319            9,402

Deferred revenue                                                            11,130           12,938
Capital lease obligations                                                    1,204            1,457
Note payable                                                                 1,527            1,609
Other liabilities                                                              287              282
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;
         3,605,133 shares issued and outstanding in 1999
         3,630,786 shares issued and outstanding in 1998                         4                4
    Common Stock, $.001 par value; 60,000,000 shares authorized;
        27,817,636 shares issued and outstanding in 1999
        27,386,858 shares issued and outstanding in 1998                        28               27
    Additional paid-in capital                                             310,296          308,561
    Unearned compensation                                                                     (360)
    Accumulated deficit                                                  (200,303)        (177,233)
    Accumulated other comprehensive (loss) income                            (493)              228
                                                                      ------------    -------------
       Total stockholders' equity                                          109,532          131,227
                                                                      ------------    -------------
       Total liabilities and stockholders' equity                         $136,999         $156,915
                                                                      ============    =============

</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, 1999, 1998, and 1997
                    (In thousands, except per share data)



<TABLE>
<CAPTION>
                                                   1999                  1998                  1997
                                                   ----                  ----                  ----
<S>                                         <C>                   <C>                    <C>
 Revenues
     Contract research and development                 $24,539               $19,714               $17,400
     Research progress payments                                                9,500                 5,000
     Contract manufacturing                              9,960                 9,113                 4,458
     Investment income                                   5,207                 6,866                 6,242
                                            ------------------     -----------------     -----------------
                                                        39,706                45,193                33,100
                                            ------------------     -----------------     -----------------

Expenses
     Research and development                           44,940                37,047                27,770
     Loss in Amgen-Regeneron Partners                    4,159                 2,484                 3,403
     General and administrative                          6,355                 5,838                 5,765
     Depreciation and amortization                       3,426                 3,019                 4,389
     Contract manufacturing                              3,612                 5,002                 2,617
     Interest                                              284                   428                   735
                                            ------------------     -----------------     -----------------
                                                        62,776                53,818                44,679
                                            ------------------     -----------------     -----------------
 Net loss                                             ($23,070)              ($8,625)             ($11,579)
                                            ==================     =================     =================

 Net loss per share, basic and diluted                  ($0.74)               ($0.28)               ($0.40)
                                            ==================     =================     =================
</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, 1999, 1998, and 1997
                                (In thousands)


<TABLE>
<CAPTION>
                                                                                 Additional       Unearned  
                                            Class A Stock     Common Stock     Paid-in Capital  Compensation
                                          ----------------- -----------------  ---------------  ------------
                                           Shares   Amount   Shares   Amount
                                          -------- -------- --------  -------
<S>                                       <C>      <C>      <C>       <C>      <C>              <C>     
Balance, December 31, 1996                   4,356       $4   21,320      $21          $264,743      ($1,080)
Amortization of unearned compensation                                                                     360
Shares issued to Procter & Gamble
      Pharmaceuticals, Inc. in connection 
      with the 1996 Stock Purchase 
      Agreement                                                  800        1               (1)
Issuance of equity securities to The
      Procter & Gamble Company                                 4,350        5            42,930              
Cost associated with issuance of
      equity securities                                                                    (31)              
Issuance of Common Stock in connection
      with exercise of stock options                              97                        468              
Conversion of Class A Stock to
      Common Stock                           (238)               238
Net loss, 1997                                                                                               
Change in net unrealized gain
      on marketable securities                                                                               
                                             -----   ------   ------    -----          --------      ------- 
      Balance, December 31, 1997             4,118        4   26,805       27           308,109         (720)     
                                                                                                                  
Amortization of unearned compensation                                                                     360     
Issuance of Common Stock in connection
      with exercise of stock options                              95                        452                   
Conversion of Class A Stock to
      Common Stock                           (487)               487
Net loss, 1998                                                                                                    
Change in net unrealized gain
      on marketable securities                                                                                    
                                             -----   ------   ------    -----          --------      ------- 
      Balance, December 31, 1998             3,631        4   27,387       27           308,561         (360)     
                                                                                                                  
Amortization of unearned compensation                                                                     360     
Issuance of Common Stock in connection
      with exercise of stock options                             367        1             1,427
Issuance of Common Stock in connection
      with Company 401(k) Savings Plan
      contribution                                                38                        308                   
Conversion of Class A Stock to
      Common Stock                            (26)                26
Net loss, 1999                                                                                                    
Change in net unrealized gain/loss
      on marketable securities                                                                                    
                                             -----   ------   ------    -----          --------      ------- 
      Balance, December 31, 1999             3,605       $4   27,818      $28          $310,296                   
                                             =====   ======   ======    =====          ========      ======= 

<CAPTION>
                                                          Accumulated Other     Total                  
                                            Accumulated     Comprehensive    Stockholders'  Comprehensive
                                              Deficit       (Loss) Income       Equity           Loss
                                           --------------  ---------------- -------------- ----------------
<S>                                        <C>             <C>              <C>            <C>
Balance, December 31, 1996                     ($157,029)              $272       $106,931
Amortization of unearned compensation                                                  360
Shares issued to Procter & Gamble         
      Pharmaceuticals, Inc. in connection 
      with the 1996 Stock Purchase        
      Agreement                           
Issuance of equity securities to The      
      Procter & Gamble Company                                                      42,935
Cost associated with issuance of          
      equity securities                                                               (31)
Issuance of Common Stock in connection    
      with exercise of stock options                                                   468
Conversion of Class A Stock to            
      Common Stock                        
Net loss, 1997                                   (11,579)                         (11,579)        ($11,579)
Change in net unrealized gain             
      on marketable securities                                        (187)          (187)            (187)
                                           --------------  ---------------- -------------- ----------------
      Balance, December 31, 1997                (168,608)                85        138,897        ($11,766)
                                                                                           ================

Amortization of unearned compensation                                                  360
Issuance of Common Stock in connection    
      with exercise of stock options                                                   452
Conversion of Class A Stock to            
      Common Stock                        
Net loss, 1998                                    (8,625)                          (8,625)         ($8,625)
Change in net unrealized gain             
      on marketable securities                                          143            143             143
                                           --------------  ---------------- -------------- ----------------
      Balance, December 31, 1998                (177,233)               228        131,227         ($8,482)
                                                                                           ================

Amortization of unearned compensation                                                  360
Issuance of Common Stock in connection    
      with exercise of stock options                                                 1,428
Issuance of Common Stock in connection
      with Company 401(k) Savings Plan    
      contribution                                                                     308
Conversion of Class A Stock to            
      Common Stock                        
Net loss, 1999                                   (23,070)                         (23,070)        ($23,070)
Change in net unrealized gain/loss        
      on marketable securities                                        (721)          (721)            (721)
                                           --------------  ---------------- -------------- ----------------
      Balance, December 31, 1999               ($200,303)            ($493)       $109,532        ($23,791)
                                           ==============  ================ ============== ================
</TABLE>


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

                                       F-5


<PAGE>


                       REGENERON PHARMACEUTICALS, INC.
                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
               Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)


<TABLE>
<CAPTION>

                                                                                   1999         1998        1997
                                                                               ------------- ----------- -----------
<S>                                                                            <C>           <C>         <C>
Cash flows from operating activities
    Net loss                                                                       ($23,070)    ($8,625)   ($11,579)
                                                                               ------------- ----------- -----------
    Adjustments to reconcile net loss to net cash
      used in operating activities
      Loss in Amgen-Regeneron Partners                                                 4,159       2,484       3,403
      Depreciation and amortization                                                    3,426       3,019       4,389
      Stock issued in consideration for services rendered                                360         360         360
      Changes in assets and liabilities
        Decrease (increase) in amounts due from The Procter & Gamble
            Company                                                                    3,169       (766)     (2,403)
        Decrease in amounts due from Merck & Co., Inc.                                 1,999          42         109
        Decrease (increase) in amounts due from Amgen-Regeneron Partners                 236       (353)          90
        Decrease (increase) in amounts due from Sumitomo Pharmaceuticals
            Co., Ltd.                                                                     16       1,948        (43)
        Increase in investment in Amgen-Regeneron Partners                             (768)     (5,211)     (2,562)
        (Increase) decrease in prepaid expenses and other assets                       (557)       (688)          35
        Increase in inventory                                                        (4,033)       (196)
        Increase (decrease) in deferred revenue                                          143     (3,310)       1,604
        Increase in accounts payable, accrued expenses,
           and other liabilities                                                       1,085       1,094         518
                                                                               ------------- ----------- -----------
                  Total adjustments                                                    9,235     (1,577)       5,500
                                                                               ------------- ----------- -----------
           Net cash used in operating activities                                    (13,835)    (10,202)     (6,079)
                                                                               ------------- ----------- -----------

Cash flows from investing activities
    Purchases of marketable securities                                              (60,067)    (87,973)   (112,611)
    Sales of marketable securities                                                    83,217      93,463      75,858
    Capital expenditures                                                             (5,682)     (3,049)     (2,146)
                                                                               ------------- ----------- -----------
           Net cash provided by (used in) investing activities                        17,468       2,441    (38,899)
                                                                               ------------- ----------- -----------

Cash flows from financing activities
    Net proceeds from the issuance of stock                                            1,428         452      43,372
    Principal payments on note payable                                                  (79)        (74)        (78)
    Capital lease payments                                                           (1,042)     (1,781)     (3,870)
                                                                               ------------- ----------- -----------
           Net cash provided by (used in) financing activities                           307     (1,403)      39,424
                                                                               ------------- ----------- -----------

           Net increase (decrease) in cash and cash equivalents                        3,940     (9,164)     (5,554)

Cash and cash equivalents at beginning of period                                      19,757      28,921      34,475
                                                                               ------------- ----------- -----------
           Cash and cash equivalents at end of period                                $23,697     $19,757     $28,921
                                                                               ============= =========== ===========

Supplemental disclosure of cash flow information
    Cash paid for interest                                                              $265        $388        $676
                                                                               ============= =========== ===========

</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, 1999, 1998, and 1997
                 (Dollars in thousands, except per share data)



I
tem 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 operations are all conducted
under a single business segment. 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.



Item 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                   6-30 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.

        Inventories

        Inventories are stated at the lower of cost or market. Cost is
determined based on standards that approximate the first-in, first-out method.
Inventories are shown net of applicable reserves.

        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.


                                     F-7


<PAGE>


                       REGENERON PHARMACEUTICALS, INC.

                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)


        Accounting for the Impairment of Long-Lived Assets

        Long-lived assets, such as fixed assets, are reviewed for impairment
when events or circumstances indicate that their carrying value may not be
recoverable. Estimated undiscounted expected future cash flows are used to
determine if an asset is impaired in which case the asset's carrying value would
be reduced to fair value. For all periods presented, no impairment losses were
recorded.

        Net Loss Per Share

        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 antidilutive. Disclosures required by SFAS No. 128 have been included
in Note 15.

        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.

        Comprehensive Loss

        Comprehensive loss represents the change in net assets of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. Comprehensive loss of the Company includes net loss
adjusted for the change in net unrealized gain or loss on marketable securities.
The net effect of income taxes on comprehensive loss is immaterial.
Comprehensive losses for the years ended December 31, 1999, 1998, and 1997 have
been included in the Statements of Stockholders' Equity.

        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 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 sales of its products 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 9 and 10). 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.


                                     F-8

<PAGE>


                       REGENERON PHARMACEUTICALS, INC.
                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)

                                       
        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 11.

        Statement of Cash Flows

        Supplemental disclosure of noncash investing and financing activities:

        Capital lease obligations of $1.1 million, $0.4 million, and $0.8
million were incurred when the Company acquired new equipment in 1999, 1998, and
1997, 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 has recognized as
compensation expense on a pro rata basis over five years as the restriction on
the Restricted Shares lapsed.

        Included in accounts payable and accrued expenses at December 31, 1999,
1998, and 1997 were $0.7 million, $0.5 million, and $0.6 million of capital
expenditures, respectively.

        Included in accounts payable and accrued expenses at December 31, 1998
was $0.3 million, of accrued 401(k) Savings Plan contribution expense. During
January 1999, the Company contributed 37,653 shares of Common Stock to the
401(k) Savings Plan in satisfaction of this obligation.

        Reclassifications

        Certain reclassifications have been made to the financial statements for
1998 and 1997 to conform with the current year's presentation.

        Future Impact of Recently Issued Accounting Standards

        Management believes that the future adoption of recently issued
accounting standards will not have a material impact on the Company's financial
statements, except that the Company is currently evaluating the future impact
that Staff Accounting Bulletin 101, "Revenue Recognition", issued in December
1999 by the Securities and Exchange Commission, will have on its financial
statements.

                                     F-9


<PAGE>


                       REGENERON PHARMACEUTICALS, INC.
                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)



I
tem 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, 1999 and 1998:


<TABLE>
<CAPTION>
                                                                                       Unrealized Holding
                                           Amortized         Fair                      ------------------
At December 31, 1999                      Cost Basis        Value           Gains          (Losses)            Net
--------------------                      ----------       --------        --------        --------         ---------
<S>                                       <C>              <C>             <C>         <C>                  <C>
Maturities within one year
   Corporate debt securities                $28,366        $28,343             $8             ($31)           ($23)
   U.S. Government securities                14,184         14,120                             (64)            (64)
                                             ------         ------           ------            ----            ----
                                             42,550         42,463              8              (95)            (87)
                                             ------         ------           ------            ----            ----

Maturities between one and three years
   Corporate debt securities                 10,337         10,264                             (73)            (73)
   U.S. Government securities                17,508         17,175                            (333)           (333)
                                             ------         ------                            -----           -----
                                             27,845         27,439                            (406)           (406)
                                             ------         ------           ------           -----           -----
                                            $70,395        $69,902             $8            ($501)          ($493)
                                            =======        =======          =======           =====           ===== 

At December 31, 1998
--------------------
Maturities within one year
   Corporate debt securities                $33,155        $33,169              $16            ($2)             $14
   U.S. Government securities                32,703         32,853              150                             150
                                             ------         ------           ------          ------          ------
                                             65,858         66,022              166             (2)             164
                                             ------         ------           ------          ------          ------
Maturities between one and three years                                                                    
   Corporate debt securities                  5,069          5,061                1             (9)              (8)
   U.S. Government securities                22,618         22,690               76             (4)              72
                                             ------         ------           ------          ------          ------
                                             27,687         27,751               77            (13)              64
                                             ------         ------           ------          ------          ------
                                            $93,545        $93,773             $243           ($15)            $228
                                            =======        =======           =======         =======         =======
</TABLE>
                                                                      

        Realized gains and losses are included as a component of investment
income. For the years ended December 31, 1999, 1998, and 1997, 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.


Item 4.          Inventories

        Inventory balances at December 31, 1999 consist of raw materials and
other direct and indirect costs associated with the production of brain-derived
neurotrophic factor ("BDNF") for Sumitomo Pharmaceuticals Company, Ltd. under a
research and development agreement (see Note 9b) and the production of an
intermediate for a Merck & Co., Inc. pediatric vaccine under a long-term
manufacturing agreement (see Note 10). Production of both products commenced in
the fourth quarter of 1999, and as of December 31, 1999, no finished products
had been shipped. The inventory balance at December 31, 1998 consists of raw
materials purchased for BDNF.

                                     F-10


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.

                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)


        Inventories as of December 31, 1999 and 1998 consist of the following:


                                      1999          1998
                                      ----          ----
Raw materials                       $ 1,042        $ 196
Work-in process                         165(1)
Finished products                     3,345           
                                      -----        -----
                                    $ 4,552        $ 196
                                    =======        =====


        (1)  Net of reserve of $0.7 million


I
tem 5.          Property, Plant, and Equipment

        Property, plant, and equipment as of December 31, 1999 and 1998 consist
of the following:


<TABLE>
<CAPTION>
                                                               1999           1998
                                                               ----           ----
<S>                                                         <C>             <C>
Land                                                        $   475         $   475
Building and improvements                                    30,562          30,463
Leasehold improvements                                       10,364           7,141
Construction in progress                                      1,119
Laboratory and other equipment                               21,017          19,366
Furniture, fixtures, and computer equipment                   3,124           2,186
                                                            -------         -------
                                                             66,661          59,631
Less, accumulated depreciation and amortization             (30,363)        (26,612)
                                                            --------        -------
                                                            $36,298         $33,019
                                                            =======         =======
</TABLE>


        Depreciation and amortization expense on property, plant, and equipment
amounted to $3.4 million, $3.0 million, and $4.4 million, for the years ended
December 31, 1999, 1998, and 1997, respectively.


Item 6.          Accounts Payable and Accrued Expenses


        Accounts payable and accrued expenses as of December 31, 1999 and 1998
consist of the following:

                                                             1999           1998
                                                             ----           ----
Accounts payable                                           $2,642         $2,223
Accrued payroll and related costs                           1,977          1,346
Accrued clinical trial expense                              1,005          1,336
Accrued expenses, other                                       643            359
Deferred compensation                                         284            287
                                                           ------         ------
                                                           $6,551         $5,551
                                                           ======         ======

                                     F-11


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.

                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)



I
tem 7.          Stockholders' Equity

        The Company's Amended Certificate of Incorporation 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. Shares
of Class A Stock are convertible, at any time, at the option of the holder into
shares of Common Stock on a share-for- share basis. 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 Company's Board of Directors
(the "Board") is authorized to issue up to 30 million shares of preferred stock,
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 has recognized
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 lapsed. The unearned compensation was fully amortized at
December 31, 1999. For the years ended December 31, 1999, 1998, and 1997, the
Company recognized compensation expense of $0.4 million in each year. The stock
options, which were 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.

        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 certificates 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 


                                     F-12


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.

                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)


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.



I
tem 8.          Commitments and Contingencies

        a.       Operating Leases

        The Company leases laboratory and office space under an operating lease
agreement which expires on June 30, 2003. 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 2002.

        At December 31, 1999, the future minimum noncancellable lease
commitments under operating leases were as follows:


<TABLE>
<CAPTION>

                                 Laboratory and
December 31,                      Office Space           Equipment           Total
------------                      ------------           ---------           -----
<S>                             <C>                     <C>               <C>
2000                                 $2,925                 $124             $3,049
2001                                  2,969                   45              3,014
2002                                  2,969                   17              2,986
2003                                  1,484                    -              1,484
                                    -------                 ----            -------
                                    $10,347                 $186            $10,533
                                    =======                 ====            =======
</TABLE>


Rent expense under operating leases was:


<TABLE>
<CAPTION>

                                          Laboratory and
Year Ending December 31,                   Office Space          Equipment          Total
------------------------                   ------------          ---------          -----
<S>                                      <C>                    <C>              <C>
1999                                         $2,826                $156             $2,982
1998                                          2,466                 194              2,660
1997                                          2,711                 459              3,170
</TABLE>


        In addition to its rent expense for laboratory and office space, the
Company paid additional rental charges for utilities, real estate taxes, and
operating expenses of $1.0 million and $0.1 million for the years ended December
31, 1999 and 1998, respectively.


                                     F-13


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.

                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)


        b.       Capital Leases

                 The Company leases equipment under noncancellable capital
leases. Lease terms range from four to five years after which, for certain
leases, the Company may extend the lease for eight additional months at defined
monthly payments, or is required to purchase the equipment at amounts defined by
the agreements.

        As of December 31, 1999, minimum rental payments under all capital
leases, including payments to acquire leased equipment, were as follows:



                                                               Minimum
                                                                Rental
               Year Ending December 31,                        Payments
               ------------------------                        --------
                         2000                                   $1,594
                         2001                                      643
                         2002                                      464
                         2003                                      161
                                                                ------
                                                                 2,862
               Less, amounts representing 
                 interest                                         (278)
                                                                ------
               Present value of net minimum 
                 capital lease payments                         $2,584
                                                                ======


        Leased equipment and building improvements included in property, plant,
and equipment was $5.3 million and $4.4 million at December 31, 1999 and 1998,
respectively; related accumulated depreciation was $3.1 million and $2.3 million
for the same respective periods.

        In connection with one capital lease, the Company entered into a 38
month equipment maintenance agreement which requires equal quarterly payments
commencing during the second quarter of 2000. The total amount due over the term
of the agreement is $0.2 million.

        c.       Note Payable

        In 1994, 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 6.4%. 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, 1999 was $27.0
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, 1998, 1999, and 2000, the Company had not
met the defined levels of employment; however, for the years ended December 31,
1997, 1998, and 1999, the NYS UDC elected either not to increase the interest
rate, or to only increase the rate by a nominal amount, the effects of which
were not material to the financial statements. The estimated fair value of the
Company's note payable to the NYS UDC at December 31, 1999 was $2.0 million. The
fair value was estimated based on the current rate offered to the Company for
debt with similar terms.

                                     F-14


<PAGE>


                       REGENERON PHARMACEUTICALS, INC.
                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)




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


                                2000         $68
                                2001          67
                                2002          67
                                2003          68
                                2004          75
                          Thereafter       1,250
                                         -------
                                          $1,595
                                         =======


        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, 1999, the Company incurred
expenses related to these Agreements of $0.6 million, $0.7 million, and $0.3
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 $0.3 million at both December 31, 1999 and 1998.



I
tem 9.          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 and the Company to form a partnership
("Amgen-Regeneron Partners" or the "Partnership") to complete the development
and to commercialize the Products. Amgen and the Company hold 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 $51.1 million. In 1999, 1998, and 1997, the Company recognized its share of
the Partnership net loss in the amounts of $4.2 million, $2.5 million, and $3.4
million, respectively, which represents 50% of the total Partnership net loss.
As of December 31, 1999, the Company continues to be an equal partner in the
Partnership.


                                     F-15


<PAGE>

                       REGENERON PHARMACEUTICALS, INC.

                        NOTES TO FINANCIAL STATEMENTS
            for the years ended December 31, 1999, 1998, and 1997
                (Dollars in thousands, except per share data)


        Payments the Company receives 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,
1999, 1998, and 1997 totaled $3.6 million, $1.9 million, and $1.5 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, 1999 and
1998 and for the years ended December 31, 1999, 1998 and 1997, are as follows:

        Balance Sheet Data

                                                           1999           1998
                                                        ----------     ---------
                Cash and cash equivalents                $3,700         $9,961
                Accounts payable and accrued 
                        expenses due to partners(1)       4,300          3,779
                Partners' capital accounts
                        Amgen                              (300)         3,091
                        The Company                        (300)         3,091


                  (1) At December 31, 1999, includes $0.5 million due the
                  Company. At December 31, 1998, includes $0.7 million due the
                  Company less $0.3 million payable by the Company to the
                  Partnership.

        Statement of Operations Data

                                         1999             1998            1997
                                         ----             ----            ----

                  Total revenue           $366             $316            $310
                  Total expenses (2)    (8,684)          (5,284)         (7,116)
                                       -------          --------        --------
                  Net loss             ($8,318)         ($4,968)        ($6,806)
                                       =======          =======         ========


                  (2) Includes $3.6 million, $1.9 million, and $1.5 million
                  related to services provided by the Company in 1999, 1998, and
                  1997, 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 (the "R&D 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 were 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 $3.0 million for the
years ended December 31, 1998 and 1997, respectively. Research 



                                      F-16


<PAGE>


                         REGENERON PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
              for the years ended December 31, 1999, 1998, and 1997
                  (Dollars in thousands, except per share data)


payments from Sumitomo Pharmaceuticals that were received in advance were
deferred and recognized as revenue when the related services were performed. At
December 31, 1997, research payments of $3.0 million were deferred. In addition,
Sumitomo Pharmaceuticals reimburses the Company for its activities in developing
and validating 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 $0.1 million, $1.3 million, and $7.6 million in 1999, 1998, and
1997, respectively. In connection with the R&D Agreement, in March 1998,
Sumitomo Pharmaceuticals initiated a Phase I clinical trial of BDNF in Japan
and, in August 1998, signed a license agreement with the Company for the
development of BDNF in Japan. Pursuant to the license agreement, Sumitomo
Pharmaceuticals made a $5.0 million milestone payment (reduced by $0.5 million
of Japanese withholding tax) related to the initiation of the Phase I BDNF
clinical trial in Japan, and will make additional payments upon the achievement
of specified milestones. The amount received in 1998 is included in research
progress payments.

        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.

        d.       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. P&G Pharmaceuticals had the option to fund
additional amounts and had the right to terminate the agreement after three
years. 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. 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. In addition, P&G agreed over
the first five years of the various agreements to provide up to $94.7 million in
support of Regeneron's research efforts related to the collaboration, of which
the Company had received $24.0 million as of December 31, 1999. The P&G
Agreement expanded and superceded the 1996 Agreement.


                                      F-17


<PAGE>


                         REGENERON PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
              for the years ended December 31, 1999, 1998, and 1997
                  (Dollars in thousands, except per share data)


        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 cancer, 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(R) 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. Of the $15.0 million, $5.0 million was paid in 1997 and $5.0 million
was paid in 1998 upon the achievement of defined milestones. Such amounts are
included in research progress payments. P&G returned to the Company the product
rights to AXOKINE during the third quarter of 1999, and funded activities
related to AXOKINE only through the end of that quarter; no further AXOKINE
funding is expected from P&G. P&G's decision to return to Regeneron the product
rights to AXOKINE has no effect on the broader ten-year collaborative P&G
Agreement.

        Contract research and development revenue related to the P&G Agreement,
including payments related to AXOKINE, was $20.8 million, $13.5 million, and
$5.2 million in 1999, 1998, and 1997, respectively. At December 31, 1998, the
P&G contract research revenue receivable was $3.2 million. There was no P&G
receivable balance at December 31, 1999.



I
tem 10.         Manufacturing Agreement

        During 1995, the Company entered into a long-term manufacturing
agreement with Merck & Co., Inc., as amended, (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 Production Period
commenced in November of 1999. The Merck Agreement is expected to extend into
2005 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, pay the Company a variable fee based on the quantity of
Intermediate supplied to Merck, and make additional bi-annual payments
("Additional Payments"), as defined. 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 and Additional Payments
are recognized over the period to which they relate, (iii) payments for Capital
Costs have been deferred and will be recognized as Intermediate is accepted by
Merck, and (iv) payments related to the manufacture of Intermediate during the
Production Period will be recognized as Intermediate is accepted by Merck.


                                      F-18

<PAGE>


                         REGENERON PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS
              for the years ended December 31, 1999, 1998, and 1997
                  (Dollars in thousands, except per share data)



        In 1999, 1998, and 1997, contract manufacturing revenue includes $7.1
million, $8.0 million, and $3.4 million of Internal Costs, respectively, and
$1.9 million, $1.1 million, and $1.1 million of Facility Fee and Additional
Payments, respectively. In addition, for the year ended December 31, 1999,
contract manufacturing revenue includes $0.4 million of previously deferred
Capital Costs and $0.6 million of other variable fees related to the manufacture
of Intermediate prior to commencement of the Production Period.



I
tem 11.         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 6,900,000 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 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.

        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.


                                      F-19



<PAGE>


                         REGENERON PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS
              for the years ended December 31, 1999, 1998, and 1997
                  (Dollars in thousands, except per share data)


        Transactions involving stock option awards during 1997, 1998, and 1999
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, 1997, 1998, and 1999 was
1,496,149, 1,994,848, and 2,366,180, respectively, with weighted average
exercise prices of $7.37, $7.49, and $8.00, respectively. As of December 31,
1999, shares available for future grants amounted to 223,996.



<TABLE>
<CAPTION>

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

   1998:     Stock options granted                                     1,006,240                      $8.61
             Stock options canceled                                     (353,888)                     $9.62
             Stock options exercised                                     (95,163)                     $4.75
                                                                         --------
             Stock options outstanding at December 31, 1998            4,173,625                      $8.08

   1999:     Stock options granted                                     2,112,345                      $8.08
             Stock options canceled                                      (96,704)                    $10.14
             Stock options exercised                                    (367,470)                     $3.89
                                                                        ---------
             Stock options outstanding at December 31, 1999            5,821,796                      $8.29
                                                                       =========
</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.


                                      F-20


<PAGE>


                         REGENERON PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
              for the years ended December 31, 1999, 1998, and 1997
                  (Dollars in thousands, except per share data)



        The following table summarizes stock option information as of December
31, 1999:



<TABLE>
<CAPTION>
                                               Options Outstanding                               Options Exercisable
                                               -------------------                               -------------------
                                                   Weighted                                                      Weighted
                                                    Average           Weighted Average                            Average
   Range of Exercise           Number              Remaining              Exercise              Number           Exercise
        Prices               Outstanding       Contractual Life            Price             Exercisable           Price
   -----------------         -----------       ----------------       ----------------       -----------         --------
<S>                          <C>               <C>                    <C>                    <C>                 <C> 
     $3.00 to  $6.00          1,345,424               4.69                $4.62               1,209,366             $4.61
     $6.13 to  $8.00          1,265,770               8.81                $7.35                  97,362             $7.08
     $8.03 to  $8.77          1,490,350               9.30                $8.70                  50,710             $8.60
     $8.78 to  $12.25         1,190,895               6.46               $10.34                 610,235            $10.70
    $12.50 to  $22.06           529,357               5.14               $14.07                 398,507            $14.29
                              ---------              -------             ------               ---------            ------
     $3.00 to $2.06           5,821,796               7.17                $8.29               2,366,180             $8.00
                              =========                                                       =========           
</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 1999, 1998, and
1997 vest over several years and 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.


                                       1999            1998            1997
                                     --------        --------       --------
               Pro forma net loss    ($27,739)       ($13,114)      ($15,638)
                                     ========        ========       ========
               Pro forma net loss 
                  per share, basic 
                  and diluted          ($0.89)         ($0.42)         ($0.54)
                                     ========        ========       ========


        For the purpose of the above pro forma calculation, the fair value of
each option granted from the Incentive Plan during 1999, 1998, and 1997 was
estimated on the date of grant using the Black-Scholes option pricing model. The
weighted-average fair value of the options granted during 1999, 1998, and 1997
was $5.27, $5.84, and $7.84, respectively. The following assumptions were used
in computing the fair value of option grants during 1999: expected volatility of
65%, expected lives of 3.5 years after vesting, and a zero dividend yield. The
following assumptions were used in computing the fair value of option grants
during 1998 and 1997: expected volatility of 85%, expected lives of 3 years
after vesting, and zero dividend yield. The risk-free interest rates used were
6.02%-6.26% in 1999, 5.30%-5.44% in 1998, and 5.79%-6.47% in 1997.

        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, all of which were
vested at December 31, 1999. As of December 31, 1999, there were 44,246 shares
available for future grants under the Plan.

                                      F-21


<PAGE>


                         REGENERON PHARMACEUTICALS, INC.
                          NOTES TO FINANCIAL STATEMENTS
              for the years ended December 31, 1999, 1998, and 1997
                  (Dollars in thousands, except per share data)



I
tem 12.         Employee Savings Plan

        The Company 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, as amended and restated during 1998, provides for
the Company to make discretionary contributions ("Contributions"), as defined.
The Company recorded Contribution expense of $0.4 million in 1999 and $0.3
million in 1998; such amounts were accrued at December 31, 1999 and 1998,
respectively. During January 2000 and January 1999, the Company contributed
54,003 and 37,653 shares, respectively, of Common Stock to the Savings Plan in
satisfaction of these obligations.



Item 13.         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, 1999 and 1998 was as follows:


                                                           1999          1998
                                                         --------      --------
          Deferred tax assets
             Net operating loss carry-forward             $74,043       $64,568
             Fixed assets                                   1,240         1,251
             Deferred revenue                               4,865         4,806
             Research and experimental tax credit 
               carry-forward                               10,309         7,371
             Other                                          1,586         1,671
             Valuation allowance                          (92,043)      (79,667)
                                                         --------      --------
                                                            - -           - -
                                                         ========      ========


        As of December 31, 1999, the Company had available for tax purposes
unused net operating loss carry-forwards of $180.8 million which will expire in
various years from 2004 to 2014. The Company's research and experimental tax
credit carry-forwards expire in various years from 2004 to 2014. Future changes
in the ownership of the Company could limit the future utilization of these net
operating loss and tax credit carry-forwards, as defined by the Federal and
state tax codes.


Item 14.         Litigation

        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, 1999, 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,
results of operations and cash flows.


                                      F-22


<PAGE>


                         REGENERON PHARMACEUTICALS, INC.

                          NOTES TO FINANCIAL STATEMENTS
              for the years ended December 31, 1999, 1998, and 1997
                  (Dollars in thousands, except per share data)




I
tem 15.         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. In 1999, 1998, and 1997, 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:


                                      Net Loss         Shares         Per Share
                                    (Numerator)     (Denominator)      Amount
                                    -----------     -------------      ------

          1999:
            Basic and Diluted        ($23,070)         31,308        ($0.74)

          1998:
            Basic and Diluted         ($8,625)         30,992        ($0.28)

          1997:
            Basic and Diluted        ($11,579)         28,702        ($0.40)



        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>

                                                1999                           1998                                1997
                                  ------------------------------    -----------------------------    -------------------------------
                                                    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           2,540,935             $5.86        1,995,674           $4.91         3,737,724             $7.17
                                                                                                      
Options and warrants with                                                                             
exercise prices above the                                                                             
average fair market value of                                                                          
the Company's common stock                                                                            
for the respective year           4,605,098            $11.21        4,433,351          $11.67         2,136,112            $14.04
                                  ---------                          ---------                         ---------
                                                                                                      
                                  7,146,033                          6,429,025                         5,873,836
                                  =========                          =========                         =========
</TABLE>




                                      F-23



<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, 1999 and 1998, and the related
statements of operations, changes in partners' (deficit) capital, and cash flows
for each of the three years in the period ended December 31, 1999. 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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States.


Los Angeles, California
February 8, 2000



                                      F-24


<PAGE>



                            AMGEN-REGENERON PARTNERS

                                 BALANCE SHEETS

                           December 31, 1999 and 1998

                                 (In thousands)


<TABLE>
<CAPTION>

                                                                                        1999               1998
                                                                                      --------           ------
                                      ASSETS

<S>                                                                                <C>                 <C>          
Total current assets - cash and cash equivalents.................................. $        3,700      $       9,961
                                                                                   ==============      =============

                   LIABILITIES AND PARTNERS' (DEFICIT) CAPITAL

Total current liabilities - accounts payable and accrued expenses due to
     partners..................................................................... $        4,300      $       3,779
                                                                                   --------------      -------------

Partners' (deficit) capital:
     Amgen........................................................................          (300)              3,091
     Regeneron....................................................................          (300)              3,091
                                                                                   --------------      -------------
         Total partners' (deficit) capital........................................          (600)              6,182
                                                                                   --------------      -------------

              Total liabilities and partners' (deficit) capital                    $        3,700      $       9,961
                                                                                   ==============      =============
</TABLE>




                             See accompanying notes.

                                      F-25


<PAGE>



                            AMGEN-REGENERON PARTNERS

                            STATEMENTS OF OPERATIONS

                  Years ended December 31, 1999, 1998 and 1997

                                 (In thousands)




<TABLE>
<CAPTION>

                                                                         1999              1998             1997
                                                                    --------------    --------------    -------------
<S>                                                                 <C>               <C>               <C>          
Revenues:
     Interest income............................................... $          366    $          316    $         310
                                                                    --------------    --------------    -------------

Total revenues.....................................................            366               316              310
                                                                    --------------    --------------    -------------

Expenses:
     Research and development performed
         by partners...............................................          8,631             5,235            7,078
     General and administrative....................................             53                49               38
                                                                    --------------    --------------    -------------

         Total expenses............................................          8,684             5,284            7,116
                                                                    --------------    --------------    -------------

Net loss........................................................... $      (8,318)    $      (4,968)    $     (6,806)
                                                                    ==============    ==============    =============
</TABLE>





                             See accompanying notes.

                                      F-26


<PAGE>



                            AMGEN-REGENERON PARTNERS

              STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL

                  Years ended December 31, 1999, 1998 and 1997

                                 (In thousands)



<TABLE>
<CAPTION>

                                                                  Amgen             Regeneron
                                                             ----------------     --------------
<S>                                                          <C>                  <C>           
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

Capital contributions                                                   5,211              5,211

Net loss                                                              (2,484)            (2,484)
                                                             ----------------     --------------

Balance at December 31, 1998                                            3,091              3,091

Capital contributions                                                     768                768

Net loss                                                              (4,159)            (4,159)
                                                             ----------------     --------------

Balance at December 31, 1999                                 $          (300)     $        (300)
                                                             ================     ==============

</TABLE>



                             See accompanying notes.

                                      F-27


<PAGE>



                            AMGEN-REGENERON PARTNERS

                            STATEMENTS OF CASH FLOWS

                  Years ended December 31, 1999, 1998 and 1997

                                 (In thousands)




<TABLE>
<CAPTION>

                                                                       1999                1998              1997  
                                                                 -----------------    --------------    ---------------
<S>                                                              <C>                  <C>               <C>            
Cash flows from operating activities:
     Net loss................................................... $         (8,318)    $      (4,968)    $       (6,806)
     Increase (decrease) in accounts payable and
         accrued expenses.......................................               521             1,955           (10,406)
                                                                 -----------------    --------------    ---------------
              Net cash used in operating activities.............           (7,797)           (3,013)           (17,212)

Cash flows from financing activities - capital
     contributions..............................................             1,536            10,422              5,124
                                                                 -----------------    --------------    ---------------

(Decrease) increase in cash and cash equivalents................           (6,261)             7,409           (12,088)

Cash and cash equivalents at beginning of period................             9,961             2,552             14,640
                                                                 -----------------    --------------    ---------------

Cash and cash equivalents at end of period...................... $           3,700    $        9,961    $         2,552
                                                                 =================    ==============    ===============

</TABLE>



                            See accompanying notes.

                                      F-28


<PAGE>


                            AMGEN-REGENERON PARTNERS

                    NOTES TO FINANCIAL STATEMENTS (Continued)


                            AMGEN-REGENERON PARTNERS


                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1999



I
tem 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
brain-derived neurotrophic factor ("BDNF") and Neurotrophin-3 ("NT-3")
("Products") for human pharmaceutical use, in conformity with a Collaboration
Agreement (Note 3).

         In January 1997, Amgen and Regeneron announced that the Phase 3
clinical trial of BDNF did not demonstrate clinical efficacy in the end points
measured 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
continues to conduct clinical trials of intrathecal delivery of BDNF for ALS and
Regeneron continues to conduct clinical trials of subcutaneous delivery of BDNF
for ALS. In addition, Regeneron is conducting clinical trials with NT-3 for the
treatment of chronic constipation on behalf of the Partnership.

         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 15 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 becomes
more than twice the amount of the balance of the other partner's capital account
(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 

                                      F-29


<PAGE>


                            AMGEN-REGENERON PARTNERS

                    NOTES TO FINANCIAL STATEMENTS (Continued)


equivalents. At December 31, 1999 and 1998, cash and cash equivalents consisted
of a single interest bearing money market account.

         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.



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

         Capital contributions are recorded in the capital account of each
partner. Capital account 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, if any, and profits or
losses are allocated to each partner's capital account in proportion to their
respective capital account contributions.



Item 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 was to 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-30


<PAGE>


                            AMGEN-REGENERON PARTNERS

                    NOTES TO FINANCIAL STATEMENTS (Continued)


         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, 1999, 1998 and 1997, the Partnership incurred expenses
(including accrued expenses) of $3,484,000, $2,448,000 and $5,561,000,
respectively, from Amgen and $5,147,000, $2,787,000 and $1,517,000,
respectively, from Regeneron for such services and materials. These amounts are
included in research and development expense in the accompanying statements of
operations. Included in the Regeneron amounts for the years ended December 31,
1999 and 1998, are $1,560,000 and $931,000, respectively, of clinical materials
provided to the Partnership by Amgen. 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, 1999, accounts payable and accrued
expenses due to partners was composed of $888,000 of accounts payable and
$2,939,000 of accrued clinical costs due to Amgen and $236,000 of accounts
payable and $237,000 of accrued clinical costs due to Regeneron. At December 31,
1998, accounts payable and accrued expenses due to partners was composed of
$1,244,000 of accounts payable and $2,096,000 of accrued clinical costs due to
Amgen and $130,000 of accounts payable and $309,000 of accrued clinical costs
due to Regeneron.



Item 4.  Year 2000 (Unaudited)

         The Year 2000 problem (the "Year 2000 Problem") was to have resulted
from computer programs and devices that did not differentiate between the year
1900 and the year 2000 because they were written using two digits rather than
four to define the applicable year; accordingly, computer systems that have
time-sensitive calculations potentially would not properly recognize the year
2000. Because Amgen maintains the books and records, manufactures and stores
clinical supplies (and other reagents), and conducts certain clinical trials for
the Partnership, the Partnership's ability to become year 2000 compliant was
primarily dependent upon Amgen's ability to become compliant. However, Amgen
believes that as a result of its year 2000 remediation and planning programs,
the Year 2000 Problem has not, as of February 22, 2000, had a material adverse
effect on the operations or financial results of Amgen. Additional disclosure
about Amgen's year 2000 program may be found in Amgen's Annual Report on Form
10-K for the year ended December 31, 1999.

         The Partnership's ability to become year 2000 compliant was also
dependent upon Regeneron's ability to become compliant, to the extent that
Regeneron conducts certain clinical trials for the Partnership or otherwise owes
certain duties to the Partnership. Regeneron has evaluated its operations to
determine the impact, if any, that the Year 2000 Problem may have. As of March
1, 2000, Regeneron has not learned of, or experienced, any material year 2000
issue with respect to its computer systems and software. Regeneron has completed
an analysis of its laboratory and manufacturing equipment with embedded systems.
This analysis did not reveal material year 2000 problems related to such
embedded systems. Prior to December 31, 1999, Regeneron also completed a survey
of its vendors who support critical business processes to determine their level
of readiness with respect to year 2000 issues. While many vendors 

                                      F-31


<PAGE>


                            AMGEN-REGENERON PARTNERS

                    NOTES TO FINANCIAL STATEMENTS (Continued)


indicated that they believed they were year 2000 compliant, many others stated
that they could not represent that they have achieved compliance or guarantee
the efficacy of their remediation efforts. Many vendors stated that the problem
is too complex for such a claim to have legitimacy; that efforts to solve the
Year 2000 Problem are merely in the nature of risk mitigation; and that success
in such efforts will be measured, with hindsight, by the minimization of the
level of technical failures and by the prompt identification and repair of
failures. As of March 1, 2000, Regeneron has not experienced year 2000 issues
with its vendors who support critical business processes. The analysis of
Regeneron's embedded systems and the information collected regarding vendor
readiness were used to formulate a contingency plan with respect to reasonably
identifiable items of equipment and materials that are critical to Regeneron's
operations. The contingency plan is still in effect and would be utilized if any
problems were to arise during the year 2000 and beyond. No assurance can be made
that Regeneron's computer systems and software, embedded systems in non-computer
equipment, and vendors will not experience any problems in the future related to
year 2000 issues. The failure of certain third parties (including Amgen and
utility and communications companies) to operate in a normal and customary
manner and to maintain year 2000 compliance (or to assure that their vendors and
suppliers are year 2000 compliant) could have a material adverse effect on the
operations and financial condition of Regeneron. It is possible that Regeneron
could be adversely affected by the failure of other third parties to be year
2000 compliant even though these third parties do not directly conduct business
with Regeneron. It is not possible to guarantee that Regeneron's year 2000
contingency plan will succeed. Additional disclosure about Regeneron's year 2000
activities may be found in Regeneron's Annual Report on Form 10-K for the year
ended December 31, 1999. If Regeneron's program to address the Year 2000 Problem
does not succeed, the Year 2000 Problem could have a material adverse effect on
the operation and financial position of the Partnership.



                                      F-32


<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 3, 2000
                                    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 25, 1999.



<TABLE>
<CAPTION>

      Signature                                         Title
      ---------                                         -----
<S>                                                     <C>


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


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


/s/   DOUGLAS S. MCCORKLE                               Controller and Assistant Treasurer
---   ------------------------------                    (Chief Accounting Officer)
      Douglas S. McCorkle                               


              *                                         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 
     -------------------------------
           Murray A. Goldberg
           (Attorney-in-Fact)

</TABLE>








<PAGE>

                                                                    EXHIBIT 23.1

  CONSENT OF INDEPENDENT ACCOUNTANTS

  We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 (Nos. 33-50480, 33-85330, 33-97176,
333-33891 and 333-80663) of Regeneron Pharmaceuticals, Inc. of our
report, which is based in part on the report of other auditors, dated
February 8, 2000 relating to the financial statements, which appears in
this Form 10-K.

                    PricewaterhouseCoopers LLP

New York, New York
March 3, 2000






<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,
From S-8 No. 33-97176, Form S-8 No. 333-33891 and Form S-8 No. 333-80663)
pertaining to the Regeneron Pharmaceuticals, Inc. Amended and Restated 1990 Long
Term Incentive Plan of our report dated February 8, 2000, 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, 1999.

                                        ERNST & YOUNG LLP

Los Angeles, California
March 3, 2000







<TABLE> <S> <C>

<ARTICLE>                     5
<CURRENCY>                                US DOLLARS
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS 
<FISCAL-YEAR-END>                         DEC-31-1999 
<PERIOD-START>                            JAN-01-1999 
<PERIOD-END>                              DEC-31-1999 
<EXCHANGE-RATE>                                 1,000 
<CASH>                                         23,697 
<SECURITIES>                                   69,902 
<RECEIVABLES>                                     624 
<ALLOWANCES>                                        0 
<INVENTORY>                                     4,552 
<CURRENT-ASSETS>                               73,044 
<PP&E>                                         66,661 
<DEPRECIATION>                                 30,363 
<TOTAL-ASSETS>                                136,999 
<CURRENT-LIABILITIES>                          13,319 
<BONDS>                                             0 
<PREFERRED-MANDATORY>                               0 
<PREFERRED>                                         0 
<COMMON>                                           28 
<OTHER-SE>                                    109,504 
<TOTAL-LIABILITY-AND-EQUITY>                  136,999 
<SALES>                                             0 
<TOTAL-REVENUES>                               39,706 
<CGS>                                               0 
<TOTAL-COSTS>                                       0 
<OTHER-EXPENSES>                               62,492 
<LOSS-PROVISION>                                    0 
<INTEREST-EXPENSE>                                284 
<INCOME-PRETAX>                              (23,070) 
<INCOME-TAX>                                        0 
<INCOME-CONTINUING>                          (23,070) 
<DISCONTINUED>                                      0 
<EXTRAORDINARY>                                     0 
<CHANGES>                                           0 
<NET-INCOME>                                 (23,070) 
<EPS-BASIC>                                    (0.74) 
<EPS-DILUTED>                                  (0.74) 
        


</TABLE>