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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
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 York13-3444607
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
777 Old Saw Mill River Road, Tarrytown, New York 10591-6707
(Address of principal executive offices, including zip code)
(914) 847-7000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock - par value $.001 per shareREGNNASDAQ Global Select Market
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.YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).YesNo
The number of shares outstanding of each of the registrant's classes of common stock as of April 13, 2021:
Class of Common StockNumber of Shares
Class A Stock, $.001 par value1,848,970
Common Stock, $.001 par value104,694,835



REGENERON PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-Q
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"ARCALYST®," "Evkeeza," "EYLEA®," "Inmazeb," "Libtayo®" (in the United States), "Praluent®" (in the United States), "REGEN-COV™," "Regeneron®," "Regeneron Genetics Center®," "Veloci-Bi®," "VelociGene®," "VelociHum®," "VelociMab®," "VelocImmune®," "VelociMouse®," "VelociSuite®," "VelociT," and "ZALTRAP®" are trademarks of Regeneron Pharmaceuticals, Inc. Trademarks and trade names of other companies appearing in this report are, to the knowledge of Regeneron Pharmaceuticals, Inc., the property of their respective owners. This report refers to products of Regeneron Pharmaceuticals, Inc., its collaborators, and other parties. Consult the product label in each territory for specific information about such products.



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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except share data)
March 31,December 31,
20212020
ASSETS
Current assets:
Cash and cash equivalents$1,437.9 $2,193.7 
Marketable securities2,065.9 1,393.3 
Accounts receivable, net4,173.0 4,114.7 
Inventories2,164.7 1,916.6 
Prepaid expenses and other current assets213.6 160.8 
Total current assets10,055.1 9,779.1 
Marketable securities3,543.7 3,135.6 
Property, plant, and equipment, net3,262.6 3,221.6 
Deferred tax assets765.1 858.9 
Other noncurrent assets145.7 168.1 
Total assets$17,772.2 $17,163.3 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$542.9 $475.5 
Accrued expenses and other current liabilities1,492.2 1,644.2 
Finance lease liabilities717.8  
Deferred revenue464.9 577.7 
Total current liabilities3,217.8 2,697.4 
Long-term debt1,978.9 1,978.5 
Finance lease liabilities 717.2 
Deferred revenue27.0 57.8 
Other noncurrent liabilities571.5 687.1 
Total liabilities5,795.2 6,138.0 
Stockholders' equity:
Preferred Stock, $.01 par value; 30,000,000 shares authorized; issued and outstanding - none
  
Class A Stock, convertible, $.001 par value; 40,000,000 shares authorized; shares issued and outstanding - 1,848,970 in 2021 and 2020
  
Common Stock, $.001 par value; 320,000,000 shares authorized; shares issued - 121,899,178 in 2021 and 121,533,460 in 2020
0.1 0.1 
Additional paid-in capital6,887.8 6,716.2 
Retained earnings 12,008.2 10,893.0 
Accumulated other comprehensive income16.2 29.3 
Treasury Stock, at cost; 17,104,177 shares in 2021 and 16,431,520 shares in 2020
(6,935.3)(6,613.3)
Total stockholders' equity11,977.0 11,025.3 
Total liabilities and stockholders' equity$17,772.2 $17,163.3 
The accompanying notes are an integral part of the financial statements.
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REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(In millions, except per share data)
Three Months Ended
March 31,
20212020
Statements of Operations
Revenues:
Net product sales$1,724.3 $1,236.7 
Collaboration revenue754.4 528.3 
Other revenue50.0 63.2 
2,528.7 1,828.2 
Expenses:
Research and development742.9 583.9 
Selling, general, and administrative405.6 367.3 
Cost of goods sold183.2 78.8 
Cost of collaboration and contract manufacturing124.8 138.5 
Other operating (income) expense, net(40.5)(40.4)
1,416.0 1,128.1 
Income from operations1,112.7 700.1 
Other income (expense):
Other income (expense), net154.9 (25.4)
Interest expense(14.6)(6.1)
140.3 (31.5)
Income before income taxes1,253.0 668.6 
Income tax expense137.8 44.0 
Net income$1,115.2 $624.6 
Net income per share - basic$10.58 $5.69 
Net income per share - diluted$10.09 $5.43 
Weighted average shares outstanding - basic105.4 109.8 
Weighted average shares outstanding - diluted110.5 115.1 
Statements of Comprehensive Income
Net income$1,115.2 $624.6 
Other comprehensive income (loss), net of tax:
Unrealized loss on debt securities(13.3)(28.8)
Unrealized gain (loss) on cash flow hedges0.2 (1.4)
Comprehensive income $1,102.1 $594.4 
The accompanying notes are an integral part of the financial statements.
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REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(In millions)
Class A StockCommon StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Stockholders' Equity
SharesAmountSharesAmountSharesAmount
Balance, December 31, 20201.8 121.5$0.1 $6,716.2 $10,893.0 $29.3 (16.4)$(6,613.3)$11,025.3 
Issuance of Common Stock for equity awards granted under long-term incentive plans
— — 0.5 — 93.9 — — — — 93.9 
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations
— — (0.1)— (66.4)— — — — (66.4)
Issuance/distribution of Common Stock for 401(k) Savings Plan
— — — — 8.5 — —  1.5 10.0 
Repurchases of Common Stock
— — — — — — — (0.7)(323.5)(323.5)
Stock-based compensation charges— — — — 135.6 — — — — 135.6 
Net income— — — — — 1,115.2 — — — 1,115.2 
Other comprehensive loss, net of tax— — — — — — (13.1)— — (13.1)
Balance, March 31, 20211.8  121.9 $0.1 $6,887.8 $12,008.2 $16.2 (17.1)$(6,935.3)$11,977.0 
Balance, December 31, 20191.8  113.3 $0.1 $4,428.6 $7,379.8 $21.1 (4.9)$(739.9)$11,089.7 
Issuance of Common Stock for equity awards granted under long-term incentive plans— — 3.1 — 817.4 — — — — 817.4 
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations— — (0.4)— (155.1)— — — — (155.1)
Issuance/distribution of Common Stock for 401(k) Savings Plan— — — — 12.5 — —  2.1 14.6 
Repurchases of Common Stock— — — — — — — (0.8)(336.0)(336.0)
Stock-based compensation charges— — — — 108.0 — — — — 108.0 
Net income— — — — — 624.6— — — 624.6 
Other comprehensive loss, net of tax— — — — — — (30.2)— — (30.2)
Balance, March 31, 20201.8 116.0 $0.1 $5,211.4 $8,004.4 $(9.1)(5.7)$(1,073.8)$12,133.0 
The accompanying notes are an integral part of the financial statements.
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REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
Three Months Ended
March 31,
20212020
Cash flows from operating activities:
Net income $1,115.2 $624.6 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization67.4 56.1 
Non-cash compensation expense130.9 105.8 
Other non-cash items, net(115.7)82.6 
Deferred taxes10.1 9.9 
Changes in assets and liabilities:
Increase in accounts receivable, net(58.3)(169.0)
Increase in inventories(252.8)(70.8)
(Increase) decrease in prepaid expenses and other assets(50.0)70.1 
(Decrease) increase in deferred revenue(143.6)73.9 
Decrease in accounts payable, accrued expenses, and other liabilities(34.7)(85.2)
Total adjustments(446.7)73.4 
Net cash provided by operating activities668.5 698.0 
Cash flows from investing activities:
Purchases of marketable and other securities(1,360.0)(714.3)
Sales or maturities of marketable and other securities416.3 441.2 
Capital expenditures(115.3)(170.1)
Net cash used in investing activities(1,059.0)(443.2)
Cash flows from financing activities:
Proceeds from issuance of Common Stock95.0 811.4 
Payments in connection with Common Stock tendered for employee tax obligations(154.5)(155.1)
Repurchases of Common Stock(306.9)(320.7)
Net cash (used in) provided by financing activities(366.4)335.6 
Net (decrease) increase in cash, cash equivalents, and restricted cash(756.9)590.4 
Cash, cash equivalents, and restricted cash at beginning of period2,207.3 1,630.3 
Cash, cash equivalents, and restricted cash at end of period$1,450.4 $2,220.7 
The accompanying notes are an integral part of the financial statements.
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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Interim Financial Statements
Basis of Presentation
The interim Condensed Consolidated Financial Statements of Regeneron Pharmaceuticals, Inc. and its subsidiaries ("Regeneron," "Company," "we," "us," and "our") have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and disclosures necessary for a presentation of the Company's financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, these financial statements reflect all normal recurring adjustments and accruals necessary for a fair statement of the Company's condensed consolidated financial statements for such periods. The results of operations for any interim period are not necessarily indicative of the results for the full year. The December 31, 2020 Condensed Consolidated Balance Sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Certain reclassifications have been made to prior period amounts to conform with the current period's presentation.
2. Product Sales
Net product sales consist of the following:
(In millions)Three Months Ended
March 31,
Net Product Sales in the United States
20212020
EYLEA®
$1,347.0 $1,172.0 
Libtayo®
69.1 61.7 
Praluent®
43.3 *
REGEN-COV™ (casirivimab with imdevimab)
262.2  
Evkeeza™
0.5  
ARCALYST®
2.2 3.0 
$1,724.3 $1,236.7 
* Effective April 1, 2020, the Company became solely responsible for the development and commercialization of Praluent in the United States and records net product sales of Praluent in the United States. See Note 3 for further details.
The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for the three months ended March 31, 2021 and 2020. Sales to each of these customers as a percentage of the Company's total gross product revenue are as follows:
Three Months Ended
March 31,
20212020
Besse Medical, a subsidiary of AmerisourceBergen Corporation
46 %54 %
McKesson Corporation29 %36 %
U.S. Government (see Note 3)13 % 
As of March 31, 2021 and December 31, 2020, the Company had $3.173 billion and $3.112 billion, respectively, of trade accounts receivable that were recorded within Accounts receivable, net.
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3. Collaboration, License, and Other Agreements
a. Sanofi
Amounts recognized in our Statements of Operations in connection with our collaborations with Sanofi are detailed below:
Statement of Operations ClassificationThree Months Ended
March 31,
(In millions)20212020
Antibody:
Regeneron's share of profits in connection with commercialization of antibodiesCollaboration revenue$260.6 $170.9 
Reimbursement for manufacturing of commercial suppliesCollaboration revenue$105.6 $80.1 
Reimbursement of research and development expensesReduction of Research and development expense$30.1 $77.6 
Regeneron's obligation for its share of Sanofi research and development expensesResearch and development expense$(11.9)$(16.7)
Reimbursement of commercialization-related expenses Reduction of Selling, general, and administrative expense$60.4 $91.2 
Immuno-oncology:
Regeneron's share of losses in connection with commercialization of Libtayo outside the United StatesCollaboration revenue$(6.1)$(6.2)
Reimbursement for manufacturing of commercial suppliesCollaboration revenue$4.7 $2.1 
Reimbursement of research and development expensesReduction of Research and development expense$21.9 $39.9 
Reimbursement of commercialization-related expensesReduction of Selling, general, and administrative expense$18.5 $10.4 
Regeneron's obligation for Sanofi's share of Libtayo U.S. gross profitsCost of goods sold$(30.4)$(26.8)
Amounts recognized in connection with up-front payments receivedOther operating income$22.9 $16.5 
Antibody
The Company is party to a global, strategic collaboration with Sanofi to research, develop, and commercialize fully human monoclonal antibodies (the "Antibody Collaboration"), which currently consists of Dupixent® (dupilumab), Kevzara® (sarilumab), and itepekimab. Under the terms of the Antibody License and Collaboration Agreement ("LCA"), Sanofi is generally responsible for funding 80%–100% of agreed-upon development costs.
Sanofi leads commercialization activities for products under the Antibody Collaboration, subject to the Company's right to co-commercialize such products. In addition to profit and loss sharing, the Company is entitled to receive sales milestone payments from Sanofi.
The following table summarizes contract balances in connection with the Company's Antibody Collaboration with Sanofi:
March 31,December 31,
(In millions)20212020
Accounts receivable, net $362.5 $407.7 
Deferred revenue
$383.4 $347.7 
In April 2020, the Company and Sanofi entered into an amendment to the LCA in connection with, among other things, the removal of Praluent from the LCA such that (i) effective April 1, 2020, the LCA no longer governs the development, manufacture, or commercialization of Praluent and (ii) the quarterly period ended March 31, 2020 was the last quarter for
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which Sanofi and the Company shared profits and losses for Praluent under the LCA. The parties also entered into a Praluent Cross License & Commercialization Agreement (the "Praluent Agreement") pursuant to which, effective April 1, 2020, the Company, at its sole cost, became solely responsible for the development and commercialization of Praluent in the United States, and Sanofi, at its sole cost, became solely responsible for the development and commercialization of Praluent outside of the United States. Under the Praluent Agreement, Sanofi will pay the Company a 5% royalty on Sanofi’s net product sales of Praluent outside the United States until March 31, 2032. The Company will not owe Sanofi royalties on the Company’s net product sales of Praluent in the United States. Although each party will be responsible for manufacturing Praluent for its respective territory, the parties have entered into definitive supply agreements under which, for a certain transitional period, the Company will continue to supply drug substance to Sanofi and Sanofi will continue to supply finished product to Regeneron.
With respect to any intellectual property or product liability litigation relating to Praluent, the parties have agreed that, effective April 1, 2020, Regeneron and Sanofi each will be solely responsible for any such litigation (including damages and other costs and expenses thereof) in the United States and outside the United States, respectively, arising out of Praluent sales or other activities on or after April 1, 2020 (subject to Sanofi's right to set off a portion of any third-party royalty payments resulting from certain patent litigation proceedings against up to 50% of any Praluent royalty payment owed to Regeneron). The parties will each bear 50% of any damages arising out of Praluent sales or other activities prior to April 1, 2020. See Note 12 for discussion of legal proceedings related to Praluent.
Immuno-Oncology
The Company is party to a collaboration with Sanofi to research, develop, and commercialize antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration"). The IO Collaboration is governed by an Amended and Restated Immuno-oncology Discovery and Development Agreement ("Amended IO Discovery Agreement"), and an Immuno-oncology License and Collaboration Agreement ("IO License and Collaboration Agreement").
Effective December 31, 2018, the Company and Sanofi entered into the Amended IO Discovery Agreement, which narrowed the scope of the existing discovery and development activities conducted by the Company under the 2015 IO Discovery Agreement to developing therapeutic bispecific antibodies targeting (i) BCMA and CD3 (the "BCMAxCD3 Program") and (ii) MUC16 and CD3 (the "MUC16xCD3 Program") through clinical proof-of-concept. During the first quarter of 2021, Sanofi did not exercise its options to license rights to these product candidates; as a result, we retain the exclusive right to develop and commercialize such product candidates and Sanofi will receive a royalty on sales (if any). In addition, the Company has no further obligations to to develop drug product candidates under the Amended IO Discovery Agreement.
Under the terms of the IO License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo (cemiplimab), an antibody targeting the receptor known as programmed cell death protein 1 (PD-1). The parties share equally, on an ongoing basis, agreed-upon development and commercialization expenses for Libtayo. The Company has principal control over the development of Libtayo and leads commercialization activities in the United States (see Note 2 for related product sales information), while Sanofi leads commercialization activities outside of the United States. The parties share equally in profits and losses in connection with the commercialization of Libtayo.
The following table summarizes contract balances in connection with the Company's IO Collaboration with Sanofi:
March 31,December 31,
(In millions)20212020
Accounts receivable, net
$(7.4)$(6.5)
Deferred revenue
$7.1 $10.7 
Other liabilities
$258.4 $280.9 
Other liabilities include up-front payments received from Sanofi for which recognition has been deferred.
The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2021 was $515.4 million. This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities.
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b. Bayer
The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA outside the United States. All agreed upon EYLEA development expenses incurred by the Company and Bayer are shared equally. Bayer markets EYLEA outside the United States, where, for countries other than Japan, the companies share equally in profits and losses from sales of EYLEA. In Japan, the Company is currently entitled to receive a tiered percentage of between 33.5% and 40.0% of EYLEA net product sales through 2021, and thereafter, the companies will share equally in profits and losses from sales of EYLEA.
Amounts recognized in our Statements of Operations in connection with our Bayer EYLEA collaboration are as follows:
Statement of Operations ClassificationThree Months Ended
March 31,
(In millions)20212020
Regeneron's net profit in connection with commercialization of EYLEA outside the United States
Collaboration revenue$308.9 $253.8 
Reimbursement for manufacturing of commercial supplies
Collaboration revenue$13.9 $27.6 
Reimbursement of research and development expenses
Reduction of Research and development expense
$10.8 

$12.0 
Regeneron's obligation for its share of Bayer research and development expenses
Research and development expense
$(12.5)$(8.1)
The following table summarizes contract balances in connection with our Bayer EYLEA collaboration:
March 31,December 31,
(In millions)20212020
Accounts receivable, net$320.3 $336.2 
Deferred revenue
$97.0 $99.7 
c. Teva
The Company and Teva are parties to a collaboration agreement (the "Teva Collaboration Agreement") to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement with Mitsubishi Tanabe Pharma Corporation. The Company leads global development activities, and the parties share development costs equally, on an ongoing basis, under a global development plan. The Company is also responsible for the manufacture and supply of fasinumab globally.
Amounts recognized in our Statements of Operations in connection with our collaboration with Teva are as follows:
Statement of Operations ClassificationThree Months Ended
March 31,
(In millions)20212020
Reimbursement of research and development expenses
Reduction of Research and development expense
$19.8 $25.2 
Amounts recognized in connection with up-front and development milestone payments received
Other operating income
$12.2 $16.6 
The following table summarizes contract balances in connection with the Teva Collaboration Agreement:
March 31,December 31,
(In millions)20212020
Accounts receivable, net$20.0 $27.7 
Other liabilities
$54.5 $66.8 
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Other liabilities include up-front and development milestone payments received from Teva for which recognition has been deferred.
The aggregate amount of the estimated consideration under the Teva Collaboration Agreement related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2021 was $123.9 million. This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities.
d. U.S. Government
REGEN-COV
In the first quarter of 2020, we announced an expansion of our Other Transaction Agreement with the Biomedical Advanced Research Development Authority ("BARDA"), pursuant to which the U.S. Department of Health and Human Services ("HHS") was obligated to fund certain of our costs incurred for research and development activities related to COVID-19 treatments. In July 2020, we entered into an agreement with entities acting at the direction of BARDA and the U.S. Department of Defense to manufacture and deliver filled and finished drug product of REGEN-COV to the U.S. government. During the first quarter of 2021, the Company completed its final deliveries of drug product under this agreement. See Note 2 for REGEN-COV net product sales recognized in connection with this agreement during the three months ended March 31, 2021.
In January 2021, the Company announced an agreement with an entity acting on behalf of the U.S. Department of Defense and HHS to manufacture and deliver additional filled and finished drug product of REGEN-COV to the U.S. government. Pursuant to the agreement, the U.S. government is obligated to purchase all filled and finished doses of drug product delivered by June 30, 2021, and may accept doses during the period from July 1, 2021 through September 30, 2021 at its discretion. The U.S. government will acquire doses at the lowest treatment dose authorized or approved by the FDA for the indication authorized under the EUA, resulting in payments to the Company of up to $2.625 billion in the aggregate. During the three months ended March 31, 2021, we did not recognize any net product sales in connection with this agreement.
e. Roche
In August 2020, we entered into a collaboration agreement (the "Roche Collaboration Agreement") with Roche to develop, manufacture, and distribute the casirivimab with imdevimab antibody cocktail (known as REGEN-COV in the United States). We continue to lead global development activities for casirivimab with imdevimab, and the parties jointly fund certain ongoing studies, as well as any mutually agreed additional new global studies to evaluate further the potential of casirivimab with imdevimab in treating or preventing COVID-19. Roche will be responsible for securing regulatory approvals outside the United States, following the initial European Medicines Agency ("EMA") approval (if any), and conducting any additional studies specifically required for approval by regulators outside the United States.
Under the terms of the agreement, each party is obligated to dedicate a certain amount of manufacturing capacity to casirivimab with imdevimab each year. We distribute the product in the United States and Roche distributes the product outside of the United States. The parties share gross profits from worldwide sales based on a pre-specified formula, depending on the amount of manufactured product supplied by each party to the market.
Amounts recognized in our Statements of Operations in connection with the Roche Collaboration Agreement are as follows:
Statement of Operations ClassificationThree Months Ended
March 31,
(In millions)20212020
Regeneron's share of gross profits in connection with sales of casirivimab with imdevimabCollaboration revenue$66.8  
Reimbursement of research and development expensesReduction of Research and development expense$86.8  
The following table summarizes contract balances in connection with the Roche Collaboration Agreement:
March 31,December 31,
(In millions)20212020
Accounts receivable, net$219.9 $77.1 
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4. Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted average number of shares of Common Stock and Class A Stock outstanding. Net income per share is presented on a combined basis, inclusive of Common Stock and Class A Stock outstanding, as each class of stock has equivalent economic rights. Diluted net income per share includes the potential dilutive effect of other securities as if such securities were converted or exercised during the period, when the effect is dilutive. The calculations of basic and diluted net income per share are as follows:
Three Months Ended
March 31,
(In millions, except per share data)20212020
Net income - basic and diluted$1,115.2 $624.6 
Weighted average shares - basic105.4 109.8 
Effect of dilutive securities:
Stock options4.5 5.0 
Restricted stock0.6 0.3 
Weighted average shares - diluted110.5 115.1 
Net income per share - basic$10.58 $5.69 
Net income per share - diluted$10.09 $5.43 
Shares which have been excluded from diluted per share amounts because their effect would have been antidilutive, include the following:
Three Months Ended
March 31,
(Shares in millions)20212020
Stock options5.0 10.2 
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5. Marketable Securities
Marketable securities as of March 31, 2021 and December 31, 2020 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).
The following tables summarize the Company's investments in available-for-sale debt securities:
(In millions)AmortizedUnrealizedFair
As of March 31, 2021Cost BasisGainsLossesValue
Corporate bonds$3,610.4 $27.7 $(5.9)$3,632.2 
U.S. government and government agency obligations487.4 0.6 (0.2)487.8 
Sovereign bonds65.0 0.8 (0.1)65.7 
Commercial paper254.2 0.1  254.3 
Certificates of deposit167.1 0.1  167.2 
$4,584.1 $29.3 $(6.2)$4,607.2 
As of December 31, 2020
Corporate bonds$3,053.0 $37.5 $(0.2)$3,090.3 
U.S. government and government agency obligations127.6 1.3  128.9 
Sovereign bonds65.2 1.1  66.3 
Commercial paper276.0 0.1  276.1 
Certificates of deposit127.4 0.1  127.5 
$3,649.2 $40.1 $(0.2)$3,689.1 
The Company classifies its investments in available-for-sale debt securities based on their contractual maturity dates. The available-for-sale debt securities listed as of March 31, 2021 mature at various dates through March 2026. The fair values of available-for-sale debt securities by contractual maturity consist of the following:
March 31,December 31,
(In millions)20212020
Maturities within one year$2,065.9 $1,393.3 
Maturities after one year through five years2,541.3 2,295.8 
$4,607.2 $3,689.1 
The following table shows the fair value of the Company's available-for-sale debt securities that have unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous loss position.
Less than 12 Months12 Months or GreaterTotal
(In millions)
As of March 31, 2021
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
Corporate bonds$1,304.1 $(5.9)  $1,304.1 $(5.9)
U.S. government and government agency obligations123.1 (0.2)  123.1 (0.2)
Sovereign bonds28.0 (0.1)  28.0 (0.1)
$1,455.2 $(6.2)  $1,455.2 $(6.2)
As of December 31, 2020
Corporate bonds$364.5 $(0.2)  $364.5 $(0.2)
There were no realized losses on sales of marketable securities, and realized gains were not material, for the three months ended March 31, 2021 and 2020.
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With respect to marketable securities, for the three months ended March 31, 2021 and 2020, amounts reclassified from Accumulated other comprehensive income into Other income (expense), net were related to realized gains on sales of available-for-sale debt securities.
6. Fair Value Measurements
The table below summarizes the Company's assets which are measured at fair value on a recurring basis. The following fair value hierarchy is used to classify assets, based on inputs to valuation techniques utilized to measure fair value:
Level 1 - Quoted prices in active markets for identical assets
Level 2 - Significant other observable inputs, such as quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuations in which significant inputs used are observable
Level 3 - Significant other unobservable inputs
(In millions)Fair Value Measurements at Reporting Date
As of March 31, 2021Fair ValueLevel 1Level 2
Available-for-sale debt securities:
Corporate bonds$3,632.2  $3,632.2 
U.S. government and government agency obligations487.8  487.8 
Sovereign bonds65.7  65.7 
Commercial paper254.3  254.3 
Certificates of deposit167.2  167.2 
Equity securities (unrestricted)77.7 $77.7  
Equity securities (restricted)924.7 924.7  
$5,609.6 $1,002.4 $4,607.2 
As of December 31, 2020
Available-for-sale debt securities:
Corporate bonds$3,090.3  $3,090.3 
U.S. government and government agency obligations128.9  128.9 
Sovereign bonds66.3  66.3 
Commercial paper276.1  276.1 
Certificates of deposit127.5  127.5 
Equity securities (unrestricted)48.3 $48.3  
Equity securities (restricted)791.5 791.5  
$4,528.9 $839.8 $3,689.1 
The Company held certain restricted equity securities as of March 31, 2021 which are subject to transfer restrictions that expire at various dates through 2024.
During the three months ended March 31, 2021 and 2020, we recorded $143.9 million of net unrealized gains and $56.8 million of net unrealized losses, respectively, on equity securities in Other income (expense), net.
In addition to the investments summarized in the table above, as of March 31, 2021 and December 31, 2020, the Company had $40.0 million and $59.2 million, respectively, in equity investments that do not have a readily determinable fair value. These investments are recorded within Other noncurrent assets.
The fair value of our long-term debt (see Note 8), which was determined based on Level 2 inputs, was estimated to be $1.803 billion and $1.958 billion as of March 31, 2021 and December 31, 2020, respectively.
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7. Inventories
Inventories consist of the following:
March 31,December 31,
(In millions)20212020
Raw materials$576.2 $459.4 
Work-in-process971.2 904.6 
Finished goods117.9 121.7 
Deferred costs499.4 430.9 
$2,164.7 $1,916.6 
Deferred costs represent the costs of product manufactured and shipped to the Company's collaborators for which recognition of revenue has been deferred.
8. Debt
In August 2020, we issued and sold $1.250 billion aggregate principal amount of senior unsecured notes due 2030 and $750 million aggregate principal amount of senior unsecured notes due 2050. Long-term debt in connection with our senior unsecured notes (collectively, the "Notes"), net of underwriting discounts and offering expenses, consists of the following:
March 31,December 31,
(In millions)20212020
1.750% Senior Notes due September 2030
$1,239.0 $1,238.7 
2.800% Senior Notes due September 2050
739.9 739.8 
$1,978.9 $1,978.5 
Interest expense related to the Notes for the three months ended March 31, 2021 was $11.1 million.
9. Income Taxes
The Company is subject to U.S. federal, state, and foreign income taxes. The Company's effective tax rate was 11.0% and 6.6% for the three months ended March 31, 2021 and 2020, respectively. The Company's effective tax rate for the three months ended March 31, 2021 was positively impacted, compared to the U.S. federal statutory rate, primarily by the reversal of liabilities related to uncertain tax positions, stock-based compensation, income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate, and federal tax credits for research activities. The Company's federal income tax returns for 2015 through 2018 are currently under audit by the Internal Revenue Service ("IRS"). During the first quarter of 2021, we reduced the amount of liabilities for uncertain tax positions related to the Company’s federal income tax returns for 2015 and 2016, and the audits of such tax years are expected to conclude in the next 12 months. The Company's effective tax rate for the three months ended March 31, 2020 was positively impacted, compared to the U.S. federal statutory rate, primarily by stock-based compensation, and, to a lesser extent, income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate and federal tax credits for research activities.
10. Stockholders' Equity
Share Repurchase Programs
In November 2019, our board of directors authorized a share repurchase program to repurchase up to $1.0 billion of our Common Stock. The share repurchase program permitted the Company to effect repurchases through a variety of methods, including open-market transactions (including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, block trades, and other transactions in compliance with Rule 10b-18 of the Exchange Act. During the three months ended March 31, 2020, we repurchased 719,167 shares of our Common Stock under the program and recorded the cost of the shares received, or $272.8 million, as Treasury Stock. As of December 31, 2020, the Company had repurchased the entire $1.0 billion it was authorized to repurchase under the program.
In January 2021, our board of directors authorized a new share repurchase program to repurchase up to $1.5 billion of our Common Stock. The share repurchase program was approved under terms substantially similar to the November 2019 share repurchase program described above. Repurchases may be made from time to time at management’s discretion, and the timing
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and amount of any such repurchases will be determined based on share price, market conditions, legal requirements, and other relevant factors. The program has no time limit and can be discontinued at any time. There can be no assurance as to the timing or number of shares of any repurchases in the future. During the three months ended March 31, 2021, we repurchased 690,265 shares of our Common Stock under the program and recorded the cost of the shares received, or $323.5 million, as Treasury Stock. As of March 31, 2021, $1.177 billion remained available for share repurchases under the program.
Sanofi Funding of Certain Development Costs
In 2018, the Company and Sanofi entered into a letter agreement (the "Letter Agreement") in connection with, among other matters, the allocation of additional funds to certain activities relating to dupilumab and itepekimab (collectively, the "Dupilumab/Itepekimab Eligible Investments"). Pursuant to the Letter Agreement, we agreed to allow Sanofi to satisfy its funding obligations with respect to Dupilumab/Itepekimab Eligible Investments, as well as Libtayo development costs, for quarterly periods ending on September 30, 2020 by selling our Common Stock owned by Sanofi. During the three months ended March 31, 2020, Sanofi elected to sell, and we elected to purchase (by issuing a credit towards the amount owed by Sanofi), 43,627 shares of our Common Stock to satisfy Sanofi's funding obligation related to Libtayo development costs, and we recorded the cost of the shares received, or $21.4 million, as Treasury Stock. In addition, during the three months ended March 31, 2020, Sanofi elected to sell, and we elected to purchase (in cash), 85,287 shares of our Common Stock in connection with Sanofi's funding obligation for Dupilumab/Itepekimab Eligible Investments, and recorded the cost of the shares received, or $41.8 million, as Treasury Stock.
11. Statement of Cash Flows
The following provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheet to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows:
March 31,
(In millions)20212020
Cash and cash equivalents$1,437.9 $2,208.2 
Restricted cash included in Other noncurrent assets
12.5 12.5 
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows
$1,450.4 $2,220.7 
Restricted cash consists of amounts held by financial institutions pursuant to contractual arrangements.
Supplemental disclosure of non-cash investing and financing activities
The following amounts were included in accounts payable, accrued expenses, and other liabilities:
March 31,December 31,March 31,December 31,
(In millions)2021202020202019
Accrued capital expenditures$75.6 $83.6 $72.6 $133.7 
As described in Note 10, during the three months ended March 31, 2020, we purchased (by issuing a credit towards the amount owed by Sanofi) shares of our Common Stock from Sanofi to satisfy Sanofi's funding obligation related to Libtayo development costs.
12. Legal Matters
From time to time, the Company is a party to legal proceedings in the course of the Company's business. Costs associated with the Company's involvement in legal proceedings are expensed as incurred. The outcome of any such proceedings, regardless of the merits, is inherently uncertain. The Company recognizes accruals for loss contingencies associated with such proceedings when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. As of March 31, 2021 and December 31, 2020, the Company's accruals for loss contingencies were not material. If the Company were unable to prevail in any such proceedings, its consolidated financial position, results of operations, and future cash flows may be materially impacted.
Proceedings Relating to Praluent (alirocumab) Injection
As described in greater detail below, the Company is currently a party to patent infringement actions initiated by Amgen Inc. (and/or its affiliated entities) against the Company and/or Sanofi (and/or the Company's and Sanofi's respective affiliated
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entities) in a number of jurisdictions relating to Praluent. See Note 3 for a description of the Company's and Sanofi's arrangement regarding the costs resulting from or associated with such actions.
United States
In the United States, Amgen has asserted claims of U.S. Patent Nos. 8,829,165 (the "'165 Patent") and 8,859,741 (the "'741 Patent"), and seeks a permanent injunction to prevent the Company and the Sanofi defendants from commercial manufacturing, using, offering to sell, or selling within the United States (as well as importing into the United States) (collectively, "Commercializing") Praluent. Amgen also seeks a judgment of patent infringement of the asserted patents, monetary damages (together with interest), costs and expenses of the lawsuits, and attorneys' fees. As described in greater detail under "Second Jury Trial and Appeal" below, on February 11, 2021, the Federal Circuit (as defined below) affirmed the lower court's decision that certain of Amgen's asserted patent claims are invalid based on lack of enablement.
First Jury Trial and Appeal. The first jury trial in this litigation (the "First Trial") was held in the United States District Court for the District of Delaware (the "District Court") from March 8 to March 16, 2016. During the course of the First Trial, the District Court ruled as a matter of law in favor of Amgen that the asserted patent claims were not obvious, and in favor of the Company and the Sanofi defendants that there was no willful infringement of the asserted patent claims by the Company or the Sanofi defendants. On March 16, 2016, the jury returned a verdict in favor of Amgen in the First Trial, finding that the asserted claims of the '165 and '741 Patents were not invalid based on either a lack of written description or a lack of enablement. On October 5, 2017, the United States Court of Appeals for the Federal Circuit (the "Federal Circuit") reversed in part the District Court's decision and remanded for a new trial on the issues of written description and enablement. In addition, it affirmed the District Court's ruling that Amgen's patents were not obvious.
Second Jury Trial and Appeal. On January 3, 2019, the District Court held oral argument in the remanded proceedings on the Company and the Sanofi defendants' motion for judgment on the pleadings regarding Amgen's willful infringement claim. On January 18, 2019, the District Court entered an order (i) denying the Company and the Sanofi defendants' motion for summary judgment on validity, (ii) denying Amgen's motion for partial summary judgment on estoppel, and (iii) granting the Company and the Sanofi defendants' cross-motion for summary judgment on estoppel. On February 8, 2019, the District Court granted the Company and the Sanofi defendants' motion for judgment on the pleadings, thereby dismissing Amgen's claim of willful infringement. The second jury trial in this litigation (the "Second Trial") was held before the District Court in February 2019 to determine the validity of Amgen's asserted patent claims. On February 25, 2019, the jury returned a verdict in the Second Trial generally in favor of Amgen, finding that two claims of the '165 Patent and one claim of the '741 Patent were not invalid. The jury also found that two claims of the '165 Patent were invalid for lack of adequate written description while rejecting the lack of enablement challenges to those two claims. On August 28, 2019, the District Court ruled as a matter of law that Amgen's asserted patent claims are invalid based on lack of enablement. The District Court also conditionally denied the Company and the Sanofi defendants' motion for a new trial. On October 23, 2019, Amgen filed a notice of appeal of the District Court's decision with the Federal Circuit. An oral hearing before the Federal Circuit was held on December 9, 2020. On February 11, 2021, the Federal Circuit affirmed the District Court's decision that certain of Amgen's asserted patent claims are invalid based on lack of enablement. On April 14, 2021, Amgen filed a petition for a rehearing en banc.
Injunctive Relief Proceedings. On March 18, 2019, Amgen filed a renewed motion for a permanent injunction to prohibit the Company and the Sanofi defendants from Commercializing Praluent in the United States (a "Permanent Injunction"), and an oral hearing on this motion was held in June 2019. Previously, the Federal Circuit stayed and then vacated a Permanent Injunction granted by the District Court in connection with the First Trial. On August 28, 2019, the District Court dismissed as moot Amgen's renewed motion for a Permanent Injunction.
Europe
Amgen has asserted European Patent No. 2,215,124 (the "'124 Patent"), which pertains to PCSK9 monoclonal antibodies, in the countries in Europe discussed below. As described in greater detail under "EPO Proceedings" below, in October 2020 the '124 Patent claims directed to compositions of matter and medical use were ruled invalid by the Technical Board of Appeal (the "TBA") of the European Patent Office (the "EPO"). This decision has impacted or will impact each of the infringement proceedings based on the '124 Patent discussed below.
EPO Proceedings. The '124 Patent was subject to opposition proceedings in the EPO seeking to invalidate certain of its claims, which were initiated by Sanofi on February 24, 2016 and, separately, by the Company, Sanofi, and several other opponents on November 24, 2016. On December 13, 2017, the Opposition Division of the EPO issued a preliminary, non-binding opinion (the "Preliminary Opinion") regarding the validity of the '124 Patent, indicating that it currently considers the claims of a new request filed by Amgen in response to the opposition to satisfy the requirements for patentability. An oral hearing on the oppositions against the '124 Patent was held on November 28–30, 2018, at which the Opposition Division upheld the validity of the '124 Patent's claims in amended form. The Company and Sanofi filed notices of appeal to the TBA on November 30, 2018.
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An oral hearing before the TBA was held on October 28–29, 2020, at which the TBA ruled that the '124 Patent claims directed to compositions of matter and medical use relevant to Praluent were invalid based on a lack of inventive step.
United Kingdom. On July 25, 2016, Amgen filed a lawsuit against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi-Synthelabo Limited, Aventis Pharma Limited, Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the English High Court of Justice, Chancery Division, Patents Court, in London, seeking a declaration of infringement of the '124 Patent by Praluent. The lawsuit also seeks a permanent injunction, damages, an accounting of profits, and costs and interest. On February 8, 2017, the court temporarily stayed this litigation on terms mutually agreed by the parties. On October 22, 2020, the court lifted the stay upon application by the Company and the Sanofi defendants, and the case will proceed in due course.
Germany. On July 25, 2016, Amgen filed a lawsuit for infringement of the '124 Patent against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the Regional Court of Düsseldorf, Germany (the "Düsseldorf Regional Court"), seeking a permanent injunction, an accounting of marketing activities, a recall of Praluent and its removal from distribution channels, and damages. On November 14, 2017, the Düsseldorf Regional Court issued a decision staying the infringement proceedings until a decision of the Opposition Division of the EPO concerning the pending opposition filed by the Company, Sanofi, and several other opponents against the '124 Patent (as discussed above). Following Amgen's request to reopen the proceedings in light of the issuance of the Preliminary Opinion, the Düsseldorf Regional Court held an oral hearing on September 11, 2018 and ruled on December 10, 2018 that the infringement proceedings would be reopened. On July 11, 2019, the Düsseldorf Regional Court found that Praluent infringes the '124 Patent and granted an injunction prohibiting the Company and Sanofi's manufacture, sale, and marketing of Praluent in Germany (the "July 11 Decision"). Amgen subsequently enforced the injunction and, as a result, commercialization of Praluent in Germany was discontinued. On July 12, 2019, the Company and Sanofi appealed the July 11 Decision to the Higher Regional Court of Düsseldorf (the "Higher Regional Court"). On August 5, 2019 and October 31, 2019, the Higher Regional Court denied the Company and Sanofi's requests for a stay of preliminary enforcement of the July 11 Decision pending the appeal on the merits. On November 3, 2020, Amgen filed a motion withdrawing this lawsuit without prejudice. An oral hearing on the merits of the appeal to the Higher Regional Court was held on November 5, 2020, at which the Higher Regional Court overturned the July 11 Decision.
France. On September 26, 2016, Amgen filed a lawsuit for infringement of the '124 Patent in the Tribunal de grande instance in Paris, France against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A., and Sanofi Chimie (subsequently added as a defendant). Amgen is seeking the prohibition of allegedly infringing activities with a €10,000 penalty per drug unit of Praluent produced in violation of the court order sought by Amgen; an appointment of an expert for the assessment of damages; disclosure of technical (including supply-chain) and accounting information to the expert and the court; provisional damages of €10.0 million (which would be awarded on an interim basis pending final determination); reimbursement of costs; publication of the ruling in three newspapers; and provisional enforcement of the decision to be issued, which would ensure enforcement of the decision (including any provisional damages) pending appeal. Amgen is not seeking a preliminary injunction in this proceeding at this time. On April 10, 2017, the Company and the Sanofi parties filed briefs seeking invalidation of certain of the claims of the '124 Patent, and Amgen filed a response on July 28, 2017. Oral hearing on this infringement lawsuit (originally scheduled for February 12, 2019) has yet to be rescheduled.
The Netherlands. On December 17, 2019, Amgen initiated a lawsuit alleging infringement of the Dutch designation of the '124 Patent in the District Court of The Hague in the Netherlands, against Sanofi-Aventis Netherlands B.V. and Sanofi-Aven