Regeneron Pharmaceuticals, Inc.

Welcome to Regeneron Pharmaceuticals Q4 2019 Earnings Conference Call. My name is Sylvia and I'll be your operator for today's call. At this time, all participants in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star then 1 on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Justin Holcomb. Justin, you may begin.

Thank you, Sylvia. Good morning, good afternoon, and good evening to everyone listening around the world. Thank you for your interest in Regeneron Pharmaceuticals, and welcome to the fourth quarter 2019 conference call. An archive of this webcast will be available on our website. Joining me today are Leonard Schleifer, Founder, President, and Chief Executive Officer, George Yancopoulos, Founding Scientist, President and Chief Scientific Officer, Marion McCourt, Senior Vice President and Head of Commercial, and Bob Landry, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will open the call for Q&A. I would also like to remind you that remarks made on today's call include forward-looking statements of our Regeneron. Such statements may include, but are not limited to, those related to Regeneron and its product and business, financial forecasts and guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement issues, intellectual property, pending litigation, and other proceedings and competition. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in Regeneron's filings with the United States Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2019, which you are planning to file with the SEC tomorrow. Regeneron does not undertake any obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, please note that GAAP and non-GAAP measures will be discussed on today's call. Information regarding our use of non-GAAP financial measures and the reconciliation of those measures to GAAP is available in our financial results press release, which can be accessed on our website. Additional information about those measures is also available on the investor and media section of our website. Once our call concludes, Bob Landry and the IR team will be available to answer further questions. With that, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer.

Thank you, Justin. Thank you to everyone for joining our call today. The fourth quarter capped off a strong 2019 for Regeneron. Our three growth drivers, ILEA, Dupixent, and Libtyo, drove double-digit growth on the top and bottom lines while we continued to make substantial investments in our innovative R&D pipeline. In the quarter, ILEA global net product sales grew 11% to $2 billion, including U.S. ILEA net sales growth of 13% to $1.22 billion, even with the launch of a new competitor. For the full year, Global net sales of ILEA grew 12% to $7.5 billion. We remain confident as we expand our leadership position in wet AMD and diabetic diseases. Dupixent sales are now annualizing at $3 billion as we expand our footprint in the treatment of type 2 inflammatory diseases. Global net product sales grew 136% to $762 million in the fourth quarter. And just last week, we announced that the FDA accepted for priority review our filing in pediatric atopic dermatitis, which, if approved, will represent a breakthrough for children 6 to 11 years old suffering from this debilitating disease. We are still in the early days of Dupixent, with many global launches just starting and several potential new indications in late-stage developments. As expected, the profits from our antibody collaboration with Sanofi continue to increase, creating further revenue and earnings diversification for Regeneron. On the strength of Dupixent, we generated profits of $104 million for the fourth quarter and $209 million for the full year, despite the losses associated with Praluent and Kevzara. To that end, we have been working hard to address Praluent and Kevzara performance to further enhance profitability of the collaborations. In December, we in Sanofi announced a major restructuring of the alliance that will improve profitability, increase efficiency, and enhance focus on Dupixent. We remain on track to close the transaction in the first quarter. In oncology, we continue to make progress both commercially and in R&D. Sales for Libtyo, our anti-PD-1 therapy, grew to $75 million in the fourth quarter. In the U.S., we extended Libtyo's leadership position as the number one systemic treatment in cutaneous squamous cell carcinoma. As we look to 2020 for Libtyo, we're excited about the late-stage data readouts in basal cell carcinoma and the interim analysis for our pivotal monotherapy study in non-small cell lung cancer. We're also making significant progress in our biospecifics program in oncology, We had a strong showing at the American Society of Hematology meeting in December, where we presented initial data for our BCMA by CD3 antibody, as well as updated data for our CD20 by CD3 antibody. While each of these programs could be important individual treatments over time, they also represent validation of our biospecifics program, which, along with Liptio, form a diverse and powerful toolkit to potentially address malignant diseases. Regeneron has a track record of tackling some of the world's most challenging health issues while creating long-term value for shareholders. Looking back at 2019, we achieved six important regulatory approvals across our growth drivers of ILEA, Dupixent, and Liptio. Beyond these approvals, we made significant advances in our pipeline, which George will discuss. Additionally, I would like to call your attention to the global health crisis on coronavirus. We have answered the call for help and are responding diligently with HHS to develop potential treatments. George will also further outline this effort. We're generally presenting 2020 from a position of financial strength. We have the necessary capital to advance and expand our wholly owned R&D pipelines. Additionally, we continue to seek value-creating business development with a focus on technologies that enable and accelerate our own technologies in drug discovery and development. And when market conditions create opportunity, we will continue to buy back shares under our share repurchase program, where we continue to see a significant dislocation between our share price and the long-term value of the company. In conclusion... We are pleased with our continued operational and financial execution that is creating near and long-term value. We are entering 2020 with strong momentum, and we remain confident in our strategy and in our business. Now I'll turn the call over to George.