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spk17: Welcome to the Regina Rahn Pharmaceuticals Second Quarter 2023 Earnings Conference Call. My name is Shannon, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Ryan Crowe, Vice President, Investor Relations. You may begin.
spk09: Thank you, Shannon. Good morning, good afternoon, and good evening to everyone listening around the world. Thank you for your interest in Regeneron, and welcome to our second quarter 2023 earnings conference call. An archive of this webcast will be available on our investor relations website shortly after the call ends. Joining me on today's call are Dr. Leonard Schleifer, Board Co-Chair, Co-Founder, President, and Chief Executive Officer, Dr. George Yancopoulos, Board Co-Chair, Co-Founder, President, and Chief Scientific Officer, Marion McCourt, Executive 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 like to remind you that remarks made on today's call may include forward-looking statements about Regeneron. Such statements may include but are not limited to those related to Regeneron and its products and business, financial forecasts and guidance, revenue diversification, development programs and related anticipated milestones, including anticipated regulatory actions, 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-Q, where the quarterly period ended June 30, 2023, which was filed with the SEC this morning. Regeneron does not undertake any obligation to update 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 in today's call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our financial results press release and our corporate presentation, which can be accessed on 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. Len? Thanks, Ryan, and thanks to everyone joining today's call.
spk03: Regeneron delivered strong results across the organization in the second quarter of 2023, while continuing to make progress toward our long-term objective of growing the business while simultaneously diversifying its revenue and earnings streams. Total revenues increased by 11% compared to the prior year quarter, primarily driven by Sanofi collaboration revenues and Libtayo net product sales. which grew by 39% and 49%, respectively. Non-ILEA revenue contributions were 41% of total revenues, the highest proportion for any quarter in the last 10 years, excluding those with COVID antibody revenue contributions. Overall, we were pleased with the trajectory of the business and believe the company continues to be well-positioned to deliver long-term growth. In a few minutes, George, Marion, and Bob will provide commentary on pipeline developments, commercial execution, and financial results that we achieved during the second quarter. For the remainder of my remarks today, I will focus on Aflibricep 8 milligrams. We are very excited about the emerging clinical profile, including the compelling two-year data from the Pivotal Photon Study in patients with diabetic macular edema, which George will discuss in more detail. Now I will summarize the progress that has been made toward getting this important product candidate approved by the FDA. As we announced in late June, the complete response letter, or CRL, that we received from the FDA regarding our biological license application for a FlibroCept 8 milligrams for the treatment of patients with wet age-related macular degeneration, DME, and diabetic retinopathy, did not identify any issues related to a flibrocept 8 milligrams clinical efficacy, safety profile, trial design, labeling, or drug substance manufacturing, nor has the FDA requested any additional clinical data. The CRL was entirely based on unresolved observations resulting from the May 2023 FDA pre-approval inspection of a third-party contract manufacturing organization, Catalan, that Regeneron engaged to complete vial filling for Aflibizep 8 milligrams. The inspection observations were noted in a Form 483 and were related to a manufacturing line in Catalin's facility that is used to fill vials with Aflibizep 8 milligrams, as well as our C5 antibody, Cozelumab, for the ultra-rare Chappell disease, which has a PDUFA date of August 20th. The inspection was conducted as part of the FDA review process for both the Aflibicept 8-mg BLA and the Pazelamab BLA. Broadly speaking, the observations cited production and process control procedures, equipment validation, and facility maintenance. We, Catalan, and the FDA have had multiple discussions since the Aflibicept 8-mg CRL. There is a clear understanding of the remediation work that is required to allow the FDA to resume approving BLAs that involve manufacturing on this line. Catalan has already provided data and information to the FDA that could satisfy some of these requirements and expects to be able to provide the remaining required data and information by mid-August. The FDA said they will strive to complete their review expeditiously prior to the August 20th PDUFA date for Pozellamab. However, if they are unable to complete their review before this date, the FDA said that they may need to extend their review by up to three months. If they do extend the review, FDA has stated that they will continue to prioritize the review and complete it as early as possible. Importantly, the FDA has also stated that their review of the Catalan manufacturing data in the context of the Pizellamab BLA will support actions for both the Pizellamab BLA and the Aflibrocept 8 milligram BLA resubmission, which has already been submitted. In summary, We in Catalan expect to submit by mid-August all of the Catalan manufacturing data and information required to address the observations resulting from the pre-improval inspection. The FDA has stated that they will strive to complete their review expeditiously prior to August 20th. If not, we anticipate the FDA will act on a Pizellamab and a Flibicep 8-milligram BLAs before the end of the third quarter. In closing, we remain confident in our strategy of focusing investment on our internal R&D capabilities while exploring potential external collaborations, as well as in our ability to deliver breakthroughs to patients and value to shareholders. With that, let me turn the call over to George.
spk06: Thank you, Len. I would like to start with our recent update on the flibrocept 8 milligram data in DME that Len referred to. At the annual American Society of Retina Specialists meeting, we presented the two-year results from our photon study. These data demonstrated that the vast majority of flibrocept 8 milligram patients randomized to the 12-week and 16-week dosing intervals continued to sustain vision and anatomic improvements through 96 weeks. 89% of all of flibrocept 8 milligram patients were able to maintain at least every 12-week dosing intervals for the entire two-year period, while 84% of patients assigned to every 16-week dosing at baseline were able to maintain that interval or extend beyond it. On that point, many patients met the criteria for extension to longer intervals, with 44% meeting the criteria for greater than 20-week dosing intervals including 27% who were eligible for 24-week dosing. The safety profile of a Flibercept 8 milligram remained consistent with ILEA. Sustaining vision and anatomic improvements while maintaining such extended dosing intervals over two years is unprecedented in the field. Our results further strengthened the clinical profile of Flibercept 8 milligram and positioned this investigational medicine to become the future standard of care for retinal diseases. Later in the third quarter, we and Bayer are planning to share initial results from the second year analysis of the PULSAR study in patients with wet AMD. Moving to our immunology and inflammation pipeline on Dupixent, we look forward to the FDA decision for our SDLA in chronic spontaneous urticaria by October 22nd, 2023. In terms of Dupixent in patients with COPD, We and Sanofi are pleased to announce that Dupixen was granted breakthrough designation for uncontrolled COPD with the neosynostilotype based on the positive results of the phase three Boreas study. Based on ongoing discussions with the FDA, we expect that in addition to the Boreas study results, we will need to provide data from the replicate phase three notice study to support a BLA, and such data requirements remain under discussion with the FDA. We continue to expect final results for the notice study by mid-2024. Moving to itapicumab, our anti-IL-33 antibody, which is being evaluated for COPD in former smokers. In May, Sanofi announced that the Phase III, ERIFI I and II studies had passed an interim futility analysis. These studies remain on track for readout and regulatory submissions in 2025. Both itapicumab and dipixin could transform the treatment paradigm for COPD by levering their distinct mechanisms of action in reducing different types of inflammation that contribute to COPD. Moving to oncology and combinations with Liptio. In June, in an oral presentation at the ASCO conference, we presented data for the combination of Fianlumab, our LAG-3 antibody, plus Liptio, which showed consistent response rates ranging from 56% to 63% across three independent cohorts of advanced melanoma patients. including a new cohort of patients who had received prior anti-PD-1 therapy in the adjuvant melanoma setting. These response rates represent about double the rate historically seen with anti-PD-1 monotherapy in similar settings, and clinically meaningful responses were observed in post hoc analysis of various populations of interest, including patients with poor prognosis factors and varying tumor PD-L1 expression levels. The safety profile of Fianlumab and the Liptio combination in these cohorts appears to be generally consistent with the safety profile of Liptio monotherapy and other anti-PD-1 or PD-L1 agents, except for the higher rates of adrenal insufficiency, which were grade 2 or lower in the majority of cases, with all cases successfully managed with steroid replacement. Our Fianlumab plus Liptio phase 3 studies in metastatic and adjuvant melanoma are enrolling patients, as are the phase 2 portions of the phase 2-3 studies in advanced non-small cell lung cancer. Next, on to bispecifics for solid tumors, which are being investigated in combination with Liptio and other modalities. Later this year, we are planning to share initial clinical data for the combination of Ubimatumab or MUC16 by CD3 bispecifics plus Liptio in advanced ovarian cancer. Last year, we showed encouraging Ubimatumab monotherapy data in advanced ovarian cancer and we believe that combining it with Liptio may lead to enhanced antitumor activity. Moving to costumatory bispecifics, we're currently exploring multiple different CD28 costumatory bispecific antibodies in early clinical trials in a variety of tumor settings in combination with Liptio or with corresponding CD3 bispecifics. In our Phase I study of Regen5678, are PSMA by CD28 costumatory bispecific in advanced prostate cancer in combination with Liptile, which has demonstrated promising anti-tumor activity. The safety profile of this combination continues to pose a challenge, highlighted by a recently observed second grade five adverse event, or death. Although serious immune-mediated adverse events continue to be highly correlated to patients who experience profound responses, we have decided to discontinue enrollment of new patients with the full-dose Liptile combination and explore PSMA by CD28 combination with lower doses of Liptile. We also will continue to explore PSMA by CD28 as a monotherapy where we have seen antitumor activity in some patients, and we will explore PSMA by CD28 in combination with other immunotherapy modalities. We believe our prostate cancer data support the exciting potential of co-stimulatory bispecifics, but with the challenge of focusing the response solely to the tumor. Our preclinical studies and mechanistic insights suggest that the degree of immune-related adverse events seen when combining co-stims with PD-1 blockade may depend on the particular co-stim target and tumor type. Moreover, combining co-stims with CD3 bispecifics may not result in these types of severe immune-mediated adverse events. Along these lines, Our other costimatory bispecific programs continue, including our MUC16 by CD28 costim with Liptile and our MUC16 by CD28 costim with Uvimatumab, both in ovarian cancer, as well as our EGFR by CD28 costim with Liptile in colorectal and other cancers. In these early dose escalation studies, we have observed limited immune-mediated toxicities to date. We are also excited about combining our costimatory bispecifics with our CD3 bispecifics in our HEMON programs, which continue to progress. We have initiated dosing of our CD22 by CD28 costumatory bispecific with ojonexamab, our CD20 by CD3 bispecific, in relapsed refractory diffuse large B-cell lymphoma, which we hope can improve on the impressive efficacy demonstrated by ojonexamab alone in that setting. In terms of ojonexamab monotherapy, U.S. and EU regulatory submissions for both relapse or refractory follicular lymphoma and diffuse large B-cell lymphoma, remain on track. Regarding limvoseltamab, or BSMA by C3 bispecific, we recently presented updated data at the ASCO annual meeting, demonstrating early, deep, and durable responses in patients with heavily pretreated multiple myeloma, with 71% objective response rate and 59% of patients achieving a very good partial response or better at the recommended 200 milligram dose, with a median follow-up of only six months, with the data potentially improving as they mature. We believe these data support limvoceltamab's best-in-class potential with differentiated efficacy, safety, hospital requirements, and favorable dosing schedule. In the fourth quarter of this year, we are planning to present additional data with longer follow-up and to submit regulatory applications for limvoceltamab. We also plan to start combination studies with the myeloma-specific COSTIM next year. Next, to genetic medicines. In the second quarter, we and LILAM jointly announced the first human data suggesting that a siRNA can be used to silence pathological genes in the brain, which may open up an entirely new approach for fighting back against neurodegenerative and other central nervous system diseases. We plan to initiate additional clinical programs for CNS diseases next year. announced by our collaborators at Intelia, we plan to initiate the first in vivo CRISPR-based phase three clinical program by year end, subject to regulatory feedback in patients with transthyretin amyloidosis cardiomyopathy. And in terms of our targeted gene delivery pipeline, we hope to initiate our first clinical program in 2024 for hemophilia B. In conclusion, Regeneron's R&D engine continues to grow and deliver differentiated late and early stage opportunities And we are looking forward to several important clinical milestones in the second half of this year. With that, I will turn the call over to Marion.
spk19: Thank you, George. In the second quarter, Regeneron delivered impressive results across our commercial portfolio. Notably, Regeneron medicines currently lead multiple disease categories, and our future is promising with short and longer-term scientific innovations on the horizon. As Len mentioned, we eagerly await the anticipated approval of a Flibercept 8 milligram for retinal diseases. Beyond that, a robust late-stage pipeline supports additional commercial opportunities that we anticipate will continue to drive growth. Starting with ILEA, the anti-VEGF category leader in retinal diseases, U.S. ILEA net sales were $1.5 billion, down 7% year-over-year, and up 5% quarter-over-quarter. ILEA total category share remained stable at 46% over the last two quarters and at approximately 70% for branded share. At the end of the second quarter, there was minimal sequential change in wholesaler inventory levels compared to the levels at the end of the first quarter. Our strategic focus is to maintain and grow Regeneron's anti-VEGF leadership, and we're well positioned to deliver on this goal in an increasingly competitive category. Last week at ASRS, we presented our two-year data in diabetic macular edema, which further confirmed the unprecedented durability of Aflibrasep 8 mg, with 44% of patients assigned intervals of at least 20 weeks at the end of their second year. Market enthusiasm remains high for this important innovation, and our commercial team is ready and excited to launch Aflibrasep 8 mg upon approval. Moving now to Liptio. Global net sales were 210 million, up 49% year-over-year on a constant currency basis. In the U.S., net sales were 130 million, up 43%, driven by steady growth in non-melanoma skin cancer and strong growth in lung cancer. In lung cancer, Leptio use in new patients' share is accelerating both monotherapy and in combination with chemotherapy, with an expanding base of prescribers in the community and academic settings. Outside the U.S., Leptionet sales were at $80 million, a 58% increase on a constant currency basis. Growth was driven by demand in the non-melanoma skin cancer indications and initial launches in lung cancer. We expect to drive accelerated performance as we build Regeneron's presence in key international markets and secure access and reimbursement for lung cancer indications. And lastly, to Depixen. which continues to revolutionize the lives of patients with type 2 diseases. Global net sales were approximately $2.8 billion, up 34% year-over-year on a constant currency basis, and up 12% compared to the first quarter of 2023. In the U.S., net sales grew 33% year-over-year to $2.1 billion, driven by growth across all indications and age groups. Once again, Dupixent is the number one prescribed biologic medicine for new-to-brand patients across all approved indications, and is the category leader in total prescriptions in four out of five indications. We see impressive uptake across our recent U.S. launches with significant opportunity for future growth. In eosinophilic esophagitis, well over 15,000 patients have been initiated since launch, and we are actively investing in disease awareness initiatives to empower patients to seek diagnosis and treatment for this debilitating disease. Our Paraga nodularis launch is off to a fast start, with physicians rapidly recognizing Dupixin as the go-to treatment for this often underdiagnosed dermalogic condition. Additionally, we look forward to our October 22nd pedufidate and chronic spontaneous urticaria, where we estimate Dupixin could benefit up to 300,000 U.S. patients. We also continue to generate impressive growth across ectopic dermatitis, asthma, and nasal polyps, Dupixent's three largest indications. There is robust demand among all indicated age groups with a significant opportunity for future growth beyond the hundreds of thousands of patients around the world whose lives have already been transformed by Dupixent. In summary, we delivered a strong commercial performance in the second quarter with Regeneron's medicines positioned for sustained growth. We continue to demonstrate industry-leading execution across our current portfolio. and we are prepared to maximize opportunities from our robust pipeline with the goal of extending Regeneron's scientific innovation to even more patients. Now I will turn the call over to Bob.
spk07: Thank you, Marion. My comments today on Regeneron's financial results and outlook will be on a non-GAAP basis unless otherwise noted. Regeneron's second quarter results demonstrate continued growth and strong financial performance across the organization. Second quarter of 2023, total revenues increased 11% year-over-year to $3.2 billion, driven by strong to PICS and sales growth, coupled with improving profitability within our Sanofi collaboration and continued momentum from Libtayo. The second quarter diluted net income per share was $10.24 on net income of $1.2 billion. Moving to collaboration revenue and starting with Bayer. Second quarter 2023 ex-U.S. ILEA net product sales were $886 million, up 4% on a constant currency basis versus second quarter 2022. Total Bayer collaboration revenue was $377 million, of which $350 million related to our share of ILEA net profits outside the U.S. Total Sanofi collaboration revenue was $944 million in the second quarter and grew 39% versus the prior year. Our share of profits from the commercialization of Depixent and Kevzar was $751 million, an increase of 51% from the second quarter of 2022, reflecting higher volumes in an improving margin profile for Depixent. We expect further margin expansion from the collaboration driven by continued Depixent global sales growth coupled with higher gross margins due to significant drug substance yield improvements resulting from topilumab manufacturing process enhancements. These factors are also contributing to a gradual increase in the rate in which we are repaying the antibody development balance to Sanofi. Once this balance is fully repaid in the next few years, we expect a meaningful step up in our share of Sanofi collaboration profits. Recall that a portion of our Sanofi collaboration revenue is related to the manufacturing of commercial supplies, for which we are reimbursed by Sanofi. As we continue to phase in the higher yield manufacturing process for Tipixen, we expect these second-half reimbursements to be approximately 25% lower than the first half of 2023, with the fourth quarter expected to be the lowest of the year. Other revenues were $69 million in the second quarter, up 17% versus the prior year. We continue to expect other revenue to be higher in the second half of 2023 as compared to the first half. Recall that other revenue primarily includes reimbursements for the manufacturing of certain Regeneron-discovered products commercialized by other companies, including XUS Prylant, Arcalist, and Zaltrap, as well as royalties for Alaris and our share of global profits for Arcalist. Moving now to our operating expenses. Second quarter 2023 R&D expense was $974 million, representing continued investment in our robust pipeline. Year-over-year R&D growth was primarily driven by higher headcount and related costs in funding of the company's pipeline, which encompasses approximately 20 late-stage or potentially registrational studies, including our ongoing FLPRCEP 8-MIG studies, Phase III studies and earlier lines, of therapy for our HEMONC product candidates and our Advancing Phenolamab Development Program. The increase in R&D expense was also driven in part by the impact of the 2022 amendments to the Sanofi Collaboration Agreement and increased manufacturing activity associated with the company's earlier stage product candidates. SG&A was $562 million in the second quarter, reflecting the ongoing build-out of our ex-US operations following the acquisition of global rights to Liptio last year, higher headcount and related costs, and higher contributions to an independent, not-for-profit patient assistance organization. Second quarter 2023 COCM was $213 million, up 44% versus the prior year, driven by manufacturing costs associated with higher Depixen volumes. As we progress the phase-in of the improved manufacturing process for Depixen, We expect COCM in the second half of this year to decline versus the first half, as our unchanged 2023 COCM guidance reflects, with the fourth quarter expected to be the lowest of the year. Now to cash flow in the balance sheet. In the first half of 2023, Regeneron generated approximately $2.1 billion in free cash flow. We ended the second quarter with cash and marketable securities, less debt of approximately $12.6 billion. We continue to opportunistically deploy cash towards share repurchases throughout the second quarter, buying back $723 million of our shares. At current levels, we remain buyers of our shares, and as of June 30th, approximately $2.3 billion remained available for repurchases under our existing authorization. Finally, we've made some minor changes to our full-year 2023 guidance ranges based on on our first half results and our latest outlook for the remainder of the year. We have tightened guidance ranges for 2023 SG&A and R&D spend and provided updated guidance ranges for our effective tax rate. A complete summary of our latest full-year guidance is available in our press release issued earlier this morning. In conclusion, Regeneron delivered positive financial results in the second quarter of 2023, and we remain excited for the potential upcoming launch of a flipper set of eight MIG in the third quarter. With that, I will now pass the call back to Ryan.
spk09: Thank you, Bob. This concludes our prepared remarks. We will now open the call for Q&A. To ensure we are able to address as many questions as possible, we will only be able to answer one question from each caller before moving to the next. Shannon, can we go to the first question, please?
spk17: Thank you. As a reminder, to ask a question, please press Star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 1-1 again. Our first question comes from the line of Evan Segerman with BMO. Your line is now open.
spk04: Hi, guys. Thank you so much for taking my questions and on all the updates today. So on the 8-milligram CRL, Do you have any idea if it's a class one or class two resubmission and you say that FDA is going to take action in the third quarter or could take action, what does that mean? Are they going to provide an approval decision or is that just going to be acceptance of a refiling? Thank you.
spk03: Hi, Evan. Thanks for your question. So just to clarify, the FDA has not classified the resubmission as class one or class two, because they have said that the timeline for Prozellamab will be governing what happens with our eight milligrams. So let me remind you what happened. There was a pre-approval inspection for both products. The Prozellamab is for our ultra-rare disease, Chappell disease, and it has a PDUCA date of the 20th. What the FDA has said is that they will review the remediation efforts in the context of the Pizellamab BLA, and therefore whatever happens there will govern the timeline and results. And when we say we expect them to take action, we mean we expect them to make an approval or not decision. If they find the manufacturing remediation acceptable for the Pizellamab BLA, then we think they'll be in a position to promptly make a decision on approval for the eight milligrams. Does that answer your question?
spk09: He's off the line. We'll move to the next question. Shannon.
spk17: Our next question comes from the line of Tyler Van Buren with TD Cowan. Your line is now open.
spk20: Hi there. Good morning. Thanks for taking the question. So, the timeline to the FDA potentially taking action by the end of this quarter on high-dose ILEA is very encouraging. Investors are clearly surprised by the short line, so kudos to you all for executing. But as we think about the data submission in a couple of weeks, what additional detail can you provide regarding the manufacturing data and other information that are required from Catalan, and how feasible it is to review this in a few days prior to the Pozzella decision date on August 20th?
spk03: Right. Great question. So we've been in very close contact with Catalan and the FDA, multiple meetings, oral, written, and so forth. And we have a clear understanding of what's required from an information point of view and from a data point of view. The submissions have been on a rolling basis that as Catalan has completed work, They've submitted data and information already to the FDA. There is very little that will be left for the last submission at the middle of August, and that's why the FDA has told us, and they know what's coming, that they will strive to expeditiously review that. If they can't get that done by the few days before the poxilumab-pidupha date, They have told us that they will prioritize our review and do that as soon as possible. That's why we have confidence about this getting done in this quarter. So to summarize, the data has been coming in on a rolling basis. We have everything we need. The last piece of information will be rolling in and submitted by the middle of the month. The FDA will strive expeditiously to review that in time for the August 20th PDUFA date. But if not, there'll be a clock extension for up to three months, but they have told us that they will prioritize our review. And that's why we believe it will get done, if not in time for the Pizellumab PDUFA date, in the near future thereafter. Okay, thanks, Len.
spk09: Next question, please, Shannon.
spk17: Our next question comes from the line of Mohit Bansal with Wells Fargo. Your line is now open. Great.
spk21: Thank you very much for taking my question, and really thank you very much for providing all the clarity on the filing situation right now. Maybe taking... So just trying to understand this a little bit more. So is it fair to say you have already submitted everything for Pazalimab, and the remaining part is related to... related to high-dose ilea only. Is that fair?
spk03: Actually, the way you should think about it, we've submitted everything we need for Pazelamab except for the final remediation of the pre-approval inspection, which applies both to Pazelamab and to the 8-milligram ilea. So it's a single pre-approval inspection, same data and information required for both, Once that is in, then we will have completed everything necessary for pozolomib and for the ELEA 8 milligrams. They are linked together. The FDA has clearly stated to us that the review of this remediation in the context of the pozolomib BLA will govern what happens to the 8 milligram remediation.
spk06: And I think Sarah said there's nothing specific to either pozolomib or a Flibercept about the data. This has to do, as Len said, with general manufacturing processes and operations at the Catalan manufacturing facility, particularly with this one manufacturing line.
spk03: That's a very good point, George. So that's why the single pre-approval inspection applies to both products. It wasn't the product specifically, it was the processes and validation on the line that fills the two products. So, one remediation satisfies both. All the data and information are being submitted on a rolling basis. The last piece comes in in the middle of August. The FDA is aware of this. They've told us in writing that they will strive to review that expeditiously. If they get it done before the end of the original PDUFA clock, that's great. If they don't, they'll consider an amendment that will set the clock back three months But notwithstanding that three months, they've told us that they will continue to prioritize our review. So we're very pleased, and we're working very hard. Catalin's working very hard. The FDA's working very hard. Everybody wants this done properly and finished and properly remediated. Okay, next question, please, Shannon.
spk17: Our next question comes from the line of Tim Anderson with Wolf Research. Your line is now open.
spk08: Thank you very much. I have a question on the BiSMO. So Roche at Q3 said they're capturing 30% of treatment-naive patients, which seems like a quite high figure, frankly. And then they said afterwards that it's not the extended dosing that's driving this as much as it is the better drying that they say docs are seeing with their product. So I'm wondering how those comments kind of line up with what you're seeing play out in the U.S. market. Thank you.
spk19: Sure. So, Tim, I will comment on our ILEA performance. And, you know, as I just shared with you, the performance in the quarter was strong. Certainly, we see ILEA steadily as the standard of care in the anti-VEGF category. We continue to capture not only naive patients, but also another big source of business is switch patients from Avastin to You know, obviously the other branded competitors are smaller in market today, but I would say that, you know, beyond your comment, probably best to get more clarification from, you know, the individuals who are commercializing furosemab in the market. But certainly I do want you to know that we are seeing, you know, continued strength in ILEA performance. and obviously very much look forward to having the potentially game-changing opportunity of bringing a Flibercept 8 milligram into the marketplace where the profile of efficacy, safety, and durability has so many KOLs and prescribers excited based on what they've seen recently in the clinical data presented at ASRS.
spk09: Thanks, Marion. Next question, please.
spk17: Our next question comes from the line of Chris Raymond with Piper Sandler. Your line is now open.
spk10: Thanks. Just maybe another market, VEGF market-related question. So I know these extended-dose therapies have benefits in and of themselves on the face of them, but there's been some decent level of market chatter around docs looking to free up injection capacity, specifically to make room for geographic atrophy patients, and specifically with the Apellis drug. Just maybe curious, how widespread was that notion that before the ceph ovary safety issue. And now with the issue, have you noticed a discernible shift among docs who were talking about that? And then maybe a related question. You guys have talked, I think, about an early effort of your own in geographic atrophy. Clearly, the market's sizable. When could we expect to hear more about that effort?
spk19: So let me share first in terms of the market dynamic. I think the most exciting thing and most important thing about a flibrocept 8 milligram is that it gives prescribers for all of their patients, whether, you know, a naive patient, a patient currently on ILEA, or a patient on another anti-VEGF category product, you know, the opportunity to decide if that patient is a candidate when we launch and, you know, when we have an FDA approval, if the patient is a candidate for a flibrocept 8 milligram. That does have benefit to the patient and prescriber and potentially to the office capacity and patient flow. I think it's premature to comment on a category that we're not directly involved in. We are, though, very focused on making sure that we are ready for lunch and certainly, you know, at the proper time, educating all stakeholders on a FlipperSep 8 milligram once we have an approval.
spk06: And in terms of our own efforts, As I'm sure many are aware, we've been very active with what we feel are very innovative approaches in the complement blockade field. And we believe that we may have an approach that may allow potentially treatment in these retinal diseases while avoiding some of the very concerning adverse events having to do with issues like occlusive vasculitis and so forth. And you'll be hearing much more about those efforts in the short term.
spk09: Okay. Thanks, Marion and George. Shannon, please move to the next question.
spk17: Our next question comes from the line of Carter Gould with Barclays. Your line is now open.
spk15: Great. Good morning, and thanks for all the transparency. Maybe switching gears a bit, in terms of the update on your COSTIM and the report of the death and the change in the dosing paradigm with 5678 in combination with Liptio, George, maybe you can speak about the implications for other combination efforts of CD28s with Liptio. Is this going to require a lower dosing with those efforts on the Liptio portion and just the broader implications there and just still your level of confidence you can kind of thread that needle in terms of the dosing levels. Thank you.
spk06: Great question. Obviously, as you know, in cancer, the biggest hurdle is actually coming up with approaches and new classes of agents that have the ability to really change the efficacy paradigm, to really bring new ability to address cancers that have previously been untreatable or refractory to treatment. So I think that that excitement continues with the CoSpIN platform in terms of all of the science and the preclinical modeling and predictions have really delivered in terms of showing that this new class does seemingly have the ability to really change the efficacy paradigm. But now we have to balance that, as you said, with the safety, because with more efficacy, which is often seen in the cancer field, comes more safety concerns. To what you just said, what we've seen preclinically, and we're now beginning to see it in the clinic, that the amount of associated immune adverse events is related to the particular COSTIM target. So what you see for one COSTIM doesn't necessarily apply to the other COSTIM. So we are, as you said, for our PSMA COSTIM, moving out of lower doses of the Leptile because the full dose combination, while it seems like it has the potential to be very efficacious, also has, in some cases, These associated, only in, remember, only in the patients who are having deep responses, these associated, in some cases, that can be very serious, even resulting in deaths associated in immune adverse events. So we're moving away from full-dose combinations there, and we're going and hoping that we can maintain some level of the efficacy, but avoiding these very serious immune-related adverse events. We're not doing that yet because we're not seeing these sort of immune-related adverse events with our other COSTIMs. And the other very, very important thing, just to remind you from our preclinical modeling, these types of immune-related adverse events that we're seeing with the PCMA in combination, COSTIM in combination with Liptio, are not seen preclinically when you combine with the C3 bispecific. And so we are very aggressively trying to move forward those programs as well, where we hope we might even have a better efficacy safety profile. So it's both a very exciting time to have these very active molecules. Remember, I'll remind you, we have three classes now, three independent classes of very active molecules that have been individually validated in our portfolio. We have the checkpoint inhibitors. In particular, our PD-1 and our LAG-3 checkpoint inhibitors, which are validated. We have our CD3-5 specifics that are validated, and we now have our COSTIMs, which are validated from the efficacy perspective. Very exciting time to be mixing and matching them. The challenge is to mix and match them appropriately to maximize the signal-to-noise, the therapeutic benefit relative to the potential adverse events we would see in the patients. Thanks, George. Next question, please.
spk17: Our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is now open.
spk18: Good morning. Thanks for taking my question and nice updates this morning. You know, clearly the possibility of a permanent J-code now has moved to April, and it shortens the runway for patients switching from ILEA ahead of potentially loss of exclusivity in May. So, kind of a two-part question here. What are the dynamics around this, and how do you, on one hand, kind of maintain and grow this switch population from ILEA? But secondly, how should we think about the uptake of high-dose ILEA without a permanent J-code? Thank you.
spk19: Hi, Sylvine. So, I'll get started. Certainly, we're conscious of the dates and the requirement for submissions to CMS that at the start of a quarter. So, you know, we would estimate potentially the timeframe that you're referencing if we have an approval in the third quarter. What I would share is that we anticipate use of a Flibrosep 8 milligram after approval and launch before we have the permanent J-code. Retina specialists are sophisticated in their reimbursement capabilities at the office level. They are experienced with newer products coming into the marketplace. on a fairly regular basis, and how to make certain that they validate reimbursement for products prior to having the permanent J-code under a temporary J-code. So, obviously, we want to have the permanent J-code. That will be a positive, but certainly we do see the opportunity for uptake across patient types prior to that situation with CMS.
spk09: Okay. Thanks, Marion. Shannon, please move to the next question.
spk17: Our next question comes from the line of Terrence Flynn with Morgan Stanley. Your line is now open.
spk13: Great. Thanks so much for taking the question. Len, I know we've talked about this before, but the company's been somewhat nontraditional on pricing decisions historically. You guys priced ILEA at a discount to Lucentis. You worked with ICER on Dupixent pricing. So just wondering why we shouldn't expect a similar approach here with high-dose ILEA. Thank you.
spk03: Thanks, Terrence. If your comments referencing similar mean thoughtful and appropriate, we would agree.
spk09: Okay. Next question, please, Shannon.
spk17: Our next question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is now open.
spk01: Good morning. Thanks for taking my question. Congrats on all the progress and appreciate all the details. Maybe just another clarification on 8 mg Iflibirzep. Can you characterize your level of confidence that a reinspection would not be required? Have you had any interactions or feedback with the agency around this? And is there a defined period of time where the FDA would need to wait reinspection or not to ensure that the remediations are sustainable before approving the BLAs? Thanks.
spk03: Great. Thanks for your question. Well, we've tried to be 1,000% transparent as usual at Regeneron, and this is really, let me just see if I can summarize it again, what we know. We've been in close contact with the FDA, as has Catalin. We know what the remediations required are, and we've been submitting them on a rolling basis. We expect to submit the last requirement by the middle of August, and that will be several days before the PDUFA date for the Pizellamab VLA. The FDA has been very clear that they will strive to expeditiously review that. If they can, great. If they can't, they said there would be a three-month clock extension. But even with the three-month clock extension, they've been very categorical in saying that they would prioritize a review and try and get it done as soon as possible. Those facts are what led us to believe it would be done during the third quarter. In all of this is the fact that there has been no need, no discussion, no indication whatsoever that a reinspection would be necessary. The FDA, of course, is free to make those decisions, but we have not seen any indication of that in our very detailed and close contact. So we've given you our best estimate at this point.
spk09: Thanks, Len. Let's move to the next question, please.
spk17: Our next question comes from the line of Chris Schott with JPMorgan. Your line is now open.
spk05: Great. Thanks so much. Can I just come back to the CD28 PSMA update? Maybe just elaborate a little bit more in terms of the approach of lowering the PD-1 exposure to address the safety issues here and taking that approach versus trying to work to further adjust the dosing of the bispecific piece of the equation. Thanks so much.
spk06: Well, we should say that we are adjusting both doses. We have been already exploring a variety of doses from very low doses to the highest active doses on the COSTEM side, but we've been doing all of them in the context of the full dose Liptia. So now what we're doing is we're exploring some of the doses that are active, particularly ones that are active as monotherapy, as I mentioned, There is monotherapy activity with the PSMA-CoStim, and now we're to try to decrease these immune-related adverse events. Let me remind you, they are in the same sort of class of immune-related adverse events that you do see with checkpoint inhibitors in general. We're just seeing them in some patients, the one with the biggest responses in some cases to a greater extent, so we're hoping that lowering the checkpoint inhibition may allow us to adjust the therapeutic window there. But we are, as you're saying, dealing with a couple different doses of the COSNIM, but now we're incorporating lower doses of the Leptio into the program as well.
spk03: I think what George said earlier, just maybe bears repeating, is that he said that we're starting with the good position of having very impressive efficacy, one, and two, side effects that are, for the most part, in the patients who are benefiting with the efficacy. That's a very good position to begin to explore and how to get the therapeutic index or signal to noise, as George calls it, right. Okay.
spk09: Let's move to the next question, Shannon.
spk03: Thank you.
spk17: Our next question comes from the line of Dane Leon with Raymond James. Your line is now open.
spk11: Thank you for taking the questions. Congratulations on the updates, and best of luck with the resolution of the reviews for pozolumab and 8-megafilbercept. I actually want to ask you to expand a bit on your discussions with FDA and potential filing or early filing on Depixent for COPD. The point I'd like a little bit more clarity on is specifically what you may be able to have from notice before the final readout of that study that you could potentially include in a package with the Boreas results to get the FDA comfortable with an accelerated review for that indication. Thank you.
spk06: Yeah. What we know right now is that we're going to need data from notice. And right now, as we said, we are still in discussions on what that data could be. Right now, we don't have any details to give you.
spk09: Okay. Thanks, George. Hopefully an update soon. Next question, please.
spk17: Our next question comes from the line of Colin Bristow with UBS. Your line is now open.
spk12: Hey, good morning, and congrats on the course and the progress. Just maybe one on the interim. Can you share anything on the utility thresholds? And if not specifically, And could you say how these sort of fed relative to Boreas? Thanks.
spk03: I don't think we have anything specific. This was handled by the Data Safety Monitoring Committee, sort of a standard approach. We're pleased that we passed it, and we will look forward to further data at the end of the study.
spk09: And both we and Santa Fe are blinded to that. We only got the goal decision from the Independent Data Monitoring Committee. So we'll proceed to a final readout for both of those studies. Let's go to the next question, please.
spk17: Our next question comes from the line of Brian Scorny with Bayard. Your line is now open.
spk14: Hey, this is Luke on for Brian. Thanks for taking the question. Can you just provide a little bit more color on what drove the LIBTIO growth this quarter? Was there any stocking or was it largely demand-based? Thanks.
spk19: Thank you, Luke, and I'm pleased to share it is demand growth. Certainly we see continued and steady performance across our skin indications, both cutaneous squamous cell carcinoma and basal cell carcinoma. In addition to that, it is exciting that we are seeing not only an increase in the number of prescribers for our lung cancer indications, but the depth of prescribing is improving and increasing in both the community and also academic settings. But that is demand-based. It is not stocking-based.
spk09: Okay. I think, Shannon, we have time for two more questions, please.
spk17: Our next question comes from the line of David Reisinger with LeeRink Partners. Your line is now open.
spk02: Yes. Thanks very much. Excuse me. So my question is for George on the COSTEMs, please. You mentioned that you haven't seen the immune AEMs with respect to your other COSTIM trials. Could you please comment on whether the dosing step-ups at this point are close to the higher dosing levels that you're stepping back from in the PSMA trial? I'm just trying to contextualize whether you really have advanced those other trials to the point to really know whether you're going to have similar problems in your other COSTEM trials. Thanks very much.
spk06: You know, that's a very good and fair question. And those programs are at earlier stages. So we won't know until we're more advanced whether when we get to the same sort of efficacy type levels, do we have the same sort of immune-related adverse event associations or not. What I was referring to is in the preclinical studies, the amount of this associated T cell activation that can lead to these sorts of immune-related adverse events varies depending on the tumor class and on the costin itself. So based on that, we would expect to see different ratios of immune-related adverse events. Those other programs, though, right now are all in stages where they're in with full dose Liptio combinations at this point. Okay.
spk09: Thanks, Shannon. We have time for one more question.
spk17: Our last question is from Akash Tiwari with Jefferies. Your line is open.
spk16: Hey, thanks so much. I'll switch it up. I guess maybe for your obesity program, you had data at the ADA showing synergy with your myostatin inhibition program when combined with the GLP-1 inhibitor. I guess the natural observation here is Regeneron doesn't currently have a program in development. Is there any interest in acquiring one externally via BD or partnership at this time? Thanks.
spk06: Well, what we would say is we do think that obviously there's a lot of focus on obesity and particularly these new agents that are causing a large amount of weight loss. But as you described, it's being increasingly recognized that the quality of this weight loss may prove challenging that many patients are actually losing muscle or lean body mass, which can be very detrimental, particularly if they stay on these therapies or yo-yo on and off them. That can really lead to substantial changes over time in body composition and can be very debilitating for patients. And as you said, we've had long investments in programs that can maintain muscle mass in various settings. And we've shown that they can maintain or even grow muscle mass in the setting of these types of obesity treatments in our preclinical modeling. So obviously it is a very exciting opportunity to think about, which is can we combine some of our muscle preservation or growth strategies and biologics to prevent these concerning side effects that are being seen with the new class of profound weight loss agents. And so we are very actively pursuing everything that we can imagine, and hopefully we'll be providing updates on our approaches as time goes along.
spk09: All right. Thanks, George. And thanks for everyone who dialed in today and for your interest in Regeneron. We apologize to those remaining in the queue that we did not have a chance to hear from. As always, the investor relations team is available to answer any remaining questions. Thank you once again and have a great day.
spk17: This concludes today's conference call. Thank you for participating. You may now.
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