Regeneron Pharmaceuticals, Inc.

Welcome to the Regeneron Pharmaceuticals fourth 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, Senior Vice President, Investor Relations. You may begin.

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 fourth quarter 2023 earnings conference call. An archive and transcript of this call will be available on the Regeneron Investor Relations website shortly after the call ends. Joining me today 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, Bob Landry, Executive Vice President and Chief Financial Officer, and Chris Fenimore, Senior Vice President and Controller. As many of you already know, Bob will retire from Regeneron after our Form 10-K is filed next week, and Chris has been appointed to become Regeneron's next CFO upon Bob's retirement. After our prepared remarks, the remaining time will be available for your questions. We anticipate today's call will last approximately 60 minutes. I'd 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, 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 risk 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, where the year ended December 31, 2023, which we expect to file with the SEC on Monday, February 5. 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 financial measures will be discussed on today's call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our quarterly earnings results press release and our corporate presentation, both of which can be accessed on the Regeneron Investor Relations website. Once our call ends, Bob, Chris, and the IR team will be available to answer any further questions. With that, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schlafer. Len?

Thank you, Ryan, and thank you to everyone joining today's call. Fourth quarter 2023 capped another strong year for Regeneron, and Bob will walk you through our financial results. From my remarks today, I'd like to briefly look back at 2023 and then discuss what's to come in the year ahead. 2023 was another remarkable year for Regeneron, highlighted by several significant achievements that better positioned the company to deliver sustainable growth and long-term shareholder value. At the start of the year, we identified five key strategic imperatives. First, obtaining FDA approval and successfully launching ILEA-HD. We did encounter a minor delay when we received a complete response letter in late June due to an issue at a third-party filler. But this was quickly remedied, and ILEA-HD was granted approval in mid-August. With what we believe to be a best-in-class potential clinical profile, ILEA-HD is poised to become the new standard of care for patients with wet age-related macular degeneration and diabetic eye diseases. The launch is off to a great start, which Marion will discuss in a few minutes. Second, we had to defend our intellectual property related to ILEA. We presented our best case and prevailed in district court, which found that one of ILEA's formulation patents was both valid and infringed by a biosimilar flibberset manufacturer. This favorable decision may have broad implications and could in the delay to biosimilar of Fliverset launches. Third, we and our collaborator, Sanofi, needed to continue driving Dupixent growth, not only by further penetrating previously approved indications, by also reaching even more patients suffering from other diseases driven by type 2 inflammation. In 2023, we did both. Topixin global net product sales grew by 34% on a constant currency basis to $11.6 billion. Topixin led in new-to-brand prescription share in the United States across all five of its approved indications. We also had a major breakthrough in chronic obstructive pulmonary disease, or COPD. In March, we reported strong data from the Boreas study, which enrolled COPD patients with uncontrolled moderate to severe disease and evidence of type 2 inflammation. The FDA granted breakthrough therapy designation during the summer, but required additional evidence of efficacy to support a regulatory filing. Based on this feedback, we in Sanofi decided to conduct an interim analysis on the replicate notice study which read out similarly compelling results, enabling our December SPLA submission and a potential U.S. launch for this indication as early as mid-2024. Fourth, we continued making progress toward our long-term goal of becoming a global leader in oncology. 2023 was highlighted by our regulatory submissions for Linvolceltamab, our BCMA-by-BCMA, CD3 bispecific in myeloma, and oginextamab, our CD20 by CD3 bispecific in lymphoma, while continuing to advance other opportunities in solid tumors. And finally, we needed to advance our early stage pipeline. And over the course of 2023, we presented intriguing proof of mechanism or proof of concept data across hematology and genetic medicines, as well as other areas including obesity, with data from non-human primates. Many of these early programs, which George will run through in a few minutes, represent first or best-in-class opportunities that we believe can drive long-term growth for Regeneron. Accomplishments in 2023 have put us in a position of strength entering 2024. For this year, one of our strategic imperatives is to continue driving commercial execution especially the ongoing launch of ILEA-HD, with the goal of accelerating the pace of conversion from other anti-VEGF agents. Another important launch milestone was achieved last month when the Center for Medicare and Medicaid Services assigned a permanent J-code for ILEA-HD that will go into effect on April 1, 2024, at which point a potential reimbursement concern for physicians will be removed. We also need to continue to drive dupixin growth in its currently improved indications as well as from the potential FDA approval and launch in COPD with an eosinophilic phenotype. If approved, dupixin would represent the first meaningful advance in over a decade for the 300,000 patients in the United States suffering from this form of COPD and would be the first ever biologic approved for COPD. In oncology this year, aside from continuing to build on the success of Liptio in non-melanoma skin cancers and non-small cell lung cancer, we're excited about the potential launches of Oginextamab and Limboceltamab, the latter of which has the potential to be the best-in-class bispecific for myeloma. We also expect to make significant advances across our pipeline in 2024, with key readouts for pheanilamab, our LAG-3 antibody, in combination with Libtyo in metastatic melanoma and non-small-cell lung cancer. Libtyo in adjuvant cutaneous squamous cell carcinoma and our factor XI antibodies in thrombosis which may inform pivotal studies. We also plan to initiate clinical trials in obesity, geographic atrophy, hemophilia B, and severe food allergies, in addition to expanding early studies of our CD28 co-stimulatory biospecific programs in solid and hematologic malignancies. In closing, we had a strong 2023 and are poised to deliver in 2024 and beyond. Our pipeline of over 30 clinical programs is delivering important and differentiated innovations. Our commercial team is executing well, and we continue to look at ways to efficiently deploy capital to drive shareholder returns over time. Before I hand it over to George, I want to take a moment to thank Bob Landry for his many contributions to Regeneron over his 10 years as our Chief Financial Officer. In addition to helping fortify Regeneron's financial strength and discipline, Bob has been an incredible mentor to many of Regeneron's current and future leaders, helped drive our financial results over the past decade, and worked tirelessly to ensure we have the resources needed to help improve the lives of patients around the world. Bob, on behalf of the entire Regeneron family, thank you, and we wish you continued good health and happiness. As we first announced back in September upon Bob's retirement next week, Chris Fenimore will become the CFO of Regeneron. We all look forward to working closely with Chris in his new role, knowing he brings a similar rigor and depth of financial knowledge that will ensure continuity and collaboration across the organization. With that, I'll now turn the call over to George.