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Josh
Operator
Welcome to the Regeneron Pharmaceuticals First Quarter 2024 Earnings Conference Call. My name is Josh, 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 call is being recorded. I will now turn the call over to Ryan Crowe, Senior Vice President in Vestal Relations. You may begin.
Ryan Crowe
Senior Vice President of Investor Relations
Thanks, Josh. Good morning, good afternoon, and good evening to everyone listening around the world. Thank you for your interest in Regeneron, and welcome to our first quarter 2024 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 on today's call are Dr. Leonard Schleifer, Board Co-Chair, Co-Founder, President, and Chief Executive Officer, Dr. George Yonkopoulos, Board Co-Chair, Co-Founder, President, and Chief Scientific Officer, Marion McCourt, Executive Vice President of Commercial, and Chris Fenimore, Senior Vice President and Chief Financial Officer. After our prepared remarks, the remaining time will be available for your questions. We anticipate today's call will last approximately 60 minutes. 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 forecast 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 10Q for the quarter ended March 31st, 2024, 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 financial 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 quarterly results press release and our corporate presentation, both of which can be accessed on the Regeneron investor relations website. Once our call concludes, 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. Leonard Schleifer. Len. Thanks, Ryan.
Dr. Leonard Schleifer
President and Chief Executive Officer, Board Co-Chair, Co-Founder
Thanks to everyone joining today's call. Regeneron is off to a strong start in 2024, reflected in our solid first quarter financial results, as well as the progress we have made across our pipeline in the first four months of the year. From my remarks today, I'd like to briefly review some of our key performance drivers and then discuss a few of our more differentiated development programs, which have the potential to drive sustainable, long-term growth for the company and value for our shareholders. After my remarks, George will provide an update on our pipeline. Marion will then review our commercial performance and Chris will discuss our financial results. First quarter, 2024 revenues grew 7% after excluding last year's revenue contribution from our COVID antibodies. Growth was primarily driven by Sanofi Collaboration Revenues and Liptio Global Net Product Sales, which grew by 14% and 45% respectively. Two picks in Global Net Product Sales were 3.1 billion, up 24%, reflecting strong growth across all approved indications. Ailea HD generated 200 million in its second full quarter on the US market, outperforming recent launches in the anti-VEGF category. Now with a permanent J-code in place, improving payer coverage, broad prescriber familiarity and satisfaction with the Ailea HD clinical profile and direct to consumer TV promotion underway, we continue to position Ailea HD as the new standard of care for retinal diseases. Shifting to chronic obstructive pulmonary disease or COPD, where Regeneron and Sanofi have two differentiated opportunities to transform the treatment paradigm for patients living with this debilitating disease. As announced in February, our SBLA for Dupixent for the treatment of COPD with type 2 inflammation was accepted by the FDA for priority review with a June 27th PDUFA date. During its review of our submission, the FDA has requested additional efficacy analyses, including an information request received earlier this week regarding subpopulations from the Boreas and Notice Pivotal Studies. Our analyses across these requested patient subgroups indicate a consistent and clinically meaningful reduction in COPD exacerbations. While the FDA has requested these analyses be submitted by the end of May, we anticipate providing them substantially sooner. We and Sanofi are confident that these additional analyses strongly support the approval of Dupixent and eosinophilic COPD. If the FDA determines that they need additional time to review these analyses, a decision on the SBLA could be delayed for up to three months. We and our partner Sanofi are preparing for a launch that many pulmonologists, respiratory key opinion leaders, and their patients are eagerly anticipating. If approved, Dupixent would be the only biologic therapy for COPD and the first new treatment approach for this disease in more than a decade. There is a high unmet need in COPD with type 2 inflammation with approximately 300,000 eligible patients in the United States and another approximately 300,000 eligible patients in the EU and Japan, where we are also seeking regulatory approvals. Turning to Idupecamab, our IL-33 antibody, which is being evaluated in former smokers with COPD regardless of eosinophilic phenotype, we remain on track to report results and enable potential global regulatory filings in the second half of next year. Idupecamab can potentially address up to one million patients in the G7 countries, while China also represents a significant opportunity. We are very excited about potentially bringing these important new therapies to COPD patients while expanding our commercial respiratory franchise. In a moment, George will describe another key opportunity in our pipeline involving Dupixent in combination with our BCMA by CD3 bispecific antibody Limboseltamab, which we believe has the potential to address any severe allergy and allow the millions of severe allergies sufferers to stop living in fear of an accidental exposure. Moving from Limboseltamab in severe allergy to its differentiated opportunity in multiple myeloma, where it is currently under FDA and EMA review in the relapsed refractory setting. In our registration enabling data set, while cross trial comparisons caveats apply, we believe Limboseltamab represents a best in class opportunity because it has the highest objective response rates and complete response rates at similar follow-up observed across the BMA bispecific class today, requires the least number of days in the hospital compared to other drugs in the category, and is the only BCMA by CD3 agent currently under review or already approved by the FDA that evaluated every four week dosing. If approved, we believe these are all important considerations for patients, caregivers, providers, and payers that could drive Limboseltamab adoption. In closing, I'm excited and energized by the differentiated opportunities in our pipeline, which now has over 35 programs in clinical development spanning many distinct therapeutic areas. Our commercial team continues to execute well and is building momentum in competitive categories, and we continue to deploy capital with the goal of driving shareholder returns over time. With that, I'll turn the call over to George. Thanks, Len.
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
Since Len covered the status of the DEPICMAB programs and COPD in great detail, I'd like to start with a bit more about our innovative treatment approach for severe allergies, a first ever combination of an immunomodulatory antibody, that is DUPICCIN, with a bi-specific antibody. Despite the remarkable benefit demonstrated by DUPICCIN across multiple diseases characterized by allergic or type two inflammation, DUPICCIN alone does not immediately reverse severe allergies by itself. These allergies are caused by high levels of an immunoglobulin class known as IgE, made by long-lived plasma cells. This has caused some to refer to the E in IgE as E for evil. Although DUPICCIN will prevent formation of new IgE plasma cells, it does not eliminate those that have already formed. Regenerant scientists have shown that these algae-causing IgE plasma cells can be rapidly eliminated with a short course of treatment with our bi-specific antibody known as Limva-Celtimab. While DUPICCIN treatment will then prevent these cells from returning, as recently highlighted in our publication in Science Translational Medicine. We have commenced our proof of concept clinical trial to explore the potential for this combination approach to eliminate severe food allergy. We are hoping to see initial observations from this small study later this year, which will inform next steps. Moving on to oncology and lipatio combinations. Early clinical results of our lag-three antibody, Pheanolimab, in combinational lipatio, suggest that these antibodies represent one of the most promising checkpoint inhibitor combinations in clinical development. Recall, Pheanolimab lipatio demonstrated potential for -in-class efficacy in first-line metastatic melanoma with objective response rates of approximately 60% across three independent cohorts from our first in-human study, with a safety profile that is similar to that seen with -PD-1 monotherapy. With longer-term follow-up, these initial responses continue to deepen, including patients converting into complete responses. We look forward to presenting updated results from these expansion cohorts in the second half of this year. Encouraged by these initial results, last year we initiated a phase 2-3 study of the combination of Pheanolimab and lipatio in first-line metastatic melanoma. This study is enrolling faster than expected and will now be conducted solely as a phase 3 study with the final analysis to be reported during 2025. These pivotal melanoma data will inform whether Pheanolimab and lipatio have the potential to emerge as a new standard of care in melanoma. Next, to our bispecifics for hematology oncology. Regarding OJNX demand, our CD20 by CD3 bispecific, as announced in March, we received complete response letters from the FDA for our BLA for relapsed refractory follicular lymphoma and relapsed refractory diffused large B-cell lymphoma. The only approvability issue was related to the limited enrollment of these confirmatory trials, which we intend to address as we continue to enroll patients in these studies. The EU decision on OJNX to have applications expected in the second half of this year. Moving on to Limbosalcomab. As Len noted, this bispecific continues to demonstrate a potentially -in-class profile in late-line myeloma in terms of efficacy, safety, dosing and hospitalization burden. In an oral presentation at the recent AACR medical meeting, we presented results of an 11-month median follow-up of 117 patients, a 71% objective response rate with 46% of patients achieving a complete response or better. We are planning to present updated 14-month follow-up results at the upcoming EHA meeting in which we anticipate observing a further deepening of responses. Regarding the ongoing FDA review, we believe the confirmatory study will be sufficiently enrolled to support approval. We're also evaluating Limbosalcomab in earlier stages of myeloma and in precursor conditions, such as smoldering myeloma and monoclonal demopathy of unknown significance, ORMGUS. Next, bispecifics for solid tumors. Our co-simulatory bispecific antibodies are being tested in numerous studies, including as monotherapies, as well as in combination with CD3 bispecifics and with liptyle. Our EGFR by CD28 bispecific in combination with liptyle, we are planning to present updated dose escalation results in an oral presentation at ASCO. Most notably, in micro-satellite stable colorectal cancer, a tumor historically unresponsive to immunotherapy, EGFR by CD28 in combination with liptyle demonstrated anti-tumor activity. Regarding safety, to date, we have not observed severe immune-related adverse events with this agent at our recommended phase two dose. Based on these data, we are enrolling dose expansion cohorts, testing our EGFR by CD28 costum bispecific plus liptyle in various cancers, including non-small cell lung cancer with or without EGFR receptor mutations, micro-satellite stable colorectal cancer, head and neck squamous cell carcinoma, and others. On to our PSMA by CD28 costimulatory bispecific, which is already demonstrating promising activity in prostate cancer in combination with liptyle. We will soon initiate combination treatment of our PSMA by CD28 costimulatory bispecific with our PSMA by CD3 bispecific, which based on preclinical studies may maintain efficacy, but with better tolerability. We're also evaluating our MUX16 by CD28 costimulatory bispecific with uvamadimab, our MUX16 by CD3 bispecific, as well as with liptyle, our CD3 by CD28 costim with limbosultimab for myeloma, and our CD22 by CD28 costim with ojonextimab for lymphoma. Moving on to our classical hematology pipeline. Our C5 approach involves a first in class combination of an sRNA with an antibody for more complete target bollicade, and our initial clinical data supports potential best in class efficacy in paroxysmal and nocturnal hemoglobinuria, or PNH. Results from the preliminary cohort of the PNH phase three study will be presented at the EHA conference in June, with additional results expected later this year. In addition to PNH and mycena gravis, which are already enrolling the respective pivotal trials, we are planning on extending the systemic combination approach to geographic atrophy in dry AMD, with the first pivotal study in GA expected to get underway this year. We are also anticipating proof concept data later this year for two complimentary factor 11 antibodies in the setting of prevention of venous thrombolylomelism after knee replacement surgery. Depending on these data, one or both of these antibodies could remain on a rapid path to registrational studies, which could begin by late 2024 or early 2025. Our first in class antibody, 2-temp6, a genetically validated target for iron overload diseases such as beta thalassemia is also making progress. This antibody has potential to meaningfully reduce toxic organ iron in patients for whom iron chelation is inadequate or intolerable. Updated proof of mechanism data and healthy volunteers will be presented at the upcoming EHA conference. These results demonstrated deep sustained reductions in serum iron and robust induction of the liver hormone, hepcidin, supporting the potential to release iron from organs. We are on track to start a phase two proof of concept study in beta thalassemia patients in the second half of the year. Moving to obesity, our most advanced approach is designed to address potential negative consequences of widespread use of GLP, GIP receptor agonists. As has been widely reported, the profound weight loss caused by these agents, unfortunately can also result in substantial loss of muscle, which is particularly concerning older obese patients. Our antibodies to myostatin related pathways may prevent this muscle loss. Indeed, our data in obese non-human primates show that combining semiglutide with Trevorgrumab, an antibody targeting myostatin, with or without garitizumab, our antibody targeting active NA or myostatin 2, demonstrated a comparable reduction in body weight at week 20 relative to semiglutide monotherapy, but with improved quality of weight loss, resulting in more fat loss while preserving or even increasing lean mass. Part A of our proof of concept study in healthy volunteers intended to demonstrate safety of a higher dose of Trevorgrumab has completed enrollment. Note that over 400 subjects, including healthy volunteers and sarcopenic patients, have been dosed with Trevorgrumab throughout its clinical development with no meaningful safety or tolerability concerns observed to date. Part B of the study, which will evaluate muscle preservation antibodies in combination with semiglutide in obese participants, remains on track to start enrolling mid-year. Assuming a reasonable pace of enrollment, we expect to report top-line results, including changes in body weight, fat mass, and muscle mass in second half of 2025. I will conclude with our genetic medicines effort. At the upcoming ASGCT conference, we will present updated data from our DB auto gene therapy program for genetic hearing loss. The first patient treated with this therapy, a -month-old girl who is profoundly deaf at baseline, now at 24 weeks after treatment, had hearing in the normal range. And the second treated patient is following a similar trajectory of improvement through earlier stages of follow-up. We are aiming to enroll several more patients this year, potentially enabling regulatory submissions by the end of next year. And we also look forward to bringing additional auditory gene therapy programs to the clinic in the coming years with the potential to address more common forms of monogenic hearing loss. Our collaboration with Intellia on CRISPR gene editing continues to advance. We've begun to enroll patients in the phase three magnitude study of Intellia 2001 for a lead indication of TTR amyloidosis with cardiomyopathy, the first in vivo CRISPR program clear to enter phase three studies in the United States. We're also on track to be the first to use CRISPR technology to insert a corrective gene in vivo for a deficiency disease. We have now achieved clearance from both the US and EU authorities for our insertion program for factor nine. And we have already enrolled initial patients into the lead in portion of this program. Moving on to our siRNA collaboration with L9OM, which has not only demonstrated successful silencing of genes in the liver, but also for the first time for siRNA in the brain. Additionally, we're excited about potentially initiating later this year a potentially pivotal study for ALN SOD treatment in ALS patients with SOD1 mutations. With that overview, I will turn the call over to Mary.
Marion McCourt
Executive Vice President of Commercial
Thanks, George. Our results in the first quarter demonstrate the strong performance of our commercial portfolio and future growth opportunity. We continue to strengthen and expand our leadership positions across our inline brands, and we are preparing for potential upcoming launches. I'll start with our anti-VEGF franchise and the ongoing launch progress of ILIA HD. First quarter US net sales grew 63% sequentially to 200 million. As real world experience with efficacy and safety continues to grow, ILIA HD is delivering on its promise of extending the duration between treatments with the majority of patients achieving this goal. Retina specialists are highly satisfied with ILIA HD as demonstrated by prescribing across a broad range of patients. To date, most ILIA HD patients are being switched from existing medicines, most notably ILIA and furosemab, and we are also seeing an increase in treatment in naive patients. For the quarter, ILIA HD and ILIA together secured 45% of the anti-VEGF category share. Combined US net sales were 1.4 billion, which includes a reduction in a wholesaler inventory of approximately 40 million. This reflects the sequential drawdown of ILIA inventory that was partially offset by a modest increase in ILIA HD inventory ahead of the Permanent J code on April 1st. Since launch, our team has made significant progress to enhance reimbursement and market access for ILIA HD. The Permanent J code has increased prescribers reimbursement confidence, reflected by increased use among existing customers, as well as a step up in new customers ordering for the first time. We're very encouraged by ILIA HD uptake despite a different payer market today compared to when ILIA was launched more than a decade ago. For example, while more than 80% of medical benefit lives are now covered for ILIA HD, increases in utilization management or step edits are impacting all branded products. We are also highly focused on educating patients about the potential for ILIA HD to deliver best in category vision and safety benefits with fewer injections. In mid-March, we began our Direct to Consumer TV campaign designed to raise brand awareness among treatment experienced and treatment-naive patients. Since initiating the DTC campaign, retina specialists have reported a significant increase in patients actively asking about and being prescribed ILIA HD. In summary, the ILIA HD launched outperformed expectations and we are on track to establish ILIA HD as the new standard of care for retinal disease. Turning now to Depixent, where first quarter global net sales grew 25% on a constant currency basis of 3.1 billion. In the US, net sales grew 17% to 2.2 billion, driven by continued robust demand and the impact of customary first quarter seasonality dynamics, including annual resets of insurance plans. Depixent is the clear leader in -to-brand prescription share across all five FDA-approved indications and leads in total biologic prescriptions in four of its approved indications. More than 850,000 patients are currently on therapy worldwide and three Depixent indications have achieved blockbuster status, atopic dermatitis, asthma, and nasal polyps. Across all three of these indications, Depixent is competitively differentiated based on its clinical profile, depth of clinical experience, and potential to be prescribed to very young patients, as young as six months in the case of atopic dermatitis. We continue to see great progress with our recent launches in EOE, Depixent's GI indication, and Praga-Nagilaris and dermatology. Patient initiations across both indications continue to reach all-time highs, and in late January, Depixent was approved in Pediatric EOE, the brand's fourth pediatric indication. Early launch indicators are positive, as Depixent is transforming the standard of care for these children, aged one to 11, as it has for adults and adolescents with EOE. In addition to its approved indications, there's great potential for Depixent in an increasing list of additional type two diseases, including COPD. If approved, Depixent will achieve two important firsts, the first biologic medicine for COPD, and also the first new treatment for more than a decade for this devastating disease. In the US, approximately 300,000 patients with uncontrolled COPD show evidence of type two inflammation. If approved, we will work to rapidly establish the unique clinical benefits of Depixent, activate physician adoption, motivate patients to seek treatment, and also advance access and affordability. We are confident that COPD will drive meaningful growth for Depixent if approved in this indication, and see an additional opportunity to address patient unmet need with Idopecmeb, our investigational IL-33 antibody, designed to help COPD patients who are former smokers. With significant runway for growth and existing and potential new indications, we are confident in Depixent's ongoing growth trajectory. And finally, to Lib-Tio, in the first quarter, global net sales were 264 million, up 44% on a constant currency basis from the prior year, driven by our dual focus in skin and lung cancers. In non-melanoma skin cancer, Lib-Tio continues to lead the immunotherapy category in CSCC and BCC, with opportunity for continued market growth. In lung cancer, we are making steady progress in capturing category share in both monotherapy and chemotherapy combination patients. Our oncology team is also preparing for the upcoming August 22nd, -Celtimab-Peducidate, recent data reinforces that Lindus-Celtimab has the potential to be best in class for late stage myeloma patients, and we look forward to its potential launch. In summary, our commercial team continues to bring important medicines to patients across an expanding range of diseases. We are focused on differentiating our medicines to increase category share and drive market growth, potential upcoming launches across our portfolio, provide the opportunity to extend the benefits of our medicines to even more patients, and with that, I'll pass the call to Chris.
Chris Fenimore
Senior Vice President and Chief Financial Officer
Thank you, Marion. My comments today on Regeneron's financial results and outlook will be on a non-GAAP basis unless otherwise noted. Regeneron delivered solid financial results in the first quarter of 2024. Excluding contributions from our COVID antibodies, total revenues increased 7% year over year to $3.1 billion, primarily driven by continued sales growth and margin expansion from Dupixent and strong global sales growth from Leptio. First quarter diluted net income per share was $9.55 on net income of $1.1 billion. Moving to collaboration revenue. First quarter ex-US net sales of Ailea and Ailea HD, known as Ailea 8-MIG outside the US, were $849 million, up 2% on a constant currency basis versus the prior year. Total bear collaboration revenue was $356 million, of which $334 million related to our share of net profits outside the US. Total Sanofi collaboration revenue grew 14% in the first quarter to $910 million. Our share of collaboration profits was $804 million, an increase of 26% versus the prior year, driven by Dupixent's continued volume growth and improving margins. Reimbursement for manufacturing of commercial supply, a component of Sanofi collaboration revenue, was $106 million for the quarter, which is expected to be the lowest of the year. On a full year basis, due to higher Dupixent volumes, we expect the amount of these reimbursements to be comparable to 2023. The Sanofi development balance was approximately $2.2 billion at the end of the first quarter. We anticipate this balance will be fully reimbursed by the end of 2026, which we expect will result in a significant step up in our Sanofi collaboration profits thereafter. Before moving to expenses, I will mention that despite lower volumes, US Prowley went sales in the first quarter reflected a gross net adjustment related to a true up of rebates due to an adverse change in payer coverage. We now expect US net sales of Prowley went to be modestly higher in 2024 as compared to 2023, primarily due to this adjustment. Now to our operating expenses. First quarter R&D expense grew 17% year over year to $1.1 billion, reflecting continued investment in our robust pipeline. SG&A grew 13% from the prior year to 544 million in the first quarter, driven by investment to support the launch of ILEA HD, including direct to consumer promotion, as well as higher headcount related costs, primarily for our ongoing international commercial expansion. First quarter gross margin on net product sales was approximately 89%, which was impacted by ongoing startup costs for our fill finish manufacturing facility. First quarter COCM was $193 million, reflecting a decline of 22% compared to the prior year, primarily due to lower depixant drug substance manufacturing costs. Now to cashflow and the balance sheet. Regeneron generated $1.4 billion in free cashflow in the first quarter, and into the quarter with cash and marketable securities, which is less debt of approximately $14.8 billion. We repurchased approximately $300 million of our shares in the first quarter, and had approximately $1.2 billion available for repurchases under our February, 2023 authorization at the end of the first quarter. This morning, we also announced a new $3 billion share repurchase program, which provides us with additional flexibility to continue returning capital to shareholders over time, and we remain buyers of our shares. Finally, we have made some minor changes to our full year 2024 financial guidance. A complete summary of our latest full year guidance is available in our press release issued earlier this morning. We now expect 2024 R&D expense to be in the range of $4.4 to $4.6 billion. The change in R&D guidance is solely due to the inclusion of operating expenses associated with the acquisition of 270 BIOS development programs, which closed on April 1st. In summary, Regeneron performed well in the first quarter and is positioned to continue to deliver strong results in 2024 and beyond. With that, I'll pass the call back to Ryan.
Ryan Crowe
Senior Vice President of Investor Relations
Thank you, Chris. 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 answer one question from each caller before moving to the next. Josh, can we please go to the first question?
Josh
Operator
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. One moment for questions.
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Josh
Operator
our first question comes from Colin Bristow with UBS. You may proceed.
Colin Bristow
UBS
Hey, good morning and congrats on the quarter. Question for George. So George, there's a lot of interest, obviously, in your muscle sparing obesity program. I was wondering if you could speak to how you think this will differentiate versus competitor muscle sparing programs. And then within that, what will you be specifically paying attention to whenever Lilly decides to disclose the Bimagromab phase two data? Thanks a lot.
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
Yeah, thanks. Great question. As you know, when you block with other approaches like Bimagromab, you're blocking over a dozen members of the so-called BMP, GDF family and so forth. And that raises the concern, because only a couple of those are actually involved in muscle preservation, that you may end up doing more harm than good. What we have identified over the years is we identified two members of this very large family of almost 20 factors, which too are specifically involved in muscle preservation. We created antibodies to each of these two individually. And we're testing these antibodies individually as well as together. And obviously in this field of obesity, safety matters almost as much as efficacy here. So we believe we have the best program that is testing specifically just the specific members of this very large family that are involved in muscle preservation, whether blocking either one or both together, is going to benefit the quality of the weight loss in terms of preserving muscle and maybe even causing more fat loss while creating hopefully the best possible safety profile. So we think that that's a big difference between our program and other programs that are blocking, as I said, almost 20 different members that are involved in all sorts of things from growth factors for the bone marrow, for red blood cells, controlling, all sorts of things from clotting to liver function and other things. And so anyway, that's the major difference in our program. Thanks, George. We move to the next question, please, Josh.
Josh
Operator
Thank you. One moment for questions. Our next question comes from Evan Seigerman with BMO Capital Markets. You may proceed.
Evan Seigerman
BMO Capital Markets
Hey guys, thank you so much for taking the question. Kind of a follow up to Colin. When you think about endpoints in muscle sparing kind of approaches and obesity, what do you think FDA would accept right now? They're not really accepting DEXA scans. They're just looking at weight loss. Do you think that they would evolve to look at quality of weight loss as a key endpoint as the space evolves?
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
Well, just to remind you, if you look at our paper where we did the non-human primate studies and so forth, is the first thing we're gonna be looking for is there is the very real possibility of increased weight loss. And that might be the simplest regulatory endpoint of all. After that, if we don't see that but we see better quality of weight loss, that could be manifested in a variety of ways, though we of course recognize that those would perhaps create more complicated ways of being regulated. So obviously, if you increase the fat loss while preserving muscle, you should have dramatic benefits in metabolic parameters, which are often used in the field, particularly in people with diabetes and so forth, as well as ultimately in terms of function by having maintenance of function as opposed to losing function and maintaining those sort of functional endpoints. So the simplest path might be simply weight loss. One could then move into metabolic parameters or muscle actual functional outcome measures. But to us, the most important thing in the Phase II study is to really just demonstrate the quality of the weight loss in terms of fat versus muscle. Because ultimately, if you're preserving muscle and increasing the fat loss, it has to be much better for patients and it may avoid a lot of catastrophic long-term effects of widespread GLP-1 use. And so if we see that, we think that we have a real opportunity to turn that into real widespread benefit for patients using this class of drugs. Okay, thanks George. Next question, please.
Josh
Operator
Thank you. One moment for questions. Our next question comes from Christopher Raymond with Piper Sandler. You may proceed.
Christopher Raymond
Piper Sandler
Thanks. I have a question on the ILEA franchise. I just noticed that McKesson bought one of the largest GPOs, US Retina, earlier this year. There's actually been, as you guys know, a relatively long march of Retina practices being rolled up by various private equity firms over the last few years. So yeah, I know this is something that's happening across a number of therapeutic specialty areas, but maybe just talk about how you see this phenomenon impacting the practice of ophthalmology in the US and any changes to your -to-market strategy and I guess related. The inventory drawdown, we didn't see that happen last year. Was there any effect from maybe some of these changes in your customer base that sort of drove that? Thanks.
Marion McCourt
Executive Vice President of Commercial
Sure, so let me take the inventory item first and then I'll come back to the overall marketplace. But this was an aggregate, as I mentioned, in the quarter we saw a reduction in wholesaler inventory broadly of about $40 million. So that reflects market-wide, but that was a combination of two elements. It was a sequential drawdown of ILEA inventory that was partially offset by a modest increase in ILEA HD inventory ahead of the permanent J code on April 1st. And then I would share on the overall market in all the categories where we participate, we're always very conscious of the segmentation of the market, targeting the market, what's occurring in terms of customer base and certainly our strategies and our approach to the marketplace is reflective of that. And the range of customers we have, as you point out, in Retina and how that market has evolved over time. And I think our commercialization approach has been very effective in addressing that market evolution.
Ryan Crowe
Senior Vice President of Investor Relations
Okay, thanks, Mary. Next question, please, Josh.
Josh
Operator
Thank you. One moment for questions. Our next question comes from Salveen Richter with Goldman Sachs. You may proceed.
Salveen Richter
Goldman Sachs
Good morning, thanks for taking my question. With regard to the COPD program here, it doesn't seem like this is an approvability question. So could you just speak to whether restrictions to specific subpopulations could be possible, albeit noting that you had subpopulation analysis that was consistent with the broader data? Thank you.
Dr. Leonard Schleifer
President and Chief Executive Officer, Board Co-Chair, Co-Founder
Yeah, Salveen, thanks for the question. You're right. From our perspective, we think the data broadly supports the entire BLA and as well as all these analyses, the approval of the drug in eosinophilic COPD. As you might imagine, the FDA, when anticipating or looking at a new class of biologics, is very interested in checking it up and down and down and up and making sure that there's no subpopulation of the study that might be driving the data. So they might, if one saw that, one might think about labeling it differently, but none of that has occurred. We've looked at all these analyses. We're gonna submit them way ahead of the schedule that they've asked for and all of the analyses show a consistent and clinically meaningful reduction in the COPD exacerbations across all of these subgroups that have been asked for. Thanks,
Ryan Crowe
Senior Vice President of Investor Relations
Len. Next question, please.
Josh
Operator
Thank you, one moment for questions. Our next question comes from Tyler Van Buren with TD Cowan, you may proceed.
Tyler Van Buren
TD Cowan
Hey guys, good morning. Thanks for taking the question. For this initial severe food allergy study and the results by year end, can you elaborate on exactly what will be reported and what you would hope to see that early clinical proof of concept and how long do you anticipate that these patients would stay on dupixent in order to maintain low or no IgE levels?
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
These are great questions. We hope from the first few patients, if the results are as dramatic as they are in the pre-clinical studies, that we'll be seeing meaningful indicators that we are really reversing severe food allergy. Of course, the first thing and the most important biomarker, as I said, is this evil immunoglobulin IgE, which you can both measure, but they are also routinely tested using these skin prick tests, which are how people are actually evaluated for allergies. So we expect, first of all, to be seeing that happening in the study in obvious ways. And then we can follow that up and it is allowed in the study if we see dramatic responses in these markers of the actual allergy causing immunoglobulin to then go on and do actual food challenge and so forth in the patient. So it all depends on how obvious the reductions in this IgE are and if they're really dramatic, we can go on and do additional allergen challenge tests. But we hope if the humans behave like the non-human primates that we might be seeing something dramatic in the initial patients.
Dr. Leonard Schleifer
President and Chief Executive Officer, Board Co-Chair, Co-Founder
George, can you comment? I think they also wanted to know how long you have to stay on the good
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
side. Yeah, the interesting thing is the animal studies suggest that the antibodies against the allergens come back as IgG, G for good antibodies. The whole point of, if you guys are familiar with so-called immunotherapy or desensitization therapy, all of those therapies, what they're trying to do is induce production of IgG to overwhelm the IgE. That's a much harder thing to do because they're not really getting rid of the IgE. They just have to overwhelm with a lot more IgG. In the animal studies, it suggests that we get rid of the IgE and we replace it with IgG. We don't know, obviously, in the humans, it may be possible that short-term treatment, relatively short-term treatment, may allow patients who have replaced their IgE with IgG and they will have long-term protection. On the other hand, we may see that to prevent these patients from making IgE and more IgGs in the future, that they may have to stay on the depixant for substantial long periods of time. The good news about that, as we all know, as was highlighted in Marion's comments, depixant, compared to most other immunomodulatory agents, it's not immunosuppressive. It actually is corrective for the immune system and as indicated by its labeling to very, very young patients, it's a very, very relatively safe immunomodulator and biologic. And since most people who have severe allergies also have a lot of other concomitant atopic diseases, it may be that it is best for these patients to keep their abnormal atelope or abnormal type two inflammation under control. So, short answer is there's a possibility it could be relatively short-term, but there's also a possibility, at least for some or the majority of patients, it could be relatively long-term, but the good news is that they may actually have a long-term benefit for the patients because these patients are almost by definition what you call atopic patients who might need control of their type two excess inflammation.
Ryan Crowe
Senior Vice President of Investor Relations
All right, moving to the next question, please.
Josh
Operator
Thank you. One moment for questions. Our next question comes from Terrence Flynn with Morgan Stanley, you may proceed.
Terrence Flynn
Morgan Stanley
Great, thanks for taking the question. Just had one on your LAG3 program. Obviously, you guys are aware that Bristol has discussed seeing a signal in a subset of lung cancer that benefits from a combination of PD-1 and LAG3. So, we'd just love your latest thoughts on how to think about that in the context of both your program and then what you're hoping to see with this phase two data later this year. Thank you.
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
Right, that's a great question. Obviously, the thing that gets us excited about our program compared to the field is that we've seen levels of activity that haven't been seen in the other LAG3 programs, particularly in melanoma. If that's true in melanoma, there would be hope that this would be seen broadly in other settings and indications. We are certainly excited to see the follow-up details on the BMS story with potential activity in a specific subpopulation. That will certainly help point us in our own studies to see what we're seeing within that subpopulation that they're talking about as well as more broadly. But of course, the hope, as I said, is if it is indeed more active in one setting, such as melanoma, the hope is it'll be broadly more active across other cancer settings as well. So, we are excited to see follow-up on their data. We're excited to see follow-up on our data, both in melanoma and in our lung studies.
Ryan Crowe
Senior Vice President of Investor Relations
Thanks, George. Next question, please.
Josh
Operator
Thank you. One moment for questions. Our next question comes from William Pickering with Bernstein. You may proceed.
William Pickering
Bernstein
Hi, good morning. Thank you so much for taking my question. I had a follow-up on the food allergy program. Could you comment on the dose of lymphosultimab that you'll be testing as compared to the myeloma setting? What gives you confidence in the safety profile? And if a patient misses a dupixent dose, would they then need to start over again with LINDBO? Thank you.
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
Yeah, these are all great questions. So, what we've already actually shown based on a variety of studies that we've done is that normal nonmalignant, noncancerous plasma cells, the cells that are the immunoglobulin factory cells, the normal versions of the cells are much more susceptible to the bispecific than our malignant myeloma cells. So, in discussions and communications with the FDA, we're actually starting at much lower doses than the doses that are used in the myeloma programs, though there is an intrapatient dose escalation process. So, we're literally watching, we're starting with low doses and we're going up in the doses until we actually hopefully see elimination of the IgE. That said, in terms of the safety, I just remind you that the much higher myeloma doses, we came up as, Len briefly summarized in this program, we believe that we have a differentiated program in terms of not only efficacy and hospitalization burden and so forth, but also in safety, we have less than 1% grade three events at those high doses in the much sicker myeloma patients. So, we hope and we expect that with lower doses in a much healthier population, that this will be a hopefully pretty well tolerated approach. And a much shorter. And a much shorter, yeah. We think that ultimately we may get by with a single short course or a very short course of treatment. In terms of whether, if somebody takes a holiday, whether one has to then start all over again with the elimination of the IgE cells, we think probably not because it takes a long time to get to those levels of IgE. So, just delaying for a short period of time, you may not bounce back to those levels. As I said, you may have converted all of those cells to IgG or good cells by that point anyway. But of course, we have to be doing the studies and we have to be looking at these patients in the clinic to really understand. I should mention that the grade three events that I was talking about are reflected by cytokine release syndrome. A lot of that is also thought to be due to the load of the cancer cells. And obviously these normal patients have much less of a load here. So, it's just another reason to expect hopefully better safety. We're gonna be going with lower doses, more gentle treatment, and they have much less load in there. So, you'd expect much less reason to be seeing things like cytokine release syndrome.
Ryan Crowe
Senior Vice President of Investor Relations
Okay,
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
next
Ryan Crowe
Senior Vice President of Investor Relations
question please.
Josh
Operator
Thank you. One moment for questions. Our next question comes from Carter Gold with Barclays, you may proceed.
Carter Gold
Barclays
Good morning, thanks for taking the questions. Congrats on all the progress. I wanted to ask another follow up sort of by specifics in autoimmune, but I wanted to go down a little bit of a different path acknowledging the BCMA and DUPI effort. But we've seen sort of CAR T efforts and ADC approaches sort of come to the rise in lupus and other autoimmune disorders. And naturally people then started talking about T cell engagers. This seems like a natural place where Regeneron could leverage its bi-specific capabilities and expertise. Are there efforts underway internally on this front? Has Regeneron looked at ways to leverage in that expertise? Thank you.
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
You know, that's a phenomenal question. And first of all, let me remind you that with our long-term collaboration and recent acquisition of 270, 270 had exactly the sort of CAR T programs that you're referring to in lupus and other autoimmune settings, which we are now obviously pursuing together with them. But that is one of the reasons why we were excited about turning the collaboration into a situation where we brought all the expertise and the scientists and leadership from 270 in-house because we're doing exactly what you suggested. We're hoping to actually literally look in -by-side studies how CAR T approaches in these settings of autoimmune, severe autoimmune disease like lupus and so forth, compare directly -to-head to our bi-specifics. And as you were sort of suggesting, you would think that there would be really little reason to think that the CAR T solutions would be preferable in this setting, both in terms of -the-shelfness and the ability to eliminate the normal cells. As I said, it's usually a lot easier to get rid of normal cells than it is malignant cells. So whatever advantages you might have in certain settings of CAR T, you would think in the normal disease setting, or at least normal cells in autoimmune disease settings, that bi-specifics might be just as good, much more convenient, and much safer. So together with now our internal Regeneron Cell Medicines Group that has involved a lot of the expertise and leadership of 270, we're exploring that exact question. I should also say that as clearly been announced by the company and is available in our public disclosures, we have already initiated separately a variety of studies looking at our bi-specifics to decrease autoantibodies and autoimmune diseases in other settings as well. So we were already looking at this, but now we're looking at these in direct comparison to our CAR T approaches with our now internal Regeneron Cell Medicines efforts.
Ryan Crowe
Senior Vice President of Investor Relations
Okay, thank you, George. Next question, please.
Josh
Operator
Thank you. One moment for questions. Our next question comes from Brian Abrahams with RBC Capital Markets. You may proceed.
Brian Abrahams
RBC Capital Markets
Hi, good morning. Thanks for taking my question and congrats on all the progress. I know docs are really excited for DUPI and COPD, but it is a new space for biologics. So I'm curious the amount of education you think is gonna be required and how this might affect the initial uptake trajectory and then how you're thinking the introduction of other biologics which have also been showing promise might impact the overall long-term market here and DUPI's positioning.
Marion McCourt
Executive Vice President of Commercial
So certainly, we look forward to the potential launch of Dupixin and COPD. There's such unmet need and such opportunity to help those patients with an asynophilic COPD. Our team, as you know, is very experienced with launches in Dupixin. So work is very much underway at Regeneron and also with obviously under our collaboration with Sanofi to make sure that we apply the best practices in the launch of new indications. I will share that many of these physicians have already experienced use of Dupixin with tremendous results. We've made great progress, as you know, in asthma, leading in new scripts and certainly making tremendous overall performance strides. But we will be very thoughtful on how best to reach physicians, how to make sure that we're aligned with reimbursement and affordability for patients, educating in the way we've come to understand as best for Dupixin and the various markets and indications that we've entered. So we look forward to this opportunity.
Ryan Crowe
Senior Vice President of Investor Relations
Okay, I think we have time for two more questions. Thank
Josh
Operator
you. One moment for questions. Our next question comes from Mohit Banzal with Wells Fargo, you may proceed.
Mohit Banzal
Wells Fargo
Great, thank you very much for taking my question. I have a question on the Tepecimab. So in our conversation and literature search, it suggests that there may be a potential for disease modification with some kind of AIV remodeling of this mechanism. Just wanted to see if you think that is possible and what markers would you be looking forward to in the phase three trial beyond the observation when the data come? Thank you.
Dr. George Yonkopoulos
Chief Scientific Officer, Board Co-Chair, Co-Founder
Well, there's always the possibility of disease modification. We actually believe, for example, Dupixin and asthma may be doing exactly that sort of benefit. One of the best ways of actually looking at that is looking at overall loss of lung function over time, because as you know, in these lung diseases, as Marion said, in both asthma and COPD, these are diseases of the lungs, followed largely by pulmonologists, the same sort of doctors, and it is well known that in both of these diseases, over time, patients start permanently losing lung capacity and lung function. We are and have been and have early data suggesting that Dupixin may prefer that in asthma, and we'll certainly be looking at those sorts of things for not only Dupixin but at Topicumab in the COPD patients in terms of modifying disease and long-term preservation and prevention of this otherwise unstoppable lung function loss. Okay,
Ryan Crowe
Senior Vice President of Investor Relations
last question, please, Josh.
Josh
Operator
Thank you. One moment for our last question. And our last question comes from Chris Schott with JP Morgan, you may proceed.
Taylor
JP Morgan
Hi, this is Taylor on for Chris Schott. Thanks for taking our question. So we were wondering, would you be able to elaborate a little bit more about how you're thinking about the Lymphocelldermab launch as we approach the August padufa, and then thinking about the field more broadly in myeloma? How are you thinking about MRD negativity as a surrogate and thoughts on how you might be able to move into earlier lines in myeloma faster? Thank you.
Dr. Leonard Schleifer
President and Chief Executive Officer, Board Co-Chair, Co-Founder
Marion can take the question on the launch and everything. I mean, obviously the MRD negativity as endorsed by that panel gives an opportunity to get these kinds of drugs to patients earlier in a variety of settings. So we're looking forward to applying that approach in our future studies as we move towards earlier in different lines of therapy. Marion on the launch.
Marion McCourt
Executive Vice President of Commercial
Sure, so we're certainly preparing for the potential launch with the August 22nd padufa date. And we're really excited because as I'd mentioned before, the recent data reinforces Lymphocelldermab as potentially a best in class product for late stage myeloma patients. So it's a wonderful opportunity to extend our oncology franchise in a new disease area. All
Ryan Crowe
Senior Vice President of Investor Relations
right, thanks, Len and Marion, and thanks to everyone who dialed in 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 IR team here at Regeneron is available to answer any remaining questions that you may have. Thank you once again and have a great day.
Josh
Operator
Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
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