Regeneron Pharmaceuticals, Inc.

Hello, and welcome to Regeneron Pharmaceuticals' fourth quarter 2024 earnings conference call. My name is Tawanda, 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, Tawanda. 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 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 Yancopoulos, Board Co-Chair, Co-Founder, President, and Chief Scientific Officer. Marion McCourt, Executive Vice President of Commercial, and Chris Fenimore, Executive Vice President and Chief Financial Officer. After our prepared remarks, the remaining time will be available for your questions. 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 forecasting guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement, intellectual property, pending litigation and other proceedings, and competition. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in Regeneron's filings with the United States Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2024, which we expect to file with the SEC tomorrow, February 5th. 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 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?

Thank you, Ryan, and thank you to everyone for joining today's call. Regeneron capped 2024 with a strong fourth quarter, highlighted by 10% revenue growth. reflecting the strength and durability of our key franchises, primarily Dupixent, Libtyo, and ILEA and ILEA HD. 2024 was also a year in which we made significant investments across our broad pipeline, which yielded notable progress across several key programs. For my remarks today, I will use some of our key performance drivers, then briefly discuss a few of our more differentiated pipeline opportunities and close with a few comments on capital allocation. After my remarks, George will provide further updates on our pipeline. Marin will then review our commercial performance. And finally, Chris will detail our financial results for the fourth quarter of 2024 and our guidance for the current year. To start, I would like to share my perspective on the current state of Regeneron. From the beginning, our focus has been on science and innovation. developing cutting edge technology platforms that repeatedly yield scientific breakthroughs. These efforts have led to 13 products that have been approved or authorized worldwide, several of which are driving revenue growth and hold significant future potential. Our approach has already delivered five blockbuster drugs, a leading pipeline of approximately 40 product candidates across various therapeutic areas, and a world-class DNA sequence-linked healthcare database, providing us with unparalleled insights into key drivers of disease. At the J.P. Morgan Conference last month, we detailed 10 differentiated mid and late pipeline opportunities that could collectively address a total market opportunity of over $220 billion. Given these opportunities, The strength of our early-stage pipeline and our turnkey technology platforms, we have never been more confident in Regeneron's future, and we are incredibly excited about what lies ahead. Moving to our quarterly results, Tupixent continues to be a transformative medicine, with over 1 million patients on treatment around the world across seven approved indications. In the U.S., depicts and remains the leader in new-to-brand prescription share across all of its approved indications and continues to be well-positioned for future growth, given the potential for further penetration in approved indications, the ongoing launch in COPD, and potential 2025 launches in chronic spontaneous urticaria and bullous tympanoid. Regarding the ongoing launch in COPD, where DUPIXIT is the first and only biologic approved, we and our partner, Sanofi, have made great progress securing broad payer coverage and reimbursement, positioning us to drive uptake over the course of this year and beyond. ILEA-HD and ILEA continue to lead the anti-VEGF category, and our commercial efforts remain focused on driving ILEA-HD uptake, while preserving share for ILEA in an increasingly competitive category. Over the course of this year, we expect continued competitive pressure on ILEA, while strengthening the profile of ILEA-HT by offering it in a more convenient prefilled syringe administration, broadening its label to include macular edema following retinal vein occlusion, or RVO, and adding more dosing flexibility, including every four-week dosing as well as extended dosing intervals of up to every 24 weeks for certain indications. With these anticipated label enhancements, ILEA-HD will offer the broader set of retinal disease indications with the greatest dose and flexibility of any product in the anti-VEGF category, positioning it to become the new standard of care in the category. And we anticipate these enhancements will lead to acceleration in ILEA-HD uptake starting in the second half of this year. Liptunia became Regeneron's latest blockbuster product in 2024, and we are looking to build on that by expanding shared metastatic non-melanoma skin cancers, along with making further inroads in lung cancer. We also plan to seek regulatory approval for high-risk adjuvant cutaneous squamous cell carcinoma, a setting in which Keytruda failed and over the longer term could represent a blockbuster opportunity globally in and of itself. Moving to our pipeline and focusing on the upcoming year, we expect regulatory approvals for limboceltumab in relapsed refractory multiple myeloma, ogenectomab in late-line follicular lymphoma, and the aforementioned ligtio indication in adjuvant CSCC. In addition, we expect to read out pivotal or proof-of-concept data this year from several other programs, including our pivotal ARIFI studies for idopecumab, our IL-33 antibody, in former smokers with COPD. Pivotal data for the pheanilumab-liptio combination in first-line metastatic melanoma are also anticipated in 2024. We also expect pivotal data for our C5 antibody siRNA combination and generalized myasthenia gravis. Finally, we expect to learn more about our potential opportunity to improve the quality of weight loss in obese patients on semiglutide by blocking myostatin and activin A. George will soon discuss these programs in more detail and provide updates on many of the other programs in our broad and differentiated pipeline. Finally, regarding capital allocation, This morning, we were pleased to announce the initiation of a quarterly cash dividend program and an additional $3 billion share repurchase authorization, increasing our total current buyback capacity to approximately $4.5 billion. These decisions reflect our board and management's ongoing commitment to returning capital to shareholders, but this does not change the core of our capital allocation framework. Importantly, our dividend, will not impact the way we plan to heavily invest in our business and pipeline going forward, does not impair our ability to do business development in the future, and we anticipate that share repurchases will remain the primary means of returning capital to shareholders. However, initiating a dividend reflects our continued confidence in the future cash flows from our business, provides more balance to our approach to capital returns, gives us flexibility in how we return capital in the future, and expands the pool of potential Regeneron shareholders to include funds with a dividend mandate. In closing, Regeneron remains in a very strong position scientifically, commercially, and financially, enabling us to invest heavily in R&D and deliver tremendous innovation from our pipeline. maximize the growth opportunities from our inline brands, initiate a quarterly dividend, and significantly increase our capacity to repurchase shares. We look forward to keeping you updated in these innovations throughout 2025 and beyond. With that, I'll now turn the call over to George.