Regeneron is fighting some serious enemies. Regeneron Pharmaceuticals develops protein-based drugs used to battle a variety of diseases and conditions, including cancer, inflammatory ailments, and eye diseases. The biotechnology company's first commercialized product is ARCALYST, a treatment for rare inflammatory diseases including Muckle-Wells Syndrome. Regeneron collaborates with Sanofi to develop candidate aflibercept (VEGF Trap) as a possible treatment for cancerous tumors. It is also developing aflibercept with Bayer HealthCare to treat eye diseases using intraocular delivery, with EYLEA approved in the US and Australia as a treatment of neovascular age-related macular degeneration (wet AMD).
Regeneron has its corporate and research & development headquarters in New York, and a satellite office in New Jersey. Internationally, it is headquartered in Dublin, Ireland, and has a manufacturing facility (under construction) in Limerick.
The company and Sanofi globally collaborate on the development and commercialization of ZALTRAP (to treat patients with metastatic colorectal cancer), and share profits and losses from commercialization of ZALTRAP, except for Japan. The company has product candidates in development in areas including hypercholesterolemia, oncology, rheumatoid arthritis, asthma, and atopic dermatitis.
Sanofi has committed to pay up to $160 million per year, or a total of $1.28 billion, between 2010 and 2017 to fund its efforts to identify and validate drug discovery targets and preclinically develop fully human monoclonal antibodies against such targets. Antibody-based clinical programs in collaboration with Sanofi included PRALUENT, Antibody to PCSK9; Sarilumab (REGN88); Dupilumab (REGN668); REGN1033; and REGN2222.
Regeneron has a nonexclusive license to certain patents relating to VEGF receptor proteins and a partial settlement agreement with Roche member company Genentech related to ophthalmic sales of EYLEA (aflibercept) Injection in the US. Under the agreement, Regeneron will make payments to Genentech based on sales of EYLEA in the US through May 2016.
In addition, in 2014 the FDA, European Commission, and Japanese Ministry of Health, Labour and Welfare approved EYLEA for the treatment of diabetic macular edema (DME).
Sales and Marketing
Research and development expenses accounted for some 45% of Regeneron's revenues in 2014.
Regeneron has reported strong revenue growth trend over the last few years. In 2014 its revenues increased by 34% due to higher product sales (EYLEA and ARCALYST) and Bayer HealthCare and Sanofi collaboration revenues.
Bayer HealthCare collaboration revenues increased due to a sales milestone received from Bayer HealthCare upon total aggregate net sales of specific commercial supplies of EYLEA outside the United States. Sanofi collaboration revenues increased primarily due to higher development activities for dupilumab, PRALUENT, and certain other, earlier-stage antibody product candidates.
Regeneron's net income decreased by 18% in 2014 due to higher research and development expenses and loss on extinguishment of debt.
Research and development expenses increased due primarily to additional costs for clinical studies of dupilumab and REGN1033, due to additional costs related to manufacturing drug supplies of PRALUENT and to its 50% share ($33.8 million) of the cost of purchasing an FDA priority review voucher in 2014.
Loss on extinguishment of debt was related to the conversion of the company's convertible senior notes during 2014.
Regeneron's operating cash flow has followed the company's revenue trend over the last five years. In 2014 operating cash flow increased by 27% due to the increase in Sanofi, Bayer HealthCare, and trade accounts receivable, a change in deferred revenues, and an increase in cash provided by accounts payable, accrued expenses, and other liabilities.
The company has expanded the applications of its protein-based technology to include the creation of human monoclonal antibodies (laboratory produced cloned proteins). Outside their partnership on aflibercept, Regeneron has an antibody development agreement with Sanofi that includes $475 million in potential milestone payments and covers potential treatments for ailments including cancer, rheumatoid arthritis, pain, cholesterol, and allergic conditions.
As its largest partner, Sanofi (which also owns a 20% stake in Regeneron) accounts for about 20% of sales. The company's other collaborations account for more than 15% of sales; firms are working together to treat ophthalmic diseases including diabetic macular edema and wet age-related macular degeneration.
The company also licenses its human antibody technology out to drug developers, which then use Regeneron's technology in researching their own antibody drugs. Licensing partners include AstraZeneca and Astellas Pharma.
In 2015 the EYLEA injection was approved by the European Commission for the treatment of visual impairment due to Macular Edema secondary to retinal vein occlusion.
In 2014 Regeneron entered into an agreement with Bayer HealthCare governing the joint development and commercialization outside the US of an antibody product candidate to PDGFR-beta, including in combination with EYLEA, for the treatment of ocular diseases or disorders. That year it signed a similar deal with Adverum Biotechnologies, to discover, develop, and commercialize novel gene therapy products for the treatment of ophthalmologic diseases.
The company launched a new human genetics initiative in 2014 via a wholly owned subsidiary, Regeneron Genetics Center LLC.
In 2012 Regeneron and Bayer HealthCare converted their 50-50 global profit-share agreement for marketing EYLEA (aflibercept) Injection as a treatment for wet AMD outside the US into a royalty arrangement in Japan, where approval for the treatment is pending authorization. Applications for marketing EYLEA have been submitted by Bayer HealthCare in Europe and other countries. The treatment is also in Phase 3 clinical studies for other indications including diabetic macular edema, myopic choroidal neovascularization, and branch retinal vein occlusion.
ARCALYST (rilonacept) was approved by the FDA in 2008 and subsequently became the company's first market-stage product. Regeneron has built up a small marketing force to promote the product in the US; ARCALYST is manufactured at the company's plant in New York and is distributed through third parties. ARCALYST targets Cryopyrin-Associated Periodic Syndromes (CAPS), a series of diseases caused by genetic mutations including Muckle-Wells Syndrome and Familial Cold Auto-inflammatory Syndrome. The drug is also being tested for the treatment of gout.
The company was founded in New York City in 1988.