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Item 7. Management’s Discussion and Analysis

2026-02-04 compared with 2025-02-05 · 120 added, 101 removed, 343 unchanged (39% of the section changed)

Management's Discussion and Analysis of Financial Condition and Results and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report.

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is a fully integrated biotechnology company that invents, develops, manufactures, and commercializes medicines for people with serious diseases.

Our research and development efforts have led to numerous approved products that have received marketing approval and approximately 40 product candidates in clinical development (including a number of marketed products for which we are investigating additional indications), most of which were homegrown in our laboratories.

Our ability to generate profits and to generate positive cash flow from operations over the next several years depends significantly on the success in commercializing EYLEA HD, EYLEA, and Dupixent.

Our research and development efforts have led to numerous products that have received marketing approval and approximately 45 product candidates currently in clinical development (including a number of marketed products for which we are investigating additional indications), most of which were homegrown in our laboratories.

Our ability to generate profits and to generate positive cash flow from operations over the next several years depends significantly on the success in commercializing our products, including EYLEA HD and Dupixent.

We expect to continue to incur substantial expenses related to our research and development activities, and our research and development activities and related costs which are not reimbursed by collaborators are expected to expand and require additional resources.

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We have entered into various collaborative arrangements to research, develop, manufacture, and commercialize products and/or product candidates.

Our collaboration agreements may require us to deliver various rights, services, and/or goods across the entire life cycle of a product or product candidate.

Our collaboration agreements may require us to deliver various rights, services, and/or goods across the entire

life cycle of a product or product candidate.

In agreements involving multiple goods or services promised to be transferred to our collaborator, we assess, at the inception of the contract, whether each promise represents a separate obligation (i.e., is "distinct"), or whether such promises should be combined as a single unit of account.

When we have a combined unit of account which includes a license and providing research and development services to our collaborator, recognition of up-front payments and development milestones earned from our collaborator is deferred (as a liability) and recognized over the development period (i.e., over time) typically using an input method on the basis of our research and development costs incurred relative to the total expected cost which determines the extent of our progress toward completion.

We review our estimates each period and make revisions to such estimates as necessary.

Due to the variability in the scope of activities and length of time necessary to develop a drug product, potential delays in development programs, changes to development plans and budgets as programs progress, including if we and our collaborators decide to expand or contract our clinical plans for a drug candidate in various disease indications, and uncertainty in the ultimate requirements to obtain governmental approval for commercialization, revisions to our estimates are likely to occur periodically, potentially resulting in material changes to amounts recognized.

If our collaborator performs research and development work or commercialization-related activities and the parties share the related costs, we also recognize, as expense (e.g., research and development expense or selling, general and administrative expense, as applicable) in the period when our collaborator incurs such expenses, the portion of the collaborator's expenses that we are obligated to reimburse.

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Stock-based Compensation

We recognize stock-based compensation expense for equity grants under our long-term incentive plans to employees and non-employee members of our board of directors (as applicable) based on the grant-date fair value of those awards.

We recognize stock-based compensation expense for equity grants under our long-term incentive plans to employees and non-employee members of our board of directors based on the grant-date fair value of those awards.

The grant-date fair value of an award is generally recognized as compensation expense over the award's requisite service period.

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We use the Black-Scholes model to compute the estimated fair value of stock option awards.

Using this model, fair value is calculated based on assumptions with respect to (i) expected volatility of our Common Stock price, (ii) the periods of time over which employees and members of our board of directors are expected to hold their options prior to exercise (expected lives), (iii) expected dividend yield on our Common Stock, and (iv) risk-free interest rates, which are based on quoted U.S.

Using this model, fair value is calculated based on assumptions with respect to (i) expected volatility of our Common Stock price, (ii) the periods of time over which employees and members of our board of directors are expected to hold their options prior to exercise (expected lives), (iii) expected dividend yield on our Common Stock, which is based on our historical practice and expectation of future dividend payments, and (iv) risk-free interest rates, which are based on quoted U.S.

Treasury rates for securities with maturities approximating the options' expected lives.

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See Note 13 to our Consolidated Financial Statements for stock-based compensation expense and related assumptions used in determining the fair value of our awards.

We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, including deferred tax assets and liabilities for expected amounts of global intangible low-taxed income ("GILTI") inclusions.

We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, including deferred tax assets and liabilities for expected amounts of Net CFC Tested Income (“NCTI”) (formerly known as global intangible low-taxed income ("GILTI")) inclusions.

Deferred tax assets and liabilities are determined as the difference between the tax basis of assets and liabilities and their respective financial reporting amounts ("temporary differences") at enacted tax rates in effect for the years in which the differences are expected to reverse.

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Payments to acquire intangible assets in an asset acquisition may include up-front payments and contingent consideration.

With regard to contingent consideration in an asset acquisition, the Company recognizes regulatory milestones upon achievement, royalties in the period in which the underlying sales occur, and sales-based milestones when the milestone is deemed probable by the Company of being achieved.

the Company of being achieved.

If contingent consideration is recognized subsequent to the acquisition date in an asset acquisition, the amount of such consideration is recorded as an addition to the cost basis of the intangible asset with a cumulative catch-up adjustment for amortization expense as if the additional amount of consideration had been accrued from the outset of the acquisition.

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944.7 787.3 538.8 157.4 248.5

Libtayo - ROW (a)

Libtayo - ROW

507.5 429.5 324.3 78.0 105.2

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37.4 76.8 69.8 (39.4) 7.0

Other products - Global

10.1 — — 10.1 —

Total net product sales $ 6,309.1 $ 7,629.2 $ 7,078.0 $ (1,320.1) $ 551.2

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Total revenues $ 14,342.9 $ 14,202.0 $ 13,117.2 $ 140.9 $ 1,084.8

(a) Effective July 1, 2022, we obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide under an Amended and Restated Immuno-oncology License and Collaboration Agreement with Sanofi ("A&R IO LCA") and, as a result, we began recording net product sales of Libtayo outside the United States as of such date.

Net Product Sales

Total EYLEA HD and EYLEA net product sales in the U.S.

increased in 2024 compared to 2023.

EYLEA HD was approved by the FDA in August 2023 and net product sales in 2024 were driven by the transition of patients from other anti-VEGF products, including EYLEA, as well as new patients naïve to anti-VEGF therapy.

Net product sales of EYLEA HD and EYLEA in 2024 were adversely impacted by a lower net selling price compared to 2023.

Total EYLEA HD and EYLEA net product sales for the fourth quarter of 2024 were favorably impacted by approximately $85 million as a result of higher wholesaler inventory levels for EYLEA, partially offset by lower wholesaler inventory levels for EYLEA HD, at the end of the fourth quarter of 2024 compared to the end of the third quarter of 2024.

Net product sales of EYLEA HD increased in 2025 compared to 2024, due to higher sales volumes, partly offset by a lower net selling price.

EYLEA HD was approved by the FDA in August 2023.

Net product sales of EYLEA decreased in 2025 compared to 2024, due to (i) lower sales volumes as a result of continued competitive pressures (as described below), loss in market share to compounded bevacizumab due to patient affordability constraints, and the continued transition of patients to EYLEA HD, and (ii) a lower net selling price.

EYLEA net product sales have been, and are likely to continue to be, negatively impacted by increased competition from other anti-VEGF products, including biosimilars, as well as the transition of patients from EYLEA to EYLEA HD.

The magnitude and duration of such impact is presently unknown.

For more information, see Part I, Item 1A.

"Risk Factors - Risks Related to Commercialization of Our Marketed Products, Product Candidates, and New Indications for Our Marketed Products - We are substantially dependent on the success of EYLEA HD, EYLEA, and Dupixent" and "The commercial success of our products and product candidates is subject to significant competition - Marketed Products." In addition, if independent not-for-profit patient assistance funds that provide copay assistance are unable to support eligible patients, this will likely have a continued negative impact on patient affordability resulting in lower utilization of higher-cost anti-VEGF agents.

Revenue from product sales is recorded net of applicable provisions for rebates, chargebacks, and discounts;

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Regeneron's share of profits $ 5,241.6 $ 3,923.5 $ 3,136.5

$ 3,923.5 $ 3,136.5 $ 2,082.0

Sales-based milestones earned — — 50.0

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642.4 607.9 613.0

Other — — 28.7

Total Antibody 4,531.4 3,799.5 2,844.4

Total Immuno-oncology (b)

Total Sanofi collaboration revenue $ 5,884.0 $ 4,531.4 $ 3,799.5

(a) Corresponding costs incurred by the Company in connection with such manufacturing is recorded within Cost of collaboration and contract manufacturing

(b) As the A&R IO LCA became effective July 1, 2022, the six months ended June 30, 2022 was the last period in which Sanofi collaboration revenue was recognized in connection with the Immuno-oncology collaboration.

Global net product sales of Dupixent and Kevzara are recorded by Sanofi, and we and Sanofi share profits on such sales.

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(929.7) (603.7) (459.8)

One-time payment in connection with amendment to the Antibody License and Collaboration Agreement — — (56.9)

Regeneron's share of profits

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(a) See "Liquidity and Capital Resources - Additional Funding Requirements" below for additional details on our contingent reimbursement obligation

The increase in our share of profits during the year ended December 31, 2024, compared to 2023, was driven by higher profits associated with Dupixent sales.

During the year ended December 31, 2023, we earned the final $50.0 million sales-based milestone from Sanofi upon aggregate annual sales of antibodies outside the United States exceeding $3.0 billion on a rolling twelve-month basis.

The increase in our share of profits during the year ended December 31, 2025, compared to 2024, was driven by higher profits primarily associated with an increase in Dupixent sales.

Bayer Collaboration Revenue

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$ 1,282.7 $ 1,403.3 $ 1,376.4

Reimbursement for manufacturing of ex-U.S.

commercial supplies (a)

Reimbursement for manufacturing of commercial supplies (a)

139.7 95.7 111.1

One-time payment in connection with change in Japan arrangement (b)

Total Bayer collaboration revenue $ 1,422.4 $ 1,499.0 $ 1,487.5

(a) Corresponding costs incurred by the Company in connection with such manufacturing is recorded within Cost of collaboration and contract manufacturing

(b) Effective January 1, 2022, the Company and Bayer commenced sharing equally in profits based on sales from Bayer to its distributor in Japan.

Previously, the Company received from Bayer a tiered percentage of sales based on sales by Bayer's distributor in Japan.

Bayer records net product sales of EYLEA 8 mg and EYLEA outside the United States.

Bayer records net product sales of EYLEA 8 mg and EYLEA outside the United States, and we and Bayer share profits on such sales.

Regeneron's share of profits in connection with commercialization of EYLEA 8 mg and EYLEA outside the United States is summarized below:

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(a) See "Liquidity and Capital Resources - Additional Funding Requirements" below for additional details on our contingent reimbursement obligation

The decrease in our share of profits for the year ended December 31, 2025, compared to the same period in 2024, was primarily driven by lower profits associated with a decrease in EYLEA sales outside the United States.

Roche Collaboration Revenue

Under the terms of the Roche collaboration, Roche distributed and recorded net product sales of Ronapreve ™ outside the United States, and the parties shared gross profits from sales based on a pre-specified formula.

In 2023, total Roche collaboration revenue was $211.0 million.

Net product sales of Ronapreve outside the United States declined as a result of new variants of the SARS-CoV-2 virus emerging that are not susceptible to the treatment.

Other Revenue

Year Ended December 31,

(In millions) 2025 2024 2023

Regeneron's share of profits

Royalties on sales of Novartis' Ilaris ® (canakinumab) (a)

$ 274.8 $ 177.5 $ 153.8

Other — (13.3) —

Total Roche collaboration revenue $ 1.4 $ 211.0 $ 627.3

Roche distributes and records net product sales of Ronapreve outside the United States, and the parties share gross profits from sales based on a pre-specified formula.

Net product sales of Ronapreve outside the United States declined as a result of new variants of the SARS-CoV-2 virus emerging that are not susceptible to the treatment.

Other Revenue

Other revenue in 2024 and 2023 included $328.6 million and $247.6 million, respectively, of royalties and share of profits earned in connection with license agreements.

Regeneron's share of profits from sales of ARCALYST (b)

231.2 115.2 60.4

196.6 222.3 321.9

Total other revenue

$ 702.6 $ 515.0 $ 536.1

(a) In connection with our agreement with Novartis, the tiered royalty rates start at 4% and reach 15% after annual sales exceed $1.5 billion

(b) In connection with our license agreement with Kiniksa Pharmaceuticals, Ltd., we are entitled to receive 50% of Kiniksa's profits from sales of ARCALYST

corresponding costs incurred by the Company in connection with such manufacturing is recorded within Cost of collaboration and contract manufacturing

Operating Expenses

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959.9 883.2 883.7 76.7 (0.5)

Other operating expense (income), net 53.4 (2.1) (89.9) 55.5 87.8

Other operating (income) expense, net (10.0) 53.4 (2.1) (63.4) 55.5

Total operating expenses $ 10,765.0 $ 10,211.3 $ 9,070.1 $ 553.7 $ 1,141.2

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(b) Includes costs incurred in connection with manufacturing drug supplies for collaborators and others

Operating expenses in 2024 and 2023 included a total of $982.8 million and $885.0 million, respectively, of stock-based compensation expense related to equity awards granted under our long-term incentive plans.

As of December 31, 2024, unrecognized stock-based compensation expense related to unvested stock options and unvested restricted stock (including performance-based restricted stock units) was $626.7 million and $1.271 billion, respectively.

We expect to recognize this stock-based compensation expense related to stock options and restricted stock over a weighted-average period of 1.9 years.

Operating expenses in 2025 and 2024 included stock-based compensation expense of $993.7 million and $982.8 million, respectively.

As of December 31, 2025, unrecognized stock-based compensation expense related to unvested stock options and unvested restricted stock was $385.8 million and $1.493 billion, respectively.

We expect to recognize this stock-based compensation expense related to stock options and restricted stock over weighted-average periods of 1.7 years and 2.3 years, respectively.

Research and Development Expenses

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Fianlimab $ 207.9 $ 215.5 $ 112.2 $ (7.6) $ 103.3

Linvoseltamab 141.9 78.7 45.5 63.2 33.2

Lynozyfic (linvoseltamab)

166.0 141.9 78.7 24.1 63.2

Ordspono (odronextamab)

165.4 129.4 96.3 36.0 33.1

111.8 96.2 70.3 15.6 25.9

Dupixent (dupilumab) 111.2 128.8 168.0 (17.6) (39.2)

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90.4 98.3 96.2 (7.9) 2.1

96.2 70.3 26.5 25.9 43.8

Pozelimab 79.4 60.2 72.4 19.2 (12.2)

Libtayo (cemiplimab) 76.1 79.1 105.3 (3.0) (26.2)

73.7 33.0 1.5 40.7 31.5

Pozelimab/cemdisiran

67.2 79.4 60.2 (12.2) 19.2

Other product candidates in clinical development and other research programs

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1,391.2 1,195.9 1,053.9 195.3 142.0

Priority review voucher

155.0 — — 155.0 —

Reimbursement of research and development expenses by collaborators (148.5) (190.8) (176.3) 42.3 (14.5)

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Research and development expenses included stock-based compensation expense of $545.4 million and $543.8 million in 2025 and 2024, respectively.

Research and development expenses in 2025 included $155.0 million related to an FDA Rare Pediatric Disease Priority Review Voucher ("PRV").

During the fourth quarter of 2025, we made the decision to utilize the PRV for a regulatory submission;

this PRV was purchased by us, and capitalized as an intangible asset, in the second quarter of 2025.

There are numerous uncertainties associated with drug development, including uncertainties related to safety and efficacy data from each phase of drug development, uncertainties related to the enrollment and performance of clinical trials, changes in regulatory requirements, changes in the competitive landscape affecting a product candidate, and other risks and uncertainties described in Part I, Item 1A.

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Acquired In-Process Research and Development ("IPR&D") Expenses

Acquired IPR&D expense in 2024 included a $45.0 million development milestone in connection with our collaboration agreement with Sonoma Biotherapeutics, Inc.

Acquired IPR&D expense in 2023 included a $100.0 million development milestone in connection with our collaboration agreement with Alnylam Pharmaceuticals, Inc., a $45.0 million up-front payment in connection with our collaboration agreement with Sonoma, and a $30.0 million charge to extend the period for selecting targets under our collaboration agreement with Intellia Therapeutics, Inc.

Acquired IPR&D expenses in 2025 included an $80.0 million up-front payment in connection with our license agreement with Hansoh Pharmaceuticals Group Company Limited.

Acquired IPR&D expenses in 2024 included a $45.0 million development milestone in connection with our collaboration agreement with Sonoma Biotherapeutics, Inc.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased in 2024, compared to 2023, due to higher commercialization-related expenses to support our launch of EYLEA HD and higher headcount and headcount-related costs partly related to our international commercial expansion.

Selling, general, and administrative expenses also included stock-based compensation expense of $355.0 million and $307.1 million in 2024 and 2023, respectively.

Selling, general, and administrative expenses decreased in 2025, compared to 2024, primarily due to lower charitable contributions to Good Days, an independent non-profit patient assistance organization with a Retinal Vascular and Neovascular Disease Fund (the "Fund").

In July 2025, we launched a matching program for donations made to the Fund and committed to quarterly matching donations through the end of 2025.

During the fourth quarter of 2025, we recognized approximately $60 million in connection with matching donations made to the Fund.

We have also recently committed to matching donations for up to a total of $200 million during 2026.

Selling, general, and administrative expenses included stock-based compensation expense of $362.9 million and $355.0 million in 2025 and 2024, respectively.

Cost of Goods Sold

Cost of goods sold increased in 2024, compared to 2023, primarily due to higher start-up costs for our Rensselaer, New York fill/finish facility.

Other Operating Expense (Income)

Other operating expense (income), net, in 2024 reflected a charge of $53.4 million related to the increase in the estimated fair value of the contingent consideration liability recognized in connection with our 2023 acquisition of Decibel Therapeutics, Inc.

Year Ended December 31,

(In millions, except gross margin on net product sales)

2025 2024 2023

Cost of goods sold

$ 1,140.8 $ 1,087.3 $ 932.1

Gross margin on net product sales (a)

(a) Gross margin on net product sales represents gross profit expressed as a percentage of total net product sales recorded by the Company.

Gross profit is calculated as net product sales (see "Net Product Sales" section above) less cost of goods sold.

Gross margin on net product sales decreased in 2025, compared to 2024, partly due to ongoing investments to support our manufacturing operations and higher inventory write-offs and reserves.

In addition, gross margin on net product sales decreased due to higher amortization expense associated with our Libtayo intangible asset as each quarter we record additions to the intangible asset related to royalties due to Sanofi.

Other Operating (Income) Expense

Other operating (income) expense, net, in 2024 reflected a charge of $53.4 million related to the increase in the estimated fair value of the contingent consideration liability recognized in connection with our 2023 acquisition of Decibel Therapeutics, Inc.

Other Income (Expense)

Other income (expense) consists of the following:

Year Ended December 31,

(In millions) 2025 2024 *

Unrealized gains (losses) on equity securities, net

Gains (losses) on marketable and other securities, net

$ 946.1 $ 118.3 $ (266.4)

Interest income 716.8 711.4 495.9

Foreign currency (losses) gains, net

(0.5) (12.9) 50.2

Other 33.7 14.7 (4.3)

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Total other income (expense) $ 1,652.8 $ 789.2 $ 152.2

* Certain prior year amounts have been reclassified to conform to the current year's presentation

Year Ended December 31,

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13.9% 7.7% 5.9%

Our effective tax rate for 2024 and 2023 was positively impacted, compared to the U.S.

On July 4, 2025, bill H.R.

1, commonly referred to as the "One Big Beautiful Bill Act" or "OBBBA," was signed into law, with certain provisions effective in 2025 and other provisions becoming effective in 2026.

The OBBBA significantly revises U.S.

corporate income tax laws by, among other things, restoring the option for immediate expense recognition for U.S.-based research and development expenditures and making permanent the ability to claim first-year bonus depreciation on qualified property.

The OBBBA also modifies U.S.

taxation on foreign earnings by, among other things, changing the tax rates for global intangible low-taxed income (now known as Net CFC Tested Income) and foreign-derived intangible income (now known as foreign-derived deduction eligible income), modifying the allocation of expenses in calculating foreign tax credits, as well as changing foreign tax credit limitations.

As a result of the OBBBA being signed into law, we recognized a charge of $44.5 million in the third quarter of 2025 related to the re-measurement of our U.S.

net deferred tax assets.

Our effective tax rate for 2025 was positively impacted, compared to the U.S.

federal statutory rate, primarily by income earned in foreign jurisdictions with tax rates lower than the U.S.

federal statutory rate and federal tax credits for research activities, partially offset by the impact of the OBBBA being signed into law.

In addition, our effective tax rate for 2025 was positively impacted by the release of liabilities for uncertain tax positions recognized upon the effective settlement of the IRS audit of our 2017 and 2018 federal income tax returns.

Our effective tax rate for 2025, compared to 2024, included a lower benefit from stock-based compensation.

Our effective tax rate for 2024 was positively impacted, compared to the U.S.

federal statutory rate, primarily by stock-based compensation, income earned in foreign jurisdictions with tax rates lower than the U.S.

federal statutory rate, and federal tax credits for research activities.

Certain countries in which we have operations, including Ireland, have adopted legislation influenced by the Organization for Economic Co-operation and Development ("OECD") Global Anti-Base Erosion Model Rules ("Pillar Two") framework, including a minimum tax rate of 15%.

The adoption of the Pillar Two framework did not have a material impact on our effective tax rate for the year ended December 31, 2024.

It is uncertain whether the United States will enact legislation to adopt the Pillar Two framework.

We continue to evaluate additional guidance released by the OECD, along with the pending legislative adoption by additional countries.

Liquidity and Capital Resources

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As of December 31, 2025, we also had borrowing availability of $750.0 million under a revolving credit facility (see further description under " Credit Facility " below).

Sources and Uses of Cash for the Years Ended December 31, 2024, 2023, and 2022

Sources and Uses of Cash

Year Ended December 31,

(In millions) 2025 2024 2023 2025 vs.

Cash flows provided by operating activities $ 4,420.5 $ 4,594.0 $ 5,014.9 $ (173.5) $ (420.9)

Cash flows used in investing activities $ (2,468.1) $ (3,185.1) $ (3,784.6) $ 717.0 $ 599.5

Cash flows used in financing activities $ (2,200.5) $ (1,790.1) $ (1,009.0) $ (410.4) $ (781.1)

Cash flows provided by (used in):

Operating activities

$ 4,978.9 $ 4,420.5 $ 4,594.0 $ 558.4 $ (173.5)

Investing activities

$ (629.1) $ (2,468.1) $ (3,185.1) $ 1,839.0 $ 717.0

Financing activities

$ (3,715.4) $ (2,200.5) $ (1,790.1) $ (1,514.9) $ (410.4)

Cash Flows from Operating Activities

In 2025, Other, net included a $155.0 million charge in connection with a fourth quarter 2025 decision to utilize a PRV for a regulatory submission;

such amount was previously capitalized as an intangible asset as described in the " Cash Flows from Investing Activities " section below.

Cash Flows from Investing Activities

Capital expenditures in 2024 included costs incurred in connection with the expansion of our research, preclinical manufacturing, and support facilities at our Tarrytown, New York corporate headquarters, as well as costs associated with the expansion of our manufacturing facilities in Rensselaer, New York (including the fill/finish facility).

In addition, in September 2024, we acquired an approximate 1,000,000 square foot facility in Saratoga Springs, New York.

We expect to incur capital expenditures of $850 million to $975 million in 2025, including in connection with the continued expansion of our facilities in Tarrytown, New York.

We expect continued significant capital expenditures over the next several years related to this expansion.

Payments for the Libtayo intangible asset of $125.7 million, $207.8 million, and $1.027 billion in 2024, 2023, and 2022, respectively, related to our acquisition (including contingent consideration paid) of the exclusive right to develop, commercialize, and manufacture Libtayo worldwide.

Acquisitions, net of cash acquired, of $54.9 million and $230.3 million in 2023 and 2022 was related to our acquisitions of Decibel Therapeutics, Inc.

and Checkmate Pharmaceuticals, Inc., respectively.

Capital expenditures in 2025 primarily included costs incurred in connection with the expansion of our research, preclinical manufacturing, and support facilities at our Tarrytown, New York corporate headquarters, as well as costs associated with the expansion of our manufacturing facilities.

We expect to incur capital expenditures of $1.100 billion to $1.300 billion in 2026, including in connection with the continued expansion of our facilities in Tarrytown, New York and developing our property in Saratoga Springs, New York for production support activities and additional manufacturing capacity.

We expect continued significant capital expenditures over the next several years related to these expansion projects.

In 2025, payments for intangible assets included $155.0 million related to a second quarter 2025 purchase of a PRV from a third party.

In addition, payments for intangible assets in 2025, 2024, and 2023 included $160.3 million, $125.7 million, and $207.8 million, respectively, for contingent consideration paid to Sanofi in connection with our acquisition of worldwide rights to Libtayo in 2022.

Cash Flows from Financing Activities

Proceeds from issuances of Common Stock, in connection with exercises of employee stock options, were $1.465 billion during 2024, compared to $1.146 billion during 2023 and $1.520 billion during 2022.

In addition, payments in connection with Common Stock tendered for employee tax obligations were $1.029 billion during 2024, compared to $700.6 million during 2023 and $445.7 million during 2022.

Proceeds from issuances of Common Stock, in connection with exercises of employee stock options, were $635.9 million during 2025, compared to $1.465 billion during 2024 and $1.146 billion during 2023.

In addition, payments in connection with Common Stock tendered for employee tax obligations were $532.1 million during 2025, compared to $1.029 billion during 2024 and $700.6 million during 2023.

For information related to repurchases of Common Stock, see "Share Repurchase Programs" section below.

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The Credit Agreement also provides a $50.0 million sublimit for letters of credit.

As set forth in the Credit Agreement, we have the option to amend the Credit Agreement to establish environmental, social, and governance targets which will be used to adjust pricing under the Credit Facility, subject to parameters to be provided in the Credit Agreement.

Proceeds of the loans under the Credit Facility may be used to finance working capital needs, and for general corporate or other lawful purposes, of Regeneron and its subsidiaries.

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Share Repurchase Programs

In November 2021, our board of directors authorized a share repurchase program to repurchase up to $3.0 billion of our Common Stock.

As of June 30, 2023, the Company had repurchased the entire $3.0 billion of its Common Stock it was authorized to repurchase under the program.

In January 2023, our board of directors authorized a share repurchase program to repurchase up to an additional $3.0 billion of our Common Stock.

As of September 30, 2024, the Company had repurchased the entire $3.0 billion of its Common Stock it was authorized to repurchase under the program.

In April 2024, our board of directors authorized a share repurchase program to repurchase up to an additional $3.0 billion of our Common Stock.

The share repurchase program permits the Company to make repurchases through a variety of methods, including open-market transactions (including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, block trades, and other transactions in compliance with Rule 10b-18 of the Exchange Act.

Our board of directors has authorized share repurchase programs, including a share repurchase program for up to $3.0 billion of our Common Stock which was authorized in February 2025.

The share repurchase programs permit the Company to make repurchases through a variety of methods, including open-market transactions (including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, block trades, and other transactions in compliance with Rule 10b-18 of the Exchange Act.

Repurchases may be made from time to time at management's discretion, and the timing and amount of any such repurchases will be determined based on share price, market conditions, legal requirements, and other relevant factors.

The program has no time limit and can be discontinued at any time.

The programs have no time limit and can be discontinued at any time.

There can be no assurance as to the timing or number of shares of any repurchases in the future.

The table below summarizes the shares of our Common Stock that we repurchased and the cost of such shares, which were recorded as Treasury Stock.

Year Ended December 31,

(In millions) 2024 2023 2022

Number of shares 2.8 2.9 3.3

Total cost of shares $ 2,613.9 $ 2,214.6 $ 2,099.8

As of December 31, 2024, $1.917 billion remained available for share repurchases under the April 2024 program.

In February 2025, our board of directors authorized a share repurchase program to repurchase up to an additional $3.0 billion of our Common Stock.

The share repurchase program was approved under terms substantially similar to the repurchase programs described above.

In February 2025, our board of directors declared our first quarterly cash dividend, in the amount of $0.88 per share on our Common Stock and Class A Stock.

The cash dividend will be payable on March 20, 2025 to shareholders of record as of February 20, 2025.

As of December 31, 2025, $1.486 billion remained available for share repurchases under our share repurchase programs.

In 2025, our board of directors declared quarterly cash dividends of $0.88 per share on our Common Stock and Class A Stock.

Each quarterly dividend was paid to our shareholders in the quarter in which the dividend was declared.

Additionally, in January 2026, our board of directors declared a cash dividend of $0.94 per share on our Common Stock and Class A Stock.

The dividend will be payable on March 5, 2026 to our shareholders of record as of February 20, 2026.

We currently intend to continue to pay a quarterly cash dividend on our outstanding Common Stock and Class A Stock.

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Such advances accrue yield at a variable rate per annum based on the one-month forward-looking Secured Overnight Financing Rate ("SOFR") term rate, plus a spread adjustment, plus an applicable margin that varies with our debt rating and total leverage ratio.

The Lease is classified as a finance lease as we have the option to purchase the Facility under terms that make it reasonably certain to be exercised.

The agreements governing the Lease financing contain financial and operating covenants.

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The amount required to fund operations will depend on various factors, including the potential regulatory approval and commercialization of our product candidates and the timing thereof and the extent and cost of our research and development programs.

We believe that our existing capital resources, borrowing availability under the Credit Facility, funds generated by anticipated product sales, and funding for reimbursement of research and development costs that we are entitled to receive under our collaboration agreements, will enable us to meet our anticipated operating needs for the foreseeable future.

We expect to continue to incur significant costs in connection with our research and development activities (including preclinical and clinical programs).

The amount of funding that will be required for our clinical programs depends upon the results of our research and preclinical programs and early-stage clinical trials, regulatory requirements, the duration and results of clinical trials underway and of additional clinical trials that we decide to initiate, and the various factors that affect the cost of each trial, including the size of trials, fees charged for services provided by clinical trial investigators and other third parties, the costs for manufacturing the product candidate for use in the trials, and other expenses.

We believe that our existing capital resources, borrowing availability under the Credit Facility, funds generated by anticipated product sales, and funding for reimbursement of research and development expenses that we are entitled to receive under our collaboration agreements, will enable us to meet our anticipated operating needs for the foreseeable future.

We expect to continue to incur significant costs in connection with our research and development activities.

The amount of funding that will be required depends upon the results of our research and preclinical programs and early-stage clinical trials, regulatory requirements, the duration and results of clinical trials underway and of additional clinical trials that we decide to initiate, and the various factors that affect the cost of each trial, including the size of trials, fees charged for services provided by clinical trial investigators and other third parties, the costs for manufacturing the product candidate for use in the trials, and other expenses.

We also anticipate continuing to incur substantial commercialization costs for our marketed products.

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Due to their nature, there is a high degree of uncertainty regarding the period and amounts of potential future cash settlement with tax authorities.

We expect the IRS to

conclude its examination of our 2017 and 2018 federal income tax returns within the next twelve months, and, as a result, we may be required to make a payment of approximately $120 million.

See Note 15 to our Consolidated Financial Statements.

We enter into collaboration and licensing agreements that may require us to pay (i) amounts contingent upon the occurrence of various future events (e.g., upon the achievement of various development and commercial milestones), which, in the aggregate, could be significant, and/or (ii) royalties calculated based on a percentage of net product sales.

could be significant, and/or (ii) royalties calculated based on a percentage of net product sales.

The specific timing of these contingent payments cannot be predicted.

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These reimbursements are deducted each quarter, in accordance with a formula, from our share of the collaboration profits otherwise payable to us, unless, in the case of Bayer, we elect to reimburse these expenses at a faster rate.

As of December 31, 2024, our contingent reimbursement obligation to Sanofi in connection with the companies' Antibody Collaboration was approximately $1.635 billion and our contingent reimbursement obligation to Bayer was approximately $315 million.

As of December 31, 2025, our contingent reimbursement obligation to Sanofi in connection with the development balance was approximately $595 million and our contingent reimbursement obligation to Bayer was approximately $296 million.

Therefore, we continue to expect that a portion of our share of profits from sales under our collaborations with Sanofi and Bayer will be used to reimburse our collaborators for these obligations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis