What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-08-05 compared with 2020-05-05 · 296 added, 103 removed, 591 unchanged (40% of the section changed)

3 unchanged sentences

(In millions, except share data)

June 30, December 31,

Current assets:

4 unchanged sentences

Accounts receivable - other 431.1 425.0

Inventories 1,640.9 1,415.5

Prepaid expenses and other current assets 263.8 273.7

4 unchanged sentences

Other noncurrent assets 175.5 144.7

Total assets $ 14,428.7 $ 14,805.2

LIABILITIES AND STOCKHOLDERS' EQUITY

2 unchanged sentences

Accrued expenses and other current liabilities 1,257.0 1,211.4

Debt 1,500.0 —

Deferred revenue - Sanofi 380.2 310.5

11 unchanged sentences

30,000,000 shares authorized;

issued and outstanding - none

issued and outstanding - no ne

Class A Stock, convertible, $ .001 par value;

6 unchanged sentences

Retained earnings 8,901.7 7,379.8

Accumulated other comprehensive (loss) income

Accumulated other comprehensive income 35.5 21.1

Treasury Stock, at cost;

15,578,240 shares in 2020 and 4,860,123 shares in 2019

( 6,142.9 ) ( 739.9 )

Total stockholders' equity 9,057.4 11,089.7

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2020 2019 2020 2019

Statements of Operations

3 unchanged sentences

Other revenue 211.8 19.5 275.0 41.7

1,952.0 1,577.8 3,780.2 2,950.4

Research and development 722.0 885.5 1,305.9 1,371.6

3 unchanged sentences

Other operating (income) expense, net ( 50.2 ) ( 63.7 ) ( 90.6 ) ( 120.4 )

1,295.6 1,262.2 2,423.7 2,154.8

Income from operations 656.4 315.6 1,356.5 795.6

Other income (expense):

Other (expense) income, net

Other income (expense), net 272.2 ( 82.9 ) 246.8 ( 9.1 )

Interest expense ( 9.7 ) ( 8.0 ) ( 15.8 ) ( 15.7 )

262.5 ( 90.9 ) 231.0 ( 24.8 )

Income before income taxes 918.9 224.7 1,587.5 770.8

Income tax expense 21.6 31.6 65.6 116.6

Net income $ 897.3 $ 193.1 $ 1,521.9 $ 654.2

Net income per share - basic $ 8.19 $ 1.77 $ 13.87 $ 6.00

3 unchanged sentences

Statements of Comprehensive Income

Net income $ 897.3 $ 193.1 $ 1,521.9 $ 654.2

Other comprehensive income (loss), net of tax:

Unrealized (loss) gain on debt securities

Unrealized gain on debt securities

44.6 14.4 15.8 30.5

Unrealized loss on cash flow hedges

— ( 1.4 ) ( 1.4 ) ( 2.4 )

Comprehensive income $ 941.9 $ 206.1 $ 1,536.3 $ 682.3

3 unchanged sentences

(In millions)

Class A Stock

Additional Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Treasury Stock

Total Stockholders' Equity

Class A Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders' Equity

Shares Amount Shares Amount Shares Amount

Balance, December 31, 2019 1.8 — 113.3 $ 0.1 $ 4,428.6 $ 7,379.8 $ 21.1 ( 4.9 ) $ ( 739.9 ) $ 11,089.7

Issuance of Common Stock for equity awards granted under long-term incentive plans

— — 3.1 — 817.4 — — — — 817.4

Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations

— — ( 0.4 ) — ( 155.1 ) — — — — ( 155.1 )

Issuance/distribution of Common Stock for 401(k) Savings Plan

— — — — 12.5 — — — 2.1 14.6

Repurchases of Common Stock

— — — — — — — ( 0.8 ) ( 336.0 ) ( 336.0 )

Stock-based compensation charges

— — — — 108.0 — — — — 108.0

— — — — — 624.6 — — — 624.6

Other comprehensive loss, net of tax

— — — — — — ( 30.2 ) — — ( 30.2 )

Balance, March 31, 2020 1.8 — 116.0 0.1 5,211.4 8,004.4 ( 9.1 ) ( 5.7 ) ( 1,073.8 ) 12,133.0

Issuance of Common Stock for equity awards granted under long-term incentive plans

— — 4.4 — 1,355.5 — — — — 1,355.5

Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations

— — ( 0.6 ) — ( 416.5 ) — — — — ( 416.5 )

Issuance/distribution of Common Stock for 401(k) Savings Plan

— — — — 7.4 — — — 2.7 10.1

Repurchases of Common Stock

— — — — — — — ( 9.9 ) ( 5,071.8 ) ( 5,071.8 )

Stock-based compensation charges

— — — — 105.2 — — — — 105.2

— — — — — 897.3 — — — 897.3

Other comprehensive income, net of tax

— — — — — — 44.6 — — 44.6

Balance, June 30, 2020 1.8 — 119.8 $ 0.1 $ 6,263.0 $ 8,901.7 $ 35.5 ( 15.6 ) $ ( 6,142.9 ) $ 9,057.4

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (continued)

Class A Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders' Equity

Shares Amount Shares Amount Shares Amount

Balance, December 31, 2018 1.9 — 111.1 $ 0.1 $ 3,911.6 $ 5,254.3 $ ( 12.3 ) ( 4.0 ) $ ( 396.4 ) $ 8,757.3

Issuance of Common Stock for equity awards granted under long-term incentive plans

— — 0.6 — 140.9 — — — — 140.9

Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations

— — — — ( 10.7 ) — — — — ( 10.7 )

Issuance of Common Stock for 401(k) Savings Plan

— — — — 4.3 — — 0.1 6.2 10.5

Repurchases of Common Stock

— — — — — — — ( 0.1 ) ( 54.0 ) ( 54.0 )

Stock-based compensation charges

— — — — 114.8 — — — — 114.8

Adjustment upon adoption of new accounting standard

— — — — — 9.7 — — — 9.7

— — — — — 461.1 — — — 461.1

Other comprehensive income, net of tax

— — — — — — 15.1 — — 15.1

Balance, March 31, 2019 1.9 — 111.7 0.1 4,160.9 5,725.1 2.8 ( 4.0 ) ( 444.2 ) 9,444.7

Issuance of Common Stock for equity awards granted under long-term incentive plans

— — 0.3 — 13.9 — — — — 13.9

Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations

— — ( 0.1 ) — ( 29.7 ) — — — — ( 29.7 )

Issuance/distribution of Common Stock for 401(k) Savings Plan

— — — — 9.3 — — — 2.4 11.7

Stock-based compensation charges

— — — — 109.2 — — — — 109.2

— — — — — 193.1 — — — 193.1

Other comprehensive income, net of tax

— — — — — — 13.0 — — 13.0

Balance, June 30, 2019 1.9 — 111.9 $ 0.1 $ 4,263.6 $ 5,918.2 $ 15.8 ( 4.0 ) $ ( 441.8 ) $ 9,755.9

The accompanying notes are an integral part of the financial statements.

2 unchanged sentences

(In millions)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net income $ 1,521.9 $ 654.2

Adjustments to reconcile net income to net cash provided by operating activities:

8 unchanged sentences

Increase in deferred revenue 78.9 129.8

(Decrease) increase in accounts payable, accrued expenses, and other liabilities

Increase in accounts payable, accrued expenses, and other liabilities 20.9 381.6

Total adjustments 119.5 431.1

4 unchanged sentences

Capital expenditures ( 300.0 ) ( 168.9 )

Net cash used in investing activities

Net cash provided by (used in) investing activities 1,010.2 ( 1,612.1 )

Cash flows from financing activities:

Proceeds from bridge loan facility 1,500.0 —

Proceeds from issuance of Common Stock 2,168.0 155.1

1 unchanged sentence

Repurchases of Common Stock ( 5,373.6 ) ( 10.0 )

Net cash provided by financing activities

Net increase in cash, cash equivalents, and restricted cash

Net cash (used in) provided by financing activities ( 2,277.2 ) 104.6

Net increase (decrease) in cash, cash equivalents, and restricted cash 374.4 ( 422.2 )

Cash, cash equivalents, and restricted cash at beginning of period 1,630.3 1,480.2

19 unchanged sentences

The change in presentation has been applied retrospectively.

The tables below present the impact of the change on the Company’s previously-filed Consolidated Balance Sheet as of December 31, 2019, and the Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows as of and for the three months ended March 31, 2019.

The tables below present the impact of the change on the Company’s previously-filed Consolidated Balance Sheet as of December 31, 2019, the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2019, and the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2019.

The Company’s previously-filed balance sheet has been updated to reflect the addition of the caption Other liabilities for the presentation of up-front and development milestones paid by collaborators that are deferred.

2 unchanged sentences

Balance Sheet Data:

As Previously Reported

As Previously Reported Adjustments As Revised

Accrued expenses and other current liabilities $ 1,086.8 $ 124.6 $ 1,211.4

10 unchanged sentences

Three Months Ended

March 31, 2019

June 30, 2019 Six Months Ended

June 30, 2019

Statement of Operations Data:

As Previously Reported

As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised

Sanofi collaboration revenue

$ 349.1 $ ( 273.3 ) $ 75.8 $ 595.5 $ ( 537.7 ) $ 57.8

Bayer collaboration revenue $ 289.0 $ ( 11.8 ) $ 277.2 $ 565.2 $ ( 24.0 ) $ 541.2

Other revenue

$ 90.3 $ ( 70.8 ) $ 19.5 $ 175.1 $ ( 133.4 ) $ 41.7

Total revenues $ 1,933.7 $ ( 355.9 ) $ 1,577.8 $ 3,645.5 $ ( 695.1 ) $ 2,950.4

Research and development

$ 1,048.3 $ ( 162.8 ) $ 885.5 $ 1,690.1 $ ( 318.5 ) $ 1,371.6

Selling, general, and administrative

$ 417.3 $ ( 122.7 ) $ 294.6 $ 828.1 $ ( 242.4 ) $ 585.7

Cost of collaboration and contract manufacturing (1)

$ 85.5 $ ( 6.7 ) $ 78.8 $ 193.8 $ ( 13.8 ) $ 180.0

Other operating (income) expense, net

— $ ( 63.7 ) $ ( 63.7 ) — $ ( 120.4 ) $ ( 120.4 )

Total operating expenses $ 1,618.1 $ ( 355.9 ) $ 1,262.2 $ 2,849.9 $ ( 695.1 ) $ 2,154.8

(1) In addition to the reclassification of certain amounts in connection with the change in accounting presentation described above, the Company also reclassified certain immaterial reimbursements that were previously classified as collaboration revenue to Cost of collaboration and contract manufacturing.

Three Months Ended

March 31, 2019

Six Months Ended

June 30, 2019

Cash Flows Data:

As Previously Reported

As Previously Reported Adjustments As Revised

Cash flows from operating activities:

Increase in deferred revenue $ 401.1 $ ( 271.3 ) $ 129.8

(Decrease) increase in accounts payable, accrued expenses, and other liabilities

Increase in accounts payable, accrued expenses, and other liabilities

$ 110.3 $ 271.3 $ 381.6

Use of Estimates

1 unchanged sentence

The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change.

We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our condensed consolidated financial statements as of and for the three months ended March 31, 2020;

however, actual results could differ from those estimates and there may be changes to our estimates in future periods.

3 unchanged sentences

ASU 2016-13 requires an entity to measure and recognize expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred.

For available-for-sale debt securities with unrealized losses, the standard requires allowances to be recorded through net income instead of directly reducing the amortized cost of the investment under the previous other-than-temporary impairment model.

For available-for-sale debt securities with unrealized credit losses, the standard requires allowances to be recorded through net income instead of directly reducing the amortized cost of the investment under the previous other-than-temporary impairment model.

The adoption of this standard did not have a material impact on our financial statements or a significant impact on our internal controls.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

Net Product Sales in the United States 2020 2019 2020 2019

Effective April 1, 2020, the Company is solely responsible for the development and commercialization of Praluent ® in the United States and will record net product sales of Praluent in the United States.

$ 1,113.7 $ 1,160.3 $ 2,285.7 $ 2,234.4

63.3 40.8 125.0 67.6

47.2 * 47.2 * *

2.7 4.2 5.7 7.7

$ 1,226.9 $ 1,205.3 $ 2,463.6 $ 2,309.7

* Effective April 1, 2020, the Company is solely responsible for the development and commercialization of Praluent in the United States and records net product sales of Praluent in the United States.

See Note 3 for further details.

The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for the three months ended March 31, 2020 and 2019 .

The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for the three and six months ended June 30, 2020 and 2019.

Sales to each of these customers as a percentage of the Company's total gross product revenue are as follows:

Three Months Ended

June 30, Six Months Ended

2020 2019 2020 2019

Besse Medical, a subsidiary of AmerisourceBergen Corporation

53 % 56 % 53 % 57 %

McKesson Corporation 32 % 34 % 34 % 32 %

Collaboration Agreements

Collaboration, License, and Other Agreements

We have entered into various collaborative arrangements to research, develop, manufacture, and commercialize product candidates and utilize our technology platforms.

4 unchanged sentences

(Unless otherwise noted, dollars in millions, except per share data)

Nature/Type of Payment

Statement of Operations Presentation

Nature/Type of Payment Statement of Operations Presentation

Regeneron's share of profits or losses in connection with commercialization of products

2 unchanged sentences

Collaboration revenue

Royalties and/or sales-based milestones earned

Collaboration revenue

Royalties and/or sales-based milestones earned Collaboration revenue

Reimbursement of Regeneron's research and development expenses

6 unchanged sentences

Reduction to Selling, general, and administrative expense

Regeneron's obligation for its share of collaborator's commercialization-related expenses

Selling, general, and administrative expense

Regeneron's obligation to pay collaborator for its share of gross profits when Regeneron is deemed to be the principal

23 unchanged sentences

Amounts recognized in our Statements of Operations in connection with our collaborations with Sanofi are detailed below:

Statement of Operations Classification

Three Months Ended

Regeneron's share of profits (losses) in connection with commercialization of antibodies

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

2020 2019 2020 2019

Regeneron's share of profits in connection with commercialization of antibodies

Sanofi collaboration revenue

$ 171.9 $ 38.8 $ 342.8 $ 11.0

Reimbursement for manufacturing of commercial supplies

Sanofi collaboration revenue

$ 100.6 $ 43.9 $ 180.7 $ 58.4

Reimbursement of research and development expenses

Reduction of Research and development expense

$ 51.3 $ 81.8 $ 128.9 $ 156.3

Regeneron's obligation for its share of Sanofi research and development expenses

Research and development expense

$ ( 24.9 ) $ ( 12.2 ) $ ( 41.6 ) $ ( 19.6 )

Reimbursement of commercialization-related expenses

Reduction of Selling, general, and administrative expense

$ 86.0 $ 121.1 $ 177.2 $ 237.7

Immuno-oncology:

1 unchanged sentence

Sanofi collaboration revenue

$ ( 6.4 ) $ ( 6.9 ) $ ( 12.6 ) $ ( 11.6 )

Reimbursement for manufacturing of commercial supplies

Sanofi collaboration revenue

$ 3.0 — $ 5.1 —

Reimbursement of research and development expenses

Reduction of Research and development expense

$ 47.0 $ 36.5 $ 86.9 $ 82.9

Reimbursement of commercialization-related expenses

Reduction of Selling, general, and administrative expense

$ 14.3 $ 1.8 $ 24.7 $ 4.0

Regeneron's obligation for Sanofi's share of Libtayo U.S.

1 unchanged sentence

Cost of goods sold

$ ( 28.2 ) $ ( 19.0 ) $ ( 55.0 ) $ ( 31.4 )

Amounts recognized in connection with up-front payments received

Other operating income

$ 20.5 $ 29.0 $ 37.0 $ 55.3

See Note 8 and Note 10 for information regarding Sanofi's sale of our Common Stock during the second quarter of 2020.

The Company is party to a global, strategic collaboration with Sanofi to discover, develop, and commercialize fully human monoclonal antibodies (the "Antibody Collaboration") .

2 unchanged sentences

Effective January 2018, the Company and Sanofi entered into a letter agreement (the "Letter Agreement") in connection with, among other matters, the allocation of additional funds to certain activities relating to dupilumab and REGN3500 (collectively, the "Dupilumab/REGN3500 Eligible Investments").

Refer to the " Immuno-Oncology " section below for further details regarding the Letter Agreement and Note 9 for additional information regarding shares purchased by us from Sanofi during the three months ended March 31, 2020 and 2019.

Refer to the " Immuno-Oncology " section below for further details regarding the Letter Agreement and Note 10 for additional information regarding shares purchased by us from Sanofi during the three and six months ended June 30, 2020 and 2019.

Sanofi leads commercialization activities for products developed under the Antibody Collaboration, subject to the Company's right to co-commercialize such products.

See discussion below related to the development and commercialization of Praluent effective April 1, 2020.

In addition to profit and loss sharing, the Company is entitled to receive up to $ 250.0 million in sales milestone

In addition to profit and loss sharing, the Company is entitled to receive up to $ 250.0 million in sales

REGENERON PHARMACEUTICALS, INC.

1 unchanged sentence

(Unless otherwise noted, dollars in millions, except per share data)

payments, with milestone payments commencing after aggregate annual sales of antibodies outside the United States (including Praluent) exceed $ 1.0 billion on a rolling twelve -month basis.

milestone payments, with milestone payments commencing after aggregate annual sales of antibodies outside the United States (including Praluent) exceed $ 1.0 billion on a rolling twelve-month basis.

The following table summarizes contract balances in connection with the Company's Antibody Collaboration with Sanofi:

June 30, December 31,

Accounts receivable

$ 383.1 $ 272.7

Deferred revenue

$ 405.5 $ 328.8

In April 2020, the Company and Sanofi entered into an amendment to the LCA in connection with, among other things, the removal of Praluent from the LCA such that (i) effective April 1, 2020, the LCA no longer governs the development, manufacture, or commercialization of Praluent and (ii) the quarterly period ended March 31, 2020 is the last quarter for which Sanofi and the Company will share profits and losses for Praluent under the LCA.

15 unchanged sentences

The parties share equally, on an ongoing basis, agreed-upon development and commercialization expenses for Libtayo.

Pursuant to the Letter Agreement, the Libtayo development budget was increased and the Company has agreed to allow Sanofi to satisfy in whole or in part its funding obligations with respect to the Libtayo development and Dupilumab/REGN3500 Eligible Investments by selling up to an aggregate of 1,400,000 shares (of which 740,914 currently remains available) of our Common Stock directly or indirectly owned by Sanofi through September 30, 2020.

If Sanofi desires to sell shares of our Common Stock during the term of the Letter Agreement to satisfy a portion or all of its funding obligations for the Libtayo development and/or Dupilumab/REGN3500 Eligible Investments,

Pursuant to the Letter Agreement, the Libtayo development budget was increased and the Company has agreed to allow Sanofi to satisfy in whole or in part its funding obligations with respect to the Libtayo development and Dupilumab/REGN3500 Eligible Investments by selling certain shares of our Common Stock directly or indirectly owned by Sanofi through September 30, 2020.

REGENERON PHARMACEUTICALS, INC.

1 unchanged sentence

(Unless otherwise noted, dollars in millions, except per share data)

we may elect to purchase, in whole or in part, such shares from Sanofi.

See Note 9 for additional information regarding shares purchased by us from Sanofi during the three months ended March 31, 2020 and 2019.

shares from Sanofi.

See Note 10 for additional information regarding shares purchased by us from Sanofi during the three and six months ended June 30, 2020 and 2019.

The Company has principal control over the development of Libtayo and leads commercialization activities in the United States (see Note 2 for related product sales information), while Sanofi leads commercialization activities outside of the United States and the parties equally share profits and losses from worldwide sales.

The following table summarizes contract balances in connection with the Company's IO Collaboration with Sanofi:

June 30, December 31,

Accounts receivable, net

$ ( 2.2 ) $ ( 16.7 )

Deferred revenue

Other liabilities

$ 486.7 $ 558.6

Other liabilities include up-front payments received from Sanofi for which recognition has been deferred.

The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2020 was $ 1.087 billion .

The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of June 30, 2020 was $ 1.020 billion.

This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities.

Amounts recognized in our Statements of Operations in connection with our Bayer EYLEA collaboration are as follows:

Statement of Operations Classification

Three Months Ended

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

2020 2019 2020 2019

Regeneron's net profit in connection with commercialization of EYLEA outside the United States

Bayer collaboration revenue

$ 230.9 $ 269.0 $ 484.7 $ 518.3

Reimbursement for manufacturing of commercial supplies

Bayer collaboration revenue

$ 13.3 $ 8.2 $ 40.9 $ 22.9

Reimbursement of development expenses

Reduction of Research and development expense

$ 8.0 $ 22.8 $ 10.6

Regeneron's obligation for its share of Bayer research and development expenses

Research and development expense

Reimbursement of other expenses

Cost of collaboration and contract manufacturing

$ ( 5.3 ) $ ( 2.0 ) $ ( 13.4 ) $ ( 6.6 )

Reimbursement of other expenses Cost of collaboration and contract manufacturing

$ 1.6 $ 4.1 $ 3.3 $ 12.9

The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA outside the United States.

3 unchanged sentences

The following table summarizes contract balances in connection with our Bayer EYLEA collaboration:

June 30, December 31,

Accounts receivable - other

$ 245.8 $ 311.6

Deferred revenue

$ 125.3 $ 123.0

REGENERON PHARMACEUTICALS, INC.

4 unchanged sentences

The Company is also responsible for the manufacture and supply of fasinumab globally.

Amounts recognized in our Statements of Operations in connection with the Teva Collaboration Agreement is as follows:

Statement of Operations Classification

Three Months Ended

Amounts recognized in our Statements of Operations in connection with the Teva Collaboration Agreement are as follows:

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

2020 2019 2020 2019

Reimbursement of research and development expenses

Reduction of Research and development expense

$ 31.0 $ 36.5 $ 56.2 $ 68.7

Amounts recognized in connection with up-front and development milestone payments received

Other operating income

$ 20.7 $ 24.5 $ 37.3 $ 46.0

The following table summarizes contract balances in connection with the Teva Collaboration Agreement:

June 30, December 31,

Accounts receivable - other

$ 28.5 $ 21.2

Other liabilities

$ 77.9 $ 114.4

Other liabilities include up-front and development milestone payments received from Teva for which recognition has been deferred.

The aggregate amount of estimated consideration under the Teva Collaboration Agreement related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2020 was $ 225.1 million .

This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities.

In 2016, we entered into a license and collaboration agreement with Intellia Therapeutics, Inc.

to advance CRISPR/Cas9 gene-editing technology for in vivo therapeutic development.

The parties collaborate to conduct research for the discovery, development, and commercialization of new therapies, in addition to the research and technology development of the CRISPR/Cas9 platform.

Under the terms of the 2016 agreement, the parties agreed to a target selection process, whereby the Company may obtain exclusive rights in up to 10 targets to be chosen by the Company during the collaboration term, subject to various adjustments and limitations set forth in the agreement.

Certain targets that either we or Intellia select pursuant to the target selection process may be subject to a co-development and co-commercialization arrangement at our option or Intellia’s option, as applicable.

In May 2020, we expanded our existing collaboration with Intellia to provide us with rights to develop products for additional in vivo CRISPR/Cas9-based therapeutic targets and for the parties to jointly develop potential products for the treatment of hemophilia A and B.

In addition, we also received non-exclusive rights to independently develop and commercialize ex vivo gene edited products.

In connection with the agreement, we made a $ 70.0 million up-front payment, which was recorded to Research and development expense in the second quarter of 2020, and purchased 925,218 shares of Intellia common stock for an aggregate purchase price of $ 30.0 million.

The amount paid in excess of the fair market value of the shares purchased, or $ 15.0 million, was also recorded to Research and development expense in the second quarter of 2020.

REGENERON PHARMACEUTICALS, INC.

1 unchanged sentence

(Unless otherwise noted, dollars in millions, except per share data)

Biomedical Advanced Research Development Authority ("BARDA")

In the first quarter of 2020, we announced an expansion of our Other Transaction Agreement ("OTA") with BARDA, pursuant to which U.S.

Department of Health and Human Services ("HHS") is obligated to fund 80 % of our costs incurred for certain research and development activities related to COVID-19 treatments.

In July 2020, we entered into an agreement with entities acting at the direction of BARDA and the U.S.

Department of Defense to manufacture and deliver filled and finished REGN-COV2 to the U.S.

The agreement could result in payments to the Company of up to $ 450.2 million in the aggregate for bulk manufacturing of the drug substance, as well as fill/finish and storage activities.

Net Income Per Share

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2020 2019 2020 2019

Net income - basic and diluted $ 897.3 $ 193.1 $ 1,521.9 $ 654.2

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(Shares in millions) 2020 2019 2020 2019

Stock options 0.1 18.3 3.5 18.1

Restricted stock — 0.4 — —

REGENERON PHARMACEUTICALS, INC.

2 unchanged sentences

Marketable Securities

Marketable securities as of March 31, 2020 and December 31, 2019 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).

Marketable securities as of June 30, 2020 and December 31, 2019 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).

The following tables summarize the Company's investments in available-for-sale debt securities:

As of March 31, 2020

Amortized Unrealized Fair

As of June 30, 2020 Cost Basis Gains Losses Value

Corporate bonds $ 2,393.2 $ 41.9 $ ( 0.7 ) $ 2,434.4

3 unchanged sentences

Certificates of deposit 105.4 0.1 — 105.5

$ 2,890.3 $ 44.9 $ ( 0.7 ) $ 2,934.5

As of December 31, 2019

4 unchanged sentences

Certificates of deposit 72.3 0.1 — 72.4

$ 4,206.3 $ 28.5 $ ( 0.3 ) $ 4,234.5

The Company classifies its investments in available-for-sale debt securities based on their contractual maturity dates.

The available-for-sale debt securities listed as of March 31, 2020 mature at various dates through March 2025.

The available-for-sale debt securities listed as of June 30, 2020 mature at various dates through July 2025.

The fair values of available-for-sale debt security investments by contractual maturity consist of the following:

June 30, December 31,

Maturities within one year $ 1,152.0 $ 1,596.5

Maturities after one year through five years 1,779.6 2,638.0

Maturities after five years 2.9 —

$ 2,934.5 $ 4,234.5

The following table shows the fair value of the Company's available-for-sale debt securities that have unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous loss position.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Unless otherwise noted, dollars in millions, except per share data)

Less than 12 Months

12 Months or Greater

As of March 31, 2020

Unrealized Loss

Less than 12 Months 12 Months or Greater Total

As of June 30, 2020 Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

Corporate bonds $ 247.9 $ ( 0.7 ) — — $ 247.9 $ ( 0.7 )

Certificates of deposit

As of December 31, 2019

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government and government agency obligations

There were no realized losses on sales of marketable securities, and realized gains were not material, for the three months ended March 31, 2020 and 2019 .

With respect to marketable securities, for the three months ended March 31, 2020 and 2019 , amounts reclassified from Accumulated other comprehensive (loss) income into Other (expense) income, net were related to realized gains on sales of available-for-sale debt securities (as described above).

17.3 ( 0.1 ) — — 17.3 ( 0.1 )

$ 274.5 $ ( 0.3 ) — — $ 274.5 $ ( 0.3 )

REGENERON PHARMACEUTICALS, INC.

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(Unless otherwise noted, dollars in millions, except per share data)

For the three and six months ended June 30, 2020, realized gains on sales of marketable securities were $ 28.0 million and $ 28.3 million, respectively, and realized losses were not material.

There were no realized losses on sales of marketable securities, and realized gains were not material, for the three and six months ended June 30, 2019.

With respect to marketable securities, for the three and six months ended June 30, 2020 and 2019, amounts reclassified from Accumulated other comprehensive income into Other income (expense), net were related to realized gains on sales of available-for-sale debt securities (as described above).

Fair Value Measurements

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Fair Value Measurements at Reporting Date

As of March 31, 2020

As of June 30, 2020 Fair Value Level 1 Level 2

Available-for-sale debt securities:

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Equity securities (restricted) 767.3 751.9 15.4

$ 3,739.6 $ 789.7 $ 2,949.9

As of December 31, 2019

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Equity securities (restricted) 557.2 557.2 —

The Company held certain restricted equity securities as of March 31, 2020 which are subject to transfer restrictions that expire at various dates through 2023.

During the three months ended March 31, 2020 and 2019 , we recorded $ 56.8 million of net unrealized losses and $ 42.8 million of net unrealized gains, respectively, on equity securities in Other (expense) income, net .

In addition to the investments summarized in the table above, as of March 31, 2020 and December 31, 2019 , the Company had $ 55.6 million in equity investments that do not have a readily determinable fair value.

These investments are recorded within Other noncurrent assets.

$ 4,853.3 $ 618.8 $ 4,234.5

The Company held certain restricted equity securities as of June 30, 2020 which are subject to transfer restrictions that expire at various dates through 2024.

During the three and six months ended June 30, 2020, we recorded $ 228.1 million and $ 171.3 million of net unrealized gains, respectively, on equity securities in Other income (expense), net.

During the three and six months ended June 30, 2019, we recorded $ 116.9 million and $ 74.1 million, respectively, of net unrealized losses on equity securities in Other income (expense), net.

REGENERON PHARMACEUTICALS, INC.

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(Unless otherwise noted, dollars in millions, except per share data)

In addition to the investments summarized in the table above, as of June 30, 2020 and December 31, 2019, the Company had $ 70.6 million and $ 55.6 million, respectively, in equity investments that do not have a readily determinable fair value.

These investments are recorded within Other noncurrent assets.

Inventories consist of the following:

June 30, December 31,

Raw materials $ 306.3 $ 216.3

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Deferred costs 505.7 400.9

$ 1,640.9 $ 1,415.5

Deferred costs represent the costs of product manufactured and shipped to the Company's collaborators for which recognition of revenue has been deferred (see Note 3).

As described in Note 10, we purchased shares of our Common Stock from Sanofi, in connection with Sanofi's secondary offering of our Common Stock held by Sanofi, with a combination of cash on hand, proceeds from the sale of marketable securities, and proceeds from loans under a $ 1.5 billion senior unsecured 364-day bridge loan facility (the "Bridge Facility") which was entered into in May 2020.

The loans under the Bridge Facility bear interest at a variable interest rate based on either the London Interbank Offered Rate or the alternate base rate, plus an applicable margin that varies with our debt rating and total leverage ratio.

The interest rate on the loans under the Bridge Facility was 2.75 % as of June 30, 2020.

The Bridge Facility will mature, and all amounts outstanding thereunder will become due and payable, in May 2021.

Amounts borrowed under the Bridge Facility may be prepaid at any time without premium or penalty.

As of June 30, 2020, $ 1.5 billion remained outstanding under the Bridge Facility.

The credit agreement governing the Bridge Facility (the "Bridge Credit Agreement") contains financial and operating covenants, which are substantially similar to the covenants set forth in our existing $ 750.0 million senior unsecured five-year revolving credit facility.

Financial covenants include a maximum total leverage ratio and a minimum interest expense coverage ratio.

We were in compliance with all covenants of the Bridge Credit Agreement as of June 30, 2020.

The Company is subject to U.S.

federal, state, and foreign income taxes.

The Company's effective tax rate was 6.6 % and 15.6 % for the three months ended March 31, 2020 and 2019 , respectively.

The Company's effective tax rate for the three months ended March 31, 2020 was positively impacted, compared to the U.S.

The Company's effective tax rate was 2.4 % and 14.1 % for the three months ended June 30, 2020 and 2019, respectively, and 4.1 % and 15.1 % for the six months ended June 30, 2020 and 2019, respectively.

The Company's effective tax rate for the three and six months ended June 30, 2020 was positively impacted, compared to the U.S.

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

federal statutory rate and federal tax credits for research activities.

The Company's effective tax rate for the three months ended March 31, 2019 was positively impacted, compared to the U.S.

federal statutory rate, primarily by the federal tax credit for research activities, stock-based compensation, the foreign-derived intangible income deduction, and income earned in foreign jurisdictions with tax rates lower than the U.S.

federal statutory rate.

The Company's effective tax rate for the three and six months ended June 30, 2019 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, stock-based compensation, federal tax credits for research activities, and, to a lesser extent, the foreign-derived intangible income deduction, partly offset by the taxation of certain global intangible low-taxed income and the non-deductible Branded Prescription Drug Fee.

Stockholders' Equity

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In November 2019, our board of directors authorized a share repurchase program to repurchase up to $ 1.0 billion of our Common Stock.

The share repurchase program permits the Company to effect 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.

The share repurchase program permits the Company to effect repurchases through a variety of methods,

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Unless otherwise noted, dollars in millions, except per share data)

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.

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

During the three months ended March 31, 2020 , we repurchased 719,167 shares of our Common Stock under the program and recorded the cost of the shares received, or $ 272.8 million , as Treasury Stock.

As of March 31, 2020, the Company had $ 473.1 million which remained available for share repurchases under the program.

The table below summarizes the shares of our Common Stock we repurchased during 2020 under the program and the cost of the shares received, which were recorded as Treasury Stock.

There were no shares repurchased under the program during the three months ended June 30, 2020.

Six Months Ended

June 30, 2020

Number of shares repurchased 719,167

Total cost of shares received $ 272.8

As of June 30, 2020, the Company had $ 473.1 million which remained available for share repurchases under the program.

Sanofi Funding of Certain Development Costs

As described in Note 3, effective January 2018, we have agreed to allow Sanofi to satisfy in whole or in part its funding obligations with respect to Libtayo development and/or Dupilumab/REGN3500 Eligible Investments by selling our Common Stock directly or indirectly owned by Sanofi.

During the three months ended March 31, 2020 , Sanofi elected to sell, and we elected to purchase (by issuing a credit towards the amount owed by Sanofi), 43,627 shares of our Common Stock to satisfy Sanofi's funding obligation related to Libtayo development costs, and we recorded the cost of the shares received, or $ 21.4 million , as Treasury Stock.

During the three months ended March 31, 2019, we purchased (by issuing a credit towards the amount owed by Sanofi) 106,972 shares of our Common Stock from Sanofi, and recorded the cost of the shares received, or $ 44.0 million , as Treasury Stock.

In addition, during the three months ended March 31, 2020 , Sanofi elected to sell, and we elected to purchase (in cash), 85,287 shares of our Common Stock in connection with Sanofi's funding obligation for Dupilumab/REGN3500 Eligible Investments, and recorded the cost of the shares received, or $ 41.8 million , as Treasury Stock.

During the three months ended March 31, 2019, Sanofi elected

As described in Note 3, effective January 2018, we have agreed to allow Sanofi to satisfy in whole or in part its funding obligations with respect to Libtayo development costs and/or Dupilumab/REGN3500 Eligible Investments by selling our Common Stock directly or indirectly owned by Sanofi.

The table below summarizes the shares of our Common Stock Sanofi elected to sell, and we elected to purchase, to satisfy Sanofi's funding obligations and the cost of the shares received, which were recorded as Treasury Stock:

Three Months Ended

June 30, Six Months Ended

2020 2019 2020 2019

Number of shares purchased (by issuing a credit towards the amount owed by Sanofi)

34,050 — 77,677 106,972

Total cost of shares received $ 20.3 — $ 41.7 $ 44.0

Dupilumab/REGN3500:

Number of shares purchased (in cash) 86,184 — 171,471 24,143

Total cost of shares received $ 51.5 — $ 93.3 $ 10.0

As of June 30, 2020, 279,766 shares of our Common Stock remained available for sale by Sanofi to satisfy its funding obligations with respect to Libtayo development costs and/or Dupilumab/REGN3500 Eligible Investments through September 30, 2020.

Additional Stock Purchased from Sanofi

In May 2020, a secondary offering of 13,014,646 shares of our Common Stock (the "Secondary Offering") held by Sanofi was completed.

In connection with the Secondary Offering, we also purchased 9,806,805 shares directly from Sanofi for an aggregate purchase amount of $ 5 billion (the "Stock Purchase").

As a result of the Secondary Offering and the Stock Purchase, Sanofi disposed of all of its shares of our Common Stock, other than 400,000 shares that it retained as of the closing of the Secondary Offering and the Stock Purchase (which Sanofi has used, and may continue to use, for the funding of certain development costs described above).

See Note 8 for additional information.

REGENERON PHARMACEUTICALS, INC.

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(Unless otherwise noted, dollars in millions, except per share data)

to sell, and we elected to purchase (in cash), 24,143 shares of our Common Stock in connection with Sanofi's funding obligation for Dupilumab/REGN3500 Eligible Investments, and recorded the cost of the shares received, or $ 10.0 million , as Treasury Stock.

Statement of Cash Flows

The following provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheet to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows:

June 30, June 30,

Cash and cash equivalents $ 1,992.2 $ 1,045.5

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Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows

$ 2,004.7 $ 1,058.0

Restricted cash consists of amounts held by financial institutions pursuant to contractual arrangements.

Supplemental disclosure of non-cash investing and financing activities

Included in accounts payable, accrued expenses, and other liabilities as of March 31, 2020 and December 31, 2019 were $ 72.6 million and $ 133.7 million , respectively, of accrued capital expenditures.

Included in accounts payable, accrued expenses, and other liabilities as of March 31, 2019 and December 31, 2018 were $ 54.4 million and $ 54.5 million , respectively, of accrued capital expenditures.

As described in Note 9, during the three months ended March 31, 2020 and 2019, we purchased (by issuing a credit towards the amount owed by Sanofi) shares of our Common Stock from Sanofi to satisfy Sanofi's funding obligation related to Libtayo development costs.

Included in accounts payable, accrued expenses, and other liabilities as of June 30, 2020 and December 31, 2019 were $ 87.4 million and $ 133.7 million, respectively, of accrued capital expenditures.

Included in accounts payable, accrued expenses, and other liabilities as of June 30, 2019 and December 31, 2018 were $ 74.7 million and $ 54.5 million, respectively, of accrued capital expenditures.

Legal Matters

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The Company recognizes accruals for loss contingencies associated with such proceedings when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated.

As of March 31, 2020 and December 31, 2019 , the Company had accruals for loss contingencies of $ 117.0 million and $ 100.0 million , respectively.

As of June 30, 2020 and December 31, 2019, the Company had accruals for loss contingencies of $ 132.2 million and $ 100.0 million, respectively.

If the Company were unable to prevail in any such proceedings, its consolidated financial position, results of operations, and future cash flows may be materially impacted.

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However, the court invalidated the '287 and '163 Patents on the ground of insufficiency.

On appeal, the Court of Appeal (Civil Division of England and Wales) reversed the English High Court's decision and held that the '287 Patent and '163 Patent are both valid and infringed by Kymab and subsequently issued a final order, which enjoins Kymab from infringing the '287 Patent and '163 Patent (subject to certain exceptions) and requires Kymab to destroy or deliver to a third party all products

Thereafter, the Supreme Court of the United Kingdom granted Kymab's application for permission to appeal the order made by the Court of Appeal with respect to an issue of validity of the '287 Patent and the '163 Patent.

An oral hearing was held on February 11–12, 2020.

On June 24, 2020, the Supreme Court of the United

REGENERON PHARMACEUTICALS, INC.

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(Unless otherwise noted, dollars in millions, except per share data)

and antibodies and cells engineered to produce antibodies which infringe the '287 Patent and '163 Patent (subject to certain exceptions).

An oral hearing was held on February 11–12, 2020, but a decision has not yet been announced.

The provisions of the final order of the Court of Appeal are stayed pending final determination of Kymab's appeal to the Supreme Court of the United Kingdom.

The Company has also been awarded a portion of the legal fees incurred by it in connection with the proceedings in the English High Court and the Court of Appeal described above.

On July 31, 2019, the Company filed an action in the English High Court for a calculation of damages relating to Kymab's infringement of the '287 Patent and the '163 Patent.

Kingdom overturned the decision of the Court of Appeal on validity and held that the '287 and '163 Patents are each invalid on the ground of insufficiency.

On July 8 and July 13, 2016, notices of opposition against the '163 Patent were filed in the European Patent Office (the "EPO") by Merus N.V.

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The writ of summons filed by Amgen seeks, among other things, a declaration of infringement, a permanent injunction, withdrawal of product from the market, and damages.

On June 24, 2020, Amgen also filed a preliminary injunction motion against the Sanofi parties.

On December 20, 2019, Amgen also filed a lawsuit alleging infringement of the Spanish designation of the '124 Patent in the Juzgado de lo Mercantil No.

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Amgen alleges, among other things, patent infringement based on the manufacture, offering for sale, introduction into the market, use, and importation or possession of Praluent (alirocumab) in Spain.

Amgen seeks, among other things, a permanent injunction, withdrawal of Praluent from the market, seizure and destruction of Praluent from the market and in storage, and damages in the form of lost profits and costs and expenses.

REGENERON PHARMACEUTICALS, INC.

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(Unless otherwise noted, dollars in millions, except per share data)

seeks, among other things, a permanent injunction, withdrawal of Praluent from the market, seizure and destruction of Praluent from the market and in storage, and damages in the form of lost profits and costs and expenses.

On May 12, 2020, the court stayed this lawsuit until October 30, 2020 on terms mutually agreed by the parties.

The '124 Patent is also subject to opposition proceedings in the EPO seeking to invalidate certain of its claims, which were initiated by Sanofi on February 24, 2016 and, separately, by the Company, Sanofi, and several other opponents on November 24, 2016.

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subsequently complied with the injunction and, as a result, the commercialization of Praluent in Japan has been discontinued.

On March 31, 2020, Amgen filed a related lawsuit in the Tokyo District Court against Sanofi K.K.

seeking damages incurred by Amgen as a result of the finding of infringement of the '333 Patent and the '288 Patent.

The Company has not been named as a defendant in this damages action.

Proceedings Relating to Dupixent (dupilumab) Injection

4 unchanged sentences

On May 1, 2017, the Company and the other plaintiffs filed a notice of voluntary dismissal of this action without prejudice.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Unless otherwise noted, dollars in millions, except per share data)

On March 23, 2017, the Company, Sanofi-Aventis U.S.

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On February 14, 2019, the PTAB issued final written decisions on the Additional IPR Petitions, invalidating all 17 claims of the '487 Patent as obvious based on one of the Additional IPR Petitions while declining to hold the challenged claims of the '487 Patent invalid based on the other.

In April 2019, the parties filed notices of appeal with the Federal Circuit appealing the PTAB's respective adverse final written decisions on the Additional IPR Petitions.

In April 2019, the parties filed notices of appeal with the Federal Circuit appealing the PTAB's respective adverse final written decisions on the Additional IPR Petitions, and oral argument has been scheduled for August 5, 2020.

On April 5, 2017, Immunex Corporation filed a lawsuit against the Company, Sanofi, Sanofi-Aventis U.S.

6 unchanged sentences

On June 21, 2017, the court denied a motion to dismiss Immunex's complaint previously filed by the Company and the Sanofi parties.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Unless otherwise noted, dollars in millions, except per share data)

28, 2017, the Company and the Sanofi parties filed an answer to Immunex's complaint and counterclaims against Immunex and Amgen (which was amended on October 31, 2017 to, among other things, add an inequitable conduct allegation), and Immunex and Amgen filed an answer to the counterclaims on July 28, 2017.

On June 28, 2017, the Company and the Sanofi parties filed an answer to Immunex's complaint and counterclaims against Immunex and Amgen (which was amended on October 31, 2017 to, among other things, add an inequitable conduct allegation), and Immunex and Amgen filed an answer to the counterclaims on July 28, 2017.

A combined hearing on the construction of certain disputed claim terms of the '487 Patent and the Company and the Sanofi parties' motion for summary judgment on the issue of indefiniteness of the '487 Patent claims was held on July 12, 2018.

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and certain other related documents and communications.

The Company is cooperating with this investigation.

On June 24, 2020, the U.S.

Attorney's Office for the District of Massachusetts filed a civil complaint in the U.S.

District Court for the District of Massachusetts alleging violations of the federal Anti-Kickback Statute, and asserting causes of action under the federal False Claims Act and state law.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Unless otherwise noted, dollars in millions, except per share data)

In September 2019, the Company and Regeneron Healthcare Solutions, Inc., a wholly-owned subsidiary of the Company, each received a civil investigative demand ("CID") from the U.S.

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The Company is cooperating with this investigation.

Proceedings Relating to EYLEA (aflibercept) Injection Pre-filled Syringe

On June 19, 2020, Novartis Pharma AG, Novartis Pharmaceuticals Corporation, and Novartis Technology LLC (collectively, "Novartis") filed a complaint with the U.S.

International Trade Commission (the "ITC") pursuant to Section 337 of the Tariff Act of 1930 requesting that the ITC institute an investigation relating to the importation into the United States and/or sale within the United States after importation of EYLEA pre-filled syringes ("PFS") and/or components thereof which allegedly infringe Novartis’s U.S.

9,220,631 (the "'631 Patent").

Novartis also requested a permanent limited exclusion order forbidding entry into the United States of EYLEA PFS or components thereof;

a permanent cease-and-desist order from the importation, sale, offer for sale, advertising, packaging, or solicitation of any sale by the Company of EYLEA PFS or components thereof;

and a bond should the Company continue to import EYLEA PFS (if found to infringe) during, if applicable, any 60-day Presidential review period ( i.e.

, the period when the President of the United States (or his designee) can disapprove any ITC decision to issue an exclusion order or cease-and-desist order).

On June 19, 2020, Novartis also filed a patent infringement lawsuit in the U.S.

District Court for the Northern District of New York asserting claims of the '631 Patent and seeking preliminary and permanent injunctions to prevent the Company from continuing to infringe the '631 Patent.

Novartis also seeks a judgment of patent infringement of the '631 Patent, monetary damages (together with interest), treble damages, costs and expenses of the lawsuits, and attorneys' fees.

On July 30, 2020, the court granted the Company's motion to stay these proceedings until a determination in the ITC proceedings discussed above, including any appeals therefrom, becomes final.

On July 16, 2020, the Company initiated two IPR petitions in the USPTO seeking a declaration of invalidity of the '631 Patent on two separate grounds.

On July 17, 2020, the Company filed an antitrust lawsuit against Novartis and Vetter Pharma International Gmbh in the United States District Court for the Southern District of New York seeking a declaration that the '631 Patent is unenforceable and a judgment that the defendants' conduct violates Sections 1 and 2 of the Sherman Antitrust Act of 1890, as amended.

The Company is also seeking injunctive relief and treble damages.

Proceedings Relating to fasinumab

On May 21, 2020, the Company and Teva Pharmaceutical Industries Limited filed a lawsuit against Rinat Neurosciences Corp.

("Rinat"), a wholly owned subsidiary of Pfizer Inc., in the English High Court of Justice in London, seeking invalidation and revocation of Rinat's European Patent No.

2,270,048 (the "'048 Patent"), European Patent No.

1,871,416 (the "'416 Patent"), and European Patent No.

2,305,711 (the "'711 Patent"), each of which pertains to the use of NGF monoclonal antibodies to treat certain symptoms in patients suffering from osteoarthritis.

On July 21, 2020, Rinat filed its defense and counterclaim seeking a declaration of infringement of the '048 Patent by fasinumab.

The counterclaim also seeks a permanent injunction, damages, an accounting of profits, and costs and interest.

A trial has been scheduled to commence in late November or early December 2021.

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-Q

Item 1. Financial Statements