What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-05 compared with 2020-08-05 · 241 added, 150 removed, 737 unchanged (35% of the section changed)

3 unchanged sentences

(In millions, except share data)

June 30, December 31,

September 30, December 31,

Current assets:

16 unchanged sentences

Accrued expenses and other current liabilities 1,303.0 1,211.4

Debt 1,500.0 —

Deferred revenue - Sanofi 409.3 310.5

2 unchanged sentences

Total current liabilities 2,337.8 2,096.6

Long-term debt 1,978.3 —

Finance lease liabilities 716.5 713.9

27 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

13 unchanged sentences

Other income (expense):

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

Other (expense) income, net ( 28.5 ) 37.8 218.3 28.7

Interest expense ( 26.3 ) ( 7.8 ) ( 42.1 ) ( 23.5 )

10 unchanged sentences

Other comprehensive income (loss), net of tax:

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 )

Unrealized (loss) gain on debt securities ( 4.9 ) 1.0 10.9 31.5

Unrealized gain (loss) on cash flow hedges 0.2 ( 0.3 ) ( 1.2 ) ( 2.7 )

Comprehensive income $ 837.4 $ 670.3 $ 2,373.7 $ 1,352.6

34 unchanged sentences

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

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

— — 0.9 — 297.5 — — — — 297.5

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

— — ( 0.2 ) — ( 80.9 ) — — — — ( 80.9 )

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

— — — — 8.6 — — — 1.3 9.9

Repurchases of Common Stock

— — — — — — — ( 0.1 ) ( 100.4 ) ( 100.4 )

Stock-based compensation charges

— — — — 104.6 — — — — 104.6

— — — — — 842.1 — — — 842.1

Other comprehensive loss, net of tax — — — — — — ( 4.7 ) — — ( 4.7 )

Balance, September 30, 2020 1.8 — 120.5 $ 0.1 $ 6,592.8 $ 9,743.8 $ 30.8 ( 15.7 ) $ ( 6,242.0 ) $ 10,125.5

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

30 unchanged sentences

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

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

— — 0.1 — 8.3 — — — — 8.3

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

— — — — ( 0.1 ) — — — — ( 0.1 )

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

— — — — 3.9 — — — 2.1 6.0

Repurchases of Common Stock

— — — — — — — ( 0.2 ) ( 48.7 ) ( 48.7 )

Conversion of Class A Stock to Common Stock

( 0.1 ) — 0.1 — — — — — — —

Stock-based compensation charges

— — — — 112.7 — — — — 112.7

— — — — — 669.6 — — — 669.6

Other comprehensive income, net of tax

— — — — — — 0.7 — — 0.7

Balance, September 30, 2019 1.8 — 112.1 $ 0.1 $ 4,388.4 $ 6,587.8 $ 16.5 ( 4.2 ) $ ( 488.4 ) $ 10,504.4

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

2 unchanged sentences

(In millions)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

15 unchanged sentences

Purchases of marketable and other securities ( 2,642.7 ) ( 2,834.9 )

Sales or maturities of marketable securities 2,843.7 745.9

Sales or maturities of marketable and other securities 3,330.3 1,306.4

Capital expenditures ( 453.2 ) ( 290.6 )

1 unchanged sentence

Cash flows from financing activities:

Proceeds from issuance of long-term debt 1,981.9 —

Proceeds from bridge loan facility 1,500.0 —

Repayment of bridge loan facility ( 1,500.0 ) —

Proceeds from issuance of Common Stock 2,471.1 163.5

2 unchanged sentences

Net cash (used in) provided by financing activities ( 1,665.2 ) 93.6

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

Net decrease in cash, cash equivalents, and restricted cash ( 43.7 ) ( 82.9 )

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, 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 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 nine months ended September 30, 2019, and the Condensed Consolidated Statement of Cash Flows for the nine months ended September 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.

15 unchanged sentences

Three Months Ended

June 30, 2019 Six Months Ended

June 30, 2019

September 30, 2019 Nine Months Ended

September 30, 2019

Statement of Operations Data:

16 unchanged sentences

(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.

Six Months Ended

June 30, 2019

Nine Months Ended

September 30, 2019

Cash Flows Data:

7 unchanged sentences

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 and six months ended June 30, 2020;

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

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Net Product Sales in the United States 2020 2019 2020 2019

2 unchanged sentences

48.5 * 95.7 * *

REGN-COV2 40.2 — 40.2 —

3.6 3.0 9.3 10.7

2 unchanged sentences

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 and six months ended June 30, 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 nine months ended September 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

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

19 unchanged sentences

Research and development expense

Up-front and development milestone payments to collaborator

Research and development expense

Up-front and development milestone payments to collaborators Research and development expense

Reimbursement of Regeneron's commercialization-related expenses

28 unchanged sentences

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

2 unchanged sentences

$ 212.8 $ 94.2 $ 555.6 $ 105.2

Sales-based milestone earned Sanofi collaboration revenue $ 50.0 — $ 50.0 —

Reimbursement for manufacturing of commercial supplies

11 unchanged sentences

Immuno-oncology:

Regeneron's share of losses in connection with commercialization of Libtayo outside the United States

Sanofi collaboration revenue

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

Regeneron's share of losses in connection with commercialization of Libtayo outside the United States Sanofi collaboration revenue $ ( 4.7 ) $ ( 4.6 ) $ ( 17.3 ) $ ( 16.2 )

Reimbursement for manufacturing of commercial supplies

8 unchanged sentences

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

gross profits

Cost of goods sold

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

gross profits Cost of goods sold $ ( 31.5 ) $ ( 20.1 ) $ ( 86.5 ) $ ( 51.5 )

Amounts recognized in connection with up-front payments received

2 unchanged sentences

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") .

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

Under the companies' Antibody License and Collaboration Agreement (the "LCA"), following receipt of the first positive Phase 3 trial results for a co-developed drug candidate, subsequent Phase 3 trial-related costs for that drug candidate ("Shared Phase 3 Trial Costs") are generally shared 80 % by Sanofi and 20 % by Regeneron.

All other agreed-upon worldwide development expenses incurred by both companies are funded by Sanofi.

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

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 itepekimab (collectively, the "Dupilumab/Itepekimab Eligible Investments").

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

See discussion below related to the development and commercialization of Praluent

REGENERON PHARMACEUTICALS, INC.

1 unchanged sentence

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

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.

effective April 1, 2020.

In addition to profit and loss sharing, the Company is entitled to receive sales milestone payments from Sanofi.

In the third quarter of 2020, the Company earned, and recognized as revenue, the first $ 50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $ 1.0 billion on a rolling twelve-month basis.

We are entitled to receive up to an aggregate of $ 200.0 million in additional sales milestone payments from Sanofi.

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

June 30, December 31,

September 30, December 31,

Accounts receivable

11 unchanged sentences

Immuno-Oncology

In 2015, the Company and Sanofi entered into a collaboration to discover, develop, and commercialize antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration").

The Company is party to a collaboration with Sanofi to research, develop, and commercialize antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration").

The IO Collaboration is governed by an Amended and Restated Immuno-oncology Discovery and Development Agreement ("Amended IO Discovery Agreement"), and an Immuno-oncology License and Collaboration Agreement ("IO License and Collaboration Agreement").

5 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 certain shares 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, we may elect to purchase, in whole or in part, such

REGENERON PHARMACEUTICALS, INC.

1 unchanged sentence

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

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.

periods through September 30, 2020 by selling certain shares of our Common Stock directly or indirectly owned by Sanofi;

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

See Note 10 for additional information regarding shares purchased by us from Sanofi during the three and nine months ended September 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,

September 30, December 31,

Accounts receivable, net

4 unchanged sentences

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 June 30, 2020 was $ 1.020 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 September 30, 2020 was $ 951.0 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.

1 unchanged sentence

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

17 unchanged sentences

In addition, the Company and Bayer share the funding of agreed-upon EYLEA development costs.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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

June 30, December 31,

September 30, December 31,

Accounts receivable - other

2 unchanged sentences

$ 122.1 $ 123.0

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

In 2016, the Company and Teva entered into a collaboration agreement (the "Teva Collaboration Agreement") to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement with Mitsubishi Tanabe Pharma Corporation.

3 unchanged sentences

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

6 unchanged sentences

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

June 30, December 31,

September 30, December 31,

Accounts receivable - other

3 unchanged sentences

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 June 30, 2020 was $ 173.3 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.

5 unchanged sentences

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.

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

REGENERON PHARMACEUTICALS, INC.

1 unchanged sentence

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

gene edited products.

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.

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

Department of Health and Human Services ("HHS") is obligated to fund 80 % of certain 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.

1 unchanged sentence

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.

See Note 2 for REGN-COV2 net product sales recognized in connection with this agreement during the three months ended September 30, 2020.

Net Income Per Share

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Shares in millions) 2020 2019 2020 2019

5 unchanged sentences

Marketable Securities

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).

Marketable securities as of September 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:

Amortized Unrealized Fair

As of June 30, 2020 Cost Basis Gains Losses Value

As of September 30, 2020 Cost Basis Gains Losses Value

Corporate bonds $ 2,796.6 $ 40.1 $ ( 0.7 ) $ 2,836.0

12 unchanged sentences

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 June 30, 2020 mature at various dates through July 2025.

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

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

June 30, December 31,

September 30, December 31,

Maturities within one year $ 1,452.9 $ 1,596.5

Maturities after one year through five years 2,097.5 2,638.0

Maturities after five years 2.9 —

$ 3,550.4 $ 4,234.5

1 unchanged sentence

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

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

Corporate bonds $ 560.5 $ ( 0.7 ) — — $ 560.5 $ ( 0.7 )

government and government agency obligations 45.5 ( 0.1 ) — — 45.5 ( 0.1 )

$ 606.0 $ ( 0.8 ) — — $ 606.0 $ ( 0.8 )

As of December 31, 2019

6 unchanged sentences

(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).

For the three months ended September 30, 2020, realized gains on sales of marketable securities were not material.

For the nine months ended September 30, 2020, realized gains were $ 28.5 million.

Realized losses were not material for the three and nine months ended September 30, 2020.

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

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

Fair Value Measurements

5 unchanged sentences

Fair Value Measurements at Reporting Date

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

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

Available-for-sale debt securities:

17 unchanged sentences

$ 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.

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

During the three and nine months ended September 30, 2020, we recorded $ 37.5 million of net unrealized losses and $ 133.8 million of net unrealized gains, respectively, on equity securities in Other (expense) income, net.

During the three and nine months ended September 30, 2019, we recorded $ 15.7 million of net unrealized gains and $ 58.4 million of net unrealized losses, respectively, on equity securities in Other (expense) income, net.

REGENERON PHARMACEUTICALS, INC.

1 unchanged sentence

(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.

In addition to the investments summarized in the table above, as of September 30, 2020 and December 31, 2019, the Company had $ 60.6 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.

The fair value of our long-term debt (see Note 8 " Senior Notes " for additional details) was estimated to be $ 1.929 billion as of September 30, 2020, and was determined based on Level 2 inputs.

Inventories consist of the following:

June 30, December 31,

September 30, December 31,

Raw materials $ 400.4 $ 216.3

4 unchanged sentences

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).

Bridge Loan Facility

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

The Bridge Facility was repaid in full during the third quarter of 2020 following the closing of the issuance and sale of the Company's senior notes (as described below).

In August 2020, we issued and sold $ 1.250 billion aggregate principal amount of senior unsecured notes due 2030 (the "2030 Notes") and $ 750 million aggregate principal amount of senior unsecured notes due 2050 (the "2050 Notes" and, together with the 2030 Notes, the "Notes").

Net proceeds from the issuance and sale of the Notes (after deducting underwriting discounts and offering expenses) were used in part to repay in full the Bridge Facility described above.

The underwriting discounts and offering expenses are being amortized as additional interest expense over the period from issuance through maturity.

The 2030 Notes accrue interest at the rate of 1.750 % per year and will mature on September 15, 2030.

The 2050 Notes accrue interest at the rate of 2.800 % per year and will mature on September 15, 2050.

Interest on each series of Notes is payable semi-annually in arrears on March 15 and September 15 of each year until their respective maturity dates.

Interest expense related to the Notes for the three months ended September 30, 2020 was $ 6.4 million.

The Notes may be redeemed at the Company’s option at any time at 100 % of the principal amount plus accrued and unpaid interest, and, until a specified period before maturity, a specified make-whole amount.

The Notes contain a change-of-control provision that, under certain circumstances, may require the Company to offer to repurchase the Notes at a price equal to 101 % of the principal amount plus accrued and unpaid interest.

The Notes also contain certain limitations on the Company’s ability to incur liens and enter into sale and leaseback transactions, as well as customary events of default.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The Company is subject to U.S.

federal, state, and foreign income taxes.

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.

The Company's effective tax rate was 15.6 % and 12.9 % for the three months ended September 30, 2020 and 2019, respectively, and 8.6 % and 14.0 % for the nine months ended September 30, 2020 and 2019, respectively.

The Company's effective tax rate for the three and nine months ended September 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 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.

The Company's effective tax rate for the three and nine months ended September 30, 2019 was positively impacted, compared to the U.S.

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

federal statutory rate, partly offset by the taxation of certain global intangible low-taxed income and the non-deductible Branded Prescription Drug Fee.

The Company believes it is reasonably possible that its unrecognized tax benefits as of September 30, 2020 may decrease within the next twelve months, and, as a result, positively impact our effective tax rate, as a result of expected settlement of audits and statute of limitation lapses.

Stockholders' Equity

1 unchanged sentence

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,

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.

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.

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.

2 unchanged sentences

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

Three Months Ended

September 30, 2020 Nine Months Ended

September 30, 2020

Number of shares repurchased 179,824 898,991

Total cost of shares received $ 100.4 $ 373.3

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

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

As of September 30, 2020, the Company had $ 372.7 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 costs and/or Dupilumab/REGN3500 Eligible Investments by selling our Common Stock directly or indirectly owned by Sanofi.

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/Itepekimab 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

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

2 unchanged sentences

Total cost of shares received — $ 29.2 $ 41.7 $ 73.3

Dupilumab/REGN3500:

Dupilumab/Itepekimab:

Number of shares purchased (in cash) — 69,143 171,471 93,286

Total cost of shares received — $ 19.4 $ 93.3 $ 29.4

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.

As of September 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/Itepekimab Eligible Investments incurred in periods through September 30, 2020.

Additional Stock Purchased from Sanofi

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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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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,

September 30, September 30,

Cash and cash equivalents $ 1,573.0 $ 1,384.8

3 unchanged sentences

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

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Supplemental disclosure of non-cash investing and financing activities

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.

The following amounts were included in accounts payable, accrued expenses, and other liabilities:

September 30, December 31, September 30, December 31,

2020 2019 2019 2018

Accrued capital expenditures $ 100.4 $ 133.7 $ 100.5 $ 54.5

Legal Matters

3 unchanged sentences

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

As of September 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.

9 unchanged sentences

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

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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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 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 enjoined Kymab from infringing the '287 Patent and '163 Patent (subject to certain exceptions) and required Kymab to destroy or deliver to a third party all products and antibodies and cells engineered to produce antibodies which infringe the '287 Patent and '163 Patent (subject to certain exceptions).

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

8 unchanged sentences

See Note 3 for a description of the Company's and Sanofi's arrangement regarding the costs resulting from or associated with such actions.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

United States

16 unchanged sentences

On October 23, 2019, Amgen filed a notice of appeal of the District Court's decision with the Federal Circuit.

An oral hearing before the Federal Circuit has been scheduled for December 9, 2020.

On March 18, 2019, Amgen filed a renewed motion for a permanent injunction to prohibit the Company and the Sanofi defendants from Commercializing Praluent in the United States (a "Permanent Injunction"), and an oral hearing on this motion was held in June 2019.

1 unchanged sentence

On August 28, 2019, the District Court dismissed as moot Amgen's renewed motion for a Permanent Injunction.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

United Kingdom.

On July 25, 2016, Amgen filed a lawsuit against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi-Synthelabo Limited, Aventis Pharma Limited, Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the English High Court of Justice, Chancery Division, Patents Court, in London, seeking a declaration of infringement of Amgen's European Patent No.

2 unchanged sentences

On February 8, 2017, the court temporarily stayed this litigation on terms mutually agreed by the parties.

Also on July 25, 2016, Amgen filed a lawsuit for infringement of the '124 Patent against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the Regional Court of Düsseldorf, Germany (the "Düsseldorf Regional Court"), seeking a permanent injunction, an accounting of marketing activities, a recall of Praluent and its removal from distribution channels, and damages.

On October 22, 2020, the court lifted the stay upon application by the Company and the Sanofi defendants, and the case will proceed in due course.

On July 25, 2016, Amgen filed a lawsuit for infringement of the '124 Patent against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the Regional Court of Düsseldorf, Germany (the "Düsseldorf Regional Court"), seeking a permanent injunction, an accounting of marketing activities, a recall of Praluent and its removal from distribution channels, and damages.

On November 14, 2017, the Düsseldorf Regional Court issued a decision staying the infringement proceedings until a decision of the Opposition Division of the EPO concerning the pending opposition filed by the Company, Sanofi, and several other opponents against the '124 Patent (as discussed below).

Following Amgen's request to reopen the proceedings in light of the issuance of the Preliminary Opinion (as defined below), the Düsseldorf Regional Court held an oral hearing on September 11, 2018 and ruled on December 10, 2018 that the infringement proceedings would be reopened.

On July 11, 2019, the Düsseldorf Regional Court found that Praluent infringes the '124 Patent and granted an injunction prohibiting the Company and Sanofi's manufacture, sale, and marketing of Praluent in Germany (the "July 11 Decision").

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

"July 11 Decision").

Amgen subsequently enforced the injunction and, as a result, commercialization of Praluent in Germany has been discontinued.

2 unchanged sentences

On August 5, 2019 and October 31, 2019, the Higher Regional Court denied the Company and Sanofi's requests for a stay of preliminary enforcement of the July 11 Decision pending the appeal on the merits.

On November 3, 2020, Amgen filed a motion withdrawing this lawsuit without prejudice.

On September 26, 2016, Amgen filed a lawsuit for infringement of the '124 Patent in the Tribunal de grande instance in Paris, France against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A., and Sanofi Chimie (subsequently added as a defendant).

9 unchanged sentences

Oral hearing on this infringement lawsuit (originally scheduled for February 12, 2019) has yet to be rescheduled.

The Netherlands.

On December 17, 2019, Amgen initiated a lawsuit alleging infringement of the Dutch designation of the '124 Patent in the District Court of The Hague in the Netherlands, against Sanofi-Aventis Netherlands B.V.

3 unchanged sentences

Amgen's requests are made on an accelerated basis and include, among other things, a request for a permanent injunction, damages, an order for customer information, a recall order, a destruction order, and an order for costs.

A trial has been scheduled for October 30, 2020.

A trial has been scheduled for February 12, 2021.

On December 20, 2019, Amgen filed a lawsuit for infringement of the Italian designation of the '124 Patent in the Tribunale di Milano - Enterprise Chamber in Milan, Italy, against Sanofi-Aventis Groupe S.A., Sanofi Chimie, and Sanofi SpA.

3 unchanged sentences

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

On August 12, 2020, the court denied Amgen's preliminary injunction motion.

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.

5 (Commercial Court) in Barcelona, Spain, against Sanofi-Aventis, S.A.

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

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.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(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.

The Company was not named as a defendant in this action.

Amgen alleged, 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 sought, 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.

On October 30, 2020, the stay was automatically lifted.

On November 2, 2020, Amgen filed a motion withdrawing this lawsuit.

EPO Proceedings.

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.

2 unchanged sentences

The Company and Sanofi filed notices of appeal to the Technical Board of Appeal (the "TBA") of the EPO on November 30, 2018.

An oral hearing before the TBA has been rescheduled for October 28–29, 2020.

An oral hearing before the TBA was held on October 28–29, 2020, at which the TBA ruled that the '124 Patent claims directed to compositions of matter and medical use were invalid based on a lack of inventive step.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

On May 19, 2017, Amgen filed a lawsuit for infringement of Amgen's Japanese Patent Nos.

22 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.

5 unchanged sentences

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, and oral argument has been scheduled for August 5, 2020.

On October 13, 2020, the Federal Circuit affirmed the PTAB's decision on the Additional IPR Petition that invalidated all 17 claims of the '487 Patent as obvious.

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

7 unchanged sentences

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.

A combined hearing on the construction of certain disputed claim terms of the '487 Patent and the Company and the Sanofi parties' motion

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

for summary judgment on the issue of indefiniteness of the '487 Patent claims was held on July 12, 2018.

On August 24, 2018, the court issued an order denying this motion and construed the disputed claim terms as proposed by Amgen.

14 unchanged sentences

The original patent term of the Immunex patents is set to expire in 2021.

Department of Justice Investigations

In January 2017, the Company received a subpoena from the U.S.

Attorney's Office for the District of Massachusetts requesting documents relating to its support of 501(c)(3) organizations that provide financial assistance to patients;

documents concerning its provision of financial assistance to patients with respect to products sold or developed by Regeneron (including EYLEA, Praluent, ARCALYST, and ZALTRAP ® );

and certain other related documents and communications.

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.

Department of Justice pursuant to the federal False Claims Act relating to remuneration paid to physicians in the form of consulting fees, advisory boards, speaker fees, and payment or reimbursement for travel and entertainment allegedly in violation of the federal Anti-Kickback Statute.

The CIDs relate to EYLEA, Praluent, Dupixent, ZALTRAP, ARCALYST, and Kevzara and cover the period from January 2015 to the present.

The Company is cooperating with this investigation.

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

6 unchanged sentences

, 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).

The ITC instituted the investigation on July 22, 2020.

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

3 unchanged sentences

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.

On July 17, 2020, the Company filed an antitrust lawsuit against Novartis and Vetter Pharma International Gmbh ("Vetter") 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.

On September 4, 2020, Novartis filed, and Vetter moved to join, a motion to dismiss the complaint, to transfer the lawsuit to the Northern District of New York, or to stay the suit;

and on October 19, 2020, Novartis filed, and Vetter moved to join, a second motion to dismiss the complaint on different grounds.

Proceedings Relating to fasinumab

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

On May 21, 2020, the Company and Teva Pharmaceutical Industries Limited ("Teva") 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.

REGENERON PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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

3 unchanged sentences

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

The '048 Patent is subject to opposition proceedings in the EPO, which were initiated by the Company on August 10, 2016 and two other opponents on August 11, 2016.

On January 3, 2018, the Opposition Division of the EPO issued a preliminary, non-binding opinion regarding the validity of the '048 Patent, indicating that it considered the granted patent to be invalid.

An oral hearing on the oppositions against the '048 Patent was held on November 29–30, 2018, at which the Opposition Division upheld the validity of the '048 Patent's claims in amended form.

The Company filed a notice of appeal to the TBA of the EPO on March 7, 2019.

On October 21, 2020, Teva filed a notice of intervention with the TBA to take part in the appeal proceedings as an intervener.

The '711 Patent is also subject to opposition proceedings in the EPO, which were initiated by the Company on May 1, 2018.

On January 31, 2019, the Opposition Division of the EPO issued a preliminary, non-binding opinion regarding the validity of the '711 Patent, indicating that it considered the granted patent to be invalid.

An oral hearing on the opposition against the '711 Patent was held on December 3, 2019, at which the Opposition Division upheld the validity of the '711 Patent's claims in amended form.

The Company filed a notice of appeal to the TBA on December 20, 2019.

An oral hearing before the TBA has been scheduled for July 29, 2021.

Proceedings Relating to REGN-COV2

On October 5, 2020, Allele Biotechnology and Pharmaceuticals, Inc.

("Allele") filed a lawsuit against the Company in the United States District Court for the Southern District of New York, asserting infringement of U.S.

10,221,221 (the "'221 Patent").

Allele seeks a judgment of patent infringement of the '221 Patent, a judgment that such infringement was willful, and an award of monetary damages (together with interest), treble damages, costs and expenses of the lawsuit, and attorneys' fees.

Department of Justice Matters

In January 2017, the Company received a subpoena from the U.S.

Attorney's Office for the District of Massachusetts requesting documents relating to its support of 501(c)(3) organizations that provide financial assistance to patients;

documents concerning its provision of financial assistance to patients with respect to products sold or developed by Regeneron (including EYLEA, Praluent, ARCALYST, and ZALTRAP ® );

and certain other related documents and communications.

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.

On August 24, 2020, the Company filed a motion to dismiss the complaint in its entirety.

An oral hearing on the motion to dismiss was held on October 7, 2020.

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.

The CIDs relate to EYLEA, Praluent, Dupixent, ZALTRAP, ARCALYST, and Kevzara and cover the period from January 2015 to the present.

The Company is cooperating with this investigation.

Shareholder Demand

On or about September 30, 2020, the Company's board of directors received a demand letter from a purported shareholder of the Company.

The demand alleges that Regeneron and its shareholders have been damaged by the conduct alleged in the civil complaint filed by the U.S.

Attorney's Office for the District of Massachusetts discussed under "Department of Justice Matters" above.

The demand letter requests that the Company's board of directors investigate alleged breaches of fiduciary duty by its officers and directors and other alleged violations of law and corporate governance practices and procedures;

bring legal action against the persons responsible for causing the alleged damages;

and implement and maintain an effective system of internal controls, compliance mechanisms, and corporate governance practices and procedures.

The Company's board of directors, working with outside counsel, is evaluating this demand letter.

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