What changed in this filing

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Item 1A. Risk Factors

2020-11-05 compared with 2020-08-05 · 165 added, 86 removed, 754 unchanged (25% of the section changed)

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Furthermore, additional risks and uncertainties are described under other captions in this report and should also be considered by our investors.

For purposes of this section, references to our products encompass products marketed by us and/or our collaborators under our collaboration agreements with them, unless otherwise stated or required by the context.

For purposes of this section, references to our products encompass products marketed or otherwise commercialized by us and/or our collaborators under our collaboration agreements with them, unless otherwise stated or required by the context.

In this section, we first provide a summary of the more significant risks and uncertainties we face and then provide a full set of risk factors and discuss them in greater detail.

Summary of Risk Factors

As noted above, we are subject to a number of risks that if realized could materially harm our business, prospects, operating results, and financial condition.

Some of the more significant risks and uncertainties we face include those summarized below.

The summary below is not exhaustive and is qualified by reference to the full set of risk factors set forth in this "Risk Factors" section.

Please carefully consider all of the information in this Form 10-Q, including the full set of risks set forth in this "Risk Factors" section, and in our other filings with the U.S.

Securities and Exchange Commission before making an investment decision regarding Regeneron.

Risks Related to the COVID-19 Pandemic

• Our business may be further adversely affected by the effects of the COVID-19 pandemic, including those impacting our manufacturing and supply chain operations, research and development efforts, commercial operations and sales force, administrative personnel, third-party service providers, and business partners and customers, as well as the demand for our marketed products.

• We face risks related to the development, manufacturing, and potential commercialization of REGN-COV2.

Commercialization Risks

• We are substantially dependent on the success of EYLEA and Dupixent.

• Sales of our products are dependent on the availability and extent of reimbursement from third-party payors, including private payors and government programs such as Medicare and Medicaid, which could change due to various factors such as the drug price control measures recently announced by the Trump administration.

• The commercial success of our products is subject to significant competition from products or product candidates that may be superior to, or more cost effective than, our products or product candidates.

• We and our collaborators on which we rely to commercialize some of our marketed products may be unable to continue to successfully commercialize or co-commercialize our products, both in the United States and abroad.

Regulatory and Development Risks

• Drug development and obtaining and maintaining regulatory approval for drug products is costly, time-consuming, and highly uncertain.

• Serious complications or side effects in connection with the use or development of our products or product candidates could cause our regulatory approvals to be revoked or limited or lead to delay or discontinuation of development of our product candidates or new indications for our marketed products.

• We may be unable to formulate or manufacture our product candidates in a way that is suitable for clinical or commercial use, which would delay or prevent continued development of such candidates and/or receipt of regulatory approval or commercial sale.

• Many of our products are intended to be used in combination with drug-delivery devices, which may result in additional regulatory, commercialization, and other risks.

Intellectual Property and Market Exclusivity Risks

• We may not be able to protect the confidentiality of our trade secrets, and our patents or other means of defending our intellectual property may be insufficient to protect our proprietary rights.

• Patents or proprietary rights of others may restrict our development, manufacturing, and/or commercialization efforts and subject us to patent litigation and other proceedings that could find us liable for damages.

• Loss or limitation of patent rights, and regulatory pathways for biosimilar competition, could reduce the duration of market exclusivity for our products, including EYLEA.

Manufacturing and Supply Risks

• We rely on limited internal and contracted manufacturing and supply chain capacity, which could adversely affect our ability to commercialize our products and to advance our clinical pipeline.

As we increase our production in anticipation of potential regulatory approval for our product candidates (such as REGN-COV2), our current manufacturing capacity will likely not be sufficient, and our dependence on our collaborators and/or contract manufacturers may increase, to produce adequate quantities of drug material for both commercial and clinical purposes.

• Expanding our manufacturing capacity and establishing fill/finish capabilities will be costly and we may be unsuccessful in doing so in a timely manner, which could delay or prevent the launch and successful commercialization of our products approved for marketing and could jeopardize our clinical development programs.

• Our ability to manufacture products may be impaired if any of our or our collaborators’ manufacturing activities, or the activities of other third parties involved in our manufacture and supply chain, are found to infringe patents of others.

• If sales of our marketed products do not meet the levels currently expected, or if the launch of any of our product candidates is delayed or unsuccessful, we may face costs related to excess inventory or unused capacity at our manufacturing facilities and at the facilities of third parties or our collaborators.

• Third-party service or supply failures, failures at our manufacturing facilities in Rensselaer, New York and Limerick, Ireland, or failures at the facilities of any other party participating in the supply chain, would adversely affect our ability to supply our products.

• Our or our collaborators’ failure to meet the stringent requirements of governmental regulation in the manufacture of drug products or product candidates could result in incurring substantial remedial costs, delays in the development or approval of our product candidates or new indications for our marketed products and/or in their commercial launch if regulatory approval is obtained, and a reduction in sales.

Other Regulatory and Litigation Risks

• If the testing or use of our products harms people, or is perceived to harm them even when such harm is unrelated to our products, we could be subject to costly and damaging product liability claims.

• Our business activities have been, and may in the future be, challenged under federal or state healthcare laws, which may subject us to civil or criminal proceedings, investigations, or penalties.

• We face risks from the improper conduct of our employees, agents, contractors, or collaborators, including those relating to potential non-compliance with relevant laws and regulations such as the Foreign Corrupt Practices Act.

• Our operations are subject to environmental, health, and safety laws and regulations, including those governing the use of hazardous materials.

• Changes in laws and regulations affecting the healthcare industry could adversely affect our business.

• Tax liabilities and risks associated with our operations outside of the United States could adversely affect our business.

• We face potential liability related to the personal information we collect from individuals, data brokers, or research institutions or obtain from clinical trials sponsored by us or our collaborators.

Risks Related to Our Reliance on Third Parties

• If our collaborations with Sanofi or Bayer are terminated or breached, our ability to develop, manufacture, and commercialize certain of our products and product candidates in the time expected, or at all, would be materially harmed.

• Our collaborators and service providers may fail to perform adequately in their efforts to support the development, manufacture, and commercialization of our drug candidates and current and future products.

Other Risks Factors – Risks Related to Employees, Information Technology, Financial Results and Liquidity, and Our Common Stock

• Our business is dependent on our key personnel and will be harmed if we cannot recruit and retain leaders in our research, development, manufacturing, and commercial organizations.

• Significant disruptions of information technology systems or breaches of data security could adversely affect our business.

• We may need additional funding in the future, which may not be available to us, and which may force us to delay, reduce, or eliminate our product development programs or commercialization efforts.

• Our indebtedness could adversely impact our business.

• Our stock price is extremely volatile.

• Our existing shareholders may be able to exert significant influence over matters requiring shareholder approval and over our management.

Risks Related to the COVID-19 Pandemic

Our business may be further adversely affected by the effects of the COVID-19 pandemic.

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This pandemic has adversely affected or has the potential to adversely affect, among other things, the economic and financial markets and labor resources of the countries in which we operate;

our manufacturing and supply chain operations, research and development efforts, commercial operations and sales force, administrative personnel, third-party service providers, and business partners and customers;

our manufacturing and supply chain operations, research and development efforts, commercial operations

and sales force, administrative personnel, third-party service providers, and business partners and customers;

and the demand for our marketed products.

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As a result of these developments, we have implemented work-from-home policies for a significant part of our employees (except those deemed critical, including those working in our laboratories and manufacturing facilities).

disclosed, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

The effects of shelter-in-place and social distancing orders, government-imposed quarantines, and work-from-home policies may further negatively impact productivity, disrupt our business, and delay our clinical programs and development timelines beyond the delays we have already experienced and disclosed, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

Such restrictions and limitations may also further negatively impact our access to regulatory authorities (which are affected, among other things, by applicable travel restrictions and may be delayed in responding to inquiries, reviewing filings, and conducting inspections);

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For example, as noted above in Part I, Item 2.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview - Programs in Clinical Development," we experienced an initial adverse impact on enrollment into new clinical studies and recruitment of new patients into open studies.

While enrollment in both new and ongoing clinical studies started to resume as regions relaxed their restrictions and healthcare resources started to become more available for non-COVID-19 activities, there has been a resurgence of COVID-19 cases in many regions across the world, and any resurgence in the regions in which we or our collaborators conduct clinical trials may require our expectations relating to the impacted studies to adjust.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview - Programs in Clinical Development," the ongoing COVID-19 pandemic continues to impact clinical trial execution in many regions across the world for us and our collaborators.

We will continue to evaluate the adverse impact of the COVID-19 pandemic on an individual trial basis.

The disruptions caused by the COVID-19 pandemic may further negatively impact the progress of our clinical trials, including the readouts of trial results.

Further, while we are focused on developing novel therapies to address the COVID-19 pandemic, our research programs and the development of our other product candidates may need to be further de-prioritized.

The disruptions caused by the COVID-19 pandemic may further negatively impact the progress of our clinical trials, including the readouts of trial results, the timing of regulatory review, and any anticipated program milestones.

Further, while we continue to focus on developing a novel therapy to address the COVID-19 pandemic, our research programs and the development of our other product candidates may need to be further de-prioritized.

Any elongation or de-prioritization of our research and development programs and clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates, which would increase our operating expenses and may have a material adverse effect on our operating results.

While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, it recently caused significant disruption of global financial markets and could cause more economic disruption in the future.

This disruption, if sustained or recurrent, could make it more difficult for us to access capital if needed.

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our Common Stock.

The global COVID-19 pandemic continues to rapidly evolve.

The ultimate impact of this pandemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems, or the global economy as a whole.

These effects could have a material impact on our operations.

To the extent the COVID-19 pandemic adversely affects our business, prospects, operating results, or financial condition, it may also have the effect of heightening many of the other risks described in this "Risk Factors" section.

We face risks related to the development, manufacturing, and potential commercialization of REGN-COV2.

In response to the recent global outbreak of COVID-19, we are pursuing the development and manufacturing of REGN-COV2, a novel investigational antibody "cocktail" treatment designed to prevent and treat infection from the SARS-CoV-2 virus.

While we recently announced positive results from the ongoing Phase 2/3 seamless trial in non-hospitalized patients with COVID-19, there are multiple ongoing clinical trials to evaluate the and efficacy of REGN-COV2 and there is no assurance of favorable results from any ongoing or future clinical trials or the timing of their completion.

For example, in October 2020, the IDMC for the REGN-COV2 treatment trials recommended that further enrollment of hospitalized patients requiring high-flow oxygen or mechanical ventilation be placed on hold.

It is possible that the FDA and other regulatory authorities may not approve REGN-COV2 for the treatment of COVID-19, or that any marketing approvals, if granted, may have significant limitations on its use.

Further, other parties may be successful in developing a more effective treatment for COVID-19.

As a result, we may never successfully commercialize REGN-COV2.

The intense public interest, including speculation by the media, in the development of REGN-COV2 has caused significant volatility in our stock price, which we expect to continue as data and other information from the ongoing and any future clinical trials evaluating REGN-COV2 and third-party product candidates for the treatment or prevention of COVID-19 as well as any regulatory actions become public.

We also face risks related to our significant investment in the development, supply, allocation, distribution, pricing, and potential commercialization of REGN-COV2.

Given the severity and urgency of the COVID-19 pandemic, we have committed significant capital and resources to fund and supply clinical trials and to accelerate and scale up the production of REGN-COV2, which involves a complex manufacturing process that is both resource- and time-sensitive.

We expect our investment in the development and manufacture of REGN-COV2 to continue through 2021 and beyond, although the magnitude of our investment will be subject to clinical data results, the duration of the COVID-19 pandemic, and other factors, including regulatory outcomes.

If we are unable to obtain regulatory approvals, or if we make a strategic decision to discontinue development of REGN-COV2 or are otherwise not successful in the commercialization of REGN-COV2, we will be unable to recoup our significant expenses incurred to date and in the future related to the development and production of REGN-COV2.

In addition, our internal manufacturing capacity will likely not be sufficient to cover the demand for REGN-COV2 if we receive regulatory approval or are otherwise authorized to market this therapy.

While we have entered into a collaboration agreement with Roche to develop, manufacture, and distribute REGN-COV2, we cannot be certain that the technology transfer process required to allow Roche to manufacture REGN-COV2 will be completed in the expected time frame or at all nor can we be certain that this collaboration will result in the anticipated increase in the current manufacturing and distribution capacity for REGN-COV2 or that any increased manufacturing and distribution capacity will be sufficient.

We and Roche also face challenges related to the allocation of existing and future supply of REGN-COV2, particularly with respect to geographic distribution.

As supplies of REGN-COV2 are expected to remain constrained, it is possible that the U.S.

government may limit or restrict our ability to distribute and commercialize REGN-COV2 outside of the United States.

In addition, as a result of the emergency situations in many countries, there is a heightened risk that REGN-COV2 may be subject to adverse governmental actions in certain countries.

government may exercise or assert certain rights with respect to our inventions, products, or product candidates.

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For example, in July 2020, we entered into an agreement to manufacture and deliver REGN-COV2 to the U.S.

Government over the remainder of 2020.

Among other rights, this agreement gives the U.S.

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government exercises or asserts any such rights or imposes these or similar measures with respect to our products, product candidates, or related inventions (including REGN-COV2), it may adversely impact our business and results of operations.

Foreign governments (including the government of Ireland, where we have manufacturing facilities) may have similar rights or attempt to assert any such rights.

This disruption, if sustained or recurrent, could make it more difficult for us to access capital if needed.

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our Common Stock.

The global COVID-19 pandemic continues to rapidly evolve.

The ultimate impact of this pandemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems, or the global economy as a whole.

These effects could have a material impact on our operations.

Foreign governments (including the government of Ireland, where we have manufacturing facilities) may have similar rights or attempt

to assert any such rights.

Further, we have observed and are likely to continue to face significant public attention and scrutiny over the complex decisions made regarding the REGN-COV2 development program, including any allocation, distribution, or pricing decisions with respect to REGN-COV2.

If we are unable to successfully manage these risks, we could face significant reputational harm, which could negatively affect our stock price.

Risks Related to Commercialization of Our Marketed Products, Product Candidates, and New Indications for Our Marketed Products

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EYLEA net sales represent a substantial portion of our revenues and this concentration of our net sales in a single product makes us substantially dependent on that product.

For the six months ended June 30, 2020 and 2019, EYLEA net sales in the United States represented 60% and 76% of our total revenues, respectively.

For the nine months ended September 30, 2020 and 2019, EYLEA net sales in the United States represented 59% and 73% of our total revenues, respectively.

If we were to experience difficulty with the commercialization of EYLEA in the United States or if Bayer were to experience any difficulty with the commercialization of EYLEA outside the United States (including as a result of the COVID-19 pandemic discussed above), or if we and Bayer are unable to maintain current marketing approvals of EYLEA, we may experience a reduction in revenue and may not be able to sustain profitability, and our business, prospects, operating results, and financial condition would be materially harmed.

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• our ability to meet the demand for commercial supplies of our marketed products;

• the outcome of the pending patent infringement proceedings relating to Dupixent and Praluent (described further in Note 12 to our Condensed Consolidated Financial Statements included in this report), as well as other risks relating to our marketed products associated with intellectual property of other parties and pending or future litigation relating thereto (as discussed under "Risks Related to Intellectual Property and Market Exclusivity" below);

• the outcome of the pending government proceedings and investigations described in Note 12 to our Condensed Consolidated Financial Statements included in this report (including the civil complaint filed against us on June 24, 2020 in the U.S.

• the outcome of the pending proceedings relating to EYLEA, Dupixent, and Praluent (described further in Note 12 to our Condensed Consolidated Financial Statements included in this report), as well as other risks relating to our marketed products associated with intellectual property of other parties and pending or future litigation relating thereto (as discussed under "Risks Related to Intellectual Property and Market Exclusivity" below);

• the outcome of the pending government proceedings and investigations and other matters described in Note 12 to our Condensed Consolidated Financial Statements included in this report (including the civil complaint filed against us on June 24, 2020 in the U.S.

District Court for the District of Massachusetts by the U.S.

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Failure to comply may also subject us to sanctions, product recalls, or withdrawals of previously approved marketing applications.

See also "Risks Related to Manufacturing and Supply - Our or our collaborators' failure to meet the stringent requirements of governmental regulation in the manufacture of drug products or product candidates could result in incurring substantial remedial costs, delays in the development or approval of our product candidates or new indications for our marketed products and/or in their commercial launch if they obtain regulatory approval, and a reduction in sales " below.

See also "Risks Related to Manufacturing and Supply - Our or our collaborators' failure to meet the stringent requirements of governmental regulation in the manufacture of drug products or product candidates could result in incurring substantial remedial costs, delays in the development or approval of our product candidates or new indications for our marketed products and/or in their commercial launch if regulatory approval is obtained, and a reduction in sales " below.

Sales of our marketed products are dependent on the availability and extent of reimbursement from third-party payors, and changes to such reimbursement may materially harm our business, prospects, operating results, and financial condition.

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Given cost sensitivities in many health care systems (which will likely be exacerbated as a result of the COVID-19 pandemic), our currently marketed products and product candidates are likely to be subject to continued pricing pressures, which may have an adverse impact on our business, prospects, operating results, and financial condition.

In addition, in order for private insurance and governmental payors (such as Medicare and Medicaid in the United States) to reimburse the cost of our marketed products, we must maintain, among other things, our FDA registration and our National Drug Code, formulary approval by pharmacy benefits managers, and recognition by insurance companies and the Centers for Medicare & Medicaid Services (the "CMS").

Drug Code, formulary approval by pharmacy benefits managers, and recognition by insurance companies and the Centers for Medicare & Medicaid Services (the "CMS").

There is no certainty that we will be able to obtain or maintain the applicable requirements for reimbursement (including relevant formulary coverage, as discussed further below) of our current and future marketed products, which may have a material adverse effect on our business.

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Further, there have been several recent U.S.

Congressional inquiries and proposed federal and state legislation and policies designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and

manufacturer patient programs, reduce the out-of-pocket cost of prescription drugs, and reform government program reimbursement methodologies for drugs.

Congressional inquiries and proposed federal and state legislation and policies designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the out-of-pocket cost of prescription drugs, and reform government program reimbursement methodologies for drugs.

At the federal level, some of the Trump administration's prior budget proposals contained drug price control measures that may be included in future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B (such as EYLEA);

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Additionally, on May 11, 2018, President Trump laid out his administration's "Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs" to reduce the cost of prescription drugs while preserving innovation and cures.

The Department of Health and Human Services has been soliciting feedback on some of these measures and may implement others impacting our business under its existing authority.

The HHS has been soliciting feedback on some of these measures and may implement others impacting our business under its existing authority.

CMS has also recently sought public comment on how best to leverage its authority provided under the Competitive Acquisition Program and introduce competition into Medicare Part B by allowing CMS to bring on vendors to negotiate payment amounts for Medicare Part B drugs.

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notice of proposed rulemaking on this program is pending review by the Office of Management and Budget.

In addition, in July 2019, President Trump indicated that his administration was considering an executive order to establish a "most favored nation" pricing plan;

and, in July 2020, President Trump announced that an executive order (the text of which is not yet available) utilizing a "most favored nation" pricing mechanism and/or potentially other drug-pricing measures could go into effect in late August 2020 unless an alternative proposal that substantially reduces drug prices is advanced by the pharmaceutical industry.

While the scope and details of these contemplated executive actions (including whether and how their mechanism may differ from that of the proposed IPI drug pricing program discussed above) are not clear, this continues to signal that the U.S.

In addition, in September 2020, President Trump signed an executive order entitled "Lowering Drug Prices by Putting America First" (the "MFN Executive Order").

The MFN Executive Order provides that it is "the policy of the United States that the Medicare program should not pay more for costly Part B or Part D prescription drugs or biological products than the most-favored-nation price" within the member countries of the Organization for Economic Co-operation and Development (the "MFN Price");

and directs the Secretary of the HHS to implement rulemaking to test a payment model pursuant to which Medicare would pay no more than the MFN Price for certain drugs covered by Medicare Parts B and D.

While the scope, details, and implementation of these contemplated executive actions (including whether and how their mechanism may differ from that of the proposed IPI drug pricing program discussed above) are not clear, this continues to signal that the U.S.

administration intends to pursue new measures to constrain drug costs and Medicare payments for drugs.

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Failure to be included in such formularies or to achieve favorable formulary status may negatively impact the utilization and market share of our marketed products.

If our marketed products are not included within an adequate number of formularies, adequate reimbursement levels are not provided, the eligible insured patient population for our products is limited, or a key payor refuses to provide reimbursement for our products in a particular jurisdiction altogether, this could have a material adverse effect on our and our collaborators' ability to commercialize the applicable product.

or a key payor refuses to provide reimbursement for our products in a particular jurisdiction altogether, this could have a material adverse effect on our and our collaborators' ability to commercialize the applicable product.

In certain foreign countries, pricing, coverage, and level of reimbursement of prescription drugs are subject to governmental control, and we and our collaborators may be unable to obtain coverage, pricing, and/or reimbursement on terms that are favorable to us or necessary for us or our collaborators to successfully commercialize our marketed products in those countries.

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and some of these antibodies, if approved in this indication, may also compete with Dupixent in CRSwNP.

There are several other potentially competitive products in development that may compete with Dupixent in asthma, as well as potential future indications, including antibodies against thymic stromal lymphopoietin ("TSLP"), the IL-33 ligand, or the IL-33 receptor (ST2).

Dupixent also faces competition from orally administered small molecule agents and inhaled products in asthma and potential future indications.

There are several other potentially competitive products in development that may compete with Dupixent in either or both of the atopic dermatitis and asthma indications, as well as potential future indications, including antibodies against thymic stromal lymphopoietin ("TSLP"), the IL-33 ligand, or the IL-33 receptor (ST2).

Libtayo also faces significant competition.

There are several competitors that are marketing and/or developing antibodies against PD-1 and/or PDL-1, including Merck's Keytruda ® (pembrolizumab), Bristol-Myers Squibb's Opdivo ® (nivolumab), Roche's Tecentriq ® (atezolizumab), and AstraZeneca's Imfinzi ® (durvalumab).

There is also significant actual and potential future competition for other products marketed by us and/or our collaborators under our collaboration agreements with them.

For example, there are several companies that are marketing and/or developing antibodies or other molecules (such as siRNAs) against PCSK9 and IL-6 and/or IL-6R, which currently (or, for product candidates in development, may in the future if approved) compete with Praluent and Kevzara, respectively.

There is also significant actual and potential future competition for other products marketed or otherwise commercialized by us and/or our collaborators under our collaboration agreements with them.

For example, there are several companies that are marketing and/or developing antibodies or other molecules (such as small interfering RNA molecules, or siRNAs) against

PCSK9 and IL-6 and/or IL-6R, which currently (or, for product candidates in development, may in the future if approved) compete with Praluent and Kevzara, respectively.

Product Candidates

Our other late-stage and earlier-stage clinical candidates in development are all fully human antibodies.

We are aware of other pharmaceutical and biotechnology companies actively engaged in the research and development of antibody-based products against targets that are also the targets of our early- and late-stage product candidates.

Our VelocImmune ® technology, other antibody generation technologies, and other late-stage and earlier-stage clinical candidates face competition from many pharmaceutical and biotechnology companies using various technologies, including antibody generation technologies and other approaches such as RNA interference (RNAi) and chimeric antigen receptor T cell (CAR-T cell) technologies.

For example, we are aware of other pharmaceutical and biotechnology companies actively engaged in the research and development of antibody-based products against targets that are also the targets of our early- and late-stage product candidates.

We are also aware of other companies developing or marketing small molecules that may compete with our antibody-based product candidates in various indications, if such product candidates obtain regulatory approval in those indications.

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Accordingly, the relative speed with which we, or our collaborators, can develop our product candidates, complete the clinical trials and approval processes, and, if such product candidates are approved for marketing and sale, supply commercial quantities to the market is expected to continue to be an important competitive factor.

uncertainties associated with developing biopharmaceutical products, we may not be the first to obtain marketing approval for a product against any particular target, which may have a material adverse effect on our business or future prospects.

Due to the uncertainties associated with developing biopharmaceutical products, we may not be the first to obtain marketing approval for a product against any particular target, which may have a material adverse effect on our business or future prospects.

We rely on our collaborations with Bayer and Sanofi for commercializing some of our marketed products.

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Under this distribution model, the distributors and specialty pharmacies generally take physical delivery of product and generally sell the product directly to healthcare providers or other pharmacies (as applicable).

For the six months ended June 30, 2020, our gross product sales of such products to two customers accounted on a combined basis for 87% of our total gross product revenue.

For the nine months ended September 30, 2020, our gross product sales of such products to two customers accounted on a combined basis for 86% of our total gross product revenue.

We expect this significant customer concentration to continue for the foreseeable future.

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We have limited commercial capabilities outside the United States and do not currently have an organization for the sales, marketing, and distribution of marketed products outside the United States.

We will need to establish commercial capabilities outside the United States as a result of any exercise of our option to co-commercialize a product outside the United States.

We will need to establish commercial capabilities outside the United States if we decide to co-commercialize a product outside the United States.

For example, we recently exercised our option under the Antibody Collaboration to co-commercialize Dupixent in certain jurisdictions outside the United States.

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If we or any of our third-party manufacturers, product packagers, labelers, or other parties performing steps in the supply chain are unable to maintain regulatory compliance, the FDA can impose regulatory sanctions, including, among other things, refusal to approve a pending application for a new drug or biologic product, or revocation of a pre-existing approval.

For additional information, see "Risks Related to Manufacturing and Supply - Our or our collaborators' failure to meet the stringent requirements of governmental regulation in the manufacture of drug products or product candidates could result in incurring substantial remedial costs, delays in the development or approval of our product candidates or new indications for our marketed products and/or in their commercial launch if they obtain regulatory approval, and a reduction in sales.

For additional information, see "Risks Related to Manufacturing and Supply - Our or our collaborators' failure to meet the stringent requirements of governmental regulation in the manufacture of drug products or product candidates could result in incurring substantial remedial costs, delays in the development or approval of our product candidates or new indications for our marketed products and/or in their commercial launch if regulatory approval is obtained, and a reduction in sales.

" Our business, prospects, operating results, and financial condition may be materially harmed as a result of noncompliance with the requirements and regulations described in this paragraph.

In addition to the regular way drug approval process, the FDA has the authority to grant an EUA to allow unapproved medical products to be used in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when, based on the totality of scientific evidence, there is evidence of effectiveness of the medical product, and there are no adequate, approved, and available alternatives.

If we are granted an EUA for any of our product candidates (such as REGN-COV2), we would be able to commercialize any such product candidate prior to FDA approval.

However, there is no guarantee that the FDA will grant an EUA for any of our product candidates;

in addition, the FDA may revoke an EUA where it is determined that the underlying health emergency no longer exists or warrants such authorization, and we cannot predict how long an EUA (if it is granted with respect to any of our product candidates) would remain in effect for any such product candidate.

Such revocation could adversely impact our business in a variety of ways, including by having to absorb related manufacturing and overhead costs as well as potential inventory write-offs if regulatory approval is not obtained timely or at all.

In addition to the FDA and other regulatory agency regulations in the United States, we are subject to a variety of foreign regulatory requirements governing human clinical trials, manufacturing, marketing and approval of drugs, and commercial sale and distribution of drugs in foreign countries.

The foreign regulatory approval process is similarly a lengthy and expensive process, the result of which is highly uncertain, and foreign regulatory requirements include all of the risks associated with FDA approval as well as country specific regulations.

FDA approval as well as country specific regulations.

We and our collaborators must maintain regulatory compliance for the products we or they commercialize in foreign jurisdictions.

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Moreover, even if we obtain positive results from preclinical testing or clinical trials, we may not achieve the same success in future trials, or the FDA and analogous foreign regulatory authorities may deem the results insufficient for an approval.

Many of our clinical trials are conducted under the oversight of independent Data Monitoring Committees ("DMCs").

Many of our clinical trials are conducted under the oversight of IDMCs.

These independent oversight bodies are made up of external experts who review the progress of ongoing clinical trials, including available safety and efficacy data, and make recommendations concerning a trial's continuation, modification, or termination based on interim, unblinded data.

Any of our ongoing clinical trials may be discontinued or amended in response to recommendations made by responsible DMCs based on their review of such interim trial results.

For example, in April 2018, the DMC monitoring the ongoing safety and efficacy of our Phase 3 clinical trials of fasinumab recommended that the higher dose-regimens be discontinued based on the risk-benefit assessment and that the program may continue with lower dose-regimens of fasinumab.

As a result, the osteoarthritis trials were modified accordingly and we discontinued dosing patients in the clinical study of fasinumab in chronic low back pain in patients with concomitant osteoarthritis of the knee and hip since this study was using only higher doses.

The recommended termination or material modification of any of our ongoing late-stage clinical trials by a DMC could negatively impact the future development of our product candidate(s), and our business, prospects, operating results, and financial condition may be materially harmed.

Any of our ongoing clinical trials may be discontinued or amended in response to recommendations made by responsible IDMCs based on their review of such interim trial results.

For example, in August 2020, we discontinued actively treating patients with fasinumab (which at such time only involved dosing in an optional second-year extension phase of one trial) following a recommendation from the responsible IDMC that the program be terminated based on available evidence to date.

recommended termination or material modification of any of our ongoing late-stage clinical trials by an IDMC could negatively impact the future development of our product candidate(s), and our business, prospects, operating results, and financial condition may be materially harmed.

We are studying our antibody-based product candidates in a wide variety of indications in clinical trials.

Many of these trials are exploratory studies designed to evaluate the safety profile of these compounds and to identify what diseases and uses, if any, are best suited for these product candidates.

These product candidates may not demonstrate the requisite efficacy and/or safety

profile to support continued development for some or all of the indications that are being, or are planned to be, studied, which would diminish our clinical "pipeline" and could negatively affect our future prospects and the value of our Company.

These product candidates may not demonstrate the requisite efficacy and/or safety profile to support continued development for some or all of the indications that are being, or are planned to be, studied, which would diminish our clinical "pipeline" and could negatively affect our future prospects and the value of our Company.

Serious complications or side effects in connection with the use of our products and in clinical trials for our product candidates and new indications for our marketed products could cause our regulatory approvals to be revoked or limited or lead to delay or discontinuation of development of our product candidates or new indications for our marketed products, which could severely harm our business, prospects, operating results, and financial condition.

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Many of our products are used and some of our products and product candidates may be used, if approved, in combination with a drug-delivery device, including a pre-filled syringe, patch pump, auto-injector, or other delivery system.

For example, in the United States EYLEA is approved in the 2mg pre-filled syringe.

For example, in the United States and the EU, EYLEA is approved in the 2mg pre-filled syringe.

The success of our products and product candidates may depend to a significant extent on the performance of such devices, some of which may be novel or comprised of complex components.

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and to continue to meet the applicable regulatory and other requirements to maintain approval or clearance once it has been received.

In addition, other parties may allege that our drug-delivery devices infringe patents or other intellectual property rights.

For example, we are currently party to patent infringement and other proceedings relating to the EYLEA pre-filled syringe, as described in Note 12 to our Condensed Consolidated Financial Statements.

Failure to successfully develop or supply the devices, delays in or failure of the studies conducted by us, our collaborators, or third-party providers, or failure of our Company, our collaborators, or the third-party providers to obtain or maintain regulatory approval or clearance of the devices could result in increased development costs, delays in or failure to obtain regulatory approval, and associated delays in a product or product candidate reaching the market.

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Our business requires using sensitive and proprietary technology and other information that we protect as trade secrets.

We seek to prevent improper disclosure of these trade secrets through confidentiality agreements.

We seek to prevent improper disclosure of these trade secrets through confidentiality agreements and other means.

If our trade secrets are improperly disclosed, by our current or former employees, our collaborators, or otherwise, it could help our competitors and adversely affect our business.

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As our products mature, our reliance on our trademarks to differentiate us from our competitors increases and as a result, if we are unable to prevent third parties from adopting, registering, or using trademarks that infringe, dilute or otherwise violate our trademark rights, our business could be adversely affected.

We may be restricted in our development, manufacturing, and/or commercialization activities by patents or other proprietary rights of others, and could be subject to damage awards if we are found to have infringed such patents or rights.

We may be restricted in our development, manufacturing, and/or commercialization activities by patents or other proprietary rights of others, and could be subject to awards of damages if we are found to have infringed such patents or rights.

Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of others (including those relating to trademarks, copyrights, and trade secrets).

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evinacumab, an antibody to ANGPTL3;

REGN-EB3, a multi-antibody therapy for Ebola;

garetosmab, an antibody to Activin A;

pozelimab, an antibody to C5;

and REGN1979, a bispecific antibody targeting CD20 and CD3.

odronextamab, a bispecific antibody targeting CD20 and CD3;

REGN-COV2, a novel investigational antibody "cocktail" treatment designed to prevent and treat infection from the SARS-CoV-2 virus.

Although we do not believe that any of our products or our late-stage antibody-based product candidates infringe any valid claim in these patents or patent applications, these other parties could initiate lawsuits for patent infringement and assert that their patents are valid and cover our products or our late-stage antibody-based product candidates, similar to the patent infringement proceedings referred to above.

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The failure to obtain any such license could prevent us from developing or commercializing any one or more of our products or product candidates, which could severely harm our business.

Loss or limitation of patent rights, and new regulatory pathways for biosimilar competition, could reduce the duration of market exclusivity for our products.

Loss or limitation of patent rights, and regulatory pathways for biosimilar competition, could reduce the duration of market exclusivity for our products.

In the pharmaceutical and biotechnology industries, the majority of an innovative product's commercial value is usually realized during the period in which it has market exclusivity.

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It is also not possible to predict changes in United States regulatory law that might reduce biological product regulatory exclusivity.

Due to this risk, and uncertainties regarding patent protection, it is not possible to predict the length of market exclusivity for any particular product we currently or may in the future commercialize with certainty based solely on the expiration of the relevant patent(s) or the current forms of regulatory exclusivity.

Due to this risk, and uncertainties regarding patent protection, it is not possible to predict the length of market exclusivity for any

particular product we currently or may in the future commercialize with certainty based solely on the expiration of the relevant patent(s) or the current forms of regulatory exclusivity.

We are aware of several companies developing biosimilar versions of EYLEA.

In the United States, the regulatory exclusivity period for EYLEA ( i.e.

, the period during which no biosimilar product

can be approved by the FDA) expires on November 18, 2023, with the possibility of an additional six months of regulatory exclusivity ( i.e.

, the period during which no biosimilar product can be approved by the FDA) expires on November 18, 2023, with the possibility of an additional six months of regulatory exclusivity ( i.e.

, until May 18, 2024) if the FDA grants pediatric exclusivity based on our completion of certain studies evaluating EYLEA in pediatric patients with retinopathy of prematurity and submission of the data from these studies to the FDA no later than 15 months before the date on which regulatory exclusivity would otherwise expire.

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Manufacturing facilities operated by us and by third-party contract manufacturers engaged by us would be inadequate to produce the active pharmaceutical ingredients of our current marketed products and our product candidates in sufficient clinical quantities if our clinical pipeline advances as planned.

For example, our internal manufacturing capacity will likely not be sufficient to cover the demand for REGN-COV2, our novel investigational antibody "cocktail" treatment designed to prevent and treat infection from the SARS-CoV-2 virus, if clinical trials evaluating this treatment are successful and we receive regulatory approval.

For example, our internal manufacturing capacity will likely not be sufficient to cover the demand for REGN-COV2, our novel investigational antibody "cocktail" treatment designed to prevent and treat infection from the SARS-CoV-2 virus, if we receive regulatory approval or are otherwise authorized to market this therapy.

In addition to expanding our internal capacity, we intend to continue to rely on our collaborators, and may also rely on contract manufacturers, to produce commercial quantities of drug material needed for commercialization of our products.

For example, as described in Part I, Item 2.

"Management's Discussion and Analysis of Financial Condition and Results of Operations," in August 2020, we announced a collaboration agreement with Roche to develop, manufacture, and distribute REGN-COV2.

We cannot be certain that the technology transfer process required to allow Roche to manufacture REGN-COV2 will be completed in the expected time frame or at all nor can we be certain that this collaboration will result in the anticipated increase in the current manufacturing and distribution capacity for REGN-COV2 or that any increased manufacturing and distribution capacity will be sufficient.

As we increase our production in anticipation of potential regulatory approval for our product candidates, our current manufacturing capacity will likely not be sufficient, and our dependence on our collaborators and/or contract manufacturers may increase, to produce adequate quantities of drug material for both commercial and clinical purposes.

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In addition, we may face difficulties or delays in developing or acquiring the necessary production equipment and technology to manufacture sufficient quantities of our product candidates at reasonable costs and in compliance with applicable regulatory requirements.

The FDA and analogous foreign regulatory authorities must determine that our existing and any expanded manufacturing facilities and any future fill/finish activities comply, or continue to comply, with cGMP requirements for both clinical and commercial production and license them, or continue to license them, accordingly, and such facilities must also comply with applicable environmental, safety, and other governmental permitting requirements.

The FDA and analogous foreign regulatory authorities must determine that our existing and any expanded manufacturing facilities and

any future fill/finish activities comply, or continue to comply, with cGMP requirements for both clinical and commercial production and license them, or continue to license them, accordingly, and such facilities must also comply with applicable environmental, safety, and other governmental permitting requirements.

We may not successfully expand or establish sufficient manufacturing or any future fill/finish capabilities or manufacture our products economically or in compliance with cGMPs and other regulatory requirements, and we and our collaborators may not be able to build or procure additional capacity in the required timeframe to meet commercial demand for our product candidates if they receive regulatory approval, and to continue to meet the requirements of our clinical programs.

This would interfere with our efforts to successfully commercialize our

marketed products, and could also delay or require us to discontinue one or more of our clinical development programs.

This would interfere with our efforts to successfully commercialize our marketed products, and could also delay or require us to discontinue one or more of our clinical development programs.

As a result, our business, prospects, operating results, and financial condition could be materially harmed.

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If we or our collaborators are required to substitute for these sources to comply with such regulatory requirements, our clinical development or commercial activities may be delayed or interrupted.

Our or our collaborators' failure to meet the stringent requirements of governmental regulation in the manufacture of drug products or product candidates could result in incurring substantial remedial costs, delays in the development or approval of our product candidates or new indications for our marketed products and/or in their commercial launch if they obtain regulatory approval, and a reduction in sales.

Our or our collaborators' failure to meet the stringent requirements of governmental regulation in the manufacture of drug products or product candidates could result in incurring substantial remedial costs, delays in the development or approval of our product candidates or new indications for our marketed products and/or in their commercial launch if regulatory approval is obtained, and a reduction in sales.

We and our collaborators and other third-party providers are required to maintain compliance with cGMPs, and are subject to inspections by the FDA or comparable agencies in other jurisdictions to confirm such compliance.

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Any finding of non-compliance could also increase our costs, cause us to delay the development of our product candidates, result in delay in our obtaining, or our not obtaining, regulatory approval of product candidates or new indications for our marketed products, and cause us to lose revenue from any marketed products, which could be seriously detrimental to our business, prospects, operating results, and financial condition.

Regulatory and Litigation Risks

Other Regulatory and Litigation Risks

If the testing or use of our products harms people, or is perceived to harm them even when such harm is unrelated to our products, we could be subject to costly and damaging product liability claims.

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Moreover, in the future we may not have access to liability insurance or be able to maintain our insurance on acceptable terms.

If we market and sell approved products in a way that violates federal or state healthcare laws, we may be subject to civil or criminal penalties.

Our business activities have been, and may in the future be, challenged under federal or state healthcare laws, which may subject us to civil or criminal proceedings, investigations, or penalties.

The FDA regulates the marketing and promotion of our products, which must comply with the Food, Drug, and Cosmetic Act and applicable FDA implementing standards.

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Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our ability to expand internationally, our ability to attract and retain employees, and our business, prospects, operating results, and financial condition.

Our operations may involve hazardous materials and are subject to environmental, health, and safety laws and regulations.

Our operations are subject to environmental, health, and safety laws and regulations, including those governing the use of hazardous materials.

Compliance with these laws and regulations is costly, and we may incur substantial liability arising from our activities involving the use of hazardous materials.

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As described above, the PPACA and potential regulations thereunder easing the entry of competing follow-on biologics into the marketplace, other new legislation or implementation of existing statutory provisions on importation of lower-cost competing drugs from other jurisdictions, and legislation on comparative effectiveness research are examples of previously enacted and possible future changes in laws that could adversely affect our business.

The Trump administration and Congress could carry out significant changes in legislation, regulation, and government policy (including with respect to the possible repeal of all or portions of the PPACA, government reimbursement changes and drug price control measures, and changes in the existing treaty and trade relationships with other countries), as evidenced by statements and actions of President Trump and certain members of Congress (including those discussed above under "Risks Related to Commercialization of Our Marketed Products, Product Candidates, and New Indications for Our Marketed Products - Sales of our marketed products are dependent on the availability and extent of reimbursement from third-party payors, and changes to such reimbursement may materially harm our business, prospects, operating results, and financial condition ").

government could carry out significant changes in legislation, regulation, and government policy (including with respect to the possible repeal of all or portions of the PPACA, government reimbursement changes and drug price control measures, and changes in the existing treaty and trade relationships with other countries), as evidenced by statements and actions of President Trump and certain members of Congress (including those discussed above under "Risks Related to Commercialization of Our Marketed Products, Product Candidates, and New Indications for Our Marketed Products - Sales of our marketed products are dependent on the availability and extent of reimbursement from third-party payors, and changes to such reimbursement may materially harm our business, prospects, operating results, and financial condition ").

While it is not possible to predict whether and when any such changes will occur, changes in the laws, regulations, and policies governing the development and approval of our product candidates and the commercialization, importation, and reimbursement of our products could adversely affect our business.

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We rely on funding and support from Sanofi to develop, manufacture, and commercialize certain of our products and product candidates.

With respect to the products that we are co-developing with Sanofi under our Antibody Collaboration (currently consisting of Dupixent, Kevzara, and REGN3500), Sanofi funds a significant portion of development expenses incurred in connection with the development of these products.

With respect to the products that we are co-developing with Sanofi under our Antibody Collaboration (currently consisting of Dupixent, Kevzara, and itepekimab), Sanofi funds a significant portion of development expenses incurred in connection with the development of these products.

In addition, we rely on Sanofi to lead much of the clinical development efforts, assist with or lead efforts to obtain and maintain regulatory approvals, and lead the commercialization efforts for these products and product candidates.

As a result of the amendment and restatement of our IO Discovery and Development Agreement with Sanofi (which forms part of our IO Collaboration), we have all rights to, and we fund and conduct on our own all research, development, manufacturing, and commercialization activities to support, all of our immuno-oncology product candidates other than MUC16xCD3 Program antibodies (such as REGN4018) and BCMAxCD3 Program antibodies (such as REGN5458 and REGN5459).

We are developing MUC16xCD3 Program antibodies (such as REGN4018) and BCMAxCD3 Program antibodies (such as REGN5458 and REGN5459) under the amended and restated IO Discovery and Development Agreement with Sanofi and Sanofi has the right to elect to co-develop these antibodies under our IO Collaboration.

If Sanofi does not elect to co-develop MUC16xCD3 Program antibodies or BCMAxCD3 Program antibodies under our IO Collaboration, or opts out of their development under our IO Collaboration, we will be required to fund and conduct on our own all such efforts to support those product candidates, unless we enter into arrangements with other parties.

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These systems are also critical to enable remote working arrangements, which have been growing in importance due in part to the COVID-19 pandemic and our implementation of work-from-home policies for a significant part of our employees.

The size and complexity of our computer systems make us potentially vulnerable to IT system breakdowns, internal and external malicious intrusion, and computer viruses, which may impact product production and key business processes.

The size and complexity of our computer systems make us potentially vulnerable to IT system breakdowns, internal and external malicious intrusion, and computer viruses and ransomware, which may impact product production and key business processes.

We also have outsourced significant elements of our information technology infrastructure and operations to third parties, which may allow them to access our confidential information and may also make our systems vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by such third parties or others.

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Data security breaches could lead to the loss of trade secrets or other intellectual property, result in demands for ransom or other forms of blackmail, or lead to the public exposure of personal information (including sensitive personal information) of our employees, clinical trial patients, customers, and others.

Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives (including industrial espionage) and expertise, including by organized criminal groups, "hacktivists," nation states, and others.

Such attacks are of ever-increasing levels of sophistication and are made by groups and individuals with a wide range of motives (including industrial espionage or extortion) and expertise, including by organized criminal groups, "hacktivists," nation states, and others.

As a company with an increasingly global presence, our systems are subject to frequent attacks.

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We may require additional financing in the future and we may not be able to raise additional funds on acceptable terms or at all.

For example, we intend to refinance the Bridge Facility (which we entered into in May 2020, as described in Part I, Item 2.

"Management's Discussion and Analysis of Financial Condition and Results of Operations") prior to its maturity in May 2021 by entering into new debt financing arrangements.

For example, there is no guarantee that we will have the ability to pay the principal amount due on the Notes at maturity or redeem, repurchase, or refinance the Notes prior to maturity on acceptable terms or at all.

In addition, in March 2017, we completed a $720.0 million lease financing for our existing corporate headquarters and other rentable area consisting of approximately 150 acres of predominately office buildings and laboratory space located in Tarrytown, New York, which will become due and payable in full on the five-year anniversary of the closing date unless extended with the consent of all the participants and subject to certain other conditions.

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We have certain indebtedness and contingent liabilities, including milestone and royalty payment obligations.

As of June 30, 2020, we had an aggregate of $2.216 billion of outstanding indebtedness under the Bridge Facility and the lease financing facility.

As of September 30, 2020, we had an aggregate of $2.695 billion of outstanding indebtedness under the Notes and the lease financing facility.

We may also incur additional debt in the future.

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Changes in foreign currency exchange rates could have a material adverse effect on our operating results.

Our revenue from outside of the United States will increase as our products, whether marketed by us or our collaborators, gain marketing approval in such jurisdictions.

Our revenue from outside of the United States will increase as our products, whether marketed or otherwise commercialized by us or our collaborators, gain marketing approval in such jurisdictions.

Our primary foreign currency exposure relates to movements in the Japanese yen, euro, British pound sterling, Canadian dollar, and Australian dollar.

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Our investments are subject to risks and other external factors that may result in losses or affect the liquidity of these investments.

As of June 30, 2020, we had $1.992 billion in cash and cash equivalents and $3.740 billion in marketable securities (including $805.1 million in equity securities).

As of September 30, 2020, we had $1.573 billion in cash and cash equivalents and $4.328 billion in marketable securities (including $777.6 million in equity securities).

Our investments consist primarily of debt securities, including investment-grade corporate bonds.

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For example, if a published U.S.

dollar LIBOR rate is unavailable after 2021, the rent payments for the leased facilities in Tarrytown, New York and the interest payments under the Bridge Facility, which are indexed to LIBOR, will be determined using various alternative methods, any of which may result in interest obligations which are more than, or do not otherwise correlate over time with, the payments that would have been made on such debt if U.S.

dollar LIBOR rate is unavailable after 2021, the rent payments for the leased facilities in Tarrytown, New York and interest for borrowings (if any) with an interest rate based on the LIBOR rate under our revolving credit facility, all of which are indexed to LIBOR, will be determined using various alternative methods, any of which may result in interest obligations which are more than, or do not otherwise correlate over time with, the payments that would have been made on such debt if U.S.

dollar LIBOR was available in its current form.

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A small number of our shareholders beneficially own a substantial amount of our Common Stock.

As of June 30, 2020, our five largest shareholders plus Dr.

Schleifer, our Chief Executive Officer, beneficially owned approximately 35.2% of our outstanding shares of Common Stock, assuming, in the case of our Chief Executive Officer, the conversion of his Class A Stock into Common Stock and the exercise of all options held by him which are exercisable within 60 days of June 30, 2020.

As of September 30, 2020, our five largest shareholders plus Dr.

Schleifer, our Chief Executive Officer, beneficially owned approximately 39.0% of our outstanding shares of Common Stock, assuming, in the case of our Chief Executive Officer, the conversion of his Class A Stock into Common Stock and the exercise of all options held by him which are exercisable within 60 days of September 30, 2020.

If our significant shareholders or we sell substantial amounts of our Common Stock in the public market, or there is a perception that such sales may occur, the market price of our Common Stock could fall.

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There can be no assurance that we will continue to repurchase shares of our Common Stock or that we will repurchase shares at favorable prices.

Our board of directors previously authorized a share repurchase program to repurchase up to $1.0 billion of our Common Stock (of which $473.1 million remained available as of June 30, 2020).

Our board of directors previously authorized a share repurchase program to repurchase up to $1.0 billion of our Common Stock (of which $372.7 million remained available as of September 30, 2020).

Any share repurchases will depend upon, among other factors, our cash balances and potential future capital requirements, our results of operations and financial condition, the price of our Common Stock on the NASDAQ Global Select Market, and other factors that we may deem relevant.

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Holders of Class A Stock, who are generally the shareholders who purchased their stock from us before our initial public offering, are entitled to ten votes per share, while holders of Common Stock are entitled to one vote per share.

As of June 30, 2020, holders of Class A Stock held 15.1% of the combined voting power of all shares of Common Stock and Class A Stock then outstanding.

As of September 30, 2020, holders of Class A Stock held 15.0% of the combined voting power of all shares of Common Stock and Class A Stock then outstanding.

These shareholders, if acting together, would be in a position to significantly influence the election of our directors and the vote on certain corporate transactions that require majority or supermajority approval of the combined classes, including mergers and other business combinations.

This may result in our taking corporate actions that other shareholders may not consider to be in their best interest and may affect the price of our Common Stock.

As of June 30, 2020:

• our current executive officers and directors beneficially owned 8.9% of our outstanding shares of Common Stock, assuming conversion of their Class A Stock into Common Stock and the exercise of all options held by such persons which are exercisable within 60 days of June 30, 2020, and 20.1% of the combined voting power of our outstanding shares of Common Stock and Class A Stock, assuming the exercise of all options held by such persons which are exercisable within 60 days of June 30, 2020;

As of September 30, 2020:

• our current executive officers and directors beneficially owned 8.5% of our outstanding shares of Common Stock, assuming conversion of their Class A Stock into Common Stock and the exercise of all options held by such persons which are exercisable within 60 days of September 30, 2020, and 19.8% of the combined voting power of our outstanding shares of Common Stock and Class A Stock, assuming the exercise of all options held by such persons which are exercisable within 60 days of September 30, 2020;

• our five largest shareholders plus Dr.

In addition, these five shareholders plus our Chief Executive Officer held approximately 43.0% of the combined voting power of our outstanding shares of Common Stock and Class A Stock, assuming the exercise of all options held by our Chief Executive Officer which are exercisable within 60 days of June 30, 2020.

In addition, these five shareholders plus our Chief Executive Officer held approximately 46.2% of the combined voting power of our outstanding shares of Common Stock and Class A Stock, assuming the exercise of all options held by our Chief Executive Officer which are exercisable within 60 days of September 30, 2020.

The anti-takeover effects of provisions of our charter, by-laws, and of New York corporate law, as well as the contractual provisions in our investor and collaboration agreements and certain provisions of our compensation plans and agreements, could deter, delay, or prevent an acquisition or other "change of control" of us and could adversely affect the price of our Common Stock.

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(ii) our announcement recommending acceptance by our shareholders of a tender offer or exchange offer that, if consummated, would constitute a change of control involving us;

(iii) the public announcement of any definitive

agreement providing for a change of control involving us;

(iii) the public announcement of any definitive agreement providing for a change of control involving us;

(iv) the date of any issuance of shares of Common Stock by us that would result in another party having more than 10% of the voting power of our outstanding Class A Stock and Common Stock (taken together) unless such party enters into a standstill agreement containing certain terms substantially similar to the standstill obligations of Sanofi;

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or (vi) other specified events, such as a liquidation or dissolution of our Company.

In addition, our Change in Control Severance Plan and the employment agreement with our Chief Executive Officer, each as amended and restated, provide for severance benefits in the event of termination as a result of a change in control of our Company.

Also, equity awards issued under our long-term incentive plans may become fully vested in connection with a "change in control" of our Company, as defined in the plans.

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

What changed 10-Q

Item 1A. Risk Factors