REGENERON PHARMACEUTICALS, INC. 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties relating to future events and the future performance of Regeneron Pharmaceuticals, Inc. (where applicable, together with its subsidiaries, "Regeneron," "Company," "we," "us," and "our"), and actual events or results may differ materially from these forward-looking statements. Words such as "anticipate," "expect," "intend," "plan," "believe," "seek," "estimate," variations of such words, and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. These statements concern, and these risks and uncertainties include, among others, the impact of SARS-CoV-2 (the virus that has caused the COVID-19 pandemic) on Regeneron's business and its employees, collaborators, and suppliers and other third parties on which Regeneron relies, Regeneron's and its collaborators’ ability to continue to conduct research and clinical programs, Regeneron's ability to manage its supply chain, net product sales of products marketed or otherwise commercialized by Regeneron and/or its collaborators (collectively, "Regeneron’s Products"), and the global economy; the nature, timing, and possible success and therapeutic applications of Regeneron's Products and product candidates being developed by Regeneron and/or its collaborators (collectively, "Regeneron's Product Candidates") and research and clinical programs now underway or planned, including without limitation EYLEA ® (aflibercept) Injection, Dupixent ® (dupilumab) Injection, Libtayo ® (cemiplimab) Injection, Praluent ® (alirocumab) Injection, Kevzara ® (sarilumab) Injection, Evkeeza TM (evinacumab), Inmazeb TM (atoltivimab, maftivimab, and odesivimab-ebgn), REGEN-COV™ (casirivimab with imdevimab), fasinumab, garetosmab, pozelimab, odronextamab, itepekimab, REGN5458, REGN5713-5714-5715, Regeneron's other oncology programs (including its costimulatory bispecific portfolio), Regeneron's and its collaborators' earlier-stage programs, and the use of human genetics in Regeneron's research programs; the likelihood and timing of achieving any of our anticipated development milestones referenced in this report; safety issues resulting from the administration of Regeneron's Products and Regeneron's Product Candidates in patients, including serious complications or side effects in connection with the use of Regeneron's Products and Regeneron's Product Candidates in clinical trials; the likelihood, timing, and scope of possible regulatory approval and commercial launch of our late-stage product candidates and new indications for Regeneron's Products, including without limitation those listed above; the extent to which the results from the research and development programs conducted by us and/or our collaborators may be replicated in other studies and/or lead to advancement of product candidates to clinical trials, therapeutic applications, or regulatory approval; ongoing regulatory obligations and oversight impacting Regeneron's Products (such as EYLEA, Dupixent, Libtayo, Praluent, Kevzara, Evkeeza, and Inmazeb), research and clinical programs, and business, including those relating to patient privacy; determinations by regulatory and administrative governmental authorities which may delay or restrict our ability to continue to develop or commercialize Regeneron's Products and Regeneron's Product Candidates; competing drugs and product candidates that may be superior to, or more cost effective than, Regeneron's Products and Regeneron's Product Candidates; uncertainty of the utilization, market acceptance, and commercial success of Regeneron's Products and Regeneron's Product Candidates and the impact of studies (whether conducted by Regeneron or others and whether mandated or voluntary) or recommendations and guidelines from governmental authorities and other third parties on the commercial success of Regeneron's Products and Regeneron's Product Candidates; our ability to manufacture and manage supply chains for multiple products and product candidates; the ability of our collaborators, suppliers, or other third parties (as applicable) to perform manufacturing, filling, finishing, packaging, labeling, distribution, and other steps related to Regeneron's Products and Regeneron's Product Candidates; the availability and extent of reimbursement of Regeneron’s Products from third-party payors, including private payor healthcare and insurance programs, health maintenance organizations, pharmacy benefit management companies, and government programs such as Medicare and Medicaid; coverage and reimbursement determinations by such payors and new policies and procedures adopted by such payors; unanticipated expenses; the costs of developing, producing, and selling products; our ability to meet any of our financial projections or guidance, including without limitation capital expenditures, and changes to the assumptions underlying those projections or guidance; the potential for any license or collaboration agreement, including our agreements with Sanofi, Bayer, and Teva Pharmaceutical Industries Ltd. (or their respective affiliated companies, as applicable), as well as Regeneron's agreement with Roche relating to the casirivimab with imdevimab antibody cocktail (known as REGEN-COV in the United States), to be cancelled or terminated; and risks associated with intellectual property of other parties and pending or future litigation relating thereto (including without limitation the patent litigation and other related proceedings relating to EYLEA, Dupixent, Praluent, and REGEN-COV described further in Note 12 to our Condensed Consolidated Financial Statements included in this report), other litigation and other proceedings and government investigations relating to the Company and/or its operations (including without limitation those described in Note 12 to our Condensed Consolidated Financial Statements included in this report), the ultimate outcome of any such proceedings and investigations, and the impact any of the foregoing may have on our business, prospects, operating results, and financial condition. These statements are made based on management's current beliefs and judgment, and the reader is cautioned not to rely on any such statements. In evaluating such statements, shareholders and potential investors should specifically consider the various factors identified under Part II, Item 1A. "Risk Factors," which could cause actual events and results to differ materially from those indicated by such forward-looking statements. We do not undertake any 22 Table of Contents obligation to update (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events, or otherwise. Overview Regeneron Pharmaceuticals, Inc. is a fully integrated biotechnology company that discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious diseases. Our commercialized medicines and product candidates in development are designed to help patients with eye diseases, allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, pain, hematologic conditions, infectious diseases, and rare diseases. Our core business strategy is to maintain a strong foundation in basic scientific research and discovery-enabling technologies, and to build on that foundation with our clinical development, manufacturing, and commercial capabilities. Our objective is to continue to be an integrated, multi-product biotechnology company that provides patients and medical professionals with important options for preventing and treating human diseases. Selected financial information is summarized as follows: Three Months Ended March 31, (In millions, except per share data) 2021 2020 Revenues $ 2,528.7 $ 1,828.2 Net income $ 1,115.2 $ 624.6 Net income per share - diluted $ 10.09 $ 5.43 For purposes of this report, references to our products encompass products marketed or otherwise commercialized by us and/or our collaborators and references to our product candidates encompass product candidates in development by us and/or our collaborators (in the case of collaborated products or product candidates under the terms of the applicable collaboration agreements), unless otherwise stated or required by the context. Products Products that have received marketing approval are summarized in the table below. Product Disease Area Territory U.S. EU Japan ROW (4) EYLEA (aflibercept) Injection (1) - Neovascular age-related macular degeneration ("wet AMD") a a a a - Diabetic macular edema ("DME") a a a a - Macular edema following retinal vein occlusion ("RVO"), which includes macular edema following central retinal vein occlusion ("CRVO") and macular edema following branch retinal vein occlusion ("BRVO") a a a a - Myopic choroidal neovascularization ("mCNV") a a a - Diabetic retinopathy a - Neovascular glaucoma ("NVG") a Dupixent (dupilumab) Injection (2) - Atopic dermatitis (in adults and adolescents) (5) a a a a - Atopic dermatitis (in pediatrics 6–11 years of age) a a a - Asthma (in adults and adolescents) a a a a - Chronic rhinosinusitis with nasal polyposis ("CRSwNP") a a a a 23 Table of Contents Product (continued) Disease Area Territory U.S. EU Japan ROW (4) Libtayo (cemiplimab) Injection (2) - Metastatic or locally advanced first-line non-small cell lung cancer ("NSCLC") a - Metastatic or locally advanced basal cell carcinoma ("BCC") a a - Metastatic or locally advanced cutaneous squamous cell carcinoma ("CSCC") a a a Praluent (alirocumab) Injection (3) - LDL-lowering in heterozygous familial hypercholesterolemia ("HeFH") or clinical atherosclerotic cardiovascular disease ("ASCVD") a a (7) a - Cardiovascular risk reduction in patients with established cardiovascular disease a a a - Homozygous familial hypercholesterolemia ("HoFH") a Kevzara (sarilumab) Solution for Subcutaneous Injection (2) - Rheumatoid arthritis ("RA") a a a a Evkeeza (evinacumab) Injection - HoFH (in adults and adolescents) a Inmazeb (atoltivimab, maftivimab, and odesivimab-ebgn) Injection - Infection caused by Zaire ebolavirus a ARCALYST ® (rilonacept) Injection for Subcutaneous Use (8) - Cryopyrin-associated periodic syndromes ("CAPS"), including familial cold auto-inflammatory syndrome ("FCAS") and Muckle-Wells syndrome ("MWS") a - Deficiency of interleukin-1 receptor antagonist ("DIRA") (in adults and pediatrics) a - Recurrent pericarditis (in adults and adolescents) a ZALTRAP ® (ziv-aflibercept) Injection for Intravenous Infusion (6) - Metastatic colorectal cancer ("mCRC") a a a a Note 1: Refer to "Net Product Sales of Regeneron-Discovered Products" section below for information regarding whether net product sales for a particular product are recorded by us or others Note 2: Product is approved for use in adults, unless otherwise noted, in the disease area described above (1) In collaboration with Bayer outside the United States (2) In collaboration with Sanofi (3) Pursuant to a 2020 agreement, the Company is solely responsible for the development and commercialization of Praluent in the United States, and Sanofi is solely responsible for the development and commercialization of Praluent outside of the United States (and Sanofi pays us a royalty on net product sales of Praluent outside the United States). (4) Rest of world. Checkmark in this column indicates that the product has received marketing approval in at least one country outside of the United States, European Union ("EU"), or Japan. (5) Approval in Japan is for adults and adolescents 15 years of age and older (6) Pursuant to a 2015 amended and restated ZALTRAP agreement, Sanofi is solely responsible for the development and commercialization of ZALTRAP, and Sanofi pays us a percentage of aggregate net product sales of ZALTRAP (7) No longer marketed by Sanofi in Japan 24 Table of Contents (8) Pursuant to a 2017 license agreement with Kiniksa Pharmaceuticals, Ltd., we granted Kiniksa the right to develop and commercialize certain new indications for ARCALYST. In March 2021, Kiniksa received marketing approval for its first new indication of ARCALYST in the United States; consequently we granted U.S. commercial rights to ARCALYST for all previously approved indications and Kiniksa pays us a share of ARCALYST profits. Refer to "Collaboration, License, and Other Agreements - Kiniksa" section below for further details. REGEN-COV - Emergency Use Authorization In November 2020, the antibody cocktail casirivimab with imdevimab administered together, known as REGEN-COV in the United States, received Emergency Use Authorization ("EUA") from the U.S. Food and Drug Administration ("FDA") for the treatment of mild to moderate COVID-19 in adults, as well as in pediatric patients at least 12 years of age and weighing at least 40 kg, who have received positive results of direct SARS-CoV-2 viral testing and are at high risk for progressing to severe COVID-19 and/or hospitalization. The EUA is temporary and does not replace a formal Biologics License Application ("BLA") submission review and approval process. This use is authorized only for the duration of the declaration that circumstances exist justifying the authorization of the emergency use, unless terminated or revoked sooner. See information regarding ongoing clinical trials of REGEN-COV below. Net Product Sales of Regeneron-Discovered Products Three Months Ended March 31, 2021 2020 % Change (In millions) U.S. ROW Total U.S. ROW Total (Total Sales) EYLEA (a) $ 1,347.0 $ 824.3 $ 2,171.3 $ 1,172.0 $ 681.7 $ 1,853.7 17 % Dupixent (b) $ 961.5 $ 301.4 $ 1,262.9 $ 679.0 $ 176.2 $ 855.2 48 % Libtayo (c) $ 69.1 $ 31.7 $ 100.8 $ 61.7 $ 13.1 $ 74.8 35 % Praluent (d) $ 43.3 $ 61.3 $ 104.6 $ 35.1 $ 44.7 $ 79.8 31 % Kevzara (b) $ 30.7 $ 38.4 $ 69.1 $ 35.3 $ 24.8 $ 60.1 15 % REGEN-COV (e) $ 262.2 $ 176.6 $ 438.8 — — — (h) Evkeeza (f) $ 0.5 — $ 0.5 — — — (h) ZALTRAP (b) $ 1.4 $ 23.0 $ 24.4 $ 1.5 $ 26.5 $ 28.0 (13 %) ARCALYST (g) $ 2.2 — $ 2.2 $ 3.0 — $ 3.0 (27 %) (a) Regeneron records net product sales of EYLEA in the United States. Bayer records net product sales of EYLEA outside the United States. The Company records its share of profits/losses in connection with sales of EYLEA outside the United States. (b) Sanofi records global net product sales of Dupixent, Kevzara, and ZALTRAP. The Company records its share of profits/losses in connection with global sales of Dupixent and Kevzara, and Sanofi pays the Company a percentage of net sales of ZALTRAP. (c) Regeneron records net product sales of Libtayo in the United States and Sanofi records net product sales of Libtayo outside the United States. The parties equally share profits/losses in connection with global sales of Libtayo. (d) Effective April 1, 2020, Regeneron records net product sales of Praluent in the United States. Also effective April 1, 2020, Sanofi records net product sales of Praluent outside the United States and pays the Company a royalty on such sales. Previously, Sanofi recorded global net product sales of Praluent and the Company recorded its share of profits/losses in connection with such sales. Refer to "Collaboration, License, and Other Agreements - Sanofi" section below for further details. (e) Regeneron records net product sales of REGEN-COV in connection with its agreements with the U.S. government. Roche records net product sales of the antibody cocktail outside the United States and the parties share gross profits from global sales. Refer to "Agreements Related to COVID-19" below for further details. (f) Regeneron records net product sales of Evkeeza in the United States. (g) Effective April 1, 2021, Kiniksa records net product sales of ARCALYST in the United States and pays us a share of ARCALYST profits. Prior to April 1, 2021, Regeneron recorded net product sales of ARCALYST in the United States. Refer to "Products" section above and "Collaboration, License, and Other Agreements - Kiniksa" section below for further details. (h) Percentage not meaningful Programs in Clinical Development Product candidates in clinical development, which are being developed by us and/or our collaborators, are summarized in the table below. We believe that our ability to develop product candidates is enhanced by the application of our VelociSuite ® technology platforms. We continue to invest in the development of enabling technologies to assist in our efforts to identify, develop, manufacture, and commercialize new product candidates. 25 Table of Contents There are numerous uncertainties associated with drug development, including uncertainties related to safety and efficacy data from each phase of drug development (including any post-approval studies), uncertainties related to the enrollment and performance of clinical trials, changes in regulatory requirements, changes to drug pricing and reimbursement regulations and requirements, and changes in the competitive landscape affecting a product candidate. The planning, execution, and results of our clinical programs are significant factors that can affect our operating and financial results. We and our collaborators conduct clinical trials in multiple countries across the world. The COVID-19 pandemic and the restrictions adopted around the globe to reduce the spread of the disease have impacted and may continue to impact our clinical development programs. We continue to evaluate the impact of the COVID-19 pandemic on an individual trial basis and oversee trial management while also working to ensure patient safety and provide sufficient supply of product candidates for the studies. The ultimate impact (including possible delays in recruiting and/or obtaining data) resulting from the COVID-19 pandemic will depend, among other factors, on the extent of the pandemic in the areas with study sites and patient populations. It is possible that the COVID-19 pandemic may cause clinical disruptions beyond those we have described. In addition, there may be delays in the timing of regulatory review and other projected milestones discussed in the table below. Refer to Part II, Item 1A. "Risk Factors" for a description of these and other risks and uncertainties that may affect our clinical programs, including those related to the COVID-19 pandemic. 26 Table of Contents Clinical Program Phase 1 Phase 2 Phase 3 Regulatory Review (i) 2021 Events to Date Select Upcoming Milestones (k) Ophthalmology EYLEA (b) –High-dose formulation in wet AMD –Retinopathy of prematurity ("ROP") (c) –High-dose formulation in wet AMD –High-dose formulation in DME –Initial results from National Institutes of Health ("NIH")-sponsored Protocol W trial in non-proliferative diabetic retinopathy ("NPDR") were announced; data confirmed results from Company-sponsored PANORAMA trial and demonstrated reduced risk of developing vision-threatening complications with every-16-weeks dosing regimen –Submit sBLA for every-16-weeks dosing regimen in patients with NPDR (second half 2021) –Report results from Phase 2 study for high-dose formulation in wet AMD (second half 2021) –Complete enrollment in Phase 3 high-dose formulation studies (second half 2021) Immunology & Inflammation Dupixent (dupilumab) (a) Antibody to IL-4R alpha subunit –Peanut allergy –Grass allergy –Atopic dermatitis in pediatrics (6 months–5 years of age) (Phase 2/3) (d) –Asthma in pediatrics (6–11 years of age) –Eosinophilic esophagitis ("EoE") (c) in adults (d) , adolescents (d) , and pediatrics –Chronic obstructive pulmonary disease ("COPD") –Bullous pemphigoid (Phase 2/3) (c) –Chronic spontaneous urticaria –Prurigo nodularis –Asthma in pediatrics (6–11 years of age) (U.S. and EU) –Asthma longer term efficacy and safety in adults and adolescents (U.S.) –200 mg auto-injector (U.S.) –Reported that Phase 2 trial of Dupixent in combination with Aimmune Therapeutics' AR101, an oral immunotherapy, in pediatric patients with peanut allergy met its primary and key secondary endpoint –Initiated Phase 3 study in hand and foot atopic dermatitis –Report results from Phase 3 study for atopic dermatitis in pediatric patients (6 months–5 years of age) (second half 2021) –FDA decision on supplemental BLA ("sBLA") (target action date of October 21, 2021) and European Commission ("EC") decision on regulatory submission (first half 2022) for asthma in pediatrics (6–11 years of age) –FDA decision on sBLA for asthma longer term efficacy and safety label update (second half 2021) –Report results from Part B of the Phase 3 study in adults and adolescents with EoE (second half 2021) 27 Table of Contents Clinical Program (continued) Phase 1 Phase 2 Phase 3 Regulatory Review (i) 2021 Events to Date Select Upcoming Milestones (k) Dupixent (dupilumab) (a) (continued) –Allergic bronchopulmonary aspergillosis ("ABPA") –Chronic inducible urticaria –Chronic sinusitis without nasal polyposis –Allergic fungal rhinosinusitis –Report results from Phase 2 monotherapy study in peanut allergy (second half 2021) –FDA decision on sBLA for 200 mg auto-injector (target action date of June 15, 2021) –Report results from Phase 3 chronic spontaneous urticaria and prurigo nodularis studies (second half 2021) Kevzara (sarilumab) (a) Antibody to IL-6R –Polyarticular-course juvenile idiopathic arthritis ("pcJIA") –Systemic juvenile idiopathic arthritis ("sJIA") Itepekimab (a) (REGN3500) Antibody to IL-33 –COPD REGN1908-1909 (f) Multi-antibody therapy to Fel d 1 –Cat allergy –Reported that Phase 2 study in cat allergic patients with mild asthma met its primary and key secondary endpoints –Initiate Phase 3 study in cat allergic asthmatics (second half 2021) REGN5713-5714-5715 Multi-antibody therapy to Bet v 1 –Birch allergy –Report results from initial Phase 3 study in birch allergy (second half 2021) REGN6490 Antibody to IL-36R –Palmo-plantar pustulosis Solid Organ Oncology Libtayo (cemiplimab) (a)(h) Antibody to PD-1 –BCC (pivotal study) –Metastatic or locally advanced CSCC (d) –Neoadjuvant CSCC –First-line NSCLC, chemotherapy combination –Second-line cervical cancer (e) –First-line NSCLC, monotherapy (EU) –Advanced BCC (EU) –Approved by FDA for first-line NSCLC, monotherapy –Approved by FDA for BCC –EC decision on regulatory submission for first-line NSCLC, monotherapy (mid-2021) 28 Table of Contents Clinical Program (continued) Phase 1 Phase 2 Phase 3 Regulatory Review (i) 2021 Events to Date Select Upcoming Milestones (k) Libtayo (cemiplimab) (a)(h) (continued) –Adjuvant CSCC –Reported positive results from Phase 3 trial in cervical cancer, demonstrating an overall survival benefit; trial stopped early based on Independent Data Monitoring Committee ("IDMC") recommendation –Interim analysis from Phase 3 study in first-line NSCLC, chemotherapy combination (second half 2021) –EC decision on regulatory submission for advanced BCC (mid-2021) –Submit sBLA and Marketing Authorization Application ("MAA") for cervical cancer (second half 2021) REGN4018 (f) Bispecific antibody targeting MUC16 and CD3 –Platinum-resistant ovarian cancer –Report results from Phase 1 study in platinum-resistant ovarian cancer (2022) REGN5668 Bispecific antibody targeting MUC16 and CD28 –Ovarian cancer REGN5678 Bispecific antibody targeting PSMA and CD28 –Prostate cancer –Report results from Phase 1 study in prostate cancer (2022) REGN5093 Bispecific antibody targeting two distinct MET epitopes –MET-altered advanced NSCLC Fianlimab (f) (REGN3767) Antibody to LAG-3 –Solid tumors and advanced hematologic malignancies REGN6569 Antibody to GITR –Solid tumors –Dosing and enrollment in Phase 1 trial temporarily suspended due to a serious adverse event REGN7075 Bispecific antibody targeting EGFR and CD28 –Solid tumors 29 Table of Contents Clinical Program (continued) Phase 1 Phase 2 Phase 3 Regulatory Review (i) 2021 Events to Date Select Upcoming Milestones (k) Hematology Odronextamab (REGN1979) Bispecific antibody targeting CD20 and CD3 –Certain B-cell malignancies (c) (partial clinical hold) –B-cell non-Hodgkin lymphoma ("B-NHL") (potentially pivotal study) (partial clinical hold) –Finalize protocol amendment for B-NHL trials and resume patient enrollment (first half 2021) –Initiate Phase 3 program REGN5458 (f) Bispecific antibody targeting BCMA and CD3 –Multiple myeloma (potentially pivotal study) –Expand into earlier lines of multiple myeloma therapy (second half 2021) REGN5459 (f) Bispecific antibody targeting BCMA and CD3 –Multiple myeloma Pozelimab (f) (REGN3918) Antibody to C5; studied as monotherapy and in combination with cemdisiran –Paroxysmal nocturnal hemoglobinuria ("PNH"), cemdisiran combination (c)(p) –CD55-deficient protein-losing enteropathy (c) , monotherapy (potentially pivotal study) –Initiate Phase 3 study in myasthenia gravis, cemdisran combination (second half 2021) Cemdisiran (p) siRNA therapeutic targeting C5 –Immunoglobulin A nephropathy REGN7257 Antibody to IL2Rg –Aplastic anemia NTLA-2001 (o) TTR gene knockout using CRISPR/Cas9 –Hereditary transthyretin amyloidosis with polyneuropathy ("hATTR-PN") General Medicine REGEN-COV (casirivimab with imdevimab) (e)(g)(m)(n) Multi-antibody therapy to SARS-CoV-2 virus –COVID-19 multi-dose safety study –COVID-19 dose-ranging virology study in non-hospitalized patients –COVID-19 treatment in non-hospitalized patients –European Medicines Agency ("EMA") Rolling Review of casirivimab with imdevimab data –Reported that Phase 3 trials in non-hospitalized COVID-19 patients met primary and key secondary endpoints –Data to be reported from Phase 3 RECOVERY trial in hospitalized patients (first half 2021) –Submit BLA and MAA for COVID-19 (mid-2021) 30 Table of Contents Clinical Program (continued) Phase 1 Phase 2 Phase 3 Regulatory Review (i) 2021 Events to Date Select Upcoming Milestones (k) REGEN-COV (casirivimab with imdevimab) (e)(g)(m)(n) (continued) –COVID-19 treatment in hospitalized patients –COVID-19 treatment in hospitalized patients (UK-based RECOVERY trial) –COVID-19 prevention –EUA amendment for lower 1,200 mg dose (treatment) –EUA amendment to add COVID-19 prevention –NIH COVID-19 Treatment Guidelines updated to strongly recommend REGEN-COV be used in non-hospitalized COVID-19 patients at high risk of clinical progression –Reported that all tested doses in Phase 2 dose-ranging study in non-hospitalized patients met the primary endpoint –Reported that Phase 3 prevention trial in uninfected household contacts of SARS-CoV-2 infected individuals met primary and key secondary endpoints Praluent (alirocumab) (j) Antibody to PCSK9 –HeFH in pediatrics –Approved by FDA for HoFH –Report interim results from Phase 3 study for HeFH in pediatrics (first half 2021) Fasinumab (l)(f) (REGN475) Antibody to NGF –Osteoarthritis pain of the knee or hip (e) –Report additional longer-term safety results from Phase 3 studies in osteoarthritis pain of the knee or hip (2021) –Continue discussions with regulatory authorities and determine next steps for the program (2021) Evkeeza (evinacumab) (f) Antibody to ANGPTL3 –Severe hypertriglyceridemia –HoFH (EU) (c)(d) –Approved by FDA for HoFH –EMA's Committee for Medicinal Products for Human Use ("CHMP") recommended approval for HoFH –EC decision on MAA for HoFH (first half 2021) 31 Table of Contents Clinical Program (continued) Phase 1 Phase 2 Phase 3 Regulatory Review (i) 2021 Events to Date Select Upcoming Milestones (k) Garetosmab (f) (REGN2477) Antibody to Activin A –Fibrodysplasia ossificans progressiva ("FOP") (c)(d)(e) (potentially pivotal study) –Further review trial data and determine next steps for the program (first half 2021) REGN4461 (f) Agonist antibody to leptin receptor ("LEPR") –Generalized lipodystrophy (e) REGN5381 Agonist antibody to NPR1 –Heart failure ALN-HSD (p) RNAi therapeutic targeting HSD17B13 –Nonalcoholic steatohepatitis ("NASH") Note: For purposes of the table above, a program is classified in Phase 1, 2, or 3 clinical development after recruitment for the corresponding study or studies has commenced (a) In collaboration with Sanofi (b) In collaboration with Bayer outside of the United States (c) FDA granted orphan drug designation (d) FDA granted Breakthrough Therapy designation (e) FDA granted Fast Track designation (f) Sanofi did not opt-in to or elected not to continue to co-develop the product candidate. Under the terms of our agreement, Sanofi is entitled to receive royalties on any future sales of the product candidate. (g) We and the Biomedical Advanced Research Development Authority ("BARDA") of the U.S. Department of Health and Human Services ("HHS") are parties to agreements whereby HHS provides certain funding to support research and development of this product candidate (h) Studied as monotherapy and in combination with other antibodies and treatments (i) Information in this column relates to U.S., EU, and Japan regulatory submissions only (j) In collaboration with Sanofi prior to April 2020. Effective April 2020, the Company is solely responsible for the development and commercialization of Praluent in the United States, and Sanofi is solely responsible for the development and commercialization of Praluent outside of the United States. Refer to "Collaboration, License, and Other Agreements - Sanofi" section below for further details. (k) As described in the section preceding the table above and Part II, Item 1A. "Risk Factors," development timelines may be further subject to change as a result of the impact of the COVID-19 pandemic (l) In collaboration with Teva and Mitsubishi Tanabe Pharma (m) Certain trials conducted with the National Institute of Allergy and Infectious Diseases ("NIAID"), part of the NIH (n) In collaboration with Roche (o) In collaboration with Intellia (p) In collaboration with Alnylam 32 Table of Contents General Our ability to generate profits and to generate positive cash flow from operations over the next several years depends significantly on the continued success in commercializing EYLEA and Dupixent. We expect to continue to incur substantial expenses related to our research and development activities, a portion of which we expect to be reimbursed by our collaborators. Also, our research and development activities outside our collaborations, the costs of which are not reimbursed, are expected to expand and require additional resources. We also expect to incur substantial costs related to the commercialization of our marketed products. Our financial results may fluctuate from quarter to quarter and will depend on, among other factors, the net sales of our marketed products; the scope and progress of our research and development efforts; the timing of certain expenses; the continuation of our collaborations, in particular with Sanofi and Bayer, including our share of collaboration profits or losses from sales of commercialized products and the amount of reimbursement of our research and development expenses that we receive from collaborators; and the amount of income tax expense we incur, which is partly dependent on the profits or losses we earn in each of the countries in which we operate. We cannot predict whether or when new products or new indications for marketed products will receive regulatory approval or, if any such approval is received, whether we will be able to successfully commercialize such product(s) and whether or when they may become profitable. Additional Information - Clinical Development Programs REGEN-COV (casirivimab with imdevimab) In February 2021, the IDMC for the REGEN-COV Phase 3 trial in non-hospitalized patients with COVID-19 found clear clinical efficacy for reducing the rate of hospitalization and death with both the 1,200 mg and 2,400 mg doses of REGEN-COV compared to placebo, and recommended stopping enrollment in the placebo group. In March 2021, we announced positive top-line results from the Phase 3 trial in non-hospitalized COVID-19 patients. The trial met its primary endpoint, showing that REGEN-COV reduced the risk of hospitalization or death by 70% (1,200 mg dose (intravenous ("IV")) and 71% (2,400 mg dose IV) compared to placebo. The trial also met key secondary endpoints, including the ability to reduce symptom duration. Based on these results, we submitted a request to the FDA to update the EUA to the lower 1,200 mg dose (refer to "Products - REGEN-COV - Emergency Use Authorization" above for further details about the EUA). In March 2021, the Company also announced that all tested doses (IV: 2,400 mg, 1,200 mg, 600 mg and 300 mg; subcutaneous injections: 1,200 mg and 600 mg) in the Phase 2 dose-ranging trial in non-hospitalized COVID-19 patients met the primary endpoint. In February 2021, the EMA announced it had commenced a Rolling Review of data for the casirivimab with imdevimab antibody cocktail. Data on the safety, tolerability, and efficacy of the antibody cocktail will continue to be shared with the EMA as they become available. Additionally in February 2021, the EMA's CHMP issued a positive opinion, recommending the antibody cocktail can be used to treat COVID-19 patients who do not require supplemental oxygen and are at high risk of progressing to severe COVID-19. The CHMP's positive opinion can be used by EU member states when making decisions on the possible use of the antibody cocktail at a national level prior to a market authorization. In April 2021, we announced positive results from the Phase 3 COVID-19 prevention trial in household contacts of SARS-CoV-2 infected individuals. The trial, which was jointly run with the NIAID, part of the NIH, met its primary and key secondary endpoints, showing that REGEN-COV 1,200 mg subcutaneous injection reduced the risk of symptomatic infections by 81% in those who were not infected. We shared this data with the FDA and requested that the EUA be expanded to include COVID-19 prevention for appropriate populations. In April 2021, the Company also announced positive data from the Phase 3 treatment trial in recently infected asymptomatic COVID-19 patients. The trial was also being jointly run with the NIAID and met all primary and key secondary endpoints. The trial demonstrated that the 1,200 mg subcutaneous injection of REGEN-COV reduced the risk of progressing to symptomatic COVID-19 by 31% (primary endpoint), and by 76% after the third day. 33 Table of Contents Agreements Related to COVID-19 U.S. Government In the first quarter of 2020, the Company announced an expansion of its Other Transaction Agreement with BARDA, pursuant to which HHS was obligated to fund certain of our costs incurred for research and development activities related to COVID-19 treatments. In July 2020, the Company also announced an agreement with entities acting at the direction of BARDA and the U.S. Department of Defense to manufacture and deliver filled and finished drug product of REGEN-COV to the U.S. government. During the first quarter of 2021, the Company completed its final deliveries of drug product under this agreement. See "Results of Operations - Revenues" below for REGEN-COV net product sales recognized in connection with this agreement during the three months ended March 31, 2021. In January 2021, the Company announced an agreement with an entity acting on behalf of the U.S. Department of Defense and HHS to manufacture and deliver additional filled and finished drug product of REGEN-COV to the U.S. government. Pursuant to the agreement, the U.S. government is obligated to purchase all filled and finished doses of drug product delivered by June 30, 2021, and may accept doses during the period from July 1, 2021 through September 30, 2021 at its discretion. The U.S. government has agreed to acquire up to 1.25 million doses at the lowest treatment dose authorized or approved by the FDA for the indication authorized under the EUA (as described under "Products - REGEN-COV - Emergency Use Authorization" above), resulting in payments to the Company of up to $2.625 billion in the aggregate. A number of factors may impact the quantity of filled and finished product supplied by June 30, 2021, including manufacturing considerations and authorized dose levels. See also Part II, Item 1A. "Risk Factors - We face risks related to the development, manufacturing, and commercialization of REGEN-COV ." Roche In August 2020, we entered into a collaboration agreement with Roche to develop, manufacture, and distribute the casirivimab with imdevimab antibody cocktail. We continue to lead global development activities for casirivimab with imdevimab, and the parties jointly fund certain on-going studies, as well as any mutually agreed additional new global studies to evaluate further the potential of casirivimab with imdevimab in treating or preventing COVID-19. Following the initial EMA approval (if any), Roche will be responsible for securing regulatory approvals outside the United States and conducting any additional studies specifically required for approval by regulators outside the United States. Under the terms of the agreement, each party is obligated to dedicate a certain amount of manufacturing capacity to casirivimab with imdevimab each year. We distribute the product in the United States and Roche distributes the product outside of the United States. The parties share gross profits from worldwide sales based on a pre-specified formula, depending on the amount of manufactured product supplied by each party to the market. Collaboration, License, and Other Agreements Sanofi Antibody We are collaborating with Sanofi on the global development and commercialization of Dupixent, Kevzara, and itepekimab (the "Antibody Collaboration"). See discussion below for updates related to the development and commercialization of Praluent effective April 1, 2020. Under the terms of the Antibody License and Collaboration Agreement (the "LCA"), Sanofi is generally responsible for funding 80%–100% of agreed-upon development costs. We are obligated to reimburse Sanofi for 30%–50% of worldwide development expenses that were funded by Sanofi based on our share of collaboration profits from commercialization of collaboration products. However, we are only required to apply 10% of our share of the profits from the Antibody Collaboration in any calendar quarter to reimburse Sanofi for these development costs Under our collaboration agreement, Sanofi records product sales for commercialized products, and Regeneron has the right to co-commercialize such products on a country-by-country basis. We co-commercialize Dupixent in the United States and have exercised our option to co-commercialize Dupixent in certain countries outside the United States. We currently anticipate commencing co-commercialization of Dupixent in such countries outside the United States later this year. We supply certain commercial bulk product to Sanofi. We and Sanofi equally share profits and losses from sales within the United States. We and Sanofi share profits outside the United States on a sliding scale based on sales starting at 65% (Sanofi)/35% (us) and ending at 55% (Sanofi)/45% (us), and share losses outside the United States at 55% (Sanofi)/45% (us). In addition to profit and loss sharing, we are 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 34 Table of Contents up to an aggregate of $200.0 million in additional milestone payments from Sanofi, including the second sales milestone in the amount of $50.0 million, when such sales outside the United States exceed $1.5 billion on a rolling twelve-month basis. In April 2020, the Company and Sanofi entered into an amendment to the LCA in connection with, among other things, the removal of Praluent from the LCA such that (i) effective April 1, 2020, the LCA no longer governs the development, manufacture, or commercialization of Praluent and (ii) the quarterly period ended March 31, 2020 was the last quarter for which Sanofi and the Company shared profits and losses for Praluent under the LCA. The parties also entered into a Praluent Cross License & Commercialization Agreement (the "Praluent Agreement") pursuant to which, effective April 1, 2020, the Company, at its sole cost, became solely responsible for the development and commercialization of Praluent in the United States, and Sanofi, at its sole cost, is solely responsible for the development and commercialization of Praluent outside of the United States. Under the Praluent Agreement, Sanofi will pay the Company a 5% royalty on Sanofi’s net product sales of Praluent outside the United States until March 31, 2032. The Company will not owe Sanofi royalties on the Company’s net product sales of Praluent in the United States. Although each party will be responsible for manufacturing Praluent for its respective territory, the parties have entered into definitive supply agreements under which, for a certain transitional period, the Company will continue to supply drug substance to Sanofi and Sanofi will continue to supply finished product to Regeneron. With respect to any intellectual property or product liability litigation relating to Praluent, the parties have agreed that, effective April 1, 2020, Regeneron and Sanofi each will be solely responsible for any such litigation (including damages and other costs and expenses thereof) in the United States and outside the United States, respectively, arising out of Praluent sales or other activities on or after April 1, 2020 (subject to Sanofi's right to set off a portion of any third-party royalty payments resulting from certain patent litigation proceedings against up to 50% of any Praluent royalty payment owed to Regeneron). The parties will each bear 50% of any damages arising out of Praluent sales or other activities prior to April 1, 2020. Immuno-Oncology We are collaborating with Sanofi on the development and commercialization of 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 (the "Amended IO Discovery Agreement"), and an Immuno-oncology License and Collaboration Agreement (the "IO License and Collaboration Agreement"). Effective December 31, 2018, the Company and Sanofi entered into the Amended IO Discovery Agreement, which narrowed the scope of the existing discovery and development activities conducted by the Company ("IO Development Activities") under the original 2015 Immuno-oncology Discovery and Development Agreement (the "2015 IO Discovery Agreement") to developing therapeutic bispecific antibodies targeting (i) BCMA and CD3 (the "BCMAxCD3 Program") and (ii) MUC16 and CD3 (the "MUC16xCD3 Program") through clinical proof-of-concept. The Amended IO Discovery Agreement provided for, among other things, Sanofi's prepayment for certain IO Development Activities regarding the BCMAxCD3 Program and the MUC16xCD3 Program. Under the terms of the Amended IO Discovery Agreement, the Company was required to conduct development activities with respect to (i) the BCMAxCD3 Program through the earlier of clinical proof-of-concept or the expenditure of $70.0 million (the "BCMAxCD3 Program Costs Cap") and (ii) the MUC16xCD3 Program through the earlier of clinical proof-of-concept or the expenditure of $50.0 million (the "MUC16xCD3 Program Costs Cap"). We are obligated to reimburse Sanofi for half of the development costs they funded that are attributable to clinical development of antibody product candidates under the Amended IO Discovery Agreement from our share of profits from commercialized IO Collaboration products. With regard to the BCMAxCD3 Program and the MUC16xCD3 Program, when the applicable Program Costs Cap was reached, Sanofi had the option to license rights to the product candidate and other antibodies targeting the same targets for, with regard to BCMAxCD3, immuno-oncology indications, and with regard to MUC16xCD3, all indications, pursuant to the IO License and Collaboration Agreement, as amended. During the first quarter of 2021, Sanofi did not exercise its options to license rights to these product candidates; as a result, we retain the exclusive right to develop and commercialize such product candidate and Sanofi will receive a royalty on sales (if any). Under the terms of the IO License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo, an antibody targeting PD-1. We have principal control over the development of Libtayo, and the parties share equally, on an ongoing basis, development and commercialization expenses for Libtayo. With regard to Libtayo, we lead commercialization activities in the United States, while Sanofi leads commercialization activities outside of the United States and the parties equally share profits from worldwide sales. Sanofi has exercised its option to co-commercialize Libtayo in the United States. We will be entitled to a milestone payment of $375.0 million in the event that global sales of Libtayo equal or exceed $2.0 billion in any consecutive twelve-month period. 35 Table of Contents Bayer EYLEA outside the United States We and Bayer are parties to a license and collaboration agreement for the global development and commercialization outside the United States of EYLEA. Under the agreement, we and Bayer collaborate on, and share the costs of, the development of EYLEA. Bayer markets EYLEA outside the United States, where, for countries other than Japan, the companies share equally in profits and losses from sales of EYLEA. In Japan, we are entitled to receive a tiered percentage of between 33.5% and 40.0% of EYLEA net sales through 2021, and thereafter, the companies will share equally in profits and losses from the sales of EYLEA. We are obligated to reimburse Bayer for 50% of the development costs that it has incurred under the agreement from our share of the collaboration profits (including payments to us based on sales in Japan). The reimbursement payment in any quarter will equal 5% of the then outstanding repayment obligation, but never more than our share of the collaboration profits in the quarter unless we elect to reimburse Bayer at a faster rate. Within the United States, we retain exclusive commercialization rights to EYLEA and are entitled to all profits from such sales. Teva Fasinumab We and Teva are parties to a collaboration agreement to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement with Mitsubishi Tanabe Pharma Corporation ("MTPC"). In connection with the agreement, Teva made a $250.0 million non-refundable up-front payment. We lead global development activities, and the parties share equally, on an ongoing basis, development costs under a global development plan. As of March 31, 2021, we had earned an aggregate of $120.0 million of development milestones from Teva and we are entitled to receive up to an aggregate of $340.0 million in additional development milestones and up to an aggregate of $1.890 billion in contingent payments upon achievement of specified annual net sales amounts. We are responsible for the manufacture and supply of fasinumab globally. Within the United States, we will lead commercialization activities, and the parties will share equally in any profits or losses in connection with commercialization of fasinumab. In the territory outside of the United States, Teva will lead commercialization activities and we will supply product to Teva at a tiered purchase price, which is calculated as a percentage of net sales of the product (subject to adjustment in certain circumstances). Alnylam In 2018, we and Alnylam Pharmaceuticals, Inc. entered into a collaboration to discover RNA interference ("RNAi") therapeutics for NASH and potentially other related diseases, as well as to research, co-develop and commercialize any therapeutic product candidates that emerge from these discovery efforts (including ALN-HSD, which is currently in Phase 1 clinical development). ALN-HSD is being co-developed with Alnylam with terms generally consistent with the form of a Co-Commercialization Collaboration Agreement in connection with the 2019 collaboration agreement as described below. Alnylam is conducting the Phase 1 clinical trial for ALN-HSD and Regeneron will be responsible for all other development as the lead party. The parties share equally, on an ongoing basis, development expenses for ALN-HSD. In 2019, we and Alnylam entered into a global, strategic collaboration to discover, develop, and commercialize RNAi therapeutics for a broad range of diseases by addressing therapeutic disease targets expressed in the eye and central nervous system ("CNS"), in addition to a select number of targets expressed in the liver. Under the terms of the agreement, we made an up-front payment of $400.0 million to Alnylam. For each program, we will provide Alnylam with a specified amount of funding at program initiation and at lead candidate designation, and Alnylam is eligible to receive up to an aggregate of $200.0 million in clinical proof-of-principle milestones for eye or CNS programs. In addition, during 2019, the parties entered into a Co-Commercialization Collaboration Agreement for a silencing RNA ("siRNA") therapeutic targeting the C5 component of the human complement pathway being developed by Alnylam, with Alnylam as the lead party, and a License Agreement for a combination product consisting of cemdisiran and pozelimab, with us as the licensee. Under the C5 siRNA Co-Commercialization Collaboration agreement, the parties share costs equally and will split profits (if commercialized); and under the License Agreement, the licensee is responsible for its own costs and expenses. The C5 siRNA License Agreement contains a flat low double-digit royalty payable to Alnylam on our potential future net sales of the combination product only subject to customary reductions, as well as up to $325.0 million in commercial milestones. 36 Table of Contents Intellia In 2016, we entered into a license and collaboration agreement with Intellia Therapeutics, Inc. to advance CRISPR/Cas9 gene-editing technology for in vivo therapeutic development. NTLA-2001, which is in Phase 1 clinical development, is subject to a co-development and co-commercialization arrangement pursuant to which Intellia will lead development and commercialization activities and the parties share an agreed-upon percentage of development expenses and profits (if commercialized) . In May 2020, we expanded our existing collaboration with Intellia Therapeutics, Inc. to provide us with rights to develop products for additional in vivo CRISPR/Cas9-based therapeutic targets and for the companies to jointly develop potential products for the treatment of hemophilia A and B, with Regeneron leading development and commercialization activities. In addition, we also received non-exclusive rights to independently develop and commercialize ex vivo gene edited products. In connection with the May 2020 agreement, we made a $70.0 million up-front payment and purchased 925,218 shares of Intellia common stock for an aggregate purchase price of $30.0 million. The up-front payment and the amount paid in excess of the fair market value of the shares purchased, or $15.0 million, were recorded to Research and development expense in the second quarter of 2020. BARDA We and BARDA are parties to agreements pursuant to which HHS provided certain funding to develop, test, and manufacture a treatment for Ebola virus infection. In July 2020, HHS exercised its option under an existing agreement to provide up to $344.6 million of additional funding for the manufacture and supply of Inmazeb. We expect to deliver a pre-specified number of Inmazeb treatment doses over the course of approximately six years. See "Agreements Related to COVID-19 - U.S. Government" section above for information related to our COVID-19 agreements. Kiniksa As described under "Products" above, pursuant to a 2017 license agreement, we granted Kiniksa the right to develop and commercialize certain new indications for ARCALYST. During the first quarter of 2021, Kiniksa received marketing approval in the United States for a new indication of ARCALYST, recurrent pericarditis, and, as a result, we received a $20.0 million milestone payment from Kiniksa. The quarterly period ended March 31, 2021 is the last quarter for which the Company will record net product sales of ARCALYST. Following this approval, Kiniksa is solely responsible for the U.S. development and commercialization of ARCALYST in all approved indications, and Regeneron will continue to supply clinical and commercial product to Kiniksa. Kiniksa will pay Regeneron 50% of its profits from sales of ARCALYST and the parties will not share in any losses incurred by Kiniksa in connection with commercialization of ARCALYST. Corporate Information We were incorporated in the State of New York in 1988 and publicly listed in 1991. Our principal executive offices are located at 777 Old Saw Mill River Road, Tarrytown, New York 10591, and our telephone number at that address is (914) 847-7000. We make available free of charge on or through our Internet website ( http://www.regeneron.com ) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission ("SEC"). Investors and other interested parties should note that we use our media and investor relations website ( http://newsroom.regeneron.com ) and our social media channels to publish important information about Regeneron, including information that may be deemed material to investors. We encourage investors and other interested parties to review the information we may publish through our media and investor relations website and the social media channels listed on our media and investor relations website, in addition to our SEC filings, press releases, conference calls, and webcasts. The information contained on our websites and social media channels is not included as a part of, or incorporated by reference into, this report. 37 Table of Contents Results of Operations Three Months Ended March 31, 2021 and 2020 Net Income Three Months Ended March 31, (In millions, except per share data) 2021 2020 Revenues $ 2,528.7 $ 1,828.2 Operating expenses 1,416.0 1,128.1 Income from operations 1,112.7 700.1 Other income (expense) 140.3 (31.5) Income before income taxes 1,253.0 668.6 Income tax expense 137.8 44.0 Net income $ 1,115.2 $ 624.6 Net income per share - diluted $ 10.09 $ 5.43 Revenues Three Months Ended March 31, (In millions) 2021 2020 $ Change * Net product sales in the United States: EYLEA $ 1,347.0 $ 1,172.0 $ 175.0 Libtayo 69.1 61.7 7.4 Praluent 43.3 * * REGEN-COV 262.2 — 262.2 Evkeeza 0.5 — 0.5 ARCALYST 2.2 3.0 (0.8) Collaboration revenue: Sanofi 364.8 246.9 117.9 Bayer 322.8 281.4 41.4 Roche 66.8 — 66.8 Other revenue 50.0 63.2 (13.2) Total revenues $ 2,528.7 $ 1,828.2 $ 700.5 * Net product sales of Praluent in the United States were recorded by Sanofi prior to April 1, 2020 Net Product Sales Net product sales of EYLEA in the United States increased for the three months ended March 31, 2021, compared to the same period in 2020, due to higher sales volume partly offset by an increase in sales-related deductions primarily due to higher rebates and discounts. Effective April 1, 2020, the Company became solely responsible for the development and commercialization of Praluent in the United States and records net product sales of Praluent in the United States. Refer to "Collaboration, License, and Other Agreements - Sanofi - Antibody " section above for further details. 38 Table of Contents During the three months ended March 31, 2021, net product sales of REGEN-COV were recorded in connection with our July 2020 agreement with the U.S. government and the Company completed its final deliveries of drug product under this agreement. In January 2021, the Company announced an additional agreement to manufacture and deliver additional filled and finished drug product of REGEN-COV to the U.S. government. The Company expects to commence deliveries of drug product under this agreement during the second quarter of 2021. Refer to "Agreements Related to COVID-19 - U.S. Government " section above for further details. Collaboration Revenue Sanofi Collaboration Revenue Three Months Ended March 31, (In millions) 2021 2020 Antibody: Regeneron's share of profits in connection with commercialization of antibodies $ 260.6 $ 170.9 Reimbursement for manufacturing of commercial supplies (1) 105.6 80.1 Total Antibody 366.2 251.0 Immuno-oncology: Regeneron's share of losses in connection with commercialization of Libtayo outside the United States (6.1) (6.2) Reimbursement for manufacturing of commercial supplies (1) 4.7 2.1 Total Immuno-oncology (1.4) (4.1) Total Sanofi collaboration revenue $ 364.8 $ 246.9 (1) Corresponding costs incurred by us in connection with such production is recorded within Cost of collaboration and contract manufacturing Antibody Sanofi provides us with an estimate of our share of the profits or losses from commercialization of antibodies for the most recent fiscal quarter; these estimates are reconciled to actual results in the subsequent fiscal quarter, and our portion of the profits or losses is adjusted accordingly, as necessary. During the three months ended March 31, 2021, the change in our share of profits in connection with commercialization of antibodies, compared to the same period of 2020, was driven by higher Dupixent profits. 39 Table of Contents Regeneron's share of profits in connection with the commercialization of Dupixent, Praluent (through March 31, 2020), and Kevzara is summarized below: Three Months Ended March 31, (In millions) 2021 2020 Dupixent, Praluent, and Kevzara net product sales (1) $ 1,332.0 $ 995.1 Regeneron's share of collaboration profits $ 289.9 $ 193.0 Reimbursement of development expenses incurred by Sanofi in accordance with Regeneron's payment obligation (29.3) (22.1) Regeneron's share of profits in connection with commercialization of antibodies $ 260.6 $ 170.9 Regeneron's share of collaboration profits as a percentage of Dupixent, Praluent, and Kevzara net product sales 20% 17% (1) Global net product sales of Dupixent and Kevzara are recorded by Sanofi. The quarter ended March 31, 2020 was the last quarter for which Sanofi and the Company shared profits and losses in connection with Sanofi's global net sales and the related commercialization of Praluent (see further details below); therefore, the quarter ended March 31, 2020 was the last quarter for which net product sales of Praluent were included in the table above. As described above under "Collaboration, License, and Other Agreements - Sanofi - Antibody ", effective April 1, 2020, the Company became solely responsible for the development and commercialization of Praluent in the United States. Under the new agreement, Sanofi is solely responsible for the development and commercialization of Praluent outside of the United States, and pays the Company a 5% royalty on Sanofi’s net product sales of Praluent outside the United States. Bayer Collaboration Revenue Three Months Ended March 31, (In millions) 2021 2020 Regeneron's net profit in connection with commercialization of EYLEA outside the United States $ 308.9 $ 253.8 Reimbursement for manufacturing of commercial supplies (1) 13.9 27.6 Total Bayer collaboration revenue $ 322.8 $ 281.4 (1) Corresponding costs incurred by us in connection with such production is recorded within Cost of collaboration and contract manufacturing Regeneron's net profit in connection with commercialization of EYLEA outside the United States is summarized below: Three Months Ended March 31, (In millions) 2021 2020 EYLEA net product sales outside the United States $ 824.3 $ 681.7 Regeneron's share of collaboration profit from sales outside the United States $ 323.7 $ 268.2 Reimbursement of development expenses incurred by Bayer in accordance with Regeneron's payment obligation (14.8) (14.4) Regeneron's net profit in connection with commercialization of EYLEA outside the United States $ 308.9 $ 253.8 Regeneron's net profit as a percentage of EYLEA net product sales outside the United States 37% 37% Bayer records net product sales of EYLEA outside the United States. Bayer provides us with an estimate of our share of the profit, including the percentage of sales in Japan that we earned, from commercialization of EYLEA outside the United States for the most recent fiscal quarter; these estimates are reconciled to actual results in the subsequent fiscal quarter, and our portion of the profit is adjusted accordingly, as necessary. 40 Table of Contents Roche Collaboration Revenue As described above under "Agreements Related to COVID-19 - Roche ", Roche distributes and records net product sales of the casirivimab with imdevimab antibody cocktail outside the United States. Roche provides us with an estimate of our share of the gross profits for the most recent fiscal quarter; these estimates are reconciled to actual results in the subsequent fiscal quarter, and our portion of the profits is adjusted accordingly, as necessary. Other Revenue Other revenue decreased during the three months ended March 31, 2021, compared to the same period of 2020, primarily due to lower amounts recognized in connection with our agreement with BARDA related to funding of certain development activities for Inmazeb for the treatment of Ebola. This decrease was partly offset by the following items included within Other revenue for the three months ended March 31, 2021: • a $20.0 million milestone payment received from Kiniksa in connection with our ARCALYST license agreement; and • effective April 1, 2020, Sanofi's reimbursement for manufacturing commercial supplies of Praluent and royalties of 5% on Sanofi’s net product sales of Praluent outside the United States. Expenses Three Months Ended March 31, (In millions, except headcount data) 2021 2020 $ Change Research and development (1) $ 742.9 $ 583.9 $ 159.0 Selling, general, and administrative (1) 405.6 367.3 38.3 Cost of goods sold (2) 183.2 78.8 104.4 Cost of collaboration and contract manufacturing (3) 124.8 138.5 (13.7) Other operating (income) expense, net (40.5) (40.4) (0.1) Total operating expenses $ 1,416.0 $ 1,128.1 $ 287.9 Average headcount 9,447 8,030 1,417 (1) Includes costs incurred as well as cost reimbursements from collaborators who are not deemed to be our customers (2) Cost of goods sold primarily includes costs in connection with producing commercial supplies for products that are sold by Regeneron in the United States ( i.e., for which we record net product sales), any royalties we are obligated to pay on such sales, and amounts we are obligated to pay to Sanofi for its share of Libtayo U.S. gross profits (3) Cost of collaboration and contract manufacturing includes costs we incur in connection with producing commercial drug supplies for collaborators and others Operating expenses for the three months ended March 31, 2021 and 2020 included a total of $130.9 million and $105.8 million, respectively, of non-cash compensation expense related to equity awards granted under our long-term incentive plans. Research and Development Expenses The following table summarizes our estimates of direct research and development expenses by clinical development program and other significant categories of research and development expenses. Direct research and development expenses are comprised primarily of costs paid to third parties for clinical and product development activities, including costs related to preclinical research activities, clinical trials, and the portion of research and development expenses incurred by our collaborators that we are obligated to reimburse. Indirect research and development expenses have not been allocated directly to each program, and primarily consist of costs to compensate personnel, overhead and infrastructure costs to maintain our facilities, and other costs related to activities that benefit multiple projects. Clinical manufacturing costs primarily consist of costs to manufacture bulk drug product for clinical development purposes as well as related external drug filling, packaging, and labeling costs. Clinical manufacturing costs also includes pre-launch commercial supplies which did not meet the criteria to be capitalized as inventory. The table below also includes reimbursements of research and development expenses by collaborators, as when we are entitled to reimbursement of all or a portion of such expenses that we incur under a collaboration, we record those reimbursable amounts in the period in which such costs are incurred. 41 Table of Contents Three Months Ended March 31, (In millions) 2021 2020 * $ Change Direct research and development expenses: REGEN-COV (casirivimab with imdevimab) $ 208.8 — $ 208.8 Libtayo (cemiplimab) 39.8 $ 36.0 3.8 Fasinumab 31.5 40.4 (8.9) EYLEA 28.1 17.6 10.5 Dupixent (dupilumab) 27.4 34.4 (7.0) Other product candidates in clinical development and other research programs 84.5 115.4 (30.9) Total direct research and development expenses 420.1 243.8 176.3 Indirect research and development expenses: Payroll and benefits 233.0 198.1 34.9 Lab supplies and other research and development costs 33.4 34.8 (1.4) Occupancy and other operating costs 95.1 82.0 13.1 Total indirect research and development expenses 361.5 314.9 46.6 Clinical manufacturing costs 133.7 180.2 (46.5) Reimbursement of research and development expenses by collaborators (172.4) (155.0) (17.4) Total research and development expenses $ 742.9 $ 583.9 $ 159.0 * Certain prior year amounts have been reclassified to conform to the current year's presentation Research and development expenses included non-cash compensation expense of $69.7 million and $56.7 million for the three months ended March 31, 2021 and 2020, respectively. There are numerous uncertainties associated with drug development, including uncertainties related to safety and efficacy data from each phase of drug development, uncertainties related to the enrollment and performance of clinical trials, changes in regulatory requirements, changes in the competitive landscape affecting a product candidate, and other risks and uncertainties described in Part II, Item 1A. "Risk Factors" (including those relating to the disruptions caused by the COVID-19 pandemic). There is also variability in the duration and costs necessary to develop a pharmaceutical product, potential opportunities and/or uncertainties related to future indications to be studied, and the estimated cost and scope of the projects. The lengthy process of seeking FDA and other applicable approvals, and subsequent compliance with applicable statutes and regulations, require the expenditure of substantial resources. Any failure by us to obtain, or delay in obtaining, regulatory approvals could materially adversely affect our business. We are unable to reasonably estimate if our product candidates in clinical development will generate material product revenues and net cash inflows. Selling, General, and Administrative Expenses Selling, general, and administrative expenses increased for the three months ended March 31, 2021, compared to the same period in 2020, primarily due to higher headcount-related costs, an increase in commercialization-related expenses for Libtayo, and an increase in expenditures related to new products. Selling, general, and administrative expenses also included non-cash compensation expense of $50.8 million and $40.3 million for the three months ended March 31, 2021 and 2020, respectively. Cost of Goods Sold Cost of goods sold increased for the three months ended March 31, 2021, compared to the same period in 2020, primarily due to the recognition of manufacturing costs in connection with product sales of REGEN-COV (which commenced in the third quarter of 2020) and Praluent in the United States (which were recorded by Sanofi prior to April 1, 2020). 42 Table of Contents Cost of Collaboration and Contract Manufacturing Cost of collaboration and contract manufacturing decreased for the three months ended March 31, 2021, compared to the same period in 2020, primarily due to the recognition of process validation costs during the three months ended March 31, 2020 in connection with manufacturing Inmazeb under our BARDA agreement; such costs did not recur during the three months ended March 31, 2021. This decrease was largely offset by the recognition of manufacturing costs associated with higher sales of Dupixent. Other Operating (Income) Expense Other operating (income) expense, net, includes recognition of a portion of amounts previously deferred in connection with up-front and development milestone payments, as applicable, received in connection with Sanofi IO, Teva, and MTPC collaborative arrangements. Other Income (Expense) Other income (expense), net, for the three months ended March 31, 2021, compared to the same period in 2020, was positively impacted by the recognition of unrealized gains on equity securities. Income Taxes Three Months Ended March 31, (In millions, except effective tax rate) 2021 2020 Income tax expense $ 137.8 $ 44.0 Effective tax rate 11.0 % 6.6 % Our effective tax rate for the three months ended March 31, 2021 was positively impacted, compared to the U.S. federal statutory rate, primarily by the reversal of liabilities related to uncertain tax positions, stock-based compensation, income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate, and federal tax credits for research activities. Our effective tax rate for the three months ended March 31, 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. Liquidity and Capital Resources Our financial condition is summarized as follows: March 31, December 31, (In millions) 2021 2020 $ Change Financial assets: Cash and cash equivalents $ 1,437.9 $ 2,193.7 $ (755.8) Marketable securities - current 2,065.9 1,393.3 672.6 Marketable securities - noncurrent 3,543.7 3,135.6 408.1 $ 7,047.5 $ 6,722.6 $ 324.9 Borrowings: Long-term debt $ 1,978.9 $ 1,978.5 $ 0.4 Working capital: Current assets $ 10,055.1 $ 9,779.1 $ 276.0 Current liabilities 3,217.8 2,697.4 520.4 $ 6,837.3 $ 7,081.7 $ (244.4) As of March 31, 2021, we also had borrowing availability of $750.0 million under a revolving credit facility. 43 Table of Contents Sources and Uses of Cash for the Three Months Ended March 31, 2021 and 2020 As of March 31, (In millions) 2021 2020 $ Change Cash flows provided by operating activities $ 668.5 $ 698.0 $ (29.5) Cash flows used in investing activities $ (1,059.0) $ (443.2) $ (615.8) Cash flows (used in) provided by financing activities $ (366.4) $ 335.6 $ (702.0) Cash Flows from Operating Activities Our net income for the three months ended March 31, 2021 included $143.9 million related to net unrealized gains on equity securities (included in other non-cash items). Inventories increased as of March 31, 2021, compared to December 31, 2020, partially (i) due to REGEN-COV production in connection with our agreement to supply drug product to the U.S. government, and (ii) as a result of purchasing additional raw materials in anticipation of potential disruptions to our supply chain due to the COVID-19 pandemic and additional production at our manufacturing facilities. Cash Flows from Investing Activities Capital expenditures during the three months ended March 31, 2021 included costs associated with the expansion of our manufacturing facilities in Rensselaer, New York and Limerick, Ireland, including construction of a fill/finish facility and related equipment. We expect to incur capital expenditures of $585 million to $650 million for the full year of 2021 primarily in connection with the continued expansion of our manufacturing facilities, including the fill/finish facility, and the expansion of our research facilities. Cash Flows from Financing Activities Proceeds from issuances of Common Stock, in connection with exercises of employee stock options, were $95.0 million during the three months ended March 31, 2021, compared to $811.4 million during the three months ended March 31, 2020. In November 2019, our board of directors authorized a share repurchase program to repurchase up to $1.0 billion of our Common Stock. As of December 31, 2020, the Company had repurchased the entire $1.0 billion of its Common Stock that it was authorized to repurchase under this program. In January 2021, our board of directors authorized a new share repurchase program to repurchase up to $1.5 billion of our Common Stock. The share repurchase program was approved under terms substantially similar to the November 2019 share repurchase program. Repurchases may be made from time to time at management’s discretion, and the timing and amount of any such repurchases will be determined based on share price, market conditions, legal requirements, and other relevant factors. The program has no time limit and can be discontinued at any time. There can be no assurance as to the timing or number of shares of any repurchases in the future. We plan to finance the share repurchase program with available cash. During the three months ended March 31, 2021, we repurchased 690,265 shares of our Common Stock under the January 2021 program and recorded the cost of the shares received, or $323.5 million, as Treasury Stock. As of March 31, 2021, $1.177 billion remained available for share repurchases under the program. Critical Accounting Policies and Use of Estimates A summary of our critical accounting policies and use of estimates are presented in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (filed February 8, 2021). There have been no material changes to our critical accounting policies and use of estimates during the three months ended March 31, 2021. Future Impact of Recently Issued Accounting Standards As of March 31, 2021, the future adoption of recently issued accounting standards is not expected to have a material impact on the Company's financial position or results of operations.