What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 198 added, 111 removed, 581 unchanged (35% of the section changed)

3 unchanged sentences

(In millions, except share data)

March 31, December 31,

June 30, December 31,

Current assets:

45 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Statements of Operations

24 unchanged sentences

Other comprehensive income (loss), net of tax:

Unrealized loss on debt securities ( 13.3 ) ( 28.8 )

Unrealized (loss) gain on debt securities ( 0.8 ) 44.6 ( 14.1 ) 15.8

Unrealized gain (loss) on cash flow hedges 0.3 — 0.5 ( 1.4 )

19 unchanged sentences

Balance, March 31, 2021 1.8 — 121.9 0.1 6,887.8 12,008.2 16.2 ( 17.1 ) ( 6,935.3 ) 11,977.0

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

— — 0.7 — 216.6 — — — — 216.6

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

— — ( 0.1 ) — ( 26.1 ) — — — — ( 26.1 )

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

— — — — 11.6 — — — 2.5 14.1

Repurchases of Common Stock

— — — — — — — ( 0.6 ) ( 288.6 ) ( 288.6 )

Stock-based compensation charges — — — — 135.9 — — — — 135.9

Net income — — — — — 3,098.9 — — — 3,098.9

Other comprehensive loss, net of tax — — — — — — ( 0.5 ) — — ( 0.5 )

Balance, June 30, 2021 1.8 — 122.5 $ 0.1 $ 7,225.8 $ 15,107.1 $ 15.7 ( 17.7 ) $ ( 7,221.4 ) $ 15,127.3

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

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

Shares Amount Shares Amount Shares Amount

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

7 unchanged sentences

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

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

— — 4.4 — 1,355.5 — — — — 1,355.5

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

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

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

— — — — 7.4 — — — 2.7 10.1

Repurchases of Common Stock

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

Stock-based compensation charges

— — — — 105.2 — — — — 105.2

— — — — — 897.3 — — — 897.3

Other comprehensive income, net of tax

— — — — — — 44.6 — — 44.6

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

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

2 unchanged sentences

(In millions)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

3 unchanged sentences

Non-cash compensation expense 276.4 209.3

Gains on marketable and other securities, net ( 553.9 ) ( 199.6 )

Other non-cash items, net 192.6 23.8

1 unchanged sentence

Changes in assets and liabilities:

Increase in accounts receivable, net ( 58.3 ) ( 169.0 )

Increase in accounts receivable ( 2,883.9 ) ( 47.1 )

Increase in inventories ( 221.5 ) ( 233.4 )

1 unchanged sentence

(Decrease) increase in deferred revenue ( 64.8 ) 78.9

Decrease in accounts payable, accrued expenses, and other liabilities ( 34.7 ) ( 85.2 )

Increase in accounts payable, accrued expenses, and other liabilities 423.7 20.9

Total adjustments ( 2,918.9 ) 119.5

4 unchanged sentences

Capital expenditures ( 263.8 ) ( 300.0 )

Net cash used in investing activities ( 1,059.0 ) ( 443.2 )

Net cash (used in) provided by investing activities ( 933.2 ) 1,010.2

Cash flows from financing activities:

Proceeds from bridge loan facility — 1,500.0

Proceeds from issuance of Common Stock 308.2 2,168.0

1 unchanged sentence

Repurchases of Common Stock ( 612.1 ) ( 5,373.6 )

Net cash (used in) provided by financing activities ( 366.4 ) 335.6

Net cash used in financing activities ( 484.6 ) ( 2,277.2 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 122.6 ) 374.4

17 unchanged sentences

(In millions) Three Months Ended

June 30, Six Months Ended

Net Product Sales in the United States

2021 2020 2021 2020

REGEN-COV™ (casirivimab with imdevimab)

$ 1,424.7 $ 1,113.7 $ 2,771.7 $ 2,285.7

78.0 63.3 147.1 125.0

41.9 47.2 85.2 47.2 *

2,591.2 — 2,853.4 —

— ** 2.7 2.2 ** 5.7

$ 4,137.8 $ 1,226.9 $ 5,862.1 $ 2,463.6

* 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.

Previously, Sanofi recorded net product sales of Praluent in the United States.

See Note 3 for further details.

The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for the three months ended March 31, 2021 and 2020.

** Effective April 1, 2021, Kiniksa records net product sales of ARCALYST in the United States.

Previously, the Company recorded net product sales of ARCALYST in the United States.

As of June 30, 2021 and December 31, 2020, the Company had $ 5.881 billion and $ 3.112 billion, respectively, of trade accounts receivable that were recorded within Accounts receivable, net.

The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for the three and six months ended June 30, 2021 and 2020.

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

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Besse Medical, a subsidiary of AmerisourceBergen Corporation

22 % 53 % 30 % 53 %

McKesson Corporation 14 % 32 % 19 % 34 %

Government (see Note 3) 57 % — 43 % —

As of March 31, 2021 and December 31, 2020, the Company had $ 3.173 billion and $ 3.112 billion, respectively, of trade accounts receivable that were recorded within Accounts receivable, net.

Collaboration, License, and Other Agreements

1 unchanged sentence

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

(In millions) 2021 2020 2021 2020

9 unchanged sentences

Reimbursement of commercialization-related expenses Reduction of Selling, general, and administrative expense $ 20.7 $ 14.3 $ 39.2 $ 24.7

Regeneron's obligation for its share of Sanofi commercial expenses Selling, general, and administrative expense $ ( 10.9 ) $ ( 4.4 ) $ ( 18.6 ) $ ( 8.9 )

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

6 unchanged sentences

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

March 31, December 31,

June 30, December 31,

(In millions) 2021 2020

2 unchanged sentences

$ 459.0 $ 347.7

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, became solely responsible for the development and commercialization of Praluent outside of the United States.

7 unchanged sentences

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

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

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 under 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.

Effective December 31, 2018, the Company and Sanofi entered into an Amended and Restated Immuno-oncology Discovery and Development Agreement ("Amended IO Discovery Agreement"), which narrowed the scope of the existing discovery and development activities conducted by the Company under 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.

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 candidates and Sanofi will receive a royalty on sales (if any).

In addition, the Company has no further obligations to to develop drug product candidates under the Amended IO Discovery Agreement.

Under the terms of the IO License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo (cemiplimab), an antibody targeting the receptor known as programmed cell death protein 1 (PD-1).

In addition, the Company has no further obligations to develop drug product candidates under the Amended IO Discovery Agreement.

Under the terms of the Immuno-oncology License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo (cemiplimab), an antibody targeting the receptor known as programmed cell death protein 1 (PD-1).

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

2 unchanged sentences

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

March 31, December 31,

June 30, December 31,

(In millions) 2021 2020

2 unchanged sentences

Deferred revenue

$ 11.4 $ 10.7

Other liabilities

1 unchanged sentence

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

The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2021 was $ 515.4 million.

The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of June 30, 2021 was $ 474.4 million.

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

5 unchanged sentences

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

(In millions) 2021 2020 2021 2020

5 unchanged sentences

Reduction of Research and development expense

$ 10.8 $ 20.7 $ 22.8

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

2 unchanged sentences

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

March 31, December 31,

June 30, December 31,

(In millions) 2021 2020

4 unchanged sentences

The Company leads global development activities, and the parties share development costs equally, on an ongoing basis, under a global development plan.

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

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

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

(In millions) 2021 2020 2021 2020

6 unchanged sentences

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

March 31, December 31,

June 30, December 31,

(In millions) 2021 2020

3 unchanged sentences

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

The aggregate amount of the estimated consideration under the Teva Collaboration Agreement related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2021 was $ 123.9 million.

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

REGEN-COV (casirivimab and imdevimab)

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

2 unchanged sentences

Department of Defense to manufacture and deliver filled and finished drug product of REGEN-COV to the U.S.

During the first quarter of 2021, the Company completed its final deliveries of drug product under this agreement.

See Note 2 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.

1 unchanged sentence

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.

government will acquire doses at the lowest treatment dose authorized or approved by the FDA for the indication authorized under the EUA, resulting in payments to the Company of up to $ 2.625 billion in the aggregate.

During the three months ended March 31, 2021, we did not recognize any net product sales in connection with this agreement.

In August 2020, we entered into a collaboration agreement (the "Roche Collaboration Agreement") with Roche to develop, manufacture, and distribute the casirivimab with imdevimab antibody cocktail (known as REGEN-COV in the United States).

We continue to lead global development activities for casirivimab with imdevimab, and the parties jointly fund certain ongoing 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.

Roche will be responsible for securing regulatory approvals outside the United States, following the initial European Medicines Agency ("EMA") approval (if any), 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.

government was obligated to purchase all filled and finished doses of drug product delivered by June 30, 2021, and agreed to acquire such doses at the lowest treatment dose authorized or approved by the FDA for the indication authorized under the Emergency Use Authorization ("EUA").

The Company has completed its final deliveries of drug product under the agreements described above.

See Note 2 for REGEN-COV net product sales recognized in connection with these agreements during the three and six months ended June 30, 2021.

In August 2020, we entered into a collaboration agreement (the "Roche Collaboration Agreement") with Roche to develop, manufacture, and distribute the casirivimab and imdevimab antibody cocktail (known as REGEN-COV in the United States and Ronapreve ™ in other countries).

We lead global development activities for casirivimab and imdevimab, and the parties jointly fund certain ongoing studies, as well as any mutually agreed additional new global studies to evaluate further the potential of casirivimab and imdevimab in treating or preventing COVID-19.

Under the terms of the agreement, each party is obligated to dedicate a certain amount of manufacturing capacity to casirivimab and imdevimab each year.

We distribute the product in the United States and Roche distributes the product outside of the United States.

2 unchanged sentences

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

(In millions) 2021 2020 2021 2020

Regeneron's share of gross profits in connection with sales of casirivimab with imdevimab Collaboration revenue $ 66.8 —

Regeneron's share of gross profits in connection with sales of casirivimab and imdevimab Collaboration revenue $ 167.9 — $ 234.7 —

Reimbursement of research and development expenses Reduction of Research and development expense $ 41.0 — $ 127.8 —

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

March 31, December 31,

June 30, December 31,

(In millions) 2021 2020

Accounts receivable, net $ 209.2 $ 77.1

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

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

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

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

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

In connection with the agreement, we made a $ 70.0 million up-front payment 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 during the three months ended June 30, 2020.

Net Income Per Share

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In millions, except per share data) 2021 2020 2021 2020

3 unchanged sentences

Stock options 4.8 7.8 4.7 6.7

Restricted stock 0.6 0.3

Restricted stock awards and restricted stock units 1.0 0.5 0.8 0.4

Weighted average shares - diluted 110.8 117.9 110.7 116.8

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(Shares in millions) 2021 2020 2021 2020

1 unchanged sentence

Marketable Securities

Marketable securities as of March 31, 2021 and December 31, 2020 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).

Marketable securities as of June 30, 2021 and December 31, 2020 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).

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

(In millions) Amortized Unrealized Fair

As of March 31, 2021 Cost Basis Gains Losses Value

As of June 30, 2021 Cost Basis Gains Losses Value

Corporate bonds $ 3,685.9 $ 24.3 $ ( 3.5 ) $ 3,706.7

12 unchanged sentences

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

The available-for-sale debt securities listed as of March 31, 2021 mature at various dates through March 2026.

The available-for-sale debt securities listed as of June 30, 2021 mature at various dates through June 2026.

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

March 31, December 31,

June 30, December 31,

(In millions) 2021 2020

5 unchanged sentences

(In millions)

As of March 31, 2021

As of June 30, 2021

Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

5 unchanged sentences

Corporate bonds $ 364.5 $ ( 0.2 ) — — $ 364.5 $ ( 0.2 )

There were no realized losses on sales of marketable securities, and realized gains were no t material, for the three months ended March 31, 2021 and 2020.

With respect to marketable securities, for the three months ended March 31, 2021 and 2020, amounts reclassified from Accumulated other comprehensive income into Other income (expense), net were related to realized gains on sales of available-for-sale debt securities.

For the three and six months ended June 30, 2021, realized gains and losses on sales of marketable securities were no t material.

For the three and six months ended June 30, 2020, realized gains on sales of marketable securities were $ 28.0 million and $ 28.3 million, respectively, and realized losses were no t material.

With respect to marketable securities, for the three and six months ended June 30, 2021 and 2020, amounts reclassified from Accumulated other comprehensive income into Other income (expense), net were related to realized gains and losses on sales of available-for-sale debt securities.

Fair Value Measurements

5 unchanged sentences

(In millions) Fair Value Measurements at Reporting Date

As of March 31, 2021 Fair Value Level 1 Level 2

As of June 30, 2021 Fair Value Level 1 Level 2

Available-for-sale debt securities:

17 unchanged sentences

$ 4,528.9 $ 839.8 $ 3,689.1

The Company held certain restricted equity securities as of March 31, 2021 which are subject to transfer restrictions that expire at various dates through 2024.

During the three months ended March 31, 2021 and 2020, we recorded $ 143.9 million of net unrealized gains and $ 56.8 million of net unrealized losses, respectively, on equity securities in Other income (expense), net.

In addition to the investments summarized in the table above, as of March 31, 2021 and December 31, 2020, the Company had $ 40.0 million and $ 59.2 million, respectively, in equity investments that do not have a readily determinable fair value.

The Company held certain restricted equity securities as of June 30, 2021 which are subject to transfer restrictions that expire at various dates through 2024.

During the three and six months ended June 30, 2021, we recorded $ 409.0 million and $ 552.9 million of net unrealized gains, respectively, on equity securities in Other income (expense), net.

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

In addition to the investments summarized in the table above, as of June 30, 2021 and December 31, 2020, the Company had $ 40.0 million and $ 59.2 million, respectively, in equity investments that do not have a readily determinable fair value.

These investments are recorded within Other noncurrent assets.

The fair value of our long-term debt (see Note 8), which was determined based on Level 2 inputs, was estimated to be $ 1.803 billion and $ 1.958 billion as of March 31, 2021 and December 31, 2020, respectively.

The fair value of our long-term debt (see Note 8), which was determined based on Level 2 inputs, was estimated to be $ 1.868 billion and $ 1.958 billion as of June 30, 2021 and December 31, 2020, respectively.

Inventories consist of the following:

March 31, December 31,

June 30, December 31,

(In millions) 2021 2020

5 unchanged sentences

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

For the three and six months ended June 30, 2021, Cost of goods sold included inventory write-offs and reserves totaling $ 139.9 million and $ 149.3 million, respectively.

For the three and six months ended June 30, 2020, such amounts were no t material.

Bridge Loan Facility

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

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

As of June 30, 2020, $ 1.5 billion remained outstanding under the Bridge Facility, and the Bridge Facility was repaid in full during the third quarter of 2020 following the closing of the issuance and sale of the Company's senior notes (as described below).

In August 2020, we issued and sold $ 1.250 billion aggregate principal amount of senior unsecured notes due 2030 and $ 750 million aggregate principal amount of senior unsecured notes due 2050.

Long-term debt in connection with our senior unsecured notes (collectively, the "Notes"), net of underwriting discounts and offering expenses, consists of the following:

March 31, December 31,

June 30, December 31,

(In millions) 2021 2020

3 unchanged sentences

$ 1,979.2 $ 1,978.5

Interest expense related to the Notes for the three months ended March 31, 2021 was $ 11.1 million.

Interest expense related to the Notes for the three and six months ended June 30, 2021 was $ 11.1 million and $ 22.2 million, respectively.

The Company is subject to U.S.

federal, state, and foreign income taxes.

The Company's effective tax rate was 11.0 % and 6.6 % for the three months ended March 31, 2021 and 2020, respectively.

The Company's 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.

The Company's effective tax rate was 17.4 % and 2.4 % for the three months ended June 30, 2021 and 2020, respectively, and 15.8 % and 4.1 % for the six months ended June 30, 2021 and 2020, respectively.

The Company's effective tax rate for the three and six months ended June 30, 2021 was positively impacted, compared to the U.S.

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

federal statutory rate and federal tax credits for research activities.

The Company's federal income tax returns for 2015 through 2018 are currently under audit by the Internal Revenue Service ("IRS").

During the first quarter of 2021, we reduced the amount of liabilities for uncertain tax positions related to the Company’s federal income tax returns for 2015 and 2016, and the audits of such tax years are expected to conclude in the next 12 months.

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

In addition, the effective tax rate for the six months ended June 30, 2021 was positively impacted by the reversal of liabilities related to uncertain tax positions.

During the six months ended June 30, 2021, we reduced the amount of liabilities for uncertain tax positions related to the Company’s federal income tax returns for 2015 and 2016, and these audits are effectively settled.

The Company's federal income tax returns for 2017 and 2018 are currently under audit by the Internal Revenue Service ("IRS").

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

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

4 unchanged sentences

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

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

As of December 31, 2020, the Company had repurchased the entire $ 1.0 billion it was authorized to repurchase under the program.

1 unchanged sentence

The share repurchase program was approved under terms substantially similar to the November 2019 share repurchase program described above.

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.

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.

During the three months ended March 31, 2021, we repurchased 690,265 shares of our Common Stock under the 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.

As of June 30, 2021, $ 887.9 million remained available for share repurchases under the program.

The table below summarizes the shares of our Common Stock we repurchased under the programs during the three and six months ended June 30, 2021 and 2020 and the cost of the shares received, which were recorded as Treasury Stock.

Three Months Ended

June 30, Six Months Ended

(In millions) 2021 2020 2021 2020

Number of shares repurchased 0.6 — 1.3 0.7

Total cost of shares received $ 288.6 — $ 612.1 $ 272.8

Sanofi Funding of Certain Development Costs

1 unchanged sentence

Pursuant to the Letter Agreement, we agreed to allow Sanofi to satisfy its funding obligations with respect to Dupilumab/Itepekimab Eligible Investments, as well as Libtayo development costs, for quarterly periods ending on September 30, 2020 by selling our Common Stock owned by Sanofi.

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

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

During the three and six months ended June 30, 2020, Sanofi elected to sell, and we elected to purchase (by issuing a credit towards the amount owed by Sanofi), 34,050 and 77,677 shares of our Common Stock to satisfy Sanofi's funding obligation related to Libtayo development costs, respectively, and we recorded the cost of the shares received, or $ 20.3 million and $ 41.7 million, respectively, as Treasury Stock.

During the three and six months ended June 30, 2020, Sanofi elected to sell, and we elected to purchase (in cash), 86,184 and 171,471 shares of our Common Stock in connection with Sanofi's funding obligation for Dupilumab/Itepekimab Eligible Investments, respectively, and recorded the cost of the shares received, or $ 51.5 million and $ 93.3 million, respectively, as Treasury Stock.

Additional Stock Purchased from Sanofi

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

In connection with the Secondary Offering, we also purchased 9,806,805 shares directly from Sanofi for an aggregate purchase amount of $ 5.0 billion (the "Stock Purchase").

As a result of the Secondary Offering and the Stock Purchase, Sanofi disposed of all of its shares of our Common Stock, other than 400,000 shares that it retained as of the closing of the Secondary Offering and the Stock Purchase (a portion of which Sanofi used for the funding of certain Libtayo development costs and/or Dupilumab/Itepekimab Eligible Investments as described above).

Statement of Cash Flows

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

March 31, December 31, March 31, December 31,

June 30, December 31, June 30, December 31,

(In millions) 2021 2020 2020 2019

Accrued capital expenditures $ 93.4 $ 83.6 $ 87.4 $ 133.7

As described in Note 10, during the three months ended March 31, 2020, we purchased (by issuing a credit towards the amount owed by Sanofi) shares of our Common Stock from Sanofi to satisfy Sanofi's funding obligation related to Libtayo development costs.

As described in Note 10, during the three months ended June 30, 2020, we purchased (by issuing a credit towards the amount owed by Sanofi) shares of our Common Stock from Sanofi to satisfy Sanofi's funding obligation related to Libtayo development costs.

Legal Matters

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

As of March 31, 2021 and December 31, 2020, the Company's accruals for loss contingencies were not material.

As of June 30, 2021 and December 31, 2020, the Company's accruals for loss contingencies were not material.

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

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As described in greater detail below, the Company is currently a party to patent infringement actions initiated by Amgen Inc.

(and/or its affiliated entities) against the Company and/or Sanofi (and/or the Company's and Sanofi's respective affiliated

entities) in a number of jurisdictions relating to Praluent.

(and/or its affiliated entities) against the Company and/or Sanofi (and/or the Company's and Sanofi's respective affiliated entities) in a number of jurisdictions relating to Praluent.

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

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On February 11, 2021, the Federal Circuit affirmed the District Court's decision that certain of Amgen's asserted patent claims are invalid based on lack of enablement.

On April 14, 2021, Amgen filed a petition for a rehearing en banc.

On April 14, 2021, Amgen filed a petition for a rehearing en banc, which was denied on June 21, 2021.

Injunctive Relief Proceedings.

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

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

Germany (the "Düsseldorf Regional Court"), seeking a permanent injunction, an accounting of marketing activities, a recall of Praluent and its removal from distribution channels, and damages.

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

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On April 10, 2017, the Company and the Sanofi parties filed briefs seeking invalidation of certain of the claims of the '124 Patent, and Amgen filed a response on July 28, 2017.

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

The Netherlands.

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

and Sanofi-Aventis Groupe S.A.

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

Amgen alleges, among other things, patent infringement based on the production, importation, and commercialization of Praluent (alirocumab) in the Netherlands.

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

On February 8, 2021, the lawsuit was dismissed.

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

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

Amgen alleges that the production, importation, and commercialization of Praluent (alirocumab) in Italy infringes the '124 Patent.

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

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

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

On February 9, 2021, the lawsuit was dismissed.

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

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

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

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

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

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

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

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

and, on February 1, 2021, the lawsuit was dismissed.

On June 22, 2021, the lawsuit was dismissed.

In December 2019, Amgen also filed lawsuits in the Netherlands, Italy, and Spain for infringement of the relevant designation of the '124 Patent in each such jurisdiction.

The Company was not named as a defendant in any of these actions.

Each of these lawsuits was dismissed in February 2021.

As previously reported, on March 31, 2020, Amgen filed a lawsuit in the Tokyo District Court against Sanofi K.K.

seeking damages incurred by Amgen as a result of the earlier finding of infringement of Amgen's Japanese Patent Nos.

5,906,333 and 5,705,288 by the Tokyo District Court Civil Division.

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

Proceedings Relating to Dupixent (dupilumab) Injection

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

On March 11, 2021, Immunex filed a petition for writ of certiorari with the United States Supreme Court.

On March 11, 2021, Immunex filed a petition for writ of certiorari with the United States Supreme Court, which was denied on June 21, 2021.

The '487 Patent expired in May 2020 following Immunex's filing of a terminal disclaimer with the USPTO.

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On February 28, 2019, the court granted a joint stipulation by the parties to stay the litigation pending resolution of the appeals of the PTAB's final written decisions on the Additional IPR Petitions discussed above.

On August 3, 2021, the court granted a motion to dismiss the lawsuit, dismissing all of Immunex's claims with prejudice.

On September 30, 2016, Sanofi initiated a revocation proceeding in the United Kingdom to invalidate the U.K.

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A final written decision of revocation of the '665 Patent was issued by the EPO on January 4, 2018.

Immunex filed a notice of appeal of the EPO's decision on January 31, 2018.

Immunex filed a notice of appeal of the EPO's decision on January 31, 2018, and an oral hearing before the TBA has been scheduled for March 2022.

On September 20, 2017 and September 21, 2017, respectively, the Company and Sanofi initiated opposition proceedings in the EPO against Immunex's European Patent No.

2,990,420 (the "'420

Patent"), a divisional patent of the '665 Patent ( i.e.

2,990,420 (the "'420 Patent"), a divisional patent of the '665 Patent ( i.e.

, a patent that shares the same priority date, disclosure, and patent term of the parent '665 Patent but contains claims to a different invention).

The oral hearing before the EPO on the oppositions occurred on February 14–15, 2019, at which the '420 Patent was revoked in its entirety.

Immunex filed a notice of appeal of the EPO's decision on May 31, 2019.

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

Immunex filed a notice of appeal of the EPO's decision on May 31, 2019, and an oral hearing before the TBA has been scheduled for March 2022.

The original patent term of the Immunex patents expired in May 2021.

Proceedings Relating to EYLEA (aflibercept) Injection

On January 7, 2021, Chengdu Kanghong Pharmaceutical Group Co., Ltd.

filed an IPR petition in the USPTO against the Company' s U.S.

("Chengdu Kanghong") filed an IPR petition in the USPTO against the Company' s U.S.

10,464,992 (the "'992 Patent") and a post-grant review petition against the Company's U.S.

10,828,345 (the "'345 Patent") seeking declarations of invalidity of the '992 Patent and '345 Patent.

On June 23, 2021, Chengdu Kanghong filed motions to dismiss each of these petitions and terminate the respective proceedings, which were granted by the USPTO on June 25, 2021.

On February 11, 2020, anonymous parties filed two requests for ex parte reexamination of the Company's U.S.

10,406,226 and the '992 Patent, and the USPTO has granted both requests to initiate reexamination proceedings.

On May 5, 2021, Mylan Pharmaceuticals Inc.

filed IPR petitions in the USPTO against the Company's U.S.

9,254,338 (the "'338 Patent") and 9,669,069 (the "'069 Patent") seeking declarations of invalidity of the '338 Patent and the '069 Patent.

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

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

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

Novartis also seeks a judgment of patent infringement of the '631 Patent, monetary damages (together with interest), an order of willful infringement of the '631 Patent (which would allow the court in its discretion to award damages up to three times the amount assessed), costs and expenses of the lawsuits, and attorneys' fees.

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

On April 8, 2021, Novartis requested that the stay of this lawsuit be lifted.

On June 11, 2021, the court lifted the stay;

and, on July 11, 2021, the Company filed a motion to dismiss the claim of willful infringement.

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

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On the same day, the Company filed a motion for a preliminary injunction and temporary restraining order, seeking to prevent implementation of the MFN Rule.

On December 22, 2020, the court heard oral argument on the Company's motion for a

preliminary injunction and temporary restraining order.

On December 22, 2020, the court heard oral argument on the Company's motion for a preliminary injunction and temporary restraining order.

On December 31, 2020, the court granted the Company's motion and issued a preliminary injunction.

On February 2, 2021, the government stated to the court that the Solicitor General had determined not to appeal the preliminary injunction.

On February 2, 2021, the government stated to the court that the Solicitor General had

determined not to appeal the preliminary injunction.

On February 10, 2021, the court entered a 90-day stay of the litigation.

On May 11, 2021, the court entered an additional 90-day stay of the litigation.

Proceedings Relating to fasinumab

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

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

On January 29, 2021, Teva filed a notice of intervention with the TBA to take part in the appeal proceedings as an intervener.

Proceedings Relating to REGEN-COV (casirivimab with imdevimab)

An oral hearing before the TBA was held on July 29, 2021, at which the '711 Patent was revoked in its entirety.

Proceedings Relating to REGEN-COV (casirivimab and imdevimab)

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

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

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

Allele seeks a judgment of patent infringement of the '221 Patent, an award of monetary damages (together with interest), an order of willful infringement of the '221 Patent (which would allow the court in its discretion to award damages up to three times the amount assessed), costs and expenses of the lawsuit, and attorneys' fees.

On July 16, 2021, the Company filed a motion to dismiss the complaint.

Department of Justice Matters

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

On June 3, 2021, the United States District Court for the Central District of California unsealed a qui tam complaint filed against the Company, Regeneron Healthcare Solutions, Inc., and Sanofi-Aventis U.S.

LLC by two qui tam plaintiffs (known as relators) purportedly on behalf the United States and various states (the "State Plaintiffs"), asserting causes of action under the federal False Claims Act and state law.

Also on June 3, 2021, the United States and the State Plaintiffs notified the court of their decision to decline to intervene in the case.

In June 2021, the Company received a CID from the U.S.

Department of Justice pursuant to the federal False Claims Act.

The CID states that the investigation concerns allegations that the Company (i) violated the False Claims Act by paying kickbacks to distributors and ophthalmology practices to induce purchase of EYLEA, including through discounts, rebates, credit card fees, free units of EYLEA, and inventory management systems;

and (ii) inflated reimbursement rates for EYLEA by excluding applicable discounts, rebates, and benefits from the average sales price reported to CMS.

The CID covers the period from January 2011 through June 2021.

The Company is cooperating with this investigation.

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On December 17, 2020, UnitedHealthcare Insurance Company and United Healthcare Services, Inc.

(collectively, "UHC") filed a lawsuit against the Company in the United States District Court for the Southern District of New York alleging UHC has been

damaged by the conduct alleged in the civil complaint filed by the U.S.

(collectively, "UHC") filed a lawsuit against the Company in the United States District Court for the Southern District of New York alleging UHC has been damaged by the conduct alleged in the civil complaint filed by the U.S.

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

UHC alleges causes of action under state law and the federal Racketeer Influenced and Corrupt Organizations Act and seeks monetary damages and equitable relief.

UHC alleges causes of action under state law and the federal Racketeer Influenced and Corrupt Organizations Act (the "RICO Act") and seeks monetary damages and equitable relief.

On March 1, 2021, the Company filed a motion to dismiss the complaint in its entirety.

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and, on April 22, 2021, the Company filed a motion to dismiss this amended complaint in its entirety.

Proceedings Initiated by Humana

On July 22, 2021, Humana Inc.

("Humana") filed a lawsuit against the Company in the United States District Court for the Southern District of New York alleging Humana has been damaged by the conduct alleged in the civil complaint filed by the U.S.

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

Humana alleges causes of action under state law and the RICO Act and seeks monetary damages and equitable relief.

Shareholder Demand

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The Company's board of directors, working with outside counsel, investigated and evaluated the allegations in the demand letter and has concluded that pursuing the claims alleged in the demand would not be in the Company's best interests at this time.

Proceedings Relating to Shareholder Derivative Complaint

On June 29, 2021, an alleged shareholder filed a shareholder derivative complaint in the New York Supreme Court, naming the current and certain former members of the Company's board of directors and certain current and former executive officers of the Company as defendants and Regeneron as a nominal defendant.

The complaint asserts that the individual defendants breached their fiduciary duties in relation to the allegations in the civil complaint filed by the U.S.

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

The complaint seeks an award of damages allegedly sustained by the Company;

an order requiring Regeneron to take all necessary actions to reform and improve its corporate governance and internal procedures;

disgorgement from the individual defendants of all profits and benefits obtained by them resulting from their sales of Regeneron stock;

and costs and disbursements of the action, including attorneys' fees.

On July 28, 2021, the defendants filed a notice of removal, removing the case from the New York Supreme Court to the U.S.

District Court for the Southern District of New York.

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

What changed 10-Q

Item 1. Financial Statements