What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-08-05 · 164 added, 140 removed, 639 unchanged (32% of the section changed)

3 unchanged sentences

(In millions, except share data)

June 30, December 31,

September 30, December 31,

Current assets:

28 unchanged sentences

40,000,000 shares authorized;

shares issued and outstanding - 1,848,970 i n 2021 and 2020

shares issued and outstanding - 1,848,970 in 2021 and 2020

Common Stock, $ .001 par value;

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

8 unchanged sentences

Cost of collaboration and contract manufacturing 214.4 143.0 493.5 454.5

Other operating (income) expense, net ( 31.3 ) ( 50.2 ) ( 71.8 ) ( 90.6 )

Other operating expense (income), net 42.0 ( 44.6 ) ( 29.8 ) ( 135.2 )

1,605.6 1,240.9 4,812.9 3,664.6

1 unchanged sentence

Other income (expense):

Other income (expense), net 420.0 272.2 574.9 246.8

Other (expense) income, net ( 16.4 ) ( 28.5 ) 558.5 218.3

Interest expense ( 14.2 ) ( 26.3 ) ( 43.2 ) ( 42.1 )

44 unchanged sentences

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

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

— — 2.5 — 816.5 — — — — 816.5

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

— — ( 0.4 ) — ( 269.6 ) — — — — ( 269.6 )

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

— — — — 10.2 — — — 1.8 12.0

Repurchases of Common Stock

— — — — — — — ( 0.2 ) ( 190.6 ) ( 190.6 )

Stock-based compensation charges — — — — 136.4 — — — — 136.4

Net income — — — — — 1,632.2 — — — 1,632.2

Other comprehensive loss, net of tax — — — — — — ( 6.2 ) — — ( 6.2 )

Balance, September 30, 2021 1.8 — 124.6 $ 0.1 $ 7,919.3 $ 16,739.3 $ 9.5 ( 17.9 ) $ ( 7,410.2 ) $ 17,258.0

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

24 unchanged sentences

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

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

— — 0.9 — 297.5 — — — — 297.5

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

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

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

— — — — 8.6 — — — 1.3 9.9

Repurchases of Common Stock

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

Stock-based compensation charges

— — — — 104.6 — — — — 104.6

— — — — — 842.1 — — — 842.1

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

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

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

2 unchanged sentences

(In millions)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

20 unchanged sentences

Cash flows from financing activities:

Proceeds from bridge loan facility — 1,500.0

Proceeds from issuance of Common Stock 1,129.6 2,471.1

1 unchanged sentence

Repurchases of Common Stock ( 778.5 ) ( 5,465.7 )

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

Proceeds from bridge loan facility — 1,500.0

Repayment of bridge loan facility — ( 1,500.0 )

Net cash used in financing activities ( 99.2 ) ( 1,665.2 )

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

Net increase (decrease) in cash, cash equivalents, and restricted cash 1,237.6 ( 43.7 )

Cash, cash equivalents, and restricted cash at beginning of period 2,207.3 1,630.3

16 unchanged sentences

(In millions) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Net Product Sales in the United States

11 unchanged sentences

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.

As of September 30, 2021 and December 31, 2020, the Company had $ 4.086 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 nine months ended September 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

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

3 unchanged sentences

Government (see Note 3) 25 % * 38 % *

* Sales to the U.S.

Government represented less than 10% of total gross product revenue during the period.

Collaboration, License, and Other Agreements

1 unchanged sentence

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2021 2020 2021 2020

Regeneron's share of profits in connection with commercialization of antibodies Collaboration revenue $ 387.0 $ 212.8 $ 975.2 $ 555.6

Sales-based milestone earned Collaboration revenue $ 50.0 $ 50.0 $ 50.0 $ 50.0

Reimbursement for manufacturing of commercial supplies Collaboration revenue $ 144.7 $ 94.3 $ 361.2 $ 275.0

15 unchanged sentences

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

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

In the third quarter of 2021, the Company earned, and recognized as revenue, the second $ 50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $ 1.5 billion on a rolling twelve-month basis.

We are entitled to receive up to an aggregate of $ 150.0 million in additional sales milestone payments from Sanofi.

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

June 30, December 31,

September 30, December 31,

(In millions) 2021 2020

16 unchanged sentences

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).

Under the terms of the Immuno-oncology License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo (cemiplimab).

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

1 unchanged sentence

The parties share equally in profits and losses in connection with the commercialization of Libtayo.

During the three months ended September 30, 2021, we updated our estimate of the total research and development costs expected to be incurred (which resulted in a change to the estimate of the stage of completion) in connection with the IO Collaboration, and, as a result, recorded a cumulative catch-up adjustment of $ 66.9 million as a reduction to other operating income.

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

June 30, December 31,

September 30, December 31,

(In millions) 2021 2020

6 unchanged sentences

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

The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of June 30, 2021 was $ 474.4 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 September 30, 2021 was $ 591.4 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

September 30, Nine Months Ended

September 30,

(In millions) 2021 2020 2021 2020

10 unchanged sentences

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

June 30, December 31,

September 30, December 31,

(In millions) 2021 2020

6 unchanged sentences

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2021 2020 2021 2020

6 unchanged sentences

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

June 30, December 31,

September 30, December 31,

(In millions) 2021 2020

1 unchanged sentence

Other liabilities $ 43.3 $ 66.8

$ 47.2 $ 66.8

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 June 30, 2021 was $ 105.1 million.

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

7 unchanged sentences

Pursuant to the agreement, the U.S.

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").

government was obligated to purchase the 1.25 million doses of drug product that we delivered by June 30, 2021.

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 September 2021, the Company announced an amendment to its January 2021 agreement to supply the U.S.

government with an additional 1.4 million doses of REGEN-COV.

Pursuant to the agreement, the U.S.

government is obligated to purchase all filled and finished doses of such additional drug product delivered by January 31, 2022, resulting in payments to the Company of up to $ 2.940 billion in the aggregate.

Additionally, Roche will supply a portion of the doses to Regeneron to fulfill our agreement with the U.S.

government (see "Roche" below for further details regarding our collaboration agreement with Roche).

See Note 2 for REGEN-COV net product sales recognized in connection with these agreements.

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).

3 unchanged sentences

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.

Each quarter, a single payment is due from one party to the other to true-up the global gross profits between the parties.

If Regeneron is to receive a true-up payment from Roche, such amount will be recorded to Collaboration revenue.

If Regeneron is to make a true-up payment to Roche, such amount will be recorded to Cost of goods sold.

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

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2021 2020 2021 2020

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

Global gross profit true-up payment owed from Roche in connection with sales of casirivimab and imdevimab Collaboration revenue $ 127.1 — $ 361.8 —

Reimbursement of research and development expenses Reduction of Research and development expense $ 10.5 $ 9.5 $ 138.3 $ 9.5

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

June 30, December 31,

September 30, December 31,

(In millions) 2021 2020

13 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Shares in millions) 2021 2020 2021 2020

1 unchanged sentence

Marketable Securities

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).

Marketable securities as of September 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 June 30, 2021 Cost Basis Gains Losses Value

As of September 30, 2021 Cost Basis Gains Losses Value

Corporate bonds $ 5,911.8 $ 19.9 $ ( 6.9 ) $ 5,924.8

3 unchanged sentences

Certificates of deposit 231.7 — — 231.7

Asset-backed securities 19.0 — — 19.0

$ 6,600.9 $ 21.0 $ ( 7.0 ) $ 6,614.9

7 unchanged sentences

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

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

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

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

June 30, December 31,

September 30, December 31,

(In millions) 2021 2020

5 unchanged sentences

(In millions)

As of June 30, 2021

As of September 30, 2021

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

1 unchanged sentence

government and government agency obligations 27.0 ( 0.1 ) — — 27.0 ( 0.1 )

Sovereign bonds 33.4 ( 0.1 ) — — 33.4 ( 0.1 )

$ 2,932.9 $ ( 7.0 ) — — $ 2,932.9 $ ( 7.0 )

1 unchanged sentence

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

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.

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

For the three months ended September 30, 2020, realized gains and losses on sales of marketable securities were no t material.

Realized gains were $ 28.5 million and realized losses were no t material for the nine months ended September 30, 2020.

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

Fair Value Measurements

5 unchanged sentences

(In millions) Fair Value Measurements at Reporting Date

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

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

Available-for-sale debt securities:

4 unchanged sentences

Certificates of deposit 231.7 — 231.7

Asset-backed securities 19.0 — 19.0

Equity securities (unrestricted) 35.7 $ 35.7 —

11 unchanged sentences

$ 4,528.9 $ 839.8 $ 3,689.1

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.

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

During the three and nine months ended September 30, 2021, we recorded $ 29.1 million of net unrealized losses and $ 523.8 million of net unrealized gains, respectively, on equity securities in Other (expense) income, net.

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

In addition to the investments summarized in the table above, as of September 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 $ 1.868 billion and $ 1.958 billion as of June 30, 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 $ 1.891 billion and $ 1.958 billion as of September 30, 2021 and December 31, 2020, respectively.

Inventories consist of the following:

June 30, December 31,

September 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.

For the three and nine months ended September 30, 2021, Cost of goods sold included inventory write-offs and reserves totaling $ 38.7 million and $ 188.0 million, respectively.

For the three and nine months ended September 30, 2020, Cost of goods sold included inventory write-offs and reserves totaling $ 11.8 million and $ 23.6 million, respectively.

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.

As described in Note 10, in the second quarter of 2020, we purchased shares of our Common Stock from Sanofi in connection with Sanofi's secondary offering of our Common Stock held by Sanofi.

This purchase was partially funded with 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).

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:

June 30, December 31,

September 30, December 31,

(In millions) 2021 2020

3 unchanged sentences

$ 1,979.6 $ 1,978.5

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.

Interest expense related to the Notes for the three and nine months ended September 30, 2021 was $ 11.1 million and $ 33.3 million, respectively.

The Company is subject to U.S.

federal, state, and foreign income taxes.

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.

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 effective tax rate was 10.2 % and 15.6 % for the three months ended September 30, 2021 and 2020, respectively, and 14.3 % and 8.6 % for the nine months ended September 30, 2021 and 2020, respectively.

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

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

federal statutory rate, the foreign-derived intangible income deduction, and federal tax credits for research activities.

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

During the nine months ended September 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, as 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.

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

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

5 unchanged sentences

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

In January 2021, our board of directors authorized an additional 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 described above.

2 unchanged sentences

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

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.

As of September 30, 2021, $ 697.3 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 nine months ended September 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

September 30, Nine Months Ended

September 30,

(In millions) 2021 2020 2021 2020

4 unchanged sentences

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 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.

During the nine months ended September 30, 2020, Sanofi elected to sell, and we elected to purchase (by issuing a credit towards the amount owed by Sanofi), 77,677 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 $ 41.7 million, as Treasury Stock.

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

During the three months ended September 30, 2020, there were no shares of our Common Stock purchased from Sanofi to satisfy Sanofi's funding obligations related to Libtayo development costs and/or Dupilumab/Itepekimab Eligible Investments.

Additional Stock Purchased from Sanofi

4 unchanged sentences

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

September 30,

(In millions) 2021 2020

6 unchanged sentences

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

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

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

(In millions) 2021 2020 2020 2019

Accrued capital expenditures $ 70.1 $ 83.6 $ 100.4 $ 133.7

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

3 unchanged sentences

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

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

As of September 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.

4 unchanged sentences

United States

In the United States, Amgen has asserted claims of U.S.

8,829,165 (the "'165 Patent") and 8,859,741 (the "'741 Patent"), and seeks a permanent injunction to prevent the Company and the Sanofi defendants from commercial manufacturing, using, offering to sell, or selling within the United States (as well as importing into the United States) (collectively, "Commercializing") Praluent.

Amgen also seeks a judgment of patent infringement of the asserted patents, monetary damages (together with interest), costs and expenses of the lawsuits, and attorneys' fees.

In the United States, Amgen asserted claims of U.S.

8,829,165 (the "'165 Patent") and 8,859,741 (the "'741 Patent"), and sought a permanent injunction to prevent the Company and the Sanofi defendants from commercial manufacturing, using, offering to sell, or selling within the United States (as well as importing into the United States) (collectively, "Commercializing") Praluent.

Amgen also sought a judgment of patent infringement of the asserted patents, monetary damages (together with interest), costs and expenses of the lawsuits, and attorneys' fees.

As described in greater detail under "Second Jury Trial and Appeal" below, on February 11, 2021, the Federal Circuit (as defined below) affirmed the lower court's decision that certain of Amgen's asserted patent claims are invalid based on lack of enablement.

24 unchanged sentences

2,215,124 (the "'124 Patent"), which pertains to PCSK9 monoclonal antibodies, in the countries in Europe discussed below.

As described in greater detail under "EPO Proceedings" below, in October 2020 the '124 Patent claims directed to compositions of matter and medical use were ruled invalid by the Technical Board of Appeal (the "TBA") of the European Patent Office (the "EPO").

This decision has impacted or will impact each of the infringement proceedings based on the '124 Patent discussed below.

EPO Proceedings.

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

On December 13, 2017, the Opposition Division of the EPO issued a preliminary, non-binding opinion (the "Preliminary Opinion") regarding the validity of the '124 Patent, indicating that it currently considers the claims of a new request filed by Amgen in response to the opposition to satisfy the requirements for patentability.

An oral hearing on the oppositions against the '124 Patent was held on November 28–30, 2018, at which the Opposition Division upheld the validity of the '124 Patent's claims in amended form.

The Company and Sanofi filed notices of appeal to the TBA on November 30, 2018.

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

United Kingdom.

On July 25, 2016, Amgen filed a lawsuit against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi-Synthelabo Limited, Aventis Pharma Limited, Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the English High Court of Justice, Chancery Division, Patents Court, in London, seeking a declaration of infringement of the '124 Patent by Praluent.

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

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

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

On July 25, 2016, Amgen filed a lawsuit for infringement of the '124 Patent against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the Regional Court of Düsseldorf,

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

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

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

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

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

On July 12, 2019, the Company and Sanofi appealed the July 11 Decision to the Higher Regional Court of Düsseldorf (the "Higher Regional Court").

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

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

An oral hearing on the merits of the appeal to the Higher Regional Court was held on November 5, 2020, at which the Higher Regional Court overturned the July 11 Decision.

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

Amgen is seeking the prohibition of allegedly infringing activities with a € 10,000 penalty per drug unit of Praluent produced in violation of the court order sought by Amgen;

an appointment of an expert for the assessment of damages;

disclosure of technical (including supply-chain) and accounting information to the expert and the court;

provisional damages of € 10.0 million (which would be awarded on an interim basis pending final determination);

reimbursement of costs;

publication of the ruling in three newspapers;

and provisional enforcement of the decision to be issued, which would ensure enforcement of the decision (including any provisional damages) pending appeal.

Amgen is not seeking a preliminary injunction in this proceeding at this time.

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.

On June 22, 2021, the lawsuit was dismissed.

In October 2020, the '124 Patent claims directed to compositions of matter and medical use relevant to Praluent were ruled invalid based on a lack of inventive step by the Technical Board of Appeal (the "TBA") of the European Patent Office (the "EPO").

This decision impacted each of the infringement proceedings based on the '124 Patent discussed below.

Amgen filed lawsuits in Germany, the United Kingdom, and France in July 2016, July 2016, and September 2016, respectively, against the Company and certain of Sanofi's affiliated entities for infringement of the relevant designation of the '124 Patent in each such jurisdiction;

and these lawsuits were dismissed in November 2020, September 2021, and June 2021, respectively.

The dismissal in Germany followed an earlier finding of infringement and granting of an injunction, both of which were subsequently overturned.

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.

the Company was not named as a defendant in any of these actions, and 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.

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

LLC, and Genzyme Corporation filed a lawsuit against Amgen and Immunex Corporation, a wholly owned subsidiary of Amgen, in the United States District Court for the District of Massachusetts seeking a declaratory judgment that the Company's and the other plaintiffs' Commercializing of Dupixent does not directly or indirectly infringe U.S.

8,679,487 (the "'487 Patent") owned by Immunex Corporation relating to antibodies that bind the human interleukin-4 receptor.

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

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

LLC, and Genzyme Corporation initiated an inter partes review ("IPR") in the United States Patent and Trademark Office ("USPTO") seeking a declaration of invalidity of the '487 Patent.

On July 28 and 31, 2017, the same parties filed two additional IPR petitions in the USPTO seeking declarations of invalidity of the '487 Patent based on different grounds (the "Additional IPR Petitions").

On October 4, 2017, the Patent Trial and Appeal Board ("PTAB") of the USPTO issued a decision on the first IPR petition and declined to institute an IPR proceeding to review the validity of the '487 Patent.

On February 15, 2018, the PTAB issued two decisions instituting the Company's and Sanofi's Additional IPR Petitions on all claims of the '487 Patent for which review had been requested.

Oral hearings on the Additional IPR Petitions before the PTAB were held on November 14, 2018.

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

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

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

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

LLC, and Genzyme Corporation initiated an inter partes review ("IPR") in the United States Patent and Trademark Office ("USPTO") seeking a declaration of invalidity of U.S.

8,679,487 (the "'487 Patent") owned by Immunex Corporation relating to antibodies that bind the human interleukin-4 receptor and subsequently filed two additional IPR petitions in the USPTO seeking declarations of invalidity of the '487 Patent based on different grounds (the "Additional IPR Petitions").

The Patent Trial and Appeal Board ("PTAB") of the USPTO issued a final written decision on the Additional IPR Petitions on February 14, 2019, invalidating all 17 claims of the '487 Patent as obvious.

This decision was subsequently affirmed by the Federal Circuit and Immunex's petition for writ of certiorari was denied by the United States Supreme Court.

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

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

LLC, Genzyme Corporation, and Aventisub LLC in the United States District Court for the Central District of California seeking a judgment of patent infringement of the '487 Patent and a declaratory judgment of infringement of the '487 Patent, in each case by the Company's and the other defendants' Commercializing of Dupixent;

LLC, Genzyme Corporation, and Aventisub LLC in the United States District Court for the Central District of California seeking a judgment of

patent infringement of the '487 Patent and a declaratory judgment of infringement of the '487 Patent, in each case by the Company's and the other defendants' Commercializing of Dupixent;

monetary damages (together with interest);

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and attorneys' fees.

Immunex is not seeking an injunction in this proceeding at this time.

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

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

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

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

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.

The court subsequently 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;

and, on August 3, 2021, 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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("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.

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

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

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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.

On September 7, 2021, Celltrion, Inc.

filed a PGR petition in the USPTO against the Company's U.S.

10,857,231 (the "'231 Patent") seeking a declaration of invalidity of the '231 Patent.

On October 26 and October 27, 2021, anonymous parties initiated opposition proceedings in the EPO against the Company's European Patent No.

2,944,306 (the "'306 Patent") seeking revocation of the '306 Patent in its entirety.

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

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The ITC instituted the investigation on July 22, 2020 and a trial was scheduled for April 19–23, 2021.

On March 26, 2021, the staff attorney appointed by the ITC's Office of Unfair Import Investigations ("OUII")—an independent government party to the case representing the public interest—determined that the '631 Patent is invalid on several grounds.

On March 26, 2021, the staff attorney appointed by the ITC's Office of Unfair Import Investigations ("OUII")—an independent government party to the case representing the public interest—

determined that the '631 Patent is invalid on several grounds.

On April 8, 2021, Novartis moved to terminate the ITC investigation in its entirety based on its withdrawal of the complaint;

and, on May 3, 2021, the ITC terminated the investigation.

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

On June 19, 2020, Novartis also filed a patent infringement lawsuit (as amended on August 2, 2021) in the U.S.

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

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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 June 11, 2021, the court, at the request of Novartis, lifted the stay.

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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Following Novartis's motion to terminate the ITC investigation discussed above, on April 16, 2021 the Company filed a new IPR petition seeking a declaration of invalidity of the '631 Patent based on the same grounds that were the basis for the OUII staff attorney's determination discussed above.

On October 26, 2021, the USPTO issued a decision instituting the IPR proceeding.

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

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On February 22, 2021, Novartis filed, and Vetter moved to join, a motion to dismiss the amended complaint.

On September 21, 2021, the court granted Novartis and Vetter's motion to transfer this lawsuit to the Northern District of New York.

As a result, this lawsuit was transferred to the same judge that had been assigned to the patent infringement lawsuit discussed above.

Proceedings Related to "Most Favored Nation" Interim Final Rule

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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 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.

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 and subsequently extended the stay, with the most recent 30-day extension granted on October 11, 2021.

On August 6, 2021, CMS issued a Notice of Proposed Rulemaking that proposes to rescind the MFN Rule.

Proceedings Relating to fasinumab

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

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

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

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

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

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

("Allele") filed a lawsuit (as amended on April 8, 2021) against the Company in the United States District Court for the Southern District of New York, asserting infringement of U.S.

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

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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.

On October 29, 2021, the qui tam plaintiffs filed an amended complaint in this matter.

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

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

On September 27, 2021, the Company filed a motion to dismiss the complaint in its entirety.

Shareholder Demand

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District Court for the Southern District of New York.

On September 24, 2021, the individual defendants moved to dismiss the complaint in its entirety.

Also on September 24, 2021, the plaintiff filed a motion to remand the case to the New York Supreme Court.

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