What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-04 compared with 2021-11-04 · 203 added, 350 removed, 453 unchanged (55% of the section changed)

3 unchanged sentences

(In millions, except share data)

September 30, December 31,

March 31, December 31,

Current assets:

34 unchanged sentences

Retained earnings 19,941.8 18,968.3

Accumulated other comprehensive income 9.5 29.3

Accumulated other comprehensive loss ( 170.1 ) ( 26.2 )

Treasury Stock, at cost;

8 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Statements of Operations

4 unchanged sentences

Research and development 843.8 742.9

Acquired in-process research and development 28.1 —

Selling, general, and administrative 450.0 405.6

1 unchanged sentence

Cost of collaboration and contract manufacturing 197.6 124.8

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

Other operating (income) expense, net ( 20.2 ) ( 40.5 )

1,706.6 1,416.0

14 unchanged sentences

Other comprehensive income (loss), net of tax:

Unrealized (loss) gain on debt securities ( 6.4 ) ( 4.9 ) ( 20.5 ) 10.9

Unrealized gain (loss) on cash flow hedges 0.2 0.2 0.7 ( 1.2 )

Unrealized loss on debt securities ( 144.9 ) ( 13.3 )

Unrealized gain on cash flow hedges 1.0 0.2

Comprehensive income $ 829.6 $ 1,102.1

18 unchanged sentences

Balance, March 31, 2022 1.8 $ — 127.6 $ 0.1 $ 8,754.1 $ 19,941.8 $ ( 170.1 ) ( 19.9 ) $ ( 8,611.2 ) $ 19,914.7

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

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)

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, 2020 1.8 $ — 121.5 $ 0.1 $ 6,716.2 $ 10,893.0 $ 29.3 ( 16.4 ) $ ( 6,613.3 ) $ 11,025.3

7 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

— — 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

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)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization 74.3 67.4

Non-cash compensation expense 413.3 310.5

Gains on marketable and other securities, net ( 524.6 ) ( 162.3 )

Stock-based compensation expense 166.9 130.9

Losses (gains) on marketable and other securities, net 204.5 ( 144.4 )

Other non-cash items, net 84.3 28.7

1 unchanged sentence

Changes in assets and liabilities:

Increase in accounts receivable ( 1,342.9 ) ( 1,275.3 )

Decrease (increase) in accounts receivable 1,197.5 ( 58.3 )

Increase in inventories ( 88.6 ) ( 252.8 )

(Increase) decrease in prepaid expenses and other assets ( 316.8 ) 16.4

(Decrease) increase in deferred revenue ( 71.2 ) 112.3

Increase in accounts payable, accrued expenses, and other liabilities 500.4 80.8

Increase in prepaid expenses and other assets ( 44.8 ) ( 50.0 )

Increase (decrease) in deferred revenue 9.5 ( 143.6 )

Decrease in accounts payable, accrued expenses, and other liabilities ( 250.4 ) ( 34.7 )

Total adjustments 1,128.2 ( 446.7 )

4 unchanged sentences

Capital expenditures ( 141.8 ) ( 115.3 )

Net cash (used in) provided by investing activities ( 3,372.0 ) 234.4

Net cash used in investing activities ( 1,705.3 ) ( 1,059.0 )

Cash flows from financing activities:

2 unchanged sentences

Repurchases of Common Stock ( 358.1 ) ( 306.9 )

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 cash provided by (used in) financing activities 64.7 ( 366.4 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 461.1 ( 756.9 )

14 unchanged sentences

Certain reclassifications have been made to prior period amounts to conform with the current period's presentation.

Beginning with the first quarter of 2022, the Company added a new line item, Acquired in-process research and development, to its Condensed Consolidated Statements of Operations and Comprehensive Income.

This line item includes in-process research and development acquired in connection with asset acquisitions as well as up-front/opt-in payments related to license and collaboration agreements.

Amounts recorded in this line item for the three months ended March 31, 2022 would have historically been recorded to Research and development expenses.

No such amounts were recorded for the three months ended March 31, 2021.

Product Sales

1 unchanged sentence

(In millions) Three Months Ended

September 30, Nine Months Ended

September 30,

Net Product Sales in the United States

$ 1,517.6 $ 1,347.0

$ 1,473.4 $ 1,318.3 $ 4,245.1 $ 3,604.0

78.4 71.6 225.5 196.6

44.8 48.5 130.0 95.7 *

676.7 40.2 3,530.1 40.2

— ** 3.6 2.2 ** 9.3

REGEN-COV ® *

$ 1,638.6 $ 1,724.3

* 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.

* Net product sales of REGEN-COV in the United States relate to product sold in connection with our agreements with the U.S.

See Note 3 for further details.

1 unchanged sentence

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

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.

As of March 31, 2022 and December 31, 2021, the Company had $ 3.664 billion and $ 5.059 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 months ended March 31, 2022 and 2021.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Besse Medical, a subsidiary of AmerisourceBergen Corporation

40 % 50 % 33 % 52 %

McKesson Corporation 30 % 29 %

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

* Sales to the U.S.

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

government — % 13 %

Collaboration, License, and Other Agreements

1 unchanged sentence

Statement of Operations Classification Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2022 2021

6 unchanged sentences

Immuno-oncology:

Regeneron's share of losses in connection with commercialization of Libtayo outside the United States Collaboration revenue $ ( 3.0 ) $ ( 4.7 ) $ ( 12.6 ) $ ( 17.3 )

Reimbursement for manufacturing of commercial supplies Collaboration revenue $ 3.1 $ 0.9 $ 10.5 $ 6.0

Regeneron's share of profits (losses) in connection with commercialization of Libtayo outside the United States Collaboration revenue $ 2.8 $ ( 6.1 )

Reimbursement for manufacturing of ex-U.S.

commercial supplies Collaboration revenue $ 2.0 $ 4.7

Reimbursement of research and development expenses Reduction of Research and development expense $ 21.5 $ 21.9

5 unchanged sentences

The Company is party to a global, strategic collaboration with Sanofi to research, develop, and commercialize fully human monoclonal antibodies (the "Antibody Collaboration"), which currently consists of Dupixent ® (dupilumab), Kevzara ® (sarilumab), and itepekimab .

Under the terms of the Antibody License and Collaboration Agreement ("LCA"), Sanofi is generally responsible for funding 80 %– 100 % of agreed-upon development costs.

Under the terms of the Antibody License and Collaboration Agreement, Sanofi is generally responsible for funding 80 %– 100 % of agreed-upon development costs.

Sanofi leads commercialization activities for products under the Antibody Collaboration, subject to the Company's right to co-commercialize such products.

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.

During the three months ended March 31, 2022, the Company earned a $ 50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $ 2.0 billion on a rolling twelve-month basis.

We are entitled to receive up to an aggregate of $ 100.0 million in additional sales milestone payments from Sanofi, which includes the next sales milestone payment of $ 50.0 million that would be earned when such sales outside the United States exceed $ 2.5 billion on a rolling twelve-month basis.

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

September 30, December 31,

March 31, December 31,

(In millions) 2022 2021

2 unchanged sentences

$ 380.2 $ 368.7

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.

Under the Praluent Agreement, Sanofi will pay the Company a 5 % royalty on Sanofi’s net product sales of Praluent outside the United States until March 31, 2032.

The Company will not owe Sanofi royalties on the Company’s net product sales of Praluent in the United States.

Although each party will be responsible for manufacturing Praluent for its respective territory, the parties have entered into definitive supply agreements under which, for a certain transitional period, the Company will continue to supply drug substance to Sanofi and Sanofi will continue to supply finished product to Regeneron.

With respect to any intellectual property or product liability litigation relating to Praluent, the parties have agreed that, effective April 1, 2020, Regeneron and Sanofi each will be solely responsible for any such litigation (including damages and other costs and expenses thereof) in the United States and outside the United States, respectively, arising out of Praluent sales or other activities on or after April 1, 2020 (subject to Sanofi's right to set off a portion of any third-party royalty payments resulting from certain patent litigation proceedings against up to 50 % of any Praluent royalty payment owed to Regeneron).

The parties will each bear 50 % of any damages arising out of Praluent sales or other activities prior to April 1, 2020.

See Note 12 for discussion of legal proceedings related to Praluent.

Immuno-Oncology

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").

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 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).

2 unchanged sentences

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:

September 30, December 31,

March 31, December 31,

(In millions) 2022 2021

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 September 30, 2021 was $ 591.4 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 March 31, 2022 was $ 532.8 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.

The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA outside the United States.

All agreed upon EYLEA development expenses incurred by the Company and Bayer are shared equally.

Bayer markets EYLEA outside the United States, where, for countries other than Japan, the companies share equally in profits and losses from sales of EYLEA.

In Japan, the Company is currently entitled to receive a tiered percentage of between 33.5 % and 40.0 % of EYLEA net product sales through 2021, and thereafter, the companies will share equally in profits and losses from sales of EYLEA.

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

The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA (aflibercept) and aflibercept 8 mg outside the United States.

All agreed-upon development expenses incurred by the Company and Bayer are shared equally.

Bayer markets EYLEA outside the United States and the companies share equally in profits and losses from sales.

In Japan, the Company was entitled to receive a tiered percentage of between 33.5 % and 40.0 % of EYLEA net product sales through 2021, and effective January 1, 2022, the companies share equally in profits and losses from sales.

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

Statement of Operations Classification Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2022 2021

Regeneron's net profit in connection with commercialization of EYLEA outside the United States

Collaboration revenue $ 351.0 $ 287.9 $ 995.3 $ 772.6

Reimbursement for manufacturing of commercial supplies

Regeneron's share of profits in connection with commercialization of EYLEA outside the United States Collaboration revenue $ 338.4 $ 308.9

Reimbursement for manufacturing of ex-U.S.

commercial supplies Collaboration revenue $ 25.0 $ 13.9

One-time payment in connection with change in Japan arrangement

Collaboration revenue $ 21.9 $ —

1 unchanged sentence

Reduction of Research and development expense

$ 11.5 $ 35.2 $ 34.3

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

1 unchanged sentence

$ ( 10.8 ) $ ( 12.5 )

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

September 30, December 31,

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

March 31, December 31,

(In millions) 2022 2021

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.

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

Statement of Operations Classification Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2021 2020 2021 2020

Reimbursement of research and development expenses

Reduction of Research and development expense

$ 5.1 $ 25.9 $ 36.6 $ 82.1

Amounts recognized in connection with up-front and development milestone payments received

Other operating income

$ 3.2 $ 17.2 $ 22.6 $ 54.5

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

September 30, December 31,

(In millions) 2021 2020

Accounts receivable, net $ 5.2 $ 27.7

Other liabilities $ 43.3 $ 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 September 30, 2021 was $ 96.7 million.

Amounts recognized in our Statements of Operations in connection with the Teva Collaboration Agreement were not material for the three months ended March 31, 2022 and 2021.

In addition, contract balances in our Balance Sheets were not material as of March 31, 2022 and December 31, 2021.

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.

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

Department of Health and Human Services ("HHS") was obligated to fund certain of our costs incurred for research and development activities related to COVID-19 treatments.

In July 2020, we entered into an agreement with entities acting at the direction of BARDA and the U.S.

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

In January 2021, the Company announced an agreement with an entity acting on behalf of the U.S.

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

Pursuant to the agreement, the U.S.

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.

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.

In 2020 and 2021, we entered into agreements to manufacture and deliver filled and finished drug product of REGEN-COV (casirivimab and imdevimab) to the U.S.

In connection with one of our 2021 agreements, Roche supplied 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).

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.

As of December 31, 2021, the Company had completed its final deliveries of drug product under its agreements with the U.S.

See Note 2 for REGEN-COV net product sales recognized during 2021.

In 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 studies.

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

6 unchanged sentences

Statement of Operations Classification Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2022 2021

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

Global gross profit payment from Roche in connection with sales of Ronapreve Collaboration revenue $ 216.3 $ 66.8

Reimbursement of research and development expenses from Roche was $ 86.8 million for the three months ended March 31, 2021.

Such amounts were not material for the three months ended March 31, 2022.

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

September 30, December 31,

March 31, December 31,

(In millions) 2022 2021

Accounts receivable, net $ 204.3 $ —

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 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.

Accrued expenses and other current liabilities $ — $ 268.8

In 2018, the Company and Alnylam Pharmaceuticals, Inc.

entered into a collaboration to discover RNA interference ("RNAi") therapeutics for NASH and potentially other related diseases, as well as to research, co-develop and commercialize any therapeutic product candidates that emerge from these discovery efforts (including ALN-HSD, which is currently in clinical development).

The parties share equally, on an ongoing basis, development expenses for ALN-HSD.

In 2019, the parties entered into a global, strategic collaboration to discover, develop, and commercialize RNAi therapeutics for a broad range of diseases by addressing therapeutic disease targets expressed in the eye and central nervous system ("CNS"), in addition to a select number of targets expressed in the liver.

For each program, we provide Alnylam with a specified amount of funding at program initiation and at lead candidate designation.

Following designation of a lead candidate, the parties may further advance such lead candidate under either a co-commercialization collaboration agreement structure (under which the parties are advancing ALN-APP, which is currently in clinical development) or a license agreement.

In addition, during 2019, the parties entered into a Co-Commercialization Collaboration Agreement for a silencing RNA ("siRNA") therapeutic targeting the C5 component of the human complement pathway being developed by Alnylam, with Alnylam as the lead party, and a License Agreement for a combination product consisting of such siRNA therapeutic (cemdisiran) and a fully human monoclonal antibody being developed by the Company (pozelimab), with the Company as the licensee.

Under the C5 siRNA Co-Commercialization Collaboration Agreement, the parties share costs equally and under the License Agreement, the licensee is responsible for its own costs and expenses.

Amounts recognized in our Statements of Operations in connection with the Alnylam agreements described above were not material for the three months ended March 31, 2022 and 2021.

In addition, contract balances in our Balance Sheets were not material as of March 31, 2022 and December 31, 2021.

In April 2022, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire Checkmate Pharmaceuticals, Inc.

at a total equity value of approximately $ 250 million.

On May 2, 2022, the Company commenced a tender offer to acquire any and all outstanding shares of common stock of Checkmate at a price of $ 10.50 per share, to be paid to each shareholder tendering Checkmate shares in cash, without interest, subject to reduction for any applicable withholding taxes.

The consummation of the tender offer is subject to certain conditions, including the tender of at least a majority of the outstanding shares of Checkmate common stock, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions.

If the tender offer is successfully consummated, the Company will acquire all shares not acquired in the tender offer through a merger that does not require the vote of Checkmate stockholders.

The transaction is expected to close in mid-2022.

Net Income Per Share

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions, except per share data) 2022 2021

9 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(Shares in millions) 2022 2021

1 unchanged sentence

Marketable Securities

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).

Marketable securities as of March 31, 2022 and December 31, 2021 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 September 30, 2021 Cost Basis Gains Losses Value

As of March 31, 2022 Cost Basis Gains Losses Value

Corporate bonds $ 8,422.3 $ 1.3 $ ( 207.4 ) $ 8,216.2

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Certificates of deposit 255.2 — ( 0.1 ) 255.1

Asset-backed securities 42.0 — ( 0.1 ) 41.9

$ 8,428.7 $ 10.8 $ ( 42.3 ) $ 8,397.2

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 September 30, 2021 mature at various dates through September 2026.

The available-for-sale debt securities listed as of March 31, 2022 mature at various dates through March 2027.

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

September 30, December 31,

March 31, December 31,

(In millions) 2022 2021

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(In millions)

As of September 30, 2021

As of March 31, 2022

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

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government and government agency obligations 326.2 ( 3.8 ) 1.2 ( 0.1 ) 327.4 ( 3.9 )

Sovereign bonds 44.7 ( 1.5 ) — — 44.7 ( 1.5 )

Commercial paper 666.5 ( 1.3 ) — — 666.5 ( 1.3 )

Certificates of deposit 324.5 ( 0.9 ) — — 324.5 ( 0.9 )

Asset-backed securities 43.7 ( 1.2 ) — — 43.7 ( 1.2 )

$ 8,674.9 $ ( 202.9 ) $ 214.1 $ ( 13.3 ) $ 8,889.0 $ ( 216.2 )

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Corporate bonds $ 5,889.3 $ ( 40.9 ) $ — $ — $ 5,889.3 $ ( 40.9 )

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.

government and government agency obligations 90.0 ( 0.8 ) — — 90.0 ( 0.8 )

Sovereign bonds 37.0 ( 0.3 ) — — 37.0 ( 0.3 )

Commercial paper 295.7 ( 0.1 ) — — 295.7 ( 0.1 )

Certificates of deposit 169.4 ( 0.1 ) — — 169.4 ( 0.1 )

Asset-backed securities 34.9 ( 0.1 ) — — 34.9 ( 0.1 )

$ 6,516.3 $ ( 42.3 ) $ — $ — $ 6,516.3 $ ( 42.3 )

For the three months ended March 31, 2022, realized gains and losses on sales of marketable securities were no t material.

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

With respect to marketable securities, for the three months ended March 31, 2022 and 2021, amounts reclassified from Accumulated other comprehensive loss into Other (expense) income, net were related to realized gains and losses on sales of available-for-sale debt securities.

Fair Value Measurements

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(In millions) Fair Value Measurements at Reporting Date

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

As of March 31, 2022 Fair Value Level 1 Level 2

Available-for-sale debt securities:

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Certificates of deposit 255.1 — 255.1

Asset-backed securities 41.9 — 41.9

Equity securities (unrestricted) 58.4 58.4 —

1 unchanged sentence

$ 9,647.1 $ 1,249.9 $ 8,397.2

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.

The Company held certain restricted equity securities as of March 31, 2022 which are subject to transfer restrictions that expire at various dates through 2024.

During the three months ended March 31, 2022 and 2021, we recorded $ 211.2 million of net unrealized losses and $ 143.9 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 March 31, 2022 and December 31, 2021, the Company had $ 46.7 million and $ 40.0 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 $ 1.891 billion and $ 1.958 billion as of September 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 $ 1.686 billion and $ 1.887 billion as of March 31, 2022 and December 31, 2021, respectively.

Inventories consist of the following:

September 30, December 31,

March 31, December 31,

(In millions) 2022 2021

4 unchanged sentences

$ 1,991.5 $ 1,951.3

Inventory balances in the table above are net of reserves of $ 566.5 million and $ 510.0 million as of March 31, 2022 and December 31, 2021, respectively.

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 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, 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.

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.

In 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:

September 30, December 31,

March 31, December 31,

(In millions) 2022 2021

3 unchanged sentences

$ 1,980.4 $ 1,980.0

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.

Interest expense related to the Notes was $ 11.1 million for each of the three months ended March 31, 2022, and 2021.

In March 2022, we entered into a Second Amended and Restated Lease and Remedies Agreement (the "Restated Lease") with BA Leasing BSC, LLC, an affiliate of Banc of America Leasing & Capital, LLC ("BAL"), as lessor (the "Lessor"), which amends, restates, and extends our lease of laboratory and office facilities in Tarrytown, New York (the "Facility").

In March 2022, we also entered into a Second Amended and Restated Participation Agreement (the "Restated Participation Agreement") with Bank of America, N.A., as administrative agent, the Lessor, and a syndicate of financial institutions as rent assignees (collectively with the Lessor, the "Participants"), which amends and restates the original Participation Agreement entered into in March 2017.

The original Participation Agreement and certain related agreements were amended and restated in order to, among other things, (i) effect a five-year extension of the original March 2022 maturity date of the $ 720.0 million lease financing (which was previously advanced in March 2017 to finance the purchase price for the Facility) and the end of the term of our lease of the Facility from the Lessor to March 2027, at which time all amounts outstanding thereunder will become due and payable in full, and (ii) modify the rate of the interest or yield that is payable to the Participants.

In accordance with the terms of the Restated Lease, we continue to pay all maintenance, insurance, taxes, and other costs arising out of the use of the Facility.

We are also required to make monthly payments of basic rent during the term of the Restated Lease in an amount equal to a variable rate per annum, which was modified in connection with the Restated Lease, to be an adjusted one-month forward-looking term rate based on the Secured Overnight Financing Rate ("SOFR"), plus an applicable margin that varies with our debt rating and total leverage ratio.

The Restated Participation Agreement and Restated Lease include an option for us to elect to further extend the maturity date of the Restated Participation Agreement and the term of the Restated Lease for an additional five-year period, subject to the consent of all the Participants and certain other conditions.

We also have the option prior to the end of the term of the Restated Lease to (a) purchase the Facility by paying an amount equal to the outstanding principal amount of the Participants' advances under the Restated Participation Agreement, all accrued and unpaid yield thereon, and all other outstanding amounts under the Restated Participation Agreement, Restated Lease, and certain related documents or (b) sell the Facility to a third party on behalf of the Lessor.

Consistent with the original lease, the Restated Lease continues to be classified as a finance lease as we have the option to purchase the Facility under terms that make it reasonably certain to be exercised.

The agreements governing the Restated Lease financing contain financial and operating covenants.

Such financial covenants and certain of the operating covenants are substantially similar to the covenants set forth in our $ 750.0 million revolving credit facility.

The Company was in compliance with all such covenants as of March 31, 2022.

The Company is subject to U.S.

federal, state, and foreign income taxes.

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 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.

The Company's effective tax rate was 8.3 % and 11.0 % for the three months ended March 31, 2022 and 2021, respectively.

The Company's effective tax rate for the three months ended March 31, 2022 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 stock-based compensation.

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.

federal statutory rate, and federal tax credits for research activities.

1 unchanged sentence

Share Repurchase Programs

In November 2019, our board of directors authorized a share repurchase program to repurchase up to $ 1.0 billion of our Common Stock.

The share repurchase program 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.

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 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.

In January 2021, our board of directors authorized a share repurchase program to repurchase up to $ 1.5 billion of our Common Stock.

The share repurchase program permitted the Company to make 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, 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 December 31, 2021, the Company had repurchased the entire $ 1.5 billion of its Common Stock that it was authorized to repurchase under the program.

In November 2021, our board of directors authorized an additional share repurchase program to repurchase up to $ 3.0 billion of our Common Stock.

The share repurchase program was approved under terms substantially similar to the share repurchase program 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.

1 unchanged sentence

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

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

September 30, Nine Months Ended

September 30,

(In millions) 2021 2020 2021 2020

Number of shares repurchased 0.3 0.2 1.6 0.9

Total cost of shares received $ 190.5 $ 100.4 $ 802.7 $ 373.3

Sanofi Funding of Certain Development Costs

In 2018, the Company and Sanofi entered into a letter agreement (the "Letter Agreement") in connection with, among other matters, the allocation of additional funds to certain activities relating to dupilumab and itepekimab (collectively, the "Dupilumab/Itepekimab Eligible Investments").

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 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

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).

During the three months ended March 31, 2022, we repurchased 566,973 shares of our Common Stock under the program and recorded the cost of the shares received, or $ 352.0 million, as Treasury Stock.

As of March 31, 2022, $ 2.493 billion remained available for share repurchases under the November 2021 program.

Statement of Cash Flows

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

September 30,

(In millions) 2022 2021

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Supplemental disclosure of non-cash investing and financing activities

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

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

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

(In millions) 2022 2021 2021 2020

5 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 September 30, 2021 and December 31, 2020, the Company's accruals for loss contingencies were not material.

As of March 31, 2022 and December 31, 2021, 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.

Proceedings Relating to Praluent (alirocumab) Injection

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

As described in greater detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and 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.

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

See Note 3 of the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 for a description of the Company's and Sanofi's arrangement regarding the costs resulting from or associated with such actions.

United States

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

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 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.

First Jury Trial and Appeal.

The first jury trial in this litigation (the "First Trial") was held in the United States District Court for the District of Delaware (the "District Court") from March 8 to March 16, 2016.

During the course of the First Trial, the District Court ruled as a matter of law in favor of Amgen that the asserted patent claims were not obvious, and in favor of the Company and the Sanofi defendants that there was no willful infringement of the asserted patent claims by the Company or the Sanofi defendants.

On March 16, 2016, the jury returned a verdict in favor of Amgen in the First Trial, finding that the asserted claims of the '165 and '741 Patents were not invalid based on either a lack of written description or a lack of enablement.

On October 5, 2017, the United States Court of Appeals for the Federal Circuit (the "Federal Circuit") reversed in part the District Court's decision and remanded for a new trial on the issues of written description and enablement.

In addition, it affirmed the District Court's ruling that Amgen's patents were not obvious.

Second Jury Trial and Appeal.

On January 3, 2019, the District Court held oral argument in the remanded proceedings on the Company and the Sanofi defendants' motion for judgment on the pleadings regarding Amgen's willful infringement claim.

On January 18, 2019, the District Court entered an order (i) denying the Company and the Sanofi defendants' motion for summary judgment on validity, (ii) denying Amgen's motion for partial summary judgment on estoppel, and (iii) granting the Company and the Sanofi defendants' cross-motion for summary judgment on estoppel.

On February 8, 2019, the District Court granted the Company and the Sanofi defendants' motion for judgment on the pleadings, thereby dismissing Amgen's claim of willful infringement.

The second jury trial in this litigation (the "Second Trial") was held before the District Court in February 2019 to determine the validity of Amgen's asserted patent claims.

On February 25, 2019, the jury returned a verdict in the Second Trial generally in favor of Amgen, finding that two claims of the '165 Patent and one claim of the '741 Patent were not invalid.

The jury also found that two claims of the '165 Patent were invalid for lack of adequate written description while rejecting the lack of enablement challenges to those two claims.

On August 28, 2019, the District Court ruled as a matter of law that Amgen's asserted patent claims are invalid based on lack of enablement.

The District Court also conditionally denied the Company and the Sanofi defendants' motion for a new trial.

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

An oral hearing before the Federal Circuit was held on December 9, 2020.

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, which was denied on June 21, 2021.

Injunctive Relief Proceedings.

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

Previously, the Federal Circuit stayed and then vacated a Permanent Injunction granted by the District Court in connection with the First Trial.

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

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.

As previously reported, on February 11, 2021, the United States Court of Appeals for the Federal Circuit (the "Federal Circuit") affirmed the lower 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 with the Federal Circuit, which was denied on June 21, 2021.

On November 18, 2021, Amgen filed a petition for writ of certiorari with the United States Supreme Court.

Amgen has asserted European Patent No.

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

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

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.

Following the EPO's decision, each of the '124 Patent infringement proceedings initiated by Amgen against the Company and certain of Sanofi's affiliated entities in these countries was dismissed, including in Germany.

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, 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.

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.

As a result of the overturned injunction in Germany discussed in the preceding sentence, the Company and/or certain of Sanofi's affiliated entities are seeking damages caused by Amgen's enforcement of the injunction.

As part of its opposition to these damages claims, on March 23, 2022, Amgen filed a counterclaim that asserted the German designation of European Patent No.

2,641,917 (the "'917 Patent") and seeks, among other things, a judgment of patent infringement, injunctive relief, and monetary damages.

The '917 Patent is a divisional patent of the '124 Patent discussed above (i.e., a patent that shares the same priority date, disclosure, and patent term of the parent '124 Patent but contains claims to a different invention).

The '917 Patent is also subject to opposition proceedings in the EPO, which were initiated by Sanofi on May 5, 2021.

An oral hearing before the EPO has been scheduled for February 21, 2023.

Proceedings Relating to Dupixent (dupilumab) Injection

United States

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 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;

monetary damages (together with interest);

an order of willful infringement of the '487 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.

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.

counterpart of European Patent No.

2,292,665 (the "'665 Patent"), another patent owned by Immunex relating to antibodies that bind the human interleukin-4 receptor.

2,292,665 (the "'665 Patent"), a patent owned by Immunex Corporation relating to antibodies that bind the human interleukin-4 receptor.

At the joint request of the parties to the revocation proceeding, the U.K.

Patents Court ordered on January 30, 2017 that the revocation action be stayed pending the final determination of the currently pending EPO opposition proceedings initiated by the Company and Sanofi in relation to the '665 Patent.

Patents Court ordered on January 30, 2017 that the revocation action be stayed pending the final determination of the EPO opposition proceedings initiated by the Company and Sanofi in relation to the '665 Patent.

The oral hearing before the EPO on the oppositions occurred on November 20, 2017, at which the claims of the '665 Patent were found invalid and the patent was revoked.

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, and an oral hearing before the TBA has been scheduled for March 2022.

Immunex filed a notice of appeal of the EPO's decision on January 31, 2018, which appeal was withdrawn at an oral hearing before the TBA on March 10, 2022 following the TBA's ruling discussed below.

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.

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

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, and an oral hearing before the TBA has been scheduled for March 2022.

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

At an oral hearing before the TBA on March 10, 2022, the TBA maintained the invalidity and revocation of the '420 Patent.

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.

("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 ("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.

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.

10,406,226 and 10,464,992, and the United States Patent and Trademark Office ("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.

filed inter partes review ("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.

On November 10, 2021, the USPTO issued a decision instituting both IPR proceedings.

On December 9, 2021, Apotex Inc.

and Celltrion, Inc.

each filed two separate IPR petitions against the Company's '338 and '069 Patents requesting that their IPRs be instituted and joined with the IPR proceedings initiated by Mylan concerning the '338 and '069 Patents, which petitions were granted on February 9, 2022.

An oral hearing has been scheduled for August 10, 2022.

On September 7, 2021, Celltrion, Inc.

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

filed a post-grant review ("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 March 14, 2022, the Company filed a Notice of Disclaimer with the USPTO, disclaiming all claims of the '231 Patent.

As a result, on March 15, 2022, the USPTO denied institution of Celltrion's PGR petition.

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

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9,220,631 (the "'631 Patent").

Novartis also requested a permanent limited exclusion order forbidding entry into the United States of EYLEA PFS or components thereof;

a permanent cease-and-desist order from the importation, sale, offer for sale, advertising, packaging, or solicitation of any sale by the Company of EYLEA PFS or components thereof;

and a bond should the Company continue to import EYLEA PFS (if found to infringe) during, if applicable, any 60-day Presidential review period ( i.e.

, the period when the President of the United States (or his designee) can disapprove any ITC decision to issue an exclusion order or cease-and-desist order).

The ITC instituted the investigation on July 22, 2020 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;

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

On November 5, 2021, the Company filed a motion to stay these proceedings in light of the pending IPR proceeding discussed below.

On January 31, 2022, the court denied the Company's motion to stay these proceedings.

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

An oral hearing has been scheduled for July 22, 2022.

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

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

and on October 19, 2020, Novartis filed, and Vetter moved to join, a second motion to

dismiss the complaint on different grounds.

On January 25, 2021, the Company filed an amended complaint seeking a judgment that Novartis's conduct violates Section 2 of the Sherman Antitrust Act based on additional grounds, as well as a judgment of tortious interference with contract.

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

On November 5, 2021, the Company filed a motion to stay these proceedings in light of the pending IPR proceeding discussed above.

On January 31, 2022, the court denied the Company's motion to stay these proceedings and granted Novartis and Vetter's motion to dismiss the amended complaint.

On February 25, 2022, the Company filed a notice of appeal of the court's decision to dismiss the amended complaint with the U.S.

Court of Appeals for the Second Circuit.

Proceedings Related to "Most Favored Nation" Interim Final Rule

On December 11, 2020, the Company filed a lawsuit in the United States District Court for the Southern District of New York against the U.S.

Department of Health and Human Services, the Secretary of HHS, the Centers for Medicare & Medicaid Services ("CMS"), and the Administrator of CMS seeking declaratory and injunctive relief related to the interim final rule with comment period entitled "Most Favored Nation (MFN) Model" issued on November 20, 2020 by HHS, acting through CMS.

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.

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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.

On February 10, 2021, the court entered a 90-day stay of the litigation and subsequently extended the stay, with the most recent 60-day extension granted on March 7, 2022.

On December 27, 2021, CMS published a final rule that rescinded the MFN Rule;

and, on March 28, 2022, the Company filed a notice of voluntary dismissal of this litigation.

Proceedings Relating to fasinumab

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On May 5, 2021, the court stayed this litigation on terms mutually agreed by the parties.

As previously reported, on July 29, 2021, the '711 Patent was revoked in its entirety by the TBA of the EPO.

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

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

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.

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

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

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

An oral hearing before the TBA has been scheduled for April 5–6, 2022.

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

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

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

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

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

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

An oral hearing before the TBA was held on April 5, 2022, at which the TBA ruled that the '048 Patent claims directed to compositions of matter and medical use relevant to fasinumab were invalid based on a lack of novelty.

Proceedings Relating to REGEN-COV (casirivimab and imdevimab)

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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.

On July 16, 2021, the Company filed a motion to dismiss the complaint, which motion was denied on March 2, 2022.

Department of Justice Matters

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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.

LLC by two qui tam plaintiffs (known as relators) purportedly on behalf of 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.

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

On January 14, 2022, the Company filed a motion to dismiss the amended complaint in its entirety.

An oral hearing has been scheduled for May 6, 2022.

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

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The Company is cooperating with this investigation.

Proceedings Initiated by UnitedHealthcare

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.

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 (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.

On March 25, 2021, UHC filed an amended complaint;

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.

Proceedings Initiated by Medicare Advantage Plans Relating to Patient Assistance Organization Support

The Company is party to several lawsuits relating to 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.

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

Shareholder Demand

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

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

These lawsuits were filed by UnitedHealthcare Insurance Company and United Healthcare Services, Inc.

(collectively, "UHC") and Humana Inc.

("Humana") in the United States District Court for the Southern District of New York on December 17, 2020 and July 22, 2021, respectively;

and by Blue Cross and Blue Shield of Massachusetts, Inc.

and Blue Cross and Blue Shield of Massachusetts HMO Blue, Inc., Medical Mutual of Ohio, and Horizon Healthcare Services, Inc.

d/b/a Horizon Blue Cross Blue Shield of New Jersey in the U.S.

District Court for the District of Massachusetts on December 20, 2021, February 23, 2022, and April 4, 2022, respectively.

These lawsuits allege causes of action under state law and the federal Racketeer Influenced and Corrupt Organizations Act and seek monetary damages and equitable relief.

On December 29, 2021, the lawsuits filed by UHC and Humana were stayed by the United States District Court for the Southern District of New York pending resolution of the proceedings before the U.S.

District Court for the District of Massachusetts discussed under "Department of Justice Matters" above.

Shareholder Demands

On or about September 30, 2020, March 30, 2022, and March 31, 2022, the Company's board of directors received three demand letters from purported shareholders of the Company.

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

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

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

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

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

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

The Company's board of directors, working with outside counsel, 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.

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

Proceedings Relating to Shareholder Derivative Complaint

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On September 23, 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.

Also on September 23, 2021, the plaintiff moved 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