What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-03 · 198 added, 125 removed, 586 unchanged (36% of the section changed)

3 unchanged sentences

(In millions, except per share data)

June 30, December 31,

September 30, December 31,

Current assets:

7 unchanged sentences

Property, plant, and equipment, net 3,704.2 3,482.2

Intangible assets, net 804.1 6.7

Deferred tax assets 1,452.1 876.9

36 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

13 unchanged sentences

Other income (expense):

Other (expense) income, net ( 133.6 ) 420.0 ( 317.4 ) 574.9

Other income (expense), net 301.4 ( 16.4 ) ( 16.0 ) 558.5

Interest expense ( 15.3 ) ( 14.2 ) ( 42.0 ) ( 43.2 )

40 unchanged sentences

Balance, June 30, 2022 1.8 — 128.3 0.1 9,120.2 20,793.9 ( 223.8 ) ( 20.6 ) ( 9,002.6 ) 20,687.8

Issuance of Common Stock for equity awards granted under long-term incentive plans — — 0.9 — 322.9 — — — — 322.9

Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.2 ) — ( 108.9 ) — — — — ( 108.9 )

Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 12.9 — — — 1.6 14.5

Repurchases of Common Stock — — — — — — — ( 1.4 ) ( 913.0 ) ( 913.0 )

Stock-based compensation charges — — — — 171.1 — — — — 171.1

Net income — — — — — 1,315.7 — — — 1,315.7

Other comprehensive loss, net of tax — — — — — — ( 51.3 ) — — ( 51.3 )

Balance, September 30, 2022 1.8 $ — 129.0 $ 0.1 $ 9,518.2 $ 22,109.6 $ ( 275.1 ) ( 22.0 ) $ ( 9,914.0 ) $ 21,438.8

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

18 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

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:

19 unchanged sentences

Capital expenditures ( 437.9 ) ( 397.0 )

Payments for Libtayo intangible asset ( 926.8 ) —

Asset acquisition, net of cash acquired ( 230.3 ) —

5 unchanged sentences

Net cash used in financing activities ( 761.4 ) ( 99.2 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 510.5 ( 122.6 )

Net increase in cash, cash equivalents, and restricted cash 606.7 1,237.6

Cash, cash equivalents, and restricted cash at beginning of period 2,898.1 2,207.3

12 unchanged sentences

These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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 and six months ended June 30, 2022 would have historically been recorded to Research and development expenses.

No such amounts were recorded for the three and six months ended June 30, 2021.

Amounts recorded in this line item for the nine months ended September 30, 2022 would have historically been recorded to Research and development expenses.

No such amounts were recorded for the three and nine months ended September 30, 2021.

Product Sales

Net product sales consist of the following:

(In millions) Three Months Ended

June 30, Six Months Ended

Net Product Sales in the United States

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2022 2021 2022 2021

$ 1,629.4 $ 1,473.4 $ 4,768.2 $ 4,245.1

2 unchanged sentences

29.7 44.8 94.5 130.0

REGEN-COV ®**

REGEN-COV ®(c)

— 676.7 — 3,530.1

13.6 6.6 33.2 9.1

ARCALYST ®***

ARCALYST ®(d)

$ 1,801.4 $ 2,279.9 $ 5,194.4 $ 8,142.0

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

(a) Prior to July 1, 2022, Regeneron recorded net product sales of Libtayo in the United States and Sanofi recorded net product sales of Libtayo outside the United States.

Effective July 1, 2022, the Company began recording net product sales of Libtayo outside the United States.

See Note 3 for further details.

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

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

* Prior to July 1, 2022, Regeneron recorded net product sales of Libtayo in the United States and Sanofi recorded net product sales of Libtayo outside the United States.

Effective July 1, 2022, the Company will record global net product sales of Libtayo.

(b) Rest of world ("ROW")

(c) 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.

As of June 30, 2022 and December 31, 2021, the Company had $ 3.888 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 and six months ended June 30, 2022 and 2021.

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

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

As of September 30, 2022 and December 31, 2021, the Company had $ 4.268 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 and nine months ended September 30, 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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2022 2021 2022 2021

3 unchanged sentences

Other Collaboration revenue $ ( 0.2 ) $ — $ 28.7 $ —

Reimbursement of research and development expenses Reduction of Research and development expense $ 52.7 $ 46.5 $ 89.2 $ 77.1

Regeneron's obligation for its share of Sanofi research and development expenses Research and development expense $ ( 15.6 ) $ ( 10.6 ) $ ( 25.3 ) $ ( 22.5 )

Reimbursement of commercialization-related expenses Reduction of Selling, general, and administrative expense $ 110.8 $ 78.3 $ 202.5 $ 137.9

(Regeneron's obligation for its share of Sanofi R&D expenses)/reimbursements of R&D expenses, net (R&D expense)/reduction of R&D expense $ ( 4.3 ) $ 34.9 $ 59.6 $ 89.5

Reimbursement of commercialization-related expenses Reduction of SG&A expense $ 108.6 $ 79.0 $ 311.1 $ 216.9

Immuno-oncology:

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commercial supplies Collaboration revenue $ — $ 3.1 $ 4.6 $ 10.5

Reimbursement of research and development expenses Reduction of Research and development expense $ 21.2 $ 22.5 $ 42.7 $ 44.4

Reimbursement of commercialization-related expenses Reduction of Selling, general, and administrative expense $ 22.4 $ 20.7 $ 41.4 $ 39.2

Regeneron's obligation for its share of Sanofi commercial expenses Selling, general, and administrative expense $ ( 10.7 ) $ ( 10.9 ) $ ( 19.9 ) $ ( 18.6 )

Reimbursement of R&D expenses Reduction of R&D expense $ — $ 21.8 $ 42.7 $ 66.2

Reimbursement of commercialization-related expenses Reduction of SG&A expense $ — $ 22.8 $ 41.4 $ 62.0

Regeneron's obligation for its share of Sanofi commercial expenses SG&A expense $ — $ ( 9.4 ) $ ( 19.9 ) $ ( 28.0 )

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

1 unchanged sentence

Amounts recognized in connection with up-front payments received Other operating income $ — $ ( 47.7 ) $ 35.1 $ ( 4.1 )

* Net of one-time payment of $ 56.9 million to Sanofi in connection with the amendment to the Antibody License and Collaboration Agreement described below

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 .

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On July 1, 2022, an amendment to the Antibody License and Collaboration Agreement became effective, pursuant to which the percentage of Regeneron’s share of profits used to reimburse Sanofi for such development costs increased from 10 % to 20 %.

A portion of the value associated with the increase in reimbursement percentage was deemed to be contingent consideration attributable to the Company's acquisition of the Libtayo rights described within the " Immuno-oncology " section below;

this portion will be recorded as an increase to the Libtayo intangible asset over time as the Company repays such development costs to Sanofi.

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

In addition to profit and loss sharing, the Company is entitled to receive 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.

During the three months ended September 30, 2021, 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 $ 1.5 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:

June 30, December 31,

September 30, December 31,

(In millions) 2022 2021

3 unchanged sentences

Immuno-oncology

The Company has been party to a collaboration with Sanofi for antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration").

The Company was previously a party to a collaboration with Sanofi for antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration").

Under the terms of the Immuno-oncology License and Collaboration Agreement, the parties were co-developing and co-commercializing Libtayo.

The parties shared equally, on an ongoing basis, development and commercialization expenses for Libtayo.

The Company had principal control over the development of Libtayo and led commercialization activities in the United States (see Note 2 for related product sales information), while Sanofi led commercialization activities outside of the United States.

The Company had principal control over the development of Libtayo and led commercialization activities in the United States, while Sanofi led commercialization activities outside of the United States.

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

2 unchanged sentences

The Company will also pay Sanofi an 11 % royalty on net product sales of Libtayo through March 31, 2034.

Amounts paid to Sanofi in connection with obtaining the worldwide rights to Libtayo, including the up-front payment and any contingent consideration, will be recorded as an intangible asset.

The Company was obligated to reimburse Sanofi for half of the development costs it funded that were attributable to clinical development of antibody product candidates under the Amended and Restated Immuno-oncology Discovery and Development Agreement from our share of profits from commercialized IO Collaboration products.

Under the A&R IO LCA, the amount of development costs incurred under the IO Collaboration for which we are obligated to reimburse Sanofi is $ 35.0 million, and the Company will reimburse Sanofi for such development costs by paying Sanofi a 0.5 % royalty on net product sales of Libtayo until all such development costs have been reimbursed by Regeneron.

The transaction was accounted for as an asset acquisition and amounts paid to Sanofi in connection with obtaining the worldwide rights to Libtayo, including the up-front payment and any contingent consideration, are recorded as an intangible asset.

See Note 8 for additional information related to the intangible asset recorded in connection with the transaction.

In accordance with the Amended and Restated Immuno-oncology Discovery and Development Agreement, the Company was obligated to reimburse Sanofi for half of the development costs it funded that were attributable to clinical development of antibody product candidates from our share of profits from commercialized IO Collaboration products.

Under the A&R IO LCA, the amount of development costs incurred under the IO Collaboration for which we are obligated to reimburse Sanofi was $ 35.0 million as of the effective date of the A&R IO LCA, and the Company pays Sanofi a 0.5 % royalty on net product sales of Libtayo until all such development costs have been reimbursed by Regeneron.

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) 2022 2021

2 unchanged sentences

Deferred revenue

$ 33.8 $ 16.0

Other liabilities

$ 241.0 $ 276.1

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

During the third quarter of 2022, in connection with the A&R IO LCA, the remaining IO Collaboration Other liabilities balance will be recorded as a reduction to the intangible asset described above.

Other liabilities included up-front payments received from Sanofi for which recognition had been deferred.

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.

In connection with the A&R IO LCA described above, the remaining IO Collaboration Other liabilities balance of $ 241.0 million as of July 1, 2022 was recognized as a reduction to the intangible asset during the three months ended September 30, 2022.

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.

4 unchanged sentences

Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2022 2021 2022 2021

4 unchanged sentences

Collaboration revenue $ — $ — $ 21.9 $ —

Reimbursement of research and development expenses

Reduction of Research and development expense

Reimbursement of R&D expenses Reduction of R&D expense $ 11.8

$ 14.5 $ 32.7 $ 35.2

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

Research and development expense

$ ( 6.9 ) $ ( 10.9 ) $ ( 17.7 ) $ ( 23.4 )

R&D expense $ ( 4.7 ) $ ( 8.0 ) $ ( 22.4 ) $ ( 31.4 )

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

June 30, December 31,

September 30, December 31,

(In millions) 2022 2021

2 unchanged sentences

$ 131.1 $ 129.4

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 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).

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

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 the three and six months ended June 30, 2021.

See Note 2 for REGEN-COV net product sales recognized during the three and nine months ended September 30, 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 collaboration agreement, 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.

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Statement of Operations Classification Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2022 2021 2022 2021

Global gross profit payment from Roche in connection with sales of Ronapreve Collaboration revenue $ 6.4 $ 127.1 $ 230.9 $ 361.8

Reimbursement of research and development expenses from Roche (recorded as a reduction of Research and development expense) was $ 41.0 million and $ 127.8 million for the three and six months ended June 30, 2021.

Such amounts were not material for the three and six months ended June 30, 2022.

Reimbursement of research and development expenses from Roche (recorded as a reduction of Research and development expense) was $ 10.5 million and $ 138.3 million for the three and nine months ended September 30, 2021.

Such amounts were not material for the three and nine months ended September 30, 2022.

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

June 30, December 31,

September 30, December 31,

(In millions) 2022 2021

Accounts receivable, net $ 3.2 $ —

Accrued expenses and other current liabilities $ — $ 268.8

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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 and six months ended June 30, 2022 and 2021.

In addition, contract balances in our Balance Sheets were not material as of June 30, 2022 and December 31, 2021.

Amounts recognized in our Statements of Operations in connection with the Alnylam agreements described above were not material for the three and nine months ended September 30, 2022 and 2021.

In addition, contract balances in our Balance Sheets were not material as of September 30, 2022 and December 31, 2021.

In May 2022, the Company completed its acquisition of Checkmate Pharmaceuticals, Inc.

3 unchanged sentences

As a result of the acquisition, the Company recorded (i) a charge of $ 195.0 million to Acquired in-process research and development and (ii) net assets of $ 35.3 million, net of cash, related to the assets acquired (including deferred tax assets and investments) and liabilities assumed.

The Company and Teva are parties to a collaboration agreement (the "Teva Collaboration Agreement") to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement with Mitsubishi Tanabe Pharma Corporation ("MTPC").

Under the terms of the Teva Collaboration Agreement, the Company leads global development activities and the parties share development costs equally.

In connection with the agreement, Teva made a $ 250.0 million non-refundable up-front payment in 2016, and as of September 30, 2022, we had received an aggregate $ 120.0 million of development milestones from Teva.

These amounts were initially recorded within other liabilities and were being recognized (as other operating income) over the period in which the Company was to satisfy its obligation to perform development activities.

During the three months ended September 30, 2022, we discontinued further clinical development of fasinumab and, as a result, recorded $ 31.9 million as an increase to other operating income as we deemed our obligation to provide development services in connection with the Teva Collaboration Agreement to be complete.

Net Income Per Share

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In millions, except per share data) 2022 2021 2022 2021

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Shares in millions) 2022 2021 2022 2021

1 unchanged sentence

Marketable Securities

Marketable securities as of June 30, 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).

Marketable securities as of September 30, 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 June 30, 2022

As of September 30, 2022

Cost Basis Gains Losses Value

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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, 2022 mature at various dates through April 2027.

The available-for-sale debt securities listed as of September 30, 2022 mature at various dates through April 2027.

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) 2022 2021

5 unchanged sentences

(In millions)

As of June 30, 2022

As of September 30, 2022

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

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

With respect to marketable securities, for the three and six months ended June 30, 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.

For the three and six months ended June 30, 2022 and 2021, realized gains and losses on sales of marketable securities were not material.

With respect to marketable securities, for the three and nine months ended September 30, 2022 and 2021, amounts reclassified from Accumulated other comprehensive loss 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, 2022 and 2021, realized gains and losses on sales of marketable securities were not material.

Fair Value Measurements

5 unchanged sentences

(In millions) Fair Value Measurements at Reporting Date

As of June 30, 2022

As of September 30, 2022

Fair Value Level 1 Level 2

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

The Company held certain restricted equity securities as of June 30, 2022 which are subject to transfer restrictions that expire at various dates through 2024.

During the three and six months ended June 30, 2022, we recorded $ 163.7 million and $ 374.9 million of net unrealized losses, respectively, on equity securities in Other (expense) income, net.

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 (expense) income, net.

In addition to the investments summarized in the table above, as of June 30, 2022 and December 31, 2021, the Company had $ 47.3 million and $ 40.0 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, 2022 which are subject to transfer restrictions that expire at various dates through 2024.

During the three and nine months ended September 30, 2022, we recorded $ 254.3 million of net unrealized gains and $ 120.6 million of net unrealized losses, respectively, on equity securities in Other income (expense), net.

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 income (expense), net.

In addition to the investments summarized in the table above, as of September 30, 2022 and December 31, 2021, the Company had $ 48.3 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 $ 1.513 billion and $ 1.887 billion as of June 30, 2022 and December 31, 2021, respectively.

The fair value of our long-term debt (see Note 9), which was determined based on Level 2 inputs, was estimated to be $ 1.400 billion and $ 1.887 billion as of September 30, 2022 and December 31, 2021, respectively.

Inventories consist of the following:

June 30, December 31,

September 30, December 31,

(In millions) 2022 2021

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, 2022, Cost of goods sold included inventory write-offs and reserves totaling $ 19.2 million and $ 66.6 million, respectively.

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 nine months ended September 30, 2022, Cost of goods sold included inventory write-offs and reserves totaling $ 34.7 million and $ 101.3 million, respectively.

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.

Intangible Assets

Intangible assets acquired in connection with an asset acquisition are recorded at cost.

Such amounts may include up-front payments and contingent consideration.

With regards to contingent consideration, the Company recognizes regulatory milestones upon achievement, royalties in the period in which the underlying sales occur, and sales-based milestones when the milestone is deemed probable by the Company of being achieved.

Intangible assets are amortized to Cost of goods sold over the estimated useful lives of the assets based on the pattern in which the economic benefits of the intangible assets are consumed;

if that pattern cannot be reliably determined, a straight-line basis is used.

If contingent consideration is recognized subsequent to the acquisition date in an asset acquisition, the amount of such consideration is recorded as an addition to the cost basis of the intangible asset with a cumulative catch-up adjustment for amortization expense as if the additional amount of consideration had been accrued from the outset of the arrangement.

The Company's intangible assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

If an indicator of impairment exists, the Company compares the projected undiscounted cash flows to be generated by the asset to the intangible asset’s carrying amount.

If the projected undiscounted cash flows of the intangible asset are less than the carrying amount, the intangible asset is written down to its fair value in the period in which the impairment occurs.

Intangible assets consist of the following:

September 30, 2022 December 31, 2021

(In millions) Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross carrying Amount Accumulated Amortization Net Carrying Amount

Acquired product rights - Libtayo 13 years

$ 814.2 $ ( 15.3 ) $ 798.9 $ — $ — $ —

Other intangibles 5 – 8 years

10.0 ( 4.8 ) 5.2 29.3 ( 22.6 ) 6.7

Intangible assets, net $ 824.2 $ ( 20.1 ) $ 804.1 $ 29.3 $ ( 22.6 ) $ 6.7

As described in Note 3, the Company recorded an intangible asset in connection with obtaining the exclusive right to develop, commercialize, and manufacture Libtayo worldwide.

The intangible asset recognized upon the effective date of the A&R IO LCA primarily consisted of the $ 900.0 million up-front payment, offset by the remaining IO Collaboration Other liabilities balance of $ 241.0 million.

During the three months ended September 30, 2022, the Company recorded additions to the Libtayo intangible asset primarily related to contingent consideration and other amounts due to Sanofi in connection with obtaining the worldwide rights to Libtayo.

For the three and nine months ended September 30, 2022, amortization expense of $ 15.6 million and $ 16.8 million, respectively, was recognized.

Amortization expense for the three and nine months ended September 30, 2021 was not material.

As of September 30, 2022, assuming no changes in the gross carrying amount of intangible assets, amortization expense for the three months ending December 31, 2022 is estimated to be $ 15.6 million and approximately $ 62 million for each of the years ending December 31, 2023 through December 31, 2027.

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:

June 30, December 31,

September 30, December 31,

(In millions) 2022 2021

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$ 1,981.1 $ 1,980.0

Interest expense related to the Notes was $ 11.1 million and $ 22.2 million, respectively, for each of the three and six months ended June 30, 2022, and 2021.

Interest expense related to the Notes was $ 11.1 million and $ 33.3 million for each of the three and nine months ended September 30, 2022, and 2021, respectively.

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").

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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.

Restated Participation Agreement, Restated Lease, and certain related documents or (b) sell the Facility to a third party on behalf of the Lessor.

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.

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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 June 30, 2022.

The Company was in compliance with all such covenants as of September 30, 2022.

The Company is subject to U.S.

federal, state, and foreign income taxes.

The Company's effective tax rate was 11.5 % and 17.4 % for the three months ended June 30, 2022 and 2021, respectively and 9.8 % and 15.8 % for the six months ended June 30, 2022 and 2021, respectively.

The Company's effective tax rate for the three and six months ended June 30, 2022 was positively impacted, compared to the U.S.

The Company's effective tax rate was 12.9 % and 10.2 % for the three months ended September 30, 2022 and 2021, respectively and 11.1 % and 14.3 % for the nine months ended September 30, 2022 and 2021, respectively.

The Company's effective tax rate for the three and nine months ended September 30, 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, to a lesser extent, stock-based compensation.

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, as these audits were effectively settled.

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 and income earned in foreign jurisdictions with tax rates lower than the U.S.

federal statutory rate, offset by the impact of income earned in the United States during 2021 related to REGEN-COV.

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 as a result of the audit of the Company's federal income tax returns for 2015 and 2016 being settled .

Stockholders' Equity

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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.

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

Repurchases may be made from time to time at management’s discretion, and the timing and amount of any such repurchases will be determined based on share price, market conditions, legal requirements, and other relevant factors.

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

As of June 30, 2022, $ 2.099 billion remained available for share repurchases under the November 2021 program.

The table below summarizes the shares of our Common Stock we repurchased under the programs and the cost of the shares received, which were recorded as Treasury Stock.

As of September 30, 2022, $ 1.186 billion remained available for share repurchases under the November 2021 program.

The table below summarizes the shares of our Common Stock we repurchased under the programs and the cost of the shares, which were recorded as Treasury Stock.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2022 2021 2022 2021

Number of shares repurchased 0.7 0.6 1.2 1.3

Total cost of shares received $ 393.6 $ 288.6 $ 745.5 $ 612.1

Number of shares 1.5 0.3 2.7 1.6

Total cost of shares $ 913.0 $ 190.5 $ 1,658.6 $ 802.7

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

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

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

(In millions) 2022 2021 2021 2020

Accrued capital expenditures $ 83.1 $ 74.8 $ 70.1 $ 83.6

Accrued payments for intangible assets $ 116.0 $ — $ — $ —

Legal Matters

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

As of June 30, 2022 and December 31, 2021, the Company's accruals for loss contingencies were not material.

As of September 30, 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.

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(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 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.

In addition, as described below, the Company filed a lawsuit against Amgen alleging that Amgen engaged in an anticompetitive bundling scheme which was designed to exclude Praluent from the market in violation of federal and state laws.

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On August 1, 2022, Amgen filed a motion to dismiss the complaint.

On August 11, 2022, Amgen filed a motion to stay these proceedings pending resolution of the patent litigation described in the preceding paragraph.

An oral hearing on Amgen's motion to dismiss and motion to stay has been scheduled for January 6, 2023.

Amgen has asserted European Patent No.

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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.

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.

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Proceedings Relating to EYLEA (aflibercept) Injection

Certain of the Company's patents pertaining to EYLEA are subject to post-grant proceedings before the United States Patent and Trademark Office ("USPTO"), EPO, or other comparable foreign authorities, including those described in greater detail below.

In addition, the Company has filed patent infringement lawsuits in several jurisdictions alleging infringement of certain Company patents pertaining to EYLEA, including those described in greater detail below.

United States

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

10,406,226 and 10,464,992, and the United States Patent and Trademark Office ("USPTO") has granted both requests to initiate reexamination proceedings.

10,406,226 and 10,464,992, and the USPTO has granted both requests to initiate reexamination proceedings.

On May 5, 2021, Mylan Pharmaceuticals Inc.

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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.

An oral hearing was held on August 10, 2022.

On July 1, 2022, Mylan filed IPR petitions against the Company's U.S.

10,130,681 (the "'681 Patent") and 10,888,601 (the "'601 Patent"), seeking declarations of invalidity of the '681 and '601 Patents.

On September 9, 2022, Apotex filed an IPR petition against the Company's U.S.

11,253,572 (the "'572 Patent") seeking a declaration of invalidity of the '572 Patent.

On September 7, 2021, Celltrion, Inc.

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

On August 2, 2022, the Company filed a patent infringement lawsuit against Mylan in the United States District Court for the Northern District of West Virginia alleging that Mylan's filing for a U.S.

Food and Drug Administration approval of an aflibercept biosimilar infringes certain Company patents.

A trial has been scheduled to begin on June 12, 2023.

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.

On June 15 and July 15, 2022, the Company and Bayer Inc.

filed patent infringement lawsuits against BGP Pharma ULC d.b.a Viatris Canada and two additional defendants in the Federal Court of Canada seeking a declaration that the making, constructing, using, or selling of an aflibercept biosimilar would directly or indirectly infringe one or more claims of the Company's Canadian Patent Nos.

2,654,510 and 3,007,276 (in the lawsuit filed on June 15, 2022) and the Company's Canadian Patent No.

2,965,495 (in the lawsuit filed on July 15, 2022).

On June 15, July 15, August 30, and October 4, 2022, the Company and Bayer Inc.

filed patent infringement lawsuits against BGP Pharma ULC d.b.a Viatris Canada ("Viatris Canada") in the Federal Court of Canada seeking a declaration that the making, constructing, using, or selling of an aflibercept biosimilar would directly or indirectly infringe one or more claims of the Company's Canadian Patent Nos.

2,654,510 (the "'510 Patent) and 3,007,276 (the "'276 Patent") (in the lawsuit filed on June 15, 2022);

the Company's Canadian Patent No.

2,965,495 (the "'495 Patent") (in the lawsuit filed on July 15, 2022);

the Company's Canadian Patent No.

2,906,768 (the "'768 Patent") (in the lawsuit filed on August 30, 2022, which has been joined with the lawsuit filed on July 15, 2022);

and the Company's Canadian Patent No.

3,129,193 (the "'193 Patent") (in the lawsuit filed on October 4, 2022).

A trial for the lawsuit concerning the '510 Patent and the '276 Patent has been scheduled for March 2024 and a trial for the lawsuit concerning the '495 Patent and the '768 Patent has been scheduled for May-June 2024.

of the lawsuit concerning the '510 Patent and the '276 Patent resulted in a statutory 24-month stay of regulatory approval of Viatris Canada's aflibercept biosimilar in Canada unless the lawsuit is resolved earlier.

On October 31, 2022, Samsung Bioepis Co., Ltd.

initiated an invalidation proceeding before the Intellectual Property Trial and Appeal Board of the Korean Intellectual Property Office against the Company's Korean Patent No.

1131429 seeking revocation of such patent in its entirety.

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

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An oral hearing was held on July 21, 2022.

On October 25, 2022, the Patent Trial and Appeal Board ("PTAB") of the USPTO issued a final written decision invalidating all claims of the '631 Patent.

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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Court of Appeals for the Second Circuit.

Proceedings Relating to fasinumab

On May 21, 2020, the Company and Teva Pharmaceutical Industries Limited ("Teva") filed a lawsuit against Rinat Neurosciences Corp.

("Rinat"), a wholly owned subsidiary of Pfizer Inc., in the English High Court of Justice in London, seeking invalidation and revocation of Rinat's European Patent No.

2,270,048 (the "'048 Patent"), European Patent No.

1,871,416 (the "'416 Patent"), and European Patent No.

2,305,711 (the "'711 Patent"), each of which pertains to the use of NGF monoclonal antibodies to treat certain symptoms in patients suffering from osteoarthritis.

On July 21, 2020, Rinat filed its defense and counterclaim seeking a declaration of infringement of the '048 Patent by fasinumab.

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

On December 15, 2020, Rinat filed an amended defense and counterclaim seeking a declaration of infringement of the '711 Patent by fasinumab.

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.

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 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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The Company is cooperating with this investigation.

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

California Department of Insurance Subpoena

In September 2022, the Company received a subpoena from the Insurance Commissioner for the State of California pursuant to the California Insurance Code.

The subpoena seeks information relating to the marketing, sale, and distribution of EYLEA, including (i) discounts, rebates, credit card fees, and inventory management systems;

(ii) Regeneron's relationships with distributors;

(iii) price reporting;

(iv) speaker programs;

and (v) patient support programs.

The subpoena covers the period from January 1, 2014 through August 1, 2021.

The Company is cooperating with this investigation.

Proceedings Initiated by Other Payors 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.

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

In the BCBS, MMO, and Horizon matters, on May 31, 2022, June 6, 2022, and June 13, 2022, respectively, the Company filed motions to transfer the actions to the United States District Court of the Southern District of New York or, in the alternative, to stay the actions in favor of the proceedings before the U.S.

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

or to dismiss the complaints with prejudice.

On September 27, 2022, the lawsuits filed by BCBS, MMO, and Horizon were stayed by the U.S.

District Court for the District of Massachusetts pending resolution of the proceedings before the same court discussed under "Department of Justice Matters" above;

and, in light of these stays, the parties to the Local 464A action have also agreed to stay that matter.

Shareholder Demands

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District Court for the Southern District of New York.

On September 23, 2021, the individual defendants moved to dismiss the complaint in its entirety.

Also on September 23, 2021, the plaintiff moved to remand the case to the New York Supreme Court.

On September 23, 2021, the plaintiff moved to remand the case to the New York Supreme Court.

Also on September 23, 2021, the individual defendants moved to dismiss the complaint in its entirety.

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