REGENERON PHARMACEUTICALS, INC. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our principal executive officer and principal financial officer each concluded that, as of the end of such period, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported on a timely basis, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. 93 Table of Contents Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022 using the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2022. The effectiveness of the Company's internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under Part IV, Item 15. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations on Effectiveness of Controls Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met and cannot detect all deviations. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or deviations, if any, within the company have been detected. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 94 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item (other than the information set forth in the next paragraph in this Item 10) will be included in our definitive proxy statement with respect to our 2023 Annual Meeting of Shareholders to be filed with the SEC, and is incorporated herein by reference. We have adopted a code of business conduct and ethics that applies to our officers, directors, and employees. The full text of our code of business conduct and ethics can be found on our website (http://www.regeneron.com) under the "Governance" heading on the "Investors & Media" page. We may satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or controller, or persons performing similar functions, by posting such information on our website where it is accessible through the same link noted above. Item 11. Executive Compensation The information called for by this item will be included in our definitive proxy statement with respect to our 2023 Annual Meeting of Shareholders to be filed with the SEC, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information called for by this item will be included in our definitive proxy statement with respect to our 2023 Annual Meeting of Shareholders to be filed with the SEC, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information called for by this item will be included in our definitive proxy statement with respect to our 2023 Annual Meeting of Shareholders to be filed with the SEC, and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services The information called for by this item will be included in our definitive proxy statement with respect to our 2023 Annual Meeting of Shareholders to be filed with the SEC, and is incorporated herein by reference. 95 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) 1. Financial Statements The consolidated financial statements filed as part of this report are listed on the Index to Financial Statements on page F-1. 2. Financial Statement Schedules All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted. 3. Exhibits Exhibit Number Description 3.1 Restated Certificate of Incorporation, as amended. (Incorporated by reference from the Form 10-Q for Regeneron Pharmaceuticals, Inc. (the "Registrant"), for the quarter ended June 30, 2015, filed August 4, 2015.) 3.2 Amended and Restated By-Laws. (Incorporated by reference from the Form 8-K for the Registrant filed December 21, 2016.) 4.1 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2019, filed February 7, 2020.) 4.2 Indenture, dated August 12, 2020, between the Registrant and U.S. Bank National Association. (Incorporated by reference from the Form 8-K for the Registrant, filed August 12, 2020.) 4.3 First Supplemental Indenture, dated August 12, 2020, between the Registrant and U.S. Bank National Association. (Incorporated by reference from the Form 8-K for the Registrant, filed August 12, 2020.) 4.4 Form of 1.750% Senior Note due 2030 (included in Exhibit 4.3). 4.5 Form of 2.800% Senior Note due 2050 (included in Exhibit 4.3). 10.1 + Regeneron Pharmaceuticals, Inc. Second Amended and Restated 2000 Long-Term Incentive Plan. (Incorporated by reference from the Registration Statement on Form S-8 for the Registrant, filed June 13, 2011.) 10.1.1 + Form of option agreement and related notice of grant for use in connection with the grant of time based vesting stock options to the Registrant's non-employee directors and executive officers under the Regeneron Pharmaceuticals, Inc. Second Amended and Restated 2000 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended March 31, 2009, filed April 30, 2009.) 10.1.2 + Form of option agreement and related notice of grant for use in connection with the grant of time based vesting stock options to the Registrant's non-employee directors under the Regeneron Pharmaceuticals, Inc. Second Amended and Restated 2000 Long-Term Incentive Plan (revised). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2011, filed February 21, 2012.) 10.1.3 + Amendment No. 1 to the Regeneron Pharmaceuticals, Inc. Second Amended and Restated 2000 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2013, filed February 13, 2014.) 10.2 + Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Registration Statement on Form S-8 for the Registrant, filed June 12, 2017.) 10.2.1 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's executive officers under the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 8-K for the Registrant, filed June 18, 2014.) 10.2.2 + Form of restricted stock award agreement and related notice of grant for use in connection with the grant of restricted stock awards to the Registrant's executive officers under the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 8-K for the Registrant, filed June 18, 2014.) 96 Table of Contents 10.2.3 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's non-employee directors under the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 8-K for the Registrant, filed June 18, 2014.) 10.2.4 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to P. Roy Vagelos, M.D. under the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2015, filed February 11, 2016.) 10.2.5 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's executive officers under the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised). (Incorporated by reference from the Form 8-K for the Registrant, filed November 19, 2015.) 10.2.6 + Form of restricted stock award agreement and related notice of grant for use in connection with the grant of restricted stock awards to the Registrant's executive officers under the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised). (Incorporated by reference from the Form 8-K for the Registrant, filed November 19, 2015.) 10.2.7 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's non-employee directors under the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2015, filed February 11, 2016.) 10.2.8 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's executive officers under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2017, filed February 8, 2018.) 10.2.9 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to P. Roy Vagelos, M.D. under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2017, filed February 8, 2018.) 10.2.10 + Form of restricted stock award agreement and related notice of grant for use in connection with the grant of restricted stock awards to the Registrant's executive officers under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2017, filed February 8, 2018.) 10.2.11 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's non-employee directors under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2017, filed February 8, 2018.) 10.2.12 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's executive officers under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2018). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2018, filed February 7, 2019.) 10.2.13 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to P. Roy Vagelos, M.D. under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2018). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2018, filed February 7, 2019.) 10.2.14 + Form of restricted stock award agreement and related notice of grant for use in connection with the grant of restricted stock awards to the Registrant's executive officers under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2018). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2018, filed February 7, 2019.) 10.2.15 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's non-employee directors under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2018). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2018, filed February 7, 2019.) 97 Table of Contents 10.2.16 + Form of restricted stock unit award agreement and related notice of grant for use in connection with the grant of restricted stock units to the Registrant's non-employee directors under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2018, filed February 7, 2019.) 10.2.17 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's executive officers under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2019). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2019, filed February 7, 2020.) 10.2.18 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to P. Roy Vagelos, M.D. under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2019). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2019, filed February 7, 2020.) 10.2.19 + Form of restricted stock award agreement and related notice of grant for use in connection with the grant of restricted stock awards to the Registrant's executive officers under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2019). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2019, filed February 7, 2020.) 10.2.20 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's non-employee directors under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2019). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2019, filed February 7, 2020.) 10.2.21 + Form of restricted stock unit award agreement and related notice of grant for use in connection with the grant of restricted stock units to the Registrant's non-employee directors under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (revised 2019). (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2019, filed February 7, 2020.) 10.2.22 + Form of performance restricted stock unit award agreement and related notice of grant for use in connection with the grant of performance restricted stock units to Leonard S. Schleifer, M.D., Ph.D., George D. Yancopoulos, M.D., Ph.D., and P. Roy Vagelos, M.D. under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2019, filed February 7, 2020.) 10.3 + Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Registration Statement on Form S-8 for the Registrant, filed June 16, 2020.) 10.3.1 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's executive officers under the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2020, filed February 8, 2021.) 10.3.2 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to P. Roy Vagelos, M.D. under the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2020, filed February 8, 2021.) 10.3.3 + Form of restricted stock award agreement and related notice of grant for use in connection with the grant of restricted stock awards to the Registrant's executive officers under the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2020, filed February 8, 2021.) 10.3.4 + Form of restricted stock unit award agreement and related notice of grant for use in connection with the grant of restricted stock units to P. Roy Vagelos, M.D. under the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2020, filed February 8, 2021.) 10.3.5 + Form of stock option agreement and related notice of grant for use in connection with the grant of non-qualified stock options to the Registrant's non-employee directors under the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2020, filed February 8, 2021.) 98 Table of Contents 10.3.6 + Form of restricted stock unit award agreement and related notice of grant for use in connection with the grant of restricted stock units to the Registrant's non-employee directors under the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2020, filed February 8, 2021.) 10.3.7 + Form of performance restricted stock unit award agreement and related notice of grant for use in connection with the grant of performance restricted stock units to Leonard S. Schleifer, M.D., Ph.D. and George D. Yancopoulos, M.D., Ph.D. under the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2020, filed February 8, 2021.) 10.4 + Amended and Restated Employment Agreement, dated as of November 14, 2008, between the Registrant and Leonard S. Schleifer, M.D., Ph.D. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2008, filed February 26, 2009.) 10.5* + Employment Agreement, dated as of December 31, 1998, between the Registrant and P. Roy Vagelos, M.D. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2004, filed March 11, 2005.) 10.6 + Offer Letter for Robert E. Landry effective September 9, 2013. (Incorporated by reference from the Form 8-K for the Registrant, filed September 12, 2013.) 10.7 + Regeneron Pharmaceuticals, Inc. Change in Control Severance Plan, amended and restated effective as of November 14, 2008. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2008, filed February 26, 2009.) 10.8 + Regeneron Pharmaceuticals, Inc. Cash Incentive Bonus Plan. (Incorporated by reference from the Form 8-K for the Registrant, filed June 17, 2015.) 10.9* IL-1 Antibody Termination Agreement by and between Novartis Pharma AG, Novartis Pharmaceuticals Corporation and the Registrant, dated as of June 8, 2009. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended June 30, 2009, filed August 4, 2009.) 10.10* License and Collaboration Agreement, dated as of October 18, 2006, by and between Bayer HealthCare LLC and the Registrant. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended September 30, 2006, filed November 6, 2006.) 10.10.1* Restated Amendment Agreement, dated December 30, 2014 and entered into effective as of May 7, 2012, by and between Bayer HealthCare LLC and the Registrant. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2014, filed February 12, 2015.) 10.10.2** Second Amendment Agreement, dated December 19, 2019, by and between Bayer HealthCare LLC and the Registrant. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2019, filed February 7, 2020.) 10.11* Amended and Restated License and Collaboration Agreement, dated as of November 10, 2009, by and among Aventis Pharmaceuticals Inc., sanofi-aventis Amerique du Nord, and the Registrant. (Incorporated by reference from the Form 10-K/A for the Registrant, for the year ended December 31, 2009, filed June 2, 2010.) 10.11.1* First Amendment to Amended and Restated License and Collaboration Agreement by and between the Registrant and Aventis Pharmaceuticals Inc., dated May 1, 2013. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended June 30, 2013, filed August 6, 2013.) 10.11.2* Amendment No. 2 to Amended and Restated License and Collaboration Agreement, dated July 27, 2015 and entered into effective as of July 1, 2015, by and between the Registrant and Sanofi Biotechnology SAS, as successor-in-interest to Aventis Pharmaceuticals, Inc. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended September 30, 2015, filed November 4, 2015.) 10.11.3** Third Amendment to Amended and Restated License and Collaboration Agreement, dated as of April 5, 2020, and effective as of April 1, 2020, by and between the Registrant, Sanofi Biotechnology SAS, and Sanofi. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended June 30, 2020, filed August 5, 2020.) 10.11.4** Fourth Amendment to Amended and Restated License and Collaboration Agreement, dated as of October 6, 2021, by and between the Registrant, Sanofi Biotechnology SAS, and Sanofi. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2021, filed February 7, 2022.) 99 Table of Contents 10.11.5** Fifth Amendment to Amended and Restated License and Collaboration Agreement, dated as of June 1, 2022, by and between the Registrant, Sanofi Biotechnology SAS, and Sanofi. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended June 30, 2022, filed August 3, 2022.) 10.12** Praluent Cross License & Commercialization Agreement, dated as of April 5, 2020, and effective as of April 1, 2020, by and between the Registrant and Sanofi Biotechnology SAS. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended June 30, 2020, filed August 5, 2020.) 10.13 Amended and Restated Investor Agreement, dated as of January 11, 2014, by and among Sanofi, sanofi-aventis US LLC, Aventis Pharmaceuticals Inc., sanofi-aventis Amerique du Nord, and the Registrant. (Incorporated by reference from the Form 8-K for the Registrant, filed January 13, 2014.) 10.13.1 Amendment to the Amended and Restated Investor Agreement, dated as of May 25, 2020, by and among the Registrant, Sanofi, Sanofi-Aventis US LLC, and Aventisub LLC. (Incorporated by reference from the Form 8-K for the Registrant, filed May 29, 2020.) 10.14*** Credit Agreement, dated as of December 19, 2022, by and among the Registrant, as a borrower and guarantor, certain direct subsidiaries of the Registrant, as the initial subsidiary borrowers, the lenders and issuing banks party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, swingline lender, and an issuing bank. (Incorporated by reference from the Form 8-K for the Registrant, filed December 20, 2022.) 10.15** Amended and Restated Immuno-oncology License and Collaboration Agreement, dated as of June 1, 2022, by and between the Registrant and Sanofi Biotechnology SAS. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended June 30, 2022, filed August 3, 2022.) 10.16* ANG2 License and Collaboration Agreement, dated as of March 23, 2016, by and between Bayer HealthCare LLC and the Registrant. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended March 31, 2016, filed May 5, 2016.) 10.17* Purchase Agreement, dated as of December 30, 2016, by and among BMR-Landmark at Eastview LLC and BMR-Landmark at Eastview IV LLC and the Registrant. (Incorporated by reference from the Form 10-K for the Registrant, for the year ended December 31, 2016, filed February 9, 2017.) 10.18*** Second Amended and Restated Participation Agreement, dated as of March 2, 2022, by and among Old Saw Mill Holdings LLC, as lessee, Bank of America, N.A., as administrative agent, BA Leasing BSC, LLC, as lessor, and the rent assignees party thereto from time to time. (Incorporated by reference from the Form 8-K for the Registrant, filed March 8, 2022.) 10.19*** Second Amended and Restated Lease and Remedies Agreement, dated as of March 2, 2022, between Old Saw Mill Holdings LLC, as lessee, and BA Leasing BSC, LLC, as lessor. (Incorporated by reference from the Form 8-K for the Registrant, filed March 8, 2022.) 10.20*** Second Amended and Restated Guaranty, dated as of March 2, 2022, made by the Registrant, Regeneron Healthcare Solutions, Inc., and Regeneron Genetics Center LLC, as guarantors. (Incorporated by reference from the Form 8-K for the Registrant, filed March 8, 2022.) 10.21** Master Agreement, dated as of April 8, 2019, by and between the Registrant and Alnylam Pharmaceuticals, Inc. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended June 30, 2019, filed August 6, 2019.) 10.21.1** Form of Co-Co Collaboration Agreement (Exhibit B to Master Agreement contained in Exhibit 10. 21 ). 10.21.2** Form of License Agreement (Exhibit C to Master Agreement contained in Exhibit 10. 21 ). 10.22** License Agreement, dated as of August 18, 2020, by and among the Registrant, F. Hoffman-La Roche Ltd, and Genentech, Inc. (Incorporated by reference from the Form 10-Q for the Registrant, for the quarter ended September 30, 2020, filed November 5, 2020.) 21.1 Subsidiaries of the Registrant. 23.1 Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm. 24.1 Power of Attorney (included on the signature page of this Annual Report on Form 10-K). 31.1 Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. 31.2 Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. 32 Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350. 100 Table of Contents 101 Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language ("Inline XBRL"): (i) the Registrant's Consolidated Balance Sheets as of December 31, 2022 and 2021; (ii) the Registrant's Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022, 2021, and 2020; (iii) the Registrant's Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022, 2021, and 2020; (iv) the Registrant's Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020; and (v) the notes to the Registrant's Consolidated Financial Statements. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). _______ * Portions of this document have been omitted and filed separately with the Securities and Exchange Commission pursuant to requests for confidential treatment pursuant to Rule 24b-2. ** Certain confidential portions of this Exhibit were omitted in accordance with Item 601(b)(10) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of all confidential portions of this Exhibit that were omitted to the Securities and Exchange Commission upon its request. *** Certain of the exhibits and/or schedules to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules of this Exhibit to the Securities and Exchange Commission upon its request. + Indicates a management contract or compensatory plan or arrangement. Item 16. Form 10-K Summary None. 101 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REGENERON PHARMACEUTICALS, INC. Date: February 6, 2023 By: /s/ LEONARD S. SCHLEIFER Leonard S. Schleifer, M.D., Ph.D. President and Chief Executive Officer 102 Table of Contents POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Leonard S. Schleifer, President and Chief Executive Officer, and Robert E. Landry, Executive Vice President, Finance and Chief Financial Officer, and each of them, his or her true and lawful attorney-in-fact and agent, with the full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities therewith, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact and agent, or either of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: Signature Title Date /s/ LEONARD S. SCHLEIFER President, Chief Executive Officer, and Director (Principal Executive Officer) February 6, 2023 Leonard S. Schleifer, M.D., Ph.D. /s/ ROBERT E. LANDRY Executive Vice President, Finance and Chief Financial Officer (Principal Financial Officer) February 6, 2023 Robert E. Landry /s/ CHRISTOPHER R. FENIMORE Senior Vice President, Controller (Principal Accounting Officer) February 6, 2023 Christopher R. Fenimore /s/ GEORGE D. YANCOPOULOS President, Chief Scientific Officer, and Director February 6, 2023 George D. Yancopoulos, M.D., Ph.D. /s/ P. ROY VAGELOS Chair of the Board of Directors February 6, 2023 P. Roy Vagelos, M.D. /s/ BONNIE L. BASSLER Director February 6, 2023 Bonnie L. Bassler, Ph.D. /s/ MICHAEL S. BROWN Director February 6, 2023 Michael S. Brown, M.D. /s/ N. ANTHONY COLES Director February 6, 2023 N. Anthony Coles, M.D. /s/ JOSEPH L. GOLDSTEIN Director February 6, 2023 Joseph L. Goldstein, M.D. /s/ CHRISTINE A. POON Director February 6, 2023 Christine A. Poon /s/ ARTHUR F. RYAN Director February 6, 2023 Arthur F. Ryan /s/ GEORGE L. SING Director February 6, 2023 George L. Sing /s/ MARC TESSIER-LAVIGNE Director February 6, 2023 Marc Tessier-Lavigne, Ph.D. /s/ CRAIG B. THOMPSON Director February 6, 2023 Craig B. Thompson, M.D. /s/ HUDA Y. ZOGHBI Director February 6, 2023 Huda Y. Zoghbi, M.D. 103 Table of Contents REGENERON PHARMACEUTICALS, INC. INDEX TO FINANCIAL STATEMENTS Page Numbers Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) F- 2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F- 4 Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020 F- 5 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2022, 2021, and 2020 F- 6 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020 F- 8 Notes to Consolidated Financial Statements F- 9 to F- 44 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Regeneron Pharmaceuticals, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Regeneron Pharmaceuticals, Inc. and its subsidiaries (the "Company") as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive income, of stockholders' equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. F-2 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accounting for the Acquisition of the Worldwide Rights to Libtayo As described in Notes 1, 3, and 8 to the consolidated financial statements, in July 2022, the Company obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide under an Amended and Restated Immuno-oncology License and Collaboration Agreement with Sanofi. The transaction was accounted for as an asset acquisition. Amounts paid in connection with obtaining the worldwide rights to Libtayo, which included an up-front payment of $ 900 million, offset by the remaining up-front payments of $ 241 million previously received under the Immuno-oncology License and Collaboration Agreement, were recorded as an intangible asset. The Company recorded additions to the Libtayo intangible asset primarily related to contingent consideration due to Sanofi in connection with obtaining the worldwide rights to Libtayo. As disclosed by management, due to the complexity of the terms of the amendments to the collaboration agreements in contemplation of the acquisition of the worldwide rights to Libtayo, significant judgment was applied by management in identifying the elements of the transaction and evaluating the timing and recognition of contingent consideration including the following: royalties, which are recorded in the period in which the underlying sales occur; sales-based milestones up to an aggregate of $ 100 million, which are recorded when the milestone is deemed probable by the Company of being achieved; a regulatory milestone of $ 100 million, which is recorded upon achievement; and a portion of the value associated with the increase in the reimbursement percentage pursuant to the amendment to the Company's Antibody License and Collaboration Agreement. The principal considerations for our determination that performing procedures relating to the accounting for the acquisition of the worldwide rights to Libtayo is a critical audit matter are (i) the significant judgment by management in identifying the elements of the transaction and in evaluating the timing and recognition of contingent consideration, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the accounting for the transaction and related disclosures, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls over management's accounting for the amendments to the collaboration agreements including controls over the identification of the elements of the transaction and evaluating the timing and recognition of contingent consideration. These procedures also included, among others (i) reviewing the Amended and Restated Immuno-oncology License and Collaboration Agreement and the amended Antibody License and Collaboration Agreement and other agreements related to the transaction; (ii) evaluating management's identification of the elements of the transaction; and (iii) evaluating the timing and recognition of contingent consideration. Professionals with specialized skill and knowledge were used to assist in evaluating the identification of the elements of the transaction. /s/ PricewaterhouseCoopers LLP Florham Park, New Jersey February 6, 2023 We have served as the Company’s auditor since 1989. F-3 Table of Contents REGENERON PHARMACEUTICALS, INC. CONSOLIDATED BALANCE SHEETS (In millions, except per share data) December 31, 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 3,105.9 $ 2,885.6 Marketable securities 4,636.4 2,809.1 Accounts receivable, net 5,328.7 6,036.5 Inventories 2,401.9 1,951.3 Prepaid expenses and other current assets 411.2 332.4 Total current assets 15,884.1 14,014.9 Marketable securities 6,591.8 6,838.0 Property, plant, and equipment, net 3,763.0 3,482.2 Intangible assets, net 915.5 6.7 Deferred tax assets 1,723.7 876.9 Other noncurrent assets 336.4 216.1 Total assets $ 29,214.5 $ 25,434.8 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 589.2 $ 564.0 Accrued expenses and other current liabilities 2,074.2 2,206.8 Finance lease liabilities — 719.7 Deferred revenue 477.9 442.0 Total current liabilities 3,141.3 3,932.5 Long-term debt 1,981.4 1,980.0 Finance lease liabilities 720.0 — Deferred revenue 69.8 73.3 Other noncurrent liabilities 638.0 680.2 Total liabilities 6,550.5 6,666.0 Commitments and contingencies (Note 11) Stockholders' equity: Preferred Stock, par value $ .01 per share; 30.0 shares authorized; issued and outstanding - none — — Class A Stock, convertible, par value $ .001 per share; 40.0 shares authorized; shares issued and outstanding - 1.8 in 2022 and 2021 — — Common Stock, par value $ .001 per share; 320.0 shares authorized; shares issued - 130.4 in 2022 and 126.2 in 2021 0.1 0.1 Additional paid-in capital 9,949.3 8,087.5 Retained earnings 23,306.7 18,968.3 Accumulated other comprehensive loss ( 238.8 ) ( 26.2 ) Treasury Stock, at cost; 22.6 shares in 2022 and 19.4 shares in 2021 ( 10,353.3 ) ( 8,260.9 ) Total stockholders' equity 22,664.0 18,768.8 Total liabilities and stockholders' equity $ 29,214.5 $ 25,434.8 The accompanying notes are an integral part of the financial statements. F-4 Table of Contents REGENERON PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (In millions, except per share data) Year Ended December 31, 2022 2021 2020 Statements of Operations Revenues: Net product sales $ 6,893.7 $ 12,117.2 $ 5,567.6 Sanofi collaboration revenue 2,855.7 1,902.2 1,186.4 Other collaboration revenue 2,058.4 1,771.1 1,186.1 Other revenue 365.1 281.2 557.0 12,172.9 16,071.7 8,497.1 Expenses: Research and development 3,592.5 2,860.1 2,647.0 Acquired in-process research and development 255.1 48.0 88.0 Selling, general, and administrative 2,115.9 1,824.9 1,346.0 Cost of goods sold 800.0 1,773.1 491.9 Cost of collaboration and contract manufacturing 760.4 664.4 628.0 Other operating (income) expense, net ( 89.9 ) ( 45.6 ) ( 280.4 ) 7,434.0 7,124.9 4,920.5 Income from operations 4,738.9 8,946.8 3,576.6 Other income (expense): Other income (expense), net 179.3 436.3 290.7 Interest expense ( 59.4 ) ( 57.3 ) ( 56.9 ) 119.9 379.0 233.8 Income before income taxes 4,858.8 9,325.8 3,810.4 Income tax expense 520.4 1,250.5 297.2 Net income $ 4,338.4 $ 8,075.3 $ 3,513.2 Net income per share - basic $ 40.51 $ 76.40 $ 32.65 Net income per share - diluted $ 38.22 $ 71.97 $ 30.52 Weighted average shares outstanding - basic 107.1 105.7 107.6 Weighted average shares outstanding - diluted 113.5 112.2 115.1 Statements of Comprehensive Income Net income $ 4,338.4 $ 8,075.3 $ 3,513.2 Other comprehensive income (loss), net of tax: Unrealized (loss) gain on debt securities ( 213.6 ) ( 56.4 ) 9.1 Unrealized gain (loss) on cash flow hedges 1.0 0.9 ( 0.9 ) Comprehensive income $ 4,125.8 $ 8,019.8 $ 3,521.4 The accompanying notes are an integral part of the financial statements. F-5 Table of Contents REGENERON PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Years Ended December 31, 2022, 2021, and 2020 (In millions) Class A Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders' Equity Shares Amount Shares Amount Shares Amount Balance, December 31, 2019 1.8 $ — 113.3 $ 0.1 $ 4,428.6 $ 7,379.8 $ 21.1 ( 4.9 ) $ ( 739.9 ) $ 11,089.7 Issuance of Common Stock for equity awards granted under long-term incentive plans — — 9.6 — 2,576.4 — — — — 2,576.4 Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 1.4 ) — ( 768.9 ) — — — — ( 768.9 ) Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 37.2 — — 0.1 7.5 44.7 Repurchases of Common Stock — — — — — — — ( 11.6 ) ( 5,880.9 ) ( 5,880.9 ) Stock-based compensation charges — — — — 442.9 — — — — 442.9 Net income — — — — — 3,513.2 — — — 3,513.2 Other comprehensive income, net of tax — — — — — — 8.2 — — 8.2 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 Issuance of Common Stock for equity awards granted under long-term incentive plans — — 6.2 — 1,676.0 — — — — 1,676.0 Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 1.5 ) — ( 944.6 ) — — — — ( 944.6 ) Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 40.7 — — 0.1 7.4 48.1 Repurchases of Common Stock — — — — — — — ( 3.1 ) ( 1,655.0 ) ( 1,655.0 ) Stock-based compensation charges — — — — 599.2 — — — — 599.2 Net income — — — — — 8,075.3 — — — 8,075.3 Other comprehensive loss, net of tax — — — — — — ( 55.5 ) — — ( 55.5 ) Balance, December 31, 2021 1.8 — 126.2 0.1 8,087.5 18,968.3 ( 26.2 ) ( 19.4 ) ( 8,260.9 ) 18,768.8 F-6 Table of Contents CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (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 Issuance of Common Stock for equity awards granted under long-term incentive plans — — 4.8 — 1,517.4 — — — — 1,517.4 Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.6 ) — ( 445.7 ) — — — — ( 445.7 ) Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 52.3 — — 0.1 7.4 59.7 Repurchases of Common Stock — — — — — — — ( 3.3 ) ( 2,099.8 ) ( 2,099.8 ) Stock-based compensation charges — — — — 737.8 — — — — 737.8 Net income — — — — — 4,338.4 — — — 4,338.4 Other comprehensive loss, net of tax — — — — — — ( 212.6 ) — — ( 212.6 ) Balance, December 31, 2022 1.8 $ — 130.4 $ 0.1 $ 9,949.3 $ 23,306.7 $ ( 238.8 ) ( 22.6 ) $ ( 10,353.3 ) $ 22,664.0 The accompanying notes are an integral part of the financial statements. F-7 Table of Contents REGENERON PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31, 2022 2021 2020 Cash flows from operating activities: Net income $ 4,338.4 $ 8,075.3 $ 3,513.2 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 341.4 286.2 235.9 Stock-based compensation expense 725.0 601.7 432.0 Losses (gains) on marketable and other securities, net 36.8 ( 387.0 ) ( 221.8 ) Other non-cash items, net 368.0 568.7 86.8 Deferred income taxes ( 746.4 ) ( 147.1 ) 75.6 Acquired in-process research and development in connection with asset acquisition 195.0 — — Changes in assets and liabilities: Decrease (increase) in accounts receivable 707.8 ( 1,927.4 ) ( 1,356.1 ) Increase in inventories ( 696.5 ) ( 494.3 ) ( 529.4 ) (Increase) decrease in prepaid expenses and other assets ( 148.6 ) ( 240.7 ) 114.9 Increase (decrease) in deferred revenue 32.4 ( 120.2 ) 148.1 (Decrease) increase in accounts payable, accrued expenses, and other liabilities ( 138.4 ) 866.1 118.9 Total adjustments 676.5 ( 994.0 ) ( 895.1 ) Net cash provided by operating activities 5,014.9 7,081.3 2,618.1 Cash flows from investing activities: Purchases of marketable and other securities ( 7,487.9 ) ( 7,048.1 ) ( 3,241.0 ) Sales or maturities of marketable and other securities 5,550.5 2,215.3 3,785.0 Capital expenditures ( 590.1 ) ( 551.9 ) ( 614.6 ) Payments for Libtayo intangible asset ( 1,026.8 ) — — Asset acquisition, net of cash acquired ( 230.3 ) — — Net cash used in investing activities ( 3,784.6 ) ( 5,384.7 ) ( 70.6 ) Cash flows from financing activities: Proceeds from issuance of Common Stock 1,519.5 1,672.3 2,575.2 Payments in connection with Common Stock tendered for employee tax obligations ( 445.7 ) ( 1,032.7 ) ( 680.8 ) Repurchases of Common Stock ( 2,082.8 ) ( 1,645.4 ) ( 5,846.8 ) 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 ( 1,009.0 ) ( 1,005.8 ) ( 1,970.5 ) Net increase in cash, cash equivalents, and restricted cash 221.3 690.8 577.0 Cash, cash equivalents, and restricted cash at beginning of period 2,898.1 2,207.3 1,630.3 Cash, cash equivalents, and restricted cash at end of period $ 3,119.4 $ 2,898.1 $ 2,207.3 Supplemental disclosure of cash flow information Cash paid for interest (net of amounts capitalized) $ 53.7 $ 55.8 $ 23.2 Cash paid for income taxes $ 1,502.4 $ 1,218.4 $ 188.1 The accompanying notes are an integral part of the financial statements. F-8 Table of Contents REGENERON PHARMACEUTICALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Business Overview and Summary of Significant Accounting Policies Organization and Business Regeneron Pharmaceuticals, Inc. and its subsidiaries ("Regeneron," "Company," "we," "us," and "our") is a fully integrated biotechnology company that discovers, invents, develops, manufactures, and commercializes medicines for serious diseases. Our products and product candidates in development are designed to help patients with eye diseases, allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, pain, hematologic conditions, infectious diseases, and rare diseases. The Company currently has nine products that have received marketing approval by the U.S. Food and Drug Administration ("FDA"). In addition, REGEN-COV ® was authorized under an Emergency Use Authorization ("EUA") from November 2020 until January 2022 when the EUA was revised to exclude its use in geographic regions where infection or exposure is likely due to a variant that is not susceptible to the treatment; with this EUA revision, REGEN-COV is not currently authorized for use in any U.S. states, territories, or jurisdictions. The Company is a party to collaboration agreements to develop and commercialize, as applicable, certain products and product candidates (see Note 3). The Company operates in one business segment, which includes all activities related to the discovery, development, and commercialization of medicines for serious diseases. The Company's business is subject to certain risks including, but not limited to, uncertainties relating to conducting research activities, product development, obtaining regulatory approvals, competition, and obtaining and enforcing patents. Basis of Presentation The consolidated financial statements include the accounts of Regeneron and its wholly-owned subsidiaries. Intercompany balances and transactions are eliminated in consolidation. Beginning with the first quarter of 2022, the Company added a new line item, Acquired in-process research and development, to its 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 during the year ended December 31, 2022 would have historically been recorded to Research and development expenses. Certain reclassifications have been made to prior period amounts to conform with the current period's presentation, including in connection with the addition of Acquired in-process research and development described above. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Concentration of Credit Risk Financial instruments which potentially expose the Company to concentrations of credit risk consist of cash, cash equivalents, certain investments, and accounts receivable. In accordance with the Company's policies, the Company mandates asset diversification and monitors exposure with its counterparties. Concentrations of credit risk with respect to customer and collaborator accounts receivable are significant. As of December 31, 2022, two individual customers accounted for 86 % of the Company's net trade accounts receivable balances. Three individual customers accounted for 91 % (including 29 % related to the U.S. government) of the Company's net trade accounts receivable balances as of December 31, 2021. The Company has contractual payment terms with each of its collaborators and customers, and the Company monitors their financial performance and credit worthiness so that it can properly assess and respond to any changes in their credit profile. As of December 31, 2022 and 2021, there were no write-offs and allowances of accounts receivable related to credit risk for the Company's collaborators or customers. Significant Accounting Policies Cash and Cash Equivalents The Company considers all highly liquid debt instruments with a maturity of three months or less when purchased to be cash equivalents. The carrying amount reported in the Consolidated Balance Sheet for cash and cash equivalents approximates its fair value. F-9 Table of Contents Debt and Equity Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters, and diversification. The Company invests its cash primarily in debt securities. The Company considers its investments in debt securities to be "available-for-sale," as defined by authoritative guidance issued by the Financial Accounting Standards Board ("FASB"). These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). Realized gains and losses on available-for-sale debt securities are included in other income (expense), net. The Company reviews its portfolio of available-for-sale debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost have resulted from a credit-related loss or other factors. If the decline in fair value is due to credit-related factors, a loss is recognized in net income, whereas if the decline in fair value is not due to credit-related factors, the loss is recorded in other comprehensive income (loss). The Company also has investments in equity securities that are carried at fair value with changes in fair value recognized within other income (expense), net. The Company has elected to measure certain equity investments it holds that do not have readily determinable fair values at cost less impairment, if any, and adjusts for observable price changes in orderly transactions for identical or similar investments of the same issuer within other income (expense), net. Accounts Receivable The Company's trade accounts receivable arise from product sales and represent amounts due from its customers. In addition, the Company records accounts receivable arising from its collaboration and licensing agreements. The Company monitors the financial performance and credit worthiness of its counterparties so that it can properly assess and respond to changes in their credit profile. The Company provides allowances against receivables for estimated losses, if any, that may result from a counterparty's inability to pay. Amounts determined to be uncollectible are written-off against the allowance. Inventories Inventories are stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first-out, or FIFO, method. The Company capitalizes inventory costs associated with the Company's products prior to regulatory approval when, based on management's judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed. The determination to capitalize inventory costs is based on various factors, including status and expectations of the regulatory approval process, any known safety or efficacy concerns, potential labeling restrictions, and any other impediments to obtaining regulatory approval. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and writes down such inventories as appropriate. In addition, the Company's products are subject to strict quality control and monitoring which the Company performs throughout the manufacturing process. If certain batches or units of product no longer meet quality specifications or become obsolete due to expiration, the Company records a charge to write down such inventory to its estimated realizable value. Property, Plant, and Equipment Property, plant, and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term. Costs of construction of certain long-lived assets include capitalized interest, which is amortized over the estimated useful life of the related asset. Expenditures for maintenance and repairs which do not materially extend the useful lives of the assets are charged to expense as incurred. The cost and accumulated depreciation or amortization of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized within income from operations. The estimated useful lives of property, plant, and equipment are as follows: Building and improvements 10 – 50 years Laboratory and other equipment 3 – 10 years Furniture and fixtures 5 years The Company periodically assesses the recoverability of long-lived assets, such as property, plant, and equipment, and evaluates such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. F-10 Table of Contents Leases The Company determines if an arrangement is a lease considering whether there is an identified asset and the contract conveys the right to control its use. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company's lease terms may include options to extend or terminate a lease when it is reasonably certain that it will exercise that option. The Company accounts for lease components (e.g., rental payments) separately from non-lease components (e.g., common area maintenance costs). Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, unless there is a transfer of title or purchase option the Company is reasonably certain to exercise. For leases where an implicit rate is not readily determinable, the Company uses its incremental borrowing rate based on information available at the lease commencement date to determine the present value of future lease payments. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term. Intangible Assets The Company makes a determination of whether an asset or set of assets acquired constitute a business. If it is determined that substantially all of the fair value of gross assets acquired in a transaction are concentrated in a single identifiable asset, then the transaction is accounted for as an asset acquisition. Intangible assets acquired in connection with an asset acquisition are recorded at cost. Such amounts may include up-front payments and contingent consideration. With regard 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 acquisition. 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. Revenue Recognition - Product Revenue Revenue from product sales is recognized at a point in time when the Company's customer is deemed to have obtained control of the product, which generally occurs upon receipt or acceptance by its customer. The amount of revenue the Company recognizes from product sales may vary due to rebates, chargebacks, and discounts provided under governmental and other programs, distribution-related fees, and other sales-related deductions. In order to determine the transaction price, the Company estimates, utilizing the expected value method, the amount of variable consideration to which the Company will be entitled. This estimate is based upon contracts with customers, healthcare providers, payors, and government agencies, statutorily-defined discounts applicable to government-funded programs, historical experience, estimated payor mix, and other relevant factors. The Company reviews its estimates of rebates, chargebacks, and other applicable provisions each period and records any necessary adjustments in the current period's net product sales. • Rebates: The Company's rebates include amounts paid to managed care organizations, group purchasing organizations, state Medicaid programs, and other rebate programs. The Company estimates reductions to product sales for each type of rebate and records an allowance for rebates in the same period in which the related product sales are recognized. The Company's liability for rebates consists of estimates for claims related to the current and prior periods that have not been paid and estimates for claims that will be made related to inventory that exists in the distribution channel at the end of the period. F-11 Table of Contents • Chargebacks and Discounts: The Company's reserves related to discounted pricing to eligible physicians, Veterans' Administration ("VA"), Public Health Services, and others (collectively "qualified healthcare providers") represent the Company's estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices the Company charges to its customers (i.e., distributors and specialty pharmacies). The Company's customers charge the Company for the difference between what they pay for the products and the discounted selling price to the qualified healthcare providers. The Company estimates reductions to product sales for each type of chargeback and records an allowance for chargebacks in the same period that the related product sales are recognized. The Company's reserve for chargebacks consists of amounts for which it expects to issue credit based on expected sales by its customers to qualified healthcare providers and chargebacks that customers have claimed but for which the Company has not yet issued credit. • Distribution-Related Fees: The Company has written contracts with its customers that include terms for distribution-related fees. The Company estimates and records distribution and related fees due to its customers generally based on gross sales. • Other Sales-Related Deductions : The Company's other sales-related deductions include co-pay assistance programs and product returns. The Company estimates and records other sales-related deductions generally based on gross sales, written contracts, and other relevant factors. Consistent with industry practice, the Company generally offers its customers a limited right to return product purchased directly from the Company, which is principally based upon the product's expiration date. Product returned is generally not resalable given the nature of the Company's products and method of administration. The Company develops estimates for product returns based upon historical experience, shelf life of the product, and other relevant factors. The Company monitors product supply levels in the distribution channel, as well as sales by its customers, using product-specific data provided by its customers. If necessary, the Company's estimates of product returns may be adjusted in the future based on actual returns experience, known or expected changes in the marketplace, or other factors. Collaborative Arrangements The Company has entered into various collaborative arrangements to research, develop, manufacture, and commercialize products and/or product candidates. Although each of these arrangements is unique in nature, such arrangements involve a joint operating activity where both parties are active participants in the activities of the collaboration and exposed to significant risks and rewards dependent on the commercial success of the activities. In arrangements where the Company does not deem its collaborator to be its customer, payments to and from its collaborator are presented in the Company's statement of operations based on the nature of our business operations, the nature of the arrangement, including the contractual terms, and the nature of the payments, as summarized in the table and further described below. Nature/Type of Payment Statement of Operations Presentation Regeneron's share of profits or losses in connection with commercialization of products Collaboration revenue Reimbursement for manufacturing of commercial supplies Collaboration revenue Royalties and/or sales-based milestones earned Collaboration revenue Reimbursement of Regeneron's research and development expenses Reduction to Research and development expenses Regeneron's obligation for its share of collaborator's research and development expenses Research and development expense Up-front/opt-in and development milestone payments to collaborators Acquired in-process research and development expense Reimbursement of Regeneron's commercialization-related expenses Reduction to Selling, general, and administrative expense Regeneron's obligation for its share of collaborator's commercialization-related expenses Selling, general, and administrative expense Regeneron's obligation to pay collaborator for its share of gross profits when Regeneron is deemed to be the principal Cost of goods sold Up-front and development milestones earned (when there is a combined unit of account which includes a license and providing research and development services) Other operating income In agreements involving multiple goods or services promised to be transferred to the Company's collaborator, the Company must assess, at the inception of the contract, whether each promise represents a separate obligation (i.e., is "distinct"), or whether such F-12 Table of Contents promises should be combined as a single unit of account. When the Company has a combined unit of account which includes a license and providing research and development services to its collaborator, recognition of up-front payments and development milestones earned from its collaborator is deferred (as a liability) and recognized over the development period (i.e., over time) typically using an input method on the basis of the Company's research and development costs incurred relative to the total expected cost which determines the extent of the Company's progress toward completion. The Company reviews its estimates each period and makes revisions to such estimates as necessary. When the Company is entitled to reimbursement of all or a portion of the expenses (e.g., research and development expenses) that it incurs under a collaboration, it records those reimbursable amounts in the period in which such costs are incurred. If the Company's collaborator performs research and development work or commercialization-related activities and the parties share the related costs, the Company also recognizes, as expense (e.g., research and development expense or selling, general, and administrative expense, as applicable) in the period when its collaborator incurs such expenses, the portion of the collaborator's expenses that the Company is obligated to reimburse. The Company's collaborators provide the Company with estimated expenses for the most recent fiscal quarter. The estimates are revised, if necessary, in subsequent periods if actual expenses differ from those estimates. Under certain of the Company's collaboration agreements, product sales and cost of sales may be recorded by the Company's collaborators as they are deemed to be the principal in the transaction. In arrangements where the Company: • supplies commercial product to its collaborator, the Company may be reimbursed for its manufacturing costs as commercial product is shipped to the collaborator (however, recognition of such cost reimbursements may be deferred until the product is sold by the Company's collaborator to third-party customers); • shares in any profits or losses arising from the commercialization of such products, the Company records its share of the variable consideration, representing net product sales less cost of goods sold and shared commercialization and other expenses, in the period in which such underlying sales occur and costs are incurred by the collaborator; and • receives royalties and/or sales-based milestone payments from its collaborator, the Company recognizes such amounts in the period earned. The Company's collaborators provide it with estimates of product sales and the Company's share of profits or losses, as applicable, for each quarter. The estimates are revised, if necessary, in subsequent periods if the Company's actual share of profits or losses differ from those estimates. Research and Development Expenses Research and development expenses include costs attributable to the conduct of research and development programs, including the cost of salaries, payroll taxes, employee benefits, materials, supplies, depreciation on and maintenance of research equipment, costs related to research collaboration and licensing agreements, clinical trial expenses, the cost of services provided by outside contractors, including services related to the Company's clinical trials, the full cost of manufacturing drug for use in research and development, amounts that the Company is obligated to reimburse to collaborators for research and development expenses that they incur, and the allocable portions of facility costs. Costs associated with research and development are expensed. For each clinical trial that the Company conducts, certain clinical trial costs are expensed immediately, while others are expensed over time based on the expected total number of patients in the trial, the rate at which patients enter and remain in the trial, and/or the period over which clinical investigators, contract research organizations ("CROs"), or other third-party service providers are expected to provide services. In the event of early termination of a clinical trial, the Company accrues and recognizes expenses in an amount based on its estimate of the remaining noncancelable obligations associated with the winding-down of the clinical trial, including any applicable penalties. Stock-based Compensation The Company recognizes stock-based compensation expense for equity grants under the Company's long-term incentive plans (including stock options, restricted stock awards, and restricted stock units (both time-based and performance-based)) to employees and non-employee members of the Company's board of directors (as applicable) based on the grant-date fair value of those awards. The grant-date fair value of an award is generally recognized as compensation expense over the award's requisite service period. Stock-based compensation expense also includes an estimate, which is made at the time of grant, of the number of awards that are expected to be forfeited. This estimate is revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. In addition, the Company reassesses its forfeiture rate assumptions at least annually, considering both historical forfeiture experience and an estimate of future forfeitures for currently outstanding unvested awards. F-13 Table of Contents The Company uses the Black-Scholes model to compute the estimated fair value of stock option awards. Additionally, the Company uses a Monte Carlo simulation to compute the estimated fair value of performance-based restricted stock units that are subject to vesting based on the Company’s attainment of pre-established criteria that include a market condition. For performance-based restricted stock units that contain a performance condition, the Company recognizes stock-based compensation expense if and when the Company determines that it is probable the performance condition will be achieved (based on the number of shares expected to be vested and issued). The Company reassesses the probability of achievement at each reporting period and adjusts compensation cost, as necessary. If there are any changes in the Company's probability assessment, the Company recognizes a cumulative catch-up adjustment in the period of the change in estimate, with the remaining unrecognized expense recognized prospectively over the remaining requisite service period. If the Company subsequently determines that the performance criteria are not met or are not expected to be met, any amounts previously recognized as compensation expense are reversed in the period when such determination is made. Income Taxes The provision for income taxes includes U.S. federal, state, local, and foreign taxes. Income taxes are accounted for under the liability method. Deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, including deferred tax assets and liabilities for expected amounts of global intangible low-taxed income ("GILTI") inclusions, are recognized on the difference between the tax basis of assets and liabilities and their respective financial reporting amounts ("temporary differences") at enacted tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is established for deferred tax assets for which it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the financial statement effects of a tax position when management's assessment is that there is more than a 50% probability that the position will be sustained upon examination by a taxing authority based upon its technical merits. Uncertain tax positions are recorded based upon certain recognition and measurement criteria. The Company re-evaluates uncertain tax positions and considers various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, and changes in facts or circumstances related to a tax position. The Company adjusts the amount of the liability to reflect any subsequent changes in the relevant facts and circumstances surrounding the uncertain tax positions. The Company recognizes interest and penalties related to income tax matters in income tax expense. Per Share Data Basic net income per share is computed by dividing net income by the weighted average number of shares of Common Stock and Class A Stock outstanding. Net income per share is presented on a combined basis, inclusive of Common Stock and Class A Stock outstanding, as each class of stock has equivalent economic rights. Basic net income per share excludes restricted stock until vested. Diluted net income per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include outstanding stock options and unvested restricted stock under the Company's long-term incentive plans, which are included under the treasury stock method when dilutive. F-14 Table of Contents 2. Product Sales Net product sales consist of the following: Year Ended December 31, (In millions) 2022 2021 2020 EYLEA ® U.S. $ 6,264.6 $ 5,792.3 $ 4,947.2 Libtayo ®(a) U.S. 374.5 306.3 270.7 ROW (b) 73.0 — — Praluent ®(c) U.S. 130.0 170.0 150.9 REGEN-COV ®(d) U.S. — 5,828.0 185.7 Evkeeza ® U.S. 48.6 18.4 — Inmazeb ® U.S. 3.0 — — ARCALYST ®(e) U.S. — 2.2 13.1 $ 6,893.7 $ 12,117.2 $ 5,567.6 (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 records global net product sales of Libtayo. See Note 3 for further details. (b) Rest of world ("ROW") (c) Effective April 1, 2020, the Company became solely responsible for the development and commercialization of Praluent in the United States and records net product sales of Praluent in the United States. Previously, Sanofi recorded net product sales of Praluent in the United States. See Note 3 for further details. (d) Net product sales of REGEN-COV in the United States relate to product sold in connection with the Company's agreements with the U.S. government. See Note 3 for further details. (e) 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 December 31, 2022 and 2021, the Company had $ 3.586 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 each of the years ended December 31, 2022, 2021, and 2020. Sales to each of these customers as a percentage of the Company's total gross product revenue are as follows: Year Ended December 31, 2022 2021 2020 Besse Medical, a subsidiary of AmerisourceBergen Corporation 55 % 30 % 51 % McKesson Corporation 28 % 18 % 32 % U.S. government * 43 % * * Sales to the U.S. government represented less than 10% of total gross product revenue during the period Revenue from product sales is recorded net of applicable provisions for rebates, chargebacks, and discounts, distribution-related fees, and other sales-related deductions. Accruals for chargebacks and discounts are recorded as a direct reduction to accounts receivable. Accruals for rebates, distribution-related fees, and other sales-related deductions are recorded within accrued liabilities. The following table summarizes the provisions, and credits/payments, for sales-related deductions. F-15 Table of Contents (In millions) Rebates, Chargebacks, and Discounts Distribution- Related Fees Other Sales- Related Deductions Total Balance as of December 31, 2019 $ 80.3 $ 46.4 $ 29.4 $ 156.1 Provisions 762.9 279.9 94.1 1,136.9 Credits/payments ( 641.0 ) ( 249.1 ) ( 78.7 ) ( 968.8 ) Balance as of December 31, 2020 202.2 77.2 44.8 324.2 Provisions 1,047.1 363.6 150.4 1,561.1 Credits/payments ( 1,034.7 ) ( 360.8 ) ( 127.6 ) ( 1,523.1 ) Balance as of December 31, 2021 214.6 80.0 67.6 362.2 Provisions 1,537.3 431.1 141.1 2,109.5 Credits/payments ( 1,398.0 ) ( 399.7 ) ( 127.2 ) ( 1,924.9 ) Balance as of December 31, 2022 $ 353.9 $ 111.4 $ 81.5 $ 546.8 F-16 Table of Contents 3. Collaboration, License, and Other Agreements a. Sanofi Amounts recognized in the Company's Statements of Operations in connection with its collaborations with Sanofi are detailed below: Statement of Operations Classification Year Ended December 31, (In millions) 2022 2021 2020 Antibody: Regeneron's share of profits in connection with commercialization of antibodies Sanofi collaboration revenue $ 2,082.0 * $ 1,363.0 $ 785.2 Sales-based milestones earned Sanofi collaboration revenue $ 100.0 $ 50.0 $ 50.0 Reimbursement for manufacturing of commercial supplies Sanofi collaboration revenue $ 633.7 $ 488.8 $ 368.0 Other Sanofi collaboration revenue $ 28.7 $ — $ — Reimbursements of R&D expenses, net of Regeneron's obligation for its share of Sanofi R&D expenses Reduction of R&D expense $ 43.0 $ 129.2 $ 149.1 Reimbursement of commercialization-related expenses Reduction of SG&A expense $ 437.4 $ 320.5 $ 359.4 Immuno-oncology ** : Regeneron's share of profits (losses) in connection with commercialization of Libtayo outside the United States Sanofi collaboration revenue $ 6.7 $ ( 13.6 ) $ ( 25.7 ) Reimbursement for manufacturing of ex-U.S. commercial supplies Sanofi collaboration revenue $ 4.6 $ 14.0 $ 8.9 Reimbursement of R&D expenses Reduction of R&D expense $ 42.7 $ 85.1 $ 166.2 Reimbursement of commercialization-related expenses Reduction of SG&A expense $ 41.4 $ 89.6 $ 64.7 Regeneron's obligation for its share of Sanofi commercial expenses SG&A expense $ ( 19.9 ) $ ( 36.3 ) $ ( 22.4 ) Regeneron's obligation for Sanofi's share of Libtayo U.S. gross profits Cost of goods sold $ ( 70.1 ) $ ( 133.0 ) $ ( 119.1 ) Amounts recognized in connection with up-front payments received Other operating income $ 35.1 $ 6.1 $ 210.6 * Net of one-time payment of $ 56.9 million to Sanofi in connection with the amendment to the Antibody License and Collaboration Agreement ** As described within the " Immuno-Oncology " section below, effective July 1, 2022, the Company obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide Antibody 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 (the "LCA"), Sanofi is generally responsible for funding 80 % to 100 % of agreed-upon development costs. The Company is obligated to reimburse Sanofi for 30 % to 50 % of worldwide development expenses that were funded by Sanofi based on the Company's share of collaboration profits from commercialization of collaboration products. Under the terms of the LCA, the Company was required to apply 10 % of its share of the profits from the Antibody Collaboration in any calendar quarter to reimburse Sanofi for these development costs. On July 1, 2022, an amendment to the LCA became effective, pursuant to which the percentage of the Company'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. The Company's contingent reimbursement F-17 Table of Contents obligation (development balance) to Sanofi under the Antibody Collaboration was approximately $ 2.864 billion as of December 31, 2022. Sanofi leads commercialization activities for products under the Antibody Collaboration, subject to the Company's right to co-commercialize such products. The Company co-commercializes Dupixent in the United States and in certain countries outside the United States. The parties equally share profits and losses from sales within the United States. The parties share profits outside the United States on a sliding scale based on sales starting at 65 % (Sanofi)/ 35 % (Regeneron) and ending at 55 % (Sanofi)/ 45 % (Regeneron), and losses outside the United States at 55 % (Sanofi)/ 45 % (Regeneron). In addition to profit and loss sharing, the Company is entitled to receive sales milestone payments from Sanofi. In each of 2020 and 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 $ 1.0 billion and $ 1.5 billion, respectively, on a rolling twelve-month basis. In 2022, the Company earned two additional $ 50.0 million sales-based milestones from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $ 2.0 billion and $ 2.5 billion, respectively, on a rolling twelve-month basis. The Company is entitled to receive the final sales milestone payment of $ 50.0 million when such sales outside the United States exceed $ 3.0 billion on a rolling twelve-month basis. The Company's significant promised goods and services in connection with the Antibody Collaboration consist of providing research and development services, including the manufacturing of clinical supplies; and providing commercial-related services, including the manufacturing of commercial supplies. The Company recognizes amounts in connection with the Antibody Collaboration based on the amount it has the right to invoice and such amount corresponds directly with the Company's performance to date; therefore, the Company does not disclose the value of the transaction price (i.e., the amount of consideration the Company expects to be entitled to) allocated to its remaining unsatisfied obligations. The following table summarizes contract balances in connection with the Company's Antibody Collaboration with Sanofi: As of December 31, (In millions) 2022 2021 Accounts receivable, net $ 692.3 $ 504.8 Deferred revenue $ 415.8 $ 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 pays the Company a 5 % royalty on Sanofi’s net product sales of Praluent outside the United States until March 31, 2032. The Company does not owe Sanofi royalties on the Company’s net product sales of Praluent in the United States. Although each party is 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 continues to supply drug substance to Sanofi and Sanofi continues 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 are 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 each bear 50 % of any damages arising out of Praluent sales or other activities prior to April 1, 2020. See Note 16 for discussion of legal proceedings related to Praluent. Immuno-Oncology 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"). The IO Collaboration was governed by an Amended and Restated Immuno-oncology Discovery and Development Agreement ("Amended IO Discovery Agreement"), and an Immuno-oncology License and Collaboration Agreement ("IO License and Collaboration Agreement"). In connection with the execution of the original Immuno-oncology Discovery and Development Agreement in 2015 ("2015 IO Discovery Agreement"), which was subsequently replaced by the Amended IO Discovery Agreement (as discussed below), Sanofi made a $ 265.0 million non-refundable up-front payment to the Company. Pursuant to the 2015 IO Discovery Agreement, the Company was to identify and validate potential immuno-oncology targets and develop therapeutic antibodies against such targets through clinical proof-of-concept. F-18 Table of Contents Effective December 31, 2018, the Company and Sanofi entered into the Amended IO Discovery Agreement, which narrowed the scope of the existing discovery and development activities conducted by the Company under the 2015 IO Discovery Agreement to developing therapeutic bispecific antibodies targeting (i) BCMA and CD3 and (ii) MUC16 and CD3 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, the Company retains 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. In connection with the execution of the IO License and Collaboration Agreement in 2015, Sanofi made a $ 375.0 million non-refundable up-front payment to the Company. Under the terms of the IO 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, 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. Effective July 1, 2022, the Company obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide under an Amended and Restated Immuno-oncology License and Collaboration Agreement with Sanofi (the "A&R IO LCA"). In connection with the A&R IO LCA, in 2022, the Company made a $ 900.0 million up-front payment to Sanofi, as well as a $ 100.0 million regulatory milestone payment. In addition, Sanofi earned a $ 65.0 million sales-based milestone upon the achievement of a specified amount of worldwide net product sales of Libtayo in 2022, and is eligible to receive an additional $ 35.0 million sales-based milestone upon the achievement of a specified amount of worldwide net product sales of Libtayo in 2023 (aggregate of $ 100.0 million in sales-based milestones eligible to be earned under the terms of the A&R IO LCA). The Company also pays Sanofi an 11 % royalty on net product sales of Libtayo through March 31, 2034. 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 IO Discovery Agreement, the Company was obligated to reimburse Sanofi for half of the development costs it funded that were attributable to clinical development of product candidates from the Company's 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 the Company was 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: As of December 31, (In millions) 2022 2021 Accounts receivable, net $ — $ ( 22.5 ) Deferred revenue $ — $ 16.0 Other liabilities $ — $ 276.1 Other liabilities included up-front payments received from Sanofi for which recognition had been deferred. Such amounts were being recognized over the remaining period in which the Company was obligated to perform development activities. 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 third quarter of 2022. During 2021, the Company updated its 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. During 2020, the Company updated its 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 $ 135.4 million as an increase to other operating income. F-19 Table of Contents b. Bayer 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. Agreed-upon development expenses incurred by the Company and Bayer are generally shared equally. The Company is also obligated to use commercially reasonable efforts to supply clinical and commercial bulk product. Within the United States, the Company is responsible for commercialization and retains profits from such sales. 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 in Japan. The Company is obligated to reimburse Bayer out of its share of the collaboration profits for 50 % of the agreed-upon development expenses that Bayer has incurred in accordance with a formula based on the amount of development expenses that Bayer has incurred and the Company's share of the collaboration profits, or at a faster rate at the Company's option. The Company's contingent reimbursement obligation to Bayer was approximately $ 273 million as of December 31, 2022. Amounts recognized in the Company's Statements of Operations in connection with its Bayer collaboration are as follows: Statement of Operations Classification Year Ended December 31, (In millions) 2022 2021 2020 Regeneron's share of profits in connection with commercialization of EYLEA outside the United States Other collaboration revenue $ 1,317.4 $ 1,349.2 $ 1,107.9 Reimbursement for manufacturing of ex-U.S. commercial supplies Other collaboration revenue $ 91.4 $ 60.1 $ 78.2 One-time payment in connection with change in Japan arrangement Other collaboration revenue $ 21.9 $ — $ — Reimbursement of R&D expenses Reduction of R&D expense $ 51.0 $ 46.1 $ 46.7 Regeneron's obligation for its share of Bayer R&D expenses R&D expense $ ( 34.3 ) $ ( 40.9 ) $ ( 35.8 ) The following table summarizes contract balances in connection with the Company's Bayer collaboration: As of December 31, (In millions) 2022 2021 Accounts receivable, net $ 348.2 $ 355.5 Deferred revenue $ 131.9 $ 129.4 c. Intellia In 2016, the Company 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. Under the terms of the 2016 agreement, the parties agreed to a target selection process, whereby the Company may obtain exclusive rights in up to 10 targets to be chosen by the Company during the collaboration term, subject to various adjustments and limitations set forth in the agreement. Certain targets that either the Company or Intellia selects pursuant to the target selection process may be subject to a co-development and co-commercialization arrangement at the Company's option or Intellia’s option, as applicable. In 2020, the Company expanded its existing collaboration with Intellia to provide the Company 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, the Company also received non-exclusive rights to independently develop and commercialize ex vivo gene edited products. In connection with the agreement, in 2020, the Company 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 Acquired in-process research and development expense. F-20 Table of Contents d. U.S. Government In 2020, the Company expanded its 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 the Company's costs incurred for research and development activities related to COVID-19 treatments. In 2020, the Company also 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. government. The agreement, as subsequently amended, provided for payments to the Company of up to $ 465.9 million in the aggregate for bulk manufacturing of the drug substance, as well as fill/finish, storage, and other activities. In January 2021, the Company entered into an agreement with the U.S. Department of Defense and HHS to manufacture and deliver additional filled and finished drug product of REGEN-COV to the U.S. government. Pursuant to the agreement, the U.S. government was obligated to purchase 1.25 million doses of drug product, which the Company delivered by June 30, 2021, resulting in payments to the Company of $ 2.625 billion. In September 2021, the Company entered into 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 was 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 $ 2.940 billion in the aggregate. Roche supplied a portion of the doses to Regeneron to fulfill the Company's agreement with the U.S. government (see "Roche" below for further details regarding the Company's collaboration agreement with Roche). As of December 31, 2021, the Company had completed its final deliveries of drug product under the agreements described above. See Note 2 for REGEN-COV net product sales recognized during the years ended December 31, 2021 and 2020 in connection with these agreements. e. Roche In 2020, the Company 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). Under the terms of the collaboration agreement, the Company leads global development activities for REGEN-COV, and the parties jointly fund certain studies. The Company has the right to distribute the product in the United States and Roche has the right to distribute the product outside of the United States. The parties share gross profits from worldwide sales based on a pre-specified formula, depending on the amount of manufactured product supplied by each party to the market. Each quarter, a single payment is due from one party to the other to true-up the global gross profits between the parties. If Regeneron is to receive a true-up payment from Roche, such amount will be recorded to Other collaboration revenue. If Regeneron is to make a true-up payment to Roche, such amount will be recorded to Cost of goods sold. Amounts recognized in the Company's Statements of Operations in connection with the Roche Collaboration Agreement are as follows: Statement of Operations Classification Year Ended December 31, (In millions) 2022 2021 2020 Global gross profit payment from Roche in connection with sales of REGEN-COV and Ronapreve Other collaboration revenue $ 627.3 $ 361.8 $ — Reimbursement of R&D expenses Reduction of R&D expense $ 6.8 $ 128.1 $ 78.5 Global gross profit payment to Roche in connection with sales of REGEN-COV and Ronapreve Cost of goods sold $ — $ 259.6 $ — The following table summarizes contract balances in connection with the Roche Collaboration Agreement: As of December 31, (In millions) 2022 2021 Accounts receivable, net $ 396.6 $ — Accrued expenses and other current liabilities $ — $ 268.8 F-21 Table of Contents f. Alnylam In 2018, the Company and Alnylam Pharmaceuticals, Inc. entered into a collaboration to discover RNA interference ("RNAi") therapeutics for nonalcoholic steatohepatitis ("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). Under the terms of the collaboration agreement, the parties share development costs equally. During the fourth quarter of 2022, Alnylam elected to opt-out of further development activities related to ALN-HSD; as a result, the Company retains the exclusive right to develop and commercialize such product and Alnylam will receive a royalty on sales (if any). In 2019, the Company and Alnylam entered into a global, strategic collaboration to discover, develop, and commercialize RNA interference 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. In connection with the collaboration, the Company made an up-front payment of $ 400.0 million to Alnylam, and also purchased shares of Alnylam common stock for $ 400.0 million. For each program, the Company provides Alnylam with a specified amount of funding at program initiation and at lead candidate designation, and Alnylam is eligible to receive up to an aggregate of $ 200.0 million in clinical proof-of-principle milestones for eye and CNS programs. Under the collaboration, the parties plan to perform discovery research until designation of lead candidates. Following designation of a lead candidate, the parties may further advance such lead candidate under either a co-development/co-commercialization collaboration agreement ("Co-Co Collaboration Agreement") (under which the parties are advancing ALN-APP and ALN-PNP, which are currently in clinical development) or License Agreement structure. The initial target nomination and discovery period is five years (which may under certain situations automatically be extended for up to seven years in the aggregate) (the "Research Term"). In addition, the Company has an option to extend the Research Term for an additional five-year period for a research extension fee ranging from $ 200.0 million to $ 400.0 million; the actual amount of the fee will be determined based on the acceptance of one or more Investigational New Drug Applications ("INDs") (or their equivalent in certain other countries) for programs in the eye and CNS. In addition, during 2019, the parties entered into a Co-Co Collaboration Agreement for cemdisiran, a small interfering 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 consisting of cemdisiran and a fully human monoclonal antibody targeting C5 being developed by the Company (pozelimab), with the Company as the licensee. Under the C5 siRNA Co-Co Collaboration Agreement, the parties shared costs equally and under the License Agreement, the Company as the licensee is responsible for its own costs and expenses. The C5 siRNA License Agreement contains a flat low double-digit royalty payable to Alnylam on potential future net sales of the combination only subject to customary reductions, as well as up to $ 325.0 million in sales milestones. During the fourth quarter of 2022, the Company elected to opt-out of further development activities pursuant to the Co-Co Collaboration Agreement for cemdisiran as a monotherapy; as a result, Alnylam retains the right to develop and commercialize such product and the Company will receive a royalty on sales (if any). Amounts recognized in the Company's Statements of Operations in connection with the Alnylam agreements described above were not material for the years ended December 31, 2022, 2021, and 2020. In addition, contract balances in the Company's Balance Sheets were not material as of December 31, 2022 and 2021. g. Checkmate In May 2022, the Company completed its acquisition of Checkmate Pharmaceuticals, Inc. (“Checkmate”) for a total equity value of approximately $ 250 million. The Company made an assessment as to whether the set of assets acquired constituted a business and should be accounted for as a business combination. Given that substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset, vidutolimod, which is in clinical development for oncology, the transaction was accounted for as an asset acquisition. 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. h. Teva 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 the Company's collaboration agreement with Mitsubishi Tanabe Pharma Corporation. Under the terms of the Teva Collaboration Agreement, the Company led global development activities and the parties share development costs equally. F-22 Table of Contents In connection with the agreement, Teva made a $ 250.0 million non-refundable up-front payment in 2016, and as of December 31, 2022, the Company had received an aggregate $ 120.0 million of development milestones from Teva. Amounts recognized in the Company's Statements of Operations in connection with the Teva Collaboration Agreement are as follows: Statement of Operations Classification Year Ended December 31, (In millions) 2022 2021 2020 Amounts recognized in connection with up-front and development milestone payments received Other operating income $ 33.3 $ 26.2 $ 47.2 In addition, the Company recognized reimbursement of R&D expenses (as a reduction of R&D expense) of $ 42.4 million and $ 109.4 million for the years ended December 31, 2021 and 2020, respectively. Such amount was not material for the year ended December 31, 2022. The following table summarizes contract balances in connection with the Teva Collaboration Agreement: As of December 31, (In millions) 2022 2021 Accounts receivable, net $ 1.6 $ 11.0 Other liabilities $ — $ 39.7 Other liabilities included up-front and development milestone payments received from Teva for which recognition had been deferred. During 2022, the Company discontinued further clinical development of fasinumab and, as a result, recorded $ 31.9 million as an increase to Other operating income as the Company deemed its obligation to provide development services in connection with the Teva Collaboration Agreement to be complete. i. Other In addition to the collaboration agreements discussed above, the Company has various other collaboration agreements that are not individually significant to its operating results or financial condition at this time. Pursuant to the terms of those agreements, the Company may be required to pay, or it may receive, additional amounts contingent upon the occurrence of various future events (e.g., upon the achievement of various development and commercial milestones) which in the aggregate could be significant. The Company may also incur, or get reimbursed for, significant research and development costs. In addition, if any products related to these collaborations are approved for sale, the Company may be required to pay, or it may receive, royalties on future sales. The payment or receipt of these amounts, however, is contingent upon the occurrence of various future events. F-23 Table of Contents 4. Marketable Securities Marketable securities as of December 31, 2022 and 2021 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 5) as well as equity securities of publicly traded companies (see Note 5). The following tables summarize the Company's investments in available-for-sale debt securities: (In millions) Amortized Unrealized Fair As of December 31, 2022 Cost Basis Gains Losses Value Corporate bonds $ 6,975.5 $ — $ ( 291.1 ) $ 6,684.4 U.S. government and government agency obligations 2,945.4 0.9 ( 6.9 ) 2,939.4 Sovereign bonds 67.1 — ( 3.0 ) 64.1 Commercial paper 121.1 — — 121.1 Certificates of deposit 182.1 — ( 0.1 ) 182.0 Asset-backed securities 28.9 — ( 1.7 ) 27.2 $ 10,320.1 $ 0.9 $ ( 302.8 ) $ 10,018.2 As of December 31, 2021 Corporate bonds $ 7,518.4 $ 10.2 $ ( 40.9 ) $ 7,487.7 U.S. government and government agency obligations 109.0 0.3 ( 0.8 ) 108.5 Sovereign bonds 64.4 0.3 ( 0.3 ) 64.4 Commercial paper 439.7 — ( 0.1 ) 439.6 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 December 31, 2022 mature at various dates through April 2028. The fair values of available-for-sale debt securities by contractual maturity consist of the following: As of December 31, (In millions) 2022 2021 Maturities within one year $ 4,636.4 $ 2,809.1 Maturities after one year through five years 5,381.4 5,588.1 Maturities after five years 0.4 — $ 10,018.2 $ 8,397.2 The following table shows the fair value of the Company's available-for-sale debt securities that have unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous loss position. F-24 Table of Contents Less than 12 Months 12 Months or Greater Total (In millions) As of December 31, 2022 Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate bonds $ 2,445.4 $ ( 73.1 ) $ 4,200.4 $ ( 218.0 ) $ 6,645.8 $ ( 291.1 ) U.S. government and government agency obligations 785.2 ( 2.0 ) 71.0 ( 4.9 ) 856.2 ( 6.9 ) Sovereign bonds 18.6 ( 1.1 ) 45.6 ( 1.9 ) 64.2 ( 3.0 ) Certificates of deposit 40.2 ( 0.1 ) — — 40.2 ( 0.1 ) Asset-backed securities 11.5 ( 0.6 ) 15.2 ( 1.1 ) 26.7 ( 1.7 ) $ 3,300.9 $ ( 76.9 ) $ 4,332.2 $ ( 225.9 ) $ 7,633.1 $ ( 302.8 ) As of December 31, 2021 Corporate bonds $ 5,889.3 $ ( 40.9 ) $ — $ — $ 5,889.3 $ ( 40.9 ) U.S. 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 ) The unrealized losses on corporate bonds as of December 31, 2022 were primarily driven by increases in interest rates. The Company has reviewed its portfolio of available-for-sale debt securities and determined that the decline in fair value below cost did not result from credit-related factors. In addition, the Company does not intend to sell, and it is not more likely than not that the Company will be required to sell, such securities before recovery of their amortized cost bases. With respect to marketable securities, for the years ended December 31, 2022, 2021, and 2020, amounts reclassified from Accumulated other comprehensive income (loss) into Other income (expense), net were related to realized gains and losses on sales of available-for-sale debt securities. Realized gains and losses on sales of marketable securities were not material for the years ended December 31, 2022, 2021, and 2020. Interest income of $ 160.1 million, $ 45.8 million, and $ 75.4 million for the years ended December 31, 2022, 2021, and 2020, respectively, was recognized in Other income (expense), net. F-25 Table of Contents 5. Fair Value Measurements The table below summarizes the Company's assets which are measured at fair value on a recurring basis. The following fair value hierarchy is used to classify assets, based on inputs to valuation techniques utilized to measure fair value: • Level 1 - Quoted prices in active markets for identical assets • Level 2 - Significant other observable inputs, such as quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuations in which significant inputs used are observable • Level 3 - Significant other unobservable inputs (In millions) Fair Value Measurements at Reporting Date As of December 31, 2022 Fair Value Level 1 Level 2 Available-for-sale debt securities: Corporate bonds $ 6,684.4 $ — $ 6,684.4 U.S. government and government agency obligations 2,939.4 — 2,939.4 Sovereign bonds 64.1 — 64.1 Commercial paper 121.1 — 121.1 Certificates of deposit 182.0 — 182.0 Asset-backed securities 27.2 — 27.2 Equity securities (unrestricted) 24.6 24.6 — Equity securities (restricted) 1,185.4 1,185.4 — $ 11,228.2 $ 1,210.0 $ 10,018.2 As of December 31, 2021 Available-for-sale debt securities: Corporate bonds $ 7,487.7 $ — $ 7,487.7 U.S. government and government agency obligations 108.5 — 108.5 Sovereign bonds 64.4 — 64.4 Commercial paper 439.6 — 439.6 Certificates of deposit 255.1 — 255.1 Asset-backed securities 41.9 — 41.9 Equity securities (unrestricted) 58.4 58.4 — Equity securities (restricted) 1,191.5 1,191.5 — $ 9,647.1 $ 1,249.9 $ 8,397.2 The Company held certain restricted equity securities as of December 31, 2022 which are subject to transfer restrictions that expire at various dates throug h 2024 . During the year ended December 31, 2022, the Company recorded $ 39.8 million of net unrealized losses on equity securities in Other income (expense), net. During the years ended December 31, 2021 and 2020, the Company recorded $ 386.1 million, and $ 196.0 million, respectively, of net unrealized gains on equity securities in Other income (expense), net. In addition to the investments summarized in the table above, as of December 31, 2022 and 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 the Company's long-term debt (see Note 10), which was determined based on Level 2 inputs, was estimated to be $ 1.443 billion and $ 1.887 billion as of December 31, 2022 and 2021, respectively. F-26 Table of Contents 6. Inventories Inventories consist of the following: As of December 31, (In millions) 2022 2021 Raw materials $ 818.4 $ 721.9 Work-in-process 963.1 707.2 Finished goods 98.6 73.7 Deferred costs 521.8 448.5 $ 2,401.9 $ 1,951.3 Inventory balances in the table above are net of reserves of $ 720.7 million and $ 510.0 million as of December 31, 2022 and 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 years ended December 31, 2022 and 2021, Cost of goods sold included inventory write-offs and reserves of $ 258.7 million and $ 457.1 million, respectively, primarily related to REGEN-COV. Inventory write-offs and reserves for the year ended December 31, 2020 were not material. 7. Property, Plant, and Equipment Property, plant, and equipment consists of the following: As of December 31, (In millions) 2022 2021 Land $ 264.5 $ 248.0 Building and improvements 2,270.0 2,088.5 Leasehold improvements 114.3 113.9 Construction in progress 980.5 767.7 Laboratory equipment 1,315.3 1,225.5 Computer equipment and software 337.4 291.5 Furniture, office equipment, and other 150.2 145.2 5,432.2 4,880.3 Less, accumulated depreciation and amortization ( 1,669.2 ) ( 1,398.1 ) $ 3,763.0 $ 3,482.2 Property, plant, and equipment in the table above includes leased property under the Company's finance lease at its Tarrytown, New York facility. See Note 11. Depreciation and amortization expense on property, plant, and equipment was $ 303.9 million, $ 281.1 million, and $ 230.8 million for the years ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022 and 2021, $ 2.960 billion and $ 2.684 billion, respectively, of the Company's net property, plant, and equipment was located in the United States and $ 803.0 million and $ 797.8 million, respectively, was located outside the United States (primarily in Ireland). F-27 Table of Contents 8. Intangible Assets Intangible assets consist of the following: As of December 31, 2022 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 $ 946.3 $ ( 35.7 ) $ 910.6 $ — $ — $ — Other intangibles 5 – 8 years 10.0 ( 5.1 ) 4.9 29.3 ( 22.6 ) 6.7 Intangible assets, net $ 956.3 $ ( 40.8 ) $ 915.5 $ 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 year ended December 31, 2022, the Company recorded additions to the Libtayo intangible asset primarily related to contingent consideration (including regulatory and sales-based milestones, as described in Note 3) and other amounts due to Sanofi in connection with obtaining the worldwide rights to Libtayo. Amortization expense on intangible assets was $ 37.6 million for the year ended December 31, 2022. Amortization expense for the years ended December 31, 2021 and 2020 was not material. As of December 31, 2022, assuming no changes in the gross carrying amount of intangible assets, amortization expense is estimated to be approximately $ 72 million for each of the years ending December 31, 2023 through December 31, 2027. 9. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: As of December 31, (In millions) 2022 2021 Accrued payroll and related costs $ 497.3 $ 440.7 Accrued clinical expenses 295.0 295.8 Accrued sales-related costs 633.6 472.7 Income taxes payable 0.3 326.3 Amounts due to collaborators (see Note 3) 10.5 287.4 Other accrued expenses and liabilities 637.5 383.9 $ 2,074.2 $ 2,206.8 F-28 Table of Contents 10. Debt Credit Facility In December 2018, the Company entered into an agreement with a syndicate of lenders (the "2018 Credit Agreement") which provided for a $ 750.0 million senior unsecured five-year revolving credit facility. The 2018 Credit Agreement, which was to mature in December 2023, included an option for the Company to elect to increase the commitments under the Credit Facility and/or to enter into one or more tranches of term loans in the aggregate principal amount of up to $ 250.0 million, subject to the consent of the lenders providing the additional commitments or term loans, as applicable, and certain other conditions. In December 2022, the Company entered into an agreement with a syndicate of lenders (the "2022 Credit Agreement") which provides for a $ 750.0 million senior unsecured five-year revolving credit facility (the "2022 Credit Facility") and replaces the 2018 Credit Agreement, which was contemporaneously terminated. The 2022 Credit Agreement includes an option for the Company to elect to increase the commitments under the 2022 Credit Facility and/or to enter into one or more tranches of term loans in the aggregate principal amount of up to $ 500.0 million, subject to the consent of the lenders providing the additional commitments or term loans, as applicable, and certain other conditions. The 2022 Credit Agreement also provides a $ 50.0 million sublimit for letters of credit. As set forth in the 2022 Credit Agreement, the Company has the option to amend the 2022 Credit Agreement to establish environmental, social, and governance targets which will be used to adjust pricing under the 2022 Credit Facility, subject to parameters to be provided in the 2022 Credit Agreement. Proceeds of the loans under the 2022 Credit Facility may be used to finance working capital needs, and for general corporate or other lawful purposes, of Regeneron and its subsidiaries. Regeneron Pharmaceuticals, Inc. has guaranteed all obligations under the 2022 Credit Facility. The 2022 Credit Agreement includes an option for the Company to elect to extend the maturity date of the 2022 Credit Facility beyond December 2027, subject to the consent of the extending lenders and certain other conditions. Amounts borrowed under the 2022 Credit Facility may be prepaid, and the commitments under the 2022 Credit Facility may be terminated, at any time without premium or penalty. The Company had no borrowings outstanding under the 2022 Credit Facility as of December 31, 2022. The 2022 Credit Agreement contains operating covenants and a maximum total leverage ratio financial covenant. The Company was in compliance with all covenants of the 2022 Credit Agreement as of December 31, 2022. Senior Notes In August 2020, the Company 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 (collectively, the "Notes"). The underwriting discounts and offering expenses are being amortized as additional interest expense over the period from issuance through maturity. Long-term debt in connection with the Notes, net of underwriting discounts and offering expenses, consists of the following: As of December 31, (In millions) 2022 2021 1.750 % Senior Notes due September 2030 $ 1,241.0 $ 1,239.9 2.800 % Senior Notes due September 2050 740.4 740.1 $ 1,981.4 $ 1,980.0 Interest on each series of Notes is payable semi-annually in arrears on March 15 and September 15 of each year until their respective maturity dates. Interest expense related to the Notes was $ 44.3 million, $ 44.4 million, and $ 17.6 million for the years ended December 31, 2022, 2021, and 2020, respectively. The Notes may be redeemed at the Company’s option at any time at 100 % of the principal amount plus accrued and unpaid interest, and, until a specified period before maturity, a specified make-whole amount. The Notes contain a change-of-control provision that, under certain circumstances, may require the Company to offer to repurchase the Notes at a price equal to 101 % of the principal amount plus accrued and unpaid interest. The Notes also contain certain limitations on the Company’s ability to incur liens and enter into sale and leaseback transactions, as well as customary events of default. F-29 Table of Contents 11. Commitments and Contingencies See Note 16 for disclosures related to legal contingencies. a. Leases The Company conducts certain of its research, development, and administrative activities at leased facilities. The Company also leases vehicles and other assets. Operating leases Amounts recognized in the Company's Consolidated Balance Sheets and Statements of Operations included in this report associated with operating leases were not material. Operating lease right-of-use assets are included within Other noncurrent assets, and lease liabilities are included in Accrued expenses and other current liabilities and Other noncurrent liabilities. Finance leases In March 2017, the Company entered into a Participation Agreement with BA Leasing BSC, LLC, an affiliate of Banc of America Leasing & Capital LLC ("BAL"), as lessor, and a syndicate of lenders (collectively with BAL, the "Lease Participants"), which provided for $ 720.0 million of lease financing from the Lease Participants for the acquisition of laboratory and office facilities in Tarrytown, New York (the "Facility"). In March 2017, the Company also entered into a Lease and Remedies Agreement with BAL, pursuant to which the Company leased the Facility from BAL for a five-year term which ended in March 2022. In March 2022, the Company entered into a Second Amended and Restated Lease and Remedies Agreement (the "Restated Lease") with BAL, as lessor (the "Lessor"), which amends, restates, and extends its lease of the Facility. In March 2022, the Company 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 and the end of the term of the Company's 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, the Company continues to pay all maintenance, insurance, taxes, and other costs arising out of the use of the Facility. The Company is 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 the Company's debt rating and total leverage ratio. The Restated Participation Agreement and Restated Lease include an option for the Company 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. The Company also has 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 the Company has 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 the Company's $ 750.0 million 2018 Credit Agreement. The Company was in compliance with all such covenants as of December 31, 2022. F-30 Table of Contents Amounts recognized in the Consolidated Balance Sheet related to the Lease are included in the table below. Other than the Lease described above, the Company had no leases accounted for as finance leases as of December 31, 2022 and 2021. As of December 31, (In millions) Classification 2022 2021 Finance lease right-of-use assets Property, plant, and equipment, net (a) $ 620.3 $ 631.3 Finance lease liabilities Finance lease liabilities $ 720.0 $ 719.7 (a) Finance lease right-of-use assets were recorded net of accumulated amortization of $ 119.4 million and $ 104.9 million as of December 31, 2022 and 2021, respectively. Finance lease costs consist of the following: Year Ended December 31, (In millions) 2022 2021 Amortization of right-of-use assets $ 14.5 $ 14.4 Interest on lease liabilities 21.6 11.9 $ 36.1 $ 26.3 Other information related to the Company's finance lease includes the following: As of December 31, 2022 2021 Remaining lease term (in years) 4.2 0.2 Discount rate 4.84 % 1.68 % Supplemental information The following is a maturity analysis of the Company's finance lease liability: (In millions) As of December 31, 2022 2023 $ 44.9 2024 38.6 2025 31.3 2026 30.7 2027 727.9 Total undiscounted lease payments 873.4 Imputed interest ( 153.4 ) Total lease liability $ 720.0 b. Research Collaboration and Licensing Agreements As part of the Company's research and development efforts, the Company enters into research collaboration and licensing agreements with other companies, universities, and other organizations. These agreements contain varying terms and provisions which include fees to be paid by the Company, services to be provided, and license rights to certain proprietary technology developed under the agreements. Some of these agreements may require the Company to pay additional amounts contingent upon the occurrence of various future events (e.g., upon the achievement of various development and commercial milestones). Additionally, the Company has in-licensed patent and/or technology pursuant to agreements which contain provisions that require the Company to pay royalties, as defined, at rates that range from 0.5 % to 12.0 %, in the event the Company sells or licenses any proprietary products developed under the respective agreements. The Company also has contingent reimbursement obligations to its collaborators Sanofi and Bayer out of the respective collaboration's profits, if they are sufficient for that purpose. See Note 3 for a more detailed description of collaboration, license, and other agreements. F-31 Table of Contents As described in Note 3, as a result of obtaining worldwide rights to Libtayo, the Company pays Sanofi a royalty on net product sales of Libtayo. In addition, in 2018, the Company and Sanofi entered into a license agreement with Bristol-Myers Squibb Company, E. R. Squibb & Sons, L.L.C., and Ono Pharmaceutical Co., Ltd. to obtain a license under certain patents owned and/or exclusively licensed by one or more of those parties that includes the right to develop and sell Libtayo. Under the agreement, the Company is obligated to pay royalties of 8.0 % on worldwide sales of Libtayo through December 31, 2023, and royalties of 2.5 % from January 1, 2024 through December 31, 2026. Prior to July 1, 2022, royalties on such sales were shared equally by the Company and Sanofi. For the years ended December 31, 2022, 2021, and 2020, the Company recorded royalty expense (net of reimbursements from collaborators, as applicable) in Cost of goods sold and Cost of collaboration and contract manufacturing of $ 84.5 million, $ 66.9 million, and $ 56.5 million, respectively, based on product sales under various licensing agreements. 12. Stockholders' Equity The Company's Restated Certificate of Incorporation, as amended, provides for the issuance of up to 40 million shares of Class A Stock, par value $ 0.001 per share, and 320 million shares of Common Stock, par value $ 0.001 per share. Shares of Class A Stock are convertible, at any time, at the option of the holder into shares of Common Stock on a share-for-share basis. Holders of Class A Stock have rights and privileges identical to Common Stockholders except that each share of Class A is entitled to ten votes per share, while each share of Common Stock is entitled to one vote per share. Class A Stock may only be transferred to specified Permitted Transferees, as defined. Under the Company's Restated Certificate of Incorporation, the Company's board of directors is authorized to issue up to 30 million shares of Preferred Stock, in series, with rights, privileges, and qualifications of each series determined by the board of directors. Share Repurchase Programs In November 2019, the Company's board of directors authorized a share repurchase program to repurchase up to $ 1.0 billion of the Company's 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. 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, the Company's board of directors authorized a share repurchase program to repurchase up to $ 1.5 billion of the Company's Common Stock. The share repurchase program was approved under terms substantially similar to the November 2019 share repurchase program described above. 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, the Company's board of directors authorized an additional share repurchase program to repurchase up to $ 3.0 billion of the Company's Common Stock. The share repurchase program was approved under terms substantially similar to the share repurchase programs described above. The program has no time limit and can be discontinued at any time. As of December 31, 2022, $ 745.2 million remained available for share repurchases under the November 2021 program. The table below summarizes the shares of the Company's Common Stock it repurchased under the programs and the cost of the shares, which were recorded as Treasury Stock. Year Ended December 31, (In millions) 2022 2021 2020 Number of shares 3.3 3.0 1.6 Total cost of shares $ 2,099.8 $ 1,655.0 $ 746.0 In January 2023, the Company's board of directors authorized a new share repurchase program to repurchase up to an additional $ 3.0 billion of the Company's Common Stock. The share repurchase program was approved under terms substantially similar to the share repurchase programs described above. The program has no time limit and can be discontinued at any time. Share 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. F-32 Table of Contents Sanofi Funding of Certain Development Costs In 2018, the Company and Sanofi entered into an agreement, which, among other things, granted Sanofi a limited waiver of Sanofi's lock-up obligations under the amended and restated investor agreement between the Company and Sanofi in order to allow Sanofi to satisfy its funding obligations with respect to Libtayo development costs and/or certain activities relating to dupilumab and itepekimab incurred in quarterly periods through September 30, 2020 by selling shares of the Company's Common Stock owned by Sanofi. During 2020, Sanofi elected to sell, and the Company elected to purchase, shares of our Common Stock to satisfy Sanofi's funding obligation related to such activities. Consequently, the Company recorded the cost of the shares received, or $ 135.0 million, as Treasury Stock during 2020. Additional Stock Purchased from Sanofi In May 2020, a secondary offering of 13,014,646 shares of the Company's Common Stock (the "Secondary Offering") held by Sanofi was completed. In connection with the Secondary Offering, the Company 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 the Company's 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 development costs described above). In May 2020, the Company entered into an amendment to the amended and restated investor agreement, which provides, among other things, that following the Secondary Offering and Stock Purchase, the “standstill” provisions, which contractually prohibit Sanofi from seeking to directly or indirectly exert control of the Company, continue to apply pursuant to their terms. Arrangements with Other Collaborators In connection with the Company's license and collaboration agreement with Bayer for the joint development and commercialization outside the United States of antibody product candidates to Ang2, Bayer is bound by certain "standstill" provisions, which contractually prohibit Bayer from seeking to influence the control of the Company or acquiring more than 20 % of the Company's outstanding shares of Class A Stock and Common Stock (taken together). This prohibition will remain in place until the earliest of (i) the fifth anniversary of the termination of the agreement (which will occur on November 1, 2023) or (ii) other specified events. Further, pursuant to the 2016 Teva Collaboration Agreement, Teva and its affiliates are bound by certain "standstill" provisions, which contractually prohibit them from seeking to directly or indirectly exert control of the Company or acquiring more than 5 % of the Company's Class A Stock and Common Stock (taken together). This prohibition will remain in place until the earliest of (i) the fifth anniversary of the expiration or earlier termination of the agreement or (ii) other specified events. 13. Long-Term Incentive Plans The Company has used long-term incentive plans for the purpose of granting equity awards to employees of the Company, including officers, and non-employees, including non-employee members of the Company's board of directors (collectively, "Participants"). The Participants may receive awards as determined by a committee of independent members of the Company's board of directors or, to the extent authorized by such committee with respect to certain Participants, a duly authorized employee (collectively, the "Committee"). The incentive plan currently used by the Company is the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (the "Second Amended and Restated 2014 Incentive Plan"). It was most recently adopted and approved by the Company's shareholders in 2020. As of the most recent shareholder approval date, the Second Amended and Restated 2014 Incentive Plan provided for the issuance of up to 22.3 million shares of Common Stock in respect of awards. In addition, upon expiration, forfeiture, surrender, exchange, cancellation, or termination of any award previously granted under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (the "Amended and Restated 2014 Incentive Plan"), the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (the "Original 2014 Incentive Plan"), or the Second Amended and Restated 2000 Long-Term Incentive Plan (the "2000 Incentive Plan"), any shares subject to such award are added to the pool of shares available for grant under the Second Amended and Restated 2014 Incentive Plan. The awards that may be made under the Second Amended and Restated 2014 Incentive Plan include: (a) incentive stock options and non-qualified stock options, (b) restricted stock awards, (c) shares of phantom stock (also referred to as restricted stock units, which may be time- or performance-based), and (d) other awards. Any award granted may (but is not required to) be subject to vesting based on the attainment by the Company of performance goals pre-established by the Committee. Stock option awards grant Participants the right to purchase shares of Common Stock at prices determined by the Committee, with exercise prices that are equal to or greater than the average of the high and low market prices of the Company's Common Stock on the date of grant (the "Market Price"). Options vest over a period of time determined by the Committee, generally on a F-33 Table of Contents pro rata basis over a four-year period. The Committee also determines the expiration date of each option. The maximum term of options that have been awarded under the 2000 Incentive Plan, the Original 2014 Incentive Plan, the Amended and Restated 2014 Incentive Plan, and the Second Amended and Restated 2014 Incentive Plan (collectively, the "Incentive Plans") is ten years . Restricted stock awards grant Participants shares of restricted Common Stock or allow Participants to purchase such shares at a price determined by the Committee. Such shares are nontransferable for a period determined by the Committee ("vesting period"). Should employment terminate, as specified in the Incentive Plans, except as determined by the Committee in its discretion and subject to the applicable Incentive Plan documents, the ownership of any unvested restricted stock awards will be transferred to the Company. Phantom stock awards provide the Participant the right to receive Common Stock or an amount of cash based on the value of the Common Stock at a future date. The award is subject to such restrictions, if any, as the Committee may impose at the date of grant or thereafter, including a specified period of employment or the achievement of performance goals. Time-based restricted stock units and performance-based restricted stock units are each a type of phantom stock award permitted under the Second Amended and Restated 2014 Incentive Plan. The Incentive Plans contain provisions that allow for the Committee to provide for the immediate vesting of awards upon a change in control of the Company, as defined in the Incentive Plans. As of December 31, 2022, there were 15.9 million shares available for future grants under the Second Amended and Restated 2014 Incentive Plan. No additional awards may be made under the 2000 Incentive Plan, the Original 2014 Incentive Plan, or the Amended and Restated 2014 Incentive Plan. a. Stock Options Transactions involving stock option awards during 2022 under the Company's Incentive Plans are summarized in the table below. Number of Shares (In millions) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (In years) Intrinsic Value (In millions) Outstanding as of December 31, 2021 18.0 $ 435.56 2022: Granted 2.0 $ 705.02 Forfeited ( 0.4 ) $ 500.26 Exercised ( 4.0 ) $ 382.66 Outstanding as of December 31, 2022 15.6 $ 481.62 6.3 $ 3,685.9 Vested and expected to vest as of December 31, 2022 15.1 $ 476.15 6.2 $ 3,632.8 Exercisable as of December 31, 2022 10.1 $ 420.47 5.0 $ 2,991.9 The Company satisfies stock option exercises with newly issued shares of the Company's Common Stock. The total intrinsic value of stock options exercised during 2022, 2021, and 2020 was $ 1.214 billion, $ 1.707 billion, and $ 2.251 billion, respectively. The intrinsic value represents the amount by which the market price of the underlying stock exceeds the exercise price of an option. F-34 Table of Contents The table below summarizes the weighted-average exercise prices and weighted-average grant-date fair values of options issued during the years ended December 31, 2022, 2021, and 2020. Number of Options Granted (In millions) Weighted-Average Exercise Price Weighted-Average Fair Value 2022: Exercise price equal to Market Price 2.0 $ 705.02 $ 220.88 2021: Exercise price equal to Market Price 2.3 $ 628.43 $ 174.20 2020: Exercise price equal to Market Price 2.9 $ 492.60 $ 126.50 For the years ended December 31, 2022, 2021, and 2020, the Company recognized $ 341.9 million, $ 328.7 million, and $ 329.5 million, respectively, of stock-based compensation expense related to stock option awards (net of amounts capitalized as inventory, which were not material for each of the three years). As of December 31, 2022, there was $ 572.0 million of stock-based compensation cost related to unvested stock options, net of estimated forfeitures, which had not yet been recognized. The Company expects to recognize this compensation cost over a weighted-average period of 1.8 years. Fair Value Assumptions: The following table summarizes the weighted average values of the assumptions used in computing the fair value of option grants during 2022, 2021, and 2020. 2022 2021 2020 Expected volatility 28 % 27 % 28 % Expected lives from grant date 5.2 years 5.5 years 5.0 years Expected dividend yield 0 % 0 % 0 % Risk-free interest rate 3.50 % 1.22 % 0.47 % Expected volatility has been estimated based on actual movements in the Company's stock price over the most recent historical periods equivalent to the options' expected lives. Expected lives are principally based on the Company's historical exercise experience with previously issued employee and board of directors' option grants. The expected dividend yield is zero as the Company has never paid dividends and does not currently anticipate paying any in the foreseeable future. The risk-free interest rates are based on quoted U.S. Treasury rates for securities with maturities approximating the options' expected lives. b. Restricted Stock Awards and Time-Based Restricted Stock Units A summary of the Company's activity related to restricted stock awards and time-based restricted stock units (excluding performance-based restricted stock units, which are detailed further below) (collectively, "restricted stock") during 2022 is summarized below. Number of Shares/Units (In millions) Weighted-Average Grant Date Fair Value Unvested as of December 31, 2021 2.1 $ 499.85 2022: Granted 0.9 $ 702.32 Vested ( 0.3 ) $ 477.22 Forfeited ( 0.1 ) $ 522.18 Unvested as of December 31, 2022 2.6 $ 571.19 For the years ended December 31, 2022, 2021, and 2020, the Company recognized $ 331.1 million, $ 221.0 million, and $ 102.5 million, respectively, of stock-based compensation expense related to restricted stock (net of amounts capitalized as inventory, which were not material for each of the three years). As of December 31, 2022, there was $ 907.7 million of stock-based F-35 Table of Contents compensation cost related to unvested restricted stock which had not yet been recognized. The Company expects to recognize this compensation cost over a weighted-average period of 2.1 years. c. Performance-based Restricted Stock Units Performance-based restricted stock units ("PSUs") have been granted to certain members of senior management of the Company. PSUs may be earned based upon the attainment of pre-established performance criteria, which may include a market and/or performance condition. Depending on the terms of the PSUs and the outcome of the pre-established performance criteria, a recipient may ultimately earn the target number of PSUs granted or a specified multiple thereof at the end of a 4 – 6 year vesting period, as applicable. The table below summarizes activity related to PSUs during 2022. The number of PSUs granted represents the maximum number of units that are eligible to be earned. Number of Shares/Units (In millions) Weighted-Average Grant Date Fair Value Unvested as of December 31, 2021 1.3 $ 209.06 2022: Granted 0.2 $ 485.61 Unvested as of December 31, 2022 1.5 $ 245.94 For each of the years ended December 31, 2022, and 2021, the Company recognized $ 52.0 million of stock-based compensation expense related to PSUs. The Company did no t recognize stock-based compensation expense related to PSUs in 2020 (as PSUs granted in 2020 were granted on December 31, 2020 and are expensed over the vesting period). As of December 31, 2022, there was $ 156.1 million of stock-based compensation cost related to unvested PSUs which had not yet been recognized. The Company expects to recognize this compensation cost on a straight-line basis over a weighted average period of 3.3 years. Fair Value Assumptions: The following table summarizes the weighted average values of the assumptions used in computing the fair value of PSUs that were granted during 2022 and 2020. The Company did not grant PSUs during 2021. 2022 2020 Expected volatility 32 % 35 % Expected dividend yield 0 % 0 % Risk-free interest rate 3.3 % 0.4 % 14. Employee Savings Plans The Company maintains the Regeneron Pharmaceuticals, Inc. 401(k) Savings Plan, as amended and restated (the "Savings Plan"). The terms of the Savings Plan allow U.S. employees (as defined by the Savings Plan) to contribute to the Savings Plan a percentage of their compensation. In addition, the Company may make discretionary contributions, as defined, to the accounts of participants under the Savings Plan. The Company also maintains additional employee savings plans outside of the United States, which cover eligible employees. Expenses recognized by the Company related to contributions to such plans were $ 67.6 million, $ 55.5 million, and $ 49.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. F-36 Table of Contents 15. Income Taxes The Company is subject to U.S. federal, state, and foreign income taxes. Components of income before income taxes consist of the following: Year Ended December 31, (In millions) 2022 2021 2020 United States $ 839.9 $ 5,944.7 $ 2,442.3 Foreign 4,018.9 3,381.1 1,368.1 $ 4,858.8 $ 9,325.8 $ 3,810.4 Components of income tax expense consist of the following: Year Ended December 31, (In millions) 2022 2021 2020 Current: Federal $ 968.5 $ 1,429.8 $ 199.0 State 7.4 6.2 1.2 Foreign 290.9 ( 38.4 ) 21.4 Total current tax expense 1,266.8 1,397.6 221.6 Deferred: Federal ( 797.7 ) ( 423.2 ) 109.0 State ( 2.7 ) ( 0.6 ) ( 2.0 ) Foreign 54.0 276.7 ( 31.4 ) Total deferred tax (benefit) expense ( 746.4 ) ( 147.1 ) 75.6 $ 520.4 $ 1,250.5 $ 297.2 A reconciliation of the U.S. statutory income tax rate to the Company's effective income tax rate is as follows: Year Ended December 31, 2022 2021 2020 U.S. federal statutory tax rate 21.0 % 21.0 % 21.0 % Taxation of non-U.S. operations ( 5.5 ) ( 2.8 ) ( 1.8 ) Stock-based compensation ( 2.9 ) ( 2.4 ) ( 7.6 ) Income tax credits ( 2.0 ) ( 1.0 ) ( 2.8 ) Foreign-derived intangible income deduction ( 1.0 ) ( 1.4 ) — Sale of non-inventory related assets between foreign subsidiaries — — ( 0.8 ) Other permanent differences 1.1 — ( 0.2 ) Effective income tax rate 10.7 % 13.4 % 7.8 % F-37 Table of Contents Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows: As of December 31, (In millions) 2022 2021 Deferred tax assets: Capitalized research and development expenses $ 845.3 $ — Deferred compensation 416.2 406.6 Accrued expenses 235.6 262.1 Fixed assets and intangible assets 227.6 257.5 Tax attribute carryforwards 41.3 6.1 Other 15.9 10.8 Deferred revenue — 57.3 Total deferred tax assets 1,781.9 1,000.4 Deferred tax liabilities: Unrealized gains on investments ( 58.2 ) ( 123.5 ) Net deferred tax assets $ 1,723.7 $ 876.9 The Company's federal income tax returns for 2017 through 2021 remain open to examination by the IRS. The Company's 2017 and 2018 federal income tax returns are currently under audit by the IRS. In general, the Company's state income tax returns from 2018 to 2021 remain open to examination. The Company's income tax returns outside of the United States remain open to examination from 2018 to 2021. The United States and many states generally have statutes of limitation ranging from 3 to 5 years; however, those statutes could be extended due to the Company's tax credit carryforward position. In general, tax authorities have the ability to review income tax returns in which the statute of limitation has previously expired to adjust the tax credits generated in those years. The amount of net unrecognized tax benefits that, if settled, would impact the effective tax rate is $ 373.7 million, $ 321.1 million, and $ 267.0 million as of December 31, 2022, 2021, and 2020, respectively. The following table reconciles the beginning and ending amounts of unrecognized tax benefits. (In millions) 2022 2021 2020 Balance as of January 1 $ 410.9 $ 267.0 $ 210.8 Gross increases related to current year tax positions 136.9 182.3 76.6 Gross (decreases) increases related to prior year tax positions ( 5.0 ) 2.9 7.2 Gross decreases due to settlements and lapse of statutes of limitations — ( 41.3 ) ( 27.6 ) Balance as of December 31 $ 542.8 $ 410.9 $ 267.0 In 2022, 2021, and 2020, the increases in unrecognized tax benefits primarily related to the Company's calculation of certain tax credits and other items related to the Company's international operations. The decrease in unrecognized tax benefits in 2021 was related to the closing of audits for the Company's federal income tax returns for 2015 and 2016. Interest expense related to unrecognized tax benefits was not material in 2022, 2021, and 2020. The Company does not believe that it is reasonably possible that the resolution of tax exposures within the next twelve months would have a material impact on the consolidated financial statements as of December 31, 2022. In August 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law in the United States. The IRA created a new corporate alternative minimum tax of 15% on adjusted financial statement income and an excise tax of 1% of the value of certain stock repurchases. The provisions of the IRA will be effective for periods beginning after December 31, 2022. The enactment of the IRA did not result in any material adjustments to the Company's income tax provisions or net deferred tax assets as of December 31, 2022. F-38 Table of Contents 16. Legal Matters From time to time, the Company is a party to legal proceedings in the course of the Company's business. The outcome of any such proceedings, regardless of the merits, is inherently uncertain. 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. Costs associated with the Company's involvement in legal proceedings are expensed as incurred . 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 December 31, 2022 and 2021, the Company's accruals for loss contingencies were not material. There are certain loss contingencies that the Company deems reasonably possible for which the possible loss or range of possible loss is not estimable at this time. Proceedings Relating to Praluent (alirocumab) Injection As described 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. 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. United States In the United States, Amgen has asserted claims of U.S. Patent Nos. 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 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 4, 2022, the United States Supreme Court granted Amgen's petition for writ of certiorari. An oral hearing has been scheduled for March 27, 2023. On May 27, 2022, the Company filed a lawsuit against Amgen in the United States District Court for the District of Delaware, alleging that, beginning in 2020, Amgen engaged in an anticompetitive bundling scheme which was designed to exclude Praluent from the market in violation of federal and state laws. The lawsuit seeks damages for harm caused by the alleged scheme, as well as injunctive relief restraining Amgen from continuing its alleged anticompetitive conduct. 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. Europe Amgen has asserted European Patent No. 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"). 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. 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 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"), 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 EPO opposition proceedings initiated F-39 Table of Contents 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, which appeal was withdrawn at an oral hearing before the TBA on March 10, 2022 following the TBA's ruling discussed below. On May 18, 2022, the revocation action in the U.K. Patents Court was dismissed following the EPO's revocation of the '665 Patent. 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). 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. 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 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. Patent Nos. 10,406,226 and 10,464,992 (the "'992 Patent"), and the USPTO has granted both requests to initiate reexamination proceedings. On May 5, 2021, Mylan Pharmaceuticals Inc. filed inter partes review ("IPR") petitions in the USPTO against the Company's U.S. Patent Nos. 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 was held on August 10, 2022. On November 9, 2022, the USPTO issued final written decisions finding that the claims of the '338 and '069 Patents are unpatentable and, therefore, invalid. On January 10, 2023, the Company filed notices of appeal of the USPTO written decisions concerning the '338 and '069 Patents with the Federal Circuit. On September 7, 2021, Celltrion, Inc. filed a post-grant review ("PGR") petition in the USPTO against the Company's U.S. Patent No. 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. In 2022, Mylan filed IPR petitions against the Company's U.S. Patent Nos. 10,130,681 (the "'681 Patent") and 10,888,601 (the "'601 Patent") (each filed July 1, 2022) and 10,857,205 (filed October 28, 2022) seeking declarations of invalidity of each of these patents. On January 11, 2023, the USPTO instituted IPR proceedings concerning the '681 Patent and the '601 Patent. On January 6, 2023, Samsung Bioepis Co., Ltd. filed a separate IPR petition against the Company's '681 Patent seeking a declaration of invalidity of the '681 Patent. On September 9, 2022, Apotex filed an IPR petition against the Company's U.S. Patent No. 11,253,572 (the "'572 Patent") seeking a declaration of invalidity of the '572 Patent. On January 17, 2023, Celltrion, Inc. filed an IPR petition against the '992 Patent seeking a declaration of invalidity of the '992 Patent. 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. Europe 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. F-40 Table of Contents Canada 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; a trial for the lawsuit concerning the '193 Patent has been scheduled for May 2024; and a trial for the lawsuit concerning the '495 Patent and the '768 Patent has been scheduled for November/December 2024. The filing 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. South Korea On October 31, 2022 and December 13, 2022, Samsung Bioepis Co., Ltd. initiated invalidation proceedings before the Intellectual Property Trial and Appeal Board of the Korean Intellectual Property Office against the Company's Korean Patent Nos. 1131429 and 1406811, respectively, seeking revocation of each of such patents in its entirety. Proceedings Relating to EYLEA (aflibercept) Injection Pre-filled Syringe On June 19, 2020, Novartis Pharma AG, Novartis Pharmaceuticals Corporation, and Novartis Technology LLC (collectively, "Novartis") filed a complaint with the U.S. International Trade Commission (the "ITC") pursuant to Section 337 of the Tariff Act of 1930 requesting that the ITC institute an investigation relating to the importation into the United States and/or sale within the United States after importation of EYLEA pre-filled syringes ("PFS") and/or components thereof which allegedly infringe Novartis’s U.S. Patent No. 9,220,631 (the "'631 Patent"). 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 April 8, 2021, Novartis moved to terminate the ITC investigation in its entirety based on its withdrawal of the complaint; and, on May 3, 2021, the ITC terminated the investigation. On June 19, 2020, Novartis also filed a patent infringement lawsuit (as amended on August 2, 2021) in the U.S. District Court for the Northern District of New York asserting claims of the '631 Patent and seeking preliminary and permanent injunctions to prevent the Company from continuing to infringe the '631 Patent. Novartis also seeks a judgment of patent infringement of the '631 Patent, monetary damages (together with interest), an order of willful infringement of the '631 Patent (which would allow the court in its discretion to award damages up to three times the amount assessed), costs and expenses of the lawsuits, and attorneys' fees. On November 7, 2022, the Company and Novartis entered into a stipulation staying the lawsuit in light of the decision in the IPR proceeding discussed below. 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. On January 15, 2021, the USPTO declined to institute an IPR proceeding on procedural grounds in light of the pending ITC investigation discussed above; the other IPR petition has been withdrawn. Following Novartis's motion to terminate the ITC investigation discussed above, on April 16, 2021 the Company filed a new IPR petition seeking a declaration of invalidity of the '631 Patent based on the same grounds that were the basis for the OUII staff attorney's determination discussed above. On October 26, 2021, the USPTO issued a decision instituting the IPR proceeding. 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 December 23, 2022, Novartis filed a notice of appeal of the PTAB's decision to the Federal Circuit. 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"). The Company is also seeking injunctive relief and treble damages. 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. 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. On February 22, 2021, Novartis filed, and Vetter moved to join, a motion to dismiss the amended complaint. On September 21, 2021, the court granted Novartis and Vetter's motion to transfer this lawsuit to the Northern District of New York. F-41 Table of Contents 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 June 10, 2022, the Company filed an appeal of the District Court's decision to dismiss the amended complaint with the U.S. Court of Appeals for the Second Circuit. Proceedings Relating to REGEN-COV (casirivimab and imdevimab) On October 5, 2020, Allele Biotechnology and Pharmaceuticals, Inc. ("Allele") filed a lawsuit (as amended on April 8, 2021 and December 12, 2022) against the Company in the United States District Court for the Southern District of New York, asserting infringement of U.S. Patent No. 10,221,221 (the "'221 Patent"). 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, which motion was denied on March 2, 2022. Department of Justice Matters In January 2017, the Company received a subpoena from the U.S. Attorney's Office for the District of Massachusetts requesting documents relating to its support of 501(c)(3) organizations that provide financial assistance to patients; documents concerning its provision of financial assistance to patients with respect to products sold or developed by Regeneron (including EYLEA, Praluent, ARCALYST, and ZALTRAP ® ); and certain other related documents and communications. On June 24, 2020, the U.S. Attorney's Office for the District of Massachusetts filed a civil complaint in the U.S. District Court for the District of Massachusetts alleging violations of the federal Anti-Kickback Statute, and asserting causes of action under the federal False Claims Act and state law. On August 24, 2020, the Company filed a motion to dismiss the complaint in its entirety. On December 4, 2020, the court denied the motion to dismiss. On December 28, 2022, the U.S. Attorney’s Office for the District of Massachusetts filed a motion for partial summary judgment. On January 31, 2023, the Company filed a motion for summary judgment. In September 2019, the Company and Regeneron Healthcare Solutions, Inc., a wholly-owned subsidiary of the Company, each received a civil investigative demand ("CID") from the U.S. Department of Justice pursuant to the federal False Claims Act relating to remuneration paid to physicians in the form of consulting fees, advisory boards, speaker fees, and payment or reimbursement for travel and entertainment allegedly in violation of the federal Anti-Kickback Statute. The CIDs relate to EYLEA, Praluent, Dupixent, ZALTRAP, ARCALYST, and Kevzara and cover the period from January 2015 to the present. On June 3, 2021, the United States District Court for the Central District of California unsealed a qui tam complaint filed against the Company, Regeneron Healthcare Solutions, Inc., and Sanofi-Aventis U.S. LLC by two qui tam plaintiffs (known as relators) purportedly on behalf 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. In June 2021, the Company received a CID from the U.S. Department of Justice pursuant to the federal False Claims Act. The CID states that the investigation concerns allegations that the Company (i) violated the False Claims Act by paying kickbacks to distributors and ophthalmology practices to induce purchase of EYLEA, including through discounts, rebates, credit card fees, free units of EYLEA, and inventory management systems; and (ii) inflated reimbursement rates for EYLEA by excluding applicable discounts, rebates, and benefits from the average sales price reported to CMS. The CID covers the period from January 2011 through June 2021. The Company is cooperating with this investigation. 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. Attorney's Office for the District of Massachusetts discussed under "Department of Justice Matters" above. 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. F-42 Table of Contents (collectively, "BCBS"), Medical Mutual of Ohio ("MMO"), Horizon Healthcare Services, Inc. d/b/a Horizon Blue Cross Blue Shield of New Jersey ("Horizon"), and Local 464A United Food and Commercial Workers Union Welfare Service Benefit Fund ("Local 464A") in the U.S. District Court for the District of Massachusetts on December 20, 2021, February 23, 2022, April 4, 2022, and June 17, 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. The MMO and Local 464A lawsuits are putative class action lawsuits. 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. 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 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 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 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 On June 29, 2021, an alleged shareholder filed a shareholder derivative complaint in the New York Supreme Court, naming the current and certain former members of the Company's board of directors and certain current and former executive officers of the Company as defendants and Regeneron as a nominal defendant. The complaint asserts that the individual defendants breached their fiduciary duties in relation to the allegations in the civil complaint filed by the U.S. Attorney's Office for the District of Massachusetts discussed under "Department of Justice Matters" above. The complaint seeks an award of damages allegedly sustained by the Company; an order requiring Regeneron to take all necessary actions to reform and improve its corporate governance and internal procedures; disgorgement from the individual defendants of all profits and benefits obtained by them resulting from their sales of Regeneron stock; and costs and disbursements of the action, including attorneys' fees. On July 28, 2021, the defendants filed a notice of removal, removing the case from the New York Supreme Court to the U.S. District Court for the Southern District of New York. 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. On December 19, 2022, the U.S. District Court for the Southern District of New York denied the plaintiff's motion to remand the case and granted a motion to stay the case pending resolution of the proceedings before the U.S. District Court for the District of Massachusetts discussed under "Department of Justice Matters" above. As a result of the stay, the court also terminated the Company's motion to dismiss the complaint without prejudice to renew upon conclusion of the stay. 17. Net Income Per Share The calculations of basic and diluted net income per share are as follows: Year Ended December 31, (In millions, except per share data) 2022 2021 2020 Net income - basic and diluted $ 4,338.4 $ 8,075.3 $ 3,513.2 Weighted average shares - basic 107.1 105.7 107.6 Effect of dilutive securities: Stock options 4.9 5.4 7.0 Restricted stock awards and restricted stock units 1.5 1.1 0.5 Weighted average shares - diluted 113.5 112.2 115.1 Net income per share - basic $ 40.51 $ 76.40 $ 32.65 Net income per share - diluted $ 38.22 $ 71.97 $ 30.52 F-43 Table of Contents Shares which have been excluded from diluted per share amounts because their effect would have been antidilutive include the following: Year Ended December 31, (Shares in millions) 2022 2021 2020 Stock options 2.3 2.9 2.7 18. Statement of Cash Flows The following provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheet to the total of the same such amounts shown in the Consolidated Statement of Cash Flows: December 31, (In millions) 2022 2021 2020 Cash and cash equivalents $ 3,105.9 $ 2,885.6 $ 2,193.7 Restricted cash included in Other noncurrent assets 13.5 12.5 13.6 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows $ 3,119.4 $ 2,898.1 $ 2,207.3 Restricted cash consists of amounts held by financial institutions pursuant to contractual arrangements. Supplemental disclosure of non-cash investing and financing activities As of December 31, (In millions) 2022 2021 2020 Accrued capital expenditures $ 70.8 $ 74.8 $ 83.6 Accrued payments for Libtayo intangible asset $ 135.5 $ — $ — F-44