What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 199 added, 354 removed, 490 unchanged (53% of the section changed)

3 unchanged sentences

(In millions, except per share data)

September 30, December 31,

March 31, December 31,

Current assets:

25 unchanged sentences

30.0 shares authorized;

issued and outstanding - no ne

shares issued and outstanding - no ne

Class A Stock, convertible, par value $ .001 per share;

17 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Statements of Operations

8 unchanged sentences

Cost of collaboration and contract manufacturing 193.4 249.1

Other operating (income) expense, net ( 0.5 ) ( 45.7 ) ( 1.6 ) ( 83.3 )

Other operating expense (income), net

2,393.6 2,215.4

1 unchanged sentence

Other income (expense):

Other income (expense), net 17.6 301.4 32.2 ( 16.0 )

Other (expense) income, net

( 34.6 ) ( 70.7 )

Interest expense ( 16.1 ) ( 18.0 )

1 unchanged sentence

Income before income taxes 700.7 858.0

Income tax expense 103.0 194.1 257.7 392.8

Income tax (benefit) expense

( 21.3 ) 40.2

Net income $ 722.0 $ 817.8

6 unchanged sentences

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on debt securities

21.3 ( 51.3 ) 62.8 ( 249.9 )

Loss on foreign currency translation ( 0.4 ) — ( 0.8 ) —

Unrealized gain on cash flow hedges — — — 1.0

Unrealized gain on debt securities

Gain on foreign currency translation

Comprehensive income $ 725.7 $ 875.0

7 unchanged sentences

Balance, December 31, 2023

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

1.8 $ — 133.1 $ 0.1 $ 11,354.0 $ 27,260.3 $ ( 80.9 ) ( 25.5 ) $ ( 12,560.4 ) $ 25,973.1

Issuance of Common Stock for equity awards granted under long-term incentive plans — — 1.5 — 672.4 — — — — 672.4

Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.4 ) — ( 335.9 ) — — — — ( 335.9 )

— — ( 0.1 ) — ( 99.2 ) — — — — ( 99.2 )

Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 18.8 — — — 1.7 20.5

— — — — 18.9 — — — 1.7 20.6

Repurchases of Common Stock — — — — — — — ( 0.3 ) ( 298.0 ) ( 298.0 )

— — — — — — — ( 0.9 ) ( 693.9 ) ( 693.9 )

Stock-based compensation charges — — — — 233.3 — — — — 233.3

1 unchanged sentence

Other comprehensive income, net of tax

Balance, March 31, 2023 1.8 — 131.4 0.1 10,597.7 24,124.5 ( 181.6 ) ( 23.5 ) ( 11,045.5 ) 23,495.2

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

— — — — — — 3.7 — — 3.7

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

— — — — ( 14.0 ) — — — — ( 14.0 )

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

Balance, March 31, 2024

1.8 $ — 134.2 $ 0.1 $ 11,942.6 $ 27,982.3 $ ( 77.2 ) ( 25.8 ) $ ( 12,856.7 ) $ 26,991.1

Repurchases of Common Stock

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

Stock-based compensation charges — — — — 208.0 — — — — 208.0

Net income — — — — — 968.4 — — — 968.4

Other comprehensive loss, net of tax — — — — — — ( 16.1 ) — — ( 16.1 )

Balance, June 30, 2023 1.8 — 131.6 0.1 10,888.5 25,092.9 ( 197.7 ) ( 24.5 ) ( 11,765.9 ) 24,017.9

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

1 unchanged sentence

Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.1 ) — ( 99.2 ) — — — — ( 99.2 )

— — ( 0.2 ) — ( 129.4 ) — — — — ( 129.4 )

Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 18.9 — — — 1.7 20.6

— — — — 16.1 — — — 1.9 18.0

Repurchases of Common Stock — — — — — — — ( 0.9 ) ( 693.9 ) ( 693.9 )

— — — — — — — ( 0.6 ) ( 507.1 ) ( 507.1 )

Stock-based compensation charges — — — — 237.4 — — — — 237.4

2 unchanged sentences

— — — — — — 57.2 — — 57.2

Balance, September 30, 2023 1.8 $ — 132.1 $ 0.1 $ 11,251.5 $ 26,100.7 $ ( 176.8 ) ( 25.1 ) $ ( 12,271.1 ) $ 24,904.4

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

Class A Stock Common Stock Additional

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

Shares Amount Shares Amount Shares Amount

Balance, December 31, 2021 1.8 $ — 126.2 $ 0.1 $ 8,087.5 $ 18,968.3 $ ( 26.2 ) ( 19.4 ) $ ( 8,260.9 ) $ 18,768.8

Issuance of Common Stock for equity awards granted under long-term incentive plans — — 1.6 — 593.7 — — — — 593.7

Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.2 ) — ( 105.8 ) — — — — ( 105.8 )

Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 12.8 — — — 1.7 14.5

Repurchases of Common Stock — — — — — — — ( 0.5 ) ( 352.0 ) ( 352.0 )

Stock-based compensation charges — — — — 165.9 — — — — 165.9

Net income — — — — — 973.5 — — — 973.5

Other comprehensive loss, net of tax — — — — — — ( 143.9 ) — — ( 143.9 )

Balance, March 31, 2023

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

1.8 $ — 131.4 $ 0.1 $ 10,597.7 $ 24,124.5 $ ( 181.6 ) ( 23.5 ) $ ( 11,045.5 ) $ 23,495.2

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

— — ( 0.1 ) — ( 41.9 ) — — — — ( 41.9 )

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

— — — — 14.0 — — — 2.2 16.2

Repurchases of Common Stock

— — — — — — — ( 0.7 ) ( 393.6 ) ( 393.6 )

Stock-based compensation charges — — — — 166.0 — — — — 166.0

Net income — — — — — 852.1 — — — 852.1

Other comprehensive loss, net of tax — — — — — — ( 53.7 ) — — ( 53.7 )

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

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

— — 0.9 — 322.9 — — — — 322.9

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

— — ( 0.2 ) — ( 108.9 ) — — — — ( 108.9 )

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

— — — — 12.9 — — — 1.6 14.5

Repurchases of Common Stock

— — — — — — — ( 1.4 ) ( 913.0 ) ( 913.0 )

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

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

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

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

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

2 unchanged sentences

(In millions)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

6 unchanged sentences

Deferred income taxes ( 190.4 ) ( 216.5 )

Acquired in-process research and development in connection with asset acquisition — 195.0

Changes in assets and liabilities:

(Increase) decrease in accounts receivable

( 256.1 ) 488.2

Decrease in accounts receivable

Increase in inventories ( 155.8 ) ( 46.8 )

Increase in prepaid expenses and other assets ( 77.9 ) ( 5.5 )

(Decrease) increase in deferred revenue ( 5.1 ) 92.0

Increase (decrease) in accounts payable, accrued expenses, and other liabilities 737.3 ( 486.0 )

Increase (decrease) in deferred revenue

116.9 ( 35.9 )

Increase in accounts payable, accrued expenses, and other liabilities

Total adjustments 790.5 549.8

5 unchanged sentences

Payments for Libtayo intangible asset ( 27.9 ) ( 100.9 )

Acquisitions, net of cash acquired

( 51.1 ) ( 230.3 )

Net cash used in investing activities ( 1,687.1 ) ( 235.7 )

3 unchanged sentences

Repurchases of Common Stock ( 291.3 ) ( 710.7 )

Net cash used in financing activities ( 1,344.0 ) ( 761.4 )

Net cash provided by (used in) financing activities

47.1 ( 322.5 )

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 0.5 ) —

14 unchanged sentences

These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

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

Recently Issued Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No.

2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures .

The amendments require disclosure of incremental segment information on an annual and interim basis.

The amendments also require companies with a single reportable segment to provide all disclosures required by this amendment and all existing segment disclosures in Accounting Standards Codification 280, Segment Reporting .

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

The Company does not expect the adoption of the amendments to have a significant impact on its financial statements.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, Income Taxes - Improvements to Income Tax Disclosures .

The amendments require (i) enhanced disclosures in connection with an entity's effective tax rate reconciliation and (ii) income taxes paid disaggregated by jurisdiction.

The amendments are effective for annual periods beginning after December 15, 2024.

The Company does not expect the adoption of the amendments to have a significant impact on its financial statements.

Product Sales

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2024 2023

1,201.6 1,433.8

42.7 — 42.7 —

144.1 94.7 384.0 264.5

88.3 31.0 235.3 31.0

40.4 29.7 121.1 94.5

19.1 13.6 53.3 33.2

Total EYLEA HD and EYLEA U.S.

1,401.6 1,433.8

Total Libtayo

$ 1,761.3 $ 1,668.0

(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")

As of September 30, 2023 and December 31, 2022, the Company had $ 3.792 billion and $ 3.586 billion, respectively, of trade accounts receivable that were recorded within Accounts receivable, net.

The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for the three and nine months ended September 30, 2023 and 2022.

(a) Rest of world ("ROW")

As of March 31, 2024 and December 31, 2023, the Company had $ 3.739 billion and $ 3.888 billion, respectively, of trade accounts receivable that were recorded within Accounts receivable, net.

The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for the three months ended March 31, 2024 and 2023.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Besse Medical, a subsidiary of Cencora, Inc.

53 % 56 % 52 % 56 %

McKesson Corporation 24 % 25 %

Collaboration, License, and Other Agreements

Amounts recognized in our Statements of Operations in connection with our collaborations with Sanofi are detailed below:

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

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 (i.e., "development balance") based on the Company's share of collaboration profits;

however, the Company is only required to apply 20 % of its share of profits from the collaboration each calendar quarter to reimburse Sanofi for these development expenses.

As of March 31, 2024, the Company's contingent reimbursement obligation to Sanofi under the collaboration was approximately $ 2.200 billion.

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

Amounts recognized in the Company's Statements of Operations in connection with its Sanofi collaboration are as follows:

Statement of Operations Classification Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2024 2023

Regeneron's share of profits in connection with commercialization of antibodies Collaboration revenue $ 804.0 $ 636.5

Sales-based milestones earned Collaboration revenue $ 50.0 $ — $ 50.0 $ 50.0

Reimbursement for manufacturing of commercial supplies Collaboration revenue $ 105.8 $ 161.9

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

Regeneron's obligation for its share of Sanofi R&D expenses, net of reimbursement of R&D expenses (R&D expense)/Reduction of R&D expense $ ( 25.8 ) $ ( 4.3 ) $ ( 66.7 ) $ 59.6

Reimbursement of commercialization-related expenses Reduction of SG&A expense $ 135.5 $ 108.6 $ 384.0 $ 311.1

Immuno-oncology (a) :

Regeneron's share of profits in connection with commercialization of Libtayo outside the United States Collaboration revenue $ — $ — $ — $ 6.7

Reimbursement for manufacturing of ex-U.S.

commercial supplies Collaboration revenue $ — $ — $ — $ 4.6

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

Regeneron's obligation for its share of Sanofi R&D expenses, net of reimbursement of R&D expenses (R&D expense)

$ ( 18.6 ) $ ( 26.4 )

Reimbursement of commercialization-related expenses Reduction of SG&A expense $ 139.5 $ 117.6

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

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

gross profits Cost of goods sold $ — $ — $ — $ ( 70.1 )

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

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

(a) 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.

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 (cemiplimab) rights described within the " Immuno-Oncology " section below;

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

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

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

During the three months ended September 30, 2023, the Company earned the final $ 50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $ 3.0 billion on a rolling twelve-month basis.

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

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

September 30, December 31,

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

March 31, December 31,

(In millions) 2024

2 unchanged sentences

$ 532.2 $ 427.7

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").

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

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

The Company had principal control over the development of Libtayo and led commercialization activities in the United States, 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 was eligible to earn an aggregate of $ 100.0 million in Libtayo sales-based milestones under the terms of the A&R IO LCA, of which they earned $ 65.0 million in 2022 and $ 35.0 million in 2023.

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.

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.

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

Agreed-upon development expenses incurred by the Company and Bayer are generally shared equally.

Bayer is responsible for commercialization activities outside the United States, and the companies share equally in profits and losses from such sales.

Within the United States, the Company is responsible for commercialization and retains profits from such sales.

Bayer is responsible for commercialization activities outside the United States, and the companies share equally in profits from such sales.

Amounts recognized in the Company's Statements of Operations in connection with its Bayer collaboration are as follows:

Statement of Operations Classification Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2024 2023

Regeneron's share of profits in connection with commercialization of EYLEA outside the United States Collaboration revenue $ 349.9 $ 315.3 $ 1,031.0 $ 993.4

Regeneron's share of profits in connection with commercialization of EYLEA 8 mg and EYLEA outside the United States

Collaboration revenue $ 333.9 $ 331.6

Reimbursement for manufacturing of ex-U.S.

commercial supplies Collaboration revenue $ 22.1 $ 25.3

One-time payment in connection with change in Japan arrangement

Collaboration revenue $ — $ — $ — $ 21.9

Regeneron's obligation for its share of Bayer R&D expenses, net of reimbursement of R&D expenses (R&D expense)/Reduction of R&D expense $ ( 9.7 ) $ 7.1 $ ( 35.1 ) $ 10.3

Regeneron's obligation for its share of Bayer R&D expenses, net of reimbursement of R&D expenses (R&D expense)

$ ( 8.7 ) $ ( 13.4 )

The following table summarizes contract balances in connection with the Company's Bayer collaboration:

September 30, December 31,

March 31, December 31,

(In millions) 2024

2 unchanged sentences

$ 151.1 $ 138.2

The Company is a party to a 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 parties jointly fund certain studies, and the Company has the right to distribute the product in the United States while 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.

Amounts recognized in the Company's Statements of Operations in connection with its Roche collaboration are as follows:

Statement of Operations Classification Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2023 2022 2023 2022

Global gross profit payment from Roche in connection with sales of Ronapreve Collaboration revenue $ — $ 6.4 $ 222.2 $ 230.9

Other Collaboration revenue $ ( 5.7 ) $ — $ ( 9.5 ) $ —

Reimbursement of research and development expenses from Roche was not material for the three and nine months ended September 30, 2023 and 2022.

The following table summarizes contract balances in connection with the Company's Roche collaboration:

September 30, December 31,

(In millions) 2023 2022

Accounts receivable, net $ — $ 396.6

In 2019, the Company and Alnylam Pharmaceuticals, Inc.

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

In connection with entering into 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.

The Company is party to a collaboration agreement with Alnylam Pharmaceuticals, Inc.

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, in addition to a select number of targets expressed in the liver.

For each program, the Company provides Alnylam with a specified amount of funding at program initiation and at lead candidate designation.

Under the terms of the collaboration, the parties 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.

During the three months ended September 30, 2023, the Company became obligated to pay Alnylam a $ 100.0 million development milestone, which was recorded to Acquired in-process research and development expense, upon the achievement of specified proof-of-principle criteria for the ALN-APP program.

Alnylam is eligible to receive an additional $ 100.0 million clinical proof-of-principle milestone in connection with an eye program.

Following designation of a lead candidate, the parties may further advance such lead candidate under either a co-development/co-commercialization collaboration agreement or license agreement.

Amounts recognized in the Company's Statements of Operations in connection with its Alnylam collaboration are as follows:

Statement of Operations Classification Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2024

2 unchanged sentences

$ ( 17.5 ) $ ( 21.3 )

Development milestone

Acquired in-process research and development $ ( 100.0 ) $ — $ ( 100.0 ) $ —

The following table summarizes contract balances in connection with the Company's Alnylam collaboration:

September 30, December 31,

March 31, December 31,

(In millions) 2024

1 unchanged sentence

$ 18.9 $ 22.6

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.

Amounts recognized in the Company's Statements of Operations in connection with its Roche collaboration are as follows:

Statement of Operations Classification Three Months Ended

(In millions) 2024

Global gross profit payment from Roche in connection with sales of Ronapreve Collaboration revenue $ 0.5 $ 222.2

Reimbursement of research and development expenses from Roche was not material for the three months ended March 31, 2024 and 2023.

Contract balances in the Company's Balance Sheets in connection with the Roche collaboration were not material as of March 31, 2024 and December 31, 2023.

In March 2023, the Company and Sonoma Biotherapeutics, Inc.

2 unchanged sentences

Sonoma is also eligible to receive a $ 45.0 million development milestone payment.

The Company and Sonoma will co-fund research and development activities and share equally any future commercial expenses and profits.

The Company will have the option to lead late-stage development and commercialization on all products globally, with Sonoma retaining rights to co-promote all such products in the United States.

Biomedical Advanced Research and Development Authority ("BARDA")

In August 2023, the Company expanded its Other Transaction Agreement ("OTA") with BARDA, pursuant to which the U.S.

Department of Health and Human Services ("HHS") is obligated to fund up to 70 % of the Company's costs incurred for certain development activities related to a next-generation COVID-19 monoclonal antibody therapy for the prevention of SARS-CoV-2 infection.

The agreement could result in payments to the Company of up to approximately $ 326 million in the aggregate to support clinical development, clinical manufacturing, and the regulatory licensure process.

Amounts recognized within Other revenue in the Company's Statements of Operations in connection with this BARDA agreement were $ 34.2 million for the three months ended September 30, 2023.

The following table summarizes the Company's contract balances in connection with this BARDA agreement:

September 30,

(In millions) 2023

Accounts receivable, net

In 2017, the Company entered into an agreement with Decibel Therapeutics, Inc.

to discover and develop new potential therapeutics to protect, repair and restore hearing (including DB-OTO, which is currently in clinical development, and preclinical programs for GJB2-related and stereocilin-related hearing loss).

In connection with the agreement, the Company also purchased shares of Decibel stock.

In August 2023, the Company entered into an Agreement and Plan of Merger to acquire Decibel, and in September 2023, the Company completed its acquisition of Decibel.

The Company paid $ 101.3 million in cash (or $ 4.00 per share of Decibel common stock), of which $ 6.6 million was attributed to post-combination services to be rendered by Decibel equity award holders, and as a result, was excluded from the amount of consideration transferred for purchase accounting.

In addition, Decibel shareholders received one non-tradeable contingent value right ("CVR") per share of Decibel common stock, which entitles the holder to receive up to $ 3.50 per share in cash upon achievement of certain clinical development and regulatory milestones for DB-OTO within specified time periods.

At closing, the Company recorded a liability related to the fair value of the CVRs of $ 43.7 million (see Note 6).

The maximum aggregate amount that holders of the CVRs may be entitled to receive if all the milestones contemplated by the CVRs are achieved is approximately $ 97 million.

The fair value of the Company's investment in Decibel stock immediately before the acquisition date was $ 10.3 million.

The Decibel acquisition was accounted for as a business combination.

In a business combination, the acquisition method of accounting generally requires that the assets acquired and liabilities assumed be recorded as of the date of the acquisition at their respective fair values.

Amounts allocated to acquired in-process research and development are capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the associated research and development efforts.

Any excess of the purchase price (consideration transferred) over the fair values of net assets acquired is recorded as goodwill.

Transaction costs in connection with a business combination are expensed as incurred.

The following table summarizes the amounts recognized for assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date:

September 25,

(In millions) 2023

Cash and cash equivalents $ 42.2

Marketable securities 12.1

Deferred tax assets, net

Indefinite-lived intangible asset related to in-process research and development 42.5

Other assets and liabilities, net

The final determination of fair values of assets acquired, liabilities assumed, and tax-related items will be completed no later than one year from the acquisition date.

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

for a total equity value of approximately $ 250 million.

As a result of the transaction, which was accounted for as an asset acquisition, the Company recorded, during the three months ended June 30, 2022, (i) a charge of $ 195.0 million to Acquired in-process research and development and (ii) net assets of $ 61.7 million, including $ 26.4 million of cash and cash equivalents acquired, related to the assets acquired (including deferred tax assets and investments) and liabilities assumed.

The parties co-fund research and development activities under the collaboration.

Amounts recognized in the Company's Statements of Operations in connection with research and development activities co-funded under the Sonoma collaboration were not material for the three months ended March 31, 2024.

In addition, contract balances in the Company's Balance Sheets in connection with the Sonoma collaboration were not material as of March 31, 2024 and December 31, 2023.

Net Income Per Share

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Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions, except per share data) 2024 2023

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Three Months Ended

September 30, Nine Months Ended

September 30,

(Shares in millions) 2024 2023

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Marketable Securities

Marketable securities as of September 30, 2023 and December 31, 2022 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).

Marketable securities as of March 31, 2024 and December 31, 2023 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).

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

(In millions) Amortized Unrealized Fair

As of September 30, 2023

As of March 31, 2024

Cost Basis Gains Losses Value

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

The available-for-sale debt securities as of September 30, 2023 mature at various dates through April 2029.

The available-for-sale debt securities as of March 31, 2024 mature at various dates through June 2029.

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

September 30, December 31,

March 31, December 31,

(In millions) 2024

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(In millions)

As of September 30, 2023

As of March 31, 2024

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

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Commercial paper 866.9 ( 0.5 ) — — 866.9 ( 0.5 )

Certificates of deposit 136.3 ( 0.1 ) — — 136.3 ( 0.1 )

Asset-backed securities 99.2 ( 0.6 ) 25.5 ( 0.7 ) 124.7 ( 1.3 )

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Sovereign bonds 12.4 ( 0.1 ) 44.8 ( 0.8 ) 57.2 ( 0.9 )

Certificates of deposit 40.2 ( 0.1 ) — — 40.2 ( 0.1 )

Commercial paper

636.8 ( 0.2 ) — — 636.8 ( 0.2 )

Asset-backed securities 61.8 ( 0.3 ) 25.3 ( 0.9 ) 87.1 ( 1.2 )

$ 7,854.9 $ ( 9.0 ) $ 4,157.5 $ ( 106.8 ) $ 12,012.4 $ ( 115.8 )

The unrealized losses on corporate bonds as of September 30, 2023 were primarily driven by increases in interest rates.

The unrealized losses on corporate bonds as of March 31, 2024 were primarily driven by increased 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 three and nine months ended September 30, 2023 and 2022, amounts reclassified from Accumulated other comprehensive loss into Other income (expense), net were related to realized gains/losses on sales of available-for-sale debt securities.

For the three months ended September 30, 2023, realized gains on sales of marketable securities were not material and there were no realized losses.

For the nine months ended September 30, 2023, and for the three and nine months ended September 30, 2022, realized gains and losses on sales of marketable securities were not material.

With respect to marketable securities, for the three months ended March 31, 2024 and 2023, amounts reclassified from Accumulated other comprehensive loss into Other (expense) income, net were related to realized gains/losses on sales of available-for-sale debt securities.

For the three months ended March 31, 2024 and 2023, realized gains/losses on sales of marketable securities were not material .

Fair Value Measurements

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(In millions) Fair Value Measurements at Reporting Date

As of September 30, 2023

As of March 31, 2024

Fair Value Level 1 Level 2 Level 3

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$ 15,952.7 $ 907.1 $ 15,045.6 $ —

Contingent consideration - CVRs

Contingent consideration

$ 59.0 $ — $ — $ 59.0

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$ 14,439.4 $ 983.8 $ 13,455.6 $ —

The Company held certain restricted equity securities as of September 30, 2023 which are subject to transfer restrictions that expire at various dates through 2024.

During the three and nine months ended September 30, 2023, the Company recorded $ 100.3 million and $ 295.9 million of net unrealized losses, respectively, on equity securities in Other income (expense), net.

In addition, during the three months ended September 30, 2023, the Company recorded a write-down of $ 29.0 million in Other income (expense), net related to the

Company's investments in private companies.

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

In addition to the investments summarized in the table above, as of September 30, 2023 and December 31, 2022, the Company had $ 60.8 million and $ 48.3 million, respectively, in equity investments that do not have a readily determinable fair value.

Contingent consideration

$ 43.7 $ — $ — $ 43.7

As of March 31, 2024, the Company held restricted equity securities which are subject to transfer restrictions that expire in June 2024.

During the three months ended March 31, 2024 and 2023, the Company recorded $ 196.2 million and $ 164.7 million, respectively, of net unrealized losses on equity securities in Other (expense) income, net.

In addition to the investments summarized in the table above, as of March 31, 2024 and December 31, 2023, the Company had $ 73.7 million and $ 74.3 million, respectively, in equity investments that do not have a readily determinable fair value.

These investments are recorded within Other noncurrent assets.

As described in Note 3, in September 2023, the Company acquired Decibel and recorded a liability for the CVRs within other liabilities.

The fair value of the CVR liability is determined based on the probability of achieving certain clinical development and regulatory milestones and estimated discount rates.

The fair value of the CVR liability is remeasured each reporting period until the contingencies are resolved, with any changes in fair value recorded in Other operating (income) expense, net.

The fair value of the Company's long-term debt, which was determined based on Level 2 inputs, was estimated to be $ 1.395 billion and $ 1.443 billion as of September 30, 2023 and December 31, 2022, respectively.

As a result of the Company's acquisition of Decibel Therapeutics, Inc.

in September 2023, the Company recorded a contingent consideration liability within other liabilities.

The fair value of the liability is determined based on the probability of achieving certain clinical development and regulatory milestones and estimated discount rates, and is remeasured each reporting period until the contingencies are resolved.

During the three months ended March 31, 2024, the Company recorded a $ 15.3 million charge related to the change in the estimated fair value of the contingent consideration liability within Other operating expense (income), net.

The fair value of the Company's long-term debt, which was determined based on Level 2 inputs, was estimated to be $ 1.497 billion and $ 1.528 billion as of March 31, 2024 and December 31, 2023, respectively.

Inventories consist of the following:

September 30, December 31,

(In millions) 2024

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$ 2,714.9 $ 2,580.5

Inventory balances in the table above are net of reserves of $ 726.2 million and $ 720.7 million as of September 30, 2023 and December 31, 2022, respectively.

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

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federal, state, and foreign income taxes.

The Company's effective tax rate was 9.3 % and 12.9 % for the three months ended September 30, 2023 and 2022, respectively, and 8.4 % and 11.1 % for the nine months ended September 30, 2023 and 2022, respectively.

The Company's effective tax rate for the three and nine months ended September 30, 2023 and September 30, 2022 was positively impacted, compared to the U.S.

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

federal statutory rate and, to a lesser extent, stock-based compensation and federal tax credits for research activities.

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 became effective for periods beginning after December 31, 2022.

The IRA did not have a material impact on the Company's financial statements for the three and nine months ended September 30, 2023.

The Company's effective tax rate was ( 3.0 %) and 4.7 % for the three months ended March 31, 2024 and 2023, respectively.

The Company's effective tax rate for the three months ended March 31, 2024 and 2023 was positively impacted, compared to the U.S.

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

federal statutory rate.

The effective tax rate for the three months ended March 31, 2024 was positively impacted, compared to the same period in 2023, primarily by additional stock-based compensation.

Stockholders' Equity

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

In November 2021, the Company's board of directors authorized a share repurchase program to repurchase up to $ 3.0 billion of the Company's Common Stock.

As of June 30, 2023, the Company had repurchased the entire $ 3.0 billion of its Common Stock that it was authorized to repurchase under the program.

In January 2023, our board of directors authorized an additional share repurchase program to repurchase up to $ 3.0 billion of our Common Stock.

In January 2023, 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 permits 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.

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

As of September 30, 2023, $ 1.826 billion remained available for share repurchases under the January 2023 program.

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

As described in Note 8, effective January 1, 2023 share repurchases, net of issuances, are subject to a 1% excise tax;

such amount, if applicable, is recognized as an additional cost of the shares acquired.

As of March 31, 2024, $ 1.233 billion remained available for share repurchases under the program.

The table below summarizes the shares of the Company's Common Stock the Company repurchased and the cost of the shares, which were recorded as Treasury Stock.

Three Months Ended

September 30, Nine Months Ended

September 30,

(In millions) 2024 2023

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Total cost of shares $ 298.0 $ 693.9

In April 2024, 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.

Statement of Cash Flows

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

September 30,

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

(In millions) 2024

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Restricted cash included in Other noncurrent assets

Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows

Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statements of Cash Flows

$ 2,609.8 $ 3,928.8

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Supplemental disclosure of non-cash investing and financing activities

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

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

(In millions) 2024

Accrued capital expenditures $ 108.0 $ 75.4 $ 90.3 $ 70.8

Accrued contingent consideration for Libtayo intangible asset $ 62.8 $ 135.5 $ 116.0 $ —

Accrued contingent consideration in connection with acquisitions

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

As of September 30, 2023 and December 31, 2022, the Company's accruals for loss contingencies were not material.

As of March 31, 2024 and December 31, 2023, 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 U.S.

federal and state laws.

United States

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

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

(collectively, "Commercializing") Praluent.

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

As 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 was held on March 27, 2023.

On May 28, 2023, the United States Supreme Court affirmed the Federal Circuit's decision that certain of Amgen's asserted patent claims are invalid based on lack of enablement.

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.

On May 27, 2022, the Company filed a lawsuit against Amgen Inc.

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 was held on January 6, 2023.

On August 1 and 11, 2022, Amgen filed a motion to dismiss the complaint and a motion to stay these proceedings, respectively.

On February 10, 2023, the court denied Amgen's motion to stay;

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A trial has been scheduled to begin in November 2024.

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, 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 was held on February 21, 2023, at which the '917 Patent was revoked.

Amgen filed a notice to appeal to the TBA of the EPO on February 27, 2023.

On June 1, 2023, Amgen filed a lawsuit against the Company and certain of Sanofi's affiliated entities in the Munich Local Division of the Unified Patent Court (the "UPC") alleging infringement of Amgen's European Patent No.

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The lawsuit seeks, among other things, a permanent injunction in several countries in Europe and monetary damages.

The '797 Patent is a divisional patent of the '124 Patent discussed above.

The '797 Patent is a divisional patent of European Patent No.

2,215,124 (the "'124 Patent") (i.e., a patent that shares the same priority date, disclosure, and patent term of the parent '124 Patent), which was previously invalidated by Technical Board of Appeal (the "TBA") of the European Patent Office (the "EPO").

A trial has been scheduled for October 16–17, 2024.

Also on June 1, 2023, Sanofi filed an action in the Munich Central Division of the UPC seeking revocation of the '797 Patent.

A trial has been scheduled for June 4–5, 2024.

Proceedings Relating to EYLEA (aflibercept) Injection

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Latest Events/Current Status

10,406,226 (the "'226 Patent") and 10,464,992 (the "'992 Patent") Anonymous parties Ex parte reexamination

February 11, 2020 On September 11, 2023, the USPTO dismissed the '226 Patent reexamination proceedings following the Company’s filing of a Notice of Disclaimer, disclaiming all claims of the '226 Patent.

On September 8, 2023, the '992 Patent reexamination proceedings were stayed by the USPTO pending resolution of the inter partes review ("IPR") of the '992 Patent initiated by Celltrion, Inc., as discussed further below.

9,254,338 (the "'338 Patent") and 9,669,069 (the "'069 Patent") Mylan Pharmaceuticals Inc., Apotex Inc., and Celltrion, Inc.

IPR petitions seeking declarations of invalidity May 5, 2021 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.

10,130,681 (the "'681 Patent"), 10,888,601 (the "'601 Patent"), and 10,857,205 (the "'205 Patent") Mylan IPR petitions seeking declarations of invalidity July 1, 2022 ('681 Patent and '601 Patent)

October 28, 2022 ('205 Patent)

IPR proceedings concerning the '681 Patent and the '601 Patent instituted on January 11, 2023;

oral hearing held on October 25, 2023.

On March 1, 2023, the USPTO denied institution of Mylan's IPR petition against the '205 Patent following the Company's filing of a Notice of Disclaimer with the USPTO, disclaiming all claims of the '205 Patent.

'681 Patent and '601 Patent

Samsung Bioepis Co., Ltd.

9,254,338 (the "'338 Patent") and 9,669,069 (the "'069 Patent") Mylan Pharmaceuticals Inc., joined by Apotex Inc.

and Celltrion

IPR petitions seeking declarations of invalidity May 5, 2021 On November 9, 2022, the USPTO issued final written decisions finding that the challenged claims of the '338 and '069 Patents are unpatentable and, therefore, invalid.

On January 10, 2023, the Company filed notices of appeal of these decisions to the United States Court of Appeals for the Federal Circuit (the "Federal Circuit").

10,130,681 (the "'681 Patent") and 10,888,601 (the "'601 Patent")

Mylan, joined by Celltrion ('601 and '681 Patents) and Samsung Bioepis Co., Ltd.

('601 Patent)

IPR petitions seeking declarations of invalidity July 1, 2022

On January 9, 2024, the USPTO issued final written decisions finding that that the challenged claims of the '681 and '601 Patents are unpatentable and, therefore, invalid.

On March 12, 2024, the Company filed notices of appeal of these decisions to the Federal Circuit.

Samsung Bioepis, joined by Biocon Biologics Inc.

('601 Patent)

IPR petitions seeking declarations of invalidity January 6, 2023 ('681 Patent)

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On July 19, 2023 and October 20, 2023, the USPTO instituted IPR proceedings concerning the '681 Patent and the '601 Patent, respectively.

11,253,572 (the "'572 Patent") Apotex

IPR petitions seeking declaration of invalidity

September 9, 2022

On March 10, 2023, the USPTO declined to institute an IPR proceeding.

Samsung Bioepis Co., Ltd.

11,253,572 (the "'572 Patent") Samsung Bioepis

IPR petition seeking declaration of invalidity

April 27, 2023

Decision whether to institute pending.

'992 Patent and '226 Patent

Celltrion IPR petitions seeking declarations of invalidity

January 17, 2023 ('992 Patent)

February 28, 2023 ('226 Patent)

On July 20, 2023, the USPTO instituted an IPR proceeding concerning the '992 Patent.

On September 1, 2023, the USPTO denied institution of Celltrion's IPR petition against the '226 Patent following the Company’s filing of a Notice of Disclaimer with the USPTO, disclaiming all claims of the '226 Patent.

On November 17, 2023, the USPTO instituted IPR proceedings concerning the '572 Patent.

Patent Litigation

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.

On August 2, 2022, the Company filed a patent infringement lawsuit against Mylan, a wholly-owned subsidiary of Viatris Inc., in the United States District Court for the Northern District of West Virginia alleging that Mylan's filing for FDA approval of an aflibercept 2 mg biosimilar infringes certain Company patents.

On April 20, 2023, Mylan filed a motion for summary judgment or partial summary judgment concerning four of the asserted patents.

On April 26, 2023, the Company filed a stipulation accepting summary judgment of noninfringement of all asserted claims of the Company's U.S.

On June 5, 2023, Biocon, as successor-in-interest to the aflibercept 2 mg biosimilar, was joined as a defendant to the lawsuit.

A trial was held from June 12, 2023 through June 23, 2023 concerning certain claims of the '601 Patent, the '572 Patent, and the Company's U.S.

Closing arguments were presented on August 3, 2023.

11,084,865 (the "'865 Patent").

On December 27, 2023, the court issued a decision finding that (i) the asserted claims of the '865 Patent were valid and infringed by Mylan and (ii) the asserted claims of the '601 and '572 Patents were infringed by Mylan but were invalid as obvious.

A scheduling conference has been set for May 17, 2024.

On November 8, November 22, and November 29, 2023, respectively, the Company filed patent infringement lawsuits against Celltrion, Samsung Bioepis, and Formycon AG in the United States District Court for the Northern District of West Virginia following service on Regeneron of each company's notice of commercial marketing.

The lawsuits allege that each company has infringed certain Company patents, including based on each company's filing for FDA approval of an aflibercept 2 mg biosimilar.

On December 27, 2023, the Company filed a second patent infringement lawsuit against Samsung Bioepis in the United States District Court for the Northern District of West Virginia alleging that Samsung's filing for FDA approval of an aflibercept 2 mg biosimilar infringes certain Company patents.

A scheduling conference has been set for May 17, 2024.

On January 10, 2024, the Company filed a patent infringement lawsuit against Amgen in the United States District Court for the Central District of California alleging that Amgen's filing for FDA approval of an aflibercept 2 mg biosimilar infringes certain Company patents.

On January 11, 2024, the Company filed a motion with the United States Judicial Panel on Multidistrict Litigation seeking to transfer this lawsuit to the United States District Court for the Northern District of West Virginia for coordinated pretrial proceedings with the lawsuits described in the preceding paragraph.

On April 11, 2024, the United States Judicial Panel on Multidistrict Litigation granted the Company's motion to transfer this lawsuit to the United States District Court for the Northern District of West Virginia for coordinated and consolidated pretrial proceedings with the lawsuits

described in the preceding paragraph.

A scheduling conference before the United States District Court for the Northern District of West Virginia has been set for May 17, 2024.

Post-Grant Proceedings

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European Patent No.

2,944,306 (the "'306 Patent") Anonymous parties Opposition proceedings October 26 and October 27, 2021 Oral hearing to be scheduled.

2,944,306 (the "'306 Patent") Anonymous parties Opposition proceedings October 26 and October 27, 2021 Oral hearing scheduled for November 2024.

European Patent No.

3,716,992 (the "EP '992 Patent") Amgen and three anonymous parties Opposition proceedings May 5-10, 2023 Oral hearing to be scheduled.

EPO European Patent No.

3,384,049 (the "'049 Patent") Amgen and anonymous parties

Opposition proceedings April 22-30, 2024

Oral hearing to be scheduled.

German Federal Patent Court

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2,364,691 (the "'691 Patent") Samsung Bioepis NL B.V.

Invalidation proceedings June 22, 2023 Oral hearing to be scheduled.

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.

Invalidation proceedings June 22, 2023 Trial has been scheduled to begin in June 2025.

High Court of Justice of England and Wales United Kingdom designations of the '691 Patent and '306 Patent

Formycon AG and Klinge Biopharma GmbH Invalidation proceedings and declaration of non-infringement by challengers' aflibercept 2 mg biosimilar

April 18, 2024 Trial to be scheduled.

Proceedings against Viatris Canada and BCIL

In 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 2 mg 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);

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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 (the "Viatris Canada 510/276 Lawsuit") 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 Viatris Canada 510/276 Lawsuit resulted in a statutory 24-month stay of regulatory approval of Viatris Canada's aflibercept biosimilar in Canada unless the lawsuit is resolved earlier.

On March 27, 2023, in light of the transfer of Viatris Canada's New Drug Submission ("NDS") of its aflibercept biosimilar to Biosimilar Collaborations Ireland Limited ("BCIL"), the Company filed a motion in the Federal Court of Canada seeking termination of the Viatris Canada 510/276 Lawsuit.

On June 5, 2023, BCIL was added as a defendant in the Viatris Canada 510/276 Lawsuit.

On June 5, 2023, following the transfer of Viatris Canada's New Drug Submission of its aflibercept 2 mg biosimilar to Biosimilar Collaborations Ireland Limited ("BCIL"), BCIL was added as a defendant in the lawsuit concerning the '510 Patent and the '276 Patent.

On March 23, 2023 and June 14, 2023, the Company and Bayer Inc.

filed patent infringement lawsuits against BCIL 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 '510 and '276 Patents.

The June 14, 2023 lawsuit was filed after BCIL served Bayer Inc.

with a statutory notification in relation to the NDS on May 23, 2023.

On September 14, 2023, the Company, Bayer Inc., and Bayer Healthcare LLC filed patent infringement lawsuits against Viatris Canada and BCIL 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 Bayer Healthcare LLC's Canadian Patent No.

filed patent infringement lawsuits against BCIL in the Federal Court of Canada seeking a declaration that the making, constructing, using, or selling of an aflibercept 2 mg biosimilar would directly or indirectly infringe one or more claims of the Company's '510 and '276 Patents.

On September 14, 2023, the Company, Bayer Inc., and Bayer Healthcare LLC filed patent infringement lawsuits against Viatris Canada and BCIL in the Federal Court of Canada seeking a declaration that the making, constructing, using, or selling of an aflibercept 2 mg biosimilar would directly or indirectly infringe one or more claims of Bayer Healthcare LLC's Canadian Patent No.

2,970,315 (the "'315 Patent").

On March 1, 2024, the Company, Bayer Inc., Bayer Healthcare LLC, Viatris Canada, BCIL, and Biocon Biologics Limited entered into a settlement agreement concerning the lawsuits described in the preceding two paragraphs.

Pursuant to the settlement agreement, each of such lawsuits has been dismissed and BCIL is generally precluded from launching its aflibercept 2 mg biosimilar product in Canada until July 1, 2025.

Proceedings against Amgen Canada

On May 9, 2023, Amgen Canada Inc.

("Amgen Canada") filed invalidation proceedings against the Company in the Federal Court of Canada seeking revocation of the '510 Patent and the '276 Patent.

On September 14, 2023, the Company, Bayer Inc., and Bayer Healthcare LLC filed patent infringement lawsuits against Amgen 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 '315 Patent.

On September 14, 2023, the Company, Bayer Inc., and Bayer Healthcare LLC filed patent infringement lawsuits against Amgen Canada in the Federal Court of Canada seeking a declaration that the making, constructing, using, or selling of an aflibercept 2 mg biosimilar would directly or indirectly infringe one or more claims of the '315 Patent.

On September 14, 2023, the Company and Bayer Inc.

filed three separate patent infringement lawsuits against Amgen 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 '193 Patent, '495 Patent, and '768 Patent, respectively.

On October 11, 2023, the Company, Bayer Inc., and Bayer Healthcare LLC filed two separate patent infringement lawsuits against Amgen 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 '510 Patent and '276 Patent, respectively.

filed three separate patent infringement lawsuits against Amgen Canada in the Federal Court of Canada seeking a declaration that the making, constructing, using, or selling of an aflibercept 2 mg biosimilar would directly or indirectly infringe one or more claims of the Company's '193 Patent, '495 Patent, and '768 Patent, respectively.

On October 11, 2023, the Company, Bayer Inc., and Bayer Healthcare LLC filed two separate patent infringement lawsuits against Amgen Canada in the Federal Court of Canada seeking a declaration that the making, constructing, using, or selling of an aflibercept 2 mg biosimilar would directly or indirectly infringe one or more claims of the Company's '510 Patent and '276 Patent, respectively.

A trial for the lawsuits concerning the '510 Patent and the '276 Patent has been scheduled for May 2025.

Proceedings against Celltrion

On January 15, 2024, the Company and Bayer Inc.

filed patent infringement lawsuits against Celltrion, Inc., Celltrion Healthcare Co, Ltd., Celltrion Pharma Inc., and Celltrion Healthcare Canada Ltd.

in the Federal Court of Canada seeking a declaration that the making, constructing, using, or selling of an aflibercept 2 mg biosimilar would directly or indirectly infringe one or more claims of the '510 Patent, the '276 Patent, the '495 Patent, the '768 Patent, the '193 Patent, and the '315 Patent.

Proceedings against Apotex

On March 6, 2024, the Company, Bayer Inc., and Bayer Healthcare LLC filed patent infringement lawsuits against Apotex Inc.

An oral hearing for certain motions concerning the '276 Patent, the '315 Patent, and the '510 Patent has been scheduled for July 8-9, 2024.

On October 31, 2022 and December 13, 2022, Samsung Bioepis Co., Ltd.

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and its parent company Samsung Biologics Co., Ltd.

before the Seoul Central District Court seeking a declaration that the making, constructing, using, or selling of an aflibercept biosimilar would infringe one or more claims of the Company's Korean Patent No.

before the Seoul Central District Court seeking a declaration that the making, constructing, using, or selling of an aflibercept 2 mg biosimilar would infringe one or more claims of the Company's Korean Patent No.

659477 (the "'477 Patent").

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and its parent company Samsung Biologics Co., Ltd.

before the Seoul Central District Court seeking a court order enjoining the manufacture, use, and assignment of an aflibercept biosimilar that infringes one or more claims of the '477 Patent.

before the Seoul Central District Court seeking a court order enjoining the manufacture, use, and assignment of an aflibercept 2 mg biosimilar that infringes one or more claims of the '477 Patent;

and on December 20, 2023, the Seoul Central District Court granted a preliminary injunction.

On January 10, 2024, the injunction was lifted against the Samsung entities following the expiration of the '477 Patent.

On March 2, 2023, the Company filed an affirmative scope confirmation action against Samsung Bioepis Co., Ltd.

before the Intellectual Property Tribunal and Appeal Board of the Korean Intellectual Property Office seeking a ruling that Samsung Bioepis's aflibercept biosimilar is covered by the claims of the '477 Patent.

On March 7, 2023, the action was designated for expedited proceedings.

before the Intellectual Property Tribunal and Appeal Board of the Korean Intellectual Property Office seeking a ruling that Samsung Bioepis's aflibercept 2 mg biosimilar is covered by the claims of the '477 Patent.

In March 2024, these proceedings were terminated as a result of the expiration of the '477 Patent.

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

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

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

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

On January 31, 2022, the court 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.

An oral hearing before the U.S.

Court of Appeals for the Second Circuit was held on October 11, 2023.

Court of Appeals for the Second Circuit (the "Second Circuit").

On March 18, 2024, the Second Circuit reversed the District Court's decision to dismiss the amended complaint and remanded the lawsuit to the District Court for further proceedings consistent with the Second Circuit's opinion.

Proceedings Relating to REGEN-COV (casirivimab and imdevimab)

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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.

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 (the "June 2020 Civil Complaint").

On August 24, 2020, the Company filed a motion to dismiss the June 2020 Civil Complaint in its entirety.

On December 4, 2020, the court denied the motion to dismiss.

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On October 25, 2023, the court certified for interlocutory appeal a portion of the court's September 27, 2023 order that addressed the causation standard applicable to the alleged violations of the federal Anti-Kickback Statute and federal False Claims Act;

and on December 11, 2023, the U.S.

Court of Appeals for the First Circuit certified for appeal (i.e., accepted for review) the court's September 27, 2023 order.

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.

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

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

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.

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

The Company is cooperating with this investigation.

On November 29, 2023, the U.S.

Department of Justice informed the Company that it had filed a notice of partial intervention in this matter.

On March 28, 2024, the Department of Justice and the U.S.

Attorney's Office for the District of Massachusetts filed a civil complaint intervention in the U.S.

District Court for the District of Massachusetts asserting causes of action under the federal False Claims Act and a claim for unjust enrichment.

Also on March 28, 2024, the U.S.

District Court of the District of Massachusetts unsealed a qui tam complaint against the Company, AmerisourceBergen, and Besse Medical by two qui tam plaintiffs (known as relators) purportedly on behalf of the United States and various states and municipalities, asserting causes of action under the federal False Claims Act and state and local laws, and alleging violations of the federal Anti-Kickback statute.

California Department of Insurance Subpoena

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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.

The Company is party to several lawsuits relating to the conduct alleged in the June 2020 Civil Complaint discussed under "Department of Justice Matters" above.

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

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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.

District Court for the District of Massachusetts concerning the allegations in the June 2020 Civil Complaint.

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;

District Court for the District of Massachusetts pending resolution of the proceedings before the same court concerning the allegations in the June 2020 Civil Complaint;

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

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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 asserts that the individual defendants breached their fiduciary duties in relation to the allegations in the June 2020 Civil Complaint discussed under "Department of Justice Matters" above.

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

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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.

District Court for the District of Massachusetts concerning the allegations in the June 2020 Civil Complaint.

As a result of the stay, the court also terminated the Company's motion to dismiss the complaint without prejudice.

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

What changed 10-Q

Item 1. Financial Statements