Item 1. Financial Statements
Item 1. Financial Statements
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except per share data)
September 30, December 31,
2024 2023
ASSETS
Current assets:
Cash and cash equivalents $ 2,011.8 $ 2,730.0
Marketable securities 7,784.7 8,114.8
Accounts receivable, net 6,107.1 5,667.3
Inventories 3,018.0 2,580.5
Prepaid expenses and other current assets 412.0 386.6
Total current assets 19,333.6 19,479.2
Marketable securities 8,490.9 5,396.5
Property, plant, and equipment, net 4,439.2 4,146.4
Intangible assets, net 1,120.1 1,038.6
Deferred tax assets 3,015.1 2,575.4
Other noncurrent assets 1,043.0 444.1
Total assets $ 37,441.9 $ 33,080.2
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 497.3 $ 606.6
Accrued expenses and other current liabilities 2,536.5 2,357.9
Deferred revenue 627.2 458.9
Total current liabilities 3,661.0 3,423.4
Long-term debt 1,984.0 1,982.9
Finance lease liabilities 720.0 720.0
Deferred revenue 207.4 126.7
Other noncurrent liabilities 1,543.6 854.1
Total liabilities 8,116.0 7,107.1
Stockholders' equity:
Preferred Stock, par value $ .01 per share; 30.0 shares authorized; shares issued and outstanding - no ne
— —
Class A Stock, convertible, par value $ .001 per share; 40.0 shares authorized; shares issued and outstanding - 1.8 in 2024 and 2023
— —
Common Stock, par value $ .001 per share; 320.0 shares authorized; shares issued - 135.3 in 2024 and 133.1 in 2023
0.1 0.1
Additional paid-in capital 12,702.8 11,354.0
Retained earnings 30,755.2 27,260.3
Accumulated other comprehensive income (loss)
60.2 ( 80.9 )
Treasury Stock, at cost; 27.0 shares in 2024 and 25.5 shares in 2023
( 14,192.4 ) ( 12,560.4 )
Total stockholders' equity 29,325.9 25,973.1
Total liabilities and stockholders' equity $ 37,441.9 $ 33,080.2
The accompanying notes are an integral part of the financial statements.
2
Table of Contents
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(In millions, except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Statements of Operations
Revenues:
Net product sales $ 1,946.4 $ 1,786.1 $ 5,626.3 $ 5,226.2
Collaboration revenue 1,660.1 1,438.3 4,450.9 4,133.1
Other revenue 114.2 138.3 335.6 323.6
3,720.7 3,362.7 10,412.8 9,682.9
Expenses:
Research and development 1,271.5 1,075.3 3,719.9 3,261.8
Acquired in-process research and development 56.2 100.0 87.2 156.1
Selling, general, and administrative 714.4 640.5 2,162.2 1,893.6
Cost of goods sold 262.3 224.5 760.5 625.3
Cost of collaboration and contract manufacturing 228.8 211.9 644.6 673.5
Other operating expense (income), net
8.0 ( 0.5 ) 37.9 ( 1.6 )
2,541.2 2,251.7 7,412.3 6,608.7
Income from operations 1,179.5 1,111.0 3,000.5 3,074.2
Other income (expense):
Other income (expense), net
327.3 17.6 866.0 32.2
Interest expense ( 13.8 ) ( 17.8 ) ( 44.7 ) ( 54.7 )
313.5 ( 0.2 ) 821.3 ( 22.5 )
Income before income taxes 1,493.0 1,110.8 3,821.8 3,051.7
Income tax expense
152.4 103.0 326.9 257.7
Net income $ 1,340.6 $ 1,007.8 $ 3,494.9 $ 2,794.0
Net income per share - basic $ 12.40 $ 9.48 $ 32.36 $ 26.16
Net income per share - diluted $ 11.54 $ 8.89 $ 30.23 $ 24.57
Weighted average shares outstanding - basic 108.1 106.3 108.0 106.8
Weighted average shares outstanding - diluted 116.2 113.4 115.6 113.7
Statements of Comprehensive Income
Net income $ 1,340.6 $ 1,007.8 $ 3,494.9 $ 2,794.0
Other comprehensive income (loss), net of tax:
Unrealized gain on debt securities
128.2 21.3 139.6 62.8
Gain (loss) on foreign currency translation
1.9 ( 0.4 ) 1.5 ( 0.8 )
Comprehensive income $ 1,470.7 $ 1,028.7 $ 3,636.0 $ 2,856.0
The accompanying notes are an integral part of the financial statements.
3
Table of Contents
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(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, 2023
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 )
Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 18.8 — — — 1.7 20.5
Repurchases of Common Stock — — — — — — — ( 0.3 ) ( 298.0 ) ( 298.0 )
Stock-based compensation charges — — — — 233.3 — — — — 233.3
Net income — — — — — 722.0 — — — 722.0
Other comprehensive income, net of tax
— — — — — — 3.7 — — 3.7
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
Issuance of Common Stock for equity awards granted under long-term incentive plans — — 1.0 — 436.5 — — — — 436.5
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.4 ) — ( 311.8 ) — — — — ( 311.8 )
Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 19.6 — — — 2.2 21.8
Repurchases of Common Stock — — — — — — — ( 0.6 ) ( 601.4 ) ( 601.4 )
Stock-based compensation charges — — — — 230.0 — — — — 230.0
Net income — — — — — 1,432.3 — — — 1,432.3
Other comprehensive income, net of tax
— — — — — — 7.3 — — 7.3
Balance, June 30, 2024
1.8 — 134.8 0.1 12,316.9 29,414.6 ( 69.9 ) ( 26.4 ) ( 13,455.9 ) 28,205.8
Issuance of Common Stock for equity awards granted under long-term incentive plans — — 0.6 — 255.7 — — — — 255.7
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.1 ) — ( 120.2 ) — — — — ( 120.2 )
Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 20.0 — — — 1.8 21.8
Repurchases of Common Stock — — — — — — — ( 0.6 ) ( 738.3 ) ( 738.3 )
Stock-based compensation charges — — — — 230.4 — — — — 230.4
Net income — — — — — 1,340.6 — — — 1,340.6
Other comprehensive income, net of tax
— — — — — — 130.1 — — 130.1
Balance, September 30, 2024
1.8 $ — 135.3 $ 0.1 $ 12,702.8 $ 30,755.2 $ 60.2 ( 27.0 ) $ ( 14,192.4 ) $ 29,325.9
4
Table of Contents
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, 2022 1.8 $ — 130.4 $ 0.1 $ 9,949.3 $ 23,306.7 $ ( 238.8 ) ( 22.6 ) $ ( 10,353.3 ) $ 22,664.0
Issuance of Common Stock for equity awards granted under long-term incentive plans — — 1.1 — 491.3 — — — — 491.3
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.1 ) — ( 99.2 ) — — — — ( 99.2 )
Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 18.9 — — — 1.7 20.6
Repurchases of Common Stock — — — — — — — ( 0.9 ) ( 693.9 ) ( 693.9 )
Stock-based compensation charges — — — — 237.4 — — — — 237.4
Net income — — — — — 817.8 — — — 817.8
Other comprehensive income, net of tax
— — — — — — 57.2 — — 57.2
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 — — 0.2 — 80.7 — — — — 80.7
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 — — — — 16.1 — — — 2.4 18.5
Repurchases of Common Stock — — — — — — — ( 1.0 ) ( 722.8 ) ( 722.8 )
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 — — 0.7 — 268.9 — — — — 268.9
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations — — ( 0.2 ) — ( 129.4 ) — — — — ( 129.4 )
Issuance/distribution of Common Stock for 401(k) Savings Plan — — — — 16.1 — — — 1.9 18.0
Repurchases of Common Stock — — — — — — — ( 0.6 ) ( 507.1 ) ( 507.1 )
Stock-based compensation charges — — — — 207.4 — — — — 207.4
Net income — — — — — 1,007.8 — — — 1,007.8
Other comprehensive income, net of tax
— — — — — — 20.9 — — 20.9
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
The accompanying notes are an integral part of the financial statements.
5
Table of Contents
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
Nine Months Ended
September 30,
2024
2023
Cash flows from operating activities:
Net income $ 3,494.9 $ 2,794.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 356.5 308.0
Stock-based compensation expense 678.4 644.6
(Gains) losses on marketable and other securities, net ( 331.2 ) 324.5
Other non-cash items, net ( 31.9 ) 17.4
Deferred income taxes ( 477.1 ) ( 551.5 )
Changes in assets and liabilities:
Increase in accounts receivable
( 436.2 ) ( 256.1 )
Increase in inventories ( 502.0 ) ( 224.4 )
Increase in prepaid expenses and other assets ( 352.2 ) ( 284.4 )
Increase (decrease) in deferred revenue 249.0 ( 5.1 )
Increase in accounts payable, accrued expenses, and other liabilities 509.5 737.3
Total adjustments ( 337.2 ) 710.3
Net cash provided by operating activities 3,157.7 3,504.3
Cash flows from investing activities:
Purchases of marketable and other securities ( 14,664.5 ) ( 9,514.2 )
Sales or maturities of marketable and other securities 12,445.3 7,059.3
Capital expenditures ( 556.3 ) ( 467.2 )
Proceeds from sale of property, plant, and equipment
20.1 —
Payments for Libtayo intangible asset ( 58.3 ) ( 145.7 )
Acquisitions, net of cash acquired
( 5.0 ) ( 51.1 )
Net cash used in investing activities ( 2,818.7 ) ( 3,118.9 )
Cash flows from financing activities:
Proceeds from issuance of Common Stock 1,374.4 844.5
Payments in connection with Common Stock tendered for employee tax obligations ( 775.7 ) ( 242.5 )
Repurchases of Common Stock ( 1,630.3 ) ( 1,946.0 )
Other
( 33.4 ) —
Net cash used in financing activities ( 1,065.0 ) ( 1,344.0 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash — ( 0.6 )
Net decrease in cash, cash equivalents, and restricted cash ( 726.0 ) ( 959.2 )
Cash, cash equivalents, and restricted cash at beginning of period 2,737.8 3,119.4
Cash, cash equivalents, and restricted cash at end of period $ 2,011.8 $ 2,160.2
The accompanying notes are an integral part of the financial statements.
6
Table of Contents
REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Interim Financial Statements
Basis of Presentation
The interim Condensed Consolidated Financial Statements of Regeneron Pharmaceuticals, Inc. and its subsidiaries ("Regeneron," "Company," "we," "us," and "our") have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and disclosures necessary for a presentation of the Company's financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, these financial statements reflect all normal recurring adjustments and accruals necessary for a fair statement of the Company's condensed consolidated financial statements for such periods. The results of operations for any interim period are not necessarily indicative of the results for the full year. The December 31, 2023 Condensed Consolidated Balance Sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America. 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.
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.
7
Table of Contents
2. Product Sales
Net product sales consist of the following:
Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2024 2023 2024 2023
EYLEA HD ®
U.S. $ 392.3 $ 42.7 $ 896.5 $ 42.7
EYLEA ®
U.S. 1,144.6 1,448.2 3,576.7 4,382.1
Total EYLEA HD and EYLEA U.S. 1,536.9 1,490.9 4,473.2 4,424.8
Libtayo ®
U.S. 194.5 144.1 536.1 384.0
Libtayo
Rest of world
94.1 88.3 313.8 235.3
Total Libtayo
Global
288.6 232.4 849.9 619.3
Praluent ®
U.S. 52.9 40.4 179.0 121.1
Evkeeza ®
U.S. 32.4 19.1 87.6 53.3
Inmazeb ®
Global
35.6 3.3 36.6 7.7
$ 1,946.4 $ 1,786.1 $ 5,626.3 $ 5,226.2
As of September 30, 2024 and December 31, 2023, the Company had $ 4.142 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 each accounted for more than 10% of total gross product revenue for the three and nine months ended September 30, 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,
2024 2023 2024 2023
Besse Medical, a subsidiary of Cencora, Inc. 51 % 53 % 51 % 52 %
McKesson Corporation 24 % 24 % 24 % 25 %
3. Collaboration, License, and Other Agreements
a. Sanofi
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 September 30, 2024, the Company's contingent reimbursement obligation to Sanofi under the collaboration was approximately $ 1.810 billion.
Sanofi leads commercialization activities for products under the collaboration, subject to the Company's right to co-commercialize such products. 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 exceeding $ 3.0 billion on a rolling twelve-month basis.
8
Table of Contents
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 2024 2023
Regeneron's share of profits
Collaboration revenue $ 1,088.3 $ 863.0 $ 2,880.6 $ 2,250.6
Sales-based milestones earned
Collaboration revenue
$ — $ 50.0 $ — $ 50.0
Reimbursement for manufacturing of commercial supplies Collaboration revenue $ 175.1 $ 151.5 $ 438.2 $ 506.0
Regeneron's obligation for its share of Sanofi R&D expenses, net of reimbursement of R&D expenses (R&D expense)
$ ( 7.8 ) $ ( 25.8 ) $ ( 35.5 ) $ ( 66.7 )
Reimbursement of commercialization-related expenses Reduction of SG&A expense $ 169.0 $ 135.5 $ 459.3 $ 384.0
The following table summarizes contract balances in connection with the Company's Sanofi collaboration:
September 30, December 31,
(In millions) 2024
2023
Accounts receivable, net $ 1,270.5 $ 1,029.1
Deferred revenue
$ 621.4 $ 427.7
b. Bayer
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 from such sales. Within the United States, the Company is responsible for commercialization and retains 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 2024 2023
Regeneron's share of profits
Collaboration revenue $ 367.6 $ 349.9 $ 1,054.5 $ 1,031.0
Reimbursement for manufacturing of ex-U.S. commercial supplies Collaboration revenue $ 23.2 $ 27.2 $ 67.4 $ 79.7
Regeneron's obligation for its share of Bayer R&D expenses, net of reimbursement of R&D expenses (R&D expense)
$ ( 11.8 ) $ ( 9.7 ) $ ( 35.2 ) $ ( 35.1 )
The following table summarizes contract balances in connection with the Company's Bayer collaboration:
September 30, December 31,
(In millions) 2024
2023
Accounts receivable, net $ 377.2 $ 381.7
Deferred revenue
$ 195.3 $ 138.2
9
Table of Contents
c. Roche
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 Company has the right to distribute the product in the United States while Roche has the right to distribute the product outside the United States. The parties share gross profits from worldwide sales.
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) 2024 2023 2024
2023
Global gross profits earned in connection with sales of Ronapreve
Collaboration revenue $ 0.5 $ — $ 1.4 $ 222.2
Other
Collaboration revenue $ — $ ( 5.7 ) $ — $ ( 9.5 )
Contract balances in the Company's Balance Sheets in connection with the Roche collaboration were not material as of September 30, 2024 and December 31, 2023.
d. Other
In addition to the collaboration and license agreements discussed above, the Company has various other collaboration and license 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.
During the three and nine months ended September 30, 2024, the Company recorded to Acquired in-process research and development expense a $ 45.0 million development milestone in connection with the Company's collaboration agreement with Sonoma Biotherapeutics, Inc.
During the three and nine months ended September 30, 2023, the Company recorded to Acquired in-process research and development expense a $ 100.0 million development milestone in connection with the Company's collaboration agreement with Alnylam Pharmaceuticals, Inc. Acquired in-process research and development expense for the nine months ended September 30, 2023 also included a $ 45.0 million u p-front payment in connection with the Company's collaboration agreement with Sonoma.
10
Table of Contents
4. Net Income Per Share
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. Diluted net income per share includes the potential dilutive effect of other securities as if such securities were converted or exercised during the period, when the effect is dilutive. The calculations of basic and diluted net income per share are as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions, except per share data) 2024 2023 2024 2023
Net income - basic and diluted $ 1,340.6 $ 1,007.8 $ 3,494.9 $ 2,794.0
Weighted average shares - basic 108.1 106.3 108.0 106.8
Effect of dilutive securities:
Stock options 5.3 4.8 5.2 4.9
Restricted stock awards and restricted stock units 2.8 2.3 2.4 2.0
Weighted average shares - diluted 116.2 113.4 115.6 113.7
Net income per share - basic $ 12.40 $ 9.48 $ 32.36 $ 26.16
Net income per share - diluted $ 11.54 $ 8.89 $ 30.23 $ 24.57
Shares which have been excluded from diluted per share amounts because their effect would have been antidilutive include the following:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(Shares in millions) 2024 2023 2024 2023
Stock options 0.1 1.7 1.5 1.7
11
Table of Contents
5. Marketable Securities
Marketable securities as of September 30, 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, 2024
Cost Basis Gains Losses Value
Corporate bonds $ 7,708.2 $ 83.5 $ ( 24.4 ) $ 7,767.3
U.S. government and government agency obligations 5,985.8 14.1 ( 1.3 ) 5,998.6
Sovereign bonds 66.7 0.4 ( 0.2 ) 66.9
Commercial paper 556.6 1.0 — 557.6
Certificates of deposit 402.1 1.0 — 403.1
Asset-backed securities 173.2 0.8 ( 0.1 ) 173.9
$ 14,892.6 $ 100.8 $ ( 26.0 ) $ 14,967.4
As of December 31, 2023
Corporate bonds $ 6,492.5 $ 10.4 $ ( 104.9 ) $ 6,398.0
U.S. government and government agency obligations 4,839.6 2.4 ( 8.6 ) 4,833.4
Sovereign bonds 58.1 — ( 0.9 ) 57.2
Commercial paper 636.8 0.2 ( 0.2 ) 636.8
Certificates of deposit 520.8 0.6 — 521.4
Asset-backed securities 88.2 0.1 ( 1.2 ) 87.1
$ 12,636.0 $ 13.7 $ ( 115.8 ) $ 12,533.9
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, 2024 mature at various dates through October 2029. The fair values of available-for-sale debt securities by contractual maturity consist of the following:
September 30, December 31,
(In millions) 2024
2023
Maturities within one year $ 7,784.7 $ 8,114.8
Maturities after one year through five years 7,181.9 4,414.5
Maturities after five years 0.8 4.6
$ 14,967.4 $ 12,533.9
12
Table of Contents
The following table shows the fair value and gross unrealized losses by category and disaggregated by the length of time that the Company's available-for-sale debt securities have been in a continuous unrealized loss position.
Less than 12 Months 12 Months or Greater Total
(In millions)
As of September 30, 2024
Fair Value Unrealized Losses
Fair Value Unrealized Losses
Fair Value Unrealized Losses
Corporate bonds $ 6,351.7 $ ( 0.7 ) $ 1,415.6 $ ( 23.7 ) $ 7,767.3 $ ( 24.4 )
U.S. government and government agency obligations 5,799.9 ( 0.1 ) 198.7 ( 1.2 ) 5,998.6 ( 1.3 )
Sovereign bonds 46.0 — 20.9 ( 0.2 ) 66.9 ( 0.2 )
Asset-backed securities 141.6 — 32.3 ( 0.1 ) 173.9 ( 0.1 )
$ 12,339.2 $ ( 0.8 ) $ 1,667.5 $ ( 25.2 ) $ 14,006.7 $ ( 26.0 )
As of December 31, 2023
Corporate bonds $ 2,363.3 $ ( 2.4 ) $ 4,034.7 $ ( 102.5 ) $ 6,398.0 $ ( 104.9 )
U.S. government and government agency obligations 4,780.6 ( 6.0 ) 52.7 ( 2.6 ) 4,833.3 ( 8.6 )
Sovereign bonds 12.4 ( 0.1 ) 44.8 ( 0.8 ) 57.2 ( 0.9 )
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 were primarily driven by changes 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 three and nine months ended September 30, 2024 and 2023, amounts reclassified from Accumulated other comprehensive income (loss) into Other income (expense), net were related to realized gains/losses on sales of available-for-sale debt securities. For the three and nine months ended September 30, 2024 and 2023, realized gains/losses on sales of marketable securities were not material.
6. Fair Value Measurements
The table below summarizes the Company's assets and liabilities which are measured at fair value on a recurring basis. The following fair value hierarchy is used to classify assets and liabilities, based on inputs to valuation techniques utilized to measure fair value:
• Level 1 - Quoted prices in active markets for identical assets or liabilities
• 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
13
Table of Contents
(In millions) Fair Value Measurements at Reporting Date
As of September 30, 2024
Fair Value Level 1 Level 2 Level 3
Assets:
Cash equivalents $ 934.8 $ 517.3 $ 417.5 $ —
Available-for-sale debt securities:
Corporate bonds 7,767.3 — 7,767.3 —
U.S. government and government agency obligations 5,998.6 — 5,998.6 —
Sovereign bonds 66.9 — 66.9 —
Commercial paper 557.6 — 557.6 —
Certificates of deposit 403.1 — 403.1 —
Asset-backed securities 173.9 — 173.9 —
Equity securities (unrestricted) 1,232.1 1,232.1 — —
Equity securities (restricted) (a)
76.1 76.1 — —
Total assets
$ 17,210.4 $ 1,825.5 $ 15,384.9 $ —
Liabilities:
Contingent consideration
$ 36.7 $ — $ — $ 36.7
As of December 31, 2023
Assets:
Cash equivalents $ 928.1 $ 6.4 $ 921.7 $ —
Available-for-sale debt securities:
Corporate bonds 6,398.0 — 6,398.0 —
U.S. government and government agency obligations 4,833.4 — 4,833.4 —
Sovereign bonds 57.2 — 57.2 —
Commercial paper 636.8 — 636.8 —
Certificates of deposit 521.4 — 521.4 —
Asset-backed securities 87.1 — 87.1 —
Equity securities (unrestricted) 864.5 864.5 — —
Equity securities (restricted) 112.9 112.9 — —
Total assets
$ 14,439.4 $ 983.8 $ 13,455.6 $ —
Liabilities:
Contingent consideration
$ 43.7 $ — $ — $ 43.7
(a) Includes equity securities which are subject to transfer restrictions that expire in April 2026
In addition to the investments summarized in the table above, as of September 30, 2024 and December 31, 2023, the Company had $ 159.8 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. Also recorded within Other noncurrent assets as of September 30, 2024 were equity investments of $ 47.0 million which are measured at fair value based on Level 3 inputs; no such investments were held by the Company as of December 31, 2023.
During the three and nine months ended September 30, 2024, the Company recorded $ 134.5 million and $ 330.8 million of net unrealized gains, respectively, on equity securities in Other income (expense), net; and 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.
14
Table of Contents
The fair value of the Company's long-term debt, which was determined based on Level 2 inputs, was estimated to be $ 1.577 billion and $ 1.528 billion as of September 30, 2024 and December 31, 2023, respectively.
7. Inventories
Inventories consist of the following:
September 30,
December 31,
(In millions) 2024
2023
Raw materials $ 856.6 $ 789.3
Work-in-process 1,230.1 1,121.8
Finished goods 164.6 147.3
Deferred costs 766.7 522.1
$ 3,018.0 $ 2,580.5
Deferred costs represent the costs of product manufactured and shipped to the Company's collaborators for which recognition of revenue has been deferred.
8. Income Taxes
The Company is subject to U.S. federal, state, and foreign income taxes. The Company's effective tax rate was 10.2 % and 9.3 % for the three months ended September 30, 2024 and 2023, respectively, and 8.6 % and 8.4 % for the nine months ended September 30, 2024 and 2023, respectively. The Company's effective tax rate for the three and nine months ended September 30, 2024 was positively impacted, compared to the U.S. federal statutory rate, primarily by income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate and stock-based compensation. The Company's effective tax rate for the nine months ended September 30, 2024 was negatively impacted by the remeasurement of existing uncertain tax positions.
The Company's effective tax rate for the three and nine months ended September 30, 2023 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.
9. Stockholders' Equity
In January 2023, 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 September 30, 2024, the Company had repurchased the entire $ 3.0 billion of its Common Stock it was authorized to repurchase under the program.
In April 2024, the Company's board of directors authorized a share repurchase program to repurchase up to an additional $ 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 Securities Exchange Act of 1934, as amended (the "Exchange Act")), privately negotiated transactions, accelerated share repurchases, block trades, and other transactions in compliance with Rule 10b-18 of the Exchange Act.
The table below summarizes the shares of the Company's Common Stock that the Company repurchased and the cost of such shares, which were recorded as Treasury Stock.
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions) 2024 2023
2024 2023
Number of shares 0.6 0.7 1.5 2.6
Total cost of shares $ 738.3 $ 507.1 $ 1,637.7 $ 1,923.8
As of September 30, 2024, $ 2.893 billion remained available for share repurchases under the April 2024 program.
15
Table of Contents
10. Statement of Cash Flows
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:
September 30,
(In millions) 2024
2023
Cash and cash equivalents $ 2,011.8 $ 2,152.3
Restricted cash included in Other noncurrent assets
— 7.9
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statements of Cash Flows
$ 2,011.8 $ 2,160.2
Restricted cash consisted of amounts held by financial institutions pursuant to contractual arrangements.
Supplemental disclosure of non-cash investing and financing activities
September 30, December 31, September 30, December 31,
(In millions) 2024
2023
2023
2022
Accrued capital expenditures $ 94.0 $ 75.4 $ 98.9 $ 70.8
Accrued contingent consideration in connection with acquisitions
$ 88.0 $ 71.6 $ 106.5 $ 135.5
11. 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 is unable to prevail in one or more of such proceedings, its consolidated financial position, results of operations, and future cash flows may be materially adversely 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 September 30, 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
United States
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 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; and on March 21, 2023, the court denied Amgen's motion to dismiss. On August 28, 2023, the Company filed an amended complaint in this matter; and, as part of its response, on September 20, 2023, Amgen filed a counterclaim alleging that the Company engaged in unfair business practices in violation of state law. On May 22, 2024, Amgen filed a motion for summary judgment. An oral hearing on Amgen's motion for summary judgment has been scheduled for November 20, 2024.
16
Table of Contents
Europe
On June 1, 2023, Sanofi filed an action in the Munich Central Division of the Unified Patent Court (the "UPC") seeking revocation of Amgen's European Patent No. 3,666,797 (the "'797 Patent"). 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 on the revocation action before the Munich Central Division of the UPC was held on June 4, 2024. On July 16, 2024, the Munich Central Division of the UPC issued a decision revoking the '797 Patent in its entirety. On September 16, 2024, Amgen appealed the decision of the Munich Central Division of the UPC to the Court of Appeal of the UPC.
Also 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 UPC alleging infringement of the '797 Patent. The lawsuit seeks, among other things, a permanent injunction in several countries in Europe and monetary damages. On July 29, 2024, the Munich Local Division of the UPC ordered a stay of the infringement lawsuit in light of the decision of the Munich Central Division of the UPC to revoke the '797 Patent in its entirety (discussed above).
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.
17
Table of Contents
United States
Post-Grant Proceedings Before USPTO
Company Patent(s)
Challenger(s)
Type of Challenge
Date of Challenge
Latest Events/Current Status
U.S. Patent Nos. 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"). On July 9, 2024, the Company's appeal was voluntarily dismissed.
U.S. Patent Nos. 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. On August 20, 2024, the Company's appeal was voluntarily dismissed.
Samsung Bioepis, joined by Biocon Biologics Inc. ('601 Patent)
IPR petitions seeking declarations of invalidity
January 6, 2023 ('681 Patent)
March 26, 2023 ('601 Patent)
On July 19, 2023 and October 20, 2023, the USPTO instituted IPR proceedings concerning the '681 Patent and the '601 Patent, respectively.
On June 14, 2024, the USPTO issued a final written decision finding that the challenged claims of the '681 Patent are unpatentable and, therefore, invalid.
U.S. Patent No. 11,253,572 (the "'572 Patent") Samsung Bioepis
IPR petition seeking declaration of invalidity
April 27, 2023
On November 17, 2023, the USPTO instituted IPR proceedings concerning the '572 Patent. On July 11, 2024, the Company filed a Notice of Disclaimer with the USPTO, disclaiming all claims of the '572 Patent.
U.S. Patent Litigation
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 U.S. Food and Drug Administration ("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. Patent No. 11,104,715. 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. Patent No. 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 Biocon and (ii) the asserted claims of the '601 and '572 Patents were infringed by Mylan and Biocon but were invalid as obvious. On June 11, 2024, the court granted the Company's motion for a permanent injunction, enjoining Mylan and Biocon from selling in the United States their aflibercept 2 mg biosimilar until the expiration of the '865 Patent. On June 21, 2024, Mylan and Biocon filed a notice of appeal of the court's December 27, 2023 and June 11, 2024 decisions to the Federal Circuit.
18
Table of Contents
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. On June 14, June 21, and June 28, 2024, respectively, the court granted the Company's motions for preliminary injunctions against Samsung Bioepis, Formycon, and Celltrion. On June 14, June 25, and July 8, 2024, respectively, Samsung Bioepis, Formycon, and Celltrion filed notices of appeal of the court's preliminary injunction decisions to the Federal Circuit. An oral hearing concerning the respective notices of appeal of Samsung Bioepis and Formycon has been scheduled for December 5, 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 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. On June 7, 2024, the Company filed a motion for a preliminary injunction against Amgen. An oral hearing before the United States District Court for the Northern District of West Virginia was held on August 13, 2024. On September 23, 2024, the court denied the Company's motion for a preliminary injunction, and the Company filed (i) a notice of appeal of such decision to the Federal Circuit, (ii) a motion for an immediate administrative stay, and (iii) a motion for a temporary injunction preventing Amgen from launching its aflibercept 2 mg biosimilar during the pendency of such appeal. On September 25, 2024, the Federal Circuit issued an administrative stay pending its review of the Company's temporary injunction motion. On October 22, 2024, the Federal Circuit denied the Company's temporary injunction motion, lifted the administrative stay, and indicated that an expedited oral hearing on the Company's appeal to the Federal Circuit will be held in January 2025.
On August 26, 2024, the Company filed a patent infringement lawsuit against Sandoz Inc. in the United States District Court for the District of New Jersey alleging that Sandoz's filing for FDA approval of an aflibercept 2 mg biosimilar infringes certain Company patents. On September 12, 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 paragraphs.
19
Table of Contents
Europe
Post-Grant Proceedings
Authority/Court
Company Patent(s)
Challenger(s)
Type of Challenge
Date of Challenge
Latest Events/Current Status
EPO
European Patent No. 2,944,306 (the "'306 Patent") Anonymous parties Opposition proceedings October 26 and October 27, 2021 Oral hearing scheduled for November 2024
EPO
European Patent No. 3,716,992 (the "'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
German designation of European Patent No. 2,364,691 (the "'691 Patent") Samsung Bioepis NL B.V. 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 has been scheduled to begin in June 2025
Amgen
Invalidation proceedings and declaration of non-infringement by challenger's aflibercept 2 mg biosimilar
September 11, 2024
Trial has been scheduled to begin in June 2025
Samsung Bioepis UK Limited
Invalidation proceedings and declaration of non-infringement by challenger's aflibercept 2 mg biosimilar
October 2, 2024
Trial has been scheduled to begin in June 2025
High Court of Justice of England and Wales United Kingdom designation of the '992 Patent
Amgen Invalidation proceedings May 13, 2024 Stayed pending final resolution of the '992 Patent EPO opposition proceedings listed above
District Court of The Hague, the Netherlands Dutch designation of the '691 Patent and '306 Patent Samsung Bioepis NL B.V. Invalidation proceedings July 17, 2024
Trial for both patents has been scheduled for July 18, 2025
High Court of Justice of England and Wales
United Kingdom designation of the '992 Patent
Samsung Bioepis UK Limited
Invalidation proceedings
July 24, 2024
Stayed pending final resolution of the '992 Patent EPO opposition proceedings listed above
Judicial Court of Paris
French designation of the '691 Patent and '306 Patent Formycon AG Invalidation proceedings and declaration of non-infringement by challenger's aflibercept 2 mg biosimilar August 19, 2024 Trial to be scheduled
20
Table of Contents
Canada
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 Company's Canadian Patent Nos. 2,654,510 (the "'510 Patent") and 3,007,276 (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 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 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 2 mg biosimilar would directly or indirectly infringe one or more claims of the Company's Canadian Patent Nos. 3,129,193 (the "'193 Patent"), 2,965,495 (the "'495 Patent"), and 2,906,768 (the "'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. On May 7, 2024 and June 28, 2024, respectively, Amgen filed a summary trial motion with respect to the '510 Patent and a motion to delist the '276 Patent from the Canada Patent Register. A hearing on the motion to delist the '276 Patent has been scheduled for November 2024. A trial for the lawsuits concerning the '510 Patent and the '276 Patent has been scheduled for May–June 2025; and a trial for the lawsuits concerning the '315 Patent and the '193 Patent has been scheduled for August–September 2025.
Proceedings against Samsung
On August 1, 2024, the Company, Bayer Inc., and Bayer Healthcare LLC filed patent infringement lawsuits against Samsung Bioepis Co., 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, the '315 Patent, and Canadian Patent No. 3,137,326 (the "'326 Patent"). On October 28, 2024, the Company, Bayer Inc., Bayer Healthcare LLC, and Samsung Bioepis Co., Ltd. entered into a settlement agreement concerning these patent infringement lawsuits, pursuant to which each such lawsuit will be dismissed and Samsung will generally be precluded from launching its aflibercept 2 mg biosimilar product in Canada until July 1, 2025.
21
Table of Contents
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 (the "'811 Patent"), respectively, seeking revocation of each such patent in its entirety.
Set forth below is a summary of patent infringement lawsuits filed by the Company and, as applicable, Bayer Consumer Care AG before the Seoul Central District Court based on allegations that the making, constructing, using, or selling of an aflibercept 2 mg biosimilar by the relevant defendant(s) would infringe one or more claims of the Company's patents listed below.
Company Patent(s)
Defendant(s)
Relief Sought
Date of Action
Korean Patent No. 659477 (the "'477 Patent")
Samsung Bioepis Co., Ltd. and its parent company Samsung Biologics Co., Ltd.
Damages
January 16, 2023
Sam Chun Dang Pharm. Co., Ltd. and OPTUS Pharmaceutical Co., Ltd
Damages
January 8, 2024
'477 Patent, '811 Patent, and Korean Patent No. 2519234 (the "'234 Patent")
Celltrion Inc.
Damages and injunctive relief
January 10, 2024
'811 Patent and '234 Patent
Sam Chun Dang Pharm. Co., Ltd. and OPTUS Pharmaceutical Co., Ltd
Damages and injunctive relief
May 8, 2024
Samsung Bioepis Co., Ltd., its parent company Samsung Biologics Co., Ltd., and Samil Pharmaceuticals Co., Ltd
Injunctive relief
May 14, 2024
'811 Patent
Samsung Bioepis Co., Ltd., its parent company Samsung Biologics Co., Ltd., and Samil Pharmaceuticals Co., Ltd.
Injunctive relief
July 30, 2024
Celltrion Inc. and Kukje Pharmaceuticals, Inc.
Injunctive relief
July 30, 2024
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 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 Novartis's U.S. Patent No. 9,220,631 (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 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. An oral hearing was held on August 6, 2024. On September 23, 2024, the Federal Circuit affirmed the PTAB's decision invalidating all claims of the '631 Patent.
On July 17, 2020, the Company filed an antitrust lawsuit against Novartis and Vetter Pharma International Gmbh ("Vetter") in the United States District Court for the Southern District of New York seeking a declaration that the '631 Patent is unenforceable and a judgment that the defendants' conduct violates Sections 1 and 2 of the Sherman Antitrust Act of 1890, as amended (the "Sherman Antitrust Act"). 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 lawsuit; 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
22
Table of Contents
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. As a result, this lawsuit was transferred to the same judge that had been assigned to the patent infringement lawsuit discussed above. 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 (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)
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. On September 18, 2023, the parties entered into a stipulation that narrowed the case to (i) whether any safe harbor defense under federal law applies to Regeneron's use of the invention covered, based on the court's claim construction, by the '221 Patent; (ii) damages for any use by Regeneron found to not be covered by such safe harbor defense; and (iii) whether any use referred to in clause (ii) above was willful. On October 4, 2024, the court granted Allele's motion for summary judgment and found that the safe harbor defense under federal law does not apply to Regeneron's use of the invention covered, based on the court's claim construction, by the '221 Patent. A trial date has not yet been scheduled.
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 (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. 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. An oral hearing on the parties' respective motions for summary judgment was held on July 21, 2023. On September 27, 2023, the court (i) denied in part and granted in part the Company's motion for summary judgment and (ii) denied in its entirety the motion for partial summary judgment filed by the U.S. Attorney's Office for the District of Massachusetts. 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. An oral hearing concerning the appeal to the U.S. Court of Appeals for the First Circuit was held on July 22, 2024.
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. On July 25, 2023, the court granted in part and denied in part the Company's motion to dismiss. On September 1, 2023, the Company filed a second motion to dismiss the amended complaint or, in the alternative, a motion for judgment on the pleadings. On July 31, 2024 and August 15, 2024, respectively, the District Court granted the Company's second motion to dismiss the amended
23
Table of Contents
complaint with respect to the remaining causes of action under federal law and declined to exercise supplemental jurisdiction over the remaining causes of action under state law. On August 26, 2024, the qui tam plaintiffs filed a notice of appeal.
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 the Centers for Medicare & Medicaid Services. The CID covers the period from January 2011 through June 2021. 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 (the "March 2024 Civil Complaint") 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. On June 25, 2024, the States of Colorado, Georgia, Michigan, North Carolina, Texas, and Washington filed a civil complaint in partial intervention (the "June 2024 Civil Complaint") in the U.S. District Court for the District of Massachusetts asserting causes of action under various state laws. On July 18, 2024, the Company filed a motion to dismiss the March 2024 Civil Complaint and the June 2024 Civil Complaint. An oral hearing has been scheduled for December 16, 2024.
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
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. (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. (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 ("RICO") 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 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 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.
On June 24, 2024, a group of plaintiffs purporting to be assignees of claims by various Medicare Advantage plans and related entities filed a putative class action complaint in the U.S. District Court for the District of Columbia on behalf of Medicare Advantage plans and other payors. The lawsuit relates to the conduct alleged in the June 2020 Civil Complaint, March 2024 Civil Complaint, and June 2024 Civil Complaint discussed under "Department of Justice Matters" above. The lawsuit alleges causes of action under state law and RICO and seeks monetary damages and equitable relief. On October 22, 2024, the Company filed a motion to transfer the proceedings to the U.S. District Court for the District of Massachusetts or, in the alternative, to stay the proceedings or dismiss the proceedings.
24
Table of Contents
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 June 2020 Civil Complaint 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 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. The Company can therefore renew the motion to dismiss upon conclusion of the stay.
25
Table of Contents
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.