Sign in

You're signed outSign in or to get full access.

RP

REGENERON PHARMACEUTICALS, INC. (REGN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was a strong beat: revenue $3,675.6M (+4% y/y) and non-GAAP diluted EPS $12.89 (+12% y/y), both materially above S&P Global consensus; strength came from EYLEA HD U.S. growth, Dupixent collaboration profits, and Libtayo momentum .
  • Dupixent global net sales (recorded by Sanofi) reached $4.3446B (+22% y/y), and EYLEA HD U.S. net sales hit a record $393M (+29% y/y); EYLEA U.S. declined to $754M (-39% y/y) amid competition, affordability pressure, and patient conversion to HD .
  • Guidance was recalibrated: SG&A lowered; R&D ranges nudged up; gross margin narrowed; GAAP ETR raised, signaling mix/tax dynamics; capex slightly increased mid-point; management does not expect the proposed 15% U.S.-EU tariff to be material in 2025 .
  • Near-term watch items: potential delay of EYLEA HD pre-filled syringe/monthly dosing/RVO approvals due to Catalent Indiana site inspection; CRL for odronextamab; accelerated approval of Lynozyfic (linvoseltamab) in R/R multiple myeloma; Libtayo adjuvant CSCC sBLA under priority review .
  • Capital returns remain robust: $1.07B Q2 buybacks, and a $0.88 dividend declared for payment on Sept 3, 2025; $2.814B buyback capacity remained at quarter-end .

What Went Well and What Went Wrong

What Went Well

  • EYLEA HD U.S. demand drove record $393M (+29% y/y) with physicians appreciating efficacy, safety, and durability; unit demand rose 16% q/q, making EYLEA HD the fastest growing innovative brand in the category .
  • Dupixent continued to scale: global net sales $4.3446B (+22% y/y), supported by new indications (BP and CSU in U.S.), with U.S. net sales $3.205B (+23% y/y), and leadership across indications and geographies .
  • Libtayo momentum: global net sales $377M (+27% y/y), U.S. $248M (+36% y/y), with adjuvant CSCC priority review and strong KOL interest; shipment timing added ~$20M this quarter .

What Went Wrong

  • EYLEA U.S. erosion: net sales fell to $754M (-39% y/y), with branded share pressured by Avastin (affordability), ongoing patient conversion to HD, and lower net selling price; branded anti-VEGF volume fell ~1.2% y/y .
  • Regulatory friction: anticipated delays for EYLEA HD PFS/monthly dosing/RVO applications due to Catalent Indiana inspection; odronextamab BLA received an FDA CRL also tied to the inspection .
  • Gross margin compression: GAAP gross margin on net product sales decreased to 83% (from 87% y/y) on manufacturing investments and higher inventory write-offs/reserves .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Revenues ($USD Millions)3,547.1 3,028.7 3,675.6
GAAP Diluted EPS ($)12.41 7.27 12.81
Non-GAAP Diluted EPS ($)11.56 8.22 12.89
GAAP Gross Margin on Net Product Sales (%)87% 81% 83%
Non-GAAP Gross Margin on Net Product Sales (%)89% 85% 86%

Segment breakdown (net product sales and select collaboration drivers):

Segment Metric ($USD Millions)Q2 2024Q1 2025Q2 2025
EYLEA HD – U.S.304 307 393
EYLEA – U.S.1,231 736 754
Total EYLEA HD + EYLEA – U.S.1,535 1,043 1,147
Libtayo – Global297 285 377
Dupixent – Global Net Sales (Sanofi)3,556.4 3,665.6 4,344.6
Sanofi Collaboration Revenue1,145.6 1,183.2 1,443.6
Bayer Collaboration Revenue375.1 343.9 415.0

KPIs and capital:

KPIQ2 2024Q1 2025Q2 2025
GAAP ETR (%)12.0% 10.6% 8.4% (incl. ~3.9% IRS audit benefit)
Non-GAAP ETR (%)10.8% 11.6% 8.3%
Free Cash Flow (YTD, $USD Millions)—815.8 (Q1) 1,741.2 (H1)
Cash & Mkt Securities ($USD Millions)—17,625.7 (Mar 31) 17,527.8 (Jun 30)
Share Repurchases ($USD Millions)—1,052 (Q1) 1,070 (Q2)
Dividend Declared ($/share)—0.88 (payable Jun 6) 0.88 (payable Sept 3)
Wtd Avg Diluted Shares (mm)115.4 111.2 108.6

Comparison vs estimates (S&P Global):

MetricQ2 2024Q1 2025Q2 2025
Revenue Estimate ($USD Millions)3,387.2*3,239.2*3,278.3*
Revenue Actual ($USD Millions)3,547.1 3,028.7 3,675.6
Primary EPS Estimate ($)10.62*8.48*8.44*
Non-GAAP Diluted EPS Actual ($)11.56 8.22 12.89

Values with asterisk (*) retrieved from S&P Global.

Key beats/misses vs estimates:

  • Q2 2025: Revenue beat ($397M absolute); EPS beat ($4.45 absolute). Drivers: higher Sanofi collaboration profits on Dupixent growth (+30% y/y share of profits), EYLEA HD U.S. growth, and Libtayo strength; ETR lower on IRS audit settlement .
  • Q1 2025: Revenue and EPS misses; impacted by lower wholesaler inventory and EYLEA U.S. demand decline; gross margin pressure from inventory write-offs .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP R&DFY 2025$5.560–$5.795B $5.660–$5.790B Raised lower bound
Non-GAAP R&DFY 2025$5.000–$5.200B $5.100–$5.200B Raised lower bound
GAAP SG&AFY 2025$2.910–$3.095B $2.810–$2.940B Lowered
Non-GAAP SG&AFY 2025$2.550–$2.700B $2.450–$2.550B Lowered
GAAP Gross Margin on Net Product SalesFY 202583%–84% ~83% Narrowed lower end
Non-GAAP Gross Margin on Net Product SalesFY 202586%–87% ~86% Narrowed lower end
COCMFY 2025$1.000–$1.150B $1.000–$1.050B Narrowed lower
Capital ExpendituresFY 2025$850–$950M $880–$950M Raised lower bound
GAAP ETRFY 20259%–11% 11%–13% Raised
Non-GAAP ETRFY 202511%–13% Unchanged Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
EYLEA HD regulatory pathPFS submission planned; approvals mid-2025; QUASAR positive in RVO sBLA priority reviews for RVO and monthly dosing; PFS CRL; extended interval sBLA rejected Catalent Indiana inspection likely delays PFS/monthly/RVO; Novo’s remedial plan; alternate fillers progressing Near-term delay risk, resolution expected; medium-term still constructive
Product performance (EYLEA/HD)U.S. net sales up 2%; EYLEA HD launched (2024) EYLEA HD +54% y/y; EYLEA -39% y/y; wholesaler inventory swing EYLEA HD +29% y/y; EYLEA -39% y/y; branded share pressures (Avastin affordability) HD adoption offsetting legacy erosion; affordability headwinds persist
Dupixent expansionContinued multi-indication growth CSU approval; COPD Japan; BP sBLA accepted BP U.S. approval; CSU U.S. approval; >600k new eligible patients; addressable U.S. >4M Strong multi-indication scaling
Oncology (Libtayo)Adjuvant CSCC positive DFS; sBLA planned sBLA submissions (U.S./EU) sBLA priority review (Oct PDUFA); U.S. #2 IO in new lung patients; shipment timing ~$20M Expanding into earlier lines; launch prep underway
Hematology (linvoseltamab)BLA resubmission (manufacturing resolution) EU conditional approval (R/R MM ≥3 prior lines) FDA accelerated approval (R/R MM ≥4 prior lines); NCCN guidelines added; response-adapted dosing New U.S. launch; broader registrational program
Tariffs/macro—Lowered gross margin guidance; no explicit tariff talk Management does not expect 15% U.S.-EU tariff to be material in 2025; monitoring 2026+ Low near-term P&L impact expected
Obesity/lean mass preservationTrevogrumab + semaglutide program ongoing COURAGE interim updates planned ~35% of semaglutide weight loss is lean mass; combos reduce lean loss 50–80% and increase fat loss at 26 weeks Validating combo strategy; late-breaking data upcoming
Legal/regulatoryMultiple filings; IP and litigation noted Biocon settlement, delaying biosimilar Antitrust jury verdict vs Amgen bundling (Praluent); odronextamab CRL (inspection impact) Mixed—legal win; regulatory delay

Management Commentary

  • “Regeneron had a strong quarter, marked by significant growth in U.S. sales of EYLEA HD and global sales of Dupixent and Libtayo along with multiple regulatory approvals… We are confident in the near- and long-term potential of our diverse pipeline” — Leonard S. Schleifer, CEO .
  • “Second quarter 2025 total revenues… reflecting higher Sanofi collaboration revenue primarily driven by DUPIXENT, higher U.S. net sales of EYLEA HD, and growth in global net sales of LIBTAYO… diluted net income per share grew 12%” — Chris Fenimore, CFO .
  • On Catalent/Novo inspection: “Not structural changes… mainly process/procedural… anticipate an expeditious resolution” — Management .
  • On tariffs: “We do not currently expect a 15% tariff… to have a material impact on our financial results in 2025” — CFO .

Q&A Highlights

  • Policy/tariffs (MFN, CMMI): Management lacks unique insight but agrees Europe must pay fair share; does not expect 2025 tariff impact; evaluating 2026+ .
  • EYLEA HD approvals timing: Issues are procedural at filler; Novo preparing robust response; expect expeditious resolution .
  • Branded share erosion vs Avastin: Branded anti-VEGF volume -1.2% y/y; affordability driving Avastin use; Regeneron branded share ~60% across EYLEA/EYLEA HD .
  • Pipeline valuation vs Street skepticism: Management points to best-in-class data for linvoseltamab and breadth of programs (myeloma, complement, thrombosis); multiple Phase 3 starts ahead .
  • Libtayo adjuvant CSCC: Priority review; potential first PD-1 in setting; shipment timing added ~$20M in Q2, expected to reverse in Q3 .

Estimates Context

  • Q2 2025 came in well above consensus: revenue $3,675.6M vs $3,278.3M* and non-GAAP EPS $12.89 vs $8.44*; drivers were Dupixent collaboration profit growth (+30% y/y share of profits), EYLEA HD U.S. demand, Libtayo growth, and lower ETR due to IRS audit settlement .
  • Q1 2025 missed: revenue $3,028.7M vs $3,239.2M* and non-GAAP EPS $8.22 vs $8.48*; impacted by wholesaler inventory normalization and EYLEA U.S. demand decline; gross margin affected by inventory write-offs .
  • Q2 2024 was also a beat: revenue $3,547.1M vs $3,387.2M* and non-GAAP EPS $11.56 vs $10.62* .

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Q2 2025 was a high-quality beat; estimate revisions likely move higher near-term given outsized EPS/revenue surprise and durable Dupixent/Libtayo growth .
  • Watch the EYLEA HD label enhancements (PFS/monthly/RVO): procedural delays at the filler likely transient; approval timing remains a near-term stock catalyst .
  • Mix shift continues: EYLEA HD offsets legacy EYLEA erosion; affordability dynamics (Avastin) remain a headwind to branded category volumes .
  • Oncology/hematology pipeline optionality expanding: Lynozyfic accelerated approval adds a new revenue leg; adjuvant CSCC for Libtayo could unlock earlier-line value; multiple registrational trials ahead .
  • Capex/Manufacturing investments ($7B+) and U.S. network build support long-term growth, though gross margin near-term sits at ~83% GAAP/~86% non-GAAP .
  • Tax and tariffs: Q2 GAAP ETR benefitted from audit settlement; management does not see 2025 tariff impact as material, reducing macro risk to estimates .
  • Capital returns remain robust; with continued buybacks and dividends, share count dilution declines, supporting EPS leverage .