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REGENERON PHARMACEUTICALS, INC. (REGN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue rose 10% year over year to $3.79B; non-GAAP diluted EPS was $12.07, up 2% YoY, while GAAP diluted EPS fell to $8.06 due to investment and market items .
  • Libtayo global net sales grew 50% YoY to $367M; EYLEA HD and EYLEA combined U.S. net sales were $1.50B (+2% YoY), with an ~$85M favorable wholesale inventory impact; Dupixent global net sales recorded by Sanofi were $3.70B (+15% YoY) .
  • Regeneron initiated a quarterly dividend at $0.88 per share and expanded buyback capacity by $3B to ~$4.5B, signaling confidence in durable cash flows and broadening the shareholder base .
  • 2025 guidance introduced: non-GAAP gross margin on net product sales 87–88%, R&D $5.0–$5.2B, SG&A $2.55–$2.70B, COCM $1.00–$1.15B, capex $850–$975M, non-GAAP ETR 11–13% .
  • Stock narrative catalysts: expected EYLEA HD label expansions (RVO; dosing flexibility; prefilled syringe), Libtayo adjuvant CSCC filing, and multiple pivotal readouts (COPD IL-33 itepekimab; Factor XI antibodies; melanoma combo), with management emphasizing pipeline breadth and optionality .

What Went Well and What Went Wrong

What Went Well

  • Libtayo achieved blockbuster status with Q4 global net sales of $367M (+50% YoY), underpinned by non-melanoma skin cancers and lung cancer; management expects adjuvant CSCC to be a differentiated opportunity where KEYTRUDA failed: “becoming the first immunotherapy to show a benefit” in high-risk CSCC .
  • EYLEA HD progress and expected label enhancements (RVO, every-4-week dosing, extended intervals to 24 weeks, prefilled syringe) position HD to “become the new standard of care” with “the greatest dosing flexibility” by 2H 2025 .
  • Capital returns stepped up with a new dividend and ~$4.5B repurchase capacity; CFO: “We are confident in the long-term growth of our business… all of which support the initiation of our first quarterly dividend and… additional share repurchase authorization” .

What Went Wrong

  • GAAP EPS declined vs prior year (Q4 2024 $8.06 vs $10.19) on higher R&D, SG&A, and net unrealized losses on equity securities; GAAP other income/(expense) reflected $213M unrealized losses in Q4 .
  • EYLEA U.S. net sales declined 11% YoY to $1.19B amid lower net price and competitive/biosimilar pressure; management also expects EYLEA net sales to be negatively impacted in Q1 2025 as elevated Q4 inventory is absorbed .
  • Non-GAAP R&D rose 19% YoY in Q4 to $1.224B and 16% for FY 2024, reflecting intensified late-stage development (COPD, oncology, hematology) and higher headcount-related costs, modestly pressuring near-term margins despite strategic value .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Total Revenues ($USD Billions)$3.434 $3.721 $3.789
GAAP Diluted EPS ($)$10.19 $11.54 $8.06
Non-GAAP Diluted EPS ($)$11.86 $12.46 $12.07
Income from Operations ($USD Billions)$0.973 $1.180 $0.990
Gross Margin on Net Product Sales (%)~86.0% (calc from $1,851.8 net product sales and $258.9 non-GAAP COGS) ~88.8% (calc from $1,946.4 net product sales and $217.4 non-GAAP COGS) 86% (CFO)

Notes: Calculations in cells are derived from cited net product sales and non-GAAP COGS.

Segment/Product Breakdown (Net Sales)

Product/Revenue Component ($USD Millions)Q4 2023Q3 2024Q4 2024
EYLEA HD – U.S.$123 $392 $305
EYLEA – U.S.$1,338 $1,145 $1,190
Total EYLEA HD + EYLEA – U.S.$1,461 $1,537 $1,495
Libtayo – Global$244 $289 $367
Total Net Product Sales$1,852 $1,946 $2,003
Sanofi Collaboration Revenue$993 $1,263 $1,213
Bayer Collaboration Revenue$377 $391 $377

Key KPIs and Drivers

KPIQ4 2023Q3 2024Q4 2024
Anti-VEGF U.S. category share (EYLEA/EYLEA HD)——~46%
Wholesale inventory impact on total EYLEA/EYLEA HD—+$40M favorable (Q3) +$85M favorable (predominantly EYLEA)
Sanofi share of profits (quarter)$886M $1,088M $1,043M
Bayer ex-U.S. EYLEA/EYLEA 8 mg net sales——$888M; +2% constant currency
Share repurchases—$738M (Q3) $976M (Q4)
Cash & Marketable Securities$16,241M (FY-end 2023) $18,287M (Q3) $17,913M (FY-end 2024)
Free Cash Flow (FY)——$3,664.6M (FY 2024)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP R&D ($B)FY 2025N/A5.560–5.795 New
Non-GAAP R&D ($B)FY 2025N/A5.000–5.200 New
GAAP SG&A ($B)FY 2025N/A2.910–3.095 New
Non-GAAP SG&A ($B)FY 2025N/A2.550–2.700 New
GAAP Gross Margin on Net Product Sales (%)FY 2025N/A84–85 New
Non-GAAP Gross Margin on Net Product Sales (%)FY 2025N/A87–88 New
Cost of Collab. Manufacturing (COCM) ($B)FY 2025N/A1.000–1.150 New
Capital Expenditures ($M)FY 2025N/A850–975 New
GAAP Effective Tax Rate (%)FY 2025N/A9–11 New
Non-GAAP Effective Tax Rate (%)FY 2025N/A11–13 New
Dividend per share ($)QuarterlyN/A$0.88 declared for March 20, 2025 New
Share Repurchase Capacity ($B)Current~$1.5 prior capacity~$4.5 after +$3.0 authorization Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
EYLEA HD label and dosingsBLA with two-year data for wAMD/DME submitted (June) 3-year PHOTON extension showed durability; category leadership Expect RVO sBLA, every-4-week dosing, prefilled syringe; HD targeted as new standard of care Improving profile
EYLEA competitive dynamicsBiosimilar/price pressure noted Lower net selling price; +$40M inventory favorability Competitive pressure persists; +$85M inventory favorability; Q1 2025 absorption likely Worsening for 2mg; HD offset
Libtayo growthPositive oncology progress; linvoseltamab/odronextamab developments +24% YoY; melanoma combo two-year activity +50% YoY; adjuvant CSCC DFS win; U.S. opportunity ~10k patients Strengthening
Dupixent expansionEC approval in COPD; multiple sBLAs advancing FDA approval in U.S. COPD; CSU/BP positive Phase 3 Broad growth; payor coverage for COPD; CSU April PDUFA; BP submission Expanding indications
Factor XI antibodiesPhase 2 initiated —Positive Phase 2; advancing into broad Phase III (two-antibody strategy) Accelerating
Data/technology platformsRGC database; DB-OTO RMAT —Proteomics leadership; Truveta collaboration adds up to 10M de-identified volunteers Expanding capabilities
Legal/IP—EYLEA litigation risks referenced Federal Circuit injunction wins imply fewer biosimilar competitors (pricing dynamic) Favorable near term

Management Commentary

  • CEO lens on durability and breadth: “We have never been more confident in Regeneron's future… focus on our four blockbuster medicines as we progress ~40 investigational candidates” .
  • On EYLEA HD positioning: “With anticipated label enhancements, EYLEA HD will offer the greatest dosing flexibility… positioning it to become the new standard of care” .
  • Capital allocation pivot: “Dividend reflects our continued confidence in the future cash flows… expands the pool of potential shareholders with a dividend mandate” .
  • R&D optionality: Two-pronged Factor XI strategy (higher efficacy vs lowest bleeding risk) to meet distinct patient needs, moving to Phase III across indications .
  • Commercial execution: “Our team is laser-focused on growing EYLEA HD adoption… prefilled syringe and 2-year label updates anticipated in Q2” .

Q&A Highlights

  • EYLEA erosion expectations: Management avoided quantitative guidance but emphasized HD catalysts and acknowledged ongoing pressure on 2mg EYLEA; Q4 category share ~46% .
  • Dividend timing: Initiated earlier to add flexibility and broaden investor base; confidence in Sanofi development balance repayment trajectory .
  • Libtayo adjuvant CSCC: DFS is pivotal; OS events expected to be few; U.S. commercial opportunity ~10k patients .
  • Inventory and competition: ~$85M Q4 favorability (predominantly EYLEA) from wholesale inventory dynamics; recent Federal Circuit wins imply fewer biosimilar competitors, altering pricing dynamics .
  • Scientific strategy: Factor XI dual-antibody optionality and complement combo in PNH/GA/MG, with attention to safety profiles and patient selection .

Estimates Context

  • Wall Street consensus (S&P Global) quarterly EPS and revenue estimates were unavailable due to an API limit today; therefore, beat/miss vs consensus cannot be determined at this time. Values would normally be sourced from S&P Global and clearly labeled with an asterisk and disclaimer (“Values retrieved from S&P Global”).
  • Given reported results (Revenue $3.789B; non-GAAP EPS $12.07), estimates may be revised to reflect: stronger Libtayo momentum, EYLEA HD adoption catalysts, and inventory-related revenue timing; but also sustained R&D intensity and EYLEA pricing/competitive headwinds .

Key Takeaways for Investors

  • Dividend initiation and expanded buyback capacity are tangible signals of confidence in durable cash flows; expect dividend-focused funds to engage and repurchases to remain primary capital return lever .
  • EYLEA HD’s 2025 catalysts (prefilled syringe, RVO approval, dosing flexibility, extended intervals) are pivotal for category leadership; watch 2H 2025 uptake and mix shift away from 2mg amid competitive pressure .
  • Libtayo’s trajectory is inflecting; adjuvant CSCC filing and potential launch could materially expand the franchise beyond current indications, particularly with KEYTRUDA’s prior miss in this setting .
  • Dupixent remains a multi-blockbuster engine with COPD ramp supported by broad payer coverage; near-term CSU PDUFA (Apr 18) and BP progress add optionality to collaboration profits .
  • 2025 spending will rise to support late-stage pipeline (Factor XI, hem/onc bispecifics, obesity, genetic medicines); margin guidance (non-GAAP 87–88%) reflects product mix and manufacturing start-up costs .
  • Near-term trading: monitor Q1 2025 EYLEA net sales absorption from elevated Q4 inventory and biosimilar dynamics; any regulatory milestones (EYLEA HD, Libtayo, Dupixent) are likely stock-moving events .
  • Medium-term thesis: diversified pipeline with multiple pivotal readouts and regulatory decisions in 2025 underpins growth beyond EYLEA; data/technology assets (RGC, proteomics, Truveta) enhance discovery and development leverage .