Regeneron Pharmaceuticals, Inc. (REGN) Management Presents at J.P. Morgan 2019 Spring Biotech Conference (Transcript)

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About: Regeneron Pharmaceuticals, Inc. (REGN)
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Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) J.P. Morgan 2019 Spring Biotech Conference March 15, 2019 1:00 PM ET

Company Participants

Bob Landry - Chief Financial Officer

Marion McCourt - Head, Commercial Organization

Jay Markowitz - Senior Vice President, Portfolio Management

Mark Hudson - Investor Relations

Conference Call Participants

Cory Kasimov - J.P. Morgan

Operator

Welcome and thank you all for standing by. I would like to inform all participants that this call is being recorded and will be available to clients of J.P. Morgan. Parts of this conference call may also be reproduced in J.P. Morgan research. If you are -- if you have any objections you may disconnect at this time. This call is not intended for EEA clients that only subscribe for Regeneron research and members of the press are not be permitted on this call. If you are with the press or are subject to MiFID II and do not have high touch access please disconnect now. At this time all participants are in a listen-only mode.

I would now like to turn the call over to Cory Kasimov. Please go ahead.

Cory Kasimov

Great. Thank you Sheena [ph], and good afternoon, everyone. My name is Cory Kasimov. I am the Senior Biotechnology Analyst at J.P. Morgan and I am here with Matthew [Hope] [ph] from our team. Thanks for joining us for the latest installment of our 2019 Spring Biotech Conference Call Series. Well, today it’s our pleasure to be hosting Regeneron and representing the company we have CFO, Bob Landry, Marion McCourt, who Heads the Commercial Organization and Jay Markowitz, the Senior Vice President of Portfolio Management and we, of course, have Dazna [ph] and Mark from IR on the line with us as well. So thank you all very much for participating today. We really do appreciate you making the time.

We will have our standard format for this call, given the amount of content to cover we’re going to jump right into Q&A. We’ll start with question on EYLEA and then work our way through Dupixent, Praluent, the emerging I/O franchise, as well as some bigger picture questions. And as usual, you can feel free to email me additional questions throughout the call and we’ll work in as many as we can time permitting.

So with that, I’ll go right into it and maybe to kick things off with EYLEA, I think, it could be helpful if you can start us off here by looking kind of at the bigger picture and characterize where you think EYLEA is in the overall lifecycle of the product?

Bob Landry

Cory, hi. Thanks. This is Bob, and Matt, thanks for hosting us today. So, again, before we get started, Jay, myself and Marion, will be making forward-looking statements and there are risks and uncertainties associated with these statements. As you know more complete description of these and other material risks can be found in our filings with the SEC including our 10-K, which we filed for the period ended December 31, 2018 and that can all be accessed on our website at www.regeneron.com.

So with that, I’ll maybe re-ask the question and then move forward.

Question-and-Answer Session

Q - Cory Kasimov

Yeah. Yeah. Yeah. And I know for you or maybe Marion, but if you can kind of just big -- take a bigger picture look at EYLEA to begin and to help set the stage and characterize where you think the product is in its overall lifecycle at this point?

Marion McCourt

Sure, Cory, and everyone. This is Marion. Good afternoon, everyone. I am happy to take that. So as everybody knows, EYLEA has now been on the market for more than seven years and certainly worth noting that in 2018 our U.S. EYLEA sales grew 10% to just over $4 billion. Obviously that was for mainly an increase in demand and as everyone knows not from price.

We continue to see important tailwinds for EYLEA as the overall market both in wet AMD and DME continued to be driven by the aging population, increase in diabetes prevalence and physician preference for EYLEA. We do believe that there is a significant number of patients still both in wet AMD and in DME diabetic eye disease who are inadequately treated or most unfortunately not treated at all.

We very much look forward to the potential approval of EYLEA in diabetic retinopathy, our PDUFA date is May 13th which we believe has the potential of changing clinical practice of the disease. While it will take some time to educate physicians and patients on treating the disease earlier, our team is prepared and preparing to build the market, we preview is a very significant and exciting growth opportunity for EYLEA, as well as continuing to grow in our currently approved indications.

Cory Kasimov

Okay. All right. That’s helpful. And we’re going to get into some of these issues that you just mentioned now. I guess, maybe I want to ask you about the competitive landscape for EYLEA and given the amount of time that you been on the market over seven years, as you said, and the amount of data you have supporting the product. How do you look at this evolution here and maybe at a higher level, how is the organization best prepared to defend the franchise over the call it intermediate to longer term?

Marion McCourt

So it is important to keep ones eye on competition and we do. In our view though it doesn’t appear that any potential near-term entrant can provide substantially different dosing flexibility, duration or most important of all, visual gains that are already achievable with EYLEA. Further EYLEA is approved in several retinal diseases and is demonstrated safety and efficacy with well over 20 million doses administered worldwide.

None of the potential competitors have the same breath of indications at launch. EYLEA has demonstrated efficacy, proven safety, robust market experience and physician confidence sets a really high bar for competition. We will execute our strategy, which includes growing the overall market, specifically in diabetic eye diseases, expanding the treatment interval options in the label and gaining approval in additional indication, as I mentioned such as diabetic retinopathy. Also as you know we’ve announced that we’re very excited with plans to advance a high dose formulation into the clinic later this year.

Bob Landry

And if I could just add on top of what Marion just said. It is pretty remarkable, Cory, when you just kind of look at the history of this space that here we are in 2019 and the only validated target for these diseases, despite looking at lots of other things, is VEGF.

And as Marion mentioned with the high dose form of EYLEA, that’s one strategy we have for the future. The other strategy that we have is developing what we hope will be an even better VEGF blocker in the eye than EYLEA. So we have a number of new molecular entities that we’re looking at and we hope that if there’s any drug that will prove superior on the visual outcome endpoints, we hope it will be ours.

Cory Kasimov

Okay. All right. Great. That’s interesting -- that’s definitely interesting. How much of a risk is there that another product comes to market with a potentially materially lower price point. If one of those companies decided to embark on that strategy, you already have products in the market with materially lower price points but if one of the newer ones came out do you see that as a risk or that’s kind of been there done that?

Marion McCourt

Well, as you’re noting, the wet AMD and DME markets are quite unique and today we have obviously off-label Avastin use. So there really is already a low priced option. So we do have experienced with this type of dynamic, this likely would limit the disruption potential if a biosimilar were to launch; in the short unapproved low cost alternatives exist today and EYLEA performs very well.

We’re selected by specialists who want to prescribe EYLEA because of the clinical differentiation. They truly see a difference in the clinical profile, and frankly, frequently mentioned clinical superiority like the dosing flexibility. So they can treat and extend where appropriate.

And safety is really important for us, for these patients and for these retinal specialists who are obviously giving injections in the eye and seeking to preserve or restore a vision of patients who are at tremendous risk.

As a reminder, EYLEA is protected by a composition of matter patents through 2023 in the U.S. It’s important to note that the intellectual property estate around EYLEA extends into the 2030s. Additionally, [the safe] [ph] formulation and manufacturing of EYLEA is not at all trivial. So as competitors potentially as you know have struggled to manufacture large molecules for ophthalmologic conditions, and naturally as well there’s an issue of quantity and consistency of supply, which is also very, very important.

We continue to be a leader in innovation and as noted have the high aspirations as I mentioned and Jay, on lifecycle management potential not only for EYLEA, but also other products in this area in the future based on our capabilities and technologies.

Jay Markowitz

Think about it though, Cory. I mean where do you ever see a biosimilar or even a branded competitor where the market may be priced at let’s say $2000 per dose and the competitor is $50 per dose, and that’s the way -- that’s where it is right now with EYLEA and the unapproved off-label compounded use of Avastin.

I mean no - it would be, I mean, I just could not imagine, I shouldn’t say I couldn’t imagine. It would be highly unlikely for a new branded drug or what have you to come on the market with where at a price points of where off label compounded Avastin is currently priced. So it is an interesting situation that is probably that maybe unique in this space.

Cory Kasimov

Right. Okay. Yeah. I agree with that. All right. So last question I have for you on EYLEA for now is, can you remind us how you’re thinking about the opportunity in diabetic retinopathy relative to the on label indications and are there commercial hurdles here more similar or different to what you’ve encountered in the past?

Marion McCourt

Sure. So of course there’s tremendous similarity from the standpoint of EYLEA’s proven track record and experience. But there are a lot of differences, because this is a market creation opportunity. As I mentioned, we do believe that EYLEA in diabetic retinopathy has the potential of changing the clinical practice of the disease. As I mentioned before our PDUFA date is on May 13th. We look forward to that.

Just to remind you of the numbers. Of about 3.5 million people in the U.S. with the diabetic retinopathy, 1 million have the greatest unmet need. Further, diabetic retinopathy is a leading cause of blindness in working age adults in the U.S. There are patients now with PDR, about 500,000 patients, they tend to be treated today with lasers. But of course laser was found to be inferior to EYLEA in the CLARITY study. There’s also a battery of patients about 600,000, with severe NPDR. They are monitored and reexamined regularly, but today they don’t receive medical or surgical treatment.

So hurdle we have is that we [save] [ph] the disease that is asymptomatic in nature in the early stages, which can result in a low or kind of non-existent sense of urgency in patient engagement. This dynamic will be unique to diabetic retinopathy in relationship to the approved medication we have today.

What might be unappreciated though is the rate at which these non-symptomatic patients can develop really serious complications that threaten their vision. So in our PANORAMA study demonstrated the patients with moderately severe and severe diabetic retinopathy may progress very rapidly and have vision threatening complications or new onset DME occurring in over 40% of the patients over the course of one year, which is substantial.

And then in patients with severe non-proliferative diabetic retinopathy at baseline, vision threatening complications and central involved DME occurred at 53% of the sham treated patients and was reduced by over 70% with EYLEA. So, this data is really, really compelling.

To raise awareness we are planning to focus on education of physicians and patients on the importance of earlier treatment intervention in diabetic retinopathy. We’re also planning on positively impacting current referral pattern potential across the diabetes care continuum to help patients with diabetic retinopathy received an evaluation from a specialist who can potentially administer EYLEA treatment if appropriate and certainly under the scenario where we achieve an increment to our label.

Jay Markowitz

So if you just take all of the stuff that Marion just told you, there is this huge population of patients who have a condition that was considered benign, but it’s not, because it could be rapidly progressive and result in threatened vision. And previously it was treated by a modality that is not as good as VEGF therapy.

So, sure, we have to and that’s why we have Marion and this terrific commercial team working on EYLEA, but the opportunity to be able to preserve vision and reduce the number of diabetics who go blind is real and we think it’s a tremendous benefit that EYLEA can bring to patients.

Marion McCourt

Yeah. I [indiscernible] anecdotally when you look at some of the survey data for what is it that diabetic patients fear the most? Loss of their sight right at the top even ahead in some of the surveys of like loss of a limb and other losses that we redeem to be incredibly significant, potential loss of sight is really, really scary to diabetic patients, to everybody, but certainly to diabetic patient population.

Cory Kasimov

Yeah. I can imagine. I only want to think about it. Okay. So let’ switch gears now and turn to Dupixent and acknowledge upfront that we’re still very early in the launch in Asthma, but how would you characterize the progress thus far and the overall level of enthusiasm in the medical community?

Marion McCourt

Sure. So early days, but as everybody knows we’re working really hard. The U.S. [indiscernible] launch has been underway for several months. As we said before it’s particularly gratifying to see good early uptake among allergists who had prior experience with Dupixent for their patients with atopic dermatitis. Education efforts continue with pulmonologist, but the feedback there has been really positive as well.

Some examples of kind of what different specialists like the most. Certainly, they see overall clinical, safety, mechanism of action, but if you call out to allergists for example, they are exceptionally receptive to the lung function FEV1 data. We had an allergist here recently, it’s important because it’s what the patient feels as exacerbations while important take long for the patient to realize the difference.

So it’s that immediate feeling that are doing more that seems to be coming out of call out from allergists that and quite obviously the fact that we have effectiveness with Dupixent for patients with Type 2 disease with comorbidities that also resonates with the allergists and there area of specialization.

For pulmonologists, it’s also the clinical data that is most compelling to them and starting to understand through education and mechanism of action and the fullness of the dataset in the efficacy area. But the other item that is probably the most important for pulmonologists is this notion of at-home or self administration, which is possible with Dupixent and hasn’t been possible with competitive biologics.

So that, while some of the competitors are established in the Asthma space, we really do believe there our mechanisms of actions, safety, tolerability, broad label, as well as the impact on comorbidities gives us a considerable competitive edge.

As a reminder, Dupixent gives us the ability to selectively block just the IO4, IO13 signaling and that is the unique approach. It’s still very early days to comment on sub-population usage, but I’m certainly -- we look forward with sharing more detail in-depth on the Asthma launch as it progresses. But early days and I emphasize it is really still very early days in the launch. We’re encouraged by what we see.

Cory Kasimov

Okay. So within those sub-population do you see these early days by use in all segments, moderate, severe and OCS-dependent patient or just too soon to really talk about?

Marion McCourt

What I think common on most probably is a fact that we are seeing and I certainly can with the team and the data, we’re seeing choice to use Dupixent in patients who are naïve to biologic therapy. I don’t have as much data on the types of patients, but I’ll give you some anecdotal data there that physicians are often most likely to try even medication on the most severe patients. But the majority of our use is coming with biologic naïve patients and then a percentage from some switches as well.

I had anecdotally first some key opinion leaders with several meetings about the compelling profile and the desire to start patients who are candidates based on our label for moderate to severe with Dupixent. But I’d also heard some really interesting stories where a physicians has been in-educate control on one of the competitive biologic agents either the patients haven’t used too much oral corticosteroids or patients where before a next dosing interval the patients is getting kind of is wearing off effect and they’ve evaluated the Dupixent on those patients to very favorable results.

Cory Kasimov

Okay. And then, Marion, I guess, you acknowledged kind of do these attributes relative to the biologic competition that’s out there in asthma. And I’m curious what your market research is suggesting in terms of how well appreciated these attributes are from the outset or is there a big educational effort that’s necessary. And I suspect and what our survey kind of that we recently published seem to suggest is that there’s a big difference in terms of understanding appreciation for the product at this stage between allergists and pulmonologist. Is that kind of what you’re seeing right now?

Marion McCourt

I would say that the way I would describe it is that allergist have already been using Dupixent, so the product that they know and they use and we’re waiting for using asthma. Where in the case of pulmonologists I think the uptake and response is very favorable, but it’s a specialty that had less experience with Dupixent to-date. So we’re seeing uptake with the pulmonologists, but we’re just seeing more pulmonologists at this point.

Cory Kasimov

Okay. Is the pulmonologists uptake in asthma reminiscent to the allergists uptake and atopic dermatitis from couple years ago?

Marion McCourt

It’s hard to me to answer that question well for you. I can do a little bit of analysis and get back to you. I can’t say it’s reminiscent because I heard a bit of the history that I wasn’t here for it. So I don’t have quite a depth of experience to comment that it is similar. What I will share is that to, many launches that I’ve been involved in both in the asthma space and other therapeutic areas, the types of comments that we hearing from pulmonologist and the early reports from our sales force, our marketing teams, our medical affairs teams. Certainly support the fact that the profile of Dupixent for pulmonologist is compelling and it’s a product that they starting to use and see differentiation to support that use.

I think the other maybe just to back so I mentioned briefly is that, pulmonologist very much like the fact that they could educate patients on how to give self an injection and certainly view. First injection loading dose in the office but then when the patients go into the home self care setting come back as they need to, to be seen or if they have questions on injection, but not having to tie up on how many office, office staff, our treatment rooms is a big quest for pulmonologist.

Cory Kasimov

Okay. All right. Let’s segue over to a topic dermatitis and now that you are a couple of years into this launch the headwinds and the tailwinds that you deal with today. Are they more or less what you would expected this point and how would you characterize the market evolution right now?

Marion McCourt

Sure. So since launch, we’ve -- Dupixent has been used to treat about 50,000 patients with inadequately controlled moderate to severe atopic dermatitis. We believe that substantial opportunity remains in atopic dermatitis and today even though we believe that our market experience is impress we only have about or even less than 15% of the adult atopic dermatitis patients in greatest need who will be considered to be on label for Dupixent therapy. So we have a lot more work to do.

Patient awareness for Dupixent in atopic dermatitis does continue to grow. We find continued increase in the percentage of patients being prescribed Dupixent for both moderate and severe disease. We also continue to work, as you know, we done a lot to support not only disease education but also patient education, provider education, that are reaching, obviously, potential patients directly through on Air TV advertise and program which we launched now several months ago.

But we also continue to work closely with payers in the U.S. to minimize step edits in -- I should say, a necessary step edits, some will potentially be appropriate and to make sure that the review processes for approval are timely, so those patients who really need to be on Dupixent therapy can access it quickly.

Cory Kasimov

Okay. And so you mentioned the relatively recent DTC campaign what’s in the reaction to that and are you able to begin to quantify the impact that might have?

Marion McCourt

Sure. So we started the program as in the fourth quarter -- as we started the program and we need some comments in our call February on the program that was started in the fourth quarter. And we do think that the on Air TV advertisement program coupled with our other consumer marketing and digital plans did have a favorable impact on our performance. Certainly, we also had a hired a world class field force for asthma, but we do feel that the on air program has been very positive consumer program for Dupixent.

Some of the things we look at are the increase we see not only in prescribing trends and I’ll comment on that briefly that when we do look at weekly new-to-brand prescriptions or NBRxs we have seen increases between about 750 to 850 patients per week. Previously in earlier quarters fourth quarter would be more frequently in the range of 500 to 600 new scripts per week. So that is favorable and certainly some of our most recent weekly NBRxs have picked up to the range of 1,000 to 1,100 new patients starts per week.

But on the overall DTC campaign as well we also look at other metrics to gauge the extent to which we are reaching patients and some of those metrics are things like our overall site visit, online visits, the organic site traffic get to our website. How much time an individual spends when they go to our site and then also there is an opportunity for patients who want additional information to actually register and we’d seen bounce up with that.

I will share with you as well as when we had a week for whatever reason to not have on Air TV broadcasts. We see all those things go down, so there is a significant corollary to the fact that we’re reaching our patients. So we do think that the TV campaign has been important in rising awareness and probably also has helped not only with those patients with severe disease who sadly may have given up on a care option, but also helping to educate those patients with moderate disease and making sure that they’re coming into the care continuum and getting to those specialists who can help them with the nature of this disease, which is to some extent crippling to people and their ability to work, to sleep, to interact. So we’re really pleased to be able to help them that way.

Jay Markowitz

The key thing to remember that’s underlying the responsiveness to these types of approaches that Marion outlined is the fact that Dupixent is an effective and safe drug and as doctors and patients are getting more experience with that, that is full lesson that they are learning. And so it’s a self reinforcing mechanism where patients hear it from other patients, doctors hear it from their patients.

And so the reflex when a patient comes in to talk about a new drug is often well should I try it? Is it safe? Will it work as well as they say. And now over the period of time since our launch, there’s the answers to those questions are yes. And so it’s been a self reinforcing mechanism and in some cases, the only way that that occurs is through time and through experience.

Cory Kasimov

Great. Okay. And how should we be thinking about the adolescent opportunity for Dupixent, where it’s just approved and how different or similar is this to the adult AD population?

Marion McCourt

Sure. So as I’m sure all are aware earlier this week, the FDA did approve Dupixent for adolescent patients. That’s those patients aged 12 years to 17 years of age with moderate to severe atopic dermatitis whose disease is not adequately controlled on topical prescription therapies or when those therapies for patients just aren’t advisable and Dupixent can be used both with and without topical corticosteroids depending upon what the prescribing physician thinks that.

But one thing as a reminder, we would estimate that the number of potential adolescent patients is about half the size of the target adult AD patient population. So as we go into the adolescent market, it really is important to remember how serious and devastating the disease can be for these teenagers, a debilitating skin condition is so difficult impacting your self-image, their ability to do well in school, ability to concentrate, their ability to sleep and it impacts the entire family when things go very, very poorly.

So we’ve got a compelling and important opportunity. We are going to be targeting the same set of allergists and dermatologists that are currently treating adults with AD. That will be our audience most definitely for early uptake.

We’ve also done a lot of work to profile those institutions with specialist pediatric derm programs and have had significant reach from those groups even in the last couple of days which has been incredibly satisfying both to our medical and commercial teams. So we have important work to do here and certainly we will also be working with payers to ensure coverage for this adolescent indication as a line extension to Dupixent.

And then finally as a reminder because we’re far from done as everybody knows with Dupixent in terms of new indications. So we do expect data from our pediatric study and atopic dermatitis that’s the age group of six to 11 later this year.

Cory Kasimov

Okay. And I was going to ask you about the pedia indication, how key do you think this segment’s going to be to unlocking the ultimate value of Dupixent treating these -- treating patients as early as you possibly can have this condition?

Marion McCourt

Well, I think, it’s the totality of the clinical data for Dupixent, that is incredibly compelling. And when we do, hopefully, have the opportunity to review the trial data in the younger pediatric population, we then will be covering from sixth through adult from this devastating condition. So we look forward to it.

But of course, I’m sure have an opportunity to talk more about it today. There are many other incremental indications for Dupixent that are exciting, if we talk more about nasal polyposis, eosinophilic esophagitis and obviously we have a lot of work to do on the asthma launch as well. But the potential of Dupixent is incredibly important. We’ve only just started to scratch the surface in terms of our commercialization.

Jay Markowitz

And it’s very interesting we consider all of these diseases or not maybe we but these diseases are all characterized separately, but its asthma atopic dermatitis, chronic rhinosinusitis with nasal polyposis et cetera. But it turns out that for many patients, the underlying mechanism is the same and that is a skewing of the immune system to the Type 2 response.

So in the instance you were asking about adolescence, atopic dermatitis, turns up the half the patients in that trial had asthma. So here there is a drug in Dupixent that is highly effective in each of these indications and patients often times have multiple manifestations of this disease.

So it’s a very attractive drug to these people, because it really does get to the underlying cause of the disease, which in some patients may manifest as a single symptom or disease complex, but in most others, it manifests more broadly and it’s very attractive to have one single drug that potentially addresses the underlying cause of multiple such conditions.

Cory Kasimov

Okay. So you guys obviously have a pretty aggressive development program ongoing for Dupi across the range of other indications you mentioned some of them. So when you get the question is there like one or two other indications you’re most excited about, is it really just you’re excited about all of them given the related underlying mechanism between the different diseases as the same?

Jay Markowitz

Yeah. I mean when you there are decades of science behind this and I think it’s well understood, there’s been a so-called epidemic of allergic type diseases, whether that’s owing to the so-called hygiene hypothesis about living in this more sterile environment or elimination of parasitic diseases and most of the developed world for which this Type 2 immunity is thought to have originally evolved to control or who knows what.

It turns out that there are a lot of people with a lot of these diseases. So there was a recent review in one of the JAMA periodicals showing that 10.8% of adults in the United States have food allergies.

We get reports about anecdotal experiences about how patients who are taking Dupixent have benefits in other kinds of allergic conditions that patients had previously suffered from. So we think that food allergy is another area in which there’s a tremendous amount of potential for something that is very common throughout the United States.

We’re very cautious. We don’t want anybody to think that Dupixent is a panacea. Now all of a sudden start eating all of these foods to which one is allergic, but it’s certainly something that we intend to test in a thorough and comprehensive way. And we think that there’s a tremendous unmet need and a very high prevalence. So it is something that we are excited about beyond the things that we’ve already mentioned.

Cory Kasimov

Okay. Just a couple of more questions on this line of conversation, but what are your latest views or thoughts on the competitive landscape outlook for Dupi in AD from things like JAK inhibitors and other biologics?

Jay Markowitz

But when you say other biologics, we have not yet seen data supporting them. And as per JAK inhibitors, no, I talked about Dupixent’s efficacy and safety. We think that that continues to distinguish it from anything out there. Also know if you look at the number of cytokines and growth factors that signals through specific JAK homo and hetero dimers, they’re quite large. If you look at the number of diseases that have been amenable to treatment with JAK inhibitors, they include these Type 1 cell mediated immune diseases like rheumatoid arthritis through type 2 allergic diseases.

So we think that having a drug that is specific for the disease pathway that is effective and safe and very well-tolerated stands us in good step against any potential competitors that maybe on the horizon.

Cory Kasimov

Okay. And then last one here and we’ll move over to oncology though its earlier in the pipeline how are you thinking about IL-33 is the target an allergic disease and maybe what you hoping to see with Regeneron 3500 in asthma later this year?

Bob Landry

So IL-33 and its receptor ST2 have some genetic validation in certain respiratory diseases such as COPD and asthma. So we think it’s a reasonable target to pursue. The caveat is that this is such a 19, it’s really a 19th century disease definition things like COPD and asthma really doesn’t talk about the underlying molecular pathophysiology.

But we think it’s a reasonable target it’s one that we have good antibody against, we’re doing I think robust studies, which include placebo control line, single agent of Regeneron 3500 or IL-33 antibody Dupixent and the combination. And so we hope to get the answers to whether there is any meaningful single agent activity from IL-33 blockade alone and whether it has anything on top of what was observed with Dupixent.

We think it’s very rare and unusual to have drug like Dupixent that has the kind of efficacy and safety that we saw. And so just from a probability standpoint, it is not likely that any other mechanism including IL-33 blockade will have that, but maybe it will and so we’ll test it.

We also think that because these singling pathways are different and potentially complementary, having both drugs we think would be beneficial to our ability to offer them in a way that’s attractive to patients and payers.

Cory Kasimov

Okay. Do you think it’s fair to say that the approach you’re taking here from a strategic development point of view is reminiscent of what you did with IPDGF and [inaudible] in those types of targets in ophthalmology?

Bob Landry

It’s reminiscent I think of any development plan where you have a really good drug and you’re trying to see if another drug will add to it.

Cory Kasimov

Okay.

Bob Landry

It sort of like its way oncology development is et cetera, et cetera. We don’t cure everybody with asthma and atopic dermatitis for instance. With Dupixent we get very good data, very efficacy but we think it may be possible to do even better and so that’s what we would like to be able to do.

Cory Kasimov

Okay. All right. So that’s good segue, we will move over immuno-oncology and for this can you maybe start by talking about why you think Regeneron is so well-positioned to effectively compete with obviously hypercompetitive space when this hasn’t been necessarily a centerpiece vertical for you in the past?

Jay Markowitz

Well it’s interesting that you frame it that way, Cory, because, while we haven’t -- what clearly not the first company to have a CTLA-4 antibody or the PD-1 antibody. This is something that the research group has been working on for years if not decade or more. And that is reflective in the fact that we have pretty full pipeline.

Remember these are not drugs that we somehow came upon through some acquisition or something. These are drugs that we were all developed in our labs and they were done in a comprehensive way with the understanding realization that no single target is likely to eliminate the dreaded disease of cancer.

And so, we think that -- we have a -- there is a rational basis to what we have and to why we pursued certain targets. Obviously, we are not first but we believe with the tie was cemiplimab. We have a highly competitive PD-1 antibody. We have foundation in cutaneous squamous cell carcinoma or CSCC, we have to expand in other skin cancers and we have what we think is a very robust development plan in first-line metastatic lung cancer.

But then even in some of these cancers that have been responsive to PD-1 blockade, the majority of patients have not benefit. And so like other companies, we’ve looked at target and are look at target like CTLA4, LAG-3 get thus far the data others have reported with these have been less than spectacular. We may have some differentiation, maybe not. We’re doing the requisite studies where we feel, we may be able to provide the next inflection point in terms of cancer treatment is in our -- with our bispecific antibody programs, both those that activate T cells through coagulation of the CD3 TcR complex, or so-called CD3 bispecific, as well as our costimulatory by specifics, the first of which are using anti-CD28 on one of the arms as the costimulatory mechanism.

And so, if you look at some of the animal data that we’ve shown starting at your conference J.P. Morgan January, we’ve shown that there’s been good activity in vivo models, where we’ve combined PD-1 blockade with the CD28 bispecific, as well as where we’ve combined the CD3 with CD28 bispecific. And because a checkpoint like PD-1 could aggregate an effective immune response that’s mediated by single 1 for signal 2, so we think that LIBTAYO maybe a fundamental and necessary ingredient in order to get the maximum amount of efficacy out of the bispecifics program.

So you name the target, we probably have an antibody against it. We’re testing multiple approaches. We’re evolving as the field evolves. But again we feel like we have all the tools and all technologies to address this field that has been changing dramatically and remarkably.

Cory Kasimov

Right. Okay. So a follow-up to that. This ought to for you Jay or maybe for Bob. From a financial perspective, how do you think about clinical development in the IO space, given who these other players are combination approaches? Just the overall complicated datasets across multiple indication therapeutics. Obviously, you would think you have to be smarter in your development plan than maybe one of the behemoths out there that can have hundreds if not thousand trials that are ongoing?

Bob Landry

Hi. It’s Bob. So, I would totally agree on just on the face of it’s not to scare any CFO with regards to how daunting it is. But again I’ll echo a little bit on what Jay said. We have a pretty thoughtful plan going forward. I mean, we have a capability to do a lot which doesn’t mean we’re going to throw spaghetti against the wall, logistics like other companies are doing. We’re to be thoughtful on what we do. And again, what this place different is the nimbleness in which we can kind of react, right?

You heard before from Len and George, I mean, we are top down company. So with regard to the Len and George, Jay and then the most senior kind of IO team constantly looking at this stuff.

We are on top and we can maneuver and we have good optionality in this and other trials are reading out, we kind of adjust and move forward and the example of that would be certainly what we just did with regards to powering up our lung cancer making the change with regards to what we’re comparing it against that would be a great example.

So we -- it is worried some, but with the good strategy we can certainly elevate that. And again, another thing we don’t get much great for and it’s -- I think people just implied is, the core strength we have on our production capability, we can produce these things as if there are not that difficult and we all know that they are very difficult whether it’s the checkpoint inhibitors, whether it’s the bispecific that we adopt there on the CD20xCD3 and BCMA, and the mark are the new co-stem.

It’s kind of the plug-in play touch strategy. We know how to make this stuff and then, as Jay said, it allows us to go after lot of targets with the technology we have, because we’re very good on the production side of it. And then, as you know, I mean, we do share on PD-1, I mean, we are sharing 50/50 on the economics on it. So, sure, high-risk programs, I do like laying off half the cost to our Sanofi friends now with that comes 50% of the economics.

But again as you know, that is PD-1 and the family on that but we also have 100% license CD20xCD3, certainly the new co-stem family 100% economics on that. So again I mean we think that it would be daunting and given everything we have but we think we have the right strategy and we’re going to be as efficient and nimble as hell to get there.

Cory Kasimov

Okay. And have you alluded something I wanted to ask about. You saw recently on clinic trials that you discontinued the Libtayo head-to-head arm with Pembro in lung cancer. Can you guys talk about the rationale here and how this maybe suggests that you’re thinking about competing in this market or the right strategy there?

Jay Markowitz

I think that you didn’t quite capture what we did, Cory. So we at one point in time had a trial where we had Libtayo plus Ipilimumab versus Pembrolizumab. But, as Bob mentioned, we have amended our trials in lung cancer, excuse me, in the phase of the data that’s come and so we have two basic strategies for first line metastatic lung cancer. The first is for the PD-L1 high expressers, we’re doing a trial like KEYNOTE-024 and KEYNOTE-042, which is cemiplimab versus KEYNOTE. Then we have a trial that again we are -- we should be so fortunate as to have the kind of success that Merck saw.

We are trying to replicate what they observed in their KEYNOTE-189 trial and so we are testing the combination of Libtayo plus chemotherapy versus chemotherapy. At one point in time, we were as you are aware there were a number of trials that we’re testing the combination of anti-PD-1 and anti-PD-L1 with anti-CTLA-4 antibodies.

We looked at those data as they were coming out and we realized that they were unlikely to have any disruptive potential over what was observed with anti-PD-1 monotherapy or the combination of anti-PD-1 plus chemotherapy.

So we moved away from that strategy, but we wanted to guard against with having a drug approved when the field had already when the puck was somewhere else and we were stating to where it had been. And so we responded to those things and we feel like the data have supported that and so that is the current plan in lung cancer.

Cory Kasimov

Okay. That’s helpful. And then on the bispecific front maybe to start, how should investors be thinking about the cadence of updates for your current clinical programs?

Jay Markowitz

So the most advanced of our bispecifics is REGN1979 or CD20xCD3 bispecific that we’re developing for relapsed/refractory follicular non-Hodgkin’s lymphoma, as well as relapsed/refractory DLBCL. What we reported at ASH in 2018 was that the higher doses tested, we had 100% objective response rate and 80% complete response rate in the relapsed/refractory follicular lymphoma cohort. And at the higher doses, we were seeing something like 60% objective responses and 20% complete responses in DLBCL diffused Large B cell lymphoma.

We continue to dose escalate and in discussing this with the clinical team relatively recently, the current plan is to submit and hopefully present updated data at two European conferences this year, one being the European Haematology Association or EHA Conference and the other, the International Conference on Malignant Lymphoma in Lugano, where we hope to show some updated data that from patients who are treated the doses we previously reported on, as well as results with some higher dose cohorts and we intend to submit and update those data as well in at ASH in 2019, again, obviously, pending acceptance of these abstracts and presentations.

Cory Kasimov

Okay. Okay. Perfect. And then within this franchise and maybe specifically for 1979, when you think about stacking up the duration of response with other programs and other modalities, how do you think about that. And if you look at what your bispecific platform does relative to say party therapies looking at the bispecific, you’re looking the totality of what’s out there today?

Jay Markowitz

We look at what matters to patients, what matters to patients is getting clearing the cancer and doing it in a way that’s safe and well tolerated. Now we like having off the shelf reagents that we can use to treat and retreat and those chronically.

We like having these potential to mix and match, because we see that sometimes patient lose response because they lose expression at the surface antigen that’s being targeted say by the CAR T-cells where sometimes they lose response because, excuse me, the CAR-T cell doesn’t persist.

So we think that there are advantages to having reagent that can be dosed chronically or intermittently that don’t require any difficult cell engineering or conditioning regimens, et cetera. We like the fact that we really have scalable off the shelf drugs in our bispecifics that we could potentially mix and match by looking at different surface molecules, targeting different surface molecules, potentially even targeting multiple T-cell activating domains.

So we over time, we have to see whether our responses are durable. That’s what matters. We have no reason or indication to believe that we will not be able to achieve that, so we’re pretty confident in these reagents.

Cory Kasimov

Okay. I just want to work in one question on Praluent and really just with everything that that’s happened in the last year or so with the ODYSSEY Outcomes data, the payer agreements, the price reductions, et cetera. How would you assess your longer term confidence level in the PCSK9 space at this point, do you still see this as an area with multi-billion dollar sales potential or is this more about squeezing what you can out of what’s been more difficult than expected market?

Marion McCourt

I disagree and let me take this one. I think that largely the market has been a difficult and also competitive one. Right now, we’re certainly focused on continuing to make sure that we work as we have includes ODYSSEY Outcomes of last March to make sure that we engage with payers so that physicians can prescribe with these and patients can have access to Praluent where we need.

Having said that the market itself continues to be a highly dynamic one, we do very much look forward to the FDA review of our label later this year and potentially having the -- we have a action date of April 28 and very much look forward to the extension to our label and feel that this will be a positive opportunity in the marketplace.

Jay Markowitz

And Cory, I’m going to editorialize because I actually as somebody who use practice medicine, I’m appalled by the dynamic of this class in that. Cardiovascular disease remains the number one cause of death in the developed world. As you can see with both our drug and our competitors drug, if they are priced at a very affordable level and the uptake, when you consider their safety profile and you consider the LDL reductions that are observed with those.

The fact that people are having heart attacks, strokes et cetera when maybe they did not have to, if they were on a drug that could have the kind of effect on LDL that we have observed with this class of drug. It’s really the service. It’s really the service to society. We are trying to do our part. We hope that the governments and the payers will also recognize the tremendous unmet need of cardiovascular disease.

Cory Kasimov

Okay. I agree with you, Jay. I definitely do. All right. We have time for one or two more questions. One of course doing it you need to ask just kind of get your views. Your most recent views on the outstanding Medicare Part B proposal specifically around international pricing index and if that’s something like it, it’s ultimately implemented how might this influence, how you think about EYLEA growth over time or just the business in general?

Marion McCourt

Sure. First, I think, it’s important to say that the concept that you mentioned of an international pricing index is very much in the early stage not yet a proposal rule.

Cory Kasimov

Marion, can you hear me? I think we might have lost you guys or all of them. Considering we just have the final questions two minutes from the topic. I think we will call it there and we can maybe get an answer to what they think on Part B and follow-up with anybody who is interested. But with that, we will end it and thanks everybody for dialing in today. If you do have any follow-up questions or any of the other outstanding e-mail questions, we’ll get to them offline and get back to you. So thanks a lot.

Operator

And that concludes the conference for today. Thank you for your participation. You may now disconnect.