Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) 38th Annual J.P. Morgan Healthcare Conference January 13, 2020 1:30 PM ET
Len Schleifer - Co-Founder, President & CEO
George Yancopoulos - Founding Scientist, President, Chief Scientific Officer
Conference Call Participants
Cory Kasimov - JPMorgan
All right, good morning everyone. My name is Cory Kasimov. I’m the Senior Large Cap Biotech analyst at J.P. Morgan. And it’s my pleasure to introduce Regeneron, one of my favorite presentations every week at this conference. We’ve another two for one special with both CEO, Len Schleifer and CSO, George Yancopoulos and please note following the presentation is a breakout across the hall in the Borgia Room.
With that, I’ll turn it over first to Len. Thank you.
Thank you, Cory. I wish your favoritism would show up in your ratings. Anyway, it is good to be here. Our favorite slides, you take a look at this. This is on our website. There’s a lot of things that I might say here, that I might regret, and this should cover some of those sins.
It’s fun to look back a decade ago given that this is the beginning of the decade. And to see where George and me, and the rest of the gang of Regeneron were, and how we've progressed over the course of the decade.
Back then, and by the way, when you look back over a decade, we try and send the message that this is a long term business and we are in it for the long term, which means we were here at the beginning of that decade actually in the beginning of several decades before that.
We had only one approved medicine. It was a small drug; it sold only about $18 million a year. We had seven drugs in development at the time, which led to over the course of a decade five of those seven to become approved drugs, which is a pretty good hit rate. The other two are still potentially also going to become drugs. We've progressed from there to have now 18 novel drugs in clinical development and that 18 million in sales has turned into over $10 billion in product sales of all of the Regeneron discovered products.
We were relatively small company with just about a 1000 employees that grew to -- it has grown to 8000 employees. We had lots of big ideas; those ideas, many had been realized, but we've been investing in even bigger ones for the future to come and George will tell you something about that.
One of the things on this slide I wanted to also contrast, but it made the cutting room floor, but I'm going to say it anyway. 10 years ago exactly to the day we were in a tiny little room with six people listening to us. So we're glad to be here today.
If you take a look at the end of the decade, it wasn't just some early advances in resting on our laurels. We had a pretty big year to end the decade, with lots of regulatory approvals, including advancing in diabetic retinopathy. Moving forward, on our pre filled syringe, we've had lots of clinical advances. George is going to get into a lot of those. I'll call your attention to the fact that we have proved in principle some very important things in immuno-oncology and we've got -- we've got some exciting potential data coming forward that we're a little bit more optimistic about now for a monotherapy for anti PD1 in lung because of the objective response data that we saw.
We've been executing commercially. Today, we announced how the quarter ended -- the year ended with $1.22 billion in sales for EYLEA. And we have not yet released the Dupixent number with Sanofi that will be coming up when we give our quarterly report.
Our revenue has grown. And I know at least one analyst said Hell would freeze over before George and Len would use their money to buy back stock, but we actually started a stock buyback program.
Our near-term growth drivers are still EYLEA, which is still growing and we still think there's opportunity for expansion, more details in a few minutes. Our Dupixent which we're working on of course with Sanofi, which we think is really changing so much about allergic diseases with multiple indications already and we hope more to come, and oncology which I'm going to tell you about in a minute, plus we have quite a few other things in the pipeline outside of oncology that could drive near-term to mid-term growth as well.
If you take a look at EYLEA, you'll see that this is a product that keeps on growing. You’re looking back over the course of a decade almost the drug was launched in the end of 2011. So it's in step by some measures it's a very mature product, but it's still generating double digit 14% year-over-year growth for the year or a 13% fourth quarter of 2019 versus fourth quarter of 2018 not driven by inventory, driven by true demand. So we're very pleased on how this drug is performing and this growth occurred in the last quarter, not withstanding yet another entry to the marketplace for some of the indications where they wet AMD.
Dupixent, it is our flagship product that we are developing and commercializing with Sanofi. You can see that the drug is already annualizing at about a $2.4 billion run rate based on the third quarter, and you can see that the growth, if you look at this graph, the growth of new -- these are weekly new prescriptions. The dip suggest holiday weeks new prescriptions growing quite remarkably sort of an inflection point occurred about six months or so ago, and it continues to grow and continues to perform. We are very excited. George will get into some of the more development we're doing for that molecule.
We launched Libtayo, our anti-PD-1 for advanced cutaneous squamous cell carcinoma, and you can see as we [indiscernible], there were lots of other drugs that were being used including another PD-1 that was being used off label in that setting, and you can see within about a year we've become the dominant player in terms of market share for advanced cutaneous squamous cell carcinoma. So this is a product that we think has now built a foundation for us in immuno oncology, which we hope to move forward on.
If you step back and say, where were we and where did we want to go about a year ago? I think George laid out for you his strategy for the company on how we were going to advance in oncology, and I'm very pleased to say we've sort of executed extremely well on that.
PD-1 as I said became the number one drug in cutaneous squamous cell. We had promising data in our first line non-small cell lung cancer monotherapy study. We've got an interim approach analysis that will be coming up later this year, which could lead to a filing if that is successful. We were encouraged but of course we'll have to see, we're encouraged because of the objective response rate that George will review for you.
Our BiSpecifics program. The most important thing about that is not only do we have two drugs already that are looking good in specific diseases. Our drug for non-Hodgkin's lymphoma and very early data, but our drug for myeloma, we have validated clinically the platform of our BiSpecifics, a very natural proprietary format. We can now roll out lots more BiSpecifics. In fact, you'll hear about that we have now started on the journey with a whole new class of BiSpecifics Costim or Costimulatory BiSpecifics which was recently written up in the scientific literature just published last week.
We continue to do business development across our portfolio. Our strategy is to maximize our opportunities and the partners that we work with by choosing partners that are like minded driven by science and where we can contribute technology and knowhow and they can contribute technology knowhow and you can you'll see a lot more of the business development activity and this is just some of the ones that are on, that already ongoing.
We have a lot coming up in terms of regulatory submissions. You can peruse this chart at your leisure. Just call your attention once more to Libtayo potentially this year or next based on a interim analysis of our first line non-small cell lung cancer, same thing between 21 and 22 our 1979, which is our BiSpecific for non-Hodgkin's lymphoma. So this is just our regulatory submissions. The pipeline is very full and quite robust.
I just want to make a couple more notes and then really turn over to the heart of the presentation. We are looking forward to commercially expand a little bit outside our home base in the United States, and we think we can do that by leveraging our core commercialization rights for Dupixent in a low risk manner.
We also heard feedback from our shareholders that we needed to simplify our relationship with Sanofi and allow us to focus on Dupixent. It’s really been great. In a short period of time, we've gotten to know Paul Hudson very well. He seems to be quite capable and quite focused on making Dupixent into a really mega block buster product. The Dupixent terms are unchanged. There's tremendous focus on executing on that between the companies and a lot of credit to Paul for bringing additional focus to this program.
Praluent and Kevzara will be simplified. We'll get the rights to Praluent in the U.S. and they'll get ex-U.S. Praluent and Kevzara. This will result -- we had a lot of losses, and a lot of difficulty I think for some of our shareholders to understand, some of our financial statements. This will all be simplified now, as and it should improve profitability by really not having to have two companies focusing on products that really aren't nearly as important as Dupixent, which really demands the attention of both of us.
So in summary over the last decade, we have transformed Regeneron into what we think of as a premium biopharmaceutical company. The end of the decade looked as promising, looks as promising to us as the beginning of the last decade. We think that the momentum we have going forward really will serve us well, and I'm going to turn it over to George.
Thanks, Len. And as I hope you appreciated from Len's remarks. The big ideas we had before 2010 had led to the invention of breakthrough, homegrown technologies such as our trap technology of VelociGene, VelocImmune technologies that created the therapeutics such as EYLEA and Dupixent that fuel the explosive growth of the last decade. We believe VelociGene, and VelocImmune will remain foundational technologies for the foreseeable future serving as important sources of new, important therapeutics.
For example, even in this age of CRISPR, VelociGene remains arguably the world's most powerful way to generate genetically humanized models, for Target Discovery and Validation, while VelocImmune remains arguably the most powerful turnkey solution to make fully human antibody therapeutics to any disease target.
But at Regeneron, we pride ourselves on continuing to push the edge. And we haven't stood still, and we believe that we've been busy inventing the next generation of technologies that are going to deliver the breakthrough therapeutics of the future.
Over the last few years, we created the Regeneron genetic center becoming one of the world's leaders in human sequencing with over 1 million individuals sequenced, all linked to -- detailed digital health records resulting in one of the largest and most powerful big data sets in the health information space, allowing unparalleled connectability between genetic variation and disease association and thus allowing us a whole new high throughput way of finding and validating drug targets.
We've also created important new turnkey therapeutics approaches such as, with our new classes of BiSpecifics that Len mentioned that derived directly from our next generation velocimmune mouse. And we've also brought in turnkey new therapeutic approaches via important collaborations with synergistic partnerships such as siRNA, from Alnylam and others. And all of these provide a unique capability to combine and mix-and-match the right set of therapeutic solutions to any disease challenge. And in that respect, I just want to provide a few very recent examples of how we have utilized our VelociGene and Veloclmmune technologies to deliver potentially important new therapeutics to patients who need them.
As we just announced last week, on the left side of the slide, are potentially pivotal Phase 2 data show that we had -- could almost entirely block abnormal new bone formation in this tragic orphan disease known as Fibrodysplasia Ossificans Progressiva in which patients form a second bony skeleton that traps them in their own bodies often leading to [indiscernible], it's a horrible disease and this new approach could prove to be a potential godsend for these poor patients.
In the middle panel, when BARDA ask the Biopharma industry to step up and try to help with the Ebola crisis, Regeneron responded, we utilized our VelocImmune technology to produce a three antibody cocktail ready for the clinic in just six months. And the NIH, a few months ago announced that the PALM study going on in the Congo was stopped early as our antibody cocktail proved superior for saving the lives of patients already infected with Ebola. This is not a vaccine. This is a potential cure.
And on the right side, on a totally different level, our velocimmune technology so flexible, it was also able to provide a therapeutic antibody that seems to almost magically and dramatically reduce cat allergy, a problem for millions of Americans. So whether it's discovering a breakthrough, potentially hold progression in a tragic orphan disease or addressing emerging infectious epidemic or impacting cat allergy our VelociGene and Veloclmmune approaches can provide solutions over and over again.
In this regard, this ability has delivered this deep and diverse pipeline across large and specialized therapeutic areas from eye disease, to heart disease, to immune diseases and cancer. And while we could speak for hours on these programs, my remaining remarks today will focus on Dupixent and on oncology. The Regeneron approach has created a number of important medical breakthroughs, but perhaps one of the most profound ones is Dupixent.
For decades Regeneron scientists worked with and followed up the seminal findings of Bill Paul at the NIH with the belief that interleukin-4 and interleukin-13 might be the key mediators of so-called Type 2 inflammatory or allergic diseases. Many of them are listed on the slide like asthma, atopic dermatitis and chronic rhinosinusitis with nasal polyps. We utilized our VelociGene and VelocImmune technologies to validate these targets to study and test them and finally to invent Dupixent as a potential therapeutic. And remarkably our clinical trials with Dupixent have proved the hypothesis that interleukin-4 and interleukin-13 are indeed the key drivers of multiple Type 2 allergic diseases. And thus Dupixent has the opportunity to impact millions of people worldwide suffering from these allergic diseases.
We believe the current approvals for Dupixent in atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyps are just the beginning. As Len showed, we are positively impacting the lives of thousands of patients with these diseases each and every day, but our efforts on Dupixent are far from over. We have several near-term opportunities in younger and earlier stages of these diseases particularly atopic dermatitis and asthma, as well as in new settings such as eosinophilic esophagitis and chronic obstructive pulmonary disease. In longer-term, we're excited about the potential on grass allergy, food allergy and a number of new potential indications where we are now starting Phase 3 studies.
In summary, we believe Dupixent can do enormous good for so many people and we're making tremendous strides, trying to grow this pipeline and bring it to so many more patients. I'll end by updating you on our efforts in immuno-oncology where we believe we have the potential to be a major player. At a higher level, our strategy is to compete, enhance and extend the power and potential benefit of our portfolio to patients with cancer.
First, we think we have an opportunity to compete in the important PD-1 space with our recently approved the anti-PD-1 antibody Libtayo. However, as you know even in so-called responsive patients or tumors more than half the patients do not respond. So we are working on combinations of our PD-1 antibody with novel therapeutics to enhance responsiveness for these tumors. And finally for the many cancers such as breast, colon, pancreatic and prostate with very limited responsiveness to checkpoint inhibition. We have a significant opportunity to enhance the benefits of immuno-oncology to more patients by studying Libtayo in combination with a number of our own novel products.
As this slide schematizes Libtayo is foundational to our approach and the power of various technologies allows us to layer on a series of combinatorial therapeutics, whether they be the more conventional Veloclmmune derived antibodies, so called CD3 BiSpecifics, our new classes of BiSpecifics including CoStimulatory BiSpecifics, we're selling vaccine therapies we access through our strategic partnerships. We believe that these approaches could provide significant benefits for the many patients who still need more powerful ways of fighting their cancers.
In terms of Libtayo, the third FDA approved Anti-PD-1. You heard from Len about how we impressively rapid fashion by finding a previously unrealized cancer indications, squamous cell carcinoma of the skin got this approved and now we're making important head ground in fighting this disease in so many patients. As Len showed, we're off to a great start in this disease and we are optimistic of the role Libtayo to play in lung cancer and other tumor types. We look forward to expanding the role of Libtayo in dermato-oncology by moving to earlier stages of squamous cell carcinoma where we have already shown impressive data in the neoadjuvant setting. And in 2020, we expect pivotal trial data in different skin disease basal cell carcinoma.
And we are really excited to extend out and compete in lung cancer. This year we release preliminary monotherapy response data in patients with high PD-L1 expression showing that Libtayo nearly doubled the response rate of standard chemotherapy, some the most impressive lung cancer response data report. We need to see how these results will translate to the full study population in terms of overall survival, but these early results are very encouraging in the context of other PD-1 directed treatment study results.
Finally, we're in the early stages of exploring Libtayo in combination with our BiSpecifics [Indiscernible] as well as other external technologies to enhance and extend the benefits of immuno-oncology to more patients with cancer. To give you some more details about our BiSpecifics approach which comes from our VELOCI-BI technology which can create and manufactured BiSpecifics of almost any desired specificity. We use a next-generation Veloclmmune mouse as a source of several distinct classes of BiSpecifics. And unlike any other BiSpecifics approach ours have no linkers, no artificial sequences, no mutations, they are manufactured using the same process such as regular antibodies with no special approaches required and they exhibit similar pharmacokinetics to regular antibodies.
This is truly a breakthrough approach for BiSpecifics unlike any other in the industry. And we make several different classes of BiSpecifics, not only a CD3 class that brings a killer T cell to a tumor and activate so-called Signal 1 in the T cell activation process, but a novel second class that we call Costim BiSpecifics that activating Signal 2 that is normally required to optimize cell killing by T cells. In our BiSpecifics are beginning to deliver on their promise in the clinic. Just last month we showed updated data for our CD20 by CD3 program in Non-Hodgkin Lymphoma as well as first-time data for our BCMAxCD3 program in multiple myeloma.
The REGN1979 BiSpecifics continues to show incredible response rates of over 90% in late stage follicular lymphoma patients with more than three quarters of patients achieving a complete response. And in an aggressive diffuse large B-cell lymphoma, we are seeing deep responses in 50% to 70% of patients with or without prior CAR T history. Again, these are incredible results with patient where few therapeutic options remaining. We have initiated a potentially pivotal Phase 2 program with this BiSpecific which starts with follicular lymphoma and will soon expand to multiple aggressive lymphomas including diffuse large B-cell lymphoma.
In our second BCMA BiSpecific for myeloma is in the early stages of dose escalation. We are already seeing encouraging responses, including responses that resulting in so-called MRD negativity in patients who are refractory otherwise to other treatments. Not only do these results make us believe we will play an active role in the treatment of these diseases, but these results also serve as validation of a BiSpecifics platform, a platform where we have multiple additional BiSpecifics that will enter the clinic over time. Our enthusiasm continues to grow for these new classes of BiSpecifics particularly our costimulatory BiSpecifics.
Just last week we published a paper in Science Translation in Medicine outlining the preclinical data, they are just excited about the potential to combine these costimulatory BiSpecifics with our first class of CD3 BiSpecifics, as well as other potential combination including with Libtayo. The Science publication demonstrate that these combination approach can drive even more markedly enhance T-cell killing of tumors then just our CD3 BiSpecifics alone, which is I've just shown you have already show on their own have impressive activity in human trials. We have dose prostate cancer patients with our first CD28 costimulatory BiSpecific in combination with Libtayo and we plan to advance additional CD28 costimulatory BiSpecifics into the clinical for other cancers this year including in combination with our CD3 BiSpecifics.
Earlier I showed you our Regeneron pipeline. Here we focused on just our immuno-oncology pipeline, deep, broad and diverse on its own. The combinatorial potential is unparallel and we look forward to bringing additional potential treatments into the pipeline this year. Again, our biological insights, our toolkit, our technologies, our abilities to mix and match and our combinatorial flexibility, we are uniquely positioned to solve these most challenging problems in the treatment of cancer.
We'll have, as Len also mentioned quite a few key milestones coming up over this coming year. The most important, we hope its evident, how passionate we are about our approach, our science and our proven track record to deliver powerful medical breakthroughs across a diverse set of diseases. And we hope that just like the big ideas we had before 2010 led to important new medicines that drove the last decade of explosive growth, we hope that even bigger ideas of the last few years will bring even more benefit to more patients in need, driving even more growth. Thanks for your attention.
End of Q&A