Regeneron Pharmaceuticals Inc (REGN) Q4 2024 Earnings Call Highlights: Strong Revenue Growth ...

Revenue Growth: 10% year-over-year increase to $3.8 billion in Q4 2024. Net Income: $1.4 billion in Q4 2024, with diluted net income per share of $12.07. Full Year Revenue: $14.2 billion for 2024, excluding Ronapreve revenues. EYLEA and EYLEA HD Sales: Combined US net sales of $1.5 billion in Q4 2024. Libtayo Sales: Global net sales of $1.2 billion for 2024, with $367 million in Q4.

Dupixent Sales: Worldwide net sales of $3.7 billion in Q4 2024, with US sales at $2.7 billion. Gross Margin: 86% on net product sales in Q4 2024. Free Cash Flow: Approximately $3.7 billion generated in 2024. Cash and Marketable Securities: $15.2 billion less debt at the end of 2024. Share Repurchase Authorization: Additional $3 billion, increasing capacity to $4.5 billion.

Quarterly Dividend: Initiation with $0.88 per share, equivalent to $3.52 annually. 2025 R&D Spend Guidance: $5 billion to $5.2 billion. 2025 SG&A Guidance: $2.55 billion to $2.7 billion. 2025 Gross Margin Guidance: 87% to 88% on net product sales. 2025 Capital Expenditures Guidance: $850 million to $975 million.

2025 Effective Tax Rate Guidance: 11% to 13%. Warning! GuruFocus has detected 4 Warning Signs with REGN. Release Date: February 04, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Regeneron Pharmaceuticals Inc (NASDAQ:REGN) reported a strong fourth quarter with 10% revenue growth, driven by key franchises like Dupixent, Libtayo, and EYLEA. The company has a robust pipeline with approximately 40 product candidates across various therapeutic areas, showcasing significant future potential.

Dupixent continues to be a transformative medicine with over 1 million patients worldwide and is well-positioned for future growth with new indications. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) announced the initiation of a quarterly cash dividend program and an additional $3 billion share repurchase authorization, reflecting confidence in future cash flows. The company is advancing several promising R&D programs, including pivotal data expected for Linvoseltamab in multiple myeloma and odronextamab in follicular lymphoma. Negative Points Regeneron Pharmaceuticals Inc (NASDAQ:REGN) faces ongoing competitive pressure in the anti-VEGF category, particularly affecting EYLEA sales. The company anticipates continued market dynamics that may put downward pressure on EYLEA business due to biosimilar competition.

There are concerns about the safety profile of some pipeline products, such as the complement programs, which have shown class-specific adverse events. The company expects increased operating expenses in 2025, driven by costs to support the expanding late-stage pipeline and international expansion. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) does not provide specific guidance on sales erosion expectations for the EYLEA franchise, leaving some uncertainty for investors. Story Continues Q & A Highlights Q: Consensus numbers suggest expectations for annual sales erosion of about 7% annually over the next few years for the EYLEA franchise. Given the dynamics you described, do you think these expectations look reasonable? A: Marion McCourt, Executive Vice President - Commercial, stated that while they don't provide guidance, they believe EYLEA HD has a compelling profile with anticipated FDA approvals that could strengthen its position.

However, they expect additional competitive pressure on EYLEA due to a biosimilar in the market. Q: Why did Regeneron decide to initiate a dividend now instead of waiting until the Sanofi development balance was paid off? A: Christopher Fenimore, CFO, explained that the decision was based on confidence in the repayment of the Sanofi development balance and a desire to diversify their capital allocation strategy. Initiating a dividend also opens up investment opportunities for funds with a dividend mandate. Q: How critical is it for Libtayo to hit overall survival in addition to DFS in the adjuvant CSCC indication? A: George Yancopoulos, Chief Scientific Officer, noted that while survival events are few due to the early stage of the disease, the FDA will ensure that data does not show unexpected trends. Marion McCourt added that the commercial opportunity in the US could benefit approximately 10,000 patients.

Q: Could you speak to the magnitude of inventory impact on EYLEA HD last quarter and the dynamics with the biosimilar? A: Marion McCourt mentioned that there was an inventory build for EYLEA HD, impacting fourth-quarter sales. The combined net product sales impact was about $85 million, with higher inventory levels for EYLEA and lower for EYLEA HD. Leonard Schleifer noted recent legal victories that might limit biosimilar competition. Q: How are you thinking about balancing investments across the pipeline with numerous programs advancing to late-stage development? A: Leonard Schleifer emphasized that their primary capital allocation is towards R&D. They remain open to partnerships if beneficial but focus on making strategic decisions without fixed allocation quotas, given their extensive pipeline.

For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. View Comments