Regeneron Reports Fourth Quarter and Full Year 2012 Financial and Operating Results

 Regeneron Reports Fourth Quarter and Full Year 2012 Financial and Operating
                                   Results

--Full year 2012 EYLEA® (aflibercept) Injection U.S. net sales of $838 million

--Estimated full year 2013 EYLEA U.S. net sales growth of approximately 50% to
$1.2 billion - $1.3 billion

--Full year 2012 non-GAAP net income of $530 million or $4.66 per diluted
share

PR Newswire

TARRYTOWN, N.Y., Feb. 14, 2013

TARRYTOWN, N.Y., Feb. 14, 2013 /PRNewswire/ --Regeneron Pharmaceuticals, Inc.
(NASDAQ: REGN) today announced financial and operating results for the fourth
quarter and full year 2012 and provided an update on development programs.

The Company reported total revenues of $415 million in the fourth quarter and
$1.4 billion for the year ended December 31, 2012. Total revenues included
EYLEA ^ U.S. net product sales of $276 million in the fourth quarter and $838
million for the full year 2012. Total revenues for the full yearincluded a
$50 million milestone payment from Sanofi and $25 million of milestone
payments from Bayer HealthCare in connection with regulatory approvals of
ZALTRAP^® (ziv-aflibercept) Injection for Intravenous Infusion and EYLEA
(aflibercept) Injection for Intravitreal Injection, respectively, as described
below.

The Company reported non-GAAP net income of $171 million, or $1.47 per diluted
share, in the fourth quarter and $530 million, or $4.66 per diluted share, for
the year ended December 31, 2012. Non-GAAP net income excludes non-cash
share-based compensation expense, non-cash interest expense related to the
Company's convertible senior notes, and a non-cash tax benefit of $336 million
recorded during the fourth quarter primarily as a result of releasing
substantially all of the valuation allowance associated with the Company's
deferred tax assets as of December 31, 2012. The Company reported GAAP net
income of $470 million, or $4.08 per diluted share, in the fourth quarter and
$750 million, or $6.75 per diluted share, for the full year 2012.

"2012 was truly a transformative year for Regeneron as strong U.S. net sales
of EYLEA drove our first full year of profitability on a GAAP and non-GAAP
basis," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive
Officer of Regeneron. "With the recent U.S. approval of EYLEA for the
treatment of macular edema following central retinal vein occlusion (CRVO),
and receipt of a Medicare J-Code for EYLEA in January 2013, we expect
continued strong U.S. growth for EYLEA and forecast U.S. net sales of $1.2
billion to $1.3 billion in 2013. Outside the U.S., our partner Bayer
HealthCare has begun to launch EYLEA for the treatment of neovascular
age-related macular degeneration (wet AMD) in Japan, Europe, Australia, and
other regions, and we expect to see substantial sales growth through 2013 and
beyond as pricing approvals are received."

"Clinical development of EYLEA in additional indications continued to progress
in 2012, as the Phase 3 program in diabetic macular edema (DME) was fully
enrolled and a Phase 3 trial in macular edema following branch retinal vein
occlusion (BRVO) was initiated," said George D. Yancopoulos, M.D., Ph.D.,
Chief Scientific Officer, and President, Regeneron Laboratories. "Our
pipeline also advanced significantly during 2012, with the roll-out of our
broad Phase 3 ODYSSEY program for REGN727, an antibody targeting PCSK9 to
reduce low-density lipoprotein (LDL) cholesterol, and the full enrollment of
our first Phase 3 trial for sarilumab, our IL-6 receptor antibody in
rheumatoid arthritis. We are also encouraged by the potential of our IL-4R
inhibitor, REGN668. REGN668 demonstrated positive proof of concept in
allergic asthma and atopic dermatitis, and data from these trials will be
submitted to medical conferences for presentation later in the year. We look
forward to starting later stage, Phase 2b trials with this antibody during
2013."

Business Highlights - Fourth Quarter 2012 and 2013 to Date

EYLEA^® (aflibercept) Injection for Intravitreal Injection

  oThe Company and Bayer HealthCare collaborate on the global development and
    commercialization of EYLEA outside the United States, and share profits
    and losses from commercialization of EYLEA outside the United States
    except for Japan, where the Company receives a royalty on sales.
    Regeneron maintains exclusive rights to EYLEA in the United States and is
    entitled to all profits from any such sales.
  oIn November 2012, Bayer HealthCare received regulatory approval for EYLEA
    in the European Union for the treatment of patients with wet AMD. In
    November 2012, Bayer HealthCare received pricing approval for EYLEA in
    Japan for the treatment of patients with wet AMD.
  oNet sales recorded by Bayer HealthCare for EYLEA outside of the United
    States were $19 million in the fourth quarter of 2012.
  oLaunches in additional countries are anticipated to continue throughout
    2013 as regulatory and pricing approvals are achieved.
  oBayer HealthCare submitted applications for marketing authorization for
    EYLEA in Europe in December 2012 and in Japan in January 2013 for the
    treatment of macular edema following CRVO.

ZALTRAP^® (ziv-aflibercept) Injection for Intravenous Infusion

  oThe Company and Sanofi collaborate on the global development and
    commercialization of ZALTRAP, and share profits and losses from
    commercialization of ZALTRAP except for Japan, where the Company receives
    a royalty on sales. Sales of ZALTRAP in the United States commenced in
    August 2012, and net sales recorded by Sanofi were $23 million in the
    fourth quarter and $32 million for the full year of 2012.
  oIn February 2013, the European Commission (EC) granted marketing
    authorization in the European Union for ZALTRAP concentrate for solution
    for infusion in combination with irinotecan/5-fluorouracil/folinic acid
    (FOLFIRI) chemotherapy in adults with metastatic colorectal cancer (mCRC)
    that is resistant to or has progressed after an oxaliplatin-containing
    regimen. 
  oMarketing authorization applications for ZALTRAP are currently under
    review by other regulatory agencies worldwide.

Monoclonal Antibodies

  oRegeneron has eleven fully human monoclonal antibodies based on the
    Company's VelocImmune^® technology in clinical development, including six
    in collaboration with Sanofi.
  oODYSSEY, a large, global Phase 3 program with REGN727, an antibody
    targeting PCSK9 to reduce LDL cholesterol, was initiated in June 2012 and
    is currently enrolling patients. The Company expects to report initial
    results from a Phase 3 ODYSSEY trial in the second half of 2013.
  oREGN668, an antibody targeting IL-4R, demonstrated positive proof of
    concept in allergic asthma and atopic dermatitis. Data in atopic
    dermatitis will be presented at the 71^st Annual Meeting of the American
    Academy of Dermatology in March 2013. Data in allergic asthma will be
    submitted to medical conferences for presentation later in the year.
  oREGN1500, an antibody against an undisclosed target that is being
    developed outside of the Sanofi collaboration, entered clinical
    development.

Fourth Quarter and Full Year 2012 Financial Results

Total Revenues: Total revenues were $415 million in the fourth quarter and
$1.4 billion for the full year 2012, compared to $123 million in the fourth
quarter and $446 million for the full year 2011. Total revenues include
collaboration revenues of $127 million in the fourth quarter and $494 million
for the full year 2012, compared to $86 million in the fourth quarter and $370
million for the full year 2011. Included in collaboration revenues in 2012
were $15 million and $10 million substantive milestone payments from Bayer
HealthCare which the Company earned in the third quarter and fourth quarter of
2012, respectively, in connection with receipt of marketing and pricing
approvals in Japan for EYLEA for the treatment of wet AMD. In addition, the
Company earned a $50 million substantive milestone payment from Sanofi in the
third quarter of 2012 in connection with FDA approval of ZALTRAP for patients
with mCRC that is resistant to or has progressed following an
oxaliplatin-containing regimen.

Product Revenues: Net product sales were $281 million in the fourth quarter
and $858 million for the full year 2012, compared to $30 million in the fourth
quarter and $45 million for the full year 2011. The increase was due to the
approval and launch of EYLEA in November 2011. EYLEA net product sales were
$276 million in the fourth quarter and $838 million for the full year 2012,
compared to $25 million for both the fourth quarter and full year 2011.
ARCALYST net product sales were $5 million in both the fourth quarters of
2012 and 2011, and $20 million for both the full years 2012 and 2011. 

Research and Development (R&D) Expenses: In 2012, GAAP R&D expenses were $181
million in the fourth quarter and $626 million for the full year, compared to
$129 million in the fourth quarter and $530 million for the full year 2011.
The higher R&D expenses in 2012 were principally due to increased R&D
headcount and activities, primarily related to the Company's antibody
collaboration with Sanofi, and higher non-cash share-based compensation
expense, partly offset by lower EYLEA development costs incurred by Bayer
HealthCare. In 2012, R&D related non-cash share-based compensation expense
was $18 million for the fourth quarter and $54 million for the full year,
compared to $9 million in the fourth quarter and $33 million for the full year
2011.

Selling, General, and Administrative (SG&A) Expenses: In 2012, GAAP SG&A
expenses were $58 million in the fourth quarter and $211 million for the full
year, compared to $36 million in the fourth quarter and $117 million for the
full year 2011. The increase was primarily due to higher selling expenses in
connection with commercialization of EYLEA, higher SG&A headcount, and higher
non-cash share-based compensation expense. In 2012, SG&A related non-cash
share-based compensation expense was $12 million in the fourth quarter and $39
million for the full year, compared to $6 million in the fourth quarter and
$23 million for the full year 2011. 

Cost of Goods Sold (COGS): In 2012, GAAP COGS was $30 million in the fourth
quarter and $84 million for the full year, compared to $3 million in the
fourth quarter and $4 million for the full year 2011. The increase in 2012
was due to the launch of EYLEA in the fourth quarter of 2011.

Interest Expense: In 2012, GAAP interest expense was $11 million in the fourth
quarter and $45 million for the full year, compared to $9 million in the
fourth quarter and $21 million for the full year 2011. In connection with the
Company's convertible senior notes, which were issued in October 2011, the
Company incurred interest expense of $8 million in the fourth quarter of 2012,
and $29 million for the full year 2012, which included $6 million and $22
million of non-cash interest expense, respectively. In both the fourth
quarter and full year 2011, the Company incurred interest expense of $5
million related to the Company's convertible senior notes, which included $4
million of non-cash interest expense.

Income Tax Benefit: In the fourth quarter of 2012, the Company recorded a GAAP
income tax benefit of $336 million, primarily attributable to the release of
substantially all of the valuation allowance associated with the Company's
deferred tax assets. The decision to reverse the valuation allowance was made
after the Company determined that it was more likely than not that these
deferred tax assets would be realized. Due to the release of the valuation
allowance in 2012, starting in 2013, the Company will record income taxes on
GAAP income using an estimated effective tax rate (which is expected to
approximate statutory tax rates). Non-GAAP net income excludes the release of
the valuation allowance described above, as well as non-cash income tax
expense. The Company does not currently pay, or expect to pay in the near
future, significant cash income taxes. When the Company begins paying
significant cash income taxes, it expects to no longer exclude non-cash income
tax expense from non-GAAP net income.

Non-GAAP and GAAP Net Income (Loss): The Company reported non-GAAP net income
of $171 million, or $1.79 per basic share and $1.47 per diluted share, in the
fourth quarter of 2012, compared to a non-GAAP net loss of $34 million, or
$0.37 per share (basic and diluted), in the fourth quarter of 2011. The
Company reported non-GAAP net income of $530 million, or $5.60 per basic share
and $4.66 per diluted share, for the full year 2012, compared to a non-GAAP
net loss of $162 million, or $1.79 per share (basic and diluted), for the full
year 2011. Non-GAAP net income (loss) excludes non-cash share-based
compensation expense, non-cash interest expense related to the convertible
senior notes, and non-cash income tax expense or benefit.

The Company reported GAAP net income of $470 million, or $4.92 per basic share
and $4.08 per diluted share, in the fourth quarter of 2012, compared to a GAAP
net loss of $53 million, or $0.58 per share (basic and diluted), in the fourth
quarter of 2011. The Company reported GAAP net income of $750 million, or
$7.92 per basic share and $6.75 per diluted share, for the full year 2012,
compared to a GAAP net loss of $222 million, or $2.45 per share (basic and
diluted), for the full year 2011.

Cash Position: At December 31, 2012, cash and marketable securities totaled
$588 million (including $8 million of restricted cash and marketable
securities), compared to $811 million (including $8 million of restricted cash
and marketable securities) at December 31, 2011. In addition, accounts
receivable related to sales of EYLEA totaled $592 million at December 31,
2012, compared to $26 million at December 31, 2011.

Use of Non-GAAP Financial Measures: The Company believes that the presentation
of non-GAAP measures is useful to investors because it excludes (i) non-cash
share-based compensation expense which fluctuates from period to period based
on factors that are not within the Company's control, such as the Company's
stock price on the dates share-based grants are issued, (ii) non-cash interest
expense related to the Company's convertible senior notes since this is not
deemed useful in evaluating the Company's operating performance, (iii)
non-cash income tax expense, since the Company does not currently pay, or
expect to pay in the near future, significant cash income taxes due primarily
to the utilization of net operating loss and tax credit carry-forwards;
therefore, non-cash income tax expense is not deemed useful in evaluating the
Company's operating performance, and (iv) a non-cash tax benefit as a result
of releasing substantially all of the valuation allowance associated with the
Company's deferred tax assets. Furthermore, management uses these non-GAAP
measures for planning, budgeting, forecasting, assessing historical
performance, and making financial and operational decisions, and also provides
forecasts to investors on this basis. However, there are limitations in the
use of these non-GAAP financial measures as they exclude certain expenses that
are recurring in nature. Furthermore, the Company's non-GAAP financial
measures may not be comparable with non-GAAP information provided by other
companies. The non-GAAP financial measures should be considered supplemental
to, and not a substitute for, measures of financial performance prepared in
accordance with GAAP. A reconciliation of the Company's GAAP to non-GAAP
results is included in Table 3 of this press release.

Conference Call Information

Regeneron will host a conference call and simultaneous webcast to discuss its
fourth quarter and full year 2012 financial and operating results on Thursday,
February 14, 2013, at 8:30 AM. To access this call, dial (888) 660-6127
(U.S.) or (973) 890-8355 (International). A link to the webcast may be
accessed from the 'Events and Presentations' page of Regeneron's website at
www.regeneron.com. A replay of the conference call and webcast will be
archived on the Company's website and will be available for 30 days.

About Regeneron Pharmaceuticals, Inc.

Regeneron is a leading science-based biopharmaceutical company based in
Tarrytown, New York that discovers, invents, develops, manufactures, and
commercializes medicines for the treatment of serious medical conditions.
Regeneron markets medicines for eye diseases, colorectal cancer, and a rare
inflammatory condition and has product candidates in development in other
areas of high unmet medical need, including hypercholesterolemia, rheumatoid
arthritis, asthma, and atopic dermatitis. For additional information about
the company, please visit www.regeneron.com.

Regeneron Forward-Looking Statement

This news release includes forward-looking statements that involve risks and
uncertainties relating to future events and the future financial performance
of Regeneron, and actual events or results may differ materially from these
forward-looking statements. These statements concern, and these risks and
uncertainties include, among others, the nature, timing, and possible success
and therapeutic applications of Regeneron's products, product candidates, and
research and clinical programs now underway or planned, including without
limitation EYLEA^® (aflibercept); unforeseen safety issues resulting from the
administration of products and product candidates in patients; the likelihood
and timing of possible regulatory approval and commercial launch of
Regeneron's late-stage product candidates; determinations by regulatory and
administrative governmental authorities which may delay or restrict
Regeneron's ability to continue to develop or commercialize Regeneron's
products and product candidates; competing drugs and product candidates that
may be superior to Regeneron's products and product candidates; uncertainty of
market acceptance of Regeneron's products and product candidates; the ability
of Regeneron to manufacture and manage supply chains for multiple products and
product candidates; coverage and reimbursement determinations by third-party
payers, including Medicare and Medicaid; unanticipated expenses; the costs of
developing, producing, and selling products; the ability of Regeneron to meet
any of its sales or other financial projections or guidance and changes to the
assumptions underlying those projections or guidance; the potential for any
license or collaboration agreement, including Regeneron's agreements with
Sanofi and Bayer HealthCare, to be canceled or terminated without any further
product success; and risks associated with third party intellectual property
and pending or future litigation relating thereto. A more complete
description of these and other material risks can be found in Regeneron's
filings with the United States Securities and Exchange Commission, including
its Form 10-K for the year ended December 31, 2011 and its Form 10-Q for the
quarter ended September 30, 2012. Regeneron does not undertake any obligation
to update publicly any forward-looking statement, including without limitation
any financial projection or guidance, whether as a result of new information,
future events, or otherwise, unless required by law.

This news release and/or the financial results attached to this news release
include amounts that are considered "non-GAAP financial measures" under SEC
rules. As required, Regeneron has provided reconciliations of these measures.



Contacts Information:
Michael Aberman, M.D.           Peter Dworkin
Investor Relations           Corporate Communications
914.847.7799                 914.847.7640 
michael.aberman@regeneron.com  peter.dworkin@regeneron.com



TABLE 1
REGENERON PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS (Unaudited)
(In thousands)
                                                  December 31,   December 31,
                                                  2012           2011
ASSETS
Cash, restricted cash, and marketable securities  $  587,511     $  810,550
Accounts receivable - trade, net                     593,207        28,254
Accounts receivable from Sanofi                      99,913         74,781
Deferred tax assets                                  340,156
Property, plant, and equipment, net                  379,940        367,955
Other assets                                         79,763         42,043
Total assets                                      $  2,080,490   $  1,323,583
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses, and other     $  118,604     $  102,068
liabilities
Deferred revenue                                     259,173        300,250
Facility lease obligations                           160,810        160,514
Convertible senior notes                             296,518        275,019
Stockholders' equity                                 1,245,385      485,732
Total liabilities and stockholders' equity        $  2,080,490   $  1,323,583





TABLE 2
REGENERON PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
                          Three months ended        Year ended
                          December 31,              December 31,
                          2012         2011         2012          2011
Revenues:
 Net product sales      $ 281,471    $ 29,752     $ 858,093     $ 44,686
 Sanofi collaboration     104,779      77,032       423,814       326,609
revenue
 Bayer HealthCare         21,791       9,374        70,099        43,072
collaboration revenue
 Technology licensing     5,892        5,892        23,571        24,858
 Contract research and    669          927          2,900         6,599
other
                            414,602      122,977      1,378,477     445,824
Expenses:
 Research and             181,024      129,041      625,554       529,506
development
 Selling, general, and    57,739       36,349       210,755       117,261
administrative
 Cost of goods sold       30,169       2,989        84,455        4,216
                            268,932      168,379      920,764       650,983
Income (loss) from          145,670      (45,402)     457,713       (205,159)
operations
Other income (expense):
 Investment income        384          799          2,012         3,549
 Interest expense         (11,495)     (9,455)      (45,304)      (21,282)
                            (11,111)     (8,656)      (43,292)      (17,733)
Income (loss) before        134,559      (54,058)     414,421       (222,892)
income taxes
Income tax benefit          335,848      615          335,848       1,132
Net income (loss)         $ 470,407    $ (53,443)   $ 750,269     $ (221,760)
Net income (loss) per     $ 4.92       $ (0.58)     $ 7.92        $ (2.45)
share - basic
Net income (loss) per     $ 4.08       $ (0.58)     $ 6.75        $ (2.45)
share - diluted
Weighted average shares     95,691       91,797       94,685        90,610
outstanding - basic
Weighted average shares     117,237      91,797       115,382       90,610
outstanding - diluted





 TABLE 3
 REGENERON PHARMACEUTICALS, INC.
 RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
 (Unaudited)
 (In thousands, except per share data)
               Three months ended           Year ended
               December 31,                 December 31,
               2012             2011        2012               2011
 GAAP net
 income        $ 470,407        $ (53,443)  $ 750,269          $ (221,760)
 (loss)
 Adjustments:
  R&D:
 Non-cash
 share-based     18,498           9,198       53,833             32,757
 compensation
 expense ^(1)
  SG&A:
 Non-cash
 share-based     11,851           6,314       39,249             23,315
 compensation
 expense ^(1)
  COGS:
 Non-cash
 share-based     422                          1,075
 compensation
 expense ^(1)
  Interest
 expense:
 Non-cash
 interest
 related to      5,591            3,944       21,623             3,944
 convertible

  senior
 notes ^(2)
  Income
 taxes:
 Non-cash        4,308                        4,308
 income tax
 expense ^(3)
  Income
 taxes:
 Release of      (340,156)                    (340,156)
 valuation
 allowance
 ^(4)
 Non-GAAP net
 income        $ 170,921        $ (33,987)  $ 530,201          $ (161,744)
 (loss)
 Non-GAAP net
 income
 (loss) per    $ 1.79           $ (0.37)    $ 5.60             $ (1.79)
 share -
 basic
 Non-GAAP net
 income
 (loss) per    $ 1.47      ^(5) $ (0.37)    $ 4.66      ^^^(5) $ (1.79)
 share -
 diluted
 Shares used
 in
 calculating:
 Non-GAAP net
 income
 (loss) per      95,691           91,797      94,685             90,610
 share -
 basic
 Non-GAAP net
 income
 (loss) per      117,237          91,797      115,382            90,610
 share -
 diluted ^(6)



^(1)  To exclude non-cash compensation expense related to employee stock
       option and restricted stock awards
       To exclude non-cash interest expense related to the amortization of the
^(2) debt discount and debt issuance costs on the Company's 1.875%
       convertible senior notes
^(3) To exclude GAAP income tax expense as this amount is not payable in
       cash
       To exclude non-cash tax benefit related to releasing substantially all
^(4) of the valuation allowance associated with the Company's deferred tax
       assets
       For diluted non-GAAP per share calculations, excludes $1.9 million of
       interest expense for the three months ended December 31, 2012 and $7.5
^(5)  million of interest expense for the year ended December 31, 2012,
       related to the contractual coupon interest rate on the Company's 1.875%
       convertible senior notes, since these securities were dilutive
       For periods with non-GAAP net income, weighted average shares
^(6)  outstanding includes the dilutive effect, if any, of employee stock
       options, restricted stock awards, convertible senior notes, and
       warrants





SOURCE Regeneron Pharmaceuticals, Inc.

Website: http://www.regeneron.com
 
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