Regeneron Reports 24% Revenue Growth in Q2 Driven by Eylea, Dupixent, and U.S. Government Contracts

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Affected by the pandemic, many pharmaceutical companies experienced a decline in performance in the second quarter of this year. However, Regeneron achieved a 24% revenue growth, driven by the strong performance of its ophthalmic drug Eylea and anti-inflammatory drug Dupixent, as well as supply agreements with the U.S. government for its COVID-19 antibody cocktail.

On August 5, Regeneron released its second-quarter 2020 financial results: revenue reached $1.95 billion, a year-on-year increase of 24%, exceeding the previously expected $1.74 billion. GAAP diluted earnings per share (EPS) was $7.61, and non-GAAP EPS was $7.16.

As a key segment within ophthalmology significantly impacted by the pandemic, Eylea achieved net sales of $1.114 billion in the U.S. market (compared to $1.16 billion in the same period last year), representing a 4% year-over-year decline but still exceeding expectations. During the same period, sales of the competing product Lucentis dropped by 25%.

Eylea has demonstrated superior performance across the anti-VEGF landscape, with its market share continuing to grow; it currently accounts for 73% of branded drug sales in the U.S. market. In fact, since May, Eylea’s sales have been rebounding as medical experts reopen their offices and patient volumes increase. Its flexible 12-week dosing interval has proven to be a valuable feature for treating patients during the pandemic.

Global net sales of the anti-inflammatory drug Dupixent reached $945 million (as recorded by Sanofi), surpassing consensus estimates by 4%, primarily driven by the U.S. market. Sales of the anti-PD-1 therapy Libtayo also exceeded industry expectations, with global second-quarter sales totaling $80 million. Recently, in a Phase III clinical trial for first-line treatment of non-small cell lung cancer (NSCLC), Libtayo demonstrated a significant improvement in overall survival compared to chemotherapy. Regeneron has planned to submit an application for this new indication in the United States.

Total revenue also included $513 million in collaboration income from Sanofi and Bayer, compared to $353 million in the same period last year. The increase in revenue from the Sanofi collaboration was driven by the company’s profit share from antibody commercialization, which amounted to $172 million in the second quarter (compared to $39 million in the same period last year). This change was primarily due to higher profits from Dupixent.

In the second quarter, the company’s other income also included revenue related to agreements with the U.S. government—specifically, the Biomedical Advanced Research and Development Authority (BARDA) within the U.S. Department of Health and Human Services (HHS). These agreements provided funding for the development activities of REGN-EB3, a triple-antibody cocktail for treating Ebola, and REGN-COV2, a double-antibody cocktail for treating COVID-19.

In June this year, the U.S. Department of Health and Human Services (HHS) exercised its option under the existing Ebola infection drug agreement to provide additional funding for the manufacturing and supply of REGN-EB3, which is undergoing priority review by the U.S. FDA with a target action date of October 25, 2020. Subject to FDA approval, Regeneron expects to deliver a predetermined number of therapeutic doses over approximately six years.

Furthermore, under an agreement signed with BARDA and the U.S. Department of Defense, Regeneron has secured a contract worth $450 million to supply REGN-COV2 to the U.S. government. The agreement stipulates that Regeneron will manufacture fixed quantities of REGN-COV2 active pharmaceutical ingredient (API) batches starting in the summer of 2020, and begin fill-finish and storage activities in the third quarter of this year.

REGN-COV2 consists of two antibodies that target two distinct, non-overlapping sites within the receptor-binding domain of the SARS-CoV-2 spike protein. These two antibodies act synergistically to reduce the risk of viral escape due to mutations. Data from non-human primate studies demonstrate that REGN-COV2 can prevent SARS-CoV-2 infection and treat infected animals by accelerating viral clearance.

Following a review of Phase I clinical safety results, Regeneron and the NIAID jointly initiated a Phase III trial to evaluate the drug’s potential to prevent infection in individuals who had close contact with COVID-19 patients but were not infected. In addition, REGN-COV2 has entered the Phase 2/3 portion of two adaptive Phase 1/2/3 clinical trials, assessing its efficacy in treating both hospitalized and non-hospitalized COVID-19 patients. The company plans to report preliminary virologic and biomarker results from these human studies in September.

Reference Source: Regeneron Rises on Eylea, Dupixent Strength as COVID-19 Antibody Funding Pours In