Michael S. Aberman - Senior Vice President, Strategy & Investor Relations Leonard S. Schleifer, M.D., Ph.D. - Founder, President and Chief Executive Officer George Damis Yancopoulos, M.D., Ph.D. - Founding Scientist, President, Regeneron Laboratories and Chief Scientific Officer Robert J. Terifay - Senior Vice President-Commercial Robert E.

Landry - Senior Vice President Finance and Chief Financial Officer.

Yaron B. Werber - Citigroup Global Markets, Inc. (Broker) Geoffrey Craig Porges - Sanford C. Bernstein & Co. LLC Chris J. Raymond - Robert W. Baird & Co., Inc. (Broker) Ying Huang - Bank of America Merrill Lynch Terence C. Flynn - Goldman Sachs & Co. Joseph P. Schwartz - Leerink Partners LLC Matt M. Roden - UBS Securities LLC Adnan S.

Butt - RBC Capital Markets LLC Cory W. Kasimov - JPMorgan Securities LLC John Newman - Canaccord Genuity, Inc. Geoffrey Meacham - Barclays Capital, Inc..

Good day, ladies and gentlemen, and welcome to the Regeneron Pharmaceuticals First Quarter 2015 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Dr. Michael Aberman, Senior Vice President, Strategy & Investor Relations of Regeneron. Sir, you may begin..

Thank you very much, operator. Good morning, and welcome to Regeneron Pharmaceuticals' first quarter 2015 Conference Call. An archive of this webcast will be available on our website under Events and Presentations for 30 days. Joining me on the call today are Dr.

Leonard Schleifer, Founder, President and Chief Executive Officer; George Yancopoulos, Founding Scientist, President of Regeneron Laboratories and Chief Scientific Officer; Bob Terifay, Senior Vice President, Commercial; and Bob Landry, Chief Financial Officer. After our prepared remarks, we will open the call for Q&A.

I'd also like to remind you that remarks made on this call include forward-looking statements about Regeneron.

Such statements may include, but are not limited to, those related to Regeneron and its products and businesses, sales and expense forecast, financial forecast, development programs, collaborations, finances, regulatory matters, intellectual property and competition.

Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in such statements.

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, 2014 and Form 10-Q for the quarter ended March 31, 2015, which was filed with the SEC this morning.

Regeneron does not undertake any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. In addition, please note that GAAP and non-GAAP measures will be discussed on today's call.

Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP are available in our financial results press release, which can be accessed on our website at www.regeneron.com. Once our call concludes, the IR team will be available to answer further questions.

With that, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer..

Thank you, Michael, and a very good morning to everyone who has joined us on the call and webcast today. The first quarter of 2015 was once again a very busy and productive time for Regeneron.

Our underlying business continues to be strong, and we believe that we are well positioned to further execute on our goal of building an innovative company that consistently brings new medicines to patients with serious diseases.

We are pleased with the continued growth that we have seen with our flagship drug, Eylea, also known as aflibercept, where U.S. sales grew over 50% year-over-year. Based on these strong results, we are raising our guidance for the U.S. Eylea net sales growth for the full year 2015 to 30% to 35%, from the previously provided range of 25% to 30%.

Turning to Praluent, we and our collaborators, Sanofi, are actively engaged in preparing for our upcoming FDA advisor committee meeting on June 9. In the U.S., we have been granted an FDA action date of July 24.

Our commercial teams have been very busy preparing for the anticipated approval and launch of Praluent, and you will hear more about this from Bob Terifay. As we have said before, we believe that our long-term growth will be fueled by our ability to consistently bring innovative medicines to the market.

To do this, we must continually advance and refuel a pipeline of medicines to help patients. We now have 16 product candidates in the clinic, and you'll hear more about some key advances from George.

In particular, our late stage pipeline is advancing rapidly, with a submission plan for sarilumab, our IL-6 receptor antibody later this year, and continued progress with dupilumab, our IL-4, IL-13 blocking antibody. With that, let me turn the call over to George, and he will be followed by Bob Terifay and then Bob Landry.

George?.

Thank you, Len, and a very good morning to everyone who has joined us today. Let me begin with Eylea. In February, the full results of the independent NIH-sponsored Protocol T study in diabetic macular edema, or DME, were published online and subsequently in the print edition in March in the New England Journal of Medicine.

The results from this study demonstrated that, compared to Lucentis and Avastin, Eylea provided significantly greater efficacy, despite one fewer injection and fewer laser treatments.

The improvement with Eylea relative to alternative anti-VEGF therapies were particularly apparent in the group with moderate or worse vision loss at the start of the trial. We are pleased with the positive reception that these data have garnered from the retinal specialist community.

Eylea received an additional FDA approval in the first quarter when it was approved for the treatment of diabetic retinopathy in patients with DME. Outside the United States, Eylea was approved by the European Commission for the treatment of visual impairment due to macular edema secondary to retinal vein occlusion, or RVO.

Our combination trials with Eylea are underway, and a Phase II trial of Eylea co-formulated with our PDGF receptor antibody is now ongoing. This trial will explore two doses of the PDGF receptor antibody, each combined with 2 milligrams of Eylea in a single intravitreal injection.

The FDA has granted this program fast-track designation for the treatment of patients with wet AMD. Our phase I combination study of Eylea co-formulated with our ANGPTL2 antibody, nesvacumab, also in a single intravitreal injection, is also ongoing, and we expect to report data from this study later in the year.

Turning to Praluent, our PCSK9 antibody for lowering LDL-cholesterol. 18-month results from the ODYSSEY long-term trial were published in the New England Journal of Medicine, in a paper titled Efficacy and Safety of Alirocumab in Reducing Lipids and Cardiovascular Events.

These data showed robust and consistent LDL-cholesterol lowering with Praluent from the largest double-blind placebo controlled trial of a PCSK9 inhibitor to date, and demonstrated that Praluent, when added to statin therapy at the maximally tolerated dose, significantly reduced LDL-cholesterol levels.

Additionally, in a post hoc analysis from this study, there was evidence of a reduction in the rate of major adjudicated cardiovascular events, or MACE, with Praluent. At the American College of Cardiology Meeting, we presented data from the CHOICE I and CHOICE II studies, which explored every four-week dosing of Praluent.

Though the every four-week dosing data will not be included in the initial Biologics License Application, these are important data that further support an individualized dosing approach to patients' lipid-lowering needs.

Importantly, these data were consistent with the LDL-cholesterol lowering observed among alirocumab-treated patient across our Phase III program to date. Turning now to our immunology and inflammation portfolio. Dupilumab, our IL-4, -13 blocking antibody, has made clinical progress across multiple indications.

As a reminder, the positive Phase IIa data of dupilumab in asthma and atopic dermatitis were both published in the New England Journal of Medicine. Later this month, we will be presenting data from the positive Phase IIb study in asthma at the Annual Meeting of the American Thoracic Society.

As a reminder, following discussions with the FDA, this study will be considered a pivotal trial, which means that we will only need to conduct a single Phase III efficacy study in asthma, which we recently initiated.

An additional major indication for dupilumab, atopic dermatitis, for which we have been granted breakthrough designation, is currently enrolling patients in the Phase III LIBERTY program. We also recently initiated a study in atopic dermatitis in children.

We expect to initiate another Phase III program in patients with nasal polyps with associated chronic sinusitis later this year. Our proof of concept study in the eosinophilic esophagitis indication is ongoing.

Turning to sarilumab, our IL-6 receptor antibody for rheumatoid arthritis, which has demonstrated positive data in both signs and symptoms, as well as in radiographic progression, in the Phase III MOBILITY study. We expect to report data from additional Phase III studies in the second quarter of this year.

We are planning on a regulatory submission in the United States in the second half of the year. We now have a pipeline of 15 fully human monoclonal antibody products that are in clinical development. I'd like to take a few minutes to highlight some of our earlier stage pipeline antibodies.

Fasinumab, our nerve growth factor antibody for chronic pain, is expected to move into pivotal studies later this year in osteoarthritis. RSV, or respiratory syncytial virus, is a common seasonal infectious disease that is the leading cause of bronchiolitis, pneumonia and hospitalization in children under the age of 1.

Based upon our discussions with the FDA, we now plan to move into pivotal studies with this program, which we expect to initiate mid-year in the Southern hemisphere. Our antibody is designed to have a higher affinity for RSV and a longer half-life than the currently approved therapy, which could result in less frequent dosing.

Regeneron 1033 is our fully human antibody to GDF8 or myostatin. We recently presented proof of mechanism data in healthy volunteers at the International Conference on Frailty and Sarcopenia Research.

In a separate Phase II proof-of-concept study in elderly patients with sarcopenia, all three doses of Regeneron 1033 met their primary endpoint of an increase in lean body mass by DEXA scan at 12 weeks compared to placebo, with changes compared to placebo of approximately 2%. This is in line with other agents that target GDF8.

We also observed improvements in some, but not all, exploratory functional endpoints in this trial. Overall, the drug was well tolerated, with no safety signals. Based on these initial results, we are considering various options for next steps for this molecule, which may include combination with other agents.

Data from this Phase II study will be presented at a future medical meeting. Turning to immuno-oncology. Our earlier stage assets are advancing. Our PD-1 antibody and our CD20xCD3 bispecific antibody are both in the clinic.

While it is still very early, and we have only enrolled small numbers of patients, we have already started to see preliminary signs of clinical activity, such as B cell depletion with the bispecific antibody, and early clinical responses with our PD-1 antibody.

We hope to be able to share more data from these programs with you later this year or early next year. We also have multiple additional immuno-oncology targets in pre-clinical development which we anticipate could be moved into the clinic in the next 12 months to 14 months.

I also want to take a moment to give you an update on the progress that we have made at the Regeneron Genetics Center, or the RGC.

We have entered into several key collaborations, including with a hospital for sick children in Toronto for the world's largest genetic study in pediatric Inflammatory Bowel Disease, with the Broad Institute and Lund University for large scale cardiovascular target sequencing project, and the University of Maryland for an Amish genetics collaboration.

We expect to have sequenced about 100,000 individuals by the end of this year. With that, I would like to now turn the call over to Bob Terifay..

our special representatives, our hospital specialists, and our reimbursement specialists, have been hired, and the first two waves of home office training have been completed. I'm very impressed with the caliber and experience of the Praluent team that we hired in less than three months.

This required screening 20,000 resumes and conducting almost 2,000 interviews. This will be a market that requires development, given that Praluent represents one of the first injectable biologics for chronic cardiovascular disease with a novel mechanism of action.

We've already launched our unbranded physician and patient campaigns, including educational websites. Meanwhile, we're busy finalizing testing of the potential branded campaigns, preparing our sales and education pieces and programs, and evaluating pricing options.

As has been broadly reported in the press, the PCSK9 inhibitor class is garnering significant scrutiny from payers, pharmacy benefits managers, and specialty pharmacies. We expect the reimbursement environment to be complex and carefully managed.

Our goal is to ensure that payers and healthcare providers understand the value the PCSK9 inhibitors can offer to patients, and the need for physician choice when initiating PCSK9 inhibitor treatment. We're working with the players involved in the market access decision-making process to focus on patient good.

That said, it will likely take several months for commercial and government payers to conduct formulary reviews, make reimbursement coverage decisions, and begin to process patient claims. Given these reasons, we expect an initial gradual uptake at launch.

We're also busy preparing the market for the potential launch of sarilumab in the United States next year. We have a significant presence at the European League Against Rheumatism meeting in Rome in June, and the American College of Rheumatology meeting in San Francisco in November.

Overall, we are undertaking substantial commercial investments to fully maximize these exciting opportunities and reach appropriate patients who can benefit most from treatment. Bob Landry will provide more detail on the financial impact. With that, let me turn over the call to our Chief Financial Officer, Bob Landry..

our obligation to pay for 20% of the phase III clinical development expense following the first positive Phase III results of our partnered antibodies, advancing our unpartnered pipeline in proprietary R&D initiatives, such as those in the area of human genomics.

Non-GAAP SG&A expenses were $117 million for the first quarter, and we do expect SG&A expenses to accelerate over the balance of the year as we ready the market for the launch of Praluent. We continue to expect non-GAAP SG&A expenses in 2015 to be in the range of $650 million to $725 million.

As previously mentioned, a portion of the SG&A expense will be offset by the reimbursement of Regeneron commercialization-related expenses recorded within Sanofi collaboration revenue. Non-GAAP cost of goods sold was $40 million for the quarter. As a reminder, in 2015, we expect to begin paying significant cash income taxes.

Our non-GAAP tax rate for this quarter, and for all of 2015, will be based on an estimate of the cash taxes paid or payable for the full year, which will be substantially lower than our GAAP effective tax rate. On a non-GAAP basis, our estimated tax rate for the first quarter of 2015 was approximately 12.5% of non-GAAP pre-tax income.

We continue to guide for cash tax as a percentage of non-GAAP pre-tax net income to be between 10% and 20% for 2015. Our capital expenditures for the first quarter of 2015 were $114 million.

Given this first quarter spend, in our remaining outlook, we are tightening our 2015 capital expense guidance to be between $650 million and $750 million, as compared to $650 million and $800 million.

Our Limerick commercial manufacturing site, which is under construction, continues to represent our largest capital investment in 2015, and we are on track to begin manufacturing validation batches in the second half of this year.

We also recently completed a land purchase of approximately 100 undeveloped acres adjacent to our Westchester County campus in Tarrytown to provide flexibility for future expansion. We ended the first quarter of 2015 with cash and marketable securities of $1.23 billion compared to $1.36 billion at December 31, 2014.

The decrease in cash and marketable securities versus year-end 2014 was partly due to higher trade accounts receivables resulting from lengthened payment terms to U.S. Eylea customers effective mid-2014 in connection with the launch of Eylea for the treatment of DME. These extended U.S.

Eylea dating (30:12) terms were subsequently reduced in the first quarter 2015. In addition, during the first quarter of 2015, we paid a total of $125 million to reduce the number of outstanding warrants held by one of our warrant holders.

These warrants had originally been issued in connection with the issuance of our senior convertible notes in 2011. Also, in a noteworthy change to our liquidity profile, in March 2015, we entered into a $750 million revolving credit facility which provides access to capital for general corporate purposes.

We have no current plans to draw upon this facility. Lastly, in April, note holders surrendered $127 million principal amount of our senior convertible notes which will be settled in the second quarter of 2015. After settling these conversion obligations, only $35 million principal amount of our senior convertible notes will remain outstanding.

All of these transactions are more fully explained in our first quarter 2015 10-Q which was filed earlier this morning. With that, I'd like to turn the call back to Michael..

Thanks, Bob. That concludes our prepared remarks. We'd now like to open the call for Q&A. As we'd like to give as many people a chance to ask questions, I remind everyone to please limit yourselves to one question. Again, as a reminder, our team will be available in our office after the call for any follow-up.

Thank you, operator, if you can now please open the call for questions..

And our first question comes from the line of Yaron Werber with Citi. Your line is now open..

Great. Thanks for taking my question. Really, congrats, this is a terrific amount of progress, especially on the pipeline. I'm going to be boring and just take the first Eylea question.

It looks like the growth looks pretty good, obviously, and the launch in DME, which frankly sort of tracks with what our servers (32:05) have been saying historically, which is faster than your initial comments going back six months ago.

What's the difference? What's driving the growth? Is it just purely Protocol T, or are you actually seeing market growth? Thank you..

Bob, do you want to take that?.

The Protocol T study has definitely had an impact on the perception of Eylea in the treatment of DME. And it appears that a lot of the growth, much of the growth, is coming at the – share offset from bevacizumab and ranibizumab. We are now focused on trying to grow the market more, as I indicated, by getting more patients into retinal specialists.

But the initial growth appears to be primarily at the – coming from the competitors..

Next question?.

And our next question comes from the line of Geoffrey Porges with Bernstein. Your line is now open..

Thank you very much, and add my congratulations on the progress and the good results for the quarter. Perhaps I'll just take a question on the pipeline, George, since you're on the call. On 2222, you moved the timeline up, which is encouraging.

Do you think it's feasible that you could get through Phase III in a single season in the Southern and Northern hemisphere? And, related to that, is it looking as though this is a product that's suitable for full-term infants, or are you going to focus on the preemies, as your predecessor did?.

I think those are great questions. Of course, generally, one would need to have two pivotal trials. So we're hoping that we would be able to complete in one season, one of the studies, though we are prepared to extend it if need be. And I think – you point to the potential opportunity here. There's a large unmet need.

RSV is, in terms of total numbers, occurs much more frequently in full-term infants, as you point out, and it causes a lot of disease and morbidity in that population, where, right now, treatment is not standard of care, and it would be wonderful to that population to offer them an alternative that – or to offer them a therapy that could actually prevent this serious disease in infants.

So, it's possible that that could comprise a large part of the opportunity..

Great. Thanks very much..

Great.

Next question?.

Thank you. And our next question comes from the line of Chris Raymond with Robert W. Baird. Your line is now open..

Hey. Thanks. Just another sort of DME question. I think you guys have long talked about the share of intravitreal therapies in DME patients being obviously less than AMD. I think the number, I've heard you guys say it for a while, is 40% share. So, some of our feedback has been that that might be coming higher as time progresses.

I wonder if you could maybe update your thoughts for us on what that share might be now or have you seen it, given all the data that's come, have you seen specifically, a movement in that share? Thanks..

Chris, obviously, all of our information, and the information that is in the public domain, is from anecdotal qualitative surveys with physicians. I think that there's some growth in the anti-VEGF penetration.

But the reality in DME is, unlike wet AMD, where patients' vision is at risk if you don't treat aggressively, this is a disease where physicians go slower. And I think, aside from the 40% that you're quoting, the bigger challenge in this marketplace is that many patients get diagnosed with DME and don't make it to a retinal specialist.

They're with an optometrist or with an ophthalmologist, where they don't get access to anti-VEGF therapy.

So, we're working very hard right now to try to get more people into a retinal specialist and treat it with an anti-VEGF therapy, but that is the big obstacle in the marketplace, to make sure the doctors get to the right doctor – or the patients get to the right doctor.

George?.

Yeah. And I just want to make a few comments. Obviously, this is a relatively new field. But now I think, over the last few years, the field has really recognized some things that make a huge difference. Of course, as Bob said, one of the problems is that there's a low diagnosis rate, and there's a low treatment rate right now.

However, there's also now the recognition from the entire field that anti-VEGFs really are a dramatic improvement over the previous standard of care and approaches, including laser therapy and so forth. So I think that's a really big recognition.

And, of course, another huge piece of data now comes from the Protocol T study that says that some anti-VEGF agents are much more powerful at controlling the disease, and improving vision, than other anti-VEGF agents.

So, we believe that there is a very large unmet need here, in terms of patients not being diagnosed and not being treated with anti-VEGF therapy, and not receiving, obviously, the best anti-VEGF therapy. And that's a very, very large opportunity..

Great. Thanks, guys..

Thank you. And our next question comes from the line of Ying Huang with Bank of America Merrill Lynch. Your line is now open..

Hi. Thank you for taking my questions, and good morning to everyone. So, Len, I know that you recently met with the CEO of Sanofi. Can you give us, on a high level, what you think the collaboration's going through, and where the strategic direction there is for Sanofi with your collaboration? And then, I have a detailed question about the DRCR trial.

So, obviously, we have all anecdotally heard from doctors that the result has been making impact on their practice in DME. Do you guys think that there will be some read-through or spillover effect into AMD as well? Thank you..

Thanks, Ying. I have one question for you.

Are you following me around, or...?.

Actually, Len, I want to know what happened in Cuba, too..

So, the answer to your first question is yes, of course, we've met and spoken with, several times, the CEO, as we would – expected to do with such an important collaborator of ours, with Sanofi. I think Olivier was a great choice by Sanofi's board to lead that company.

He's got a lot on his plate, but we were pleased to see that, high up on that list, was the relationship with Regeneron. That relationship has got a lot to do, and we've – certainly our focus, both on, how do we make sure that the launches are going to go seamlessly and spectacularly – that's sort of job number one.

You do all this hard research and development work, and now we got to finish it off by strong launches. And obviously, we've got three potential launches coming over the next several years.

Not just with Praluent for low cholesterol, but also sarilumab for rheumatoid arthritis and, of course, dupilumab for a variety of allergic diseases, including atopic dermatitis, asthma, and perhaps several others. So, we have lots to talk about, the relationship is strong, and we have plenty to do.

In terms of the – your question is whether there's a halo effect of the Protocol T, I've heard several people suggest that that's the case.

One person told me that previously, a practice might be able to just carry Avastin, if they didn't want to get into the buy and build business, but when they see the Protocol T data, they feel they have to carry Eylea, because there's such a differential there. And once they start doing it, and then they might be more inclined to use it for AMD.

I don't know how often that sort of scenario plays out, but I can imagine some sort of a halo effect. Of course, we're out of the promotional aspect about this. We can – we don't talk to doctors about Protocol T, we don't promote it. Our field force doesn't promote it, because it's not in our label.

But the good thing about the retinal community is that they have lots and lots of meetings. And it's already been presented at a retinal specialty meeting. It's been – was presented – I was at the ARVO meetings over the past several days, it will be presented again at several – at the ASRS and several other retinal meetings.

So they have lots of opportunity to hear – and frankly better than to hear from us, which we can't do. They hear from the people who conducted the studies, who make a very strong presentation about the results. So, I think it will move market share.

In DME, I think it will increase market share, moving more people to get treated, and I think it potentially could have a halo effect..

Thanks, Len.

Next question?.

Thank you. And our next question comes from the line of Terence Flynn with Goldman Sachs. Your line is now open..

Good morning, thanks for taking the question. Just wondering if you can maybe provide us some insight into the potential questions or topics at the upcoming ad com for Praluent? And if not on that question, then maybe you could give us some more details with respect to any shift in your account base for Eylea post the DME launch.

Just wondering if you can comment at all about growth trends from existing accounts versus new accounts? Thanks..

Thanks, Terence. As far as the advisory panel, we're waiting, as you are, for the FDA briefing book and the questions to come out. So, when we know them, obviously you'll know them.

We, of course, have our war games and our scenarios, but we'll probably not comment on that and let Regeneron-Sanofi do its work, and Amgen will have to do its work and, of course, the FDA will be doing the most important work.

Bob, did you want to comment on the Eylea question?.

Yeah. I think that, in terms of accounts, we've pretty well penetrated the retinal accounts. And so, our DME business is coming from existing accounts. It is interesting that diabetes is distributed differently in the United States than wet AMD. So, we do see a different geographic disbursement of the sales.

But in terms of the accounts, it's pretty much the same accounts..

The one qualitative thing, of course, that we feel very good about is that, when you're going into a new product cycle, which we hope we're going into, it's nice that your flagship product is still really growing very strongly. At 50% year-over-year in the U.S. growth, that was terrific, and that was with a little modest inventory drawdown.

I think that that bodes well, that the company is strong and continues to be strong, as we try and broaden our base of important products..

Next question?.

Our next question comes from the line of Joseph Schwartz with Leerink Partners. Your line is now open..

Great. Thanks very much. I'm wondering, I'm still intrigued by the approach that you're taking for Regeneron 1033 in sarcopenia. So, I was wondering if you could expand a little bit about the signals that you saw, in terms of the functional endpoints.

Are any of them potential registrational endpoints? And then, what kinds of combinations are you contemplating for this drug?.

George?.

Well, we certainly are very gratified that this genetically defined pathway can indeed be followed up with the biologic, and you can see the right type of biological responses without untoward effect, sort of as the genetics would have predicted. So, that is very gratifying for the whole field of genetics and genomics and so forth.

This is a very complicated area. You talked about registrational endpoints and so forth. This is a very young field. There really hasn't been too much done in this area. So that's still a developing area, in terms of how one would approve it.

And in terms of combinations, that's still very early in our program, and certainly, there's a lot of competitive issues there, so I'm not going to necessarily get into what we might imagine.

But certainly, this is an area where we think that there's the possibility of taking this one pathway, where you see this moderate benefit, perhaps, and combining it with others, and perhaps increase the benefit, both in terms of the anatomy and in terms of the function, and be able to provide a more meaningful result to patients..

Yeah. Do you think that the accelerometry tools could help you get around any requirements for PROs that the FDA might otherwise require? Seems like Novartis is working a lot on that area..

We can have this as a side – about, perhaps, these fine details..

Okay, sounds good. Thanks..

We'll talk..

Okay, next question..

Thank you. Our next question comes from the line of Matt Roden with UBS. Your line is now open..

Great. Nice quarter, guys, and thanks for having me on the call. I wanted to come back to the RSV program, gratified to see that moving forward sooner rather than later, and I'm just trying to think around the corner a little bit, to see how – thinking about how this program could play out here.

George, would I be wrong to interpret your prior comment as meaning that there seems to be interest or buy-in among the regulators to move into a broader target population, the full-term babies? And then related, maybe more of a commercial question is, in that core population of those born 32 weeks to 34 weeks gestation, I'm just trying to understand what kind of data you think you need to show to get around or mitigate any kind of pricing strategy that might arise from your competitor? Thanks very much..

Right. Well, my prior comments, I think, were just that.

In that I think that these questions point out that the current standard of care is that the actual infants that are treated with the RSV therapeutics is very, very limited and there is a much broader population that, in fact, the CDC has actually said could dramatically benefit if this type of approach could be made more broadly.

And certainly, that is shaping our thinking, and I think that's about – that about represents our perspective..

I would only add perhaps, George, to emphasis your comments, that we hope to have a differentiated product on – in terms of maybe how long it might be able to be – last before you have to give a repeat, or something of that nature.

So, it isn't simply, if we do something, the competition can respond in kind commercially, there may be differentiations in the product as well. We'll have to see that as the data goes on..

Okay.

Next question?.

Our next question comes from the line of Adnan Butt with RBC Capital Market. Your line is now open..

Hi. Thanks, and let me throw a curveball and ask on fasinumab. So would that be a Phase III study or a Phase II in it, and would you be starting at the same dose levels where the program finished off? Thanks..

Yeah. The thing about that program that you have to understand is that, you could call these really whatever you want, Phase II/IIIs, Phase IIbs, Phase IIIs. What's going to drive it is not the number of efficacy trials you have or need.

What's going to drive this program is the number of patients you need exposed, very – thousands of patients exposed, and that's really going to be the main driver. The efficacy part of this is pretty much in hand for the – across the class. It shows impressive efficacy. Refining the doses, of course, can be done in a IIb/III setting.

But really, the way you have to think about this, the way we're thinking about it, is that it's a question of making sure you're getting the adequate exposure done that would support a filing..

Great.

Next question?.

Our next question comes from the line of Robert (sic) [Robyn] (49:31) Karnauskas with Deutsche Bank. Your line is now open..

Hi, guys. This is Adnan (49:36) for Robyn. Congrats on the progress. So, just going back to the PCSK9 launch. Being about one month ahead of the competitor, how do you view – what's the benefit there? And also, could you comment any on the litigation, I guess, with Amgen regarding the patent? Thank you..

Yeah. So, we have no comment on really either of those, and that's it..

Fantastic..

We think – to reiterate what we said in the past, we don't believe we infringed any valid claims. If you've been following this close enough, what we've already said is that, in lieu of a preliminary injunction proceeding, the court's going to give a early trial date, expecting that to be around March of next year.

Beyond that, we really don't have much to say. And how we're going to use our month to our advantage is – probably better off we keep that to ourselves, or we'll lose that advantage..

I tried. I tried. I tried. Well....

It's worth trying. I know Amgen wanted you to try but, but we can't oblige, sorry..

Next question..

One follow-up, one quick follow-up just, that you may be able to answer.

How do you view potentially broadening the label for PCSK9?.

I didn't hear that.

Say it again?.

Sorry. In terms of – how do you potentially view – I know your launcher is a small – a more narrow label for PCSK9.

How do you potentially view a broader label, and when we might see that?.

Well, I'm not sure what the question is. You know we've done a very broad development program that focuses on the people who really could benefit. We think that it would be irresponsible for anybody to suggest that statins aren't the first line of approach here. Statins have been a very good drug.

They've been shown to have very strong effects on cardiovascular outcomes. They've been used by millions and millions of people of every race and nationality around the world. There's a strong safety record, and we're – so, we're – we really believe that that's not the marketplace we're going after, obviously.

What we're looking for, nevertheless, is that there are millions, if not – maybe even 10 million people who – where statins is not adequate for them, for a variety of reasons. Maybe they've got familial hypercholesterolemia and they just simply can't get their cholesterol where their doctors would like it to go.

Maybe they have been on statins and they've had a heart attack, or very high risk and they – still at risk, they need to go even lower. And maybe there are some people who are statin intolerant. I think you've heard all sorts of estimates out there of how many peoples and what the market size is and et cetera, et cetera.

I'm sure that those are grossly exaggerated, at least the ones that I've read. I think that this could be an important class of drugs when used properly, and when respecting the fact that statins should be the front line of therapy..

Thank you very much..

Great. Next question, please..

Thank you, and our next question comes from the line of Cory Kasimov with JPMorgan. Your line is now open..

Great. Thanks. Good morning, guys. So, with regard to your PD-1 candidate, can you elaborate a little on your latest thoughts around development plans there, and whether you expect to only combine the agent with other in-house assets, or if you'll be looking for outside collaborations as well? Thanks..

Yes and yes.

And, George, you want to elaborate on that any further?.

Well, I think you just gave away the answer, yes and yes is the answer. I think that we all know that this is a very exciting new class and target, and we have, as we've already indicated, we have multiple additional targets, that are within a year or two of development, that are potential partners for this therapy in various settings.

And we also are very actively looking to molecules outside of our own pipeline with which to combine it. And we think it's very early in the whole entire immuno-oncology field to understand how to really best harness the potential and the power of this field.

And so we're very excited to be a part of it, and we're very excited to have what, even from our very early clinical studies, looks to be an active molecule that's out there..

Great. Next question..

Thanks..

Our next question comes from the line of John Newman with Canaccord. Your line is now open..

Hey, guys. Good morning. Thanks for taking my question. I just wondered if you could comment a bit, just obviously based on what's in the public domain regarding what is known about the difference in formulations between your PCSK9 product and Amgen's? I'm specifically curious as to what we know about the fact that your concentration is half of theirs.

I'm just curious as to what types of implications that might have in the real world since, just theoretically, having a concentration that's half of another product within the same volume might suggest some differences in how the drugs are administered. Thanks..

So John, I think you may have some confusion there. But without getting into the details of the formulation, let me just focus on the important differentiating points that potentially could arise as we look through all the data and get through the advisory panel and approval.

Regeneron has a formulation that allows for the treatment at 75-milligram dosage form, as well as a 150-milligram dosage form. And there are many patients for whom 75 milligrams is more than adequate, and they will get the benefit that you're looking for. There are some where the people would like to get a higher benefit.

Well then, of course, you have the opportunity to use our higher dose, a 150 milligram formulation. So we do have the ability to individualize, and we don't have to, with our product, give people what I would call forced higher dosing, or forced overdosing, more than you really need to give to get the job done.

These products look – and I hope that'll come across our advisory panel, these products look very good at this stage. But of course, you're only dealing with thousands of patient-years of exposure, and for – typically our trials have lasted about 18 months.

And so, when you're talking about a lifetime of therapy, of course, some people would like to – some doctors would prefer to use the lowest dose that will get the job done. That, to us, is a big point of differentiation. Maybe we should leave it at that, and more will come as we get, I think, through the advisory panel, the labeling, and the launch.

And George, you want to add?.

Yeah. I just wanted to make a couple of comments. I think, as Len correctly pointed out, I think the most important potential difference for the patients is the option – and for their physicians – is the option to choose between a lower dose or a higher dose, certainly for initiation of therapy.

But just to – as Len said, to get the facts right, our 150-milligram dose is actually a more concentrated formulation, not a less concentrated formulation. And also, in terms of that, when, for example, their monthly dose's form is actually a – 3 mLs worth of an injection.

So, these are actually things that – depending on how you look at it, would actually be considered in our favor. But those are minor details.

I think the important point is Len's point about the fact that we have the flexibility of dosing, and the patients, and the physicians can, based on their baseline LDL and their goals, can decide which dosage form to initiate therapy with..

Operator, we have time for one last question, and for those who didn't make it on the call, we apologize. We'll make sure to try to get to you next time, and you know we'll be in the office after the call. So, final question..

Thank you. And our last question comes from the line of Geoff Meacham with Barclays. Your line is now open..

Hey, guys. Thanks for letting me slip in a question here. So, question for you on PCSK9. When you look at the market awareness today of the class, and maybe the urgency to treat, what are the subtleties between the U.S. and EU opportunities? I guess I'm just trying to get a sense for – if there's a reason to think that o-U.S.

may be different dynamics, based on Bob's launch comment. Thanks..

Bob?.

cardiologists, lipidologists and endocrinologists, given that the data have come out at the cardiology and lipidology and diabetes meetings. In terms of the differences between the U.S. and Europe, Europe is very much governed by governmental payers.

And so, although awareness is very high, it's going to come down to a decision as to which patient types are deemed to be suitable for PCSK9 inhibitor therapy, dependent upon price point.

In the United States, as we talked about a little bit on the call earlier, the payers are exerting more involvement than they have in the past, but the physicians can still have choice as to which patients get access to therapy.

So, I think uptake in the United States – the patient pool in the United States is likely to be larger than that outside of the United States..

I think, with that, I'm going to conclude today's call and thank everybody for participating. And again, we'll be in our office. I know we have a bunch of scheduled calls with you guys. And again, you know how to reach us if you need anything. So take care..

Ladies and gentlemen, thank you participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a wonderful day..