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

Landry - Chief Financial Officer.

Ying Huang - Bank of America Merrill Lynch Terence C. Flynn - Goldman Sachs & Co. Matthew K. Harrison - Morgan Stanley & Co. LLC Mohit Bansal - Deutsche Bank Securities, Inc. Geoffrey Craig Porges - Sanford C. Bernstein & Co. LLC Adnan S. Butt - RBC Capital Markets LLC John Newman - Canaccord Genuity, Inc. Colleen Hanley - Robert W. Baird & Co. Cory W.

Kasimov - JPMorgan Chase & Co. Joseph P. Schwartz - Leerink Partners LLC Gbola Amusa - Chardan Capital Markets LLC Phil M. Nadeau - Cowen & Co. LLC Geoffrey Meacham - Barclays Capital, Inc. Biren Amin - Jefferies LLC Matthew M. Roden - UBS Securities LLC.

Good day ladies and gentlemen, and welcome to the Regeneron Pharmaceuticals Q2 2015 Earnings Conference Call. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Dr. Michael Aberman, Senior Vice President of Strategy and Investor Relations for Regeneron. You may begin..

Thank you very much. Good morning, and welcome to Regeneron Pharmaceuticals' second 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; Dr.

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'll open the call for Q&A.

I would 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 business, sales and expense forecasts, 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 filing with the United States Securities and Exchange Commission or SEC including its Form 10-K for the year ended December 31, 2014 and Form 10-Q for the quarter ended June 30, 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 these 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, Bob Landry and 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..

sarilumab for rheumatoid arthritis; dupilumab for atopic dermatitis and asthma; fasinumab for pain, and REGN2222 for RSV or respiratory syncytial virus. With that, let me turn the call over to Dr. George Yancopoulos, Regeneron's Chief Scientific Officer. He will be followed by Bob Terifay and then by Bob Landry.

George?.

Thank you, Len, and a very good morning to everyone who has joined us today.

Before I talk about the pipeline, I want to offer my congratulations to all my colleagues at Regeneron as well as our partners for the continued success of EYLEA and the recent approval of Praluent and also acknowledge the many patients, investigators and physicians involved in all these efforts.

Last week, we announced a major collaboration with Sanofi in the arena of immuno-oncology, and I'd like to begin by providing some additional details on the scientific and strategic aspects of this collaboration.

Immuno-oncology has been a rapidly evolving area and has shown the potential to dramatically improve outcomes for patients with certain types of cancers. The current immuno-therapies which are delivered as monotherapy or in combination with traditional chemotherapy have yielded overall response rates in the 10% to 30% range.

Many of these responses have been durable and have led to increased survival indications such as melanoma, kidney and lung cancer to date. While these data are incredibly exciting, we believe that the field is still in its early days. Our goal is to improve outcome in a range of different cancers.

We believe that we are well positioned to deliver on this goal. We increasingly believe that the future of cancer medicine will involve innovative combinations of targeted medicines. We're cognizant of the fact that this is a crowded area with many players who have immuno-oncology assets that are more advanced.

Nevertheless, we believe that the key to future successes in this complicated area is the efficiency and sophistication with which one can attempt and evaluate novel treatments and their combinations in novel settings. And we believe that we are well positioned to be competitive in this area.

With Regeneron's unique biology, technology and genetics capabilities, we hope to be able to combine antibodies to multiple targets, adopt creative ways to use these antibodies as well as harness novel technologies such as biospecifics.

In addition, access to our proprietary animal models allow us an early indication of which combinations are more likely to be successful in the clinic, which we think gives the collaboration an additional advantage. In terms of novel combination therapies, we have several immune targets such as LAG3 and GITR in late-stage preclinical development.

Our PD-1, antibody which we anticipate might be the foundation of several combination therapies has already demonstrated evidence of activities in early clinical trials. In addition, we believe that our novel and proprietary bispecific platform will deliver additional opportunities for both monotherapy and combination approaches.

Our first is bispecific, a CD20xCD3 antibody, which is outside of the Sanofi collaboration, has already demonstrated activity in early human trials and could potentially pave the way for multiple additional bispecifics to enter the clinic in the coming years.

These other potential bispecific antibodies are included in our immuno-oncology collaboration with Sanofi. Bob Landry will review the financial aspects of the collaboration shortly, but let me highlight some of the key aspects of the deal, and in particular, the differences from the existing antibody collaboration.

As a reminder, in the existing collaboration, Sanofi provides funding for pre-clinical discovery and development work up through filing of an investigational new drug or IND application, at which point Sanofi can either opt in or not for these antibodies. During that pre-clinical work, Regeneron has final say over all activities.

If Sanofi opts in, Sanofi funds 100% of the clinical development cost and also has final say over clinical development and commercial activities. Under the new immuno-oncology collaboration, Sanofi's right to opt in is later, at clinical proof of concept, which means Regeneron has greater control of development through a later stage.

In addition, after opt in, unlike the existing collaboration, Regeneron retains the leading global development role and lead commercialization role in the US for half of the antibodies on an alternating basis beginning with PD-1.

Obviously, there's an incredible amount of trust that has been built through the many years of the Sanofi collaboration that allows such an arrangement, and we look forward to working with Sanofi on building an immuno-oncology franchise.

In terms of late-stage antibodies, let me begin with our most advanced program, sarilumab, our IL-6 receptor antibody which is in clinical studies for the treatment of rheumatoid arthritis.

In the second quarter, we reported positive data from three additional Phase 3 trials, including the SARIL-RA TARGET study of sarilumab in combination with non-biological disease modifying anti-rheumatic drugs, or DMAR therapy, in patients who are inadequate responders to or intolerant of TNF-alpha inhibitors.

These data are in addition to the previously reported data from the Phase 3 MOBILITY study where sarilumab demonstrated positive results in both signs and symptoms as well as in radiographic progression. We're on track to submit a BLA in the US by year-end, and a regulatory submission in Europe towards the end of next year.

One of the most exciting late-stage product candidates in our pipeline is dupilumab, our IL-4/13 pathway blocking antibody which is in clinical studies in multiple indications. Our pivotal Phase 3 studies in the atopic dermatitis indication are fully enrolled and we expect to report data from these studies in the first half of next year.

Our second pivotal study of dupilumab in asthma is currently enrolling patients. This Phase 3 study will explore two doses of dupilumab, 200-milligram and 300-milligram, administered every other week.

As we have mentioned previously, following discussion with the FDA, we will only need to conduct this one additional Phase 3 efficacy study in this indication since our Phase 2b trial will be considered pivotal. Our Phase 2 study of dupilumab in the eosinophilic esophagitis is ongoing and currently enrolling patients.

Turning now to our other late-stage programs. NURSERY-PreTerm, our first Phase 3 trial of our antibody for RSV, is enrolling patients in the Southern Hemisphere where the RSV season is from May through October. A second Phase 3 trial in this indication is planned for later this year in the Northern Hemisphere.

I'm happy to report that fasinumab, our NGF antibody, is now in Phase 2b/3 clinical trials. We expect to hear from the FDA in the second half about the partial clinical hold, which if lifted, will allow us to conduct studies that are longer than 16 weeks in duration. Our EYLEA combination trials are ongoing.

A Phase 2 trial of EYLEA co-formulated with our PDGF receptor antibody is underway and has been granted fast-track designation for the treatment of wet AMD. Our Phase I combination study of EYLEA co-formulated with our ANG2 antibody is also ongoing, and we expect to report data from this study later this year.

The Regeneron Genetics Center continues to make progress, anchored by our foundational collaboration with Geisinger Health System. We currently have about a dozen additional collaborations across a variety of therapeutic areas and remain on track to sequence 100,000 individuals by the end of this year.

With that update, I'd like to turn this call over to Bob Terifay..

Thank you, George, and good morning everyone. This is a very exciting time in the history of Regeneron. Almost four years after its initial US launch, EYLEA or our aflibercept injection continues to demonstrate strong sales growth.

In addition just last month, Praluent or alirocumab received US regulatory approval for the lowering of poorly controlled low density lipoprotein cholesterol in specific high-risk patient groups, and was shortly thereafter made available to patients who need it.

Praluent was also given a positive recommendation by the European regulators, with EU approval expected in September. Starting this with EYLEA. Second quarter US net sales grew 58% year-over-year. Net US EYLEA sales to distributors in the second quarter were $655 million.

Underlying physician demand has continued to remain strong and grew sequentially quarter-over-quarter by 19%, representing the highest sequential quarter-over-quarter growth that we've experienced since the third quarter of 2012.

Market research with retinal specialists indicates that a key driver of EYLEA growth in the second quarter is the continued positive impact of the results of the Protocol T study in patients with diabetic macular edema or DME.

As a reminder, this independent NIH-sponsored study explored the comparative effectiveness of EYLEA with ranibizumab and off-label bevacizumab and demonstrated that EYLEA provided greater efficacy despite one fewer injection and fewer laser treatments.

The efficacy differences were particularly pronounced in the pre-specified group of patients whose vision was worse at study initiation. This group represents about 50% of all DME patients. These data have been viewed very positively by physicians and payers and were one of the biggest drivers of strong EYLEA growth in the second quarter.

According to a survey of 200 retinal specialists evaluating the reported usage of VEGF inhibitors in the second quarter of 2015 as well as a chart audit from 183 retinal specialists, EYLEA is now the market-leading product among FDA approved anti-VEGF drugs in all of our labeled indications.

With our share of eyes growing quarter-over-quarter versus ranibizumab in DME and macular edema following retinal vein occlusion and remaining consistent relative to ranibizumab in the last quarter in wet AMD. Likewise, overall EYLEA is gaining market share from bevacizumab especially in DME.

The share gain is coming from both switches as well as new patient starts. Lastly, EYLEA growth is also coming from penetration into new physician practices that previously did not use EYLEA.

Outside of the United States where we share EYLEA profits with our collaborator, Bayer HealthCare, second quarter EYLEA sales were $338 million, representing a 37% growth year-over-year on a reported basis, notwithstanding substantial adverse currency impact.

In the second quarter, Bayer HealthCare received regulatory approval in Japan for EYLEA for the treatment of macular edema secondary to retinal vein occlusion or RVO. Turning now to Praluent. Since it's only been 10 days since US approval, it's too early for me to provide any meaningful specifics about the ongoing launch.

We are however pleased with our operational implementation of the launch. We received FDA approval for Praluent on Friday afternoon, July 24. We created and trained the field forces on the final customer-facing materials, certified them on contact, and made all launch materials available to the field teams over the weekend following approval.

We had a full-field force deployment on Monday, July 27. We actually had our first prescription forms submitted to our reimbursement and patient services hub called MY Praluent on Sunday night, July 26. From the information that we have, it appears that the first patient dosed with commercial Praluent occurred on Monday morning, July 27.

I'd also like to spend some time talking about the eligible patient population for Praluent.

We are gratified that the Food and Drug Administration has recognized a significant unmet medical need in a broad group of indicated patients, those with clinical atherosclerotic cardiovascular disease, which includes patients with a history of acute coronary syndromes or myocardial infarction, stable or unstable angina, coronary or other arterial revascularization, stroke or transient ischemic attack, or peripheral arterial disease presumed to be of atherosclerotic origin.

These patients are receiving maximally tolerated statin therapy and are not at their LDL-C goal.

Praluent is also indicated for patients with a history of heterozygous familial hypercholesterolemia receiving maximally tolerated statin therapy whose conditions are diagnosed based upon a combination of cholesterol levels, physical manifestations, family history, and genetic testing.

Our health economics analysis indicates that there are approximately 8 million to 10 million patients in the United States who could be eligible for PCSK9 inhibitor therapy. However, maximally tolerated statin therapy will and should remain the mainstay of therapy.

With our educational efforts, we believe that more patients will likely go on and stay on statins, and therefore may be able to get to their goal on statin therapy alone.

Other factors that will contribute to reduce the size of the actual PCSK9 inhibitor market include the resistance of some physicians to use biologic therapy for LDL-C reduction, physicians' reluctance to take on responsibility for prior authorization documentation, patients' unwillingness to inject themselves, and ongoing low physician and patient urgency to get LDL cholesterol under control.

As I've stated previously, the reimbursement environment is complex and will be carefully managed. Our goal has been to ensure that payers and healthcare providers understand the value that Praluent can offer to patients. And to that end, we are actively engaged in extensive discussions with payers.

We expect that it will take several months for some 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.

In response to potential delays in formulary decisions and reimbursement decisions, we're offering samples and free product to appropriate labeled patients who are waiting an insurance coverage decision. This may delay uptake in commercial sales reporting.

For example, for Medicare Part D or government pay patients, there could up to a six-month coverage decision period. So for the next several months, performance cannot be judged based upon reported sales. This would understate both the volume of physician and patient adoption.

Outside of the United States, Praluent has received a positive opinion from the European CHMP with approval expected in late September. Our 18,000 patient ODYSSEY outcomes study is ongoing and we expect this study to be fully enrolled by year-end with completion expected by the end of 2017. Turning now to sarilumab.

The IL-6 inhibitor class has shown consistent double-digit growth in the United States year-over-year. If sarilumab is approved, it will be the second entrant in this class. With the availability of second agent in the class, we anticipate that increased awareness and education should contribute to further class growth.

We also continue on our pre-commercialization efforts for dupilumab. For example in June, we had a major presence at the World Congress of Dermatology meeting in Vancouver, British Columbia. With an educational booth and symposium focused on the pathophysiology of and impact of atopic dermatitis.

With that, let me turn the call over to our Chief Financial Officer, Bob Landry..

Regeneron will spend up to approximately $1.1 billion under the immuno-oncology collaboration discovery agreement and Sanofi will reimburse us for up to $825 million of these costs. Regeneron and Sanofi will equally fund post proof-of-concept development for clinical programs, for which we are considered the development and US commercialization lead.

For REGN2810, our PD-1 antibody that is currently in clinical development, a separate $650 million commitment has been established that will be equally funded by both companies. Regeneron is the development and commercial lead in the US for this program.

In addition, Sanofi will fund 100% of any development costs associated with the immuno-oncology clinical programs for which they are considered the development and global commercialization lead.

Regeneron's recently filed 10-Q for the quarterly period ended June 30, 2015, and a Form 8-K filed on July 31, 2015, provides further disclosure of our recent immuno-oncology collaboration with Sanofi. Our capital expenditures for the first half of 2015 were $354 million.

Given the first half spend and our remaining outlook, we are tightening our 2015 capital expenditure guidance to a range between $675 million to $750 million from $650 million and $750 million.

Our Raheen, Ireland, commercial manufacturing site, which is under construction, continues to represent our largest capital investment in 2015 and continues to progress as planned.

Additionally, both the first half 2015 expenditures and full year 2015 guidance includes infrastructure expansions related to increasing our manufacturing capacity in Rensselaer as well as the ongoing expansion of our Tarrytown R&D and corporate headquarters in order to meet our continual growth outlook.

We ended the second quarter of 2015 with cash and marketable securities of $1.19 billion. With the recent execution of the immuno-oncology collaboration, we are expecting receipt of the $640 million in upfront payments from Sanofi shortly.

As we have been reporting, we have been opportunistically repurchasing the warrants that we issued in 2011 in connection with our convertible debt. We intend to continue repurchasing these warrants up to an aggregate amount of $400 million. With that, I'd like to turn the call back to Michael..

Thank you, Bob. That concludes our prepared remarks. We'd now like to open the call to Q&A. As we'd like to give as many people a chance to ask questions as possible, we request you limit yourself to one question. Bob Landry and the IR team will be available after the call for follow-up questions. Thank you.

Operator, you can please open the call for questions..

Thank you. Our first question comes from the line of Ying Huang with Bank of America. Your line is open. Please go ahead..

Hi. Good morning, guys. Congratulations for a great quarter. The first question on the strength of EYLEA in this quarter. Bob, maybe can you give us a little bit more color in terms of whether you also see more penetration in AMD rather than just in DME and where that share is coming from? And then secondly, just a question on Praluent.

CVS' CEO just said on the earnings call this morning that they plan to employ a similar strategy to the so-called formulary exclusion strategy to manage their PCSK9. So, I was wondering what's your strategy if that happens actually from the payers.

And then just a housekeeping question, are you going to block the IMS subscripts for Praluent or not? Thank you..

That was three questions, Ying. So bad instruction following..

All right. Bob Terifay, please..

Well in terms of EYLEA growth, the bulk of the growth is coming in DME, both in terms of growing the DME market overall for the anti-VEGF class, as well as taking market share from both Lucentis as well as bevacizumab. We do see some growth in RVO and some slight growth in wet AMD. But the majority of the growth that we're seeing is in DME.

In terms of your questions on Praluent, it's too early to talk specifically about payers, but we've always expected that the payers are going to want patients to step through maximally tolerated statin therapy in order to get access to Praluent. And that is our labeling.

And so, it's not a surprise that people are advocating for patients to have been on maximally tolerated statin therapy. The IMS data, yes, we intend to utilize IMS data. So, you will see the IMS data in the audits..

Okay. Next question. Thank you..

Thank you. Our next question comes from the line of Terence Flynn with Goldman Sachs. Your line is open. Please go ahead..

Hi. Thanks for taking the questions. Maybe just another one on EYLEA for DME. You mentioned you're seeing new prescribers there. Are those retinal specialists or is there a broader category here? And then do you have any insight on referral trends from either ophthalmologists or endos to retinal specialists of DME patients? Thanks..

So, the new practices are generally smaller ophthalmology practices that were rebuying Avastin because they were not familiar with all the reimbursement techniques in terms of buy and bill. But with the recent DME data, there's more interest in utilizing EYLEA.

With regards to referrals, as we've talked about on the last couple of calls, we are actively working with ophthalmologists as well as optometrists to build awareness of the need for regular screening for eye exams and to get patients to retinal specialists as soon as DME is diagnosed. And we're hoping some of the is starting to pay off..

Next question?.

Thank you. Our next question comes from the line of Matthew Harrison with Morgan Stanley. Your line is open..

Great. Thanks for taking the question. I wanted to ask about the bispecific in the PD-1. On the past two calls you've characterized responses that you seen with those patients. I don't know if you'd be willing to give us some more detail around that.

And if you're not, could you tell us when we might see that data? Is it possible to see that data at ASH this year? Thanks..

Yeah. We're waiting for the appropriate medical conference in which to provide more detail Thanks..

Next question..

Our next question comes from the line of Robyn Karnauskas with Deutsche Bank. Your line is open..

Great. Thanks for taking my question. This is Mohit filling in for Robyn. Congratulations on a great quarter.

So, turning a little bit on your RSV program, could your Phase 3 trial be a pivotal trial given the plan is to enroll 24 patient in this trial? And what is the baseline risk of developing RSV in the babies you are enrolling in this trial? Thank you..

I think you're asking about the RSV pivotal trials, whether it's Phase 3 and the last one the risk of enrolling infants or?.

So, the baseline risk of developing RSV in these patients. So because I mean, it seems like a natural history kind of study. That's why I am asking..

Right. No. These are considered to be pivotal studies and we've discussed very carefully with the FDA in terms of the infant population which is in fact intended to be a somewhat broader population of infants at risk. Thank you..

Next question..

Thank you. Our next question comes from the line of Geoffrey Porges with Bernstein. Your line is open..

Thanks very much. Appreciate the chance to ask a question. George, can I just throw a couple of questions to, first, on the immuno-oncology side, you mentioned both that you have opted in and will be the commercialization partner for the PD-1, but also alluded to the fact that you may have a PD-L1.

Could you give us a sense of your view of the relative merits of a PD-1 and a PD-L1, because superficially you might say that that was overkill.

And then just on the RSV, again could you explain where you are in terms of having a final manufacturing process to take into pivotal trials? I mean, are you there yet? Can you scale up with the process you have?.

Yeah. On the first question, we certainly feel that the signs suggest and maybe the early clinical data suggest that if anything PD-1, if anything should have somewhat broader efficacy than PD-L1.

On the other hand, there may be some patients who might be able to tolerate a PD-L1 better in settings where for example, they maybe getting some toxicity due to for example inhibition of PD-L2. So we think it might be useful to have both components, but certainly we think that PD-1 should be more likely the broader foundational therapy.

On the second question, yeah, we're using our standard manufacturing approach, which we've used for all of our other clinical programs for RSV. So, we think it's certainly commercializable..

Great. Next question..

Thank you. Our next question comes from the line of Adnan Butt with RBC Capital Markets. Your line is open..

Hey. Thanks. Congrats on the solid EYLEA number as well. So first, could you comment on the scale and scope of the sampling program? Will it require the same pre-authorization process that we would be expected of a paid script? And then is there a two-year follow-up of Protocol T data as well? And is that going to be as meaningful? Thanks..

So in terms of the sampling, we have to obviously obtain physicians' signatures to be able to get access to the samples, but then it is up to the physician to determine which patients get access to the therapy..

In terms of Protocol T, yes, there will be two-year data and certainly we're very interested in seeing what that data will look like..

Great. Next question..

Next question comes from the line of John Newman with Canaccord. Your line is open, please go ahead..

Hi, guys. Thanks for taking the question and I'd like to add my congrats on the EYLEA number, very strong. My question is regarding the development strategy for both PD-1 and PD-L1. We've seen a few companies around the fringes running studies in combination with – or running studies where two investigational drugs are being tested at the same time.

And I'm just curious if that might be a strategy that you would discuss with the agency that could allow you to sort of maybe leapfrog some of your competition in the PD-1 and the PD-L1 space. Thanks..

Yeah. We are certainly exploring that opportunity. We agree with you that that is frankly going to be a necessary approach for the entire field to make appropriate progress in this very complex setting. So, I'm sure that we and a lot of other people are thinking and considering that approach..

Great. Next question..

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

You may be on mute, Joe..

Joe, you might be..

Or fell asleep..

We'll come back to Joe..

Next question..

Our next question comes from the line of Mark Schoenebaum with Evercore ISI. Your line is open..

Hi, guys. This is John (41:10) filling in for Mark. Congrats on the quarter. Just a quick one on the RSV program, if I may. So, I think you previously mentioned the half-life of the antibody could result in, so less frequent dosing. I was wondering if you've disclosed the dosing regimen of the antibody in Phase 3.

Is it in fact less frequent than Synagis? Are you doing once per season dosing? And then really fast on IO. I'm trying to better understand how the logistics of alternating the lead programs work. So, is it by order of filed INDs, or is it by when Sanofi opts in to the collaboration? And how would that work for a combination regimen? Thanks..

Michael can take the second one. Then we'll go back to..

Yeah, that will be alternating at the time of opting in. And there is a mechanism for how to deal with combinations where you're combining two different products either in the discovery program or the license side. I don't know if I want to get into that detail. Perhaps after the call..

But this is a good time to say that. This is Len.

Our relationship with Sanofi, as George said in his opening remarks, has really been quite spectacular and has been built on many, many years of closely collaborating on every aspect of what we do, from discovery, to early development, to full development through scale up, and through commercialization now with Praluent.

So I think the partners know how to work together, and this will be handled rather straight forwardly. The basic concept from your vantage point is that on half the programs, we'll be taking the lead, on half the programs they'll be taking the lead..

Yeah, just to elaborate on what Len says, I mean, we've done it before. We're going to just do what's right for the program. And we don't necessarily follow the contract because we have such a good relationship with Sanofi. If it makes sense not to alternate as per what's in the contract, we'll do what's right for the program.

In terms of RSV, yeah, we are certainly exploring less frequent dosing regimens in the pivotal studies and we have reason to believe that they might work, so we're hoping that the data might support that..

Thanks, John (43:23).

Next question?.

Thank you. Our next question comes from the line of Brian Skorney with Robert W. Baird. Your line is open. Please go ahead..

Hi. This is Colleen Hanley in for Brian Skorney. Thanks for taking my questions. Two quick ones for you on Praluent.

How will Praluent be distributed? Will it be through retail distributor or special channel? And you touched on this a little bit before, but do you think IMS prescription data services will be good surrogates for sales or will distribution be so selective that you can't really offer a decent capture rate? Thanks..

So, I'll start with the IMS, it's going – as I said earlier, it's going to take several months for us to get to a sales reporting that is reliable based upon it taking some time to get reimbursement, patients being on samples, and patients being on free product. So when the IMS data comes out later this week, it's not going to be terribly reliable.

It will improve over time. But again remember, not all of the specialty pharmacies report to IMS, so some of the data are projected. So obviously, ultimately it's going to be our actual sales data that are going to be more reliable. In terms of Praluent distribution, we are distributing through a network of specialty pharmacies..

Okay. Thank you..

Great.

Good questions, the next questions please?.

Thank you. The next question comes from the line of Cory Kasimov with JPMorgan. Your line is open..

Hey. Good morning, guys. Thank you for taking the questions. I wanted to ask about the IO collaboration as well.

So in addition to in-house combinations, will you also be looking outside of the Regeneron and Sanofi pipelines for potential combos? And do you have any residual concerns that IP potentially becomes an issue given the land grab that's currently going on in the field? Thanks..

I'll – the first question, the answer is yes. We will be exploring all opportunities for combinations. So I don't have specifics, but there's no reason why we couldn't look outside the collaboration for novel combinations. That said, thankfully for us, we have George and his team and we have a plethora of things to do internally.

And so those will probably definitely take precedence. In terms of IP, Len? Standard answer..

Yeah. I don't think – we look at IP very carefully. We're pretty experienced and been in the antibody IP business for a long time. And we should just leave it at that..

Okay. Thanks guys..

Next question?.

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

Thanks for coming back to me. I was wondering if you could give us some insight into what is it about the IO antibodies that you're pursuing that makes you so enthusiastic about the potential to obtain better responsiveness or safety and tolerability? Yeah, you alluded to the response rates, that it sounds like you think you can improve upon it.

Is it higher affinity for the target as was the case with dupilumab, other aspects of the technology that you can offer us some insight into your approach there?.

Well, I think what's going to be required for success here is a really comprehensive approach and bringing to bear many different antibody candidates in the right settings, in the right combinations. And we have not only some of the more carefully characterized targets covered, but we also have a large number of innovative and novel targets.

And we think that there's going to be a little bit of magic and maybe a certain degree of luck and a lot of science involved in figuring how to best do this. And this is what we think that we're historically strong at.

So this is why we think that this is a great opportunity, because it is so early in the game here and it's going to be a complex business and the complexity I think plays to our advantages..

Next question?.

Thank you. Our next question comes from the line of Gbola Amusa with Chardan Capital. Your line is open..

Hi. Thank you for taking my call. Gbola Amusa from Chardan Capital. On EYLEA, on the beat, could you just confirm where dosing has gone year-over-year? We've seen for the overall market for example, dosing has gone from four per year to five to six to seven.

So could you confirm that there weren't major changes there? And then secondly on your economic interest in wet AMD through gene therapy with your Avalanche stake and partnership, could you give any thoughts on the recent Phase 2a data on wet AMD? Or if it's too early for that, would you give us a sense on when we may get more visibility on your intentions with that program?.

Right. So, in terms Avalanche, Mike, you might want to comment on that..

Yeah. My comment will be, we're not going to comment on that. We'll let the process go out and you'll hear from Avalanche..

Well, I might just remind everybody that the prime mover of the Avalanche deal for us was to get a look into gene therapy for eye diseases where there is no standard of care already and where gene therapy would be uniquely positioned as a therapeutic choice. So therefore, the risks, rewards of the programs would be greater.

Nevertheless as Michael says, we will look at and review this data as we expect to..

In terms of EYLEA dosing, we're trending very close to what we see in our prescribing information which is dosing every eight weeks. I'll remind you, if you look at the number of doses per year in the Protocol T trial, which had a different dosing regimen, they lined up pretty closely to what we saw in our own DME studies.

So physicians are generally after an initial loading dose period, able to get patients out for at least eight weeks..

Okay, so -.

No year-over-year – apologies, no year-over-year change drove the beat effectively. It was -.

So you're asking the question do we have more doses, which is driving the increase. No, we're not seeing more doses drive, per year driving net sales..

Great. And our next question..

Great. Thank you..

Thanks, Gbola. Next question..

Thank you. Our next question comes from the line of Phil Nadeau with Cowen & Company. Your line is open..

Good morning. Thanks for taking my question. Let me add my congratulations on all the progress. Just a question on dupilumab and atopic dermatitis.

In the adult pivotal program, can you remind us what you need to file? Can you file on the 16-week data, or do you need to wait for the 52-week data? And then similarly on atopic dermatitis for kids, what is the update on the pediatric development plan, and when could you start pivotal trials there? Thanks..

So in terms of the filing, we expect to have to do the 16-week data from two of the trials, but we'll expect to have one-year data from the longer-term trial for the initial filing. So we'll have thousands of patients in that initial filing..

The other question is pediatrics..

Oh, pediatrics. I'm sorry. Those pediatric PK and other preparatory studies as well as getting into actual efficacy studies is really ongoing.

There was a panel, a conference on this and the idea was that we should be moving sooner rather than later and not waiting for the outcome of our Phase III data to move into what can be fairly devastating conditions for pediatric patients. So that program is ongoing..

All right.

Next question?.

Thank you. Our next question comes from the line of Geoff Meacham with Barclays. Your line is open..

Good morning, guys. Thanks for the question. A couple on Praluent.

I know you guys don't want to give too much detail on launch strategies, but is relaxing payment terms as you do with EYLEA initially part of the plan? If you don't want to answer that, when you think about the economics, the payback economics to Sanofi for Praluent, are those flexible depending on the launch trajectory? In other words, can you tweak those in a material way depending on the trajectory? Thanks..

The payback economics are based upon a percentage of profit, so it's already – it's all embedded in there and it's only based on the percentage. When the product turn profitable we pay a percentage, 10% of our profits back for repayment..

In terms of the payment terms and remember EYLEA is a buy-and-build product under very different circumstances from Praluent, so we don't have the same terms..

Next question, operator?.

Great. Thanks..

Thanks, Geoff..

Thank you. Our next question comes from the line of Biren Amin with Jefferies. Your line is open..

Yeah, thanks for taking my questions. Maybe just on EYLEA. Could you review the physician assessments program that you're providing with the DME launch, because I believe you had a pretty robust program at the time of the wet AMD launch? And second question is on PD-1 Phase 1 trial.

What tumor types are being enrolled in? What's the rationale for combination with cyclophosphamide? Thanks..

So, our patient assistance program is consistent with all of our EYLEA indications. We have an income cutoff of $100,000 per patient in terms of income. And if they fall within that, they get access to the patient assistance..

George, the question was on rationale for cyclophosphamide in PD-1..

Yeah, the notion is that cyclophosphamide might be, in a certain way, not blocking T-cell effectiveness and response while activating a certain type of immune activation pathway, so that it might work well to go in combination with PD-1. In terms of in our first studies, we're going after a board group of diverse patients in terms of cancers..

Operator, we have time for one last question..

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

Great. Thanks very much for taking the question and congrats on really nice progress this quarter. I just want to go back to EYLEA.

And, Bob, it seems like everything that you're describing here in terms of the gains that you've made commercially with EYLEA in really all settings should be practically sustainable, right? And yet this quarter, we've seen a 21% Q-on-Q growth that's a lot higher than we've seen in the recent three quarters or so, really the most we've seen in three years.

So I guess what I'm getting at is, when you look at the guidance, it seems to imply reversion to single-digit growth for the remaining 3Q and 4Q this year.

And I'm just trying to understand why shouldn't the gains that you've made be sort of sustainable? And it occurs to me that the guidance might just be conservative, but I'm just trying to understand if there are any other factors we need to consider that should drive a reversion in the growth. Thanks very much..

Bob may want to comment beyond the usual factors, which are includes seasonality, there's effects on the pent up demand that maybe were satisfied after Protocol T came out.

Bob, anything else?.

Well, I think our guidance, we feel very confident in. But yeah, we do model based upon what happens in previous years and we do see in the third and fourth quarter that there is with vacations and holidays and the risk of snow, that sometimes there is some seasonality..

Great. Thank you everybody for participating in this call. As I mentioned earlier, the IR team as well as our CFO, Bob Landry, is going to be available if there's follow-up questions. We'll be in our office. Please shoot us an email or give us a call and we'll try to get back to you. Thank you very much. Operator, that concludes the call..

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day..