雷傑納榮製藥 (REGN) 2022 Q1 法說會逐字稿

Welcome to the Regeneron Pharmaceuticals' First Quarter 2022 Earnings Conference Call. My name is Gigi, and I'll be your operator for today's call. (Operator Instructions) Please note that this conference is being recorded.

I will now turn the call over to Ryan Crowe, Vice President, Investor Relations. You may begin.

Thank you, Gigi. Good morning, good afternoon and good evening to everyone listening around the globe. Thank you for your interest in Regeneron and welcome to our first quarter 2022 earnings conference call. An archive of this webcast will be available on our Investor Relations website shortly after the call ends.

Joining me today are Dr. Leonard Schleifer, Founder, President and Chief Executive Officer; Dr. George Yancopoulos, Co-Founder, President and Chief Scientific Officer; Marion McCourt, Executive Vice President and Head of Commercial; and Bob Landry, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will open the call for Q&A.

I would also like to remind you that remarks made on this call today include forward-looking statements about Regeneron. Such statements may include, but are not limited to, those related to Regeneron and its products and businesses, financial forecast and guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement issues, intellectual property, pending litigation and other proceedings 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 that statement.

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-Q for the quarterly period ended March 31, 2022, which was filed with the SEC this morning. Regeneron does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

In addition, please note that GAAP and non-GAAP measures will be discussed in today's call. Information regarding our use of non-GAAP financial measures and the reconciliation of those measures to GAAP is available on our financial results press release, which can be accessed on our website.

Once our call concludes, Bob Landry and the IR team will be available to answer any further questions.

This earnings call is neither an offer to purchase nor a solicitation of an offer to sell securities of CheckMate Pharmaceuticals, Inc. In connection with the tender offer for CheckMate stock, Regeneron and Scandinavian Acquisition Sub, Inc. filed with the SEC and tender offer statement on Schedule TO and other tender offer materials, and CheckMate filed a solicitation recommendation statement on Schedule 14D-9 with the SEC. Copies of the documents filed with the SEC by Regeneron and CheckMate are available free of charge on Regeneron's website at investor.regeneron.com or on CheckMate's website at ir.checkmatepharma.com as applicable, or at the SEC's website at www.sec.gov.

You should review such materials filed with the SEC carefully because they contain or will contain important information about the tender offer for CheckMate stock that holders of CheckMate securities and other investors should consider before making any decision with respect to the tender offer.

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

Thank you, Ryan. Welcome to your first earnings call. Hope all of our stakeholders will join me in giving you a warm welcome to the Regeneron team. Thanks to everyone joining the call as well.

Following an exceptional 2021, Regeneron is off to a strong start in 2022. Our first quarter results were driven by execution across the entire company as we continue to realize the benefits of our sustained investment in differentiated research and development, along with our focus on commercial performance.

We also continue to drive shareholder value through prudent capital allocation, including approximately $350 million of share repurchases in the first 3 months of this year.

Regarding our financial performance, we delivered strong double-digit revenue and non-GAAP earnings per share growth. Excluding revenue contributions from our investigation of COVID antibody cocktail, revenues grew 25%, reflecting our increasingly diversified core business, which continues to thrive.

For EYLEA, global net sales grew 11% to nearly $2.4 billion in the first quarter, including $1.5 billion of revenues in the United States, up 13% versus last year, which outpaced the U.S. anti-VEGF category growth. In yet another milestone for EYLEA, after more than 10 years, we recently surpassed 50 million EYLEA injections globally, a testament to its well-established efficacy and safety profile.

We believe EYLEA continues to represent a significant long-term growth opportunity, primarily driven by an aging population, increasing utilization among a rapidly-growing diabetic population as well as the potential for our investigational aflibercept 8 milligrams to complement and enhance our retinal franchise.

For Dupixent, in quarter 1, global revenues for the quarter exceeded $1.8 billion, an increase of 43% to last year as we continue to redefine the treatment of Type 2 inflammatory diseases. A significant opportunity remains to reach even more patients in already-approved indications, and we look forward to potentially launching Dupixent in 7 new indications in the U.S. later this year and in early 2023, including pediatric atopic dermatitis, eosinophilic esophagitis and prurigo nodularis. Collectively, approximately 200,000 U.S. patients are suffering from these 3 indications today, but currently have no approved -- no FDA-approved systemic treatment options.

In oncology, Libtayo continues to capture significant share in FDA-approved non-melanoma skin cancer indications where it is considered the standard of care. Beyond dermato-oncology, we're beginning to generate momentum in monotherapy non-small cell lung cancer in the United States, helping to build a foundation for potential launch of Libtayo plus chemotherapy later this year, which would allow Libtayo to address a much larger population of non-small cell lung cancer patients.

As we have said before, we continue to consider Libtayo to be foundational to our immuno-oncology development strategy and expect it to serve as the backbone for our investigational clinical program in combination with various antibodies, bispecifics and co-stimulatory bispecifics in our pipeline as well as other pipeline candidates, including those from our collaborations.

In April, we announced our agreement to acquire CheckMate Pharmaceuticals, Regeneron's first-ever acquisition of the company. Upon closing, we expect CheckMate differentiated Toll receptor 9 agonist, vidutolimod, will add a promising new modality to Regeneron's pipeline of potential approaches for difficult-to-treat cancers.

Looking ahead, we remain on track for the second half of this year to share data in difficult-to-treat solid tumors, such as ovarian and prostate cancers; to submit a BLA for odronextamab, a potentially best-in-class CD20xCD3 bispecific for refractory B-cell lymphomas; and to advance REGN5458, our BCMAxCD3 bispecific.

Finally, regarding our ongoing COVID-19 response, Regeneron remains committed to combating the virus as we head towards the likely endemic stage. We firmly believe that monoclonal antibodies will continue to play an important role, particularly to protect immunocompromised individuals who do not respond adequately to COVID-19 vaccines as well as to treat infected patients whom an oral antiviral therapy is not well tolerated or might trigger serious drug-drug interactions. We are progressing next-generation antibodies that are designed to be active against multiple variants, including those of Omicron lineage, and initiated a first-in-human study last month.

Concurrently, as the FDA continues their review of our REGEN-COV BLA for COVID-19 treatment and prophylaxis, we are working closely and collaboratively with them and other global regulatory authorities to establish clinical and regulatory pathways to bring additional safe and effective monoclonal treatment options to patients as quickly as possible.

In closing, we are excited about the strong commercial momentum for our in-line portfolio and the progress we have made advancing our pipeline so far this year. For the remainder of 2022, we anticipate up to 8 additional U.S. and EU regulatory approvals, up to 4 additional U.S. or EU regulatory filings, pivotal data for aflibercept at 8 milligrams as well as various other data readouts from other pipeline programs, which George will discuss.

We remain confident in the long-term outlook for our business, and our pipeline continues to be highly productive, and we are in a strong financial position, all of which positions Regeneron to deliver sustainable growth and long-term value creation.

Now, I will turn the call over to George.

Thank you, Len, and I will start with ophthalmology today.

At the recent Angiogenesis meeting, we presented encouraging results for the Phase II CANDELA study of aflibercept 8 milligram in patients with wet AMD. CANDELA met the primary safety endpoints with no new safety signals observed through week 44, and efficacy endpoints numerically favored aflibercept 8 milligram in visual acuity, drying and other anatomical measures through week 44.

Phase III studies, PHOTON in DME and PULSAR in wet AMD are ongoing. The primary objective of the Phase III study is to determine whether aflibercept 8 milligram dosing can allow for more extended dosing intervals while maintaining efficacy and safety.

Regarding Phase III design in both PHOTON and the PULSAR studies, patients are randomized at baseline to 3 groups: An every 8-week EYLEA 2-milligram arm; an every 12-week 8-milligram aflibercept arm; and every 16-week 8-milligram aflibercept arm following loading doses. The primary endpoint of both these studies is mean change in best-corrected visual acuity or BCVA at week 48. The primary endpoint will be met if 8-milligram aflibercept is non-inferior to 2-milligram EYLEA, while being dosed less frequently.

We anticipate results of both PHOTON and PULSAR in the second half of this year, and if positive, to file for regulatory approvals in the U.S. and EU by early 2023.

Moving to Dupixent, which had a remarkable quarter in terms of clinical updates and regulatory progress. In January, we announced our second positive Phase III study in prurigo nodularis, a disease with high unmet need. At the AAAAI and AAD meeting this year, we presented detailed data from the first positive Phase III study in prurigo nodularis. And we also presented detailed data from our positive Phase III studies in eosinophilic esophagitis and in chronic spontaneous urticaria or CSU in biologic-naive patients.

The second Phase III CSU study in patients refractory to omalizumab did not reach statistical significance at an interim analysis. And as announced in March, we have completed enrollment in the first of the 2 Phase III Dupixent studies in COPD and anticipate data from this first study to read out in the first half of next year.

In terms of regulatory progress, we expect an FDA decision for Dupixent in children aged 6 months to 5 years with moderate to severe atopic dermatitis by the new June 9 PDUFA date. We are also excited about an upcoming trial in collaboration with the National Institute of Allergy and Infectious Diseases or the NIAID to assess efficacy and safety of Dupixent for asthma in underserved populations, including Black and Hispanic children in the United States.

Additionally, we are expecting an FDA decision for our supplementary BLA in eosinophilic esophagitis in patients 12 years and older by August 3, and we completed our regulatory submission for prurigo nodularis indication with FDA acceptance of this application anticipated shortly.

Moving to Libtayo and oncology. We are excited about the upcoming milestones in our oncology pipeline, including the FDA decision on our Libtayo chemo combo application for non-small cell lung cancer, data readouts and potential regulatory filings for our hematologic bispecifics as well as initial data readouts from our bispecific antibodies for solid tumors.

In hematology, odronextamab, our CD20xCD3 bispecific, has the potential for best-in-class efficacy in both follicular and diffuse large B-cell lymphoma, and was recently granted Fast Track designation from the FDA for these indications. Detailed results of our first-in-human study were recently published in Lancet Hematology and our registration intent programs in late-stage follicular lymphoma and DLBCL are expected to complete enrollment soon. Based on the safety profile we are observing from an updated step-up dosing regimen, we believe odronextamab has the potential to be administered entirely within the outpatient setting. We look forward to filing with this updated data set later this year pending regulatory feedback from the FDA.

Development of REGN5458, our BCMAxCD3 bispecific investigated for relapsed or refractory multiple myeloma, remains on track. And pending regulatory feedback, we are planning to submit regulatory approval in the first half of 2023. Studies in earlier lines of the disease, as well as an umbrella study in multiple myeloma investigating 5458 in combination with various standard of care products and investigational candidates, will begin enrollment shortly.

In the second half of the year, we anticipate initial clinical data disclosures for 3 first-in-class bispecifics. Our MUC16xCD3 monotherapy for late-stage ovarian cancer, our METxMET bispecific antibody for MET-altered non-small cell lung cancer, as well as our PSMAxCD28 co-stim bispecific in combination with Libtayo in late-stage prostate cancers. For these late-stage cancers, patients have limited options and showing any durable response would be a promising early sign to be confirmed with additional clinical studies also involving combinations.

We continue to progress our strategic approach to oncology, which starts with Libtayo as our foundational anti-PD-1 therapy and is augmented by logical combinations utilizing our broad oncology pipeline, whether it involves combining Libtayo with a second checkpoint inhibitor, as we are doing with the LAG-3 antibody in melanoma and other settings, with different combinations of bispecifics or with other agents in our portfolio.

Briefly turning to our antibodies against COVID-19. As we recently announced, the FDA extended its review of our REGEN-COV BLA for COVID-19 treatment and prophylaxis, with a new action date of July 13. This extension was due to ongoing discussions with additional data provided to the FDA on pre-exposure prophylaxis use of REGEN-COV. As this regulatory process continues, we are advancing next-generation COVID-19 antibodies and initiated a first-in-human trial with a new candidate in April. We continue to believe that a major unmet need for COVID antibodies is in chronic disease prevention for immunocompromised patients, and future development efforts will be addressing this population.

Concluding with our Regeneron Genetics medicine, where we and collaborators continue to advance our pipeline.

For our siRNA collaboration with Alnylam, we are very excited about our first-in-class approach to combining siRNA with antibody therapeutics, designed to maximize effect as well as duration of target blockade. The first of these is our C5 siRNA antibody combination, cemdisiran plus pozelimab. Phase III studies of their combination treatment for paroxysmal nocturnal hemoglobinuria, or PNH, and myasthenia gravis are underway. We will be dosing patients shortly.

In PNH, we are planning to test our combo in both naive and switch patients tested against standard of care therapies, including ravulizumab and eculizumab. Beyond C5, several edition combination programs are in our pre-clinical pipeline.

We continue to work with Alnylam as leaders in the use of siRNA therapeutics to address non-alcoholic steatohepatitis, or NASH, with several programs addressing novel targets discovered by the Regeneron Genetics Center. First data in NASH patients for ALN-HSD are anticipated mid-2022. We are progressing a second target, PNPLA3 into the clinic later this year, and we have recently identified an additional novel promising target that has been validated by RGC and is awaiting peer review publication.

We are also pleased to report a notable milestone that we and Alnylam initiated our first CNS-targeted siRNA clinical program, targeting amyloid precursor protein or APP, in development for both cerebral amyloid angiopathy and Alzheimer's disease. Showing that this siRNA approach can reduce levels of the target protein in the CNS has the potential to open the door for using this approach in multiple genetically-defined neurodegenerative diseases.

In the first quarter, we and Intellia provided an update on our joint CRISPR-based knockout program for transthyretin amyloidosis. Just to remind you, this is the first example of achieving CRISPR-based genomic editing in human beings. Our recent update demonstrated greater than 90% reduction of transthyretin durably achieved for the follow-up observation period in patients with hereditary transthyretin amyloidosis with polyneuropathy as well as acceptable safety observed so far.

Our genetics medicine portfolio now includes the diverse pipeline of siRNA candidates that we are working on with Alnylam, targeting the diseases of the liver, the brain and the eye as well as our crystal-based approaches in collaboration with Intellia and our viral-targeted gene delivery programs, such as with Decibel addressing congenial forms of hearing loss and other internal programs. While it's still early, we think these groundbreaking approaches have the potential to change the practice of medicine.

And with that, I will turn the call over to Marion.

Thank you, George. Our commercial performance in the first quarter reflects strong execution and the competitive strengths of our diversified and growing portfolio.

Starting with EYLEA. First quarter global net sales grew 11% year-over-year to nearly $2.4 billion. Over the same period, U.S. net product sales grew 13% to $1.52 billion as EYLEA continues to strengthen its leadership position. Across all proved indications, EYLEA is the preferred anti-VEGF treatment based on its differentiated efficacy and safety profile as well as extensive real-world patient and physician experience.

As Len mentioned, we are incredibly proud that EYLEA has helped improve or save the vision of patients around the world, with more than 50 million treatments since launch.

Category growth in EYLEA market share continued to increase across all approved indications. In diabetic eye disease, we have seen notable increases across the patient continuum from initial patient diagnosis through to receiving ongoing EYLEA treatment. We believe diabetic eye disease will remain an important source of future growth for EYLEA, as unfortunately, most patients remain underdiagnosed and undertreated.

Beyond EYLEA, our investigational aflibercept 8 milligram clinical program continues to generate excitement and a high level of interest within the retinal community. If supported by Phase III results, aflibercept 8 milligram has the potential to be a major enhancement to the anti-VEGF treatment paradigm.

In summary, we are confident in Regeneron's ability to maintain leadership over the long term based on our current EYLEA performance and future potential of aflibercept 8 milligram.

Turning now to Libtayo, with first quarter global net sales of $125 million. In the U.S., net sales were $79 million based on steadily-improving demand across FDA-approved non-melanoma skin cancer indications. The number of prescribers has increased in our non-small cell lung cancer monotherapy indication based on growing brand awareness, positive prescriber feedback and an increasing number of institutions and networks that have included Libtayo in protocols and pathways. We are working to build on this momentum ahead of the potential chemotherapy combination approval expected later this year that would dramatically expand the patient opportunity for Libtayo in lung cancer.

And finally, on to Dupixent, which again achieved remarkable growth for the quarter, demonstrated by a 43% increase in global net sales to over $1.8 billion. Our performance is fueled by a robust uptake across all approved indications as well as an expanding geographic footprint and potential future indications, including use in younger patients.

Dupixent is a transformational medicine for patients and prescribers with significant growth potential ahead. In the U.S., net product sales grew 38% to $1.3 billion. In atopic dermatitis, Dupixent is the first-line systemic treatment in patients with moderate to severe disease. Health care specialists recognize Dupixent's differentiated profile, which includes dual NT-IL-4 and IL-13 mechanism of action, compelling efficacy, rapid symptom relief and well-established safety profile. More than 430,000 patients worldwide are currently on treatment across all indications, and launch preparations are underway for the June potential label expansion for children as young as 6 months of age with atopic dermatitis. We estimate approximately 75,000 biologic eligible children in the U.S. could benefit from Dupixent in this younger age group.

We also look forward to potentially extending Dupixent's label to include additional dermatology conditions, including prurigo nodularis where patients have no currently FDA-approved medicines. Approximately 75,000 U.S. patients with PN are in need of new treatment options and may benefit from Dupixent.

In the highly-competitive biologic asthma indication, Dupixent continues to grow based on its compelling differentiation for health care professionals based on its unique dual mechanism of action, ease of administration, demonstrated safety, broad label and use in both steroid-dependent patients and pediatric patients.

There are positive prescribing trends from the recent pediatric asthma launch. In nasal polyps, Dupixent remains the preferred choice for both ENTs and allergists, with rapid growth even 3 years after initial launch.

Many patients with Type 2 or allergic disease suffer from another concomitant Type 2 disease. For example, in our atopic dermatitis clinical program, 40% of patients also had asthma. Dupixent is differentiated not only by its efficacy and safety profile in individual FDA-approved Type 2 indications, but also its potential to simultaneously address multiple Type 2 diseases in the same patient.

We look forward to expanding Dupixent into even more Type 2 diseases. Launch preparations are underway for eosinophilic esophagitis, where there are no FDA-approved medicines and significant unmet need.

Importantly, in our EoE clinical program, approximately 45% of patients also had atopic dermatitis or asthma. If approved in EoE, we estimate at least 50,000 patients in the U.S. could benefit from Dupixent in this indication. Key opinion leaders continue to provide positive feedback on our clinical data, especially given the lack of effective approved treatment alternatives for the patients who suffer from multiple EoE symptoms.

Turning briefly now to Dupixent in markets outside the U.S. In the first quarter, net product sales grew 61% to $485 million. Over the past year, Regeneron has expanded our commercial presence in several key markets outside the United States, and we are encouraged with progress so far integrating our sales efforts with Sanofi.

In summary, we see significant potential for Dupixent to continue to change the lives of patients and our families, and we will continue to advance initiatives that bring Dupixent to those in need.

In conclusion, we are pleased with the performance across our portfolio. We continue to advance our in-line brands and are on track to deliver on future launches, positioning Regeneron for sustained and long-term growth.

Now, I'll turn the call over to Bob.

Thank you, Marion. My comments today are on Regeneron's financial results, and outlook will be on a non-GAAP basis unless otherwise noted.

Regeneron is off to a strong start in 2022, with double-digit top and bottom line growth in the first quarter driven by execution across the business. First quarter total revenues grew 17% year-over-year to $2.97 billion. Excluding global revenues related to the COVID-19 antibody cocktail, total revenues grew 25%, demonstrating continued strength of our core business. First quarter total diluted net income per share grew 16% to $11.49 on net income of $1.3 billion.

Beginning with collaboration revenue and starting with Bayer. First quarter 2022 ex-U.S. EYLEA net product sales were $869 million, growing 7% on a reported basis and 13% on a constant currency basis versus first quarter of 2021. Total Bayer collaboration revenue was $385 million, of which we recorded $338 million for our share of net profits from EYLEA sales outside the U.S.

Total Sanofi collaboration revenue was $631 million in the first quarter of 2022 and grew 73% from the prior year, driven by Dupixent. In this quarter, we recognized the $50 million sales milestone upon achieving $2 billion of aggregate ex-U.S. sales for antibody collaboration products on a rolling 12-month basis.

Finally, we recorded Roche collaboration revenue of $216 million related to Roche sales of Ronapreve outside the U.S. We do expect additional revenue from this collaboration primarily in the second half of 2022.

Regarding REGEN-COV in the U.S. Consistent with our commentary from earlier this year, we did not record any U.S. sales for REGEN-COV in the first quarter of 2022. Absent the execution and fulfillment of an additional government contract, we do not expect to record any U.S. sales for REGEN-COV this year.

Other revenue in the first quarter of 2022 was $94 million. This includes a $30 million upfront payment from our collaborator, Ultragenyx to market Evkeeza outside of the U.S.

Moving now to our operating expenses. R&D increased 12% to $751 million, driven by higher headcount and clinical manufacturing costs, including for next-gen COVID antibodies, partially offset by lower clinical trial costs for REGEN-COV.

Starting in the first quarter of 2022, we are changing the presentation of our non-GAAP results to include in-process R&D acquired in connection with asset acquisitions as well as upfront and opt-in payments related to license and collaboration agreements. Going forward, we will now include these charges in both GAAP and non-GAAP results as a new line item called acquired in-process research and development.

In the first quarter of 2022, acquired IP R&D was $28 million, which includes a $20 million opt-in payment to our collaborator, Adicet. In full year 2021, there were $44 million of aggregate upfront payments excluded from non-GAAP R&D expense, all of which were recorded in the fourth quarter of 2021.

SG&A expense increased 10% year-over-year to $389 million, primarily due to costs related to growth initiatives for EYLEA and higher headcount to support our expanding organization. COCM increased 58% year-over-year to $198 million due to higher sales of Dupixent and an increase in shipments of commercial supplies of Praluent for Sanofi outside the United States.

Finally, the first quarter 2022 effective tax rate was 11.6% compared to 10.5% in the prior year.

Shifting now to cash flow and the balance sheet. In the first quarter of 2022, Regeneron generated $2 billion in free cash flow, inclusive of collections from the U.S. government for sales of REGEN-COV recorded in the fourth quarter of 2021. It ended the first quarter of 2022 with cash and marketable securities less debt of $11.4 billion.

We continue to deliver on our capital allocation priorities. Last month, we announced the agreement to acquire CheckMate Pharmaceuticals for a total equity value of approximately $250 million. Earlier this week, we launched the tender offer for CheckMate shares and expect this deal to close in mid-2022, subject to receipt of regulatory approval and other customary closing conditions.

In addition, we repurchased $352 million of our shares in the first quarter of 2022. We continue to be opportunistic buyers where we see dislocation between our stock price and our intrinsic valuation.

I will conclude with select updates to our full year 2022 guidance and outlook. We were updating full year R&D guidance to be in the range of $2.9 billion to $3.1 billion. The increase in guidance is driven by clinical manufacturing costs for next-gen COVID antibodies, most of which were recorded in the first quarter, and advancing programs across our pipeline. We also now expect our full year effective tax rate to be in the range of 12% to 14%. A complete summary of our latest full year guidance is available in our press release issued earlier this morning.

In conclusion, our core business is performing well, and we continue to make investments in our R&D engine supported by our strong financial position, leaving Regeneron well positioned for sustainable long-term growth.

With that, I will pass the call back to Ryan.

Thank you, Bob.

Gigi, that concludes our prepared remarks. We'd now like to open the call for Q&A. With more than 20 callers in the queue and to ensure we are able to address as many questions as possible, we will answer only one question from each caller before moving to the next.

Gigi, please go ahead.

(Operator Instructions) Our first question comes from the line of Chris Raymond from Piper Sandler.

Just a question maybe for Marion, if I can, on EYLEA and sort of the competitive set. I know you guys have said feedback from the market and the biz now has been somewhat muted, but it's actually kind of striking how different Roche is sort of viewing the reception of the drug. They highlight a lot of enthusiasm from stocks, and I know there's a lot of talk about what will happen after a permanent J-code.

But I know you guys have a lot of levers to pull here, not least of which is launching the high-dose format of EYLEA. But can you talk a little bit about the rebates, how they are playing into your counter strategy in the maybe near to intermediate term? And how we should be thinking about net pricing going forward?

Chris, happy to give you some characterization of the market. First, let me comment on EYLEA. And as we reported today, our performance certainly with EYLEA in a very competitive marketplace is quite strong across indications. And certainly, we see very strong performance not only in capturing more than our fair share of the market growth, but also competitive share gains across indications.

As a reminder, in rural market, we have about 50% of the VEGF category market share with EYLEA. And in the branded marketplace, over 75% of the branded market share.

I really do think it's probably best to let Roche comment on uptake of their new product in the marketplace. I'll share that prescribers and key opinion leaders come into us on the importance of the demonstrated safety they see with EYLEA, the efficacious profile that we have and certainly the extensive consideration across indications and in-market use that has been incredibly robust.

As it relates to other items on pricing and things of that sort, generally, we don't comment. But I certainly will say that looking ahead, we see strong leadership with EYLEA and a profile that is certainly leading the category in terms of experience, uptake and use.

Our next question comes from the line of Cory Kasimov from JPMorgan.

To follow up on EYLEA, I wanted to ask about the high dose formulation. Assuming the results read out as you anticipate, how do you think about this product potentially slotting into the treatment landscape? Is it possible that this could broadly take over from your current dose? Or would you expect it to be primarily used in certain segments of the market?

So I think at this point, we'll want to wait and look at product profile as the clinical data matures. And then certainly, as we move into launch preparation planning, we'll be considerate of how the profile matches up against patient need and opportunity. So I think more to come on specifics on uptake. We remain optimistic. But of course, we need to wait and see how the clinical data matures and the profile of product is clarified.

Our next question comes from the line of Evan Seigerman from BMO Capital Markets.

I love if you could expand on some of the rationale behind acquiring or proposing to acquire Checkmate Pharmaceuticals. Anything in the data that was particularly notable when you were doing your diligence that piqued your interest? And do you expect to go forward combining their asset with Libtayo versus say, nivolumab or pembro as they had on their prior trials?

I'm sure -- it's Len. I'm sure George would love to stand upon the thinking. But unfortunately, because we just launched the tender offer, we're really not committed to have that discussion. And we'll look forward to that discussion, assuming that the deal closes around the middle of the year as we anticipate.

Fair enough, Len. Fair enough. That's all right.

But because we couldn't answer that question, if you get back in the queue, we'll come back to you for another question.

Fair enough.

Our next question comes from the line of Salveen Richter from Goldman Sachs.

On these initial bispecific datasets in solid tumors in the second half, could you just speak to what exactly we're going to see initially? And then what you would like to -- you would want to see from the dataset in terms of being clinically meaningful?

Well, as I indicated in my remarks, basically, we're going into late-stage patients, heavily, pre-treated. We're hoping to actually be able to report on seeing objective responses, and the number and the duration of the responses is what we're looking for. We would love to be able to see significant numbers of durable responses, showing that each one of these novel agents is really making a difference in the late-stage patients.

That, of course, would open up for each one of them, we think, very important opportunities in terms of both those late-stage settings, but also particularly with logical combinations going back into earlier and earlier stage patients. So each one of them could become then a significant program not only in monetary, but in combination with logical other agents.

So as I said, responses with duration is what we're looking for in all 3 of those programs.

Just to amplify a little bit what -- to make sure nobody missed what George just said is that, it seems to be the case that with these types of reagents, much as it is the case with other anti-cancer agents, that while you start in the latest, most difficult patients, there is better activity in earlier lines with these kinds of immune reagents. So finding activity in the late, heavily pre-treated would be very encouraging.

Our next question comes from the line of Brian Abrahams from RBC Capital Markets.

Congrats on all the progress. Can you elaborate a little bit more on the safety benefit that you're seeing for odronextamab stepped up dosing? And I guess, what it means in terms of differentiating versus other bispecifics in development, and ultimately, CAR-T, and then your confidence that you'll retain similarly strong efficacy with this dose?

Yes. We actually had initiated the concept for bispecifics in general as we were very early players in the field of this concept of step-up dosing. And what it seems to be -- being confirmed by our own data and other people's data is that when you give them initially at low doses and gradually stepped up to your optimal dose, you are reducing the incidence of severe side effects and particularly cytokine release syndrome.

We had actually pretty low rates with our original, so our original dosing regimen was also a step-up dosing regimen. But in collaboration with the FDA, we redefined the stepped-up dosing and came up with an even more gradual program. It only extends the timing to get to maximum dose by 1 week, and we're still obviously getting to that same dose.

And what we're saying is that from the early read from the new step-up dosing, which presumably we'll give you the detailed data at some point in the future, the results are looking very promising. The already low rate of significant cytokine release syndrome that we were seeing, looks like it's depressed even further down to rates where we think, as I stated, we will be able to use this regimen in this approach in the outpatient setting.

So it's just very promising that we've come up with a safe -- what looks like to be a safe protocol that could be used in outpatient settings. And it's getting to the same maximum dose in a pretty short period of time as well.

Our next question comes from the line of Carter Gould from Barclays Capital.

One for me. I want to understand, I guess, how you're thinking about your broader CV effort? We've heard from a number of large pharma and biotech companies sort of rededicating themselves to CV recently. And when you map out the indications and products, I'd argue, you have one of the broader pipelines across CV. But you don't really get much credit for it, and probably you and Evkeeza remain relatively small contributors to your sales. So do you see this being a major commercially relevant area for Regeneron going forward? I'd just like to understand your ambitions here a little bit better.

We have not obviously realized what we think is the full potential of our CV expertise and capabilities, and we are exploring ways on how to do that. Some of which may require us to rethink combinations of both types of reagents and targets, and hopefully, you'll hear more about that. But we would agree, it's -- right now, it's not a major contributor to our near-term performance.

Our next question comes from the line of Brian Skorney from Baird.

This is Luke Herrmann on for Brian Skorney. Could you talk a bit more about 5458, maybe your confidence that the currently enrolling Phase II study will support a filing? Any timeline granularity and combinations you're particularly excited about there?

Yes. Well, in small numbers, we have very competitive response rates with deep responses and duration that we think, for these late-stage patients, should be able to support registration if we can replicate it in the larger Phase II registrational possible study that we are undertaking. We continue to see a very acceptable safety and tolerability profile. And as you said, this is just sort of the first step in the whole program. We are very excited about combinations, and we're also very excited about moving to earlier lines of therapy.

In terms of combinations, as we've talked about before, it's very logical, and the pre-clinical data are very compelling, that combinations with so-called co-stimulatory bispecifics that also bind to a target on the same myeloma cells but now activate what we and others refer to as [signal 2], will be very exciting and has really the potential to enhance responsiveness and deepen responsiveness and deepen duration.

We have a series of additional next-generation candidate as well that we could layer on top of that next series of logical combinations, which involve these co-stimulatory molecules. And we're also thinking that obviously, as Len already mentioned, going to earlier lines of therapy is only going to increase the responsiveness and the opportunities to get longer and longer responses, and dare I say, even potentially cures.

So that's the basic summary of our programs. Get registration in the late -- late setting by replicating the data that we've seen with our ongoing registration, possible Phase II study. Adding combinations to enhance responses, deepen responsiveness and duration. And three, going into earlier lines of therapy as well.

Our next question comes from the line of Brittany A. Woods from Cowen & Company.

This is Brittany on for Tyler. Congrats on another strong quarter. So a multi-part question, a bit related on the REGEN-COV cocktail. For the ongoing studies of the next-gen candidates, when do you expect that it will be filed for approval for the regulatory path forward look like? And also, if we continue to be in a relatively low case period as we enter the endemic phase, what could a pivotal trial ultimately look like there?

These are all really great questions. And we are continuing to discuss our regulatory path, both for getting our, hopefully, full approval for our existing cocktail, but also the regulatory path going forward for next-generation cocktails with the FDA. That's an ongoing discussion that has potential to change, and obviously, associated studies to support that program have the potential to change. So we're not, at this point, talking about the details of either. But great questions.

And suffice it to say the complexities are increased when you have to start thinking about supply as well. So as George said, we're in discussions with the agency about what it would take to get an authorization. But you're always chasing the next variant, and we have probably what we think is greatest end-to-end capabilities in this space as is out there, but still knowing which variant to manufacture for which antibody and how to keep chasing that, it's a fairly complex situation. But we're committed to try and make monoclonal as an important part of the solution. And I think they can be, but it is going to require some artful science, so to speak.

Our next question comes from the line of Dane Leone from Raymond James.

Congratulations on all the progress across all of your programs. One question for me on the PHOTON and PULSAR outcomes. It's been interesting to hear your narrative over many years now through EYLEA, and your team has generally been right in terms of next-generation efforts that have kind of failed to displace EYLEA as the standard of care. And to that point, I'm a little interested from your commentary on the CANDELA readout and how that impacts your interpretation of PHOTON and PULSAR. Meaning, what does your team really think ends up being a differentiated outcome for those patients that are able to treat and extend on the high dose out to q.16 weeks? And does that have to be a comparison to what read out with faricimab studies to make it a compelling drug option or a higher dose option in the market to complement EYLEA?

And the context for this, I guess, I'd put it as you guys have generally contended that a lot of these studies comparing against per label EYLEA are not actually fair studies to be running. Faricimab obviously used extra loading dose. But in the real world, the treatment extent of EYLEA versus any of these other agents is actually quite equivalent.

So I'd be just interested to hear how you think that contextualization of these high-dose aflibercept studies really inform of who should get the higher dose if and when it becomes available?

That's going to be obviously a choice for clinicians to decide once they've seen all the data. But I think that an important consideration is still going to be not only the duration, because duration does matter, efficacy, efficacy management, but safety. And I think the distinct advantage we have with high-dose EYLEA is that from a molecular point of view, whether you're having immunologic reactions and those sorts of things, EYLEA is a very well-known entity. If we can transition to a higher dose with the same kind of safety and allow for longer duration, I think that is a more attractive paradigm in switching to a new molecular mechanism of action with unproven safety with 50 million injections behind it. And frankly, I do think even the FDA views the -- when you're changing dosing paradigms of the same molecule as different when you're bringing in a new molecule.

So we can't say and we wouldn't dare to speak for what clinicians will do once they see the data, but we do feel strongly that having the same EYLEA backbone, if we get the safety that we anticipate thus far from the small CANDELA study, and we get the kind of extension of duration, perhaps more driving to look at the actual numbers. I think that sort of transition is more efficient than transitions that may occur with new reagents.

Our next question comes from the line of Charlie Yang from Morgan Stanley.

This is Charlie Yang on for Matthew. I just want to follow up on the REGN5458, BCMA bispecific. I guess my question here is, given the competitor is ahead and potentially account getting approval later this year, and they are already testing in combination with DARZALEX, for example, I'm just curious about kind of your confidence on the 5458 in terms of its outlook. And maybe just provide some thoughts on the competitive landscape and the commercial opportunity across different line of settings?

Yes. We think being marginally ahead or behind here isn't really going to mean all that much. It's how good your actual agent is. And also, of course, what opportunities you have for combinations. And so as we said, if we can reproduce the efficacy we've seen in our initial studies in our potentially pivotal Phase II program, that will make it a very, very competitive agent in terms of efficacy, and that's what obviously really matters.

But also in terms of combinations, we do believe that we have some of the most interesting and potentially game-changing combinations with novel agents such as these co-stimulatory bispecifics that are whole different opportunities than combinations with traditional -- more traditional agents. So it can take the efficacy that hopefully, we will see with the monotherapy, both in the late-stage setting but just as, if not more importantly, in the earlier stage settings, and really extend and take it to another level.

And so being a little bit ahead or behind here is not going to be as important as producing really good data. Combinations, we think it's really whether you can really come up and you have in your portfolio very interesting logical combinations that can really be game-changing. And we think that we have those opportunities, which is why we're so excited about this program.

Our next question comes from the line of Mohit Bansal from Wells Fargo.

Great. Thank you for squeezing me in. Maybe a question on EYLEA, high-dose EYLEA. George, I would love to get your take on the design of the DME trial. It seems like there are 5 monthly doses in the 2-milligram arm just like label, but only 3 for the 8-milligram arm. Could you please walk us through the rationale behind this difference? And wouldn't it put high-dose EYLEA at a disadvantage?

Yes. Well, certainly, the whole goal of the high-dose EYLEA is to deliver the same efficacy and safety, as Len said, safety being very important, but with the reduced injection schedule. And so honestly, it is, as you said, more challenging to be accomplishing the results in PHOTON with less loading injections than for the 2-milligram EYLEA. But that is the goal with the high dose aflibercept. So it is challenging, but it is the higher dose. That's what the goal is, and I guess the data will speak.

Yes. And I think we could eliminate. If we gave too high the loading dose, obviously, it might complicate some of the efficacy readouts. But as George said, I think the -- based on what we know when we designed it, this looks like it could -- we're optimistic.

All right. Thank you. I think we're done.

Gigi, we conclude the call.

This concludes today's conference call. Thank you for participating. You may now disconnect.