Regeneron's Q3 2025 Earnings Call: Contradictions Emerge on Eylea Demand, Manufacturing, and Factor Xi Prioritization

Date of Call: October 28, 2025

Financials Results

• Revenue: $3.8 billion total revenues, up 1% YOY
• EPS: $11.83 diluted net income per share (third quarter)
• Gross Margin: 86% on net product sales, lower versus prior year due to product mix and higher manufacturing investments

Guidance:

• Updated and narrowed 2025 guidance ranges (see press release).
• Expect a mid‑teens percentage increase in R&D expense in 2026 vs 2025.
• Anticipate returning approximately $4 billion to shareholders (dividends + repurchases) in 2025.
• Expect Sanofi development balance to be fully reimbursed by no later than end of Q3 2026.
• Expect EYLEA HD Q4 sequential demand growth to moderate to high single digits pending label enhancements.
• Plan to bring internal filling capacity online next year to support manufacturing.

Business Commentary:

• Regeneron's Financial Performance:
• Regeneron reported a solid Q3 with double-digit net sales growth for several key products. Dupixent net sales increased by 26%, Libtayo by 24%, and EYLEA HD in the U.S. by 10% on a constant currency basis compared to the prior year.

• Growth was driven by strong demand and market leadership in their respective therapeutic areas, as well as the introduction of new product indications and geographic expansions.

• EYLEA HD and Market Dynamics:

• EYLEA HD net sales grew by 18% quarter-over-quarter, reaching $431 million, despite competitive pressures in the branded anti-VEGF category.

• The growth is attributed to favorable clinical efficacy, safety, and durability, which have made EYLEA HD a preferred choice among retina specialists.

• Dupixent's Expansion and Market Leadership:

• Dupixent's global net sales reached $4.9 billion, reflecting a 28% increase year-over-year in the U.S. market.

• The increase is due to strong physician adoption and patient demand across multiple approved indications and geographic regions, along with successful launches in new indications.

• Libtayo's Market Gains and Approval Expansion:

• Libtayo's worldwide net sales grew by 24% year-over-year, with U.S. sales increasing by 12%.
• The expansion is due to established leadership in non-melanoma skin cancers and new indications, notably the recent FDA approval in high-risk adjuvant cutaneous squamous cell carcinoma, which is poised to treat up to 10,000 eligible patients.

Sentiment Analysis:

Overall Tone: Positive

• Management: "Regeneron delivered a solid third quarter"; Dupixent global net sales $4.9B (up 26% CC); EYLEA HD U.S. net sales $431M, an all-time high; "Third quarter 2025 total revenues of $3.8 billion grew 1% YOY"; strong pipeline readouts and multiple Phase III successes cited.

Q&A:

• Question from Akash Tewari (Jefferies LLC): It seems like your team has retooled your commercial strategy on EYLEA, and it seems related to kind of price. What are you doing on a ground level when it comes to volume-based discounts that's allowing you to take share from Roche and Amgen? And are you seeing more price erosion on EYLEA? Or are we also seeing that discounting on high dose? And maybe just lastly, should we continue to see volume gains and revenue gains ahead of the label enhancement potentially midyear?
  Response: Management declined to disclose rebate/discount details; said EYLEA HD uptake is driven by product efficacy, safety and durability; expect EYLEA HD Q4 demand growth to moderate–high single digits while standard EYLEA demand may continue to decline (EYLEA 2 mg down ~10% QoQ).

• Question from Geoffrey Meacham (Citigroup Inc.): On utilizing the balance sheet, you guys haven't historically done larger-scale BD... In manufacturing, what's the appetite to further expand your plans that you've announced just so you own all elements of the manufacturing?
  Response: Open to large deals if they create value; committed to expanding domestic manufacturing (>$7B plan) and expect their own filling plant to come online next year to improve control over filling.

• Question from Christopher Raymond (Raymond James): As clinics' inventory policies have evolved, especially with private equity influence, how has that affected adoption and why are the label enhancements important to enable clinics to center inventory around one drug?
  Response: Retina specialists choose based on clinical attributes; EYLEA HD's efficacy, safety and durability are driving adoption and availability/payer coverage improvements, rather than inventory or private-equity-driven decisions alone.

• Question from Terence Flynn (Morgan Stanley): For IL-33 (itepekimab) in COPD, can you discuss insights that drove the differential outcome in the prior two Phase IIIs and what you'd change for a third trial?
  Response: Management declined to discuss specifics for competitive reasons; stated they will consult with FDA to determine next steps before deciding on another Phase III.

• Question from Tyler Van Buren (TD Cowen): Probability of the late-December decision on the RVO and every-4-week dosing filing with the new filler resulting in approval? Is this the same alternate filler used for the recent Libtayo adjuvant CSCC approval?
  Response: It's a different filler; approval timing depends on that filler passing FDA inspection/review—if cleared before the late-Nov PDUFA it could be wrapped up then; otherwise they hope inspection/approval in December followed by rapid resubmission.

• Question from Evan Seigerman (BMO Capital Markets): What internal changes have you made with regulatory/manufacturing teams to prevent recent CRLs and ensure products reach patients quickly?
  Response: Management said the issues are primarily third-party filling constraints—not internal regulatory failings—are investing in in‑house filling (plant expected next year) and building backups, though qualifying alternate fillers is complex and time-consuming.

• Question from Brian Abrahams (RBC Capital Markets): For the Factor XI antibody program and the large Phase II in Afib, what are you looking for to move into registrational programs and accelerate the program?
  Response: Phase II is a lead-in to pivotal work; focus is demonstrating an improved benefit‑risk profile—particularly reduced bleeding—so the two distinct antibodies can be tailored to different patient needs and enable broader indications.

• Question from Cory Kasimov (Evercore ISI): After positive Phase III data for cemdisiran, how do you see the commercial opportunity in gMG and plans for Europe?
  Response: Cemdisiran offers convenient subcutaneous dosing every 3 months with stable, deep efficacy and potential safety advantages versus full complement inhibitors; commercial/launch planning is underway and the team will be launch‑ready based on this differentiated clinical profile.

• Question from Alexandria Hammond (Wolfe Research): On the upcoming Libtayo + LAG‑3 readout, confidence in outperforming KEYTRUDA and details on the open‑label Phase III vs Opdualag?
  Response: The randomized study versus KEYTRUDA is powered for PFS and OS and includes two dose arms; management hopes at least one arm outperforms KEYTRUDA and is prepared for Opdualag‑like comparisons; readout expected first half next year.

• Question from Salveen Richter (Goldman Sachs): For the GA program, what is the likely pivotal study design (lesion growth vs vision, comparator) and when might we hear about I&I novel targets?
  Response: Pivotal GA program is placebo‑controlled focusing on slowing GA lesion growth and vision outcomes; cohort A readout expected H2 2026; additional I&I novel targets will be rolled out over the next few months with new clinical programs initiating next year.

Contradiction Point 1

EYLEA Demand and Market Strategy

It highlights differing explanations for the demand growth and market performance of EYLEA HD, which could impact investor understanding of the company's competitive strategy and market dynamics.

How are volume-based discounts helping you gain market share from Roche and Amgen? Is EYLEA experiencing increased price erosion? Will volume and revenue growth continue before the mid-year label enhancement? - Akash Tewari(Jefferies LLC)

2025Q3: EYLEA HD's performance is driven by its clinical efficacy, safety, and durability. We expect sequential demand growth to moderate to high single digits pending label enhancements. EYLEA demand was reduced by 10% quarter-over-quarter, reflecting competitive dynamics and affordability issues. - **Leonard Schleifer(CEO)**, **Marion McCourt(CMO)**

What caused the QoQ rebound in EYLEA HD? Can you explain the Catalent site inspection issue and potential HD approval delays? - Tyler Martin Van Buren(TD Cowen)

2025Q2: EYLEA HD demand growth was driven by physician appreciation for its clinical efficacy, safety, and durability. - **Leonard S. Schleifer(CEO)**, **Marion E. McCourt(CMO)**

Contradiction Point 2

Manufacturing and Regulatory Issues

It involves differing explanations for manufacturing and regulatory challenges, which could impact investor confidence in the company's operational capabilities and product timelines.

What internal changes have been made to address CRLs and expedite product approvals and patient access? - Evan Seigerman(BMO Capital Markets Equity Research)

2025Q3: The issues are not due to internal regulatory problems but to manufacturing complexities, especially getting backups online. We are working diligently to rectify the situation. - **Leonard Schleifer(CEO)**

What caused the QoQ rebound in EYLEA HD? What are the details of the Catalent inspection and HD approval delays? - Tyler Martin Van Buren(TD Cowen)

2025Q2: I don't see anything that requires us to go back to the FDA on EYLEA. The issues at the Catalent site are mainly procedural, not structural. - **Leonard S. Schleifer(CEO)**

Contradiction Point 3

BD and Manufacturing Expansion

It highlights differing indications of the company's openness to using the balance sheet for large deals and manufacturing expansion, which could impact investor expectations regarding strategic growth initiatives.

Are you open to larger-scale BD using the balance sheet? What are your manufacturing expansion plans? - Geoffrey Meacham(Citigroup Inc., Research Division)

2025Q3: We have no allergy to using the balance sheet for large deals if they make sense. We are committed to domestic manufacturing, with our filling plant expected to come online next year, enhancing standard biologics manufacturing control. - **Leonard Schleifer(CEO)**

What is the ROI of prioritizing internal R&D, and is licensing out non-core assets justified considering innovation premiums? - Geoffrey Christopher Meacham(Citi)

2025Q2: We've actually done 3 deals since COVID where we've paid cash. So, we've been very open-minded about that. We've raised $10 billion over the last 2 years before the pandemic to make sure we have room on our balance sheet. - **Leonard S. Schleifer(CEO)**

Contradiction Point 4

Factor XI Antibody Program and Indication Prioritization

It involves differing perspectives on the prioritization of indications for the Factor XI antibody program and the timeline for launches, which affects strategic focus and investor expectations.

What are the goals for the Factor XI antibody program in Afib studies, and how do you plan to move into larger indications? - Brian Abrahams(RBC Capital Markets, Research Division)

2025Q3: In June, we initiated a Phase 2b study in AFib. The goal is to demonstrate the safety and efficacy of this therapy in a broader population, with an extended duration of dosing. The current study is a run-in for potential Phase III programs. Our approach allows for customized anticoagulation tailored to individual patients' bleeding risk, which opens up opportunities beyond SPAF. - **George Yancopoulos(CSO)**

How do you prioritize indications for your Factor XI antibody, and when do you expect product launches? - Alexandria Hammond(Wolfe Research)

2025Q1: We are prioritizing indications that will allow us to demonstrate the benefits of our anti-coagulation and bleeding risk profiles. We are not disclosing all indications, but we anticipate launching certain indications sooner than others. Our goal is to emphasize the potential for reduced bleeding risk, and we are starting to enroll Phase 3 studies this year. - **George Yancopoulos(CSO)**

Contradiction Point 5

EYLEA HD Market Share and Competitive Pressure

It addresses the company's strategic positioning and competitive landscape, which are crucial for understanding market dynamics and revenue expectations.

What strategies are you using via volume-based discounts to gain market share from Roche and Amgen? Are you seeing increased price erosion for EYLEA? Will volume and revenue growth continue before the midyear label enhancement? - Akash Tewari(Jefferies LLC)

2025Q3: EYLEA HD's performance is driven by its clinical efficacy, safety, and durability. We expect sequential demand growth to moderate to high single digits pending label enhancements. EYLEA demand was reduced by 10% quarter-over-quarter, reflecting competitive dynamics and affordability issues. - **Leonard Schleifer(CEO)**, **Marion McCourt(CMO)**

Are the consensus estimates for annual sales decline of 7% for the EYLEA franchise reasonable? Can you provide directionality? - Brian Abrahams(RBC Capital Markets)

2024Q4: We see EYLEA HD with a strong profile due to its clinical profile and potential enhancements. We've seen competitive pressure, but EYLEA HD's market share is at 46%, indicating a strong position. The market share reflects a compelling profile despite competitive pressure. - **Marion McCourt(CMO)**