Regeneron Reports Third Quarter 2009 Financial and Operating Results

TARRYTOWN, N.Y., Nov. 3 /PRNewswire-FirstCall/ -- Regeneron Pharmaceuticals,
Inc. (Nasdaq: REGN) today announced financial and operating results for the
third quarter of 2009. The Company reported a net loss of $1.0 million, or
$0.01 per share (basic and diluted), for the third quarter of 2009 compared
with a net loss of $19.1 million, or $0.24 per share (basic and diluted), for
the third quarter of 2008. The Company reported a net loss of $31.3 million,
or $0.39 per share (basic and diluted), for the nine months ended September
30, 2009 compared with a net loss of $49.6 million, or $0.63 per share (basic
and diluted), for the same period in 2008. During the third quarter of 2009,
the Company recognized as revenue a $20.0 million milestone payment from Bayer
HealthCare, as described below.

At September 30, 2009, cash, restricted cash, and marketable securities
totaled $438.6 million compared with $527.5 million at December 31, 2008.

Current Business Highlights

ARCALYST® (rilonacept) - Inflammatory Diseases
The Company shipped $5.3 million of ARCALYST® (rilonacept) Injection for
Subcutaneous Use to its U.S. distributors during the third quarter of 2009,
compared to $4.3 million in the same quarter of 2008. Shipments during the
first nine months of 2009 were $15.0 million compared to $6.7 million for the
same period of 2008. ARCALYST, an interleukin-1 (IL-1) blocker, was approved
in the United States in February 2008 for the treatment of
Cryopyrin-Associated Periodic Syndromes (CAPS), including Familial Cold
Auto-inflammatory Syndrome (FCAS) and Muckle-Wells Syndrome (MWS) in adults
and children 12 and older. The Company currently projects shipments of
ARCALYST to its U.S. distributors to total approximately $20 million in 2009.
In October 2009, rilonacept was approved under exceptional circumstances by
the European Medicines Agency (EMEA) for the treatment of CAPS with severe
symptoms in adults and children aged 12 years and older.

ARCALYST is in a Phase 3 clinical development program for the treatment of
gout. The program includes four clinical trials, all of which are currently
enrolling patients. Two Phase 3 clinical trials (called PRE-SURGE 1 and
PRE-SURGE 2) are evaluating ARCALYST versus placebo for the prevention of gout
flares in patients initiating urate-lowering drug therapy. A third Phase 3
trial in acute gout (SURGE) is evaluating treatment with ARCALYST alone versus
ARCALYST in combination with a non-steroidal anti-inflammatory drug (NSAID)
versus an NSAID alone. The fourth Phase 3 trial is a placebo-controlled
safety study (RE-SURGE). The Company expects to report initial data from the
Phase 3 program in the first half of 2010. Regeneron owns worldwide rights to
ARCALYST (rilonacept).

Aflibercept (VEGF Trap) - Oncology
Aflibercept, an anti-angiogenic protein product candidate designed to bind all
forms of vascular endothelial growth factor A (VEGF-A), is being developed
worldwide by Regeneron and its collaborator, sanofi-aventis. At the end of
the third quarter of 2009, more than 80 percent of the planned number of
patients were enrolled in each of three Phase 3 trials that are evaluating
combinations of aflibercept with standard chemotherapy regimens for the
treatment of cancer. One trial (called VELOUR) is evaluating aflibercept as a
2nd line treatment for metastatic colorectal cancer in combination with
FOLFIRI (folinic acid (leucovorin), 5-fluorouracil, and irinotecan). A second
trial (VITAL) is evaluating aflibercept as a 2nd line treatment for metastatic
non-small cell lung cancer in combination with docetaxel. The third trial
(VENICE) is evaluating aflibercept as a 1st line treatment for metastatic
androgen-independent prostate cancer in combination with docetaxel/prednisone.
All three trials are studying the current standard of chemotherapy care for
the cancer being studied with and without aflibercept. Analyses of the data
from these studies will be conducted when a prespecified number of events have
occurred in each trial. Based on current enrollment and event rates, an
interim analysis of the Phase 3 study in colorectal cancer is expected to be
conducted by an independent data monitoring committee (IDMC) in the second
half of 2010. Complete results from this study in colorectal cancer and from
the study in non-small cell lung cancer are anticipated in the first half of
2011. Based on the current enrollment and number of events, an interim
analysis of the prostate study is expected to be conducted by an IDMC in
mid-2011, with complete results anticipated in 2012. In addition, a Phase 2
study (AFFIRM) is being conducted of aflibercept in 1st line metastatic
colorectal cancer in combination with folinic acid (leucovorin),
5-fluorouracil, and oxaliplatin.

In September 2009, as previously reported, a fourth Phase 3 trial (VANILLA)
that was evaluating aflibercept as a 1st line treatment for metastatic
pancreatic cancer in combination with gemcitabine was discontinued at the
recommendation of an IDMC. As part of a planned interim efficacy analysis, the
Committee determined that the addition of aflibercept to gemcitabine would be
unable to demonstrate a statistically significant improvement in the primary
endpoint of overall survival compared to placebo plus gemcitabine in this
study. The types and frequencies of adverse events reported on the combination
arm with aflibercept were generally as anticipated.

VEGF Trap-Eye - Ophthalmologic Diseases
VEGF Trap-Eye, a specially purified and formulated form of VEGF Trap for use
in intraocular treatment of retinal disease, is being developed by Regeneron
and its collaborator, Bayer HealthCare. Two Phase 3 studies (VIEW 1 and VIEW
2) evaluating VEGF Trap-Eye in patients with the neovascular form of
Age-related Macular Degeneration (wet AMD) are now fully enrolled, and we
expect initial data from this program to be reported in late 2010. A Phase 2
study (called DA VINCI) of VEGF Trap-Eye for the treatment of the Diabetic
Macular Edema (DME) is also fully enrolled, with data expected during the
first half of 2010. Additionally, two Phase 3 studies in Central Retinal Vein
Occlusion (CRVO) are enrolling patients; data from the first of these studies
are anticipated to be available in the first half of 2011.

During October 2009, 24-month results of the extension stage of the Phase 2
study of VEGF Trap-Eye in wet AMD (CLEAR-IT 2) were presented at the 2009
American Academy of Ophthalmology meeting. After receiving VEGF Trap-Eye for
one year, the 117 patients who elected to enter the extension stage were dosed
on a 2.0 mg PRN basis, irrespective of the dose at which they were treated
earlier in the study. On a combined basis, for these 117 patients, the mean
gain in visual acuity was 7.3 letters (p<0.0001 versus baseline) at the
three-month primary endpoint of the original Phase 2 study, 8.4 letters
(p<0.0001 versus baseline) at one year, and 6.1 letters (p<0.0001 versus
baseline) at month 12 of the extension study. Thus, after 24 months of dosing
with VEGF Trap-Eye in the Phase 2 study, patients continued to maintain a
highly significant improvement in visual acuity versus baseline, while
receiving, on average, only 4.6 injections over the 21-month PRN dosing phase
that extended from month three to month 24. The most common adverse events
were those typically associated with intravitreal injection.

Bayer HealthCare has rights to market VEGF Trap-Eye outside the United States,
where the companies will share equally in profits from any future sales of
VEGF Trap-Eye. Regeneron maintains exclusive rights to VEGF Trap-Eye in the
United States.

Monoclonal Antibodies
During the third quarter of 2009, REGN475, an antibody to Nerve Growth Factor
(NGF), a novel target for pain, began a dose ranging study in osteoarthritis
of the knee. Trial results are expected during the first half of 2010. A
Phase 1 study of REGN475 in healthy volunteers is also continuing, and Phase 1
studies are in progress with REGN88, an antibody to the interleukin-6 receptor
(IL-6R) that is being evaluated in rheumatoid arthritis, and REGN421, an
antibody to Delta-like ligand-4 (Dll4) that is being studied in patients with
advanced malignancies. REGN475, REGN88, and REGN421 are fully human monoclonal
antibodies generated by Regeneron using the VelocImmune® technology and
developed within the Company's human antibody collaboration with
sanofi-aventis. Regeneron and sanofi-aventis expect to enter two more human
monoclonal antibodies into clinical development this year and to advance an
average of two to three into clinical development each year thereafter over
the next several years.

Financial Results

Revenues
Total revenues increased to $117.5 million in the third quarter of 2009 from
$65.6 million in the same quarter of 2008 and increased to $282.5 million for
the first nine months of 2009 from $182.6 million for the same period of 2008.
The Company's revenue was comprised of contract research and development
revenue, a 2009 research progress payment, technology licensing revenue, and
net product sales.

Contract Research and Development Revenue
Contract research and development revenue relates primarily to the Company's
aflibercept and antibody collaborations with sanofi-aventis and the Company's
VEGF Trap-Eye collaboration with Bayer HealthCare. Contract research and
development revenue for the three and nine months ended September 30, 2009 and
2008 consisted of the following:

Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
(In millions) 2009 2008 2009 2008
---- ---- ---- ----
Contract research & development
revenue
Sanofi-aventis $68.5 $42.0 $178.9 $116.3
Bayer HealthCare 12.2 9.0 34.9 28.2
Other 1.8 1.9 5.3 5.4
--- --- --- ---
Total contract research &
development revenue $82.5 $52.9 $219.1 $149.9
===== ===== ====== ======

For the three and nine months ended September 30, 2009 and 2008, contract
research and development revenue from sanofi-aventis consisted of the
following:

Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
(In millions) 2009 2008 2009 2008
---- ---- ---- ----
Aflibercept:
Regeneron expense reimbursement $7.0 $7.3 $21.6 $29.3
Recognition of deferred revenue
related to up-front payments 2.5 2.1 7.4 6.2
--- --- --- ---
Total aflibercept 9.5 9.4 29.0 35.5
--- --- ---- ----
Antibody:
Regeneron expense reimbursement 55.7 29.5 139.8 72.4
Recognition of deferred revenue
related to up-front payment 2.6 2.6 7.9 7.9
Recognition of revenue
related to VelociGene((R))
agreement 0.7 0.5 2.2 0.5
--- --- --- ---
Total antibody 59.0 32.6 149.9 80.8
---- ---- ----- ----
Total sanofi-aventis contract
research & development revenue $68.5 $42.0 $178.9 $116.3
===== ===== ====== ======

Sanofi-aventis' reimbursement of Regeneron's aflibercept expenses decreased
for the three and nine months ended September 30, 2009, compared to the same
periods in 2008, primarily due to lower Company costs associated with internal
research activities and, for the nine months ended September 30, 2009, lower
costs related to manufacturing clinical drug supplies. Sanofi-aventis also
incurs aflibercept development expenses directly, including costs related to
the Phase 3 clinical trials sanofi-aventis is overseeing in the oncology
program.

Sanofi-aventis' reimbursement of Regeneron's expenses under the antibody
collaboration increased for the three and nine months ended September 30,
2009, compared to the same periods in 2008, due to an increase in research
activities conducted under the collaboration's discovery agreement and
increases in development activities for antibody candidates, including REGN88,
REGN421, and REGN475, under the collaboration's license agreement.

For the three and nine months ended September 30, 2009 and 2008, contract
research and development revenue from Bayer HealthCare consisted of the
following:

Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
(In millions) 2009 2008 2009 2008
---- ---- ---- ----
Cost-sharing of Regeneron
VEGF Trap-Eye development
expenses $9.7 $5.7 $27.5 $18.3
Recognition of deferred
revenue related to up-front
and non-substantive
milestone payments 2.5 3.3 7.4 9.9
--- --- --- ---
Total Bayer HealthCare
contract research &
development revenue $12.2 $9.0 $34.9 $28.2
===== ==== ===== =====

In periods when the Company recognizes VEGF Trap-Eye development expenses that
the Company incurs under the collaboration with Bayer HealthCare, the Company
also recognizes, as contract research and development revenue, the portion of
those VEGF Trap-Eye development expenses that is reimbursable by Bayer
HealthCare. The Company incurred higher VEGF Trap-Eye development expenses
under the collaboration for the three and nine months ended September 30,
2009, compared to the same period in 2008, primarily in connection with the
collaboration's clinical development programs in wet AMD, DME, and CRVO.

Research Progress Payment
In July 2009, the Company received a $20.0 million substantive milestone
payment from Bayer HealthCare in connection with the dosing of the first
patient in a Phase 3 trial of VEGF Trap-Eye in CRVO. The payment was
recognized in revenues as a research progress payment for the three and nine
months ended September 30, 2009.

Technology Licensing Revenue
Regeneron has entered into non-exclusive license agreements with AstraZeneca
and Astellas that allow those companies to utilize VelocImmune® technology in
their internal research programs to discover human monoclonal antibodies.
Each company is required to make six $20.0 million annual, non-refundable
payments, subject to the ability to terminate their agreements after making a
total of four such payments. To date, the Company has received $60.0 million
in payments from each of AstraZeneca and Astellas under these agreements.
Upon receipt, these payments are deferred and recognized as revenue ratably
over the ensuing year of each agreement. Regeneron will also receive a
mid-single-digit royalty on sales of any antibodies discovered utilizing
VelocImmune.

Net Product Sales
Revenue and deferred revenue from product sales are recorded net of applicable
provisions for prompt pay discounts, product returns, estimated rebates
payable under governmental programs (including Medicaid), distributor fees,
and other sales-related costs. For the three and nine months ended September
30, 2009, the Company recognized as revenue $5.0 million and $13.4 million of
ARCALYST® (rilonacept) net product sales, respectively, for which the right of
return no longer exists and rebates can be reasonably estimated, compared to
$2.7 million for three and nine months ended September 30, 2008. At September
30, 2009 and 2008, deferred revenue related to ARCALYST net product sales
totaled $5.0 million and $3.8 million, respectively.

Expenses
Total operating expenses for the third quarter of 2009 were $118.7 million, 42
percent higher than the same period in 2008, and $317.2 million for the first
nine months of 2009, 34 percent higher than the same period in 2008. Average
headcount increased to 998 in the third quarter of 2009 from 851 in the same
period of 2008 and increased to 967 for the first nine months of 2009 from 778
in the same period of 2008, due primarily to the Company's expanding research
and development activities principally in connection with the sanofi-aventis
antibody collaboration. Operating expenses included non-cash compensation
expense related to employee stock option and restricted stock awards of $7.5
million in the third quarter of 2009 and $22.6 million for the first nine
months of 2009, compared with $8.2 million and $24.7 million, respectively,
for the same periods of 2008.

Research and development (R&D) expenses increased to $105.4 million in the
third quarter of 2009 from $72.1 million in the comparable quarter of 2008,
and to $280.0 million in the first nine months of 2009 from $200.3 million in
the same period of 2008. In the third quarter and first nine months of 2009,
the Company incurred higher R&D costs primarily related to additional R&D
headcount, clinical development costs for ARCALYST, VEGF Trap-Eye, and
monoclonal antibodies, research and preclinical development costs associated
with the antibody programs, and facility-related costs to support expanded R&D
activities.

Selling, general, and administrative (SG&A) expenses increased to $12.8
million in the third quarter of 2009 from $11.1 million in the comparable
quarter of 2008, and to $35.9 million in the first nine months of 2009 from
$35.7 million in the same period of 2008. In the third quarter and for the
first nine months of 2009, the Company incurred higher compensation and
facility-related expenses due primarily to increases in administrative
headcount to support the expanded research and development activities, higher
patent-related costs, and higher expenses related to ARCALYST® (rilonacept),
partially offset by lower market research costs related to various programs
and a decrease in recruitment costs for administrative headcount.

Other Income and Expense
Investment income decreased to $0.9 million in the third quarter of 2009 from
$3.7 million in the comparable quarter of 2008 and to $3.9 million in the
first nine months of 2009 compared to $15.5 million in the first nine months
of 2008. The decrease in investment income was due to lower yields on, and
lower balances of, cash and marketable securities in 2009 compared to 2008.

Interest expense decreased to $0.6 million in the third quarter of 2009 from
$1.8 million in the comparable quarter of 2008, and to $0.6 million in the
first nine months of 2009 from $7.5 million in the same period of 2008.
Interest expense in 2009 was attributable to the imputed interest portion of
the Company's payments to its landlord to lease newly constructed laboratory
and office facilities in Tarrytown, New York, which commenced in the third
quarter of 2009. Interest expense in 2008 was attributable to the Company's
5.5 percent Convertible Senior Subordinated Notes; no Notes were outstanding
in 2009. During the first nine months of 2008, the Company repurchased $82.5
million in principal amount of its 5.5 percent Convertible Senior Subordinated
Notes. In connection with the repurchased notes, the Company recognized a
$0.9 million loss on early extinguishment of debt. The remaining $117.5
million of these notes were repaid in full upon their maturity in October
2008.

Income Tax Expense
In the third quarter of 2008, the Company incurred and paid income tax
expense, consisting primarily of alternative minimum tax, of $3.1 million,
which resulted from the utilization of certain net operating loss
carry-forwards for tax purposes that would otherwise have expired over the
next several years.

Revision of Previously Issued Financial Statements
The Company has revised its financial statements at December 31, 2008 and for
the three and nine months ended September 30, 2008 in connection with the
application of authoritative guidance issued by the Financial Accounting
Standards Board (FASB) to the Company's December 2006 lease, as amended, of
laboratory and office facilities in Tarrytown, New York. The revisions
consisted entirely of non-cash adjustments, primarily to the Company's balance
sheet at December 31, 2008, and had no impact to the Company's business
operations, existing capital resources, or the Company's ability to fund its
operating needs, including the development of its product candidates. The
revisions, and a description of the basis for the revisions, are more fully
described in the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2009.

About Regeneron Pharmaceuticals
Regeneron is a fully integrated biopharmaceutical company that discovers,
develops, and commercializes medicines for the treatment of serious medical
conditions. In addition to ARCALYST® (rilonacept) Injection for Subcutaneous
Use, its first commercialized product, Regeneron has therapeutic candidates in
clinical trials for the potential treatment of cancer, eye diseases,
inflammatory diseases, and pain, and has preclinical programs in other
diseases and disorders. Additional information about Regeneron and recent
news releases are available on Regeneron's web site at www.regeneron.com.

This news release discusses historical information and includes
forward-looking statements about Regeneron and its products, development
programs, finances, and business, all of which involve a number of risks and
uncertainties, such as risks associated with preclinical and clinical
development of Regeneron's drug candidates, determinations by regulatory and
administrative governmental authorities which may delay or restrict
Regeneron's ability to continue to develop or commercialize its product and
drug candidates, competing drugs that are superior to Regeneron's product and
drug candidates, uncertainty of market acceptance of Regeneron's product and
drug candidates, unanticipated expenses, the availability and cost of capital,
the costs of developing, producing, and selling products, the potential for
any collaboration agreement, including Regeneron's agreements with the
sanofi-aventis Group and Bayer HealthCare, to be canceled or to terminate
without any product success, risks associated with third party intellectual
property, and other material risks. 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 (SEC), including its Form 10-K for
the year ended December 31, 2008 and Form 10-Q for the quarter ended September
30, 2009. Regeneron does not undertake any obligation to update publicly any
forward-looking statement, whether as a result of new information, future
events, or otherwise unless required by law.

Contacts Information:
Peter Dworkin Laura Lindsay
Investor Relations Media Relations
914.345.7640 914.345.7800
peter.dworkin@regeneron.com laura.lindsay@regeneron.com

REGENERON PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS (Unaudited)
(In thousands)

September 30, December 31,
2009 2008
------------ ------------
(Revised)*

ASSETS
Cash, restricted cash, and marketable
securities $438,596 $527,461
Receivables 67,766 35,212
Property, plant, and equipment, net 215,169 142,035
Other assets 20,661 19,512
------ ------

Total assets $742,192 $724,220
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $55,291 $36,168
Deferred revenue 198,546 209,925
Facility lease obligation 62,571 54,182
Other long-term liabilities 3,341 2,431
Stockholders' equity 422,443 421,514
------- -------

Total liabilities and stockholders'
equity $742,192 $724,220
======== ========

* Revised as described in the paragraph of this press release titled
"Revision of Previously Issued Financial Statements."

REGENERON PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)

For the three months For the nine months
ended September 30, ended September 30,
2009 2008 2009 2008
---- ---- ---- ----
(Revised)* (Revised)*
Revenues
Contract research and
development $82,482 $52,878 $219,104 $149,914
Research progress payments 20,000 20,000
Technology licensing 10,000 10,000 30,000 30,000
Net product sales 4,973 2,706 13,364 2,706
----- ----- ------ -----
117,455 65,584 282,468 182,620
------- ------ ------- -------

Expenses
Research and development 105,434 72,089 279,972 200,335
Selling, general, and
administrative 12,840 11,103 35,892 35,652
Cost of goods sold 472 292 1,299 292
--- --- ----- ---
118,746 83,484 317,163 236,279
------- ------ ------- -------

Loss from operations (1,291) (17,900) (34,695) (53,659)
------ ------- ------- -------

Other income (expense)
Investment income 857 3,674 3,935 15,513
Interest expense (581) (1,772) (581) (7,457)
Loss on early extinguishment
of debt (7) (938)
--- ----- ----- -----
276 1,895 3,354 7,118
--- ----- ----- -----

Net loss before income tax
expense (1,015) (16,005) (31,341) (46,541)

Income tax expense 3,079 3,079
----- ----- ------ -----

Net loss $(1,015) $(19,084) $(31,341) $(49,620)
======= ======== ======== ========

Net loss per share amounts,
basic and diluted $(0.01) $(0.24) $(0.39) $(0.63)

Weighted average shares
outstanding, basic and diluted 79,866 78,937 79,663 78,706

* Revised as described in the paragraph of this press release titled
"Revision of Previously Issued Financial Statements."

SOURCE Regeneron Pharmaceuticals, Inc.

Peter Dworkin, Investor Relations, +1-914-345-7640,
peter.dworkin@regeneron.com; or Laura Lindsay, Media Relations,
+1-914-345-7800, laura.lindsay@regeneron.com