Regeneron Reports Third Quarter Financial and Operating Results
Thursday October 31, 8:06 am ET
TARRYTOWN, N.Y.--(BUSINESS WIRE)--Oct. 31, 2002--Regeneron Pharmaceuticals, Inc. (Nasdaq: REGN - News) today announced financial and operating results for the three and nine months ended September 30, 2002.
Regeneron reported a net loss of $32.8 million, or $0.75 per share, for the third quarter of 2002 compared with a net loss of $19.9 million, or $0.46 per share, for the third quarter of 2001. The Company reported a net loss of $88.7 million, or $2.02 per share, for the nine months ended September 30, 2002 compared with a net loss of $47.8 million, or $1.15 per share, for the same period in 2001.
Cash, marketable securities, and restricted marketable securities totaled $341.4 million at September 30, 2002 compared with $438.4 million at December 31, 2001 and with $268.0 million at September 30, 2001.
Total operating expenses for the third quarter of 2002 were $38.7 million, 35 percent higher than the same period in 2001. For the first nine months of 2002, these expenses were $104.4 million, 42 percent higher than the comparable period in 2001. Research and development expenses increased 37 percent to $34.3 million for the third quarter of 2002 and rose 47 percent to $90.5 million for the first nine months of 2002, primarily due to expansion of programs related to product candidates currently in clinical development. The Company also continued to expand its basic research programs and enabling technology platforms supporting that research.
Contract manufacturing expense relates primarily to Regeneron's long-term manufacturing agreement with Merck & Co., Inc. For the first nine months of 2002, contract manufacturing expense decreased to $4.8 million from $5.3 million in the comparable period of 2001 because Regeneron shipped less product to Merck. Certain quantities of product that the Company manufactured for Merck during the first nine months of 2002 will not be shipped until later this year or 2003. Regeneron recognizes contract manufacturing revenue and the related manufacturing expense as the product is shipped.
General and administrative expenses increased to $2.8 million in the current quarter from $2.5 million in last year's third quarter. For the first nine months of 2002, these expenses were $9.2 million, compared with $6.9 million in the same period in 2001. General and administrative expenses rose primarily due to higher staffing to support the growth of the Company and higher fees paid to outside service providers. These expenses were also higher during the first nine months of 2002 as a result of higher patent prosecution and legal expenses related to the expansion of the Company's intellectual property portfolio.
Interest expense increased in the third quarter and for the first nine months of 2002 compared to the same periods in 2001 due to interest incurred on $200.0 million of convertible notes issued by the Company in October 2001. These notes, which mature in 2008, bear interest at 5.5% per annum. Investment income declined in the current quarter and for the first nine months of 2002 compared to the same periods in 2001 due to lower effective interest rates on investment securities. The loss in Amgen-Regeneron Partners decreased for the first nine months of 2002 compared with the same period in 2001 due to the substantial completion of studies conducted on behalf of the partnership.
Regeneron's total revenue increased to $6.6 million in the third quarter of 2002 from $5.5 million in the same period of 2001 due primarily to the receipt of a non-recurring $1.0 million payment related to the Company's long-term manufacturing agreement with Merck. The Company's total revenue for the first nine months of 2002 decreased to $17.1 million from $17.6 million for the comparable period of 2001 due primarily to the decrease in contract research and development revenue resulting from the substantial completion of studies conducted on behalf of Amgen-Regeneron Partners.
Per share amounts are based on the weighted average number of shares of the Company's Common Stock and Class A Stock outstanding.
Current Business Highlights
Regeneron's clinical development program includes AXOKINE (R) in Phase III trials for the treatment of obesity, the IL-1 Trap in a Phase II trial for the treatment of rheumatoid arthritis, and other therapeutic candidates in early-stage clinical development.
The AXOKINE Phase III program continued to expand during the third quarter. In July 2001, we initiated a pivotal trial for AXOKINE in approximately 2,000 subjects that is being conducted in 65 sites across the United States. The trial includes a twelve-month treatment period, which is expected to be completed in January 2003, in which subjects receive daily subcutaneous self-injections of placebo or AXOKINE. This is followed by a twelve-month open-label safety extension phase, in which all study subjects receive AXOKINE. An additional trial began in June 2002 that will assess the safety and efficacy of AXOKINE in overweight individuals with type 2 diabetes mellitus. Two other trials, designed to evaluate the safety of intermittent treatment with AXOKINE and study maintenance of weight loss following short-term treatment regimens, were fully enrolled in July 2002. Additional Phase III studies are expected to begin in 2003.
The Company's IL-1 Trap is currently enrolling participants in a Phase II trial for the treatment of rheumatoid arthritis. The trial will involve approximately 200 subjects and will study the safety and efficacy of the IL-1 Trap in people with active rheumatoid arthritis. Participants will be treated for 12 weeks and evaluated for an additional 10 weeks after treatment ends. This trial follows a Phase I program in which subjects treated with the IL-1 Trap experienced dose-dependent improvements in tender and swollen joints and CRP (C-Reactive Protein) levels, as well as the composite ACR (American College of Rheumatology) measure of disease activity.
Regeneron has three early-stage clinical development programs: The VEGF Trap for cancer, the IL-4/13 Trap for the treatment of asthma, and PegAXOKINE for the treatment of obesity. The VEGF Trap is in a Phase I clinical trial designed to assess the safety and tolerability of the molecule in subjects with solid tumor malignancies or with non-Hodgkins lymphoma. Regeneron recently initiated a Phase I trial for the IL-4/13 Trap in subjects with mild to moderate asthma. This trial is a placebo-controlled, double-blind, dose escalation study to assess the safety and tolerability of the IL-4/13 Trap. PegAXOKINE, a chemically modified version of AXOKINE, is being evaluated for its potential to remain in the bloodstream longer than unmodified AXOKINE in obese subjects. Preliminary results of a PegAXOKINE Phase I trial demonstrated that the molecule has a long pharmacokinetic half-life, potentially compatible with once-per-week dosing regimens. In its current formulation, PegAXOKINE is not optimally absorbed into the blood stream and has caused unacceptable injection site reactions. The Company is currently working on an improved formulation for PegAXOKINE.
About Regeneron
Regeneron is a biopharmaceutical company that discovers, develops, and intends to commercialize therapeutic medicines for the treatment of serious medical conditions. Regeneron has therapeutic candidates in clinical trials for the potential treatment of obesity, rheumatoid arthritis, cancer, and asthma and has preclinical programs in other diseases and disorders. Regeneron's platform technologies include Targeted Genomics(TM), Functionomics(TM), and Designer Protein Therapeutics(TM). |
