CORRECTING and REPLACING Regeneron Reports Third Quarter Financial and Operating Results.Business Editors/Health/Medical Writers BIOWIRE2K CORRECTION...by Regeneron Pharmaceuticals, Inc. TARRYTOWN, N.Y.--(BUSINESS WIRE)--Oct. 30, 2003 In BW5181 issued Oct. 29, 2003: Please replace the release dated Oct. 29, 2003 with the following corrected version. REGENERON REPORTS THIRD QUARTER FINANCIAL AND OPERATING RESULTS Regeneron Pharmaceuticals, Inc. (Nasdaq: REGN) today announced financial and operating results for the third quarter of 2003. Regeneron reported a net loss of $27.4 million, or $0.52 per share, for the third quarter of 2003 compared with a net loss of $32.8 million, or $0.75 per share, for the third quarter of 2002. The Company reported a net loss of $88.1 million, or $1.80 per share, for the nine months ended September 30, 2003 compared with a net loss of $88.7 million, or $2.02 per share, for the same period in 2002. At September 30, 2003, cash, marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , and restricted marketable securities totaled $391.1 million compared with $295.2 million at December 31, 2002. On September 5, 2003, the Company entered into a collaboration agreement with Aventis under which the two companies will jointly develop and commercialize Vascular Endothelial Growth Factor Vascular endothelial growth factor (VEGF) is an important signaling protein involved in both vasculogenesis (the de novo formation of the embryonic circulatory system) and angiogenesis (the growth of blood vessels from pre-existing vasculature). (VEGF VEGF vascular endothelial growth factor. ) Trap, Regeneron's lead anti-angiogenesis compound. Aventis made an up-front payment of $80.0 million and purchased 2.8 million newly issued shares of the Company's common stock for $45.0 million. Regeneron's total revenue increased to $17.4 million in the third quarter of 2003 from $6.6 million in the same period of 2002. The Company's total revenue for the first nine months of 2003 increased to $36.2 million from $17.1 million for the comparable period of 2002. The increase in revenue is attributable primarily to higher contract research and development revenue. The increase in contract research and development revenue compared with 2002 resulted from the recognition of $7.8 million of revenue for the third quarter of 2003 and $19.7 million for the first nine months of 2003 related to our collaboration with Novartis Pharma AG on the IL- il- 1 pref. Variant of in-1. il- 2 pref. Variant of in-2. 1 Trap, which began in the first quarter of 2003, and our collaboration with Aventis on the VEGF Trap, which began in the third quarter of 2003. The Company recognizes revenue in connection with these collaborations in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements. As a result, $102.0 million of non-refundable payments that have been received or are receivable as of September 30, 2003 in connection with our Novartis and Aventis collaborations have been deferred and will be recognized as revenue in future periods. Contract manufacturing revenue relates to Regeneron's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. manufacturing agreement with Merck & Co., Inc. Contract manufacturing revenue increased to $6.5 million in the third quarter of 2003 from $3.8 million in the same period of 2002 because the Company shipped more product to Merck during the quarter. The Company recognizes revenue and the related manufacturing expense as product is shipped to Merck. Contract manufacturing revenue decreased to $8.0 million in the first nine months of 2003 from $8.9 million in the prior year period, due primarily to the receipt of a non-recurring $1.0 million payment in the third quarter of 2002 related to the Merck agreement. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the third quarter of 2003 were $43.1 million, 11 percent higher than the same period in 2002. For the first nine months of 2003, total operating expenses rose 14 percent from the prior year to $119.1 million. Research and development (R&D) expenses increased 1 percent to $34.7 million in the third quarter of 2003, compared with the same period of 2002. Increased development expenses for the IL-1 Trap and VEGF Trap in the third quarter of 2003, compared with the same quarter last year, were offset in part by a decline in development expenses related to the AXOKINE(R) program. For the first nine months of 2003, R&D expenses increased 14 percent to $102.8 million compared with the same period in 2002. The increase for the first nine months of 2003 was primarily due to expenses associated with the Company's development programs for the IL-1 Trap for the treatment of rheumatoid arthritis rheumatoid arthritis Chronic, progressive autoimmune disease causing connective-tissue inflammation, mostly in synovial joints. It can occur at any age, is more common in women, and has an unpredictable course. and VEGF Trap for the treatment of cancer. Contract manufacturing expense increased in both the third quarter and first nine months of 2003 compared with the same periods in 2002 because more product was shipped to Merck. General and administrative expenses increased in the third quarter and for the first nine months of 2003 versus comparable periods in 2002 primarily due to increased administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. required to support the Company's expanding development pipeline, higher insurance costs, and expenses for external service providers. Investment income declined in the third quarter and for the first nine months of 2003 compared with prior year periods due to lower effective interest rates on investment securities and lower levels of interest-bearing investments. Interest expense declined slightly compared with last year's third quarter. Interest expense is attributable primarily to $200.0 million of convertible notes issued in October 2001, which mature in 2008 and bear interest at 5.5% per annum Per annum Yearly. . Per share amounts are based on the weighted average number of shares of the Company's Common Stock and Class A Stock outstanding. For the quarter ended September 30, 2003, the weighted average number of shares outstanding increased to 52.9 million shares compared with 44.0 million shares in the same period last year, due primarily to the sale of 7.5 million and 2.8 million shares of the Company's common stock to Novartis and Aventis, respectively, in 2003. Current Business Highlights Regeneron currently has four product candidates in clinical development. AXOKINE is in Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA trials for the treatment of obesity obesity, condition resulting from excessive storage of fat in the body. Obesity has been defined as a weight more than 20% above what is considered normal according to standard age, height, and weight tables, or by a complex formula known as the body mass index. . The other three therapeutic candidates emerged from the Company's proprietary Trap program. These molecules have been designed to attach to (or "trap") specific cytokines Cytokines Chemicals made by the cells that act on other cells to stimulate or inhibit their function. Cytokines that stimulate growth are called "growth factors. and growth factors in the blood stream that, in excess, may cause harmful biological activity. The IL-1 Trap recently completed a Phase II trial for rheumatoid arthritis. The VEGF Trap is in a Phase I trial for cancer, and the IL-4/13 Trap is in a Phase I trial for asthma. In the AXOKINE program, Regeneron announced during the third quarter that it was moving forward with its Phase III program for the treatment of obesity. The decision was made following a meeting with the United States Food and Drug Administration United States Food and Drug Administration (FDA), n.pr a unit of the Public Health Service created to protect the health of the nation against impure and unsafe foods, drugs, and cosmetics. (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ) during which the Company reviewed results from the initial pivotal trial and its plans for future development. Regeneron and Novartis, who entered into a collaboration agreement earlier this year to develop and commercialize the IL-1 Trap, reported in October 2003 that they would be working together to evaluate the data from the recently completed Phase II trial and determine the best path forward for the next clinical study. In a dose-ranging Phase II study, which involved approximately 200 subjects, the IL-1 Trap demonstrated evidence of clinical activity in patients with rheumatoid arthritis and a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. safety and tolerability tol·er·a·ble adj. 1. Capable of being tolerated; endurable. 2. Fairly good; passable. See Synonyms at average. tol profile. During the third quarter, the Company entered into a collaboration agreement with Aventis to jointly develop and commercialize the VEGF Trap in cancer and other indications. Aventis has one of the pharmaceutical industry's leading oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. portfolios. A Phase I dose-escalation study, in which subjects receive a weekly subcutaneous injection Noun 1. subcutaneous injection - an injection under the skin injection, shot - the act of putting a liquid into the body by means of a syringe; "the nurse gave him a flu shot" of the VEGF Trap, is currently in progress and an intravenous intravenous /in·tra·ve·nous/ (-ve´nus) within a vein or veins.intrave´nously in·tra·ve·nous adj. Abbr. IV Within or administered into a vein. phase of this study is planned. This trial is designed to assess the preliminary safety and tolerability of the VEGF Trap in people with solid tumor tumor: see neoplasm. malignancies or with non-Hodgkin's lymphoma non-Hodg·kin's lymphoma n. Any of various malignant lymphomas characterized by the absence of Reed-Sternberg cells. Non-Hodgkin's lymphoma . Aventis and Regeneron indicated that they plan a broad development program for the VEGF Trap in various cancer indications. They also noted that they would move rapidly to study the VEGF Trap in eye diseases, where the abnormal formation of new blood vessels Blood vessels Tubular channels for blood transport, of which there are three principal types: arteries, capillaries, and veins. Only the larger arteries and veins in the body bear distinct names. - a process termed "angiogenesis angiogenesis /an·gio·gen·e·sis/ (-jen´e-sis) vasculogenesis; development of blood vessels either in the embryo or in the form of neovascularization or revascularization. an·gi·o·gen·e·sis n. " - is deemed pathologic pathologic /patho·log·ic/ (path?ah-loj´ik) 1. indicative of or caused by some morbid condition. 2. pertaining to pathology. and can cause serious problems. Possible other indications are also under consideration. Regeneron is also conducting a Phase I study of 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 preliminary safety and tolerability of the IL-4/13 Trap. About Regeneron Regeneron is a biopharmaceutical company that discovers, develops, and intends to commercialize therapeutic medicines for the treatment of serious medical conditions See carpal tunnel syndrome, computer vision syndrome, dry eyes and deep vein thrombosis. . Regeneron has therapeutic candidates in clinical trials for the potential treatment of obesity, rheumatoid arthritis, cancer, and asthma and has preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. programs in other diseases and disorders. This news release discusses historical information and includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about Regeneron and its products, programs, finances, and business, all of which involve a number of risks and uncertainties, such as risks associated with preclinical and clinical development of drugs and biologics, determinations by regulatory and administrative governmental authorities, competitive factors, technological developments, the availability and cost of capital, the costs of developing, producing, and selling products, the potential for any collaboration agreement to be canceled or to terminate without any product success, and other material risks. A more complete description of these risks can be found in Regeneron's filings with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission, including its Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2002 and the Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2003. 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. Additional information about Regeneron and recent news releases are available on Regeneron's Worldwide Web Home Page at www.regeneron.com.
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,
2003 2002 2003 2002
---- ---- ---- ----
Revenues
Contract research and
development $ 10,882 $ 2,780 $ 28,245 $ 8,215
Contract manufacturing 6,510 3,786 7,980 8,861
--------- --------- --------- ---------
17,392 6,566 36,225 17,076
--------- --------- --------- ---------
Expenses
Research and
development 34,650 34,295 102,757 90,473
Contract manufacturing 4,844 1,637 5,769 4,757
General and
administrative 3,601 2,811 10,548 9,167
--------- --------- --------- ---------
43,095 38,743 119,074 104,397
--------- --------- --------- ---------
Loss from operations (25,703) (32,177) (82,849) (87,321)
--------- --------- --------- ---------
Other income (expense)
Investment income 1,285 2,378 3,594 7,703
Interest expense (2,982) (3,017) (8,826) (9,066)
--------- --------- --------- ---------
(1,697) (639) (5,232) (1,363)
--------- --------- --------- ---------
Net loss ($ 27,400) ($ 32,816) ($ 88,081) ($ 88,684)
========= ========= ========= =========
Net loss per share
amounts, basic and
diluted ($ 0.52) ($ 0.75) ($ 1.80) ($ 2.02)
========= ========= ========= =========
Weighted average number
of Common and Class A
shares outstanding:
basic and diluted 52,902 43,950 48,926 43,895
========= ========= ========= =========
REGENERON PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS (Unaudited)
(In thousands)
September 30, December 31,
2003 2002
---- ----
ASSETS
Cash, marketable securities and restricted
marketable securities $ 391,123 $ 295,246
Receivables 9,197 4,017
Inventory 7,698 6,831
Property, plant and equipment, net 83,715 76,825
Other assets 8,768 8,655
--------- ---------
Total assets $ 500,501 $ 391,574
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 20,967 $ 30,309
Deferred revenue 114,036 15,134
Notes payable 200,000 200,000
Other liabilities 9,296 150
Stockholders' equity 156,202 145,981
--------- ---------
Total liabilities and stockholders' equity $ 500,501 $ 391,574
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