Regeneron Pharmaceuticals Inc. (REGN) reported a third-quarter net loss of $1.015 million, or 1 cent per share, which was much better than the Zacks Consensus Estimate of a loss of 23 cents. The company suffered a loss of $19.084 million or 24 cents in the year-ago quarter.
The narrower loss reflected the increased contract research and development revenues from its collaborations with Sanofi-Aventis (SNY) and Bayer HealthCare, coupled with a milestone payment from Bayer.
Total revenues for the quarter came in at $117.45 million from $65.58 million, up 79%. Total revenues consisted of contract research and development revenues, a 2009 research progress payment, technology licensing revenues apart from net product sales.
Revenues from contract research and development increased 56% to $82.48 million from $52.88 million in the year-ago quarter. Contract research and development revenues relate primarily to Regeneron’s aflibercept and antibody collaborations with Sanofi-Aventis and the company’s VEGF Trap-Eye collaboration with Bayer HealthCare. Contract research and development revenues from Sanofi-Aventis and Bayer HealthCare increased 63% to $68.5 million from $42 million and 35.5% to $12.2 million from $9 million, respectively.
The milestone payment from Bayer in connection with the commencement of dosing in a phase III trial of VEGF (vascular endothelial growth factor) Trap-Eye in Central Retinal Vein Occlusion (CRVO) for the quarter came in at $20 million. Revenues from technology licensing for the quarter remained flat at $10 million. Revenues from net product sales increased 83.4% to $4.97 million for the third quarter of 2009.
Research and development expenses increased 46.2% to $105.4 million in the third quarter of 2009 from the comparable quarter of 2008. The higher spend was 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 increased R&D activities.
Selling, general and administrative expenses increased 15.3% to $12.8 million in the reported quarter from $11.1 million in the comparable quarter of 2008. The increase was primarily attributable to the higher compensation and facility-related expenses incurred on account of increases in headcount to support the expanded research and development activities, higher patent-related costs, and higher Arcalyst related expenses. They were partially offset by lower market research costs related to various programs and a decrease in recruitment costs relating to administrative headcount.
Regeneron exited the quarter with cash, restricted cash and marketable securities of $438.6 million as against $527.5 million at the end of 2008.
Currently, we are Neutral on Regeneron.
Read the full analyst report on “REGN”
Read the full analyst report on “SNY”
Zacks Investment Research
