Regeneron Pharmaceuticals Inc. (REGN) suffered a fourth-quarter net loss of $36.5 million, or 46 cents per share, which was higher than the Zacks Consensus Estimate of a net loss of 34 cents. The company suffered a loss of $29.5 million, or 37 cents per share in the year ago quarter. The wider loss in the reported quarter despite higher revenues was attributable to higher research and development expenses.
Quarterly Results
Total revenue for the quarter came in at $96.8 million, compared to $55.8 million a year ago. Total revenue included collaboration revenue, technology licensing revenue, net product sales, and contract research and other revenue. The 73.4% increase in total revenues was mainly attributable to higher collaboration revenue in the quarter.
Collaboration revenue, pertaining to the company’s aflibercept and antibody collaborations with Sanofi-Aventis (SNY) and its VEGF (vascular endothelial growth factor) Trap-Eye collaboration with Bayer HealthCare, climbed approximately 98.6% to $80.58 million in the fourth quarter of 2009.
Revenue from technology licensing, arising out of the license agreements with AstraZeneca (AZN) and Astellas, came in flat year-over-year at $10 million. Net product sales from Arcalyst approved for treating Cryopyrin-Associated Periodic Syndromes (CAPS) came in at $5.0 million in the fourth quarter of 2009, up 41.2%. Revenue from contract research and others accounted for the remaining in the reported quarter.
Total operating expenses in the quarter climbed 54% to $136.2 million. Research and development (R&D) spend in the quarter increased to $118.8 million from $74.6 million primarily because of the additional R&D headcount, clinical and pre-clinical development costs for the company’s pipeline candidates.
Selling, general, and administrative expenses increased to $17.0 million in the reported quarter from $13.2 million in the year-ago quarter. The rise was attributable to higher compensation expense, patent-related costs and facility-related costs. The increases were partially offset by lower marketing costs, recruitment costs, and professional fees.
Yearly Results
For full year 2009, Regeneron suffered a net loss of $67.8 million, or 85 cents per share, which was higher than the Zacks Consensus Estimate of a net loss of 76 cents. The company suffered a loss $79.1 million or $1.00 per share in 2008.
Total revenue in 2009 came in at $379.3 million as against $238.5 million in 2008, up 59%. The increase was mainly attributable to higher collaboration revenue in 2009, which climbed to approximately $314.5 million, up 69.8% year-over-year.
Revenue from technology licensing came in flat year-over-year at $40 million. Net product sales in 2009 came in at $18.4 million as against $6.2 million in 2008. Revenue from contract research and others accounted for the remaining total revenue in 2009.
Total operating expenses in 2009 climbed 39.6% year-over-year to $453.4 million. Research and development (R&D) spend in the year increased to $398.8 million from $274.9 million in 2008. The increase in 2009 was primarily attributable to the additional R&D headcount, clinical and pre-clinical development costs incurred for developing the company’s pipeline.
Selling, general, and administrative expenses in 2009 increased to $52.9 million from $48.9 million in 2008. The year-over-year rise was attributable to higher compensation expense, patent-related costs and facility-related costs. The increases were partially offset by lower marketing costs, recruitment costs, and professional fees.
As of Dec 31, 2009, Regeneron had cash, restricted cash, and marketable securities of approximately $390 million as against $527.5 million as on Dec 31, 2008.
Currently, we are Neutral on Regeneron which implies that we expect the stock to perform in line with the overall U.S. equity market over the next 6 to 12 months. Consequently, we recommend investors to retain the stock over the time period.
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