Regeneron Pharmaceuticals (NASDAQ: REGN) reported a 4% decline in earnings for the first quarter of 2019 due to higher costs and expenses. The results missed analysts’ expectations. However, higher product sales drove total revenues higher by 13%.
Net income decreased 4% to $461 million and earnings fell by 4% to $3.99 per share. Adjusted earnings dropped by 5% to $4.45 per share.
Total revenues grew 13% to $1.71 billion. Higher sales from Eylea injection, which was administered into the eye to treat certain retinal diseases, drove net product sales higher by 12%. Libtayo, which was approved by the FDA to treat a type of skin cancer, had net product sales in the United States of $26.8 million in the first quarter of 2019.
Looking ahead into the full year 2019, the company now expects unreimbursed R&D expenses of $1.855 billion to $2 billion and selling, general and administrative expenses of $1.690 billion to $1.795 billion. Capital expenditures are now anticipated to be $410 million to $475 million. The effective tax rate is now predicted to be 11% to 13%.
For the first quarter, revenues from Sanofi and Bayer collaboration jumped 20% year-over-year. The increase in Sanofi collaboration was due to the company’s share of lower losses of collaboration antibodies, primarily driven by higher net product sales of Dupixent. This was partly offset by a decrease in reimbursement of R&D costs under the Immuno-oncology Discovery and Development Agreement with Sanofi.
The change in Bayer collaboration revenue was due to a rise in net profits in connection with higher sales of Eylea outside the US. The company recognized its share of the profits, including a percentage of sales in Japan, from Eylea sales outside the US within Bayer collaboration revenue.
For the first quarter, R&D expenses increased by 29% principally due to additional costs incurred in connection with its earlier-stage pipeline, an increase in Libtayo development expenses, higher clinical manufacturing costs, and higher headcount and headcount-related costs.
Regeneron has twenty product candidates in clinical development, including five of the company’s U.S. Food and Drug Administration (FDA), approved products for which it is investigating additional indications. The company initiated phase 3 clinical study of Dupixent in chronic obstructive pulmonary disease (COPD).
Shares of Regeneron ended Monday’s regular session up 2.18% at $344.23 on the Nasdaq. The stock has risen over 18% in the past year while it has fallen over 15% in the past three months.
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