There was some good news for investors the last time Regeneron Pharmaceuticals (NASDAQ:REGN) reported its quarterly results. In February, the company announced that revenue rose 22% from the prior-year period while adjusted earnings increased by 29%.
Regeneron announced its first-quarter results before the market opened on Tuesday. This time around, there was some bad news for investors. Here are the highlights of the biotech's Q1 update.
By the numbers
The company's top-line performance improved in the first quarter. Revenue rose 13% year over year to $1.71 billion. Analysts had estimated that Regeneron's revenue for the quarter would come in at $1.76 billion.
The company announced Q1 GAAP net income of $461 million, or $3.99 per share. This represented a 4% decrease from GAAP earnings of $478 million, or $4.16 per share, reported in the same quarter of 2018.
On a non-GAAP adjusted basis, Regeneron's net income in the first quarter was $518 million, or $4.45 per share. This was a 4% decrease from the prior-year period adjusted net income of $537 million, or $4.67 per share. Wall Street analysts had estimated that the company would post adjusted earnings of $5.46 per share in the quarter.
Behind the numbers
As blockbuster drug Eylea goes, so goes Regeneron. Sales for the biotech's top-selling eye-disease drug increased 8.4% to $1.74 billion this quarter.
Regeneron's partnership with Sanofi also contributed significantly to the biotech's first-quarter revenue growth. Sales for cancer drug Libtayo totaled $26.8 million. The drug won approval from the Food and Drug Administration in September 2018 for treating advanced cutaneous squamous cell carcinoma.
Sales for Dupixent, which is approved for treating atopic dermatitis and asthma, soared 184% over the prior-year period to $373.7 million. Sales for rheumatoid arthritis drug Kevzara jumped 172% year over year to $33.7 million. However, the growth for cholesterol drug Praluent was sluggish, with sales increasing 6.7% over the prior-year period to $63.9 million. And sales for eye-disease drug Zaltrap slipped 6.8% year over year to $24.5 million.
Regeneron's bottom line was weighed down by the company's increased spending. The biotech's research and development (R&D) costs jumped nearly 29% year over year to $641.8 million. Overall expenses grew 30% over the prior-year period's result to $1.23 billion.
Regeneron now anticipates full-year 2019 GAAP Sanofi collaboration revenue to be between $500 million and $535 million, down from its previous guidance of $510 million to $560 million. The company also projected 2019 GAAP unreimbursed R&D expenses to be between $1.88 billion and $2 billion, compared to a range of $1.86 billion to $2 billion provided in its previous outlook. GAAP selling, general, and administrative (SG&A) expenses are projected to be between $1.69 billion and $1.8 billion, down from the previous guidance of between $1.7 billion and $1.83 billion.
Non-GAAP unreimbursed R&D expenses are expected to be between $1.61 billion and $1.71 billion, compared to the prior outlook of $1.59 billion to $1.71 billion. Non-GAAP SG&A is anticipated to be between $1.5 billion and $1.58 billion, compared to the previous guidance of $1.5 billion to $1.6 billion.
There are a couple of key regulatory decisions on the way for Regeneron. The company anticipates FDA approval for Eylea in treating diabetic retinopathy in the next few days. An FDA decision on Dupixent as an add-on maintenance treatment for adults with inadequately controlled severe chronic rhinosinusitis with nasal polyps is expected in June.