Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`Q1 2012 Earnings Call
`
`Company Participants
`
`, SVP CommercialBob Terifay
`
`George Yancopoulos
`, Chief Scientific Officer, President
`Len Schleifer, President, CEO
`Michael Aberman
`, VP Strategy & IR
`, SVP Finance & Administration, CFO
`Murray Goldberg
`
`FINAL
`
`Other Participants
`
`, AnalystBiren Amin
`
`, AnalystChris Raymond
`
`
`, AnalystGeoff Meacham
`, Analyst
`Jason Kantor
`Jim Birchenough
`, Analyst
`Kumar Venkatesaran, Analyst
`Manny Mahinscher, Analyst
`Phil Nadeau
`, Analyst
`Robyn Karnauskas
`, Analyst
`
`, AnalystSteve Byrne
`Terence Flynn
`, Analyst
`
`Presentation
`
`Operator
`
`Good morning, ladies and gentlemen, and welcome to the Regeneron Pharmaceuticals
`conference call to discuss the First Quarter 2012 financial results. My name is Kevin and I'll
`be your coordinator today. At this time, all participants are in a listen-only mode. We will
`conduct a question-and-answer session towards the end of this call. As a reminder, this
`conference is being recorded for replay purposes. I would now like to turn the call over to
`Dr. Michael Aberman, Vice President of Strategy and Investor Relations for Regeneron.
`Please proceed, Dr. Aberman.
`
`Michael Aberman
`
`{BIO 6989908 <GO>}
`
`Thank you, Kevin. Good morning, and welcome to Regeneron Pharmaceuticals' First
`Quarter 2012 conference call. An archive of this webcast will be available on our website
`under the event and presentation page for 30 days.
`
`Page 1 of 17
`
`Bloomberg Transcript
`
`Exhibit 2134
`Page 01 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`Joining me on the call today is Dr. Leonard Schleifer, Founder, President and Chief
`Executive Officer; George Yancopoulos, Chief Scientific Officer and President of
`Regeneron Research Labs; Murray Goldberg, Chief Financial Officer; and Robert Terifay,
`Senior Vice President Commercial. After our preferred remarks, we will open the call for
`Q&A. I would also like to remind you that remarks made on this call that are not historical
`in nature may be forward-looking statements about Regeneron and are subject to a
`number of risks and uncertainties. Actual events and our actual results may differ
`materially.
`
`Such remarks may include, but are not limited to, those related to Regeneron and its
`products and business, sales forecast, financial forecast, development programs,
`collaborations, finances, regulatory matters, intellectual property and competition. All of
`which involve a number of risks and uncertainties. A more complete description of these
`and other material risks can be found in Regeneron's filings with the United States
`Securities and Exchange Commission, or SEC, including its Form 10-K for the year ended
`December 31, 2011, and Form 10-Q for the quarter ended March 31, 2012, which we filed
`this morning.
`
`Regeneron does not undertake any obligation to update publicly any forward-looking
`statement whether as a result of new information, future event or otherwise unless
`required by law. GAAP and non-GAAP measures will be discussed on today's call.
`Information regarding our use of a non-GAAP financial measures and a reconciliation of
`these measures to GAAP are available in our financial results press releases which can
`obtained on our website. Once our call concludes, the IR team will be available to answer
`further questions. With that, let me turn the call over to our President and Chief Executive
`Officer, Dr. Len Schleifer.
`
`Len Schleifer
`
`Thanks, Michael, and good morning to everyone. Before I get to the meat of today's call,
`on the occasion of today's milestone for Regeneron I would like to say a few thank-yous as
`surely many thanks are owed to many, many people. I offer these thanks on behalf of both
`me and my good friend, George Yancopoulos. As most of you know, George is the lead
`inventor of EYLEA and is, in fact, responsible for our entire pipeline and technologies.
`George and I embarked on this professional partnership and exciting journey together
`many years ago with the firm belief that good science would lead to good drugs. I believe
`we were right, although predicting the exact timing of things, as you well know, can be
`rather challenging.
`
`In any case, we owe great debts of gratitude to all of our colleagues over the years who
`have dedicated themselves to bringing drugs to patients, as well as to the thousands and
`thousands of patients who have volunteered for our clinical studies. We are also are
`greatly indebted to the physicians and the medical community for helping us with all of
`our clinical trials and for the partnership we have had with the FDA as we navigated the
`development process. Finally, thanks to our partners and all of our shareholders who have
`believed in us and helped finance our efforts. Now, back to business.
`
`FINAL
`
`Bloomberg Transcript
`
`Page 2 of 17
`
`Exhibit 2134
`Page 02 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`Today we're happy to report a very successful quarter and a true milestone for Regeneron
`as it was the First Quarter in our history that we achieved profitability both on the GAAP
`and non-GAAP basis as a result of product sales. This achievement was driven by the
`continued strong launch of EYLEA in the United States. EYLEA's unique product profile as
`the only FDA approved treatment for wet AMD labeled for less than monthly dosing that
`showed clinically equivalent efficacy to monthly ranibizumab continues to resonate with
`patients and their caregivers, physicians and payers.
`
`As a result of this strong launch and First Quarter sales of $124 million, we are increasing
`our full-year US EYLEA net sales forecast to be between $500 million and $550 million.
`Meeting of this forecast would place EYLEA among the most successful biotech launches.
`Given this new forecast as well as our strong profit margin and the terms of our
`agreements with collaborators who fund a large portion of our R&D expenses, we also
`now believe we will achieve non-GAAP profitability for the full year 2012. Before we get
`into some of the details behind the launch and our updated forecast, let me highlight
`some other important accomplishments during this quarter.
`
`Turning first to our late-stage assets, the FDA recently granted priority review status to the
`ZALTRAP BLA for the treatment of previously treated metastatic colorectal cancer. We now
`have expect three FDA decisions for our drug candidates in the second half of the year,
`ARCALYST for the prevention of gout flares in patients initiating uric acid lowering therapy
`which had a PDUFA date of July 30. ZALTRAP for the treatment of previously treated
`metastatic colorectal cancer which has a PDUFA due date of August 4, and EYLEA for the
`treatment of central retinal vein occlusion, or CRVO, which has a PDUFA date of
`September 23. Our regulatory department has never been busier with the FDA on these
`applications as well as preparing for the upcoming ARCALYST advisory committee
`meeting scheduled for May 8.
`
`Turning to our antibody pipeline, we have seen significant interest in the scientific and
`clinical communities in our potentially first-in-class lipid lowering PCSK9 antibody,
`REGN727, which is part of our collaboration with a Sanofi. During the quarter we saw
`Phase 1 data published in the New England Journal of Medicine and Phase 2 data
`presented at the annual meeting of the American College of Cardiology including during
`a late-breaking clinical trial session.
`
`The data, which showed up to a 72% decrease in LDL cholesterol or bad cholesterol,
`when adding REGN727 on top of existing statin therapy was encouraging to us and to
`many of the expert cardiologists who are seeing the data for the first time. This high level
`of interest was also evident in the broad media coverage of these publications and
`presentations. As we've discussed previously, Regeneron 727 demonstrated an
`acceptable profile in these studies, acceptable safety profile in these studies. There is still
`much work to be done in our anti-PCSK9 program as the data we presented were from
`Phase 2 trials. As such, we and Sanofi look forward to initiating our full Phase 3 program
`to further evaluate the efficacy and safety of 727 later in the Second Quarter following
`feedback from US and European regulatory agencies.
`
`Another positive development from our pipeline this quarter was the FDA advisory
`committee's unanimous vote in favor of the ongoing development of anti-nerve growth
`
`Page 3 of 17
`
`FINAL
`
`Bloomberg Transcript
`
`Exhibit 2134
`Page 03 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`factor, anti-NGF agents in pain associated with osteoarthritis. We believe there could be
`an important role for these agents in the treatment of this pain and we hope to be able to
`provide an update on our development plans for our NGF antibody, REGN475, in the next
`few months after discussions with the FDA. As a reminder, Regeneron now has sole rights
`to REGN475 with a royalty obligation to Sanofi.
`
`With that, let me turn back to the EYLEA launch which we can report continues to exceed
`expectations. Net product sales to our distributors for the First Quarter 2012 were $124
`million which includes a modest increase in our distributors inventory of about $10 million.
`This implies approximately $114 million in sales to healthcare providers. Market research
`suggests the strong launch has been driven by several factors including the high market
`awareness of EYLEA, physician and patient's belief in the value of achieving clinically
`equivalent efficacy to monthly ranibizumab with less than monthly dosing and their
`experience with EYLEA since the launch.
`
`FINAL
`
`Also, the favorable perception of Regeneron as a pharmaceutical company, the belief that
`we are a different kind of company, that we listen to and deal openly and candidly with
`the patient, physician and payer communities is an important factor. As we reported
`before, another important factor contributing to the strong EYLEA uptake is that we are
`penetrating both the community of patients who are initiating therapy for wet AMD for the
`first time as well as patients switching from existing therapies as I will describe in a
`moment. So, let me turn to some of the metrics that we can share about the launch.
`
`Our market research has been relatively consistent with what we have seen from survey
`work done outside the Company such as the never-ending surveys reported by the
`investment community. Specifically, our survey data suggested approximately 40% of
`EYLEA patients are new to anti-VEGF therapy. This means that about 60% of EYLEA use
`has come from patients switching from other therapies. Importantly, prior Lucentis users
`account for the majority of switches at roughly 60% but prior Avastin users are an
`important contributor at roughly 40%. The most common reasons physicians report for
`why they switch patients to EYLEA are continued retinal edema despite treatment with
`Lucentis or Avastin, and non-optical[ph] response to existing therapy and the desire to
`have less frequent injections and/or office visits.
`
`In terms of our field force, we've been very pleased by the effectiveness and the reception
`they have received from the retinal community. As expected at this stage in the launch, we
`have seen rapid growth in the number of retinal practices ordering EYLEA and our
`distributors have now shipped EYLEA to more than 70% of the practices known to us to
`have used Lucentis in the past. While the launch is going well, reimbursement concerns
`for many issue for many doctors particularly while we wait for permanent J code which we
`expect to be assigned in January 2013.
`
`Meanwhile, extended terms are available to physicians' offices to allow ample time for
`them to receive reimbursement for EYLEA. We also expect reimbursement concerns to be
`alleviated by two recent developments. Since April 1, hospital outpatient facilities have
`been able to use a temporary C code for EYLEA which automates the reimbursement
`process for this group of users. In addition, EYLEA has been assigned a Q code that goes
`into effect this July. The Q code is a temporary but specific code for EYLEA that can be
`
`Bloomberg Transcript
`
`Page 4 of 17
`
`Exhibit 2134
`Page 04 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`used more broadly than the C code and which results in automated reimbursement. We
`believe that this will help streamline the reimbursement process as we await the
`assignment of a permanent J code. As we've said before, we have seen reimbursement
`from all of the regional Medicare carriers, secondary and supplemental insurers,
`commercial payers and private payers. We've also seen broad adoption by hospital
`formulas.
`
`As indicated earlier, we are increasing our full year 2012 EYLEA net sales forecast from
`$250 million to $300 million to $500 million to $550 million. So, let me spend a few
`moments on this updated forecast. There are three types of patients that will influence our
`continued sales and growth. The first is the new patients who are naive to therapy, the
`second is new patients to EYLEA who are switching from existing anti-VEGF therapy, and
`the third are patients who have already been started on EYLEA, the continuing patients.
`
`FINAL
`
`For the first group, new naive patients, we expect continued growth at some practices
`who have only started trying EYLEA expanding to more patients as well as continued
`growth in the early adopters. Here, reimbursement issues will remain a tempering factor.
`For the second group, new switches, we expect continued growth but there is some
`uncertainty as to how big this patient population is. For both of these new patient groups,
`given our 70% level of penetration of physicians' offices, we can now -- we can also now
`expect a slowdown in the rate of new account growth.
`
`Lastly are the patients who have already switched and started on EYLEA. Our market
`research suggests that the majority of these patients will be treated with three initial
`monthly doses followed by less frequent dosing regimens. On the one hand, continued
`patient use of EYLEA provides an ongoing source of revenue but the switch to less
`frequent dosing and potential discontinuations may moderate growth. The bottom line is
`that it is important to remember that EYLEA has been on the market for less than six
`months. We are really still in the early stages of this product launch with many
`uncertainties.
`
`In the First Quarter a survey suggested EYLEA is capturing approximately 10% of the anti-
`VEGF market for wet AMD including off-label Avastin which accounts for approximately
`60% of that market. We believe there is room for continued growth as many of the
`practices that have ordered EYLEA have ordered only limited quantities and could
`increase their use as they gain experience and are reassured that there will be no major
`reimbursement issues. That said, there are factors such as the switch by existing EYLEA
`users to less frequent dosing regimens as I discussed a moment ago, that could moderate
`growth.
`
`Beyond the wet AMD launch in the United States, later this year we expect an FDA
`decision on our supplemental BLA to expand use of EYLEA to CRVO and by our
`healthcare plans to launch EYLEA into international markets. With that, I would now like to
`turn the call over to Murray Goldberg, our Chief Financial Officer, who will review our First
`Quarter financial results.
`
`Bloomberg Transcript
`
`Murray Goldberg
`
`{BIO 1463711 <GO>}
`
`Page 5 of 17
`
`Exhibit 2134
`Page 05 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`Thank you, Len, and good morning, everyone. As you might imagine, I'm particularly
`pleased to discuss our financial results for the First Quarter of 2012, the first time in
`Regeneron's history that we reported a profitable quarter on an operational basis. Total
`revenues in the First Quarter were $232 million. This includes $124 million of EYLEA net
`sales and $4 million of ARCALYST sales. The gross-to-net adjustment for EYLEA sales was
`similar to last quarter at approximately 7.4%. Sanofi collaboration revenue was $85 million
`for the First Quarter of 2012 which was similar to the First Quarter last year. This item
`includes Sanofi's reimbursement to us for antibody and ZALTRAP R&D expenses that we
`incurred, offset by approximately $4 million in pre-commercialization expenses for
`ZALTRAP that Sanofi incurred and that we reimbursed them for. Our reimbursement to
`Sanofi is accounted for as contra revenue.
`
`FINAL
`
`Looking forward in 2012, this line will include growing pre-commercial expenses for
`ZALTRAP in preparation for potential launch in a variety of countries at the end of this year
`and next year. Our share of these pre-commercialization expenses would, potentially, be
`at least partially offset by an approval milestone. Buyer collaboration revenue is about
`$12.5 million in the First Quarter and represents buyers cost sharing of some of the EYLEA
`development expenses that we incurred. As EYLEA launches globally, this item will also
`include our share of the profits and losses from commercialization outside the United
`States as well as a potential approval and sales milestones from buyer.
`
`Cost of goods sold in the First Quarter was $12.3 million or about 9.6% of net product
`sales. This includes an accrual for royalties payable to Genentech under the license and
`partial settlement agreement that we signed in December relating to ophthalmic sales of
`EYLEA in the United States. Non-GAAP research and development expense was $128
`million for the First Quarter this year compared to $122 million in the First Quarter last
`year. The increase in R&D spending was driven primarily by higher R&D headcount and
`activities, partly related to our antibody collaboration with Sanofi and partly related to our
`own internal R&D efforts.
`
`To provide some perspective on the amount that we spend on internal R&D programs
`that is not reimbursed, start with the $128 million of First Quarter R&D expense which
`excludes non-cash compensation expense. Sanofi reimbursed $84 million of this expense
`and buyer reimbursed another $10 million. So, our First Quarter net R&D expense was $34
`million this year compared to $31 million last year. Thus, almost 75% of our R&D expense
`in the First Quarter was reimbursed by our collaborators, a similar percentage was
`reimbursed for all of 2011.
`
`Our net R&D expense primarily represents spending on ARCALYST, on antibodies not in
`the Sanofi collaboration, some EYLEA clinical costs and investments in new discovery
`technology. We anticipate that this net R&D expense will trend upward through the
`remainder of 2012 and could increase even faster as antibodies outside the Sanofi
`collaboration, such as our NGF antibody, Regeneron 475, moves into advanced stage
`clinical trials. Let me also point out that not reflected in the $128 million total R&D number
`is the considerable spending by Sanofi and buyer on our collaboration programs that
`does not flow through our income statement.
`
`Bloomberg Transcript
`
`Page 6 of 17
`
`Exhibit 2134
`Page 06 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`In 2011, that averaged around $50 million in quarter. Non-GAAP SG&A expenses were $46
`million for the First Quarter. These SG&A expenses include the fully burdened cost of the
`EYLEA field force. While we do not expect EYLEA's selling expenses to vary significantly
`quarter-to-quarter this year. In the event that ARCALYST is approved for the prevention of
`gout flares in patients initiating uric acid lowering therapy, we anticipate that SG&A
`expenses could increase by $20 million to $30 million in the second half year to support
`the launch. This would bring full-year non-GAAP SG&A to $180 million to $210 million with
`the higher end of that guidance reflecting the potential ARCALYST launch in gout. As a
`reminder, non-GAAP R&D and non-GAAP SG&A expenses exclude non-cash share-based
`compensation expense.
`
`Turning with some delight to the bottom line, we reported non-GAAP net income of $40
`million or $0.37 per diluted share for the First Quarter of 2012. Non-GAAP net income
`excludes non-cash share-based compensation expense and non-cash interest expense
`related to our convertible notes. On a GAAP basis, we also had a profitable quarter with
`net income of $12 million or $0.11 per diluted share. As you will note, despite turning
`profitable for the quarter, we have not provided for a tax liability as we have released a
`portion of our full valuation allowance against our large balance of net operating loss
`carry forwards and other tax credits. When we transition into showing consistent profits,
`we will provide more guidance on the accounting treatment of these and NOL's and tax
`credits.
`
`On a cash basis, we do not anticipate that we will have a cash tax liability for at least
`several years. Our non-GAAP fully diluted average shares outstanding in the First Quarter
`were approximately 112.5 million shares. Include about 14 million shares attributable to
`stock options and restricted stock that are accounted for using the treasury method, and
`about 5 million shares associated with our convertible notes that are accounted for using
`the if-converted method. With that, I will turn the call back to Michael.
`
`Michael Aberman
`
`{BIO 6989908 <GO>}
`
`Thank you, Murray. That concludes our prepared remarks. We'd now like to open the call
`to Q&A. As we'd like to give as many people a chance to ask questions as possibly, we
`request that you limit yourself to one question. Our team will be available in our office
`after the call for follow-up questions. Thank you, and, Kevin, if you could now please open
`the call now for questions.
`
`Questions And Answers
`
`Operator
`
`(Operator Instructions) Our first question comes from Robyn Karnauskas with Deutsche
`Bank.
`
`Q - Robyn Karnauskas
`{BIO 15238701 <GO>}
`Hi, guys. Congratulations on making my very busy morning. Great launch. The key
`question I have for you is you talk a lot about 70% penetration in new physician offices but
`
`Page 7 of 17
`
`FINAL
`
`Bloomberg Transcript
`
`Exhibit 2134
`Page 07 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`it really implies that you are really being used in a fraction of patients. Can you give some
`color on where you think EYLEA is being used amongst the doctor community? Is it in
`more large practices or are the community practices starting to use of EYLEA more? And
`where do you think the growth will come from? Thanks.
`
`A - Len Schleifer
`Bob, you want to comment on that?
`
`A - Bob Terifay
`{BIO 4342122 <GO>}
`So, we are actually seeing a very good distribution of EYLEA use in all types of practices.
`The large volume practices, the academic practices as well as a number of practices who
`don't broadly use Lucentis who have used -- who have switched from Avastin to EYLEA.
`So, we are very encouraged about the use. As Len pointed out, what we're still waiting to
`see, and reimbursement is one of those hurdles, physicians are holding back a little bit on
`how much EYLEA they use, but we do have very good penetration in all segments.
`
`A - Michael Aberman
`Next question operator?
`
`{BIO 6989908 <GO>}
`
`Operator
`
`One moment. Our next question comes from Jason Kantor with RBC Capital Markets.
`
`Q - Jason Kantor
`{BIO 1957973 <GO>}
`Hi. Thanks for putting up a huge quarter. Can you give us some sense how you are
`thinking now that you have done this AMD launch, how you are thinking about the CRVO
`launch and how much of that is built into your guidance and how you are thinking about
`that relative to the rapid uptake in AMD?
`
`A - Len Schleifer
`Just a from the guidance, that is it should be viewed for the most part as our wet AMD
`guidance. Bob, do you want to comment about the launch of CRVO if we were to get it
`labeled this year?
`
`A - Bob Terifay
`{BIO 4342122 <GO>}
`CRVO is a much smaller market than the wet AMD market. It is about 30,000 patients in
`the United States have central retinal vein occlusion. The length of treatment of patients
`with CRVO could be much shorter. Some patients stop treatment at six months, although
`recent studies have shown that there are patients that will continue to benefit from anti-
`VEGF therapy for over a year. We see the CRVO opportunity as an opportunity to broaden
`the label to have the product more firmly established on formularies. Clearly the product
`will offer benefit to those patients who need it in CRVO but the real market opportunity
`will continue to be wet AMD.
`
`FINAL
`
`Bloomberg Transcript
`
`Page 8 of 17
`
`Exhibit 2134
`Page 08 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`Q - Jason Kantor
`Great.
`
`{BIO 1957973 <GO>}
`
`A - Michael Aberman
`Next question.
`
`{BIO 6989908 <GO>}
`
`Operator
`
`Our next question comes from Chris Raymond with Robert Baird.
`
`Q - Chris Raymond
`{BIO 4690861 <GO>}
`Thanks. Just another question on the launch, on the EYLEA launch. Just curious if you
`have any visibility into the dynamics of patients transitioning from the q.4 week dosing,
`the loading dose, to the q.8 week dose? I'm sure you know some have worried about sort
`of hitting a wall of sorts. Our checks kind of indicate that maybe that has already started
`and may be well under way. I wonder if you could maybe give some color as to what you
`are seeing?
`
`A - Len Schleifer
`Yes. We don't have patient level information on dosing. From surveys, what we hear is that
`the majority of docs use the three loading doses and then switch over to some less
`frequent regimen. Many will use the label, we hope, which is q.8 weeks but some
`continue to use on their own p.r.n. or treat and extend. Obviously, the more difficult
`patients that start who, for example, some who might not have been able to even get by
`with monthly dosing of their anti-VEGF, some of these patients may stay on monthly
`dosing of our drug which is, of course, also in our label.
`
`A - Bob Terifay
`{BIO 4342122 <GO>}
`I think some of our highest utilization, however, is in more rural areas where people have
`to travel far for their appointments and so the every eight week dosing is appealing in
`those types of the settings.
`
`Q - Chris Raymond
`Okay. Thanks.
`
`{BIO 4690861 <GO>}
`
`Operator
`
`Our next question comes from Jim Birchenough with BMO Capital.
`
`Q - Jim Birchenough
`{BIO 5068439 <GO>}
`Hi, guys. Just let me add my congrats on the quarter and the profitability. I wanted to drill
`down on the switch business and I'm just wondering if you have any metrics on what the
`switch opportunity is if you think about the type of patients that are being switched which
`the feedback we're getting is patients that have persistent fluid on monthly Lucentis and
`
`Page 9 of 17
`
`FINAL
`
`Bloomberg Transcript
`
`Exhibit 2134
`Page 09 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`Avastin and if you think about what is the proportion of the market that could be switched
`and when you think about what has already been switched, I'm trying to get a sense of
`what is in front of us in terms of new switch. If you could maybe give us some detail on
`that?
`
`A - Len Schleifer
`Maybe I will ask George to comment on what is known from the data in terms of -- in
`some of the larger trials what fraction of people still have fluid at the end of treatment.
`
`A - George Yancopoulos
`{BIO 1463723 <GO>}
`It seems from the large studies that even with monthly Lucentis use, up to 30% to 40% of
`the patients do not achieve complete anatomical control and correction and the numbers
`actually from the catheter[ph] are even far higher for Avastin. It seems as if there are
`substantial proportion of the patients who might be able to benefit from a more potent
`anti-VEGF agent.
`
`Q - Jim Birchenough
`{BIO 5068439 <GO>}
`If I could -- can I follow up on that?
`
`A - Len Schleifer
`Go ahead, Jim.
`
`Q - Jim Birchenough
`{BIO 5068439 <GO>}
`I'm just try to understand these buckets, new naive, new switch, already switched and just
`get a sense of what's the new naive patient pool, what's the new switch patient pool and
`what's the already switched patient pool just so we can get a sense of what is in front of us
`in terms of growth opportunity?
`
`A - George Yancopoulos
`{BIO 1463723 <GO>}
`I can tell you that most surveys and most prescription audits will show that in any given
`month about 25% of eyes are new to anti-VEGF therapy, so 75% are continuing on anti-
`VEGF therapy. Is important that when we think about the switch market, there was a pent-
`up demand. There were a number of people who were coming in even more frequently
`than monthly due to edema and those patients were switched to EYLEA very, very quickly.
`So that's one of the reasons we are being cautious and not overestimating what the switch
`potential for the rest of the year is. We are encouraged by the switches we have seen, but
`there was a group of patients that were waiting for something new. We can tell you that of
`our switches, 60% of them came from Lucentis and, importantly, 40% of them came from
`Avastin. We anticipate to continue to see switches, we just did not know at what rate.
`
`FINAL
`
`Bloomberg Transcript
`
`Q - Jim Birchenough
`Okay. Thanks, guys.
`
`{BIO 5068439 <GO>}
`
`Page 10 of 17
`
`Exhibit 2134
`Page 10 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`Operator
`
`Our next question comes from Terence Flynn with Goldman Sachs.
`
`Q - Terence Flynn
`{BIO 15030404 <GO>}
`Hi. Thanks for taking the question. Congrats for me as well. Just wondering if you can
`comment at all on monthly trends, March relative to February, and then maybe anything in
`April relative to March that you are seeing. Because if I run through the numbers it seems
`like you saw a decent acceleration in March and I was wondering if there is anything that
`is driving that or if that is accurate? Thanks.
`
`FINAL
`
`A - Len Schleifer
`We're not able to comment on week to week, month to month or beyond the quarter
`trends. We have got to leave up, you will have to figure that one out by yourself. Even if
`we had data available for you today, the reliability early in the launch of all of this is you
`see fluctuations, and I don't want to comment on what we're actually seeing other than to
`say I think we have taken a pretty careful look and tried to model this in a number of
`different ways. We tried to take into account the switches, the dosing reductions, we've
`tried to take into account discontinuations, share of new patients, et cetera. You can build
`very complicated models or we can -- or you can try to make more simplified models but
`however we do it, we think that our guidance of $500 million to $550 million is the best
`that one can make with the data we have in hand.
`
`Q - Terence Flynn
`Okay. Thanks a lot.
`
`{BIO 15030404 <GO>}
`
`Operator
`
`Our next question comes from Steve Byrne with Bank of America.
`
`Q - Steve Byrne
`{BIO 7019262 <GO>}
`Hi. I think I will switch over to one of the development projects. Can you talk about why
`you think Sanofi would have elected not to co-develop 475 right ahead of the adcom[ph]?
`
`A - Len Schleifer
`I think that is probably a question that is better directed to Sanofi. I would not presume to
`speak for them.
`
`Q - Steve Byrne
`{BIO 7019262 <GO>}
`And the other two antibodies that you have in development that they've also elected not
`to co-develop, do you have plans to continue with those or is the data just somewhat
`underwhelming?
`
`A - Len Schleifer
`
`Page 11 of 17
`
`Bloomberg Transcript
`
`Exhibit 2134
`Page 11 of 17
`
`

`

`Company Name: Regeneron Pharmaceuticals Inc
`Company Ticker: REGN US Equity
`Date: 2012-04-26
`
`None of the discontinuations, as far as I recall, have anything to do with a safety concern
`or certainly our view of the data. They have a very deep and broad pipeline. They are
`going to make decisions on what they want to develop and what they don't want to
`develop, what it fits into what they are up to. Nobody gets all of these decisions right.
`Obviously, I think Regeneron is in a strong enough position with its pipeline with more
`than 10 different things ongoing and multiple things going in the clinic each year that we
`certainly don't have to continue anything that George and his team feel don't make the
`cut either in terms of likelihood of technical success, safety concerns or market
`opportunity.
`
`Q - Steve Byrne
`Okay. Thank you.
`
`{BIO 7019262 <GO>}
`
`Operator
`
`Our next question comes from Biren Amin with Jefferies.
`
`Q - Biren Amin
`{BIO 7512048 <GO>}
`Yes, thanks for taking my question. Is your assessment that doctors are prescribing EYLEA
`in Medicare patients only with supplemental insurance and would co-