Regeneron Pharmaceuticals, Inc. (REGN) Earnings & Analysis

Latest quarter

Regeneron reported Q3 FY2026 revenue of $5.1 billion, above the $4.6 billion consensus, and adjusted earnings per share of $20.07, above the $16.08 consensus. Revenue rose from $3.8 billion a year earlier, while diluted earnings per share rose to $18.45 from $13.62.

CFO Christopher Fenimore attributed the revenue increase primarily to higher Sanofi collaboration revenue, alongside growth from Libtayo and EYLEA HD. The filing said higher Dupixent sales and repayment of the Sanofi development balance increased Regeneron’s share of collaboration profits. It also attributed lower profit from its Bayer collaboration to lower EYLEA sales outside the United States.

Regeneron’s filing said higher volumes increased U.S. EYLEA HD sales, partly offset by a lower net selling price. It attributed lower original EYLEA sales to reduced volumes amid competition and patients’ transition to EYLEA HD.

Regeneron reported a gross margin of 88.8%, compared with 86.1% a year earlier, and an operating margin of 40.0%, compared with 27.3%. Free cash flow was $1.4 billion in both periods.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Commercial executive Marion McCourt said Dupixent’s third-quarter worldwide net sales were $6.5 billion. She said U.S. sales grew 40% year over year to $5.1 billion, driven by growth across indications and age groups and favorable gross-to-net adjustments reported by Sanofi.

McCourt said EYLEA HD U.S. sales rose 62% from a year earlier to $699 million, while physician unit demand grew 20% from the second quarter. She attributed the demand increase to recent label enhancements that broadened the medicine’s use across retinal practices. For original EYLEA, she reported U.S. sales of $400 million, down 41% year over year, and a high-single-digit sequential decline in physician demand. She said both products benefited modestly from the timing of end-of-quarter shipments.

Looking ahead, McCourt expected approximately 10% sequential growth for EYLEA HD in the fourth quarter, partly offset by pricing pressure, and a low- to mid-teens sequential demand decline for original EYLEA. She cited increasing competition from additional biosimilar launches and said Regeneron was looking toward potential approval of an EYLEA HD prefilled syringe.

On Libtayo, McCourt said worldwide sales grew 51% year over year on a constant-currency basis to $550 million. She said the recent approval for adjuvant cutaneous squamous cell carcinoma was helping drive growth and that the company expected further uptake in that indication and lung cancer.

CFO Christopher Fenimore said Regeneron recorded its full share of Sanofi collaboration profits in the quarter for the first time, following repayment of the development balance. Under the amended alliance, he said, the companies will share development and commercialization costs and global profits equally for four next-generation antibodies, while existing Dupixent and Kevzara terms remain unchanged. Fenimore also said Regeneron expected non-GAAP research and development expense to rise by a mid-teens percentage in 2027 to support clinical programs.

Guidance

Regeneron raised its FY2026 non-GAAP research and development expense guidance to $6.050–$6.150 billion from $5.950–$6.050 billion. It lowered non-GAAP selling, general and administrative expense guidance to $2.400–$2.500 billion from $2.500–$2.600 billion.

The company raised its expected non-GAAP gross margin on net product sales to approximately 86% from 84%–85%. It also changed its capital expenditure range to $1.050–$1.100 billion from $1.030–$1.100 billion.