Welcome to the Regeneron Pharmaceuticals Third Quarter 2023 Earnings Conference Call. My name is Shannon, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Ryan Crowe, Vice President, Investor Relations. You may begin.

Thank you, Shannon. Good morning, good afternoon and good evening to everyone listening around the world. Thank you for your interest in Regeneron and welcome to our third quarter 2023 earnings conference call. An archive and transcript of this webcast will be available on our Investor Relations website shortly after the call ends. Joining me on today's call are Dr. Leonard Schleifer, Board Co-Chair, Co-Founder, President and Chief Executive Officer; Dr. George Yancopoulos, Board Co-Chair, Co-Founder, President and Chief Scientific Officer; Marion McCourt, Executive Vice President and Head of Commercial; and Bob Landry, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will open the call for Q&A. I would like to remind you that remarks made on today's call may include forward-looking statements about Regeneron. Such statements may include, but are not limited to those related to Regeneron and its products and businesses -- business, financial forecast and guidance, revenue diversification, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement issues, intellectual property, pending litigation and other proceedings, and competition. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. 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, including its Form 10-Q for the quarterly period ended September 30, 2023, which was filed with the SEC this morning. Regeneron does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, please note that GAAP and non-GAAP measures will be discussed in today's call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our financial results press release and our corporate presentation, both of which can be accessed on our website. Once our call concludes, Bob Landry and the Investor Relations team will be available to answer any further questions. With that, let me turn the call over to our President and Chief Executive Officer, Dr. Leonard Schleifer. Len?

Thanks, Ryan, and thanks to everyone joining today's call. Regeneron delivered another strong quarter marked by continued execution across the company, which drove double-digit top line growth and notable progress across our innovative R&D pipeline. Total revenues increased by 15% on a reported basis compared to the prior year quarter, primarily driven by Sanofi collaboration revenues and Libtayo global net product sales, which grew by 50% and 62%, respectively. Dupixent global net product sales were $3.1 billion, up 33%, reflecting strong growth across all approved indications. Non-GAAP net income per share -- diluted share increased by 4%, including an unfavorable $0.77 impact from acquired IP R&D. Today, I will briefly discuss the launch of EYLEA HD, the progress we continue to make across our pipeline, and our latest thinking on capital allocation. I will then hand the call over to George, Marion and Bob, who will provide additional commentary on our pipeline, developments, commercial execution and our financial results for the quarter. Starting with EYLEA HD, which is off to a great start. We launched in late August shortly following FDA approval, and recorded $43 million of net product sales in the final six weeks of the quarter, which compares favorably to recent launches in the retinal disease category. Importantly, revenues were driven by strong initial demand with multiple reorders by distributors before the end of the quarter. In addition, samples for EYLEA HD were made available shortly after the launch, enabling prescribers and patients to trial the product. Early EYLEA HD utilization has come from across the spectrum of wet age-related macular degeneration and diabetic macular edema patients, and momentum continues to build as positive real-world clinical experiences accumulate. We have also made significant progress establishing access and reimbursement, and we will continue to work on positioning EYLEA HD,…

Thanks, Len. I'd like to start with our recent data update for EYLEA HD. At the EU Retina Meeting last month, we presented the two-year results from the PULSAR study in wet AMD, which demonstrated that the vast majority of EYLEA HD patients randomized to 12 and 16 week dosing intervals continue to sustain vision and anatomic improvements through 96 weeks. 78% of all EYLEA HD patients were able to maintain at least every 12-week dosing intervals for the entire two-year period, with 88% assigned to at least every 12-week dosing by the end of the two-year period. Similarly, 70% of patients randomized to every 16-week dosing at baseline were able to maintain at least that interval through two years with 78% assigned to at least every 16-week dosing at week 96. Moreover, during the second year, many patients met the criteria for extension to even longer dosing intervals, with 47% meeting the criteria for at least 20-week dosing intervals, including 28% who were eligible for 24-week dosing intervals. The safety profile of EYLEA HD remain consistent with EYLEA, sustaining vision and anatomic improvements while maintaining such extended dosing intervals over two years in both wet AMD and DME is a remarkable advancement for the patients and their physicians. We believe that these results give EYLEA HD the potential to become the new standard of care for these retinal diseases. Moving to our immunology and inflammation pipeline. On Dupixent in COPD, our first pivotal study BOREAS met the primary and all two secondary endpoints in a previously unprecedented success for a biologic in a Phase 3 study in patients with uncontrolled COPD and evidence of Type 2 inflammation. Based on recent feedback from the FDA, in addition to the positive results from the BOREAS study, a positive interim analysis of…

Thank you, George. I’m delighted to share details of our commercial performance in the third quarter, including very encouraging early signals for EYLEA HD as well as ongoing results from our inline brands. Starting with our anti-VEGF retinal franchise. Regeneron achieved $1.49 billion in total net sales for the quarter in the U.S. We were excited to rapidly launch EYLEA HD in late August following its U.S. approval, and total net sales for the quarter were $43 million. Early launch indicators have been very positive. Physician enthusiasm was extremely high prior to EYLEA HD launch, and that interest has translated into early use in a broad range of patient types across wet AMD and diabetic eye disease. It is noteworthy that physicians are prescribing EYLEA HD in recalcitrant, switch and naive patients. We are already hearing anecdotal case reports from physicians whose recalcitrant patients are returning. Many of these patients have now been able to achieve drying that they were unable to obtain with other products. To accelerate this early launch momentum, our highly experienced team is rapidly advancing reimbursement and market access. We have confirmed paid claims from 100% of Medicare jurisdictions, and many large payers have recently published coverage policies for EYLEA HD. This includes both Medicare Advantage and commercial plans. While early, the speed of EYLEA HD coverage is significantly outpacing recent competitive launches. In addition, we continue to be on track to have a permanent J-Code by April 1, 2024, which we anticipate will drive additional uptake. These early reimbursement successes and positive physician experiences are being shared by prescribers with our team and more broadly with the retina community. These initial results bode well for the future of EYLEA HD and substantiate our belief that EYLEA HD will rapidly become the new standard of care…

Thanks, Marion. My comments today on Regeneron’s financial results and outlook will be on a non-GAAP basis unless otherwise noted. Regeneron performed well in the third quarter, with execution across the business continuing to drive strong top and bottom line growth. Third quarter 2023 total revenues increased 15% year-over-year to $3.4 billion, primarily driven by sales growth for Dupixent, coupled with improving margins within the Sanofi collaboration as well as continued growth from LIBTAYO. Third quarter diluted net income per share grew 4% to $11.59 on net income of $1.3 billion. This included a $100 million acquired IP R&D charge incurred in the third quarter of 2023, which decreased growth by approximately 7 percentage points. Moving to collaboration revenue and starting with Bayer. Third quarter 2023 ex-U.S. EYLEA net product sales were $872 million, up 6% on a constant currency basis versus the prior year. Total Bayer collaboration revenue was $377 million, of which $350 million related to our share of EYLEA net profits outside the U.S. Total Sanofi collaboration revenue was $1.1 billion in the third quarter, up 50% versus the prior year, which included the final $50 million sales based milestone. Our share of profits from the commercialization of Dupixent and KEVZARA was $863 million, an increase of 57% versus the third quarter of 2022, driven by Dupixent’s continued volume growth and improving margins. As we guided last quarter third quarter reimbursements for the manufacturing of commercial supplies from Sanofi, a component of Sanofi collaboration revenues declined sequentially, primarily due to the ongoing phase in of a new higher yielding manufacturing process. In the fourth quarter, we expect a continuation of this trend with reimbursements for manufacturing of commercial supplies expected to be sequentially lower by approximately $40 million. Other revenues were $138 million in the third quarter…

Thank you, Bob. This concludes our prepared remarks. We will now open the call for Q&A. To ensure that we are able to address as many questions as possible. We will answer one question from each caller before moving to the next. Shannon, can we please go to the first question?

Thank you. [Operator Instructions] Our first question comes from the line of Evan Seigerman with BMO Capital Markets. Your line is now open.

Hi, guys. Thank you for giving me the question, and congrats on all the progress. So you have over $15 billion of cash and marketable securities on your balance sheet. Maybe, Bob, you could talk about how you think about capital allocation? I know interest rates are high, but how else can you spend that money to drive even higher returns for Regeneron shareholders?

Yes. Thanks, Evan. I mean, I know having dealt with you and certainly many of our investors, this is certainly an issue that we’ve been tasked to solve. Now obviously interest rates are a lot higher. So obviously what we’re returning on that is certainly much better than the kind of days of 2020 and 2021. But we kind of stick to our knitting here with regards to our capital allocations. I mean George just went through a plethora of obviously pipeline progress that we’re making. Again, first and foremost, we’re going to make sure that is fully funded to the extent possible on that. And then with regards to acquisitions, you heard with Len’s intro, I mean, we continue to look at a lot of opportunities. Certainly, the market that is out there on the biotech space is not in the greatest shape, as you know. So again, we think there are opportunities out there, but just because we have the means doesn’t mean that we’re going to kind of push into something that may not give us an optimal result. It may not be kind of we like franchises, as you’ve heard me say that before. So we need to make sure that it’s the right fit with George and the team with regards to that. So we’ll continue to do that. And you’ve seen our share repurchases of which we’re $1.9 billion through nine months. We’ve done that at a very good price with regards to how we’re buying that back. We’re very kind of scientific in our approach on that. We do think that the stock continues to be undervalued given all the pipeline progress and the catalyst that we have. So we’re going to continue to push that button going forward. So we’re going to stick to our knitting. But again, as Len kind of alluded to, we are looking at a lot of opportunities that are out there. And if the right one makes the necessary fit, then we’ll move forward. And again, you kind of saw that with Checkmate and Decibel, albeit those were smaller, but again, those were nice kind of franchise fits into the business.

Next question, please, Shannon.

Our next question comes from the line of Mohit Bansal with Wells Fargo. Your line is now open

Great. Thank you for taking my question. And congrats on all the progress. My question is regarding the ulcerative colitis trial you are doing with Dupixent. Could you talk a little bit about the rationale behind that? And are you enriching this trial in any way on the basis of eosinophil counts or any other marker there? Thank you.

Yes. So as you sort of hinted at, what we have realized is that all of the diseases that we are treating with Dupixent really are interrelated diseases that reflect a systemic disorder that is upregulation of so called Type 2 inflammation. And in some cases it manifests in the lungs, in some cases in the skin, in some cases in the gut, and so forth all over the body, and in many cases in most patients, actually in more than one location. And so in every disease that we’re going after, including now, as you mentioned, in ulcerative colitis, we believe that there are a subset of patients who may be marked with Type 2 inflammation in their gut. We are, as you say, indicating, utilizing biomarkers that might select out these patients. And so we’re going to see whether a subset of ulcerative colitis patients are driven by this Type 2 inflammation that’s driving all the other related manifestations of this systemic disorder.

Thanks, George. Let’s move to the next question, please, Shannon.

Our next question comes from the line of Chris Raymond with Piper Sandler. Your line is now open.

Yes, thank you. Just maybe Dupixent in [ph] COPD, I think the last time we talked to you guys on this, you were talking about the risk reward on taking an interim look on notice, just given the alpha hit. Looks like you’ve decided to take that step here. But can you give us a sense of the alpha hit [ph] you are taking by doing this interim look? Just looking at BOREAS, with the 30% reduction in exacerbations, it would seem you’d have a decent amount of room here if notice is tracking similarly. But if you can give us any more color on how you’re thinking about this risk reward of this decision and assume you’re going to press release that result of that if it’s going to be the end of the year? Thanks.

Yes. We’re not going to get into the details of the statistical niceties on how you do this. An alpha sparing approach is what’s typical for an interim analysis. We’ll work closely with Sanofi on how to do this in the most efficient manner possible and get to the information as appropriate when it appears.

Thanks, Len. Next question, please, Shannon.

Our next question comes from the line of Colin Bristow of UBS. Your line is now open.

Good morning and congrats on the quarter. Not surprisingly, we’ve been getting an increasing number of questions on your obesity assets. And I was wondering if you could just talk to your strategy and level of enthusiasm here and maybe frame out some of the timelines, GPR75 [ph], the leptin receptor antagonist. I think you shared some pretty provocative data at ADA on the myostatin blocker and the Activin A blocker. Maybe you could just tell us your level enthusiasm is this something that you’re going to go full force and plan to have a major presence in down the road? Just some color there would be helpful. Thank you.

Yes. As you said, we’re very excited about, I guess, two of the approaches that we’ve been taking in obesity. One is our unique collection of targets that we’ve either been the first to discover, like the GPR75 genetically identified target that came from our Regeneron Genetics Center, which is a very exciting new target for obesity, as well as our new approaches such as our leptin receptor agonistic antibody. But one thing we’re doing is moving those programs forward and understanding exactly what their potential is in the field of obesity. But as you said, right now, the field which is dominated by these GLP-1 agonists also is recognizing increasing problems with this type of weight loss, meaning that about 40% of the weight loss is due to muscle loss. That means if you lose 20 pounds, eight pounds of that approximately on average, will be muscle. Most patients will never get that muscle back. This can, over time, especially if patients go off these drugs and regain the weight as fat can create potentially a very large public health problem and dilemma. So we also have been, as you pointed out, very active in the field of muscle preservation and muscle growth agents. We’ve developed some, I think, some of the most exciting candidates in the field that have the ability to do this. And we are certainly considering how to study these muscle preservation and muscle growth agents in combination with existing weight loss agents to see whether we can maintain or even grow muscle in the setting of weight loss. Hopefully, perhaps increasing the quality of the weight loss, maybe even resulting in greater weight loss. But most importantly, making sure that the patients, in terms of their muscle and so forth, do a lot better. And we will be talking about our clinical trials in this area, we hope, very shortly.

Okay. Thanks, George. Next question, please, Shannon.

Our next question comes from the line of Tyler Van Buren of TD Cowen. Your line is now open.

Great. Thanks guys. And congrats on the tremendous quarterly results. It’s great to see the early EYLEA HD sales, of course, and you mentioned that naive and switch patients are being treated. But are you seeing switches from VABYSMO specifically, and to what extent are you guys sending samples out as we think about assessing additional demand beyond sales?

Thanks, Tyler. So let me address the first part and the positive anecdotal case reports we’re getting back really carry across the theme of better vision, better drying than they’ve seen with other anti-VEGF products. They also comment on very frequently the tremendous confidence that they have in the safety of EYLEA and the experience over many, many years. In terms of the switches, it’s early days. We are seeing switches from EYLEA, as you would expect, and of course, we’re the category leaders. So there are more potential patients to consider as well. But we are also hearing switches from faricimab. We’re hearing also switches from Avastin and other products in the category. And the early reports have been quite encouraging. To your other part of your question related to sampling. We do have a sampling program for EYLEA HD. It’s intended to give physicians experience with EYLEA HD in an appropriate way. The program is constructed on an on demand basis. We don’t disclose the number of samples or things of that sort. And certainly that’s not what you were asking. But I can share with you that we have seen a high conversion rate from practices ordering EYLEA HD samples and then subsequently placing orders of commercial product through commercial channels.

Thank you, Marion. Next question, please?

Our next question comes from the line of Terence Flynn of Morgan Stanley. Your line is now open.

Great. Thank you. This is [indiscernible] on for Terence Flynn. Thank you for taking our question. Quick one from us. Could you provide an update on the timing or relative implications of the biosimilar EYLEA litigation with Mylan? Thank you.

Yes. So we had a trial in West Virginia, a bench trial, and we are waiting for a decision from the Judge. It’s out of our control, and as soon as it comes, it’ll come. It’s been several months. So it could come soon or not. It’s one of those things where it’s really beyond our ability to predict and control.

Thanks, Len. Next question, Shannon.

Our next question is from the line of Carter Gould with Barclays. Your line is now open.

Great. Good morning and congrats on all the progress. Maybe a follow up for Marion. Thanks for all the color on the commercial dynamics for high dose EYLEA. One thing you didn’t touch on as much, though, is sort of how maybe some of the step edit language has evolved. Is that sort of tracking in line with what you were seeing with standard dose EYLEA or any broader commentary on how that’s tracking relative to your expectations? Thank you.

Sure. So, as a quick reminder, as we get into payer mix, I’ll remind everybody that these are approximates based on typical patterns in the category. It’s a little bit different when you look at a product that just launched, but about 45% of our overall business is in Medicare fee for service. And as I mentioned to you in the call today, we’ve made great progress there, not only in coverage, which is the first step to get coverage, but then taking the extra step to make sure that claims are being paid. So we’re seeing now that 100% of Medicare fee for service jurisdictions have coverage and demonstrated paid claims. When we go over to Medicare Advantage, which is roughly about 25% of anti-VEGF category business, and commercial, which is about 20, what we’re seeing so far. And we are making good progress with payers. We’re seeing that EYLEA HD is being positioned consistently with EYLEA and other brands in the category. And there are plans, as you know, that have a step edit or utilization management. The good news is that EYLEA HD is being positioned consistently with EYLEA and other brands. We don’t see a differentiation there.

Okay, Marion. Thank you. Next question, Shannon, please.

Our next question comes from the line of Robyn Karnauskas with Truist Securities. Your line is now open.

Hi, guys. Thanks for the question. Question on CSU. I know it’s a big opportunity. Many patients are not controlled well with antihistamines, and you have a CRL. Is Study C sufficient anything in particular you think the FDA is looking for? Is there a disconnect or they’re changing what they view for the bar for approval? What’s your thoughts there? Thanks.

Yes. Well, as you know, we had one very positive study. We had a second study that actually had a P of 0.049, but for various statistical purposes, just missed meeting its predetermined statistical hurdle. But it’s certainly all the indicators were going in the right direction. And what the FDA indicated that they wanted to see the results of our ongoing Study C, as we call it, to make their decision. And so what we’re hoping is that that study, which is in the same population of the very positive initial study, remember the second study was in these recalcitrant patients who had failed [indiscernible], among other therapies. But Study C is in the same population as our very first Study A, the very positive study. And we're hoping that if we get consistent data in that study, that the FDA will consider and look favorably upon it.

Okay. Thanks George. Next question Shannon.

Our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is now open.

Good morning. Thanks for taking my question. With regard to your cancer portfolio, as we look to additional data coming out at ASH and the proof of concept we've seen so far, but combination data that we're looking to with Libtayo. Can you just talk to us about the optimization still required here and how you're thinking about positioning it in the context of emerging targets and competitive dynamics? Thank you.

Yes. We have a very large collection of combination opportunities that we're very excited about. The first one that we hope has a chance of really crossing the finish line in a very significant way, in a very seen population, is our combination of Libtayo in combination with fianlimab, putting together these two checkpoints, the anti-PD-1 and the anti-LAG-3. And I think in this case, we believe we have evidence that we have the best-in-class type of activity with both agents separately. And as you've hopefully seen in our earlier stage clinical trials, the data suggests that when we put them together, we really can make a remarkable advance for patients in terms of the number of patients who respond and the extent of their progression-free survival. And we're now, as we announced in a pivotal trial where we hope that we will in the – within the next year, perhaps be able to provide the results from that trial, which might confirm this remarkable advance for patients. If it works in this first-line melanoma setting, it really opens up the door to a whole series of other opportunities both in related melanoma settings, such as an even earlier stage melanoma setting such as the adjuvant and perioperative settings, but we could be moving to other cancers as well with that proof of principle. So that's the nearest term Libtayo checkpoint combination approach. As you know, with our bispecifics, the combination opportunities there are also very exciting, either with Libtayo or with each other. And we have, in that space shown that our individual agents, the important thing is we have now validated so many of our individual agents as having once again the potential for best-in-class type of activity, whether it's our agent for myeloma or our CD20 bispecific in, for example, follicular lymphoma and so forth and so on. But we're also excited about our costim bispecifics. We've released the data about the incredible efficacy in, at early stages that we see in combination with Libtayo. But that one – that one is countered by concerns with immune-mediated adverse events that we're seeing in these patients. It is hard to dramatically increase the extent of immunotherapy benefit without having it associated with increased autoimmune type reactions. We're working very hard on that, and we think, based on preclinical data that the trick may be combining our costims with our CD3 bispecifics where we don't see these dramatic potential increases in the mechanisms that may lead to immune adverse events. So in summary, our checkpoint combinations are very near-term. Our bispecifics are single agents have been validated and hopefully will be being considered by the FDA for approval in the relatively near future. And the combinations are beginning to demonstrate exciting opportunity, and we're trying to tune that in order to try to present the best efficacy safety profile for patients.

Alright. Thank you, George. Shannon, please the next question.

Our next question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is now open.

Hey, guys. Congrats on the good launch so far. And thanks for taking my question. You mentioned in the press release some impact of price on EYLEA. I was wondering if you could elaborate a little bit more on this, when you think this might stabilize; any extent that this might affect high-dose EYLEA as well? Thanks.

Sure, Brian. So I would comment that in an increasingly competitive category, there of course, there's been some pressure on EYLEA. I'd also reflect that in 12 years in the market, it's really modest rebating and discounting if you look at the history of the brand. And of course, that on a brand that has never taken a price increase. But we will continue to be very much watching uptake of EYLEA HD, taking very responsible and appropriate and thoughtful measures on pricing. And certainly, as I reported to early days, we're making some very strong progress in the marketplace in terms of making sure that physicians gain confidence in reimbursement of EYLEA HD as they initiate patients.

Okay. Thanks Marion. Please the next question, Shannon.

Our next question comes from the line of Yatin Suneja with Guggenheim. Your line is now open.

Hey, guys. Thank you for taking my question. Question on Dupixent. Could you maybe share your views on the newer mechanism? For example, OX40 or perhaps a longer-acting version of Dupixent on the franchise; maybe if you can talk about your efforts in terms of life cycle management of Dupixent? Thank you.

Yes. Maybe getting back to some of the comments that I made before. The collection of so-called allergic or Type 2 conditions, which Dupixent addresses, are all characterized by a systemic inflammatory problem increase in the so-called Type 2 inflammation, which if you look at the science and literature is really of this digital pathway that largely evolved and was one of the most active parts of the immune system to fight things like fecal parasites, which are really not an issue now in the developed world. This part of the immune system should essentially in the modern world be entirely quiescent. It serves almost no role. The problem is it becomes unleashed abnormally to do things that it shouldn't be doing, like fighting allergens or attacking the skin or the gut in atopic dermatitis or eosinophilic esophagitis. What Dupixent does uniquely is that it controls, and the data now demonstrate this, the incredible effect that it puts this useless angry tiger back in the cage where it belongs. And that is why it has this incredible profile of not only efficacy but safety. Because what's shutting down is it's shutting down a pathway that should be vestigial in the modern world that becomes unleashed and attacks all different parts of the body. We believe that any of this current competition that's ongoing doesn't share these remarkable features that give Dupixent its incredible broad efficacy across the spectrum of diseases with its unique safety profile. Because all of these other approaches, including, for example, the OX40 approach and so forth, are addressing different fundamental immune pathways that are important in the immune system's function to do a lot of actual useful things in the modern world, like, for example, fighting viral infections in cancer and so forth. So Dupixent really…

So just to add a small point to what George's eloquent explanation of why Dupixent is such a special drug and the prediction that it would be safe because it's attacking this vestigial part of the immune system, you're looking at somewhere in the neighborhood of three-quarters of million people on the drug, many more than that so that have demonstrated the safety that is predicted by the science.

Including in children, as we know, as young as six months is approved there where it's been demonstrating not only incredible safety but incredible efficacy.

Great points. Thank you. Shannon, I think we have time for two more questions, please.

Our next question comes from the line of Dane Leone with Raymond James. Your line is now open.

Thanks for taking the questions, and congratulations on a strong quarter. Just actually really two quick ones for me. First one being, can you just comment whether you saw any impact from increased utilization of biosimilar ranibizumab during the quarter on EYLEA sales. A number of high-volume clinics had highlighted favorable margin opportunities from using more biosimilar ranibizumab, which seems to be potentially a transient impact and use of some of the brands, but it would be interested in your commentary there. And then we've gotten just a lot of inbounds in terms of ongoing patent litigation of EYLEA. Could you just maybe state for us what your current expectation is for EYLEA patent life? And just any thoughts you have on how the ruling that we're awaiting could actually impact your base case? Thank you.

Yes. So I'll cover the patents and then Marion can cover any additional insight into the marketplace. On the patents, we're involved in litigation. There's a couple of key patents that have evolved in this case that both relate to formulation as well as dosing. On the base case is that, for us, assuming that the exclusivity will expire in May, but we will see what happens in the litigation, which could be an upside, obviously, for the franchise.

All right. And on the ranibizumab impact, it's relatively early in their launches, and – but there hasn't been a notable impact to the category. The Lucentis biosimilar shares in the low single-digit area in the third quarter, and certainly the impact has been seen more relative to Lucentis, which has declining share. But certainly, this is not extended to EYLEA HD.

Thanks Marion. We'll just take our last question, please, Shannon.

Our last question is from the line of Brian Skorney with Baird. Your line is now open.

Hey, thanks for taking my question. It looks like J&J had a really good first quarter of their myeloma bispecific. So it definitely seems like there's a good demand there. But also an element of them having control of a lot of offerings for myeloma. So obviously, [indiscernible] would always dominate each in oncology, but with the initial launch of your bispecific next year. I'm just wondering what your strategy is for competing in the initial late line as a third to market? Do you think that there is differentiated enough data here to kind of take share? Or is the focus really on generating data in earlier line of combos to kind of move up market share? Thanks.

Well, of course, it's both. We do believe that data rules, the best, both efficacy, safety profile, but also convenience profile. And we will be continuing to show our evolving and maturing data, which we believe could result in best-in-class in terms of efficacy, in terms of response rates and complete response rates in terms of safety, in terms of the frequency of Cytokine Release Syndrome and so forth, and in terms of differentiation in terms of mandated hospitalization. So we will be continuing to present our data. Of course, we'll see exactly ultimately what gets in the label and what the FDA supports but there's the potential here for best-in-class differentiation in terms of efficacy, safety and convenience and schedule. And of course, as you said we're also moving with, we think, an exciting program in earlier lines of therapy. And all of this is also going to be combined with the opportunities for our future combinations. We have a variety of costim bispecifics that we're excited about combining specifically with this agent in the Plasma Cell Dyscrasias setting. So we think it's a very exciting opportunity. As you said, unfortunately there's a large opportunity out there because there's a lot of patients that are still in need. I think that if you have the best agent for late-stage patients. A lot of people want to use it. And then if we figure out the best program to demonstrate how it can be utilized in earlier-stage patients that can certainly enhance that opportunity let alone if we come up with one of our magic combos that really takes it to the whole next level.

Okay. Thanks George, and thanks to everyone who dialed in today and for your interest in Regeneron. We apologize to those remaining in the queue that we do not have a chance to hear from. But as always, the Investor Relations team here is available to answer any remaining questions you may have. Thank you once again, and have a great day.

This concludes today's conference call. Thank you for joining. You may now disconnect.