Welcome to the Regeneron Pharmaceuticals Second Quarter 2024 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 call is being recorded. I will now turn the call over to Ryan Crowe, Senior 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 Second Quarter 2024 Earnings Conference Call. An archive and transcript of this call will be available on the Regeneron 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 of Commercial; and Chris Fenimore, Senior Vice President and Chief Financial Officer. After our prepared remarks, the remaining time will be available for your questions. We anticipate today's call will last approximately 60 minutes. 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 business, financial forecast and guidance, 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 quarter ended June 30th, 2024, 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 financial measures will be discussed on today's call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our quarterly results press release and our corporate presentation, both of which can be accessed on the Regeneron Investor Relations website. Once our call concludes, Chris 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. Thanks to everyone joining today's call. Regeneron continued its track record of strong execution highlighted by double-digit revenue and earnings growth in the second quarter along with important advances across our broad pipeline. For my remarks today, I'd like to briefly review some of the key performance drivers for the quarter and then discuss near-term pipeline opportunities. After my remarks, George will provide further updates on our pipeline. Marion will then review our commercial performance. And finally Chris will detail our quarterly financial results and discuss updates to our full year guidance. Second quarter 2024 total revenues grew 12% to $3.55 billion, primarily driven by sales of EYLEA HD in the United States. Higher Sanofi collaboration revenues reflecting the continued strong performance of DUPIXENT as well as robust growth for LIBTAYO. EYLEA HD generated $304 million in its third full quarter on the US market and continues to outperform recent launches in the anti-VEGF category. Net product sales for EYLEA HD and EYLEA combined were $1.53 billion, representing a 2.3% growth compared to the prior year. We are encouraged that despite increased competition in the anti-VEGF space, we have achieved a strong EYLEA HD launch trajectory while maintaining our category-leading combined EYLEA HD and EYLEA market share of 45%. Our efforts to bring an EYLEA HD pre-filled syringe, the United States market remain a high priority, and we are tracking towards a potential pre-filled syringe launch by early 2025. In summary, we continue to position EYLEA HD as the new standard-of-care for retinal diseases based on its differentiated clinical profile, coupled with strong familiarity and satisfaction among retinal specialists. DUPIXENT global revenues grew 29% on a constant currency basis to $3.56 billion, reflecting strong growth across all approved indications, age groups and geographies. In June, the European Commission…

Thank you, Len. Starting with DUPIXENT. Regarding COPD, data from our second confirmatory trial, NOTUS was featured as a late-breaking presentation at the American Thoracic Society Conference and simultaneously published in the New England Journal of Medicine. In NOTUS, DUPIXENT reduced exacerbations by 34%, while significantly improving lung function confirming the unprecedented results from the previously reported Phase III BOREAS trial. Based on data from NOTUS and BOREAS, DUPIXENT was recently approved by the European regulatory authorities for eosinophilic COPD patients uncontrolled on maximum standard-of-care inhaled therapy. Additional submissions are under review with other regulatory authorities around the world, including in the US, China and Japan. Beyond COPD later this year, we are looking forward to data readouts from Phase III studies of DUPIXENT in chronic spontaneous urticaria and bullous pemphigoid. Seven years after its initial FDA approval and with approval in seven different indications around the world DUPIXENT continues to deliver potential new approvals for additional important disease indications. Regarding our small pilot study to potentially eliminate severe food allergies using our innovative approach that combines DUPIXENT and linvoseltamab or BCMA by CD3 bispecific, we continue to expect to see initial data by the end of this year. On itepekimab, our IL-33 antibody in development for certain COPD patients, our two Phase III studies are now fully enrolled, study readouts and regulatory submissions for our second therapeutic candidate for this devastating disease are expected in the second half of next year. Moving to oncology and starting with fianlimab, our LAG-3 antibody in combination with LIBTAYO, at the upcoming ESMO meeting in September, we look forward to presenting longer-term follow-up on the metastatic melanoma cohorts from our first-in-human study. Responses have continued to deepen with the proportion of complete responders and median progression-free survival continuing to improve. These results strengthen…

Thank you, George. Our second quarter commercial results further solidify Regeneron's leadership across therapeutic categories. Our performance demonstrates the ongoing strength and diversity of our product portfolio with continued growth opportunities powered by existing and upcoming product and indication launches across multiple geographies. I'll start with EYLEA HD and EYLEA in the US. In the second quarter, combined net sales for both medicines grew 2.3% year-over-year to $1.53 billion. EYLEA continues its clear category leadership while EYLEA HD remained the fastest growing medicine in this highly competitive category. EYLEA HD continued its launch momentum in the second quarter, delivering net product sales of $304 million, which represents 52% sequential growth. EYLEA HD continues to be the fastest launch of any anti-VEGF therapy since EYLEA more than a decade ago and the trajectory confirms a significant transition to EYLEA HD is underway. The breadth and depth of EYLEA HD prescribing continues to grow with utilization across a broad range of patients, including a treatment-naive population, which has doubled since last quarter. Physicians are also increasingly switching patients to EYLEA HD from other anti-VEGF treatments based on their positive early treatment experiences. And these switch patients, early real-world data indicate that treatment intervals are being extended with EYLEA HD. EYLEA HD's durability, along with the same trusted efficacy, visual acuity and safety as EYLEA represents a meaningful improvement for patient lives and greater efficiency for physician practices. The number of physician offices ordering EYLEA HD during the second quarter increased by more than 50% compared to the prior quarter. We believe this suggests prescriber confidence in EYLEA HD's clinical profile as well as in reimbursement now that the permanent J-code has been well established. Of note, we recognize the importance of providing physicians with a pre-filled syringe option and as Len mentioned,…

Thank you, Marion. My comments today on Regeneron's financial results and outlook will be on a non-GAAP basis unless otherwise noted. Regeneron delivered strong double-digit top and bottom line growth in the second quarter. Total revenues increased 12% year-over-year to $3.5 billion, primarily driven by strong execution of the ongoing EYLEA HD launch in the US, higher Sanofi collaboration revenue and continued global sales growth from LIBTAYO. Second quarter diluted net income per share grew 13% from the prior year to $11.56 on net income of $1.4 billion. Second quarter revenues from our Sanofi collaboration grew to $1.1 billion, primarily composed of our share of collaboration profits of $988 million, which increased by 32% compared to the prior year driven by DUPIXENT's continued volume growth and improving margins. Reimbursement from manufacturing and commercial supply, the other component of Sanofi collaboration revenue was $157 million, taking into account increased volumes, offset by manufacturing efficiencies, we continue to expect reimbursement for manufacturing and commercial supply in 2024 to be comparable to 2023 on a full year basis. The Sanofi development balance was approximately $2 billion at the end of the second quarter, reflecting a reduction of approximately $190 million from the end of the first quarter. We continue to anticipate this balance will be fully reimbursed to Sanofi by the end of 2026. Moving to Bayer. Second quarter ex-US net sales of EYLEA and EYLEA 8 mg were $908 million, up 8% on a constant currency basis versus the prior year. Total Bayer collaboration revenue was $375 million, of which $353 million related to our share of net profits outside the US. Now to our operating expenses. Second quarter R&D expense grew 10% year-over-year to $1.1 billion, reflecting continued investments to support our robust pipeline, including late-stage oncology and hematology programs. We…

Thank you, Chris. This concludes our prepared remarks. We will now open the call for Q&A. To ensure 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 go to the first question, please?

[Operator Instructions] Our first question comes from the line of Tyler Van Buren with TD Cowen. Your line is now open.

Hey, guys. Good morning. Congratulations on the great quarter. Regarding the EYLEA franchise, I'm really encouraged to see that the overall franchise is up year-over-year and that the 45% category share is maintained quarter-over-quarter. So do you believe that EYLEA HD is reaching a stage and maturity of its launch, where it will allow the overall category share to be relatively stable in the coming quarters that will allow you to participate in the retinal disease market growth and is the market still growing around 10% year-over-year?

Marion?

So Tyler, I'll take it in a couple of pieces. Thank you for the question. First, I did want to comment, we were very pleased to report the total net sales of 1.4, excuse me, $1.54 billion in the quarter. Obviously, as you mentioned, that's a 2.4% increase year-over-year. Additionally, I'll just comment a little bit more on EYLEA HD. We certainly are very much in the launch stage. This is our third full quarter of results that we're reporting today. And certainly, we're encouraged that in the quarter, we had a 52% increase in net sales. And certainly, that calculation represents $100 million net sales increase from the prior quarter, which is very significant in this competitive market. So certainly, we are continuing to progress our launch and see it is important. Certainly, EYLEA is an important source of switch patients for EYLEA HD. Next, we see switches coming from faricimab, also avastin, very pleased as well this quarter to report that we're seeing increased use of EYLEA HD in naive patient population. So all-in-all, we see this indicative that EYLEA HD has the potential and certainly the profile to be the new standard-of-care. I think you also asked me about market growth, overall market growth. Let me cover that as well. I would say probably at this stage in the year, we're tracking more on single-digit growth in the category in the midrange as opposed to double-digit, which I think is what was cited in your question.

That's right. Okay. Thank you, Marion. Let's move to the next question please.

Our next question comes from the line of Evan Seigerman with BMO Capital Markets. Your line is now open.

Hi, guys. Thank you so much for taking my question and always congrats on the progress. I want to touch on your work in obesity specifically with leptin. Can you just walk me through some of the rationale of moving this to a Phase II? I know that leptin had been kind of controversial, clearly, you saw some interesting data in earlier trials. But why do you want to add this on top of say, tirzepatide, versus using triple agonist that Lilly is doing some of the other trials. Thank you so much.

Well, we have leptin going forward in a number of different programs. I believe the one that you're talking about is in combination with other weight loss agent. And that's based on results that suggest that the reason leptin doesn't work in normal obese patients is because in those patients who have a high degree of fat and are in fact on the upswing of their obesity profile, their leptin levels are very high. They're already saturating. Once you undergo profound weight loss, the leptin levels drop and you may be getting into the range where the leptin is now providing a signal, which is creating an increased desire in the individual to each. And so in these patients, it may be that some of the weight loss is limited by decreases in the leptin, which is then driving increasing feeding type of behavior. So this might be and at least it's been shown in animal studies to be the situation where leptin might actually be playing an important role. So as you point out, in historical studies in stably obese patients, leptin is already saturated and giving more leptin may not have a benefit. But in these settings where there are falling leptin levels, the falling and low leptin levels may lead to a food-seeking drive and giving leptin in that setting may allow further weight loss on top of that obtained with these other agents, which tend to plateau at a certain point, and that plateau at least based on animal studies may be in part driven by these drops in the leptin. And these studies, as you know, are done in collaboration with a partnership with Lilly. So there -- so we're studying it in collaboration with their agent tirzepatide.

Thanks, George. Let's move to the next question.

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

Hey, good morning. Thanks for taking my question and congratulations on the quarter and all the progress. On linvo, as you prepare for the potential launch there, I'm curious the feedback you're getting on how docs may position it relative to existing therapies, how much appreciation there is out there for the efficacy and administration advantages that you cited in your slide? And maybe you could also elaborate a little bit more on some of the issues with the third-party facility and they're confident if that's resolved. Thanks.

I'll take the third-party issue and George can cover or Marion, how people are thinking about a BCMA approach and where it might fit in the longer term. There's been a lot of third-party filler type and manufacturing issues with lots of CRLs across our, the biopharmaceutical space. As you know, we had one last year with HD EYLEA and this was a case where the FDA was inspecting our filler for a different product. And they found some observations the observation is needed to be remediated, but because of the nature of the observations, a reinspection is necessary, we believe, based on what we've been told is that the observations have been remediated. But since there's a reinspection required, it might not get done, it's likely not to get done in time for our PDUFA date. That's why we called your attention to that. This is an industry-wide kind of issue. I think the FDA is, in fact, having planning some sort of public hearing on these sorts of things. We're working with the FDA because this is a priority review application to see how we can resolve this in this expeditious manner as possible. George or Marion, do you want to cover these.

Yes, I'll start and then I'll hand it over to Marion. But as we summarize and we've detailed and as we'll continue to be presented, the efficacy data with our bispecific continues to look like it is leading the field as the data matures, and patients continue on treatment, they continue to progress to deeper and deeper responses and where now we have complete response rates at 50% with, we believe, best-in-class PFS and overall survival type numbers. This is obviously really important because what cancer treatment is all about is trying to eliminate the cancer and getting long-term durable responses and survival in the patients. And we would imagine that this is exactly what patients and physicians are focused about. Other aspects of our profile, we also believe in terms of safety and our dosing schedule and hospitalization burden also, we believe, are best-in-class. In terms of how Marion believes the physician community is appreciating the data, I'll ask Marion to comment on that.

Thanks, George. And certainly, we're very excited about the potential upcoming approval for linvoseltamab. George describes the differentiated clinical efficacy, safety profile that will be incredibly important to physicians. We have a highly experienced hematology team in place and ready for launch.

Yes, I would just add, this is Len. I would just add that we're not limiting ourselves, obviously, just to the last line. We are trying to move this aggressively either in monotherapy or in combinations to much early lines of therapy. The rule of thumb has been in cancer that you tend to get more responses as you move to earlier lines. But this would be quite remarkable given what George just told you about the amount of responses we're seeing in the last line. So we're very excited about moving this forward and we'll go -- we'll keep you updated as we do that.

Yes. Just a follow-up on what Len said, obviously, this is why we're moving to these trials in these earlier lines of therapy. Obviously, we won't be commercializing those areas until we get the results from those clinical trial.

Sure. Absolutely.

All right, gentlemen. Let's go to the next question.

Our next question comes from the line of Cory Kasimov with Evercore ISI. Your line is now open.

Thank you, guys. Good morning. Thanks for taking the question. So we're getting an increasing amount of inbound interest in your Factor XI program. Can you speak to the differences, I guess, probably for George between your two antibodies? And what will be the key aspects you'll be focused on in your upcoming readouts to know you're on the right track? Thank you.

Yes. So very importantly, what we've done is we've created antibodies that split the mechanism of action. One affects the activation domain, the other the catalytic domain. We have developed in both these classes, the only ones in class or the best-in-class type of antibodies, which are best at actually hitting and inhibiting that target based on all of the signs, a huge amount of genetics in part fortified by our own Regeneron genetics efforts and so forth, it suggests that these two approaches will allow us to separate and optimize optimum efficacy and optimum safety. So it's quite possible that we might actually move forward with both of these antibodies for different target populations in some of which where efficacy is the primary driver and others where safety might be most important. So they're very unique in their mechanisms of action. They really are exploring this target both much more precisely by splitting the mechanism of action, but also more powerfully than competitors that have antibodies that can do one or the other of these things. So we're very excited about these programs. As we said, we have some proof-of-concept studies ongoing and we hope by the end of the year to be able to announce the directions we may be taking either or both of these antibodies going forward in the future.

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

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

Hey, thanks. And just a quick question on EYLEA and the commercial progress. So you guys, I think, were pretty clear in your messaging on the permanent J-code is we should not really see an inflection that was sort of seen maybe with VABYSMO when they got their permanent J-code as there were some other variables such as discounting, et cetera, going on with that example. But we've gotten some market feedback that access barriers remain even with the J-code change and specifically among Medicare Advantage plans. Marion, I'm kind of curious if you can sort of talk about the dynamic there and how you see things playing out with respect to access post permanent J-code.

Sure. I'm very, very happy to comment. So certainly, for a portion of the market, fee-for-service Medicare patients, there's open access and freedom of prescribing for physicians. If we go to those areas of the market where there's a payer impact, our teams have successfully opened access for EYLEA HD in a way that covers over 80% of patient lives. So certainly, significant progress has been made and we continue to work through situations where physicians might be having some utilization management or step edits I will share that those are often easily managed when the physician and office staff provide information. But overall, the takeaway message should be that EYLEA HD has a very strong payer coverage. And again 80% of the market where reimbursement is in place.

Thanks, Marion. Let's move to the next question, Shannon.

Our next question comes from the line of Akash Tewari with Jefferies. Your line is now open.

Hi. This is Kathy on for Akash. So for your myostatin program, can you talk about your preference for using a doublet versus triplet combination approach in your Phase III trials? And also where do you think myostatin will stack up versus GIP, GLP, amylin combination approaches, which could show potentially like 90% plus fat versus muscle loss. Thank you.

Yes. Well, once again, what we focused on is creating individual reagents that allow us to best dissect the pathway and separate out which are the most important players. As you're aware, other people, for example, are using an antibody that blocks all the pathways, not only the two that we've targeted, but about 20 others that are irrelevant for muscle and we know are known to have a variety of other potential side effects and adverse effects. So we targeted the two muscle specific pathways in this whole mechanism. And what we want to see is which one might have the best efficacy to safety profile that we believe is very important. Once we determine that, we may move forward with either one or both of these antibodies in combination with the weight loss agents or we also have been developing in our pipeline, a variety of unimolecular solutions that will allow a single molecule to do whichever one of these multiple pathways we want to attack in addition to the weight loss pathway. So what we're hoping to do is by dissecting the pathway as precisely and scientifically as possible, allow us to choose between the unimolecular solutions that we can have to follow on. That said, remember, it's not just a matter of amplifying the weight loss because with more weight loss, regardless of pathway you use, you can throw on the GLP-1 agonist, you can throw on GPR antagonist, you can lay on additional pathways. The more rate loss and the more rapidly occurs, which is what patients want, out of necessity because you're mimicking the starvation to get the pathway, it inevitably leads to muscle loss because of why, because of activation of these very pathways that we're looking at. So any approach right now that focuses on rapidly causing weight loss will of necessity because it plugs into evolutionarily conserved pathways of necessity will result in profound lean body and muscle loss, which can be a huge detriment to these patients especially the older obese patient. And by invoking these agents blocking these specific pathways, we may be able to do two things. We may block this associated necessarily evolutionary conserved muscle loss that accompanies rapid and profound weight loss while also perhaps increasing the amount of fat loss, which is what you specifically want to lose. This is what we've now shown in preclinical studies, including through nonhuman primates and these studies that we're embarking on right now should tell us whether all of these pathways, which are incredibly evolutionarily conserved will indeed pertain in humans and whether we really can optimize not only the weight loss, that's not what's important, but optimize particularly fat loss while maintaining the muscle. And we believe we're the only ones who are properly precisely interrogating the pathways and we'll be able to dissect them to decide on which exactly is the best, safest pathway to give the best benefit to the patient.

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

Our next question comes from the line of Chris Schott with JPMorgan. Your line is now open.

Great. Thanks so much for the question. Just on linvo, DUPIXENT and food allergy. I know it's early but an exciting program. Can you help us just a bit to frame out the number of patients or percent of those with food allergy where you think this could be an appropriate treatment if the data we see later this year and going forward supports moving that combination forward? Thanks so much.

I think that it's all going to be a matter of the benefit to risk profile once again. And this is what, as I've said in these other programs we're focusing on. We believe, based on all the data that we've shown, that we may have a very safe way of eliminating the actual cells that are causing all these allergic responses and then very safely keep them from coming back by giving one of the world's historically most safe biologics, which is DUPIXENT. Of course, we have to prove this in patients. And so we are starting in the most severe food allergy patients. And in these patients where they have, for example, very high unmet need, very high risks and so forth, it warrants undertaking this approach. The more effective it is, but more importantly, the safer we can prove it is then the broader the population can go. And in fact, if ultimately, we really have a very safe way of eliminating all allergy inducing cells and then preventing their rebound. And remember, particularly, most of these patients are also suffering from other allergic diseases, some of them may already be indicated for DUPIXENT. So you're giving them a drug which may actually be helping them anyway and has been shown to be quite safe in terms of as almost any biologic goes. We may be able to go into milder and milder allergy patients. So we can start and we are starting with the most severe patients we're seeing in these patients with a high unmet need, whether this approach is both effective, but also safe and how safe it is and the safer it is, we can broaden wider and wider. There's also ultimately no need to be limited to food allergies, you can actually eliminate essentially all allergies from the most serious to the most mundane, but it depends on the benefit risk and the safety, which is what we're testing in these initial studies. And for the initial studies, we're taking the most severe food-allergic patients who have a very high unmet need and very high risk profile depending on how it goes there, we can broaden to milder and milder types of disease.

I mean the numbers I get are quite staggering. Looking at -- if you just look at the number of emergency room visits a year, it could be hundreds of thousands of millions of people go to the emergency room for food-based allergies. Obviously, a smaller number for actual anaphylaxis. But just to reinforce exactly what George says, if all it takes is an induction in BCMA to induce the process where you can get on to Dupi, Dupi is a very safe agent, and we've got hundreds of thousands, approaching million of patients on the drug. So we know the profile of that drug. So this is all makes great scientific sense. We just have to take our time, do it safely and see how it develops.

Thanks, Len and George. Let's move to the next question, please, Shannon.

Our next question comes from the line of Tim Anderson with Wolfe Research. Your line is now open.

Thank you very much. I have a question on EYLEA and this DOJ investigation into the marketing practices that emerged since April, where they assert that you guys violate the False Claims Act. Can you provide an update on kind of what happens from here, specifically in the interim and out of prudence, has Regeneron changed any of its marketing practices since April. And is that having any impact even on prescribers. I asked because on Slide 6, you mentioned, other market dynamics that resulted in lower volumes and lower price. I am just wondering what those where.

There's nothing in the marketplace related to this lawsuit. And frankly we think there's nothing to this lawsuit. And we have not changed our practice, and we intend to fight it vigorously. And I think once you see our papers in court, you'll get a much better understanding of that.

Let's move to the next question, please.

Our next question comes from the line of David Risinger with Leerink Partners. Your line is now open.

Yes. Thanks very much. So Regeneron is obviously a tremendous R&D leader, but there's also substantial innovation happening outside of the company, and the company has a tremendous balance sheet that it's not really putting to work. So my question is, is there an opportunity to leverage Regeneron's eye disease commercial presence by acquiring novel potential blockbuster therapies for severe eye disease. And if so, does the company see any opportunities in the near to medium term to do so? Thanks very much.

Yes, it's a great question, and it's one we ask every day here. Is there some opportunity that we are -- isn't resulting from our own innovation that we should be trying to acquire. We have not seen any such large scale. Obviously, we've done some smaller scale and hundreds of millions of kind of numbers or a few million and whether or not we would -- we could leverage any of our in-line products or research capabilities, it's certainly something we think about, but there's nothing that we at the moment for late-stage products see an opportunity for.

Thanks, Len. Let's move to the next question please, Shannon.

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

Good morning. Thanks for taking my question. On the Factor XI programs here, could you speak to the potential commercial opportunity that are represented and what the future development plans look like here? Thank you.

Well, as I said, we're in the stages of evaluating our Factor XI two classes of antibodies that are attacking this pathway in two different ways. We expect I think we've already talked about. One of them will be more effective at preventing clot formation, but potentially come with slightly more serious side effect profiles. The other might be less effective, but much safer. And as I said, we thought it was important to really precisely interrogate this pathway using these two antibodies that are attacking, two different parts. So this is one enzyme. It has an activation domain, a catalytic domain. And by blocking independently the two different domains, we expect to deliver two different profiles each one with the best-in-class antibody. Once we really understand those profiles, we will understand in which directions to be taken either one or both potentially in antibodies. We can easily imagine taking forward, the more effective one, but for a higher-risk patients, let's say, the less effective one into settings where you might want more safety and clot prevention is not as important. So all of this is going to depend on these profiles. And as I said, we hope to get our key data by the end of this year, and that should better define the efficacy and safety profile how they compare to the various existing agents that are out there now and which direction to take them for which indication. So two antibodies, two distinct profiles we hope to better understand them based on our initial proof-of-concept study. And from there, we'll understand where to take them and what the ultimate opportunity will be. But obviously there's still enormous need here for agents that can block, clot and thrombus formation. And so much depends on safety profiles here, and we're very excited about having the opportunity to have these two very related but distinct profiles.

Just to amplify a little bit of what George said the direct oral anticoagulant market is a very, very large market. It's about a $20 billion market. if you could bring to part of that market, most of that market or some fragment similar efficacy, but with a better safety profile then you really have a big opportunity here. So that's what we're sort of focusing on. Can we deliver with one or the other antibody in the proper setting, as George was suggesting a same or better efficacy, but with a better safety profile. If we can give you that, if we can give patients that, then we will be able to really have a big large market opportunity.

And there are many settings where you don't use certain agents because of the safety profile, which could create whole new opportunities as well.

Okay. Thank you. Let's move to the next question please, Shannon.

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

Good morning. Congrats on the quarter. I appreciated the earlier commentary from Len on the pre-filled syringe effort, I guess, but for Marion and the team, just the confidence that the high dose launch momentum won't be disrupted by the relative near-term disadvantage of VABYSMO having a pre-filled syringe and if you wanted to give more specificity on your own time lines, that would be appreciated. Thank you.

Well, I think I said in my prepared remarks that we're anticipating a launch in early 2025. I'm not sure what the competition is actually going to do about launching, but we're a matter of months, I think, a part if they launch ahead of us. And so I don't think that, that's going to have a significant impact in the marketplace where people really are focused, I think, on the profile of our drug, the durability of our drug, the safety experience they've had with aflibercept, the active ingredient. So we feel pretty confident in the ongoing launch.

Okay. Thank you. We have time for two more questions, please, Shannon.

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

Hi. This is Chris on for Terence. Just one question from us about EYLEA HD. Given what you have seen in the market dynamics in 2Q. How should we think about the pace of conversion for the second half of 2024?

You should think hard about it. That's your job. I don't know if Marion wants to have any comment there.

I would just say that as I commented earlier, we're very pleased in our progress in the EYLEA HD launch.

All right. Thank you. Let's move to the final question, please, Shannon.

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

Thank you very much for taking my question, Shannon. I just want to, again, talk about EYLEA HD. In terms of -- Marion, if you could comment on, at this point, how much is switch versus naive patient adjustment? I assume most of them are switch and are they difficult to treat patients in the beginning? And then when you think about going forward, do you think you're in the early innings of conversion? Or do you think there is some other dynamics we should think about from the pricing as well as access point of view as we model EYLEA HD versus standard dose EYLEA going forward? Thank you.

So it's always a combination of initiation for EYLEA HD of switch patients and then, of course, naive patients. So I'd mentioned the profile today of switch patients to EYLEA HD, which is very encouraging comes not surprisingly from EYLEA because it's the largest product in the category, secondarily from faricimab. And then the third source of switch patients would be avastin and then there's everything else. But what's really encouraging, as I mentioned in the quarter, is that the utilization among treatment-naive patients doubled from the prior quarter. So we'll continue to see an ongoing combination as does every product potentially, if it's got the right profile in the category, but the evolution of prescribing to EYLEA HD is progressing very well.

Thanks, Marion, and thanks to everyone who dialed in today for your interest in Regeneron. We apologize to those remaining in the Q&A queue that did not have a chance -- that we did not have a chance to hear from. As always, the IR team is available to answer any remaining questions that you may have. Thank you once again and have a great day.

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