Google earnings: Alphabet stock jumps nearly 4%, sees revenue jump 34% to $55.3 billion in the first quarter

Google’s parent company reported revenues of $55.3 billion for the first three months of the year — a 34% jump from the same period last year — and made close to $18 billion in profit, comfortably blowing past analyst estimates. It also announced a $50 billion stock buyback.

The company’s stock jumped nearly 4% in after-hours trading on Tuesday.

“Over the last year, people have turned to Google (GOOG) Search and many online services to stay informed, connected and entertained,” Google and Alphabet CEO Sundar Pichai said in a statement Wednesday.

Google’s cloud business, which the company has increasingly leaned on to diversify from its core advertising revenue, trimmed its losses to $974 million from $1.7 billion in the same quarter last year. Revenue from cloud increased 46% year over year, to $4 billion.

“Our Cloud services are helping businesses, big and small, accelerate their digital transformations,” Pichai added.

With the vaccination rollout around the United States in full swing and a broader reopening of the country on the horizon, tech companies that made billions off people forced to work from home may now have to change their strategies. This week’s earnings bonanza will be a big early indicator, with Facebook (FB), Apple (AAPL), Amazon (AMZN), Twitter (TWTR), Microsoft (MSFT) and chipmaker AMD (AMD) all set to report earnings in the coming days. Google, for its part, benefited from a big increase in digital ad spending and cloud computing investments
While the full extent of a return to pre-pandemic life won’t be apparent for some time, there are reasons for tech investors to remain optimistic. Businesses are preparing to let workers continue to log in remotely, which means a continued reliance on gadgets and services. And some of the transformation that has occurred over the last year, such as more digital meetings or virtual doctor’s visits, is likely to stick.
Some headwinds do exist, however, including the possibility of greater regulation and the Biden administration’s desire to raise corporate and capital gains taxes.

China GDP Q1 2021: Economy grows by a record 18.3% in the first quarter

The world’s second largest economy grew 18.3% in the first quarter of 2021 compared to a year earlier, according to government statistics released Friday. That’s the best quarterly growth since 1992, when China started publishing such figures.
The surge is mainly because of a low base effect, as China had shut down large swaths of its economy in early 2020 to contain the coronavirus outbreak. On a quarterly basis, the Chinese economy grew only 0.6% in the January-to-March period, according to the government. In the fourth quarter of 2020, the economy had expanded 6.5%.

Still, the growth figures indicate that China’s economic recovery continues to gather steam.

The world’s second largest economy has performed well relative to the rest of the globe. China was the only major economy to record growth in 2020, expanding 2.3% as many countries struggled to contain the coronavirus pandemic. Chinese authorities called last year’s performance “better than we had expected.”

Earlier this week, customs statistics showed the country’s imports jumped more than 38% last month in US dollar terms compared to a year earlier, a sign that demand within China is picking up. Exports grew by nearly 31%.

Sohu.com Reports Fourth Quarter and Fiscal Year 2020 Unaudited Financial Results

BEIJING, Feb. 4, 2021 /PRNewswire/ — Sohu.com Limited (NASDAQ: SOHU), China’s leading online media, video, search and gaming business group, today reported unaudited financial results for the fourth quarter and fiscal year ended December 31, 2020.

In view of the previously-announced Share Purchase Agreement between subsidiaries of Tencent Holdings Limited (“Tencent“) and the Company and its wholly-owned subsidiary Sohu.com (Search) Limited (“Sohu Search”) with respect to Sohu Search’s Sogou Inc. (“Sogou”) shares (the “Sogou Share Purchase”), the results of operations for Sogou have been excluded from the Company’s results from continuing operations in the Company’s condensed consolidated statements of operations and are presented in separate line items as discontinued operations. Retrospective adjustments to the historical statements have been made in order to provide a consistent basis of comparison. Unless indicated otherwise, results presented in this release are related to continuing operations only.

Fourth Quarter Highlights

  • Total revenues were US$253 million[1], up 34% year-over-year and 60% quarter-over-quarter.
  • Brand advertising revenues were US$42 million, flat year-over-year and up 2% quarter-over-quarter.
  • Online game revenues were US$196 million, up 49% year-over-year and 94% quarter-over-quarter.
  • GAAP net income from continuing operations attributable to Sohu.com Limited was US$47 million, compared with a net loss of US$29 million in the fourth quarter of 2019 and a net loss of US$15 million in the third quarter of 2020.
  • Non-GAAP net income from continuing operations attributable to Sohu.com Limited was US$53 million, compared with a net loss of US$6 million in the fourth quarter of 2019 and a net loss of US$7 million in the third quarter of 2020.

Fiscal Year 2020 Highlights

  • Total revenues were US$750 million, up 11% compared with 2019. 
  • Brand advertising revenues were US$147 million, down 16% compared with 2019. 
  • Online game revenues were US$537 million, up 22% compared with 2019.
  • GAAP net loss from continuing operations attributable to Sohu.com Limited was US$55 million. Excluding the impact of an additional accrual of withholding income tax recognized by Changyou in the second quarter of 2020[2], GAAP net income attributable to Sohu.com Limited was US$33 million, compared with a net loss of US$157 million in 2019.
  • Excluding the impact of the additional accrual of withholding income tax described above, non-GAAP net income from continuing operations attributable to Sohu.com Limited was US$51 million, compared with a net loss of US$128 million in 2019.

[1] On a constant currency (non-GAAP) basis, if the exchange rate in the fourth quarter of 2020 had been the same as it was in the fourth quarter of 2019, or RMB7.03=US$1.00, US$ total revenues in the fourth quarter of 2020 would have been US$239 million, or US$14 million less than GAAP total revenues, and up 27% year-over-year.

[2] Following completion of the Changyou privatization, Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends. As a result, Changyou recognized an additional accrual of withholding income tax of US$88 million in the second quarter of 2020.

Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, “For the fourth quarter of 2020 and for the whole year, we faced significant challenges with the outbreak of the COVID-19 pandemic and the uncertain macroeconomic environment. However, with our continuing efforts to innovate products and technology, improve monetization efficiency and strictly control our budgets, we were able to return to profitability as we recorded net income of US$53 million this quarter, which greatly exceeded our previous guidance. For the whole year of 2020, excluding an additional accrual of withholding income tax made by Changyou in the second quarter, we also achieved a profit of US$51 million. For Sohu Media Portal and Video, we continued to focus on generating and distributing real-time and reliable news and premium content, and strengthened our competitiveness and credibility as a mainstream media platform. We consistently upgraded our live broadcasting technology, integrated it into the Sohu product matrix, and applied it widely to various content marketing events, which further enhanced the overall value of the Sohu Media Portal and Video. Benefitting from our continuous efforts, our brand advertising revenues reached the high -end of our previous guidance this quarter. For Changyou, thanks to the solid performance of some special servers for TLBB PC that launched during the quarter, the online games business performed well as revenue exceeded the high end of our prior guidance.”

Fourth Quarter Financial Results 

Revenues

Total revenues were US$253 million, up 34% year-over-year and 60% quarter-over-quarter.

Brand advertising revenues totaled US$42 million, flat year-over-year and up 2% quarter-over-quarter.

Online game revenues were US$196 million, up 49% year-over-year and 94% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were mainly due to the successful launch of a number of special servers for TLBB PC that used a memorable early version of the game for content (“TLBB Vintage”).

Gross Margin

Both GAAP and non-GAAP[3] gross margin was 79%, compared with 64% in the fourth quarter of 2019 and 66% in the third quarter of 2020.

Both GAAP and non-GAAP gross margin for the brand advertising business was 31%, flat with that of fourth quarter of 2019 and third quarter of 2020. 

Both GAAP and non-GAAP gross margin for online games was 90%, compared with 75% in the fourth quarter of 2019 and 80% in the third quarter of 2020. The year-over-year increase in gross margin was mainly due to an increase in online game revenues, as well as a decrease in online game costs as a result of lower revenue-sharing payments related to TLBB Honor. The quarter-over-quarter increase in gross margin was mainly due to an increase in online game revenues, while costs remained relatively flat.

[3] Non-GAAP results exclude share-based compensation expense; non-cash tax benefits from excess tax deductions related to share-based awards; changes in fair value recognized in the Company’s consolidated statements of operations with respect to equity investments with readily determinable fair values; an impairment charge recognized for investments unrelated to the Company’s core businesses; income/expense from an adjustment of contingent consideration previously recorded for acquisitions; and interest expense recognized in connection with the one-time transition tax (the “Toll Charge”) imposed by the U.S. Tax Cuts and Jobs Act signed into law on December 22, 2017 (the “U.S. TCJA”). Explanation of the Company’s non-GAAP financial measures and related reconciliations to GAAP financial measures are included in the accompanying “Non-GAAP Disclosure” and “Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP Measures.”

Operating Expenses

For the fourth quarter of 2020, GAAP operating expenses totaled US$133 million, up 13% year-over-year and 16% quarter-over-quarter. Non-GAAP operating expenses were US$132 million, up 15% year-over-year and 21% quarter-over-quarter. The year-over-year increase in operating expenses was mainly due to increases in Changyou’s licensing fees, as well as increases in marketing expenses. The quarter-over-quarter increase was mainly due to increases in marketing expenses.

Operating Profit/(Loss)

GAAP operating profit was US$67 million, compared with an operating profit of US$2 million in the fourth quarter of 2019 and an operating loss of US$11 million in the third quarter of 2020.

Non-GAAP operating profit was US$68 million, compared with an operating profit of US$6 million in the fourth quarter of 2019 and an operating loss of US$5 million in the third quarter of 2020. 

Income Tax Expense/(Benefit)

GAAP income tax expense was US$21 million, compared with an income tax benefit of US$3 million in the fourth quarter of 2019 and income tax expense of US$11 million in the third quarter of 2020. Non-GAAP income tax expense was US$21 million, compared with an income tax benefit of US$6 million in the fourth quarter of 2019 and income tax expense of US$10 million in the third quarter of 2020. The income tax expense in the fourth quarter of 2020 and the income tax benefit in the fourth quarter of 2019 included one-time tax benefits of US$7 million and US$19 million, respectively, that were recognized as a result of some of Changyou’s subsidiaries having been granted preferential tax rates upon their receipt of Key National Software Enterprise status or Software Enterprise status.

Net Income/(Loss)

GAAP net income from continuing operations attributable to Sohu.com Limited was US$47 million, or net income of US$1.18 per fully-diluted ADS, compared with a net loss of US$29 million in the fourth quarter of 2019 and a net loss of US$15 million in the third quarter of 2020.

Non-GAAP net income from continuing operations attributable to Sohu.com Limited was US$53 million, or net income of US$1.33 per fully-diluted ADS, compared with a net loss of US$6 million in the fourth quarter of 2019 and a net loss of US$7 million in the third quarter of 2020.

Liquidity

As of December 31, 2020, cash and cash equivalents and short-term investments were US$318 million.

Fiscal Year 2020 Financial Results

Revenues

Total revenues were US$750 million, up 11% compared with 2019.

Brand advertising revenues were US$147 million, down 16% compared with 2019. The decrease was mainly due to the continuing negative impact of the COVID-19 outbreak in 2020.

Online game revenues were US$537 million, up 22% compared with 2019. The year-over-year increase was mainly due to the successful launch of TLBB Vintage during the fourth quarter of 2020.

Gross Margin

Both GAAP and non-GAAP gross margin was 71%, compared with 64% in 2019.

Both GAAP and non-GAAP gross margin for the brand advertising business was 28%, compared with 28% in 2019.

Both GAAP and non-GAAP gross margin for online games was 83%, compared with 80% in 2019.

Operating Expenses

For 2020, GAAP operating expenses totaled US$459 million, down 8% compared with 2019. Non-GAAP operating expenses were US$445 million, down 11% compared with 2019. The decrease in operating expenses was mainly due to decreased marketing expenses.

Operating Profit/(Loss)

GAAP operating profit was US$73 million, compared with an operating loss of US$71 million in 2019.

Non-GAAP operating profit was US$88 million, compared with an operating loss of US$69 million in 2019. 

Income Tax Expense

GAAP income tax expense was US$133 million, compared with income tax expense of US$28 million in 2019. Non-GAAP income tax expense was US$127 million, compared with income tax expense of US$20 million in 2019. The income tax expense in 2020 included an additional accrual of withholding income tax of US$88 million recognized by Changyou in the second quarter of 2020, as Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends after the completion of the privatization of Changyou. The income tax expense in the fourth quarter of 2020 and the income tax benefit in the fourth quarter of 2019 included one-time tax benefits of US$7 million and US$19 million, respectively, that were recognized as a result of some of Changyou’s subsidiaries having been granted preferential tax rates upon their receipt of Key National Software Enterprise status or Software Enterprise status.

Net Income/(Loss)

GAAP net loss from continuing operations attributable to Sohu.com Limited was US$55 million, or US$1.40 loss per fully-diluted ADS. Non-GAAP net loss from continuing operations attributable to Sohu.com Limited was US$37 million, or US$0.94 loss per fully-diluted ADS. 

Excluding the impact of the additional accrual of withholding income tax described above, GAAP net income from continuing operations attributable to Sohu.com Limited was US$33 million, or net income of US$0.82 per fully-diluted ADS, compared with a net loss of US$157 million in 2019; non-GAAP net income from continuing operations attributable to Sohu.com Limited was US$51 million, or net income of US$1.29 per fully-diluted ADS, compared with a net loss of US$128 million in 2019.

Supplementary Information for Changyou Results

Fourth Quarter 2020 Operating Results

  • For PC games, total average monthly active user accounts[4] (MAU) were 2.3 million, an increase of 5% year-over-year and 17% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were mainly driven by the successful launch of TLBB Vintage during the quarter, partially offset by the termination of operation of Warframe. Total quarterly aggregate active paying accounts[5] (APA) were 0.9 million, a decrease of 6% year-over-year and 4% quarter-over-quarter. The decreases were mainly due to the termination of operation of Warframe.
  • For mobile games, total average MAU were 2.4 million, a decrease of 35% year-over-year and quarter-over-quarter. Total quarterly APA were 0.6 million, a decrease of 46% year-over-year and 7% quarter-over-quarter. The decreases in MAU and APA compared with the fourth quarter of 2019 reflected the natural declining life cycles of Changyou’s older games, including Legacy TLBB Mobile and TLBB Honor. Comparing with the third quarter of 2020, the decrease of MAU was mainly from Illusion Connect and the decrease of APA was mainly from TLBB Honor.

[4] Monthly active user accounts refers to the number of registered accounts that are logged in to these games at least once during the month.

[5] Quarterly aggregate active paying accounts refers to the number of accounts from which game points are utilized at least once during the quarter.

Fourth Quarter 2020 Unaudited Financial Results

Total revenues were US$199 million, an increase of 47% year-over-year and 91% quarter-over-quarter. Online game revenues were US$196 million, an increase of 49% year-over-year and 94% quarter-over-quarter. Online advertising revenues were US$3 million, a decrease of 23% year-over-year and 4% quarter-over-quarter.

GAAP and non-GAAP gross profit were both US$179 million, an increase of 78% year-over-year and 115% quarter-over-quarter.

GAAP operating expenses were US$68 million, an increase of 28% year-over-year and quarter-over-quarter. The year-over-year increase was mainly due to an increase in licensing fees. The quarter-over-quarter increase was mainly due to an increase in licensing fees, as well as an increase in marketing and promotional spending for online games.

Non-GAAP operating expenses were US$67 million, an increase of 32% year-over-year and 33% quarter-over-quarter.

GAAP operating profit was US$110 million, compared with an operating profit of US$47 million for the fourth quarter of 2019 and US$30 million for the third quarter of 2020.

Non-GAAP operating profit was US$112 million, compared with a non-GAAP operating profit of US$50 million for the fourth quarter of 2019 and US$33 million for the third quarter of 2020.

Fiscal Year 2020 Unaudited Financial Results

Total revenues were US$548 million, an increase of 20% year-over-year. Online game revenues were US$537 million, an increase of 22% year-over-year. Online advertising revenues were US$12 million, a decrease of 15% year-over-year.

GAAP gross profit was US$453 million, an increase of 26% year-over-year. Non-GAAP gross profit was US$454 million, an increase of 26% year-over-year.

GAAP operating expenses were US$228 million, an increase of 18% year-over-year. The year-over-year increase was mainly due to an increase in licensing fees, as well as an increase in share-based compensation expense as new share-based awards took effect in the fourth quarter of 2019.

Non-GAAP operating expenses were US$216 million, an increase of 13% year-over-year.

GAAP operating profit was US$226 million, compared with an operating profit of US$167 million for 2019.

Non-GAAP operating profit was US$238 million, compared with a non-GAAP operating profit of US$169 million for 2019.

Business Outlook

For the first quarter of 2021, Sohu estimates:

  • Brand advertising revenues to be between US$27 million and US$32 million; this implies an annual increase of 5% to 25% and a sequential decrease of 23% to 35%.
  • Online game revenues to be between US$137 million and US$147 million; this implies an annual increase of 3% to 10% and a sequential decrease of 25% to 30%.
  • Non-GAAP net income from continuing operations attributable to Sohu.com Limited to be between US$5 million and US$15 million; and GAAP net income from continuing operations attributable to Sohu.com Limited to be between US$1 million and US$11 million.

For the first quarter 2021 guidance, the Company has adopted a presumed exchange rate of RMB6.54=US$1.00, as compared with the actual exchange rate of approximately RMB6.97=US$1.00 for the first quarter of 2020, and RMB6.63=US$1.00 for the fourth quarter of 2020. 

This forecast reflects Sohu’s management’s current and preliminary view, which is subject to substantial uncertainty, particularly in view of the potential ongoing impact of the worldwide COVID-19 pandemic, which remains difficult to predict.

Non-GAAP Disclosure

To supplement the unaudited consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), Sohu’s management uses non-GAAP measures of gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per ADS, which are adjusted from results based on GAAP to exclude the impact of the share-based awards, which consist mainly of share-based compensation expense and non-cash tax benefits from excess tax deductions related to share-based awards;  changes in fair value recognized in the Company’s consolidated statements of operations with respect to equity investments with readily determinable fair values; an impairment charge recognized for investments unrelated to the Company’s core businesses; income/expense from an adjustment of contingent consideration previously recorded for acquisitions; and interest expense recognized in connection with the Toll Charge imposed by the U.S. TCJA. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

Sohu’s management believes excluding share-based compensation expense, changes in fair value recognized in the Company’s consolidated statements of operations with respect to equity investments with readily determinable fair values; an impairment charge recognized for investments unrelated to the Company’s core businesses; non-cash tax benefits from excess tax deductions related to share-based awards; income/expense from an adjustment of contingent consideration previously recorded for acquisitions; and interest recognized in connection with the Toll Charge from its non-GAAP financial measure is useful for itself and investors. Further, the impact of share-based compensation expense and changes in fair value recognized in the Company’s consolidated statements of operations with respect to equity investments with readily determinable fair values; impairment charge recognized for investments unrelated to the Company’s core businesses; non-cash tax benefits from excess tax deductions related to share-based awards; income/expense from the adjustment of contingent consideration previously recorded for acquisitions; and interest expense recognized in connection with the Toll Charge cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts that have been the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As the impact of share-based compensation expense and changes in fair value recognized in the Company’s consolidated statements of operations with respect to equity investments with readily determinable fair values, an impairment charge recognized for investments unrelated to the Company’s core businesses, non-cash tax benefits from excess tax deductions related to share-based awards, and income/expense from an adjustment of contingent consideration previously recorded for acquisitions does not involve subsequent cash outflow or is reflected in the cash flows at the equity transaction level, Sohu does not factor this impact in when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result, in general, the monthly financial results for internal reporting and any performance measures for commissions and bonuses are based on non-GAAP financial measures that exclude share-based compensation expense and changes in fair value recognized in the Company’s consolidated statements of operations with respect to equity investments with readily determinable fair values, an impairment charge recognized for investments unrelated to the Company’s core businesses, non-cash tax benefits from excess tax deductions related to share-based awards, and income/expense from the adjustment of contingent consideration previously recorded for acquisitions, and also excluded the interest expense recognized in connection with the Toll Charge.

The non-GAAP financial measures are provided to enhance investors’ overall understanding of Sohu’s current financial performance and prospects for the future. A limitation of using non-GAAP gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per ADS, excluding share-based compensation expense, non-cash tax benefits from excess tax deductions related to share-based awards, and income/expense from the adjustment of contingent consideration previously recorded for acquisitions, is that the impact of share-based awards and non-cash tax benefits from excess tax deductions related to share-based awards has been and will continue to be a significant recurring expense in Sohu’s business for the foreseeable future, and income/expense from the adjustment of contingent consideration previously recorded for acquisitions may recur in the future. In order to mitigate these limitations Sohu has provided specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables include details on the reconciliation between the GAAP financial measures that are most directly comparable to the non-GAAP financial measures that have been presented.

Notes to Financial Information

Financial information in this press release other than the information indicated as being non-GAAP is derived from Sohu’s unaudited financial statements prepared in accordance with GAAP.

Safe Harbor Statement

This announcement contains forward-looking statements. It is currently expected that the Business Outlook will not be updated until release of Sohu’s next quarterly earnings announcement; however, Sohu reserves right to update its Business Outlook at any time for any reason. Statements that are not historical facts, including statements about Sohu’s beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, instability in global financial and credit markets and its potential impact on the Chinese economy; exchange rate fluctuations, including their potential impact on the Chinese economy and on Sohu’s reported US dollar results; recent slow-downs in the growth of the Chinese economy; the uncertain regulatory landscape in the People’s Republic of China; fluctuations in Sohu’s quarterly operating results; the possibilities that Sohu will be unable to recoup its investment in video content and that Changyou will be unable to develop a series of successful games for mobile platforms or successfully monetize mobile games it develops or acquires; Sohu’s reliance on online advertising sales, online games and mobile services for its revenues; the impact of the U.S. TCJA; the effects of the COVID-19 virus on the economy in China in general and on Sohu’s business in particular; the possibility that the pending Sogou Share Purchase and the pending previously-announced merger of Sogou with a subsidiary of Tencent (the “Sogou Merger”) contemplated by an Agreement and Plan of Merger (the “Sogou Merger Agreement”) with direct and indirect wholly-owned subsidiaries of Tencent will not occur as planned if events arise that result in the termination of the Share Purchase Agreement and/or the Sogou Merger Agreement, or if one or more of the various closing conditions to the Sogou Share Purchase and/or the Sogou Merger, including without limitation anti-trust clearance of the Sogou Share Purchase under PRC law, are not satisfied or waived.  Further information regarding these and other risks is included in Sohu’s annual report on Form 20-F for the year ended December 31, 2019, and other filings with and information furnished to the Securities and Exchange Commission.

Conference Call and Webcast 

Sohu’s management team will host a conference call at 7:30 a.m. U.S. Eastern Time, February 4, 2021 (8:30 p.m. Beijing/Hong Kong time, February 4, 2021) following the quarterly results announcement. Participants can register for the conference call by navigating to http://apac.directeventreg.com/registration/event/9366048. Once preregistration has been completed, participants will receive dial-in numbers, an event passcode, and a unique registrant ID.

To join the conference, please dial the number you receive, enter the event passcode followed by your unique registrant ID, and you will be joined to the conference instantly. Please dial in 10 minutes before the call is scheduled to begin.

A telephone replay of the call will be available after the conclusion of the conference call at 10:30 a.m. Eastern Time February 4 through February 11, 2021. The dial-in details for the telephone replay are:

International:

+1-646-254-3697

Passcode:

9366048

The live Webcast and archive of the conference call will be available on the Investor Relations section of Sohu’s Website at http://investors.sohu.com/.  

About Sohu.com

Sohu.com Limited (NASDAQ: SOHU) is China’s premier online brand and indispensable to the daily life of millions of Chinese, providing a network of web properties and community based/web 2.0 products which offer the vast Sohu user community a broad array of choices regarding information, entertainment and communication. Sohu has built one of the most comprehensive matrices of Chinese language web properties and proprietary search engines, consisting of the mass portal and leading online media destination www.sohu.com; interactive search engine www.sogou.com; developer and operator of online games www.changyou.com/en/ and online video website tv.sohu.com.

Sohu’s corporate services consist of online brand advertising on Sohu’s matrix of websites as well as bid listing and home page on its in-house developed search directory and engine. Sohu also provides multiple news and information services on mobile platforms, including Sohu News App and the mobile news portal m.sohu.com. Sohu’s online game subsidiary Changyou develops and operates a diverse portfolio of PC and mobile games, such as Tian Long Ba Bu (“TLBB”), one of the most popular PC games in China. Changyou also owns and operates the 17173.com Website, a game information portal in China. Sohu’s online search subsidiary Sogou (NYSE: SOGO) has grown to become the second largest search engine by mobile queries in China. It also owns and operates Sogou Input Method, the largest Chinese language input software. Sohu, established by Dr. Charles Zhang, one of China’s internet pioneers, is in its twenty-fifth year of operation.

For investor and media inquiries, please contact:

In China:

In the United States:

SOHU.COM LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)











Three Months Ended



Twelve Months Ended



Dec. 31, 2020


Sep. 30, 2020


Dec. 31, 2019



Dec. 31, 2020


Dec. 31, 2019

Revenues:












    Brand advertising

$

41,810

$

41,094

$

41,640


$

146,526

$

175,056

    Online games


196,063


101,324


131,689



536,684


440,902

    Others


15,362


15,476


15,376



66,680


57,845

Total revenues


253,235


157,894


188,705



749,890


673,803













Cost of revenues:












    Brand advertising (includes share-based
    compensation expense of $-59, $240, $2, $177, and
    $22, respectively)


28,836


28,459


28,677



105,604


126,406

    Online games (includes share-based compensation
    expense of $79, $151, $137, $543,and $120,
    respectively)


19,154


20,024


33,181



91,526


88,992

Others 


5,086


5,075


6,928



20,307


28,249

Total cost of revenues


53,076


53,558


68,786



217,437


243,647













Gross profit


200,159


104,336


119,919



532,453


430,156













Operating expenses:












    Product development (includes share-based
    compensation expense of $966, $2,469, $1,992, $7,326,
    and $1,365, respectively) 


65,671


59,532


58,316



241,941


234,852

    Sales and marketing (includes share-based
    compensation expense of $-95, $496, $1, $458, and $-
    327, respectively) 


51,945


40,250


43,789



159,787


204,665

    General and administrative (includes share-based
    compensation expense of $459, $2,516,  $1,135,
    $5,976,and $1,170, respectively)


15,696


15,176


15,475



57,354


54,591

    Goodwill impairment and impairment of intangibles
    via acquisitions of businesses







7,245

Total operating expenses


133,312


114,958


117,580



459,082


501,353













Operating profit/(loss)


66,847


(10,622)


2,339



73,371


(71,197)













Other income/(expense), net


1,738


7,859


(12,563)



25,993


7,963

Interest income


2,670


1,933


969



7,369


6,103

Interest expense


(1,176)


(1,352)


(2,501)



(6,234)


(14,370)

Exchange difference


(2,080)


(2,043)


(785)



(3,800)


1,430

Income/(loss) before income tax expense


67,999


(4,225)


(12,541)



96,699


(70,071)













Income tax expense/(benefit)

21,416

11,082

(2,908)



133,226


28,428

Net income/(loss) from continuing operations


46,583


(15,307)


(9,633)



(36,527)


(98,499)

Net income/(loss) from discontinued operations, net of
tax[6]


(9,212)


(42,181)


34,989



(91,793)


55,108

Net income/(loss)


37,371


(57,488)


25,356



(128,320)


(43,391)













Less: Net income/(loss) from continuing operations
attributable to the noncontrolling interest
shareholders


2


(50)


19,429



18,448


58,223

Less: Net income/(loss) from discontinued
operations attributable to the noncontrolling
interest shareholders


(6,119)


(27,874)


23,022



(60,656)


47,722













Net income/(loss) from continuing operations
attributable to Sohu.com Limited


46,581


(15,257)


(29,062)



(54,975)


(156,722)

Net income/(loss) from discontinued operations
attributable to Sohu.com Limited


(3,093)


(14,307)


11,967



(31,137)


7,386

Net income/(loss) attributable to Sohu.com Limited


43,488


(29,564)


(17,095)



(86,112)


(149,336)













Basic net income/(loss) from continuing operations per
ADS attributable to Sohu.com Limited

$

1.18

$

(0.39)

$

(0.74)


$

(1.39)

$

(3.99)

Basic net income/(loss) from discontinued operations
per ADS attributable to Sohu.com Limited

$

(0.08)

$

(0.36)

$

0.30


$

(0.79)

$

0.19

Basic net income/(loss) per ADS attributable to
Sohu.com Limited

$

1.10

$

(0.75)

$

(0.44)


$

(2.18)

$

(3.80)

ADS used in computing basic net income/(loss) per
ADS attributable to Sohu.com Limited


39,508


39,286


39,263



39,452


39,249













Diluted net income/(loss) from continuing operations
per ADS attributable to Sohu.com Limited

$

1.18

$

(0.39)

$

(0.75)


$

(1.40)

$

(4.01)

Diluted net income/(loss) from discontinued operations
per ADS attributable to Sohu.com Limited

$

(0.08)

$

(0.36)

$

0.30


$

(0.79)

$

0.18

Diluted net income/(loss) per ADS attributable to
Sohu.com Limited

$

1.10

$

(0.75)

$

(0.45)


$

(2.19)

$

(3.83)

ADS used in computing diluted net income/(loss)  per
ADS attributable to Sohu.com Limited


39,508


39,286


39,263



39,452


39,249





































[6] On September 29, 2020, the Company entered into a Share Purchase Agreement with Tencent’s subsidiary TitanSupernova Limited (“Parent”), pursuant to which the Company’s
wholly-owned subsidiary Sohu.com (Search) Limited agreed to sell all of the Sogou Class A ordinary shares and Sogou Class B ordinary shares owned by it to Parent at a purchase
price of $9.00 per share. In view of the Share Purchase Agreement, the results of operations for Sogou have been excluded from the Company’s results from continuing operations in
the condensed consolidated statements of operations for the third quarter and are presented in separate line items as discontinued operations. Retrospective adjustments to the
historical statements have been made in order to provide a consistent basis of comparison. Unless indicated otherwise, results presented are related to continuing operations only.

SOHU.COM LIMITED


CONDENSED CONSOLIDATED BALANCE SHEETS 


(UNAUDITED, IN THOUSANDS)










As of Dec. 31, 2020


As of Dec. 31, 2019


ASSETS






Current assets:






Cash and cash equivalents

$

217,057

$

162,662


Restricted cash[7]


330,791


3,290


Short-term investments


100,745


321,483


Account receivables, net


87,521


126,081


Prepaid and other current assets 


106,590


97,531


Held for sale assets (current) [8]


1,412,168


1,304,621


Total current assets


2,254,872


2,015,668


Long-term investments, net


31,634


30,987


Fixed assets, net


337,674


337,682


Goodwill 


48,434


47,390


Intangible assets, net


4,842


9,922


Restricted time deposits


101,519


240


Prepaid non-current assets 


1,006


1,882


Other assets


42,140


30,413


 Held for sale assets (non-current) [8]



217,680


Total assets

$

2,822,121

$

2,691,864








LIABILITIES 






Current liabilities:






           Accounts payable 

$

107,611

$

121,318


           Accrued liabilities


157,513


157,861


           Receipts in advance and deferred revenue


52,055


50,321


           Accrued salary and benefits


100,826


86,666


           Taxes payable


28,006


25,997


           Short-term bank loans[7]


315,550


114,528


           Other short-term liabilities


106,171


91,065


           Held for sale liabilities (current)[8]


416,998


453,111


Total current liabilities

$

1,284,730

$

1,100,867








Long-term accounts payable


3,202


767


Long-term bank loans


92,000


 


Long-term tax liabilities[9]


406,353


277,544


Other long-term liabilities


3,855


83


Held for sale liabilities (non-current) [8]



5,686


Total long-term liabilities

$

505,410

$

284,080


                         Total liabilities

$

1,790,140

$

1,384,947














SHAREHOLDERS’ EQUITY:






          Sohu.com Limited shareholders’ equity


347,369


428,454


          Noncontrolling interest


684,612


878,463


                     Total shareholders’ equity

$

1,031,981

$

1,306,917








Total liabilities and shareholders’ equity  

$

2,822,121

$

2,691,864









[7] In December 2020, to roll over matured offshore financing facilities, Changyou entered into a bank loan agreement pursuant to which it has drawn down U.S.
dollar-denominated loans in the aggregate amount of US$216 million that are secured by current restricted time deposits of RMB1.4 billion (approximately
US$215 million), as well as a mortgage on a building owned by Sohu. All of the loans carry a floating rate of interest based on the LIBOR. All of the loans are
due to be repaid, and accordingly the restricted time deposits released, in 2021.

[8] On September 29, 2020, the Company has entered into a Share Purchase Agreement with Tencent’s subsidiary TitanSupernova Limited (“Parent”), pursuant
to which the Company’s wholly-owned subsidiary Sohu.com (Search) Limited has agreed to sell all of the Sogou Class A ordinary share and Sogou Class B
ordinary shares owned by it to Parent at a purchase price of $9.00 per share. Sogou related assets and liabilities were classified as assets/liabilities held for sale.

[9] Following completion of the Changyou privatization, Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends. As
a result, Changyou recognized an additional accrual of withholding income tax of US$88 million in the second quarter of 2020.

SOHU.COM LIMITED


RECONCILIATIONS OF NON-GAAP RESULTS OFOPERATIONS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES


(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
























Three Months Ended Dec. 31, 2020


Three Months Ended Sep. 30, 2020


Three Months Ended Dec. 31, 2019




GAAP


Non-GAAP
Adjustments


Non-
GAAP


GAAP


Non-GAAP
Adjustments


Non-
GAAP


GAAP


Non-GAAP
Adjustments


Non-
GAAP


























(59)

(a)





240

(a)





2

(a)



Brand advertising gross profit

$

12,974

$

(59)

$

12,915

$

12,635

$

240

$

12,875

$

12,963

$

2

$

12,965


Brand advertising gross margin


31%




31%


31%




31%


31%




31%


























79

(a)





151

(a)





137

(a)



Online games gross profit 

$

176,909

$

79

$

176,988

$

81,300

$

151

$

81,451

$

98,508

$

137

$

98,645


Online games gross margin


90%




90%


80%




80%


75%




75%


























(a)





(a)





(a)



Others gross profit 

$

10,276

$

$

10,276

$

10,401

$

$

10,401

$

8,448

$

$

8,448


Others gross margin


67%




67%


67%




67%


55%




55%


























20

(a)





391

(a)





139

(a)



Gross profit

$

200,159

$

20

$

200,179

$

104,336

$

391

$

104,727

$

119,919

$

139

$

120,058


Gross margin


79%




79%


66%




66%


64%




64%










































Operating expenses

$

133,312

$

(1,330)

(a) $

131,982

$

114,958

$

(5,481)

(a) $

109,477

$

117,580

$

(3,128)

(a) $

114,452


























1,350

(a)





5,872

(a)





3,267

(a)



Operating profit/(loss)

$

66,847

$

1,350

$

68,197

$

(10,622)

$

5,872

$

(4,750)

$

2,339

$

3,267

$

5,606


Operating margin


26%




27%


-7%




-3%


1%




3%






















Income tax expense/(benefit)

$

21,416

$

(8)

(c,d)$

21,408

$

11,082

$

(642)

(c,d)$

10,440

$

(2,908)

$

(2,737)

(c,d)$

(5,645)


























1,350

(a)





5,872

(a)





3,267

(a)







3,547

(c)





1,587

(c)





(2,490)

(c)







1,190

(d)





1,171

(d)





1,907

(d)







(e)





(e)





23,154

(e)



Net income/(loss) before non-
controlling interest

$

46,583

$

6,087

$

52,670

$

(15,307)

$

8,630

$

(6,677)

$

(9,633)

$

25,838

$

16,205


























1,350

(a)





5,872

(a)





3,267

(a)







(b)





(b)





(2,688)

(b)







3,547

(c)





1,587

(c)





(2,490)

(c)







1,190

(d)





1,171

(d)





1,907

(d)







(e)





(e)





23,154

(e)



Net income/(loss) from
continuing operations
attributable to Sohu.com
Limited for diluted net loss per ADS

$

46,581

$

6,087

$

52,668

$

(15,257)

$

8,630

$

(6,627)

$

(29,299)

$

23,150

$

(6,149)


Net income/(loss) from
discontinued operations
attributable to Sohu.com
Limited for diluted
net  loss per ADS[10]

$

(3,093)

$

425

$

(2,668)

$

(14,307)

$

1,462

$

(12,845)

$

11,686

$

1,309

$

12,995


Net income/( loss) attributable
to Sohu.com Limited for
diluted net  loss per ADS

$

43,488

$

6,512

$

50,000

$

(29,564)

$

10,092

$

(19,472)

$

(17,613)

$

24,459

$

6,846


Diluted net income/(loss) from
continuing operations per
ADS attributable to Sohu.com
Limited 

$

1.18



$

1.33

$

(0.39)



$

(0.17)

$

(0.75)



$

(0.16)


Diluted net income/(loss) from
discontinued operations per
ADS attributable to Sohu.com
Limited

$

(0.08)



$

(0.06)

$

(0.36)



$

(0.33)

$

0.30



$

0.33


Diluted net income/(loss) per
ADS attributable to Sohu.com
Limited

$

1.10



$

1.27

$

(0.75)



$

(0.50)

$

(0.45)



$

0.17


Shares used in computing
diluted net income/(loss) per
ADS attributable to Sohu.com
Limited


39,508




39,508


39,286




39,286


39,263




39,396










































Note:




















(a) To eliminate the impact of share-based awards as measured using the fair value method. This adjustment does not have an impact on income tax expense.


(b) To adjust Sohu’s economic interests in Changyou attributable to the above non-GAAP adjustments. This adjustment does not have an impact on income tax expense.


(c) To adjust for a change in the fair value of the Company’s investment in Hylink and the income tax effect.


(d) To adjust for the effect of the U.S. TCJA.


(e) To adjust for the one-time impairment charge recognized for an investment unrelated to the Company’s core businesses.





























[10] On September 29, 2020, the Company entered into a Share Purchase Agreement with Tencent’s subsidiary TitanSupernova Limited (“Parent”), pursuant to which the Company’s wholly-owned
subsidiary Sohu.com (Search) Limited has agreed to sell all of the Sogou Class A ordinary share and Sogou Class B ordinary shares owned by it to Parent at a purchase price of $9.00 per share. In view of
the Share Purchase Agreement, the results of operations for Sogou have been excluded from the Company’s results from continuing operations in the condensed consolidated statements of operations
for the third quarter and are presented in separate line items as discontinued operations. Retrospective adjustments to the historical statements have been made in order to provide a consistent basis of
comparison. Unless indicated otherwise, results presented are related to continuing operations only. 

SOHU.COM LIMITED







RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES







(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)




























Twelve Months Ended Dec. 31, 2020


Twelve Months Ended Dec. 31, 2019









GAAP


Non-GAAP
Adjustments


Non-
GAAP


GAAP


Non-GAAP
Adjustments


Non-
GAAP






























177

(a)





22

(a)








Brand advertising gross profit

$

40,922

$

177

$

41,099

$

48,650

$

22

$

48,672







Brand advertising gross margin


28%




28%


28%




28%






























543

(a)





120

(a)








Online games gross profit

$

445,158

$

543

$

445,701

$

351,910

$

120

$

352,030







Online games gross margin


83%




83%


80%




80%






























(a)





(a)








Others gross profit 

$

46,373

$

$

46,373

$

29,596

$

$

29,596







Others gross margin


70%




70%


51%




51%






























720

(a)





142

(a)








Gross profit

$

532,453

$

720

$

533,173

$

430,156

$

142

$

430,298







Gross margin


71%




71%


64%




64%


























Operating expenses

$

459,082

$

(13,760)

(a)  $

445,322

$

501,353

$

(2,208)

(a)  $

499,145






























14,480

(a)





2,350

(a)








Operating profit/(loss)

$

73,371

$

14,480

$

87,851

$

(71,197)

$

2,350

$

(68,847)







Operating margin


10%




12%


-11%




-10%


























Income tax expense[11]

$

133,226

$

(5,985)

(c,d)$

127,241

$

28,428

$

(8,549)

(c,d) $

19,879

















































14,480

(a)





2,350

(a)












660

(c)





(1,992)

(c)












6,205

(d)





7,887

(d)












(e)





23,154

(e)








Net loss before non-controlling interest


(36,527)


21,345


(15,182)


(98,499)


31,399


(67,100)

















































14,480

(a)





2,350

(a)












(2,868)

(b)





(2,069)

(b)












660

(c)





(1,992)

(c)












6,205

(d)





7,887

(d)












(e)





23,154

(e)








Net loss from continuing operations
attributable to Sohu.com Limited for
diluted net  loss per ADS

$

(55,365)

$

18,477

$

(36,888)

$

(157,282)

$

29,330

$

(127,952)







Net income/(loss) from discontinued
operations attributable to Sohu.com
Limited for diluted net  loss per ADS [12]

$

(31,139)


3,048

$

(28,091)

$

6,833


5,159

$

11,992







Net loss attributable to Sohu.com Limited
for diluted net  loss per ADS

$

(86,504)


21,525

$

(64,979)

$

(150,449)


34,489

$

(115,960)


























Diluted net loss from continuing
operations per ADS attributable to
Sohu.com Limited

$

(1.40)



$

(0.94)

$

(4.01)



$

(3.26)







Diluted net income/ (loss) from
discontinued operations per ADS attributable to
Sohu.com Limited

$

(0.79)



$

(0.71)

$

0.18



$

0.31







Diluted net loss per ADS attributable to
Sohu.com Limited. 

$

(2.19)



$

(1.65)

$

(3.83)



$

(2.95)







ADS used in computing diluted net
income/(loss) per ADS attributable to
Sohu.com Limited 


39,452




39,452


39,249




39,249


























Note:



















(a) To eliminate the impact of share-based awards as measured using the fair value method. This adjustment does not have an impact on income tax expense.

(b) To adjust Sohu’s economic interests in Changyou attributable to the above non-GAAP adjustments. This adjustment does not have an impact on income tax expense.

(c) To adjust for a change in the fair value of the Company’s investment in Hylink and the income tax effect.

(d) To adjust for the effect of the U.S. TCJA.

(e) To adjust for the one-time impairment charge recognized for an investment unrelated to the Company’s core businesses.




























[11] Following completion of the Changyou privatization, Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends. As
a result, Changyou recognized an additional accrual of withholding income tax of US$88 million in the second quarter of 2020.






[12] On September 29, 2020, the Company entered into a Share Purchase Agreement with Tencent’s subsidiary TitanSupernova Limited (“Parent”), pursuant to
which the Company’s wholly-owned subsidiary Sohu.com (Search) Limited has agreed to sell all of the Sogou Class A ordinary share and Sogou Class B
ordinary shares owned by it to Parent at a purchase price of $9.00 per share. In view of the Share Purchase Agreement, the results of operations for Sogou have
been excluded from the Company’s results from continuing operations in the condensed consolidated statements of operations for the third quarter and are
presented in separate line items as discontinued operations. Retrospective adjustments to the historical statements have been made in order to provide a
consistent basis of comparison. Unless indicated otherwise, results presented are related to continuing operations only.






SOURCE Sohu.com Limited

Regeneron Reports Fourth Quarter and Full Year 2020 Financial and Operating Results

TARRYTOWN, N.Y., Feb. 5, 2021 /PRNewswire/ —

  • Fourth quarter 2020 revenues increased 30% to $2.42 billion versus fourth quarter 2019(4)
  • Fourth quarter 2020 EYLEA® U.S. net sales increased 10% to $1.34 billion versus fourth quarter 2019 and full year 2020 EYLEA U.S. net sales increased 7% versus 2019
  • Fourth quarter 2020 Dupixent® global net sales(2), which are recorded by Sanofi, increased 56% to $1.17 billion versus fourth quarter 2019 and full year 2020 Dupixent global net sales increased 75% versus 2019
  • Fourth quarter 2020 GAAP diluted EPS was $10.24 and non-GAAP diluted EPS(1) was $9.53
  • REGEN-COV antibody cocktail for COVID-19 received FDA Emergency Use Authorization; new agreement signed with U.S. government to purchase up to 1.25 million additional doses
  • Positive interim data reported from Phase 3 trial with REGEN-COV used as passive vaccine to prevent COVID-19

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced financial results for the fourth quarter and full year 2020 and provided a business update.

“In 2020, the Regeneron team rapidly mobilized our significant scientific, development, manufacturing, and operational capabilities to bring our monoclonal antibody cocktail, REGEN-COV, to patients with COVID-19 through an Emergency Use Authorization,” said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. “In 2021, in addition to our ongoing work on COVID-19, we expect further diversified growth driven by continued EYLEA momentum, expanded approvals and increased market penetration for Dupixent, and new launches for Libtayo in oncology. We anticipate U.S. regulatory action for Libtayo in both non-small cell lung cancer and basal cell carcinoma within the next month – and anticipate additional readouts later this year from across our oncology pipeline, including the bispecific platform.”

Financial Highlights



Three Months Ended 
 December 31,




Year Ended
December 31,



($ in millions, except per share data)


2020


2019


% Change


2020


2019


% Change

Total revenues(4)


$

2,423



$

1,864



30%


$

8,497



$

6,558



30%

GAAP net income


$

1,149



$

792



45%


$

3,513



$

2,116



66%

GAAP net income per share –
  diluted


$

10.24



$

6.93



48%


$

30.52



$

18.46



65%

Non-GAAP net income(1)


$

1,080



$

858



26%


$

3,666



$

2,827



30%

Non-GAAP net income per
  share – diluted(1)


$

9.53



$

7.50



27%


$

31.47



$

24.67



28%

“In 2020, Regeneron delivered double-digit top- and bottom-line growth and significant shareholder value despite the unprecedented circumstances of a global pandemic,” said Robert E. Landry, Executive Vice President, Finance and Chief Financial Officer of Regeneron. “As we look ahead into 2021 and beyond, our business momentum and strong balance sheet give us confidence as we invest in R&D for long-term growth and execute on our capital allocation priorities.”

Business Highlights

Key Pipeline Progress
Regeneron has approximately 30 product candidates in clinical development, including five marketed products for which it is investigating additional indications. Updates from the clinical pipeline include:

Dupixent® (dupilumab)

  • In November 2020, the European Commission (EC) extended the marketing authorization in the European Union (EU) to include children 6 to 11 years of age with severe atopic dermatitis who are candidates for systemic therapy.
  • In October 2020, the Company and Sanofi announced that a Phase 3 trial met its primary and all key secondary endpoints in children aged 6 to 11 years with uncontrolled moderate-to-severe asthma. A supplemental Biologics License Application (sBLA) was subsequently submitted and a submission in the EU is planned by the end of the first quarter of 2021.
  • Phase 3 studies in chronic inducible urticaria, chronic sinusitis without nasal polyposis, and allergic fungal rhinosinusitis were initiated.

REGEN-COV (casirivimab and imdevimab), a dual antibody cocktail to SARS-CoV-2 virus

  • In November 2020, REGEN-COV received Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA). REGEN-COV is authorized for the treatment of mild to moderate COVID-19 in certain patients at high risk for progressing to severe COVID-19 and/or hospitalization.
  • In January 2021, the Company announced a second agreement with the U.S. government to manufacture and deliver REGEN-COV. The U.S. government has agreed to acquire up to 1.25 million additional doses at the lowest treatment dose authorized or approved by the FDA for the indication authorized under the EUA, resulting in payments to the Company of up to $2.625 billion in the aggregate. The U.S. government is obligated to purchase all filled and finished doses of drug product delivered by June 30, 2021, and may accept doses through September 30, 2021 at its discretion. A number of factors may impact available filled and finished supply by June 30, 2021, including manufacturing considerations and authorized dose levels. The agreement is in addition to the July 2020 agreement with the U.S. government for approximately 300,000 doses.
  • In February 2021, the European Medicines Agency (EMA) announced it had commenced a Rolling Review of data for the casirivimab and imdevimab antibody cocktail. Data on the safety, tolerability, and efficacy of the antibody cocktail will be shared with the EMA as they become available in the coming months.
  • In October 2020, the Company announced additional positive results from an ongoing Phase 2/3 seamless trial in the COVID-19 outpatient setting showing that REGEN-COV significantly reduced viral load and COVID-19 medical visits (hospitalizations, emergency room, urgent care visits, and/or physician office/telemedicine visits). Initial clinical data from this trial were published in the New England Journal of Medicine (NEJM) in December 2020.
  • A Phase 2 dose-ranging treatment study in non-hospitalized patients with COVID-19 was initiated and a lower 1,200 mg dose is being evaluated in the ongoing outpatient trial.
  • In December 2020, the Company announced initial encouraging data from an ongoing Phase 1/2/3 trial in seronegative hospitalized COVID-19 patients requiring low-flow oxygen. The Phase 3 program in hospitalized patients will continue based on passing a futility analysis evaluating the risk of death or receiving mechanical ventilation and demonstrating positive reductions in viral load. In October 2020, the Independent Data Monitoring Committee (IDMC) for this trial recommended that, based on a potential safety signal and an unfavorable risk/benefit profile at this time, further enrollment of patients requiring high-flow oxygen or mechanical ventilation be placed on hold.
  • The United Kingdom-based RECOVERY trial continues to evaluate REGEN-COV in hospitalized patients and has enrolled more than 6,000 patients in the cohort randomizing patients 1:1 to receive REGEN-COV or placebo.
  • In January 2021, the Company announced positive initial results from an ongoing Phase 3 trial evaluating REGEN-COV used as a passive vaccine for the prevention of COVID-19 in people at high risk of infection (due to household exposure to a COVID-19 patient). An exploratory analysis was conducted on the first approximately 400 evaluable individuals enrolled in the trial, who were randomized to receive passive vaccination with REGEN-COV (1,200 mg via subcutaneous injections) or placebo.
  • In January 2021, the Company announced that preclinical studies showed that the REGEN-COV antibody cocktail retains its potent neutralizing ability against circulating SARS-CoV-2 variants identified in the United Kingdom, South Africa, and Brazil. Both antibodies in the cocktail retained their potency against the UK variant (B.1.1.7); imdevimab retained its potency against the South African variant (B.1.351), while casirivimab potency was reduced but still comparable to that of other single antibodies in development against the original virus. The REGEN-COV antibody cocktail was prospectively designed so that if variants arose affecting one component, the other component could compensate and still allow for potent neutralizing activity. In fact, as reported in Science in June 2020, Regeneron scientists predicted the key mutation that has since appeared in the South African and Brazil variants, and further showed that this mutation would lower potency of the casirivimab component, but be compensated for by the imdevimab component.

Libtayo® (cemiplimab)

  • The FDA accepted for priority review, with a target action date of February 28, 2021, the sBLA for Libtayo as monotherapy to treat patients with first-line locally advanced or metastatic non-small cell lung cancer (NSCLC) with ≥50% PD-L1 expression. A regulatory application for Libtayo as monotherapy in first-line NSCLC was also submitted in the EU.
  • The FDA accepted for priority review, with a target action date of March 3, 2021, the sBLA for Libtayo for the treatment of patients with locally advanced or metastatic basal cell carcinoma (BCC). A regulatory application for Libtayo in advanced BCC was also submitted in the EU.

Inmazeb (atoltivimab, maftivimab, and odesivimab-ebgn)

  • In October 2020, the FDA approved Inmazeb (REGN-EB3) for the treatment of infection caused by Zaire ebolavirus in adult and pediatric patients, including newborns of mothers who have tested positive for the infection.

REGN5458, a bispecific antibody targeting BCMA and CD3

  • In December 2020, the Company announced updated data from the Phase 1 portion of a Phase 1/2 trial in patients with relapsed or refractory (R/R) multiple myeloma. The results continued to show deep and durable responses in patients with heavily-pretreated multiple myeloma and were shared in an oral presentation at the virtual 2020 American Society of Hematology (ASH) Annual Meeting.

Odronextamab, a CD20xCD3 bispecific antibody

  • In December 2020, updated results from the Phase 1 trial in R/R follicular lymphoma, diffuse large B-cell lymphoma, and other B-cell non-Hodgkin lymphomas were shared in an oral presentation at ASH and included patient follow-up data of up to 3 years.
  • In December 2020, the Company announced it was pausing new enrollment of patients with B-cell non-Hodgkin lymphomas (B-NHL) in its trials in compliance with an FDA partial clinical hold. The FDA requested that the Company amend the trial protocols in order to further reduce the incidence of ≥Grade 3 cytokine release syndrome (CRS) during step-up dosing. The Company is working with the FDA to amend the protocol, with the goal of resuming patient enrollment within the first half of 2021.

Additional Bispecific Antibodies

  • In addition to REGN5458 and odronextamab, the Company has advanced two CD3 bispecifics into clinical trials including MUC16xCD3 (REGN4018), which is being studied in ovarian cancer.
  • Three costimulatory CD28 bispecifics are now in clinical trials targeting prostate cancer, ovarian cancer, and other solid tumors.
  • Also in clinical development is the first of a third class of bispecifics, METxMET (REGN5093), in non-small cell lung cancer driven by MET mutations and/or amplifications.

Itepekimab, an antibody to IL-33

  • The Company and Sanofi have initiated a Phase 3 program in chronic obstructive pulmonary disease (COPD).

REGN5713-5714-5715, a multi-antibody therapy to Betv1

  • A Phase 3 study in birch allergy was recently initiated. REGN5713-5714-5715 is designed to treat allergic inflammatory conditions caused by the allergen Betv1, which is the main allergen responsible for birch pollen allergies. Birch pollen allergy is one of the most common causes of seasonal allergies that occur in the spring, and is also believed to trigger “oral allergy syndrome” food reactions to related allergens found in fruits and nuts such as apples, pears, and cherries.

Select 2021 Milestones

Programs



Milestones

EYLEA


Report results from Phase 2 study for high-dose formulation in neovascular age-related macular degeneration (wet AMD)

Dupixent


FDA decision on sBLA and MAA submission for asthma in pediatrics (6–11 years of age)



Report results from Part B of the Phase 3 study in adults and adolescents with eosinophilic esophagitis (EoE)



Report results from Phase 3 study in prurigo nodularis

REGEN-COV (casirivimab and imdevimab)


Report additonal data from Phase 3 portion of COVID-19 study in non-hospitalized patients



Report results for lower 1,200 mg dose in Phase 3 portion of COVID-19 study in non-hospitalized patients



Report additional data from Phase 3 portion of COVID-19 prevention study in household contacts



Data to be reported from Phase 3 United Kingdom-based RECOVERY trial in hospitalized patients



Report data from Phase 2 dose-ranging virology study in non-hospitalized patients



Submit BLA and MAA for COVID-19

Libtayo


FDA decision on sBLA (target action date of February 28, 2021) and EC decision on regulatory submission for first-line NSCLC, monotherapy



Interim analysis from Phase 3 study in first-line NSCLC, chemotherapy combination



FDA decision on sBLA (target action date of March 3, 2021) and EC decision on regulatory submission for advanced BCC



Interim analysis from Phase 3 study in cervical cancer

REGN5458 (BCMA and CD3 Bispecific Antibody)


Complete patient enrollment in potentially pivotal Phase 2 study in multiple myeloma



Initiate pivotal trials in earlier lines of multiple myeloma therapy

Odronextamab (CD20 and CD3 Bispecific Antibody)


Complete patient enrollment in potentially pivotal Phase 2 study in B-NHL



Initiate Phase 3 program

Praluent


FDA decision on sBLA for homozygous familial hypercholesterolemia (HoFH) in adults (target action date of April 4, 2021)

Evkeeza™ (evinacumab) (ANGPTL3 Antibody)


FDA decision on BLA (target action date of February 11, 2021) and EC decision on MAA for HoFH

Fasinumab (NGF Antibody)


Report additional longer-term safety results from Phase 3 studies in osteoarthritis pain of the knee or hip



Continue discussions with regulatory authorities and determine next steps for the program

Fourth Quarter and Full Year 2020 Financial Results

Effective January 1, 2020, Regeneron implemented changes in the presentation of its financial statements related to certain reimbursements and other payments for products developed and commercialized with collaborators. The Company made these changes in presentation to better reflect the nature of the Company’s costs incurred and revenues earned pursuant to arrangements with collaborators and to enhance the comparability of Regeneron’s financial statements with industry peers. The change in presentation has been applied retrospectively. See note (4) below for further information.

Revenues

Total revenues increased by 30% to $2.423 billion in the fourth quarter of 2020, compared to $1.864 billion in the fourth quarter of 2019. Full year 2020 total revenues increased 30% to $8.497 billion, compared to $6.558 billion for the full year 2019.

EYLEA® net product sales in the United States increased to $1.343 billion in the fourth quarter of 2020, compared to $1.222 billion in the fourth quarter of 2019. Full year 2020 EYLEA net product sales in the United States increased to $4.947 billion, compared to $4.644 billion for the full year 2019. Overall distributor inventory levels for EYLEA in the United States remained within the Company’s one-to-two-week targeted range.

Net product sales of REGEN-COV were $146 million in the fourth quarter of 2020 and $186 million for the full year of 2020.

Total revenues also include Sanofi and Bayer collaboration revenues(2) of $678 million in the fourth quarter and $2.373 billion for the full year 2020, compared to $482 million in the fourth quarter and $1.549 billion for the full year 2019. Sanofi collaboration revenue increased primarily due to the Company’s share of profits from commercialization of antibodies, which were $230 million and $785 million in the fourth quarter and full year 2020, respectively, compared to $104 million and $209 million in the fourth quarter and full year 2019, respectively. The change in the Company’s share of profits from commercialization of antibodies was primarily driven by higher Dupixent profits. In addition, in the third quarter of 2020, the Company earned the first $50 million sales-based milestone from Sanofi, upon annual sales of antibodies outside the United States exceeding $1.0 billion on a rolling twelve-month basis.

Refer to Table 4 for a summary of collaboration revenue.

Other revenues in the fourth quarter and full year of 2020, compared to the same periods in the prior year, increased primarily due to recognition of revenue of $43 million and $187 million, respectively, in connection with the Company’s agreement with the Biomedical Advanced Research Development Authority (BARDA) related to funding of certain development activities for antibodies related to the treatment of COVID-19. Other revenues for the full year of 2020 also increased due to recognition of revenue in connection with the Company’s agreement with BARDA related to funding of certain Inmazeb development activities and Sanofi’s reimbursement for manufacturing commercial supplies of Praluent.

Operating Expenses



GAAP


%
Change


Non-GAAP(1)


%
Change

($ in millions)


Q4 2020


Q4 2019



Q4 2020


Q4 2019


Research and development (R&D)


$

745



$

552



35%


$

675



$

450



50%

Selling, general, and administrative
  (SG&A)


$

304



$

452



(33%)


$

381



$

311



23%

Cost of goods sold (COGS)


$

180



$

109



65%


$

166



$

93



78%

Cost of collaboration and contract
  manufacturing (COCM)


$

174



$

113



54%


*



*



n/a

Other operating (income) expense,
  net


$

(145)



$

(38)



282%


*



*



n/a














* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been recorded




GAAP


%
Change


Non-GAAP(1)


%
Change

($ in millions)


2020


2019



2020


2019


Research and development


$

2,735



$

2,450



12%


$

2,411



$

1,770



36%

Selling, general, and administrative


$

1,346



$

1,342



—%


$

1,280



$

1,069



20%

Cost of goods sold


$

492



$

362



36%


$

451



$

316



43%

Cost of collaboration and contract
  manufacturing


$

628



$

403



56%


*



*



n/a

Other operating (income) expense,
  net


$

(280)



$

(209)



34%


*



*



n/a














* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been recorded

  • The higher GAAP and non-GAAP R&D expenses in the fourth quarter and full year 2020, compared to the same periods in the prior year, were primarily due to additional costs incurred in connection with COVID-19 related development activities. The higher GAAP and non-GAAP R&D expenses for full year 2020 were also due to additional costs incurred in connection with the Company’s earlier-stage pipeline, higher headcount and headcount-related costs, and an increase in clinical manufacturing activities. GAAP R&D expenses for full year 2020 included $85 million of up-front payments in connection with the Intellia collaboration agreement, and GAAP R&D expenses for full year 2019 included a $400 million up-front payment in connection with the Alnylam collaboration agreement.
  • The change in GAAP and non-GAAP SG&A expenses in the fourth quarter and full year 2020, compared to the same periods in the prior year, was primarily due to an increase in commercialization-related costs for EYLEA and Libtayo, higher headcount-related costs, and, effective April 1, 2020, no longer receiving Praluent-related cost reimbursements from Sanofi for Regeneron-incurred expenses. GAAP SG&A expenses for the fourth quarter and full year 2020 were also positively impacted by a reversal of $121 million in accruals for litigation-related loss contingencies in the fourth quarter of 2020 as a result of the October 2020 ruling by the Technical Board of Appeal of the European Patent Office and its impact on certain patent infringement actions in Europe relating to Praluent. In addition, in the fourth quarter of 2019, the Company recorded a $35 million GAAP SG&A charge related to employee separation costs, as the Company eliminated certain commercialization activities and related headcount in connection with the restructuring of the antibody agreement with Sanofi.
  • The increase in COGS in the fourth quarter and full year 2020, compared to the same periods in the prior year, was primarily due to the recognition of manufacturing costs in connection with the initiation of product sales of REGEN-COV (which commenced in the third quarter of 2020) and Praluent in the United States (which were recorded by Sanofi prior to April 1, 2020), as well as higher product sales of Libtayo and EYLEA in the United States. These increases were partly offset by lower period costs for the Company’s Limerick commercial manufacturing facility and lower inventory write-downs and reserves.
  • The increase in COCM in the fourth quarter and full year 2020, compared to the same periods in the prior year, was primarily due to the recognition of manufacturing costs associated with Dupixent and recognition of costs in connection with manufacturing ex-U.S. commercial supplies of Praluent for Sanofi. In addition, COCM increased for full year 2020 due to process validation costs in connection with manufacturing Inmazeb under our BARDA agreement.
  • Other operating (income) expense, net, includes recognition of a portion of amounts previously deferred in connection with up-front and development milestone payments, as applicable, received in connection with the Company’s collaborative arrangements. The increase in other operating income in the fourth quarter and full year 2020 was primarily due to the recognition of cumulative catch-up adjustments of $100 million, net, arising from an update to the estimate of the stage of completion for certain collaboration programs.

Other Financial Information

GAAP other income (expense), net, includes the recognition of net gains on equity securities of $60 million in the fourth quarter and $222 million for the full year 2020, compared to net gains of $189 million in the fourth quarter and $118 million for the full year 2019. In August 2020, the Company issued and sold $1.250 billion aggregate principal amount of 1.750% senior unsecured notes due 2030 and $750 million aggregate principal amount of 2.800% senior unsecured notes due 2050, for which the associated interest expense is included in GAAP and non-GAAP other income (expense), net.

GAAP income tax expense was $75 million and the effective tax rate was 6.2% in the fourth quarter of 2020, compared to $98 million and 11.0% in the fourth quarter of 2019. GAAP income tax expense was $297 million and the effective tax rate was 7.8% for the full year 2020, compared to $313 million and 12.9% for the full year 2019. The GAAP effective tax rate for the fourth quarter and full year 2020 was positively impacted, compared to the U.S. federal statutory rate, primarily by stock-based compensation, federal tax credits for research activities, and income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate. In the fourth quarter and full year 2020, the non-GAAP effective tax rate was 7.7% and 9.1%, respectively, compared to 10.6% and 14.6% in the fourth quarter and full year 2019, respectively.

GAAP net income per diluted share was $10.24 in the fourth quarter of 2020, compared to GAAP net income per diluted share of $6.93 in the fourth quarter of 2019. GAAP net income per diluted share was $30.52 for the full year 2020, compared to GAAP net income per diluted share of $18.46 for full year 2019. Non-GAAP net income per diluted share was $9.53 in the fourth quarter of 2020, compared to non-GAAP net income per diluted share of $7.50 in the fourth quarter of 2019. Non-GAAP net income per diluted share was $31.47 for the full year 2020, compared to non-GAAP net income per diluted share of $24.67 for the full year 2019. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

During 2020, the Company repurchased 1.6 million shares of its common stock under the Company’s share repurchase program. As of December 31, 2020, the Company had repurchased the entire $1.0 billion it was authorized to repurchase under the program.

In January 2021, the Company’s board of directors authorized a new share repurchase program to repurchase up to $1.5 billion of the Company’s common stock. Repurchases may be made from time to time at management’s discretion through a variety of methods. The program has no time limit and can be discontinued at any time.

Net cash provided by operating activities in the fourth quarter of 2020 was $1.231 billion, compared to $787 million in the fourth quarter of 2019, resulting in $1.070 billion in free cash flow for the fourth quarter of 2020, compared to $648 million for the fourth quarter of 2019. Net cash provided by operating activities for the full year 2020 was $2.618 billion, compared to $2.430 billion in net cash provided by operating activities for the full year 2019, resulting in $2.004 billion in free cash flow for the full year 2020, compared to $2.000 billion for the full year 2019.

2021 Financial Guidance(3)

The Company’s full year 2021 financial guidance consists of the following components:



GAAP


Non-GAAP(1)

R&D


$3.000 billion–$3.175 billion 


$2.700 billion–$2.850 billion 

SG&A


$1.700 billion–$1.850 billion


$1.500 billion–$1.630 billion

Gross margin on net product sales(5)


86%–88% 


87%–89%

COCM(6)


$670 million–$750 million


*

Other operating (income) expense, net


($150) million–($175) million


*

Capital expenditures


$600 million–$680 million


*

Effective tax rate (ETR)


11–13%


12–14%






* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been or are expected to be recorded.

A reconciliation of full year 2021 GAAP to Non-GAAP financial guidance is included below:



Projected Range

($ in millions)


Low


High

GAAP R&D


$

3,000



$

3,175


R&D: Non-cash share-based compensation
  expense


(300)



(325)


Non-GAAP R&D


$

2,700



$

2,850







GAAP SG&A


$

1,700



$

1,850


SG&A: Non-cash share-based compensation
  expense


(200)



(220)


Non-GAAP SG&A


$

1,500



$

1,630







GAAP gross margin on net product sales


86%



88%


Non-cash share-based compensation
  expense


1%



1%


Non-GAAP gross margin on net product sales


87%



89%







GAAP ETR


11%



13%


Income tax effect of GAAP to non-GAAP
  reconciling items and other


1%



1%


Non-GAAP ETR


12%



14%



(1)

This press release uses non-GAAP R&D, non-GAAP SG&A, non-GAAP gross margin on net product sales, non-GAAP other income (expense) net, non-GAAP effective tax rate, non-GAAP net income, non-GAAP net income per share, and free cash flow, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are computed by excluding certain non-cash and/or other items from the related GAAP financial measure. The Company also includes a non-GAAP adjustment for the estimated income tax effect of reconciling items.

The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate from period to period based on factors that are not within the Company’s control (such as the Company’s stock price on the dates share-based grants are issued or changes in the fair value of the Company’s investments in equity securities) or items that are not associated with normal, recurring operations (such as restructuring-related expenses, including employee separation costs). Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. With respect to free cash flows, the Company believes that this non-GAAP measure provides a further measure of the Company’s operations’ ability to generate cash flows. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company’s core business operations. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company’s non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company’s historical GAAP to non-GAAP results is included in Table 3 of this press release.



(2)

The Company’s collaborators provide it with estimates of the collaborators’ respective sales and the Company’s share of the profits or losses from commercialization of products for the most recent fiscal quarter. The Company’s estimates for such quarter are reconciled to actual results in the subsequent fiscal quarter, and the Company’s share of the profit or loss is adjusted on a prospective basis accordingly, if necessary.



(3)

The Company’s 2021 financial guidance does not assume the completion of any significant business development transactions not completed as of the date of this press release.



(4)

Applicable amounts previously reported for the three months and year ended December 31, 2019 and as of December 31, 2019 have been revised to reflect a change in presentation of cost reimbursements from collaborators who are not deemed to be the Company’s customers from collaboration revenue to a reduction of the corresponding operating expense. The Company also changed the presentation of amounts recognized in connection with up-front and development milestone payments received from collaboration revenue to other operating income, as well as the presentation of the corresponding balance sheet accounts. The revisions were reclassifications only and had no impact on the Company’s previously reported GAAP and non-GAAP net income and net income per share. Refer to the Company’s Form 10-Q for the quarterly period ended September 30, 2020 (Note 1 of the Notes to Condensed Consolidated Financial Statements) for further details.



(5)

Gross margin on net product sales represents gross profit expressed as a percentage of total net product sales recorded by the Company. Gross profit is calculated as net product sales less cost of goods sold.



(6)

Corresponding reimbursements from collaborators and others for manufacturing of commercial supplies is recorded within revenues.

Conference Call Information

Regeneron will host a conference call and simultaneous webcast to discuss its fourth quarter and full year 2020 financial and operating results on Friday, February 5, 2021, at 8:30 AM. To access this call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International), conference ID 1580376. A link to the webcast may be accessed from the “Investors and Media” page of Regeneron’s website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company’s website and will be available for at least 30 days.

About Regeneron Pharmaceuticals, Inc.

Regeneron is a leading biotechnology company that invents life-transforming medicines for people with serious diseases. Founded and led for over 30 years by physician-scientists, Regeneron’s unique ability to repeatedly and consistently translate science into medicine has led to eight FDA-approved treatments and numerous product candidates in development, almost all of which were homegrown in Regeneron’s laboratories. Regeneron’s medicines and pipeline are designed to help patients with eye diseases, allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, pain, infectious diseases, and rare diseases.

Regeneron is accelerating and improving the traditional drug development process through its proprietary VelociSuite® technologies, such as VelocImmune®, which uses unique genetically-humanized mice to produce optimized fully-human antibodies and bispecific antibodies, and through ambitious research initiatives such as the Regeneron Genetics Center®, which is conducting one of the largest genetics sequencing efforts in the world.

For additional information about the Company, please visit www.regeneron.com or follow @Regeneron on Twitter.

Forward-Looking Statements and Use of Digital Media

This press release includes forward-looking statements that involve risks and uncertainties relating to future events and the future performance of Regeneron Pharmaceuticals, Inc. (“Regeneron” or the “Company”), and actual events or results may differ materially from these forward-looking statements. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” variations of such words, and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. These statements concern, and these risks and uncertainties include, among others, the impact of SARS-CoV-2 (the virus that has caused the COVID-19 pandemic) on Regeneron’s business and its employees, collaborators, and suppliers and other third parties on which Regeneron relies, Regeneron’s and its collaborators’ ability to continue to conduct research and clinical programs, Regeneron’s ability to manage its supply chain, net product sales of products marketed or otherwise commercialized by Regeneron and/or its collaborators (collectively, “Regeneron’s Products”), and the global economy; the nature, timing, and possible success and therapeutic applications of Regeneron’s Products and product candidates being developed by Regeneron and/or its collaborators (collectively, “Regeneron’s Product Candidates”) and research and clinical programs now underway or planned, including without limitation EYLEA® (aflibercept) Injection, Dupixent® (dupilumab), Libtayo® (cemiplimab), Praluent® (alirocumab), Kevzara® (sarilumab), Inmazeb (atoltivimab, maftivimab, and odesivimab-ebgn), fasinumab, Evkeeza (evinacumab), REGEN-COV (casirivimab and imdevimab), garetosmab, pozelimab, odronextamab, itepekimab, REGN5458, REGN5713-5714-5715, Regeneron’s other oncology programs (including its costimulatory bispecific portfolio), Regeneron’s and its collaborators’ earlier-stage programs, and the use of human genetics in Regeneron’s research programs; the likelihood and timing of achieving any of the anticipated milestones described in this press release; safety issues resulting from the administration of Regeneron’s Products and Regeneron’s Product Candidates in patients, including serious complications or side effects in connection with the use of Regeneron’s Products and Regeneron’s Product Candidates in clinical trials; the likelihood, timing, and scope of possible regulatory approval and commercial launch of Regeneron’s Product Candidates and new indications for Regeneron’s Products, including without limitation EYLEA, Dupixent, Libtayo, Praluent, Kevzara, Inmazeb, Evkeeza, fasinumab, REGEN-COV, garetosmab, pozelimab, odronextamab, itepekimab, REGN5458, and REGN5713-5714-5715; the extent to which the results from the research and development programs conducted by Regeneron and/or its collaborators may be replicated in other studies and/or lead to advancement of product candidates to clinical trials, therapeutic applications, or regulatory approval; ongoing regulatory obligations and oversight impacting Regeneron’s Products (such as EYLEA, Dupixent, Libtayo, Praluent, Kevzara, and Inmazeb), research and clinical programs, and business, including those relating to patient privacy; determinations by regulatory and administrative governmental authorities which may delay or restrict Regeneron’s ability to continue to develop or commercialize Regeneron’s Products and Regeneron’s Product Candidates; competing drugs and product candidates that may be superior to, or more cost effective than, Regeneron’s Products and Regeneron’s Product Candidates; uncertainty of market acceptance and commercial success of Regeneron’s Products and Regeneron’s Product Candidates and the impact of studies (whether conducted by Regeneron or others and whether mandated or voluntary), on the commercial success of Regeneron’s Products and Regeneron’s Product Candidates; the ability of Regeneron to manufacture and manage supply chains for multiple products and product candidates; the ability of Regeneron’s collaborators, suppliers, or other third parties (as applicable) to perform manufacturing, filling, finishing, packaging, labeling, distribution, and other steps related to Regeneron’s Products and Regeneron’s Product Candidates; the availability and extent of reimbursement of Regeneron’s Products from third-party payers, including private payer healthcare and insurance programs, health maintenance organizations, pharmacy benefit management companies, and government programs such as Medicare and Medicaid (including the impact of the recently issued “most-favored-nation” interim final rule); coverage and reimbursement determinations by such payers and new policies and procedures adopted by such payers; unanticipated expenses; the costs of developing, producing, and selling products; the ability of Regeneron to meet any of its financial projections or guidance and changes to the assumptions underlying those projections or guidance, including GAAP and non-GAAP R&D, GAAP and non-GAAP SG&A, GAAP and non-GAAP gross margin on net product sales, COCM, other operating (income) expense, net, capital expenditures, and GAAP and non-GAAP effective tax rate; the potential for any license or collaboration agreement, including Regeneron’s agreements with Sanofi, Bayer, and Teva Pharmaceutical Industries Ltd. (or their respective affiliated companies, as applicable), as well as Regeneron’s agreement with Roche relating to REGEN-COV, to be cancelled or terminated; and risks associated with intellectual property of other parties and pending or future litigation relating thereto (including without limitation the patent litigation and other related proceedings relating to EYLEA, Dupixent, Praluent, and REGEN-COV), other litigation and other proceedings and government investigations relating to the Company and/or its operations (including the pending civil litigation initiated by the U.S. Attorney’s Office for the District of Massachusetts), the ultimate outcome of any such proceedings and investigations, and the impact any of the foregoing may have on Regeneron’s business, prospects, operating results, and financial condition. A more complete description of these and other material risks can be found in Regeneron’s filings with the U.S. Securities and Exchange Commission. Any forward-looking statements are made based on management’s current beliefs and judgment, and the reader is cautioned not to rely on any forward-looking statements made by Regeneron. Regeneron does not undertake any obligation to update (publicly or otherwise) any forward-looking statement, including without limitation any financial projection or guidance, whether as a result of new information, future events, or otherwise.

Regeneron uses its media and investor relations website and social media outlets to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Regeneron is routinely posted and is accessible on Regeneron’s media and investor relations website (http://newsroom.regeneron.com) and its Twitter feed (http://twitter.com/regeneron).

Non-GAAP Financial Measures

This press release and/or the financial results attached to this press release include amounts that are considered “non-GAAP financial measures” under SEC rules. As required, Regeneron has provided reconciliations of such non-GAAP financial measures.

TABLE 1

REGENERON PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions)




December 31,



2020


2019*

Assets:





Cash and marketable securities


$

6,722.6



$

6,471.1


Accounts receivable – trade, net


3,111.5



2,100.0


Accounts receivable – Sanofi and other, net


1,003.2



685.6


Inventories


1,916.6



1,415.5


Property, plant, and equipment, net


3,221.6



2,890.4


Deferred tax assets


858.9



824.2


Other assets


328.9



418.4


Total assets


$

17,163.3



$

14,805.2







Liabilities and stockholders’ equity:





Accounts payable, accrued expenses, and other liabilities


$

2,806.8



$

2,514.2


Long-term debt


1,978.5




Deferred revenue


635.5



487.4


Finance lease liabilities


717.2



713.9


Stockholders’ equity


11,025.3



11,089.7


Total liabilities and stockholders’ equity


$

17,163.3



$

14,805.2



* Certain revisions have been made to the previously reported December 31, 2019 amounts. See note (4) above.

TABLE 2

REGENERON PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except per share data)




Three Months Ended
December 31,


Year Ended
December 31,



2020


2019*


2020


2019*

Revenues:









Net product sales


$

1,621.8



$

1,286.4



$

5,567.6



$

4,834.4


Sanofi collaboration revenue


317.1



170.8



1,186.4



403.6


Bayer collaboration revenue


360.6



310.8



1,186.1



1,145.6


Other revenue


123.4



95.5



557.0



174.0




2,422.9



1,863.5



8,497.1



6,557.6


Expenses:









Research and development


744.5



552.4



2,735.0



2,450.0


Selling, general, and administrative


303.5



451.8



1,346.0



1,341.9


Cost of goods sold


179.6



108.5



491.9



362.3


Cost of collaboration and contract manufacturing


173.5



113.2



628.0



402.8


Other operating (income) expense, net


(145.2)



(38.1)



(280.4)



(209.2)




1,255.9



1,187.8



4,920.5



4,347.8











Income from operations


1,167.0



675.7



3,576.6



2,209.8











Other income (expense):









Other income (expense), net


72.4



220.8



290.7



249.5


Interest expense


(14.8)



(6.7)



(56.9)



(30.2)




57.6



214.1



233.8



219.3











Income before income taxes


1,224.6



889.8



3,810.4



2,429.1











Income tax expense


75.4



97.8



297.2



313.3











Net income


$

1,149.2



$

792.0



$

3,513.2



$

2,115.8











Net income per share – basic


$

10.90



$

7.25



$

32.65



$

19.38


Net income per share – diluted


$

10.24



$

6.93



$

30.52



$

18.46











Weighted average shares outstanding – basic


105.4



109.2



107.6



109.2


Weighted average shares outstanding – diluted


112.2



114.3



115.1



114.6







* Certain revisions have been made to the previously reported December 31, 2019 amounts. See note (4) above.

TABLE 3

REGENERON PHARMACEUTICALS, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (Unaudited)

(In millions, except per share data)




Three Months Ended
December 31,


Year Ended
December 31,



2020


2019


2020


2019

GAAP R&D


$

744.5


$

552.4


$

2,735.0


$

2,450.0

R&D: Non-cash share-based compensation expense


69.1


72.4


238.6


250.4

R&D: Up-front payments related to license and collaboration
  agreements



30.0


85.0


430.0

Non-GAAP R&D


$

675.4


$

450.0


$

2,411.4


$

1,769.6










GAAP SG&A


$

303.5


$

451.8


$

1,346.0


$

1,341.9

SG&A: Non-cash share-based compensation expense


38.6


45.4


153.0


167.7

SG&A: Litigation contingencies


(121.0)


60.0


(95.0)


70.0

SG&A: Restructuring-related expenses


5.2


35.2


8.1


35.2

Non-GAAP SG&A


$

380.7


$

311.2


$

1,279.9


$

1,069.0










GAAP COGS


$

179.6


$

108.5


$

491.9


$

362.3

COGS: Non-cash share-based compensation expense


13.8


15.7


40.4


46.2

COGS: Other




0.9


Non-GAAP COGS


$

165.8


$

92.8


$

450.6


$

316.1










GAAP other income (expense), net


$

57.6


$

214.1


$

233.8


$

219.3

Other income/expense: Gains on investments


(59.5)


(189.0)


(221.6)


(118.3)

Interest expense: Other




12.7


Non-GAAP other income (expense), net


$

(1.9)


$

25.1


$

24.9


$

101.0










GAAP net income


$

1,149.2


$

792.0


$

3,513.2


$

2,115.8

Total of GAAP to non-GAAP reconciling items above


(53.8)


69.7


222.1


881.2

Income tax effect of GAAP to non-GAAP reconciling items


14.8


(4.1)


(38.9)


(169.9)

 Income tax expense: Impact of sale of assets between foreign
  subsidiaries


(30.0)




(30.0)



Non-GAAP net income


$

1,080.2


$

857.6


$

3,666.4


$

2,827.1










Non-GAAP net income per share – basic


$

10.25


$

7.85


$

34.07


$

25.89

Non-GAAP net income per share – diluted


$

9.53


$

7.50


$

31.47


$

24.67










Shares used in calculating:









Non-GAAP net income per share – basic


105.4


109.2


107.6


109.2

Non-GAAP net income per share – diluted


113.4


114.3


116.5


114.6










Effective tax rate reconciliation:









GAAP effective tax rate


6.2

%


11.0

%


7.8

%


12.9

%

Income tax effect of GAAP to non-GAAP reconciling items


1.5

%


(0.4)

%


1.3

%


1.7

%

Non-GAAP effective tax rate


7.7

%


10.6

%


9.1

%


14.6

%










Free cash flow reconciliation:









Net cash provided by operating activities


$

1,231.0


$

787.4


$

2,618.1


$

2,430.0

Capital expenditures


(161.4)


(139.0)


(614.6)


(429.6)

Free cash flow


$

1,069.6


$

648.4


$

2,003.5


$

2,000.4


















TABLE 4

REGENERON PHARMACEUTICALS, INC.

COLLABORATION REVENUE (Unaudited)

(In millions)




Three Months Ended
December 31,


Year Ended
December 31,



2020


2019*


2020


2019*

Sanofi collaboration revenue:









Antibody:









Regeneron’s share of profits in connection with
  commercialization of antibodies


$

229.6



$

104.1



$

785.2



$

209.3


Sales-based milestone earned






50.0




Reimbursement for manufacturing of commercial supplies


93.0



72.2



368.0



216.0


Immuno-oncology:









Regeneron’s share of losses in connection with
  commercialization of Libtayo outside the United States


(8.4)



(5.5)



(25.7)



(21.7)


Reimbursement for manufacturing of commercial supplies


2.9





8.9




Total Sanofi collaboration revenue


$

317.1



$

170.8



$

1,186.4



$

403.6











Bayer collaboration revenue:









Regeneron’s net profit in connection with commercialization of
  EYLEA outside the United States


$

335.3



$

298.1



$

1,107.9



$

1,091.4


Reimbursement for manufacturing of commercial supplies


25.3



12.7



78.2



54.2


Total Bayer collaboration revenue


$

360.6



$

310.8



$

1,186.1



$

1,145.6







* Certain revisions have been made to the previously reported December 31, 2019 amounts. See note (4) above.

TABLE 5

REGENERON PHARMACEUTICALS, INC.

NET PRODUCT SALES OF REGENERON-DISCOVERED PRODUCTS (Unaudited)

(In millions)




Net Product
Sales
Recorded by
Regeneron


Three Months Ended
December 31,






2020


2019


% Change




U.S.


ROW


Total


U.S.


ROW


Total


(Total Sales)

EYLEA(a)


U.S.


$

1,343.2



$

858.8



$

2,202.0



$

1,222.1



$

782.5



$

2,004.6



10

%

Dupixent


(b)


$

925.6



$

246.4



$

1,172.0



$

605.2



$

146.3



$

751.5



56

%

Libtayo(b)


U.S.


$

74.1



$

23.2



$

97.3



$

60.5



$

14.2



$

74.7



30

%

Praluent(c)


U.S.


$

55.2



$

45.7



$

100.9



$

43.1



$

38.3



$

81.4



24

%

Kevzara


(b)


$

36.6



$

34.9



$

71.5



$

37.6



$

22.1



$

59.7



20

%

REGEN-COV(d)


U.S.


$

145.5





$

145.5









(e)

ZALTRAP


(b)


$

0.9



$

23.9



$

24.8



$

2.4



$

26.5



$

28.9



(14)

%

ARCALYST


U.S.


$

3.8





$

3.8



$

3.8





$

3.8



%




















Net Product
Sales
Recorded by
Regeneron


Year Ended
December 31,






2020


2019


% Change




U.S.


ROW


Total


U.S.


ROW


Total


(Total Sales)

EYLEA(a)


U.S.


$

4,947.2



$

2,961.5



$

7,908.7



$

4,644.2



$

2,897.4



$

7,541.6



5

%

Dupixent


(b)


$

3,226.2



$

818.6



$

4,044.8



$

1,871.2



$

444.4



$

2,315.6



75

%

Libtayo(b)


U.S.


$

270.7



$

77.5



$

348.2



$

175.7



$

18.1



$

193.8



80

%

Praluent(c)


U.S.


$

186.0



$

172.8



$

358.8



$

126.0



$

162.7



$

288.7



24

%

Kevzara


(b)


$

141.6



$

128.3



$

269.9



$

129.0



$

77.7



$

206.7



31

%

REGEN-COV(d)


U.S.


$

185.7





$

185.7









(e)

ZALTRAP


(b)


$

5.8



$

97.9



$

103.7



$

7.3



$

101.1



$

108.4



(4)

%

ARCALYST


U.S.


$

13.1





$

13.1



$

14.5





$

14.5



(10)

%


















(a) Regeneron records net product sales of EYLEA in the United States. Bayer records net product sales of EYLEA outside the United States. The Company records its share of profits/losses in connection with sales of EYLEA outside the United States.

(b) Regeneron records net product sales of Libtayo in the United States. Sanofi records net product sales of Libtayo outside the United States and global net product sales of Dupixent, Kevzara, and ZALTRAP. The Company records its share of profits/losses in connection with (i) sales of Libtayo outside the United States, and (ii) global sales of Dupixent and Kevzara, within collaboration revenue (see Table 4). Sanofi pays the Company a percentage of net sales of ZALTRAP. 

(c) Effective April 1, 2020, Regeneron records net product sales of Praluent in the United States. Also effective April 1, 2020, Sanofi records net product sales of Praluent outside the United States and pays the Company a royalty on such sales. Previously, Sanofi recorded global net product sales of Praluent and the Company recorded its share of profits/losses in connection with such sales.

(d) Regeneron records net product sales of REGEN-COV in connection with its agreements with the U.S. government.

(e) Percentage not meaningful

SOURCE Regeneron Pharmaceuticals, Inc.

Related Links

www.regeneron.com