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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | | | | | | | | | | |
| (Mark One) | | |
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended June 30, 2024 |
| OR | | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from __________ to __________ |
| | | | | | | | | | | |
| Commission File Number: 000-19034 | |
REGENERON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
| New York | | 13-3444607 |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | | | | | | | | | |
777 Old Saw Mill River Road, Tarrytown, New York 10591-6707 |
| (Address of principal executive offices, including zip code) |
(914) 847-7000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common Stock - par value $.001 per share | REGN | NASDAQ Global Select Market |
| | | | | | | | | | | | | | |
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | Yes | ☒ | No | ☐ |
| | | | |
| Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). | Yes | ☒ | No | ☐ |
| | |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Large accelerated filer | ☒ | | Accelerated filer | ☐ | | Non-accelerated filer | ☐ | | Smaller reporting company | ☐ | | Emerging growth company | ☐ | | |
| | | | | | | | | | | | | | |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | ☐ | | |
| | | | |
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | Yes | ☐ | No | ☒ |
The number of shares outstanding of each of the registrant's classes of common stock as of July 25, 2024:
| | | | | | | | |
| Class of Common Stock | | Number of Shares |
| Class A Stock, $.001 par value | | 1,817,146 |
| Common Stock, $.001 par value | | 108,417,383 |
REGENERON PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
| | |
"Altibodies™," "ARCALYST®," "Evkeeza®," "EYLEA®," "EYLEA® HD," "Inmazeb®," "Libtayo®," "Praluent®" (in the United States), "REGEN-COV®," "Regeneron®," "Regeneron Genetics Center®," "RGC®," "Veloci-Bi®," "VelociGene®," "VelociHum®," "VelociMab®," "VelocImmune®," "VelociMouse®," "VelociSuite®," "VelociT®," "Veopoz®," and "ZALTRAP®" are trademarks of Regeneron Pharmaceuticals, Inc. Trademarks and trade names of other companies appearing in this report are, to the knowledge of Regeneron Pharmaceuticals, Inc., the property of their respective owners. This report refers to products of Regeneron Pharmaceuticals, Inc., its collaborators, and other parties. Consult the product label in each territory for specific information about such products. |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except per share data) | | | | | | | | | | | |
| June 30, | | December 31, |
| 2024 | | 2023 |
| ASSETS |
| Current assets: | | | |
| Cash and cash equivalents | $ | 1,920.7 | | | $ | 2,730.0 | |
| Marketable securities | 7,888.3 | | | 8,114.8 | |
| Accounts receivable, net | 5,717.1 | | | 5,667.3 | |
| Inventories | 2,873.6 | | | 2,580.5 | |
| Prepaid expenses and other current assets | 681.9 | | | 386.6 | |
| Total current assets | 19,081.6 | | | 19,479.2 | |
| | | |
| Marketable securities | 7,722.4 | | | 5,396.5 | |
| Property, plant, and equipment, net | 4,305.9 | | | 4,146.4 | |
| Intangible assets, net | 1,102.2 | | | 1,038.6 | |
| Deferred tax assets | 2,880.9 | | | 2,575.4 | |
| Other noncurrent assets | 993.8 | | | 444.1 | |
| Total assets | $ | 36,086.8 | | | $ | 33,080.2 | |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
| Current liabilities: | | | |
| Accounts payable | $ | 561.7 | | | $ | 606.6 | |
| Accrued expenses and other current liabilities | 2,360.9 | | | 2,357.9 | |
| Deferred revenue | 586.0 | | | 458.9 | |
| Total current liabilities | 3,508.6 | | | 3,423.4 | |
| | | |
| Long-term debt | 1,983.6 | | | 1,982.9 | |
| Finance lease liabilities | 720.0 | | | 720.0 | |
| Deferred revenue | 205.6 | | | 126.7 | |
| Other noncurrent liabilities | 1,463.2 | | | 854.1 | |
| Total liabilities | 7,881.0 | | | 7,107.1 | |
| | | |
| Stockholders' equity: | | | |
Preferred Stock, par value $.01 per share; 30.0 shares authorized; shares issued and outstanding - none | — | | | — | |
Class A Stock, convertible, par value $.001 per share; 40.0 shares authorized; shares issued and outstanding - 1.8 in 2024 and 2023 | — | | | — | |
Common Stock, par value $.001 per share; 320.0 shares authorized; shares issued - 134.8 in 2024 and 133.1 in 2023 | 0.1 | | | 0.1 | |
| Additional paid-in capital | 12,316.9 | | | 11,354.0 | |
| Retained earnings | 29,414.6 | | | 27,260.3 | |
| Accumulated other comprehensive loss | (69.9) | | | (80.9) | |
Treasury Stock, at cost; 26.4 shares in 2024 and 25.5 shares in 2023 | (13,455.9) | | | (12,560.4) | |
| Total stockholders' equity | 28,205.8 | | | 25,973.1 | |
| Total liabilities and stockholders' equity | $ | 36,086.8 | | | $ | 33,080.2 | |
| | | |
| The accompanying notes are an integral part of the financial statements. |
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(In millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| Statements of Operations | | | | | | | | |
| Revenues: | | | | | | | | |
| Net product sales | | $ | 1,918.6 | | | $ | 1,772.1 | | | $ | 3,679.9 | | | $ | 3,440.1 | |
| Collaboration revenue | | 1,524.0 | | | 1,316.7 | | | 2,790.8 | | | 2,694.8 | |
| Other revenue | | 104.5 | | | 69.3 | | | 221.4 | | | 185.3 | |
| | 3,547.1 | | | 3,158.1 | | | 6,692.1 | | | 6,320.2 | |
| | | | | | | | |
| Expenses: | | | | | | | | |
| Research and development | | 1,200.0 | | | 1,085.3 | | | 2,448.4 | | | 2,186.5 | |
| Acquired in-process research and development | | 23.9 | | | — | | | 31.0 | | | 56.1 | |
| Selling, general, and administrative | | 758.8 | | | 652.0 | | | 1,447.8 | | | 1,253.1 | |
| Cost of goods sold | | 257.8 | | | 192.4 | | | 498.2 | | | 400.8 | |
| Cost of collaboration and contract manufacturing | | 222.4 | | | 212.5 | | | 415.8 | | | 461.6 | |
Other operating expense (income), net | | 14.6 | | | (0.6) | | | 29.9 | | | (1.1) | |
| | 2,477.5 | | | 2,141.6 | | | 4,871.1 | | | 4,357.0 | |
| | | | | | | | |
| Income from operations | | 1,069.6 | | | 1,016.5 | | | 1,821.0 | | | 1,963.2 | |
| | | | | | | | |
| Other income (expense): | | | | | | | | |
Other income (expense), net | | 573.3 | | | 85.3 | | | 538.7 | | | 14.6 | |
| Interest expense | | (14.8) | | | (18.9) | | | (30.9) | | | (36.9) | |
| | 558.5 | | | 66.4 | | | 507.8 | | | (22.3) | |
| | | | | | | | |
| Income before income taxes | | 1,628.1 | | | 1,082.9 | | | 2,328.8 | | | 1,940.9 | |
| | | | | | | | |
Income tax expense | | 195.8 | | | 114.5 | | | 174.5 | | | 154.7 | |
| | | | | | | | |
| Net income | | $ | 1,432.3 | | | $ | 968.4 | | | $ | 2,154.3 | | | $ | 1,786.2 | |
| | | | | | | | |
| Net income per share - basic | | $ | 13.25 | | | $ | 9.05 | | | $ | 19.95 | | | $ | 16.69 | |
| Net income per share - diluted | | $ | 12.41 | | | $ | 8.50 | | | $ | 18.68 | | | $ | 15.68 | |
| | | | | | | | |
| Weighted average shares outstanding - basic | | 108.1 | | | 107.0 | | | 108.0 | | | 107.0 | |
| Weighted average shares outstanding - diluted | | 115.4 | | | 113.9 | | | 115.3 | | | 113.9 | |
| | | | | | | | |
| Statements of Comprehensive Income | | | | | | | | |
| Net income | | $ | 1,432.3 | | | $ | 968.4 | | | $ | 2,154.3 | | | $ | 1,786.2 | |
| Other comprehensive income (loss), net of tax: | | | | | | | | |
Unrealized gain (loss) on debt securities | | 7.9 | | | (15.7) | | | 11.4 | | | 41.5 | |
Loss on foreign currency translation | | (0.6) | | | (0.4) | | | (0.4) | | | (0.4) | |
| Comprehensive income | | $ | 1,439.6 | | | $ | 952.3 | | | $ | 2,165.3 | | | $ | 1,827.3 | |
| | | | | | | | |
| The accompanying notes are an integral part of the financial statements. |
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(In millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Class A Stock | | Common Stock | | Additional
Paid-in Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Treasury Stock | | Total Stockholders' Equity |
| | Shares | | Amount | | Shares | | Amount | | | | | Shares | | Amount | |
Balance, December 31, 2023 | | 1.8 | | $ | — | | | 133.1 | | $ | 0.1 | | | $ | 11,354.0 | | | $ | 27,260.3 | | | $ | (80.9) | | | (25.5) | | $ | (12,560.4) | | | $ | 25,973.1 | |
| Issuance of Common Stock for equity awards granted under long-term incentive plans | | — | | | — | | | 1.5 | | | — | | | 672.4 | | | — | | | — | | | — | | | — | | | 672.4 | |
| Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations | | — | | | — | | | (0.4) | | | — | | | (335.9) | | | — | | | — | | | — | | | — | | | (335.9) | |
| Issuance/distribution of Common Stock for 401(k) Savings Plan | | — | | | — | | | — | | | — | | | 18.8 | | | — | | | — | | | — | | | 1.7 | | | 20.5 | |
| Repurchases of Common Stock | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (0.3) | | | (298.0) | | | (298.0) | |
| Stock-based compensation charges | | — | | | — | | | — | | | — | | | 233.3 | | | — | | | — | | | — | | | — | | | 233.3 | |
| Net income | | — | | | — | | | — | | | — | | | — | | | 722.0 | | | — | | | — | | | — | | | 722.0 | |
Other comprehensive income, net of tax | | — | | | — | | | — | | | — | | | — | | | — | | | 3.7 | | | — | | | — | | | 3.7 | |
Balance, March 31, 2024 | | 1.8 | | | — | | | 134.2 | | | 0.1 | | | 11,942.6 | | | 27,982.3 | | | (77.2) | | | (25.8) | | | (12,856.7) | | | 26,991.1 | |
| Issuance of Common Stock for equity awards granted under long-term incentive plans | | — | | | — | | | 1.0 | | | — | | | 436.5 | | | — | | | — | | | — | | | — | | | 436.5 | |
| Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations | | — | | | — | | | (0.4) | | | — | | | (311.8) | | | — | | | — | | | — | | | — | | | (311.8) | |
| Issuance/distribution of Common Stock for 401(k) Savings Plan | | — | | | — | | | — | | | — | | | 19.6 | | | — | | | — | | | — | | | 2.2 | | | 21.8 | |
| Repurchases of Common Stock | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (0.6) | | | (601.4) | | | (601.4) | |
| Stock-based compensation charges | | — | | | — | | | — | | | — | | | 230.0 | | | — | | | — | | | — | | | — | | | 230.0 | |
| Net income | | — | | | — | | | — | | | — | | | — | | | 1,432.3 | | | — | | | — | | | — | | | 1,432.3 | |
Other comprehensive income, net of tax | | — | | | — | | | — | | | — | | | — | | | — | | | 7.3 | | | — | | | — | | | 7.3 | |
Balance, June 30, 2024 | | 1.8 | | $ | — | | | 134.8 | | $ | 0.1 | | | $ | 12,316.9 | | | $ | 29,414.6 | | | $ | (69.9) | | | (26.4) | | $ | (13,455.9) | | | $ | 28,205.8 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (continued) |
| | Class A Stock | | Common Stock | | Additional
Paid-in Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Treasury Stock | | Total Stockholders' Equity |
| | Shares | | Amount | | Shares | | Amount | | | | | Shares | | Amount | |
| Balance, December 31, 2022 | | 1.8 | | | $ | — | | | 130.4 | | | $ | 0.1 | | | $ | 9,949.3 | | | $ | 23,306.7 | | | $ | (238.8) | | | (22.6) | | | $ | (10,353.3) | | | $ | 22,664.0 | |
| Issuance of Common Stock for equity awards granted under long-term incentive plans | | — | | | — | | | 1.1 | | | — | | | 491.3 | | | — | | | — | | | — | | | — | | | 491.3 | |
| Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations | | — | | | — | | | (0.1) | | | — | | | (99.2) | | | — | | | — | | | — | | | — | | | (99.2) | |
| Issuance/distribution of Common Stock for 401(k) Savings Plan | | — | | | — | | | — | | | — | | | 18.9 | | | — | | | — | | | — | | | 1.7 | | | 20.6 | |
| Repurchases of Common Stock | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (0.9) | | | (693.9) | | | (693.9) | |
| Stock-based compensation charges | | — | | | — | | | — | | | — | | | 237.4 | | | — | | | — | | | — | | | — | | | 237.4 | |
| Net income | | — | | | — | | | — | | | — | | | — | | | 817.8 | | | — | | | — | | | — | | | 817.8 | |
Other comprehensive income, net of tax | | — | | | — | | | — | | | — | | | — | | | — | | | 57.2 | | | — | | | — | | | 57.2 | |
Balance, March 31, 2023 | | 1.8 | | | — | | | 131.4 | | | 0.1 | | | 10,597.7 | | | 24,124.5 | | | (181.6) | | | (23.5) | | | (11,045.5) | | | 23,495.2 | |
| Issuance of Common Stock for equity awards granted under long-term incentive plans | | — | | | — | | | 0.2 | | | — | | | 80.7 | | | — | | | — | | | — | | | — | | | 80.7 | |
| Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations | | — | | | — | | | — | | | — | | | (14.0) | | | — | | | — | | | — | | | — | | | (14.0) | |
| Issuance/distribution of Common Stock for 401(k) Savings Plan | | — | | | — | | | — | | | — | | | 16.1 | | | — | | | — | | | — | | | 2.4 | | | 18.5 | |
| Repurchases of Common Stock | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1.0) | | | (722.8) | | | (722.8) | |
| Stock-based compensation charges | | — | | | — | | | — | | | — | | | 208.0 | | | — | | | — | | | — | | | — | | | 208.0 | |
| Net income | | — | | | — | | | — | | | — | | | — | | | 968.4 | | | — | | | — | | | — | | | 968.4 | |
Other comprehensive loss, net of tax | | — | | | — | | | — | | | — | | | — | | | — | | | (16.1) | | | — | | | — | | | (16.1) | |
Balance, June 30, 2023 | | 1.8 | | $ | — | | | 131.6 | | $ | 0.1 | | | $ | 10,888.5 | | | $ | 25,092.9 | | | $ | (197.7) | | | (24.5) | | $ | (11,765.9) | | | $ | 24,017.9 | |
| | | | | | | | | | | | | | | | | | | | |
| The accompanying notes are an integral part of the financial statements. |
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
| | | | | | | | | | | | | | |
| | Six Months Ended June 30, |
| | 2024 | | 2023 |
| Cash flows from operating activities: | | | | |
| Net income | | $ | 2,154.3 | | | $ | 1,786.2 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
| Depreciation and amortization | | 234.8 | | | 202.6 | |
| Stock-based compensation expense | | 453.3 | | | 440.7 | |
(Gains) losses on marketable and other securities, net | | (196.5) | | | 197.5 | |
| Other non-cash items, net | | (2.9) | | | 29.2 | |
| Deferred income taxes | | (308.5) | | | (425.8) | |
| Changes in assets and liabilities: | | | | |
(Increase) decrease in accounts receivable | | (47.3) | | | 207.4 | |
| Increase in inventories | | (337.6) | | | (147.2) | |
| Increase in prepaid expenses and other assets | | (604.2) | | | (8.9) | |
| Increase (decrease) in deferred revenue | | 206.0 | | | (50.4) | |
| Increase in accounts payable, accrued expenses, and other liabilities | | 315.1 | | | 158.7 | |
| Total adjustments | | (287.8) | | | 603.8 | |
| Net cash provided by operating activities | | 1,866.5 | | | 2,390.0 | |
| | | | |
| Cash flows from investing activities: | | | | |
| Purchases of marketable and other securities | | (10,073.4) | | | (6,271.1) | |
| Sales or maturities of marketable and other securities | | 8,186.7 | | | 4,061.5 | |
| Capital expenditures | | (314.4) | | | (291.2) | |
Proceeds from sale of property, plant, and equipment | | 20.1 | | | — | |
| Payments for Libtayo intangible asset | | (58.3) | | | (121.8) | |
Acquisitions, net of cash acquired | | (5.0) | | | — | |
| Net cash used in investing activities | | (2,244.3) | | | (2,622.6) | |
| | | | |
| Cash flows from financing activities: | | | | |
| Proceeds from issuance of Common Stock | | 1,119.7 | | | 575.9 | |
| Payments in connection with Common Stock tendered for employee tax obligations | | (655.5) | | | (113.1) | |
| Repurchases of Common Stock | | (895.2) | | | (1,399.5) | |
Net cash used in financing activities | | (431.0) | | | (936.7) | |
| | | | |
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | | (0.8) | | | (0.4) | |
| | | | |
Net decrease in cash, cash equivalents, and restricted cash | | (809.6) | | | (1,169.7) | |
| | | | |
| Cash, cash equivalents, and restricted cash at beginning of period | | 2,737.8 | | | 3,119.4 | |
| | | | |
| Cash, cash equivalents, and restricted cash at end of period | | $ | 1,928.2 | | | $ | 1,949.7 | |
| | | | |
| The accompanying notes are an integral part of the financial statements. |
REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Interim Financial Statements
Basis of Presentation
The interim Condensed Consolidated Financial Statements of Regeneron Pharmaceuticals, Inc. and its subsidiaries ("Regeneron," "Company," "we," "us," and "our") have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and disclosures necessary for a presentation of the Company's financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, these financial statements reflect all normal recurring adjustments and accruals necessary for a fair statement of the Company's condensed consolidated financial statements for such periods. The results of operations for any interim period are not necessarily indicative of the results for the full year. The December 31, 2023 Condensed Consolidated Balance Sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Recently Issued Accounting Standards
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures. The amendments require disclosure of incremental segment information on an annual and interim basis. The amendments also require companies with a single reportable segment to provide all disclosures required by this amendment and all existing segment disclosures in Accounting Standards Codification 280, Segment Reporting. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company does not expect the adoption of the amendments to have a significant impact on its financial statements.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes - Improvements to Income Tax Disclosures. The amendments require (i) enhanced disclosures in connection with an entity's effective tax rate reconciliation and (ii) income taxes paid disaggregated by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024. The Company does not expect the adoption of the amendments to have a significant impact on its financial statements.
2. Product Sales
Net product sales consist of the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | Six Months Ended June 30, |
| (In millions) | | | 2024 | | 2023 | | 2024 | | 2023 |
EYLEA® HD | U.S. | | $ | 304.2 | | | $ | — | | | $ | 504.2 | | | $ | — | |
EYLEA® | U.S. | | 1,230.5 | | | 1,500.1 | | | 2,432.1 | | | 2,933.9 | |
| Total EYLEA HD and EYLEA | U.S. | | 1,534.7 | | | 1,500.1 | | | 2,936.3 | | | 2,933.9 | |
Libtayo® | U.S. | | 182.4 | | | 130.2 | | | 341.6 | | | 239.9 | |
Libtayo | Rest of world | | 115.0 | | | 79.8 | | | 219.7 | | | 147.0 | |
Total Libtayo | Global | | 297.4 | | | 210.0 | | | 561.3 | | | 386.9 | |
Praluent® | U.S. | | 56.1 | | | 40.5 | | | 126.1 | | | 80.7 | |
Evkeeza® | U.S. | | 30.4 | | | 19.3 | | | 55.2 | | | 34.2 | |
Inmazeb® | Global | | — | | | 2.2 | | | 1.0 | | | 4.4 | |
| | | $ | 1,918.6 | | | $ | 1,772.1 | | | $ | 3,679.9 | | | $ | 3,440.1 | |
As of June 30, 2024 and December 31, 2023, the Company had $3.958 billion and $3.888 billion, respectively, of trade accounts receivable that were recorded within Accounts receivable, net.
The Company had product sales to certain customers that each accounted for more than 10% of total gross product revenue for the three and six months ended June 30, 2024 and 2023. Sales to each of these customers as a percentage of the Company's total gross product revenue are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended
June 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| Besse Medical, a subsidiary of Cencora, Inc. | | 51 | % | | 51 | % | | 51 | % | | 51 | % |
| McKesson Corporation | | 24 | % | | 25 | % | | 24 | % | | 25 | % |
3. Collaboration, License, and Other Agreements
a. Sanofi
The Company is party to a global, strategic collaboration with Sanofi to research, develop, and commercialize fully human monoclonal antibodies, which currently consists of Dupixent® (dupilumab), Kevzara® (sarilumab), and itepekimab.
Sanofi is generally responsible for funding 80% to 100% of agreed-upon development costs. The Company is obligated to reimburse Sanofi for 30% to 50% of worldwide development expenses that were funded by Sanofi (i.e., "development balance") based on the Company's share of collaboration profits; however, the Company is only required to apply 20% of its share of profits from the collaboration each calendar quarter to reimburse Sanofi for these development expenses. As of June 30, 2024, the Company's contingent reimbursement obligation to Sanofi under the collaboration was approximately $2.013 billion.
Sanofi leads commercialization activities for products under the collaboration, subject to the Company's right to co-commercialize such products.
Amounts recognized in the Company's Statements of Operations in connection with its Sanofi collaboration are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Statement of Operations Classification | | Three Months Ended June 30, | | Six Months Ended June 30, |
| (In millions) | | | 2024 | | 2023 | | 2024 | | 2023 |
Regeneron's share of profits | | Collaboration revenue | | $ | 988.3 | | | $ | 751.1 | | | $ | 1,792.3 | | | $ | 1,387.6 | |
| Reimbursement for manufacturing of commercial supplies | | Collaboration revenue | | $ | 157.3 | | | $ | 192.6 | | | $ | 263.1 | | | $ | 354.5 | |
| Regeneron's obligation for its share of Sanofi R&D expenses, net of reimbursement of R&D expenses | | (R&D expense) | | $ | (9.1) | | | $ | (14.5) | | | $ | (27.7) | | | $ | (40.9) | |
| Reimbursement of commercialization-related expenses | | Reduction of SG&A expense | | $ | 150.8 | | | $ | 130.9 | | | $ | 290.3 | | | $ | 248.5 | |
The following table summarizes contract balances in connection with the Company's Sanofi collaboration:
| | | | | | | | | | | | | | |
| | June 30, | | December 31, |
| (In millions) | | 2024 | | 2023 |
| Accounts receivable, net | | $ | 1,133.0 | | | $ | 1,029.1 | |
Deferred revenue | | $ | 601.9 | | | $ | 427.7 | |
b. Bayer
The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA 8 mg (aflibercept 8 mg) and EYLEA (aflibercept) outside the United States. Agreed-upon development expenses incurred by the Company and Bayer are generally shared equally. Within the United States, the Company is responsible for commercialization and retains profits from such sales. Bayer is responsible for commercialization activities outside the United States, and the companies share equally in profits from such sales.
Amounts recognized in the Company's Statements of Operations in connection with its Bayer collaboration are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Statement of Operations Classification | | Three Months Ended June 30, | | Six Months Ended June 30, |
| (In millions) | | | 2024 | | 2023 | | 2024 | | 2023 |
Regeneron's share of profits | | Collaboration revenue | | $ | 353.0 | | | $ | 349.5 | | | $ | 686.9 | | | $ | 681.1 | |
| Reimbursement for manufacturing of ex-U.S. commercial supplies | | Collaboration revenue | | $ | 22.1 | | | $ | 27.2 | | | $ | 44.2 | | | $ | 52.5 | |
| Regeneron's obligation for its share of Bayer R&D expenses, net of reimbursement of R&D expenses | | (R&D expense) | | $ | (14.7) | | | $ | (12.0) | | | $ | (23.4) | | | $ | (25.4) | |
The following table summarizes contract balances in connection with the Company's Bayer collaboration:
| | | | | | | | | | | | | | |
| | June 30, | | December 31, |
| (In millions) | | 2024 | | 2023 |
| Accounts receivable, net | | $ | 373.4 | | | $ | 381.7 | |
Deferred revenue | | $ | 171.1 | | | $ | 138.2 | |
c. Roche
The Company is a party to a collaboration agreement with Roche to develop, manufacture, and distribute the casirivimab and imdevimab antibody cocktail (known as REGEN-COV® in the United States and Ronapreve™ in other countries). Under the terms of the collaboration agreement, the Company has the right to distribute the product in the United States while Roche has the right to distribute the product outside the United States. The parties share gross profits from worldwide sales based on a pre-specified formula, depending on the amount of manufactured product supplied by each party to the market.
Amounts recognized in the Company's Statements of Operations in connection with its Roche collaboration are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Statement of Operations Classification | | Three Months Ended June 30, | | Six Months Ended
June 30, |
| (In millions) | | | 2024 | | 2023 | | 2024 | | 2023 |
| Global gross profit payment from Roche in connection with sales of Ronapreve | | Collaboration revenue | | $ | 0.4 | | | $ | — | | | $ | 0.9 | | | $ | 222.2 | |
Other | | Collaboration revenue | | $ | — | | | $ | (3.8) | | | $ | — | | | $ | (3.8) | |
Contract balances in the Company's Balance Sheets in connection with the Roche collaboration were not material as of June 30, 2024 and December 31, 2023.
d. Other
In addition to the collaboration and license agreements discussed above, the Company has various other collaboration and license agreements that are not individually significant to its operating results or financial condition at this time. Pursuant to the terms of those agreements, the Company may be required to pay, or it may receive, additional amounts contingent upon the occurrence of various future events (e.g., upon the achievement of various development and commercial milestones), which in the aggregate could be significant. The Company may also incur, or get reimbursed for, significant research and development costs.
During the three and six months ended June 30, 2024, the Company recorded to Acquired in-process research and development expense $23.9 million and $31.0 million, respectively, which primarily related to up-front payments, as well as a premium on equity securities purchased, in connection with collaboration and licensing agreements. During the six months ended June 30, 2023, the Company recorded to Acquired in-process research and development expense $56.1 million, which included a $45.0 million up-front payment in connection with the Company's collaboration agreement with Sonoma Biotherapeutics, Inc.
4. Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted average number of shares of Common Stock and Class A Stock outstanding. Net income per share is presented on a combined basis, inclusive of Common Stock and Class A Stock outstanding, as each class of stock has equivalent economic rights. Diluted net income per share includes the potential dilutive effect of other securities as if such securities were converted or exercised during the period, when the effect is dilutive. The calculations of basic and diluted net income per share are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| (In millions, except per share data) | | 2024 | | 2023 | | 2024 | | 2023 |
| Net income - basic and diluted | | $ | 1,432.3 | | | $ | 968.4 | | | $ | 2,154.3 | | | $ | 1,786.2 | |
| | | | | | | | |
| Weighted average shares - basic | | 108.1 | | | 107.0 | | | 108.0 | | | 107.0 | |
| Effect of dilutive securities: | | | | | | | | |
| Stock options | | 5.0 | | | 4.8 | | | 5.1 | | | 4.9 | |
| Restricted stock awards and restricted stock units | | 2.3 | | | 2.1 | | | 2.2 | | | 2.0 | |
| Weighted average shares - diluted | | 115.4 | | | 113.9 | | | 115.3 | | | 113.9 | |
| | | | | | | | |
| Net income per share - basic | | $ | 13.25 | | | $ | 9.05 | | | $ | 19.95 | | | $ | 16.69 | |
| Net income per share - diluted | | $ | 12.41 | | | $ | 8.50 | | | $ | 18.68 | | | $ | 15.68 | |
Shares which have been excluded from diluted per share amounts because their effect would have been antidilutive include the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| (Shares in millions) | | 2024 | | 2023 | | 2024 | | 2023 |
| Stock options | | 1.5 | | | 1.7 | | | 1.5 | | | 1.7 | |
5. Marketable Securities
Marketable securities as of June 30, 2024 and December 31, 2023 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).
The following tables summarize the Company's investments in available-for-sale debt securities:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | | Amortized | | Unrealized | | Fair |
As of June 30, 2024 | | Cost Basis | | Gains | | Losses | | Value |
| Corporate bonds | | $ | 7,362.2 | | | $ | 3.8 | | | $ | (69.6) | | | $ | 7,296.4 | |
| U.S. government and government agency obligations | | 5,787.1 | | | 0.2 | | | (19.8) | | | 5,767.5 | |
| Sovereign bonds | | 54.0 | | | — | | | (0.7) | | | 53.3 | |
| Commercial paper | | 785.3 | | | — | | | (0.4) | | | 784.9 | |
| Certificates of deposit | | 384.3 | | | 0.1 | | | (0.1) | | | 384.3 | |
| Asset-backed securities | | 151.6 | | | — | | | (1.1) | | | 150.5 | |
| | $ | 14,524.5 | | | $ | 4.1 | | | $ | (91.7) | | | $ | 14,436.9 | |
| | | | | | | | |
As of December 31, 2023 | | | | | | | | |
| Corporate bonds | | $ | 6,492.5 | | | $ | 10.4 | | | $ | (104.9) | | | $ | 6,398.0 | |
| U.S. government and government agency obligations | | 4,839.6 | | | 2.4 | | | (8.6) | | | 4,833.4 | |
| Sovereign bonds | | 58.1 | | | — | | | (0.9) | | | 57.2 | |
| Commercial paper | | 636.8 | | | 0.2 | | | (0.2) | | | 636.8 | |
| Certificates of deposit | | 520.8 | | | 0.6 | | | — | | | 521.4 | |
| Asset-backed securities | | 88.2 | | | 0.1 | | | (1.2) | | | 87.1 | |
| | $ | 12,636.0 | | | $ | 13.7 | | | $ | (115.8) | | | $ | 12,533.9 | |
The Company classifies its investments in available-for-sale debt securities based on their contractual maturity dates. The available-for-sale debt securities as of June 30, 2024 mature at various dates through June 2029. The fair values of available-for-sale debt securities by contractual maturity consist of the following:
| | | | | | | | | | | | | | |
| | June 30, | | December 31, |
| (In millions) | | 2024 | | 2023 |
| Maturities within one year | | $ | 7,888.3 | | | $ | 8,114.8 | |
| Maturities after one year through five years | | 6,548.6 | | | 4,414.5 | |
| Maturities after five years | | — | | | 4.6 | |
| | $ | 14,436.9 | | | $ | 12,533.9 | |
The following table shows the fair value of the Company's available-for-sale debt securities that have unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous loss position.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less than 12 Months | | 12 Months or Greater | | Total |
(In millions) As of June 30, 2024 | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss |
| Corporate bonds | $ | 4,835.6 | | | $ | (16.3) | | | $ | 2,460.8 | | | $ | (53.3) | | | $ | 7,296.4 | | | $ | (69.6) | |
| U.S. government and government agency obligations | 4,803.5 | | | (6.1) | | | 964.0 | | | (13.7) | | | 5,767.5 | | | (19.8) | |
| Sovereign bonds | 26.7 | | | (0.1) | | | 26.6 | | | (0.6) | | | 53.3 | | | (0.7) | |
| Commercial paper | 784.9 | | | (0.4) | | | — | | | — | | | 784.9 | | | (0.4) | |
Certificates of deposit | 384.3 | | | (0.1) | | | — | | | — | | | 384.3 | | | (0.1) | |
| Asset-backed securities | 81.7 | | | (0.2) | | | 68.8 | | | (0.9) | | | 150.5 | | | (1.1) | |
| $ | 10,916.7 | | | $ | (23.2) | | | $ | 3,520.2 | | | $ | (68.5) | | | $ | 14,436.9 | | | $ | (91.7) | |
| | | | | | | | | | | |
As of December 31, 2023 | | | | | | | | | | | |
| Corporate bonds | $ | 2,363.3 | | | $ | (2.4) | | | $ | 4,034.7 | | | $ | (102.5) | | | $ | 6,398.0 | | | $ | (104.9) | |
| U.S. government and government agency obligations | 4,780.6 | | | (6.0) | | | 52.7 | | | (2.6) | | | 4,833.3 | | | (8.6) | |
| Sovereign bonds | 12.4 | | | (0.1) | | | 44.8 | | | (0.8) | | | 57.2 | | | (0.9) | |
Commercial paper | 636.8 | | | (0.2) | | | — | | | — | | | 636.8 | | | (0.2) | |
| Asset-backed securities | 61.8 | | | (0.3) | | | 25.3 | | | (0.9) | | | 87.1 | | | (1.2) | |
| $ | 7,854.9 | | | $ | (9.0) | | | $ | 4,157.5 | | | $ | (106.8) | | | $ | 12,012.4 | | | $ | (115.8) | |
The unrealized losses on corporate bonds as of June 30, 2024 were primarily driven by increased interest rates. The Company has reviewed its portfolio of available-for-sale debt securities and determined that the decline in fair value below cost did not result from credit-related factors. In addition, the Company does not intend to sell, and it is not more likely than not that the Company will be required to sell, such securities before recovery of their amortized cost bases.
With respect to marketable securities, for the three and six months ended June 30, 2024 and 2023, amounts reclassified from Accumulated other comprehensive loss into Other income (expense), net were related to realized gains/losses on sales of available-for-sale debt securities. For the three and six months ended June 30, 2024 and 2023, realized gains/losses on sales of marketable securities were not material.
6. Fair Value Measurements
The table below summarizes the Company's assets and liabilities which are measured at fair value on a recurring basis. The following fair value hierarchy is used to classify assets and liabilities, based on inputs to valuation techniques utilized to measure fair value:
•Level 1 - Quoted prices in active markets for identical assets or liabilities
•Level 2 - Significant other observable inputs, such as quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuations in which significant inputs used are observable
•Level 3 - Significant other unobservable inputs
| | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | | | Fair Value Measurements at Reporting Date |
As of June 30, 2024 | Fair Value | | Level 1 | | Level 2 | | Level 3 |
Assets: | | | | | | | |
| Cash equivalents | $ | 781.8 | | | $ | 94.8 | | | $ | 687.0 | | | $ | — | |
| Available-for-sale debt securities: | | | | | | | |
| Corporate bonds | 7,296.4 | | | — | | | 7,296.4 | | | — | |
| U.S. government and government agency obligations | 5,767.5 | | | — | | | 5,767.5 | | | — | |
| Sovereign bonds | 53.3 | | | — | | | 53.3 | | | — | |
| Commercial paper | 784.9 | | | — | | | 784.9 | | | — | |
| Certificates of deposit | 384.3 | | | — | | | 384.3 | | | — | |
| Asset-backed securities | 150.5 | | | — | | | 150.5 | | | — | |
| Equity securities (unrestricted) | 1,090.9 | | | 1,090.9 | | | — | | | — | |
| Equity securities (restricted) | 82.9 | | | 82.9 | | | — | | | — | |
Total assets | $ | 16,392.5 | | | $ | 1,268.6 | | | $ | 15,123.9 | | | $ | — | |
| | | | | | | |
Liabilities: | | | | | | | |
Contingent consideration | $ | 90.4 | | | $ | — | | | $ | — | | | $ | 90.4 | |
| | | | | | | |
As of December 31, 2023 | | | | | | | |
| Assets: | | | | | | | |
| Cash equivalents | $ | 928.1 | | | $ | 6.4 | | | $ | 921.7 | | | $ | — | |
| Available-for-sale debt securities: | | | | | | | |
| Corporate bonds | 6,398.0 | | | — | | | 6,398.0 | | | — | |
| U.S. government and government agency obligations | 4,833.4 | | | — | | | 4,833.4 | | | — | |
| Sovereign bonds | 57.2 | | | — | | | 57.2 | | | — | |
| Commercial paper | 636.8 | | | — | | | 636.8 | | | — | |
| Certificates of deposit | 521.4 | | | — | | | 521.4 | | | — | |
| Asset-backed securities | 87.1 | | | — | | | 87.1 | | | — | |
| Equity securities (unrestricted) | 864.5 | | | 864.5 | | | — | | | — | |
| Equity securities (restricted) | 112.9 | | | 112.9 | | | — | | | — | |
Total assets | $ | 14,439.4 | | | $ | 983.8 | | | $ | 13,455.6 | | | $ | — | |
| | | | | | | |
Liabilities: | | | | | | | |
Contingent consideration | $ | 43.7 | | | $ | — | | | $ | — | | | $ | 43.7 | |
The Company held certain restricted equity securities as of June 30, 2024 which are subject to transfer restrictions that expire in April 2026.
During the three and six months ended June 30, 2024, the Company recorded $392.5 million and $196.3 million of net unrealized gains, respectively, on equity securities in Other income (expense), net; and during the three and six months ended June 30, 2023, the Company recorded $30.9 million and $195.6 million of net unrealized losses, respectively, on equity securities in Other income (expense), net.
In addition to the investments summarized in the table above, as of June 30, 2024 and December 31, 2023, the Company had $196.8 million and $74.3 million, respectively, in equity investments that do not have a readily determinable fair value. These investments are recorded within Other noncurrent assets.
The fair value of the Company's long-term debt, which was determined based on Level 2 inputs, was estimated to be $1.485 billion and $1.528 billion as of June 30, 2024 and December 31, 2023, respectively.
7. Inventories
Inventories consist of the following:
| | | | | | | | | | | |
| June 30, | | December 31, |
| (In millions) | 2024 | | 2023 |
| Raw materials | $ | 843.6 | | | $ | 789.3 | |
| Work-in-process | 1,154.9 | | | 1,121.8 | |
| Finished goods | 154.4 | | | 147.3 | |
| Deferred costs | 720.7 | | | 522.1 | |
| $ | 2,873.6 | | | $ | 2,580.5 | |
Deferred costs represent the costs of product manufactured and shipped to the Company's collaborators for which recognition of revenue has been deferred.
8. Income Taxes
The Company is subject to U.S. federal, state, and foreign income taxes. The Company's effective tax rate was 12.0% and 10.6% for the three months ended June 30, 2024 and 2023, respectively, and 7.5% and 8.0% for the six months ended June 30, 2024 and 2023, respectively. The Company's effective tax rate for the three and six months ended June 30, 2024 was positively impacted, compared to the U.S. federal statutory rate, primarily by stock-based compensation and income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate, partly offset by the remeasurement of existing uncertain tax positions.
The Company's effective tax rate for the three and six months ended June 30, 2023 was positively impacted, compared to the U.S. federal statutory rate, primarily by income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate and, to a lesser extent, stock-based compensation and federal tax credits for research activities.
9. Stockholders' Equity
In January 2023, the Company's board of directors authorized a share repurchase program to repurchase up to $3.0 billion of the Company's Common Stock. The share repurchase program permits the Company to make repurchases through a variety of methods, including open-market transactions (including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, block trades, and other transactions in compliance with Rule 10b-18 of the Exchange Act. Repurchases may be made from time to time at management's discretion, and the timing and amount of any such repurchases will be determined based on share price, market conditions, legal requirements, and other relevant factors. The program has no time limit and can be discontinued at any time. There can be no assurance as to the timing or number of shares of any repurchases in the future.
In April 2024, the Company's board of directors authorized a share repurchase program to repurchase up to an additional $3.0 billion of the Company's Common Stock. The share repurchase program was approved under terms substantially similar to the share repurchase program described above.
The table below summarizes the shares of the Company's Common Stock the Company repurchased and the cost of the shares, which were recorded as Treasury Stock.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended
June 30, |
| (In millions) | | 2024 | | 2023 | | 2024 | | 2023 |
| Number of shares | | 0.6 | | | 1.0 | | | 0.9 | | | 1.9 | |
| Total cost of shares | | $ | 601.4 | | | $ | 722.8 | | | $ | 899.4 | | | $ | 1,416.7 | |
As of June 30, 2024, an aggregate of $3.631 billion remained available for share repurchases under the programs.
10. Statement of Cash Flows
The following provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheets to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows:
| | | | | | | | | | | | | | |
| | June 30, |
| (In millions) | | 2024 | | 2023 |
| Cash and cash equivalents | | $ | 1,920.7 | | | $ | 1,937.2 | |
| Restricted cash included in Prepaid expenses and other current assets | | 7.5 | | | 5.5 | |
Restricted cash included in Other noncurrent assets | | — | | | 7.0 | |
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statements of Cash Flows | | $ | 1,928.2 | | | $ | 1,949.7 | |
Restricted cash consists of amounts held by financial institutions pursuant to contractual arrangements.
Supplemental disclosure of non-cash investing and financing activities
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, | | December 31, | | June 30, | | December 31, |
| (In millions) | 2024 | | 2023 | | 2023 | | 2022 |
| Accrued capital expenditures | $ | 112.6 | | | $ | 75.4 | | | $ | 107.5 | | | $ | 70.8 | |
Accrued contingent consideration in connection with acquisitions | $ | 95.1 | | | $ | 71.6 | | | $ | 60.8 | | | $ | 135.5 | |
11. Legal Matters
From time to time, the Company is a party to legal proceedings in the course of the Company's business. The outcome of any such proceedings, regardless of the merits, is inherently uncertain. If the Company were unable to prevail in any such proceedings, its consolidated financial position, results of operations, and future cash flows may be materially impacted. Costs associated with the Company's involvement in legal proceedings are expensed as incurred. The Company recognizes accruals for loss contingencies associated with such proceedings when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. As of June 30, 2024 and December 31, 2023, the Company's accruals for loss contingencies were not material. There are certain loss contingencies that the Company deems reasonably possible for which the possible loss or range of possible loss is not estimable at this time.