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Collaboration, License, and Other Agreements | 9 Months Ended
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Sep. 30, 2020
Revenue from Contract with Customer [Abstract] |
Collaboration, License, and Other Agreements | Collaboration, License, and Other Agreements We have entered into various collaborative arrangements to research, develop, manufacture, and commercialize product candidates and utilize our technology platforms. Although each of these arrangements is unique in nature, such arrangements involve a joint operating activity where both parties are active participants in the activities of the collaboration and exposed to significant risks and rewards dependent on the commercial success of the activities. In arrangements where we do not deem our collaborator to be our customer, payments to and from our collaborator are presented in our statement of operations based on the nature of our business operations, the nature of the arrangement, including the contractual terms, and the nature of the payments, as summarized in the table and further described below.
Nature/Type of Payment |  | Statement of Operations Presentation
Regeneron's share of profits or losses in connection with commercialization of products |  | Collaboration revenue
Reimbursement for manufacturing of commercial supplies |  | Collaboration revenue
Royalties and/or sales-based milestones earned |  | Collaboration revenue
Reimbursement of Regeneron's research and development expenses |  | Reduction to Research and development expenses
Regeneron's obligation for its share of collaborator's research and development expenses |  | Research and development expense
Up-front and development milestone payments to collaborators |  | Research and development expense
Reimbursement of Regeneron's commercialization-related expenses |  | Reduction to Selling, general, and administrative expense
Regeneron's obligation for its share of collaborator's commercialization-related expenses |  | Selling, general, and administrative expense
Regeneron's obligation to pay collaborator for its share of gross profits when Regeneron is deemed to be the principal |  | Cost of goods sold
Up-front and development milestones earned (when we have a combined unit of account which includes a license and providing research and development services) |  | Other operating income
In agreements involving multiple goods or services promised to be transferred to our collaborator, we must assess, at the inception of the contract, whether each promise represents a separate obligation (i.e., is "distinct"), or whether such promises should be combined as a single unit of account. When we have a combined unit of account which includes a license and providing research and development services to our collaborator, recognition of up-front payments and development milestones earned from our collaborator is deferred (as a liability) and recognized over the development period (i.e., over time). In arrangements where we satisfy our obligation(s) during the development phase over time, we recognize amounts initially deferred over time typically using an input method on the basis of our research and development costs incurred relative to the total expected cost which determines the extent of our progress toward completion. We review our estimates each period and make revisions to such estimates as necessary. When we are entitled to reimbursement of all or a portion of the research and development expenses that we incur under a collaboration, we record those reimbursable amounts in the period in which such costs are incurred. In connection with the commercialization phase of our collaborative arrangements, we may be obligated to perform commercialization-related activities on behalf of the collaboration. If we are reimbursed for all or a portion of costs incurred for the commercialization-related activities, we record those reimbursable amounts in the period in which such costs are incurred. Under certain of the Company's collaboration agreements, product sales and cost of sales may be recorded by the Company's collaborators as they are deemed to be the principal in the transaction. In arrangements where we: •are obligated to use commercially reasonable efforts to supply commercial product to our collaborator, we may be reimbursed for our manufacturing costs as commercial product is shipped to the collaborator; however, recognition of such cost reimbursements is deferred until the product is sold by our collaborator to third-party customers; •share in any profits or losses arising from the commercialization of such products, we record our share of the variable consideration, representing net product sales less cost of goods sold and shared commercialization and other expenses, in the period in which such underlying sales occur and costs are incurred by the collaborator; and •receive royalties and/or sales-based milestone payments from our collaborator, we recognize such amounts in the period earned. Our collaborators provide us with estimates of product sales and our share of profits or losses, as applicable, for such quarter. These estimates are reconciled to actual results in the subsequent fiscal quarter, and collaboration revenue is adjusted accordingly, as necessary. a. Sanofi Amounts recognized in our Statements of Operations in connection with our collaborations with Sanofi are detailed below:
|  | Statement of Operations Classification |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  |  | 2020 |  | 2019 |  | 2020 |  | 2019
Antibody: |  |  |  |  |  |  |  |  |  |
Regeneron's share of profits in connection with commercialization of antibodies |  | Sanofi collaboration revenue |  | $ | 212.8 |  |  | $ | 94.2 |  |  | $ | 555.6 |  |  | $ | 105.2 |
Sales-based milestone earned |  | Sanofi collaboration revenue |  | $ | 50.0 |  |  | — |  |  | $ | 50.0 |  |  | — |
Reimbursement for manufacturing of commercial supplies |  | Sanofi collaboration revenue |  | $ | 94.3 |  |  | $ | 85.4 |  |  | $ | 275.0 |  |  | $ | 143.8 |
Reimbursement of research and development expenses |  | Reduction of Research and development expense |  | $ | 45.5 |  |  | $ | 60.2 |  |  | $ | 174.4 |  |  | $ | 216.5 |
Regeneron's obligation for its share of Sanofi research and development expenses |  | Research and development expense |  | $ | (17.5) |  |  | $ | (10.2) |  |  | $ | (59.1) |  |  | $ | (29.8) |
Reimbursement of commercialization-related expenses |  | Reduction of Selling, general, and administrative expense |  | $ | 83.2 |  |  | $ | 111.6 |  |  | $ | 260.4 |  |  | $ | 349.3 |
Immuno-oncology: |  |  |  |  |  |  |  |  |  |
Regeneron's share of losses in connection with commercialization of Libtayo outside the United States |  | Sanofi collaboration revenue |  | $ | (4.7) |  |  | $ | (4.6) |  |  | $ | (17.3) |  |  | $ | (16.2) |
Reimbursement for manufacturing of commercial supplies |  | Sanofi collaboration revenue |  | $ | 0.9 |  |  | — |  |  | $ | 6.0 |  |  | — |
Reimbursement of research and development expenses |  | Reduction of Research and development expense |  | $ | 49.8 |  |  | $ | 38.0 |  |  | $ | 136.7 |  |  | $ | 120.9 |
Reimbursement of commercialization-related expenses |  | Reduction of Selling, general, and administrative expense |  | $ | 14.5 |  |  | $ | 3.0 |  |  | $ | 39.2 |  |  | $ | 7.0 |
Regeneron's obligation for Sanofi's share of Libtayo U.S. gross profits |  | Cost of goods sold |  | $ | (31.5) |  |  | $ | (20.1) |  |  | $ | (86.5) |  |  | $ | (51.5) |
Amounts recognized in connection with up-front payments received |  | Other operating income |  | $ | 20.0 |  |  | $ | 18.5 |  |  | $ | 57.0 |  |  | $ | 73.8 |
See Note 8 and Note 10 for information regarding Sanofi's sale of our Common Stock during the second quarter of 2020. Antibody The Company is party to a global, strategic collaboration with Sanofi to research, develop, and commercialize fully human monoclonal antibodies (the "Antibody Collaboration"). Under the companies' Antibody License and Collaboration Agreement (the "LCA"), following receipt of the first positive Phase 3 trial results for a co-developed drug candidate, subsequent Phase 3 trial-related costs for that drug candidate ("Shared Phase 3 Trial Costs") are generally shared 80% by Sanofi and 20% by Regeneron. All other agreed-upon worldwide development expenses incurred by both companies are funded by Sanofi. Effective January 2018, the Company and Sanofi entered into a letter agreement (the "Letter Agreement") in connection with, among other matters, the allocation of additional funds to certain activities relating to dupilumab and itepekimab (collectively, the "Dupilumab/Itepekimab Eligible Investments"). Refer to the "Immuno-Oncology" section below for further details regarding the Letter Agreement and Note 10 for additional information regarding shares purchased by us from Sanofi during the three and nine months ended September 30, 2020 and 2019. Sanofi leads commercialization activities for products developed under the Antibody Collaboration, subject to the Company's right to co-commercialize such products. See discussion below related to the development and commercialization of Praluent effective April 1, 2020. In addition to profit and loss sharing, the Company is entitled to receive sales milestone payments from Sanofi. In the third quarter of 2020, the Company earned, and recognized as revenue, the first $50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $1.0 billion on a rolling twelve-month basis. We are entitled to receive up to an aggregate of $200.0 million in additional sales milestone payments from Sanofi. The following table summarizes contract balances in connection with the Company's Antibody Collaboration with Sanofi:
|  | September 30, |  | December 31,
|  | 2020 |  | 2019
Accounts receivable |  | $ | 453.2 |  |  | $ | 272.7 |
Deferred revenue |  | $ | 433.6 |  |  | $ | 328.8 |
In April 2020, the Company and Sanofi entered into an amendment to the LCA in connection with, among other things, the removal of Praluent from the LCA such that (i) effective April 1, 2020, the LCA no longer governs the development, manufacture, or commercialization of Praluent and (ii) the quarterly period ended March 31, 2020 is the last quarter for which Sanofi and the Company will share profits and losses for Praluent under the LCA. The parties also entered into a Praluent Cross License & Commercialization Agreement (the "Praluent Agreement") pursuant to which, effective April 1, 2020, the Company, at its sole cost, is solely responsible for the development and commercialization of Praluent in the United States, and Sanofi, at its sole cost, is solely responsible for the development and commercialization of Praluent outside of the United States. Under the Praluent Agreement, Sanofi will pay the Company a 5% royalty on Sanofi’s net product sales of Praluent outside the United States until March 31, 2032. The Company will not owe Sanofi royalties on the Company’s net product sales of Praluent in the United States. Although each party will be responsible for manufacturing Praluent for its respective territory, the parties have entered into definitive supply agreements under which, for a certain transitional period, the Company will continue to supply drug substance to Sanofi and Sanofi will continue to supply finished product to Regeneron. With respect to any intellectual property or product liability litigation relating to Praluent, the parties have agreed that, effective April 1, 2020, Regeneron and Sanofi each will be solely responsible for any such litigation (including damages and other costs and expenses thereof) in the United States and outside the United States, respectively, arising out of Praluent sales or other activities on or after April 1, 2020 (subject to Sanofi's right to set off a portion of any third-party royalty payments resulting from certain patent litigation proceedings against up to 50% of any Praluent royalty payment owed to Regeneron). The parties will each bear 50% of any damages arising out of Praluent sales or other activities prior to April 1, 2020. See Note 12 for discussion of legal proceedings related to Praluent. Immuno-Oncology The Company is party to a collaboration with Sanofi to research, develop, and commercialize antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration"). The IO Collaboration is governed by an Amended and Restated Immuno-oncology Discovery and Development Agreement ("Amended IO Discovery Agreement"), and an Immuno-oncology License and Collaboration Agreement ("IO License and Collaboration Agreement"). Effective December 31, 2018, the Company and Sanofi entered into the Amended IO Discovery Agreement, which narrowed the scope of the existing discovery and development activities conducted by the Company ("IO Development Activities") under the 2015 IO Discovery Agreement to developing therapeutic bispecific antibodies targeting (i) BCMA and CD3 (the "BCMAxCD3 Program") and (ii) MUC16 and CD3 (the "MUC16xCD3 Program") through clinical proof-of-concept. If Sanofi exercises its option to license rights to a BCMAxCD3 Program antibody or MUC16xCD3 Program antibody thereunder, it will co-develop these drug candidates with the Company through product approval. Sanofi will fund development costs up front for a BCMAxCD3 Program antibody and we will reimburse half of the total development costs for such antibody from our share of future IO Collaboration profits to the extent they are sufficient for this purpose. In addition, we and Sanofi will share equally, on an ongoing basis, the development costs for a MUC16xCD3 Program antibody. Under the terms of the IO License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo (cemiplimab), an antibody targeting the receptor known as programmed cell death protein 1 (PD-1). The parties share equally, on an ongoing basis, agreed-upon development and commercialization expenses for Libtayo. Pursuant to the Letter Agreement, the Libtayo development budget was increased and the Company has agreed to allow Sanofi to satisfy in whole or in part its funding obligations with respect to the Libtayo development and Dupilumab/Itepekimab Eligible Investments incurred in periods through September 30, 2020 by selling certain shares of our Common Stock directly or indirectly owned by Sanofi; if Sanofi desires to sell such shares, we may elect to purchase, in whole or in part, such shares from Sanofi. See Note 10 for additional information regarding shares purchased by us from Sanofi during the three and nine months ended September 30, 2020 and 2019. The Company has principal control over the development of Libtayo and leads commercialization activities in the United States (see Note 2 for related product sales information), while Sanofi leads commercialization activities outside of the United States and the parties equally share profits and losses from worldwide sales. The following table summarizes contract balances in connection with the Company's IO Collaboration with Sanofi:
|  | September 30, |  | December 31,
|  | 2020 |  | 2019
Accounts receivable, net |  | $ | (4.5) |  |  | $ | (16.7) |
Deferred revenue |  | $ | 13.6 |  |  | $ | 9.4 |
Other liabilities |  | $ | 441.8 |  |  | $ | 558.6 |
Other liabilities include up-front payments received from Sanofi for which recognition has been deferred. The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of September 30, 2020 was $951.0 million. This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities. b. Bayer Amounts recognized in our Statements of Operations in connection with our Bayer EYLEA collaboration are as follows:
|  | Statement of Operations Classification |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  |  | 2020 |  | 2019 |  | 2020 |  | 2019
Regeneron's net profit in connection with commercialization of EYLEA outside the United States |  | Bayer collaboration revenue |  | $ | 287.9 |  |  | $ | 275.0 |  |  | $ | 772.6 |  |  | $ | 793.3 |
Reimbursement for manufacturing of commercial supplies |  | Bayer collaboration revenue |  | $ | 12.0 |  |  | $ | 18.6 |  |  | $ | 52.9 |  |  | $ | 41.5 |
Reimbursement of development expenses |  | Reduction of Research and development expense |  | $ | 11.5 |  |  | $ | 5.0 |  |  | $ | 34.3 |  |  | $ | 15.6 |
Regeneron's obligation for its share of Bayer research and development expenses |  | Research and development expense |  | $ | (12.9) |  |  | $ | (7.0) |  |  | $ | (26.3) |  |  | $ | (13.6) |
Reimbursement of other expenses |  | Cost of collaboration and contract manufacturing |  | $ | 2.0 |  |  | $ | 3.7 |  |  | $ | 5.3 |  |  | $ | 16.6 |
The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA outside the United States. Bayer markets EYLEA outside the United States, where, for countries other than Japan, the companies share equally in profits and losses from sales of EYLEA. In Japan, the Company is currently entitled to receive a tiered percentage of between 33.5% and 40.0% of EYLEA net product sales through 2021, and thereafter, the companies will share equally in profits and losses from sales of EYLEA. In addition, the Company and Bayer share the funding of agreed-upon EYLEA development costs. The following table summarizes contract balances in connection with our Bayer EYLEA collaboration:
|  | September 30, |  | December 31,
|  | 2020 |  | 2019
Accounts receivable - other |  | $ | 299.2 |  |  | $ | 311.6 |
Deferred revenue |  | $ | 122.1 |  |  | $ | 123.0 |
c. Teva In 2016, the Company and Teva entered into a collaboration agreement (the "Teva Collaboration Agreement") to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement with Mitsubishi Tanabe Pharma Corporation. The Company leads global development activities, and the parties share development costs equally, on an ongoing basis, under a global development plan. The Company is also responsible for the manufacture and supply of fasinumab globally. Amounts recognized in our Statements of Operations in connection with the Teva Collaboration Agreement are as follows:
|  | Statement of Operations Classification |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  |  | 2020 |  | 2019 |  | 2020 |  | 2019
Reimbursement of research and development expenses |  | Reduction of Research and development expense |  | $ | 25.9 |  |  | $ | 34.2 |  |  | $ | 82.1 |  |  | $ | 102.9 |
Amounts recognized in connection with up-front and development milestone payments received |  | Other operating income |  | $ | 17.2 |  |  | $ | 22.8 |  |  | $ | 54.5 |  |  | $ | 68.8 |
The following table summarizes contract balances in connection with the Teva Collaboration Agreement:
|  | September 30, |  | December 31,
|  | 2020 |  | 2019
Accounts receivable - other |  | $ | 26.6 |  |  | $ | 21.2 |
Other liabilities |  | $ | 61.0 |  |  | $ | 114.4 |
Other liabilities include up-front and development milestone payments received from Teva for which recognition has been deferred. The aggregate amount of estimated consideration under the Teva Collaboration Agreement related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of September 30, 2020 was $130.3 million. This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities. d. Intellia In 2016, we entered into a license and collaboration agreement with Intellia Therapeutics, Inc. to advance CRISPR/Cas9 gene-editing technology for in vivo therapeutic development. The parties collaborate to conduct research for the discovery, development, and commercialization of new therapies, in addition to the research and technology development of the CRISPR/Cas9 platform. Under the terms of the 2016 agreement, the parties agreed to a target selection process, whereby the Company may obtain exclusive rights in up to 10 targets to be chosen by the Company during the collaboration term, subject to various adjustments and limitations set forth in the agreement. Certain targets that either we or Intellia select pursuant to the target selection process may be subject to a co-development and co-commercialization arrangement at our option or Intellia’s option, as applicable. In May 2020, we expanded our existing collaboration with Intellia to provide us with rights to develop products for additional in vivo CRISPR/Cas9-based therapeutic targets and for the parties to jointly develop potential products for the treatment of hemophilia A and B. In addition, we also received non-exclusive rights to independently develop and commercialize ex vivo gene edited products. In connection with the agreement, we made a $70.0 million up-front payment, which was recorded to Research and development expense in the second quarter of 2020, and purchased 925,218 shares of Intellia common stock for an aggregate purchase price of $30.0 million. The amount paid in excess of the fair market value of the shares purchased, or $15.0 million, was also recorded to Research and development expense in the second quarter of 2020. e. Biomedical Advanced Research Development Authority ("BARDA") In the first quarter of 2020, we announced an expansion of our Other Transaction Agreement ("OTA") with BARDA, pursuant to which the U.S. Department of Health and Human Services ("HHS") is obligated to fund 80% of certain of our costs incurred for certain research and development activities related to COVID-19 treatments. In July 2020, we entered into an agreement with entities acting at the direction of BARDA and the U.S. Department of Defense to manufacture and deliver filled and finished REGN-COV2 to the U.S. government. The agreement could result in payments to the Company of up to $450.2 million in the aggregate for bulk manufacturing of the drug substance, as well as fill/finish and storage activities. See Note 2 for REGN-COV2 net product sales recognized in connection with this agreement during the three months ended September 30, 2020.

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- Definition The entire disclosure for collaborative arrangements in which the entity is a participant, including a) information about the nature and purpose of such arrangements; b) its rights and obligations thereunder; c) the accounting policy for collaborative arrangements; and d) the income statement classification and amounts attributable to transactions arising from the collaborative arrangement between participants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=6931272&loc=SL5834143-161434 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 808 -URI http://asc.fasb.org/topic&trid=5833765 + Details
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