Leonard S. Schleifer - President and Chief Executive Officer Michael Aberman – Vice President, Investor Relations

Thanks for joining us. So thank you all for joining in and listening. For those of you who are on the webcast, next we have Regeneron Pharmaceuticals with the CEO, Leonard Schleifer as well as Michael Aberman from Investor relations. For those of you who are in the audience, just raise your hand. We have mics, we can bring them over to you. For those of you who have figured out how to use the Internet, well there is a website and an app where we are sort of letting people ask questions completely anonymously. If you post it on the wall basically you can ask a question without me knowing who you are and there is also a poll question. We would like more people to poll sort of figuring out like why you own Regeneron and whether or not you think they are going to beat, miss or have consensus, probably (inaudible), whether you think they’ll beat, miss or come in line next year (inaudible) and also email me at (inaudible) with any anonymous questions. And with that, Len, to start with you, Len, so you had some great data this morning that you released which created a lot of controversy for the day. Maybe talk a little bit about your point of view, maybe just summarize for those – the people in the room who don’t know the data and then maybe give your point of view of what are the key points of the data. What are people missing who are responding negatively?

Sure. But before we begin let me just give you our forward-looking statement quickly because remarks that are not historical in nature may be forward-looking about Regeneron and subject to a number of risks and uncertainties, our actual results may differ materially. Such remarks may include, but are not limited to those related to Regeneron and its products, development programs, finances, business including EYLEA, all of which involve a number of risks and uncertainties and a complete descriptions of all those risks and uncertainties can be found in our filings with the SEC including our 10-K for December 31st, 2010 and in our Form 10-Q for September 30th. And we don’t undertake any obligation to update any public forward-looking statements. Now also since we have in the middle of launching a product, EYLEA, I want to point out that we’ll be discussing data for EYLEA, including some of the two year data you just asked me about and that - those data have not been reviewed by the FDA, they are not in our approved label. As a reminder, EYLEA is approved in the US for the treatment of wet age-related macular degeneration at a recommended dose of two milligrams administered by intravitreal injection every four weeks or monthly for the first 12 weeks or three months and followed by two milligrams, once every eight weeks or two months thereafter and I’d direct you to the full prescribing information which is available on regeneron.com for important safety information and risks associated with the use of EYLEA. Okay. Now having gone through that, let’s talk a little bit about the data that we released this morning which is the two year data from our VIEW studies. Just to remind everybody, the VIEW studies were designed to test the hypothesis that every…

That was helpful. So help us understand why PRN , say for the capped trial because you only had a loading dose or then PRN versus here you have 12 months versus PRN. Is the difference or the better data that we have appear in Lucentis just because you’ve got a full month or 12 months of Lucentis?

Speculation, you can make a reasonable guess, that’s a reasonable hypothesis. What I am saying is, the PRN is doing so well with Lucentis because they had 12 solid injections before they went to PRN. That’s a possibility. Obviously we did equally well in this study and we had half as many injections overall. Remember we had every other month after the loading dose versus them in every month. The other possibilities is that there is differences from trial to trial, and remember every PRN therapy isn’t well, I think you are going to need less so come in when you think you need it or I think you need it, it’s very careful, arduous monitoring of the patients every month, making them come to the doc, they are getting sophisticated tests. So I think that you could imagine that those criteria could be applied differently from trial to trial and certainly I would imagine wouldn’t be as applied as rigorously out in the practice world as they would be in a trial world.

Do you think that doctors will put that in context most PRN data with Lucentis’ outlook over time; it looks like the patient will go blind over time. Will they look at this stage and think any differently of Lucentis or?

I mean the big question is whether or not – I think you are asking the bigger context is will docs be shift – want to shift over to a regimen that’s not dependent upon a patient showing up every month and getting an assessment and somebody making a decision. And I think that’s what one thing that EYLEA offers, that’s the only drug that’s labeled that can be used less frequently than monthly and still have clinically equivalent efficacy outcome. Clinically equivalent efficacy outcome in a label used less than monthly, it’s the only product that has that. Might doctors get there another way with PRN? I don’t think they can get there without monthly monitoring, I’ll say that, although some people would try treating extent, how are they going to get there? Doctors are going to do what obliviously they think is best for patients, but we are offering them a very, clear cut alternative. It’s labeled, it’s approved, it’s simple, patients don’t have to – they’re not required to show up every month for the monitoring. So I think that is a differentiated product.

Do you think though this data will change anyone’s mind on Lucentis less frequently?

It’s a funny thing. When the CAT data came out, if you talked to people who believed in Avastin, they thought this was the greatest data in the world and it showed that Avastin could be substituted for Lucentis. And if you talk to people who believed in Lucentis, they saw the data and they said what are you talking about? Lucentis was better than Avastin. Avastin didn’t even meet the criteria of non-inferiority when given PRN. So this is really a case where beauty may be in the eyes of the beholder, but I don’t think it’s going to – for sure it’s not going to be binary. This is not a binary outcome for anybody that is – someone is going to say I must do this. I must switch to regimens every other month or I have to continue with PRN. It’s not everybody is going to go that and I think that we would hope that practice would evolve over time to what’s a pretty convenient and straight-forward approach to treating patients.

So a couple – several investor questions. One, what was the proportion of patients with absence of fluid in eyes, or tears in each arm.

Yeah. I don’t have those data for you today but we should have those in the – I can’t remember, hope – we’re presenting this sometime in the early part of next year and those data should be available then.

Then this is sort of similar to what we are asking, but they’re asking about the real world significance of this data. This is sort of getting to where I - do you think a 0.5 injection difference will play a different role in the markets? I mean the key question here is when we go to the Retina meeting and we are in the audience …

How are the dots going to react?

What are they going to say?

Well, think about it this way. If you think about our data, and you say well, 25% of people needed from these data in this study, and you can’t generalize, it hasn’t been approved by the FDA, but in this study, one and half, approximately 1.4 more injections Lucentis and the top half of the people need on average one injection. The problem is that when you start treating a new patient, you don’t know which patients they are. Are they going to be a high requirer or a low requirer? I would imagine – and I don’t know this, that docs who are really committed to the PRN approach would prefer to use a drug that appears to be able to deliver across the spectrum at least in this trial the data that we saw. I would prefer that, if it were up to me, and I don’t dictate practice obviously, but if it were up to us, people would follow the labels and rely on what’s been carefully vetted and carefully tested and reviewed by the FDA and in our case, once again it’s the only label that says you can use it less frequently than monthly and get clinically equivalent efficacy. I think we haven’t – I mean you guys are always a little bit maybe avant-garde. You’re always looking at – what’s the next thing…

Crazy.

.I don’t want to say crazy, you invited me to your conference and I appreciate that, but the truth of the matter is that I read a data that the basis of approval has to be digested, understood and applied. Let alone the data that hasn’t been approved but these data, I think the data in this study surely favored EYLEA as a lone reacting agent in this study.

Another question. What proportion – I think you sort of answered this I just want to make sure we have the answer right. How many patients in the EYLEA and Lucentis arm needed protocol mandate minimum injections? Is it about 50%?

Right. It was very close to 50% for the EYLEA group and somewhat lower than that – I think it was in the neighborhood of about, not quite 20% on a percentage based basis, somewhere in the low 40s, got the minimum with Lucentis. So no matter how we looked at it, how many people got the minimum, how many people needed – if you are at the high end, how many injections you needed, what was the average number of injections across all the patients, cutting the patients in half, there basically seems to be a shift in the requirement for a greater requirement of treatment with Lucentis. When you spread it across an entire trial where about half the patients are uninformative because they are getting the minimum, you only see about a half an injection difference. When you look in the part of the trial where there is a potential to do better, there was a full injection. A full injection in a one year period is a meaningful amount in a clinical trial.

That’s helpful. Well, let’s think about the less – the good data with less frequent dosing of EYLEA. Do you think that will influence the real world dosing frequency of EYLEA? You could have after a loading dose, six doses a year, I think we modeled five. What do you think the people – doctors are really going to do?

Once again, I don’t know the answer to that. I hope, I wish that they would follow the label. Obviously not everybody is going to do it exactly as it’s labeled, but the label offers a very straightforward answer. You can get on average, the clinically equivalent results that you can get with monthly Lucentis. That’s a pretty powerful statement that the FDA has put in our label and I think you can try and do better by seeing the patients monthly, but I’m not sure what you’d actually accomplish rather than just using the drug the way I think it was recommended for use.

Great. Okay, and more questions, a lot of questions from clients.

Okay.

I’m going to wait for that one. That one is on PC SK9; we’ll save that for later.

Okay.

Maybe you can talk a little bit about your initial feedback on the launch of EYLEA.

Right.

What is the initial feedback on the price and what is the initial feedback on sort of your strategy?

Right. So let’s talk a little bit about the price. We believe that it was possible to deliver a price that was fair to payers…

Can you hold on one moment?

Yes.

I think we’re having a problem with the feed. Probably they are going to get me your…

There’s my…

Switch mics.

I hope we didn’t lose all of that. How is that? Is that a little better?

Whoever wrote this on the iPad...

How is that, better?

All right, keep going.

So, you asked me about price and how the launch is going. So let me talk to you first about the price. I really believe that we tried to find the price that was fair to patients, fair to the healthcare payers and fair to our shareholders, and solving that equation, our normal approach – what I wanted to do is chop the country up into four quadrants and try a whole bunch of prices from very low to right where we were to a little higher to a lot higher to see how it would have worked and would have felt better about it. But you don’t get to do that. You get to price the product and we had to pick a price. The feedback we got was very positive. The key opinion leaders who we work with, they felt that we listened and we did listen to them and they had a big influence on us and the patients and payers and doctors influenced us to price this and so we listened, we did what they asked. We came in somewhat modestly below the per-injection cost of Lucentis. Of course if you look on a label basis we’re substantially less expensive because you’re talking about not having to do monitoring every month and you’re talking about not having to do injection fees every month and you’re not talking about monthly injections. So we’re less expensive on a per injection basis. We’re less expensive on a use basis comparing label to label. But some people would say well, are you – you’re less good. Is that why you’re less expensive? That’s the old paradigm I think in pharma. Don’t ever come in a little bit lower because people will say that you’re not as good. We don’t believe that. We actually believe that you can come in a little bit lower and still have a product that offers advantages to patients. So of course the proof of the pudding in all this is how the launch going. So I desperately want to…

Would you like to go at the first week of sales?

I desperately want to pay out first six stage of sales volume but nobody around the company thought that was a good idea. But we’ve only had a few selling days obviously, but we’re very pleased on how the launch is going. We’re very pleased on the reception. We’re pleased on the ordering etcetera, but once – we can’t get into anything quantitative until we have some real world experience over a longer time. But I’m very pleased.

And has there been any changes with competitive pricing or how has the competition responded to your price point?

We haven’t heard anything on that front yet.

Are you seeing uptake in - initial uptake in any – or any physicians where they get volume based discounts on Lucentis where they are getting more discounts on Lucentis than maybe some…?

Right, I don’t have that kind of segmentation from seven days of selling, but I can tell you that we don’t see that approach. That approach was not particularly well received. Maybe it meets the legalities and I assume that it does, but the approach of giving volume-based discounts was not well received by this – the retinal community and we wanted to be responsive to that. You can lose goodwill pretty quickly and it takes a lot to earn it. We’d like to earn that and stick with it.

Okay. One of the things everyone’s focused on for Regeneron is consensus numbers. And you guys gratefully put out updated consensus number of $100 million for next year roughly. When you think about the market, current sales of Lucentis is about $1.4 billion, $1.5 billion. What percentage of those are really AMD?

I think the vast majority of those sales are AMD. I don’t have a specific number for you, but certainly the vast majority of AMD and I want to point out by the way, we didn’t put out consensus numbers.

Right, compiled.

They were compiled. You guys asked for it. We don’t stand behind them, they are not our estimates. We’re not going to – don’t interpret that as any guidance from us. Good, better and different.

So when you think about what $100 million means, that may be less than 10% of the market. If you looked at Lucentis during the launch, they got to $300 million. What is realistic in this day and age for launches and how much market share?

Right. So I don’t want to get into quantitative and you can – some people have made the point that if you assume - if every single patient were to go on a branded therapy, it’s a $5 billion market in the United States and maybe somewhat significantly higher than that globally, but obviously that isn’t the case. There’s only $2 billion, but if you just sort of market share points obviously, then each market share point is somewhere in the neighborhood of $50 million in revenues. We’re going to see how we go, but I do want to point out that – just to be a little bit critical of you and your friends on – not you personally but Wall Street that is the notion, I’ve heard this so many times, Len, forget about it, your launch isn’t going to go well. No launches go well. It’s like the industries can - never sold anything and we’re going to show at the launch. I don’t really pay that much attention to this, but I do want to point out one thing. We are not – we don’t have the burden of launching a product where we have to teach the doctors that we have something that’s worthwhile for their patients. We don’t have to explain to them that the pricing is fair. We’re going to a market where the anti-VEGF may be one of the most important drugs in the entire pharmaceutical industry. And by the way it’s important not only for eye, but it’s obviously important for cancer. And before I forget I just want to mention that – and we may or not get to it – our ZALTRAP which is our cancer product has been filed. We’ve gotten very solid second line colorectal data. We’ve…

Okay. I guess those of you who are listening to the webcast and didn’t hear what Leonard said earlier, about half the patients needed probably around one more injection with Lucentis versus EYLEA.

So just to rephrase that very quickly if it wasn’t – didn’t come through in the webcast. Let me say it again. If you look at the study there was a minimum effect, so about half the patients on EYLEA, just a hair under 50% and just a little bit over 40% on Lucentis, required the minimum number of injections. But if you divided the patients into the median for each group, what you found is that those patients in the lower number of injections, you couldn’t do any better because you had a minimum number of injections. But those patients in the top half, you actually did a full injection better. One full injection better and if you looked at the more demanding ones, it was 1.4 injections better. So it’s clear that this data and this study indicate that Lucentis required more treatment, more intense treatment than EYLEA did, and so that was good. We didn’t design the study to exactly test all this. Once again if you didn’t hear it it’s not in the label and we suggest and recommend that you follow the label if you’re out there listening because we really believe that we have a well differentiated label that can make a difference.

So going to that point of there are some patients who need a lot of injections. The Retina meeting last year there was a lot of talk about some people getting Lucentis twice a month even. What is the percentage of patients in the real world who really are not responding to on label Lucentis very well, need a lot more injections?

Right. Well, on label Lucentis – that’s…

I know. Those are two questions there. On label with…

Yes, so two questions, on label Lucentis, most people do – the vast majority of people seem to do quite well and we can get clinically equivalent efficacy with every other month injection compared to on label. Now, off label use, which I’m not a believer in and I’m not a promoter of, certainly not in our product and nor Genentech’s products, I would say that in our trial those people who needed more than – needed six or more injections which would be basically more than every other month, was a full quarter of the patients on Lucentis, 26% or 27% and only about 16%, so, nearly half as many on EYLEA needed more than that six month injection. So I think what that says is, (inaudible) it kind of says we’ve got the study right in the first year and we did – our scientists did a really good job of picking what is the right interval and it seems to be every other month after loading dose as is in our label.

Do you think it may be 10% of the patients that are not responding ideally to (inaudible) or doctors having trouble, is the vision (inaudible)?

I don’t know the answer to that. I can only tell you from our study there were 25% of patients, 27% of patients who were requiring more then, more than every other month therapy.

Okay. Do you have any - does anyone have any questions in the audience on EYLEA before I turn quickly to the antibody business? To turn to the antibody business, the part of the business that people are not very focused on and there’s debate about like how much value you can assign now. When do you think people are going to get the antibody business? And the issue really comes from a lack of news flows. I get your PC SK9, that’s still in Phase 2, you’re a long way away from Pjhase3.

I’ve seen Phase 2 assets recently valued pretty highly in our industry.

That’s true.

And so – but let’s talk a little bit about PC SK9 and why we’re excited about it and then let’s talk about the relationship overall with sanofi. Maybe I’ll start with the latter. Remember we have a very broad based relationship with sanofi and what that involves is about $160 million a year in discovery funding as well as funding for the development of our antibody pipeline to those molecules that they opt into. What’s important about that? Well if you’re a new company and all you had was EYLEA, you’d have to spend an awful lot of money to build the pipeline, an awful lot of money, and you’d eat up all your profits pretty damn quickly if you were doing anything close to what we’re doing, except we don’t eat up our profits because we’ve got this partnership with sanofi that leverages us and provides us all these resources. It allows us to keep just a little under 50% of the profit split with sanofi. So that’s one thing that I think people – you say maybe people get it or they don’t get it. I think they will get it when they start to see how much we can continue to spend on the pipeline on one hand, but not have to eat up all the profits which we’ve worked so hard to deliver we hope to our shareholders with EYLEA for example. Now, what’s in that pipeline? Let’s talk about there’s a lot of things in there. I mentioned ANG2, potentially anti-ANG2, anti-Dll4 and there’s anti-IL-4 receptor. There’s a number of molecules in there, but let’s talk about PC SK9 because PC SK9 may be viewed as the most exciting one. But mind you, these things change and that’s the beauty of having a half…

I think we’re actually out of time.

Well, we can’t be out of time. We’ve got six more programs that we…

I know. I know. I don’t think (inaudible).

If you invite us back next year we can continue this conversation. Thank you very much.