Good day, ladies and gentlemen, and welcome to the Regeneron Pharmaceuticals Fourth Quarter 2013 Earnings Conference Call. (Operator Instructions). As a reminder this conference call is being recorded. I would now turn the call over to your host, Dr. Michael Aberman. You may begin.

Thank you, operator. Good morning, every and welcome to Regeneron Pharmaceuticals Fourth Quarter and Year End 2013 Conference Call. An archive of this webcast will be available on our website under Events and Presentations for 30 days. Joining me on the call today is Dr. Leonard Schleifer, Founder, President and Chief Executive Officer; George Yancopoulos, Founding Scientist, President of Regeneron Laboratories and Chief Scientific Officer; Bob Landry, our Chief Financial Officer; and Bob Terifay, Senior Vice President of Commercial. After our prepared remarks we'll open the call for Q&A. I would also like to remind you that, remarks made on this call include forward-looking statements about Regeneron. Such statements may include, but are not limited to, those related to Regeneron and its products and business, sales and expense forecasts, financial forecast, development programs, collaborations, finances, regulatory matters, intellectual property and competition. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in such statements. A more complete description of these and other material risks can be found in Regeneron's filings with the United States Securities and Exchange Commission or SEC, including its Form 10-K for the year-ended December 31, 2013, which we will filing with the SEC later this week and Form 10-Q for the quarter-ended September 30, 2013, which was filed with the SEC in November 2013. Regeneron does not undertake any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. In addition, please note that GAAP and non-GAAP measures will be discussed on today's call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP are available in our financial results press release, which can be accessed at our website at www.regeneron.com. Once our call concludes, the IR team will be available to answer further questions. With that let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer.

Thank you, Michael, and good morning to everyone. 2013 was another great year for Regeneron. The EYLEA franchise continue to grow steadily in the U.S. and globally our late-stage pipeline made significant progress, we invested in several new R&D initiatives that we hope will position us for the next leg of growth in the future and we expanded our geographic footprint. Starting with EYLEA fourth quarter 2013 EYLEA U.S. net sales were $402 million and full year 2013 EYLEA U.S. net sales were $1.409 billion, representing a growth of approximately 70% from the full year 2012. EYLEA also performed very well outside of the United States with net sales of $184 million in the fourth quarter of 2013 and full year 2013 ex- U.S. EYLEA sales of $472 million. Bayer HealthCare continues to be strong collaborator and we look forward to their continued execution of EYLEA launch outside the U.S. as countries in Europe, Latin America and Asia start contributing in 2014. As we look forward to the balance of 2014 there are number of potential growth drivers for EYLEA. As we have previously announced, in the U.S. we have granted a PDUFA date of August 18th for the diabetic macular edema or DME indication. Yesterday, we reported positive two year data from the VISTA-DME which George will discuss shortly. We believe that diabetic macular edema could ultimately be a big opportunity as wet AMD based on disease incidence. And we expect our fourth indication Macular Edema following Branch Retinal Vein Occlusion or BRVO to be filed with the FDA by the end of the first quarter. Taking all these factors into consideration we estimate full year 2014 U.S. EYLEA net sales of $1.7 billion to $1.8 billion which represents approximately 25% year-over-year growth. We expect that a significant part…

Thank you Len and a very good morning to everyone who has joined us today. As Len mentioned, Regeneron's pipeline has been advancing rapidly in the fourth quarter of 2013 witnesses a lot of this progress. Let me begin with EYLEA. As we have previously reported the FDA has accepted for filing our supplemental BLA for EYLEA in the diabetic macular edema or DME indication and we have been granted a PDUFA date of August 2014. Our ex-U.S. partner Bayer HealthCare has also submitted an application for Marketing Authorization Europe in this indication. EYLEA is now approved for two indications, Wet AMD and Macular Edema Following Central Retinal Vein Occlusion or CRVO in the U.S., EU Japan and other countries around the world. In terms of DME, just yesterday we announced the two year results from the Phase III VISTA DME trial. These results showed that the improvement in vision compared to laser photocoagulation therapy that was seen after one year of treatment with EYLEA 2 milligrams does either monthly or every other month after five initial injections was sustained after two years of treatment. It is important to emphasize that in this long-term study, EYLEA dose every other month resulted in visual acuity benefit that was similar to that achieved with monthly dosing. It is also worth noting that 43% of the patients in the VISTA study were not treated naïve and in fact had received prior anti-VEGF therapy. In this trial EYLEA was generally well tolerated with a similar overall incidence of adverse events, ocular serious adverse events and non-ocular serious systemic adverse events, across the EYLEA treatments groups and the laser control group. The types and incidents of adverse events were consistent with what is expected with VEGF inhibition. Additional details from the three years VISTA DME…

Thank you George and good morning everyone. In the United States as Len mentioned earlier, EYLEA or intravitreal aflibercept injection net sales in the fourth quarter of 2013 were $403 million and full year 2013 EYLEA net sales were slightly over $1.4 billion. As we described at a recent investor continue, when we first disclose our 2013 U.S. EYLEA net sales results, the fourth quarter sales based on slowdown for Thanksgiving and Christmas holidays but were also helped by modest inventory build at the end of the year. Now I will provide more detail on the market dynamics. We will be sharing with you some qualitative data from our market research survey that was independently conducted in the fourth quarter. As before this data come from physician-based questionnaires, in this case from 200 representative physicians. I will share with you with you the numbers that were reported in this survey. But I would like to remind you that these numbers of physician reported estimates, based on our survey. Let me begin with the Wet AMD indication. In the fourth quarter of 2013 according to our surveyed physicians we had approximately half of the branded anti-VEGF market. The branded anti-VEGF market continues to represent about half of the total wet AMD market. Turning now to the second indication for which EYLEA is approved in the United States, Macular edema following central retinal vein occlusion our data from our market research survey suggest that during the fourth quarter EYLEA achieved over 40% share of the approved anti VEGF products indication. The branded market represents 45% of the overall macular edema following CRVO indication. As Len and George mentioned earlier the FDA has accepted our supplemental BLA for EYLEA in diabetic macular edema or DME. And we've been granted a PDUFA date of…

Thank you Bob and good morning to everyone. As Len mentioned in his opening remarks Regeneron experienced strong financial performance throughout 2013. In the fourth quarter we earned $2.24 per diluted share from non-GAAP net income of 259 million and we earned $8.17 per diluted share from non-GAAP net income of $935 million for the full year. This represents growth in non-GAAP net EPS of 52% for the three months and 75% for the full year 2013 compared to the same period of 2012. As a reminder non-GAAP EPS excludes non-cash share-based compensation expense, non-cash interest expense related to our senior convertible notes and non-cash income tax expense. In 2012 it excluded the release of the valuation allowance. A full reconciliation of GAAP and non-GAAP earnings is set out in our earnings release. Total revenues were $610 million in the fourth quarter and $2.1 billion for the full year of 2013 which represented growth of 47% for the three months and 53% for the year ended December 31, 2013. Net product sales of $406 million in the fourth quarter were comprised of $402 million of U.S. EYLEA net sales and $4 million of ARCALYST rilonacept net sales. For the full year 2013 U.S. EYLEA net sales were $1.4 billion and ARCALYST net sales were $17 million. As Bob mentioned fourth quarter U.S. EYLEA sales benefited from an increase in distributor inventory. Specifically at the end of the fourth quarter 2013 U.S distributors held a little over two weeks of inventory which is higher than the typical range of one to two weeks that has been held by distributors. This increase in inventory may have been in part due to the tightening of commercial terms that went into effect on January 1, 2014. So far this year inventory levels appear to…

Thanks Bob and thank you everybody else. 2014 is a promising year for us. We believe that we have the key elements that are required for long term growth, deepening our existing franchise advancing our broad and active pipeline investing in new technologies such as new initiatives in human genomics and expanding our presence globally. With that I would now turn the call over to Michael.

Thank you, Len. That concludes our prepared remarks. We'd now like to open the call for Q&A. As we'd like to give many people a chance to ask questions as possible we again request you to limit yourself to one question. Our team will be available in the office after the call for follow up questions. Thank you and operator and if you could please open the call for questions.

(Operator Instructions). And the first question is from Adnan Butt of RBC Capital Markets. Your line is open.

Hi good morning everyone. I will start with a tax question you touched a bit on this but can you give us a bit more on what IP is actually overseas at this time and what IP you intend to take, is it just EYLEA or could it be more than that? And then secondly when does this start to impacting tax and maybe you can give some high level thoughts on what statutory tax rates are and then what they would be with the amounts of things that you are planning to take overseas? Thanks.

Sure. Hi, this is Len. As far as what intellectual property has been migrated we are not going to go into details of that, but I should say that it's not limited to EYLEA and it can be any and all and we are doing that as we view it as appropriate. As far as what the impact on the tax rate I think Bob said is that in 2017 it might began to have an impact but we are not going to get into the details unless Bob do you have anything further you want to add?

Yeah I'll just give you a little bit more color on as you would expect we do have kind of net operating loss carry-forwards going forward of approximately $460 million and then we obviously have federal and state credit tax credits forwards going forward of roughly $120 million. That will allow us not to pay significant tax cash tax through at least mid-2015. I had said obviously this is subject to change based on various factors that may come about, but that's our current position today. And again as Len said we are kind of taking the right steps as you'd expect a company like us to take going forward and we won't get into specificities of these with regards to the migration of the IP but as Len said you can rest assured it's not just EYLEA and that coupled with kind of our new manufacturing facility that we're getting kind of in the ground in Ireland will allow us to get favorable tax rates beginning in kind of that 2017 year.

Right next question?

The next question is from Ying Huang of Barclays. Your line is open.

Good morning, guys thanks for taking my question. First I would like to ask you to elaborate your thought on the VISTA data because we saw the arterial and trauma and related events and also the death rate there picking up. I was wondering if you could comment on the regulatory indication for that arm and then what you might see as the positioning in the competition in the DME landscape. And then secondly it sounds like you guys are seeing somewhat like steady stage market share for EYLEA in wet AMD market. So I was wondering if you have any long-term strategy in growing share in that market.

First of all, that's two questions. Compound question which would you prefer to have answered. We'll start with the DME -- we're not going to get into the details of our regulatory discussions but other than to say that we've made our submission, the FDA has filed the package and we are on track we think for PDUFA date based on our submissions in August of this year. In terms of the data we were very pleased with the data George do you want to add anything on that?

Yeah, as this is also very highly scrutinized area because of concerns about anti-VEGF agents with regard to systemic adverse events and the so called AT/PT events as well as deaths. And of course we found it very comforting that are systemic, serious systemic adverse events were similar between all groups as was the -- our serious adverse events declined by the AT/PT criteria. And in terms of death it's very important to point out that the 2 milligram every other month group, which produced data virtually identical to that of the monthly group was numerically very similar to that of the laser control group, the monthly group did have numerically a higher number but that was not even normally significantly different from the laser control group. So overall we are continuing to wait for the second study but I think that in the field we're pretty comforted by this data.

All right just to emphasize what George is saying about this, the 2-8 in similar, for the 2-4 in terms of the efficacy that should not be under appreciated that's just exactly how those curves overlap in terms of efficacy between the alternate month group and the monthly group. Bob do you want to have comment about market share?

Yeah, so first of all I would remind you as we pointed out that despite the fact we launched several years after Lucentis we added even market share in wet AMD with Lucentis and we made $1.4 billion last year. So we're very encouraged with the performance of EYLEA. Future growth will come primarily from new patients and we have implemented a number of strategies to try to pick up more new patients to the marketplace. I think the biggest challenge to growth for both us and Lucentis is the fact that despite the change in the compounding landscape there has been very little change in the use of Avastin in the marketplace. And that's probably the major obstacle for both products at the current time. So I'll just say and I anticipate a question on the compounding our projections don't assume any significant change in the compounding environment. That is not to say there might not be some of laws rewritten but and the FDA has said that there are no compounding exceptions that are applicable to biologics, the new lower of compounding does not grant these waivers to biologics but how the FDA will enforce that and whether that will change things is yet to be determined. We wait to see what the FDA will do. Of course our long standing opinion has been we're in favor of choice. We think it's good that patients can choose, they can choose right now between three alternatives, be it Avastin, be it Lucentis and EYLEA we are interested in having choice is good but we would like to have only a single quality standard in terms of the manufacture and preparation of the product. Next question, Michael.

The next question is from Chris Raymond of Robert Baird. Your line is open. Chris Raymond - Robert Baird & Co.: Yeah, thanks. I was just wondering if you could maybe comment on so you've discussed it with FDA here you have got your -- I am sorry your PDUFA date -set. Any updates on likelihood of a panel in front of that for DME?

Yeah I mean I think the FDA reserves the right to call a panel if they need one, we've had no indication to-date that there will be one, but it's not too late if they choose to but right now they haven't. I don't know if that's helpful but that's the way it works. Chris Raymond - Robert Baird & Co.: Okay. Thanks.

Thank you. The next question is from Jason Kantor of Crédit Suisse. Your line is open. Jason Kantor - Crédit Suisse : Great. You answered my compounding question, so I'll ask another which is on the human genomics effort, this is obviously a very big project and I am just wondering if there will be sort of any interim kind of announceable events where you give progress updates on anything that might be coming out of that or is this something that is going to go somewhat radio silence for years until a drug pops out of this program versus something we can expect updates on?

Yeah, maybe George can give you some perspective on that.

I think we are viewing a situation where the program can impact every aspect of everything that we do and I can tell you we've already had results that have impacted how we think about, how we design our programs and so forth. So this is the continuous data. We will certainly be taking advantage of it in a continuous fashion of course we hope that there will be some huge breakthroughs that will also lead to important new therapeutics opportunities. And we also anticipate that there will be a lot of publishing going on continuously also not only from our selves but importantly from our collaborators such as Geisinger. Jason Kantor - Crédit Suisse : Could you expand on what you mean by you've already seen impact to some of your thinking around your programs. What are you referring to?

Yeah, it's probably a bit premature to get into those details, Jason. So but stay tuned this is an exciting area. Jason Kantor - Crédit Suisse : Thank you.

Okay.

Thank you. The next question is from Robyn Karnauskas of Deutsche Bank. Your line is open.

Hi, guys thanks for taking my question. So maybe you could frame for us how to think about the data for the IL-4 IL-13 compound given that you are going to have a couple of data sets in the next six months. Just what would be, what is the data set that we should be focused on and what are your thoughts on IL-4 in asthma? Thanks.

George?

Well, certainly very soon as we announced in the first quarter we will be getting data from our Phase IIB study in atopic dermatitis. We certainly hope that, that data will confirm and extend the data to-date and as we indicated we think that, that is a very large opportunity on itself and it's an earlier program in terms of moving towards the market and towards approval in asthma. In terms of asthma obviously we are going to be doing the Phase IIb and we are going to be anticipating that data in terms of also confirming what we've seen to-date better establishing our dose relationship and going forward into the real cause.

Yeah, and just to be clear the data coming up at the Quad AI at the end of this month would be the Phase IIa data. And then as George indicated we will be additionally getting Phase IIb data perhaps later this quarter or the second quarter. So lots going on in the atopic dermatitis area and the asthma Phase IIb program is very large study that's well underway in terms of enrollment. So this is a pretty exciting area for us.

Okay. Thanks.

Thank you. And the next question is from Terence Flynn of Goldman Sachs. Your line is open.

Hi, thanks for taking my question. Maybe another on the pipeline front. Was just wondering the EYLEA PDGF co-formulation trial, if you could give us any more insights on the design there, that will include EYLEA control arm, when we might get some data? And then maybe your thoughts on that target and given what we are seeing from the competition out there? Thanks.

Well in terms of the target we've said many times that it's potentially interesting to combine PDGF and EYLEA. We also think it's potentially interesting and maybe more interesting to combine [inaudible] and EYLEA. And I think other people can speak to their own data but we don't view this as a done deal just yet and I don't George you want to get into it that or not give anything on trial design.

I don't think we're going to be talking about the details of our trial design at this point. But as Len said we're very excited about the fact that we have the opportunity to combine both of these agents in terms of either the PDGF agent or the anti-agents in the same as intro-vitrial formulation as EYLEA which I think if either of these agents can walk for a substantive advantage I think that would be very attractive and convenient to patients for getting a single injection with both the agents in it. Okay. Next question.

Yes the next question is from Geoff Meacham of JP Morgan. Your line is open.

Hi this is Carter on for Jeff. Congrats on a good quarter. A question related to the differentiation strategy for sarilumab do you think you can differentiate versus [actamer] strictly in the basis of the reduction of progression in joint damage, in case of pretty comparable --

I don't think it's appropriate for us to be doing any cross trial comparisons at this point if at all let's wait until we get our data and then I think the rheumatology community will be able to assess, I think as George indicated in his talk the fact that we have both two different dosing regimens that we've been able to demonstrate I think reasonable data with both may afford a nice choice given subcutaneously et cetera. By the way give regard to Geoff because this is fourth time in all that somebody stood in for him and we hope he's okay.

So I just wanted to add to that we think the field is far from knowing the best way to use biologics as you already heard there is a substantial number of patients who don’t respond best to TNS and I think that it's both an issue of the right trials being done and trial designs and so forth. The best get the best biologic to the best patients and I think that’s going to be important way of expanding the opportunity of anti-VEGF agents in general in this space.

The next question is from Yaron Werber of Citi. Your line is open.

Hi everybody and thanks for taking my question. I don't know how you are going to let me sneak in two questions because I know you might not answer the first one. The first on just for Bob the DME market can you give us a sense how much of it is branded now versus sort of Avastin I am trying to get a sense how much is the [inaudible] and then if you don't mind I have a second one. I just don’t understand the biology for you guys may be for George and for Len, -- EYLEA sort of synergies versus PDGF and EYLEA synergy. I am just trying to get a sense help us understand evaluate it little bit and why may be take - testing them separately and is there even an opportunity to test them all together as a triple, so plenty of questions in there?

So Yaron those are good questions we'll deal with both of them. First Bob can you comment on the -- so in terms of DME obviously for a number of years it was not an improved product so Avastin was the dominant player in the marketplace since Lucentis has launched they have rapidly penetrated the market. But they are not at the same 50-50 split as in the wet AMD market it's more like 60% of Avastin 40% Lucentis from the survey data that we have. That said with the launch of Lucentis the anti-VEGF market in DME is growing so we're very encouraged that over time the DME market, as I said only right now only a portion is getting into anti-VEGF therapy. But we expect that to change and especially when you look at the data which indicates patients really should not be receiving laser. If they get laser early on from what we saw in our year two data they never really catch up when they get anti-VEGF therapy. So we believe there is a major opportunity for anti-VEGF therapy to be used earlier in the treatment of clinically significant DME. Okay. So George you want to comment on relatively pre-clinical or whatever data if you have anything want to say that PDGS and Avastin and whether or not a combination makes any sense at all?

Well right now we view the pre-clinical data is actually stronger for ANG potent II. They both are acting predominantly on the blood vessels as opposed to PDGF which is acting on the smooth muscles. So I guess theoretically there is some rationale a possibility of the three way combination but I think actually first we are going to have to -- as a field to convincingly demonstrate that either agent on top of anti-VEGF have a substantial advantage. Okay, next question.

The next question is from Matt Roden of UBS. Your line is open.

Hi, thanks for taking the question and congrats on the progress. I just wanted to ask you about the market share trends here. Can you speak to whether or not the market share in AMD and CRVO you report is representative of what you see if you limited that sample to just patients starting therapy or switching therapy? And then related as you think about launching into DME, is there anything you can learn from your experience here in AMD and RVO together with the dosing advantages and things like that could result in sort of the super market share gain in DME with EYLEA than you had in the previous indication, thanks.

Yeah, I would say we were pretty pleased with how quickly we got market share and I am not sure we have much to add on that. Bob do you want to come on that?

I think I don’t want to split it out our survey data for new versus switched patients, what I would say is that the majority of our business that is not on -- from continuing patients is now on new patients which is very encouraging. We’ve really got that pool of switched patients earlier on and now it’s we’re fighting it out to get new patients, by new patients our share in new patients is greater than our share in switches. With regard to the DME growth I think that the opportunity is similar to what we saw in with wet AMD, there is a dissatisfied group of patients who will be switched and our real opportunity is to grow the market because quite frankly laser therapy is not appropriate and most patients were set with DME with central vision and we have to get that message out.

Right, obviously that bothers you post the approvals hopefully which is due in August of this year, okay.

Okay, next question.

Next question is from Joseph Schwartz of Leerink. Your line is open.

Thanks a lot. I was wondering if you could talk about how you've designed your antibody against PDGF and what science supports going after the receptor versus the lag end and PDGF data versus other sub units.

Yeah, I think that's a little bit proprietary so we will have to duck that one. But we will give you another question if you have one.

Thanks, how about are you detecting any potential changes in the way physicians are reimbursed for inter vitrial injections.

Bob, do you have any comment or question about that?

Over the short term there are no anticipated changes but right now the whole health care environment is uncertain so I can't talk about what might happen in the future.

Okay, alright, great thanks.

Thank you. The next question is from [Rachel Span] of Bank of America, your line is open.

Just two quick ones, just to make sure I understand your guidance for sales in the first quarter and your inventory comments, are you actually guiding for 1Q sales that are lower than the fourth quarter reported sales? And then to follow up on the DME comments, it sounds like that there will be because Roche has already kind of said that the market, if I am interpreting their comments correctly, is around $250 million in sales for DME in U.S. now and I understand it is going to grow. Just sounds like there's overall there is a much smaller pool of patients to switch and we ought to be thinking about DME in the context of your comments. I just want to make sure I understand if it's as big as AMD that’s really several years from now as opposed to in the next two years. Is that so?

Yeah, good question. The second question, in terms of the size of the DME markets you are correct. We are launching into a market that is much less mature than the AMD market that is assuming we get approval we will launching into a market there is much less mature and therefore you are correct the number of actual switches available might be less. On the other hand our statement that the market could be as large really was a demographic statement relating to the number of patients with DME and the fact that the disease is often bilateral, the number of eyes that could be needed to be treated. And the fact that a significant fraction of the market is now still laser at least according to the several meeting that I have been the people feel that laser user usage will be decreasing dramatically. In terms of we did not give specific sequential quarterly guidance but you are correct that we were suggesting that there could be a negative effect of on the first quarter of this year based on inventory realignment and plus the growth that we're predicting. As I said it's tilted more towards the second half of the year especially post the approval of DME if it comes in August.

So Len I think one thing people need to keep in mind when they're looking at about $250 million number is that Lucentis is dosed at a 0.3 milligram dose in DME. So it's three-fifth of the price in AMD. So you really can't compare AMD and DME numbers.

Okay, good questions, thanks. So we have time for couple of more I think?

Yes two more questions operator?

Yes sir, the next question is from Phil Nadeau from Cowen & Co. Your line is open. Phil Nadeau - Cowen & Co.: Yeah thanks for taking my question, good morning. Thanks for taking my question. Just a question on Alirocumab, just wondering if you could give us an update on the outcomes trial how's it proceeding and then a related question what is the rate limiting factor to filing Alirocumab in U.S. is it that the outcomes trial has to have a certain percentage of enrollment or are you going to wait for the data from the trial.

Yeah so I think what we've said is that we're not going to comment on the specifics of our outcome data progress enrolment et cetera because it is a very competitive field. We have indicated that in terms of what's required for filing with the FDA wanted to see some progress and I am not going to get some specifics there but they were looking at progress in terms of the number of events and a blinded setting in one group or the other overall number of events. So they knew the progress was -- so the progress of the trial was moving along but we don't want to get into the specifics there either because each program they have its own nuances. So hope that helps. Next question.

The final question is from Biren Amin of Jefferies. Your line is open. Biren Amin - Jefferies & Co., Inc.: Len, a question on your competitors they are working at more and frequent delivery of anti-VEGF could you may be share your thoughts on EYLEA and your efforts on -- around this, thanks.

Yeah we continue to look at alternative delivery systems whether it would be through genetic approaches whether it would be through delivery devices or what have you as far we know one of our competitors had something in Phase I for quite some time now and we haven't seen that progress. We don't know much more than you do. And we don't have anything in the clinic as yet but I can assure you we look at this area very carefully and we'll see whether or not going to be this combination will make a difference as well. Okay, Michael?

Well, thank you -- thanks everybody we appreciate you participating in our fourth quarter call. We look forward to a great 2014 and with that I would like to close the call.

Thank you, ladies and gentlemen this concludes today's conference. You may now disconnect. Good day.