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Mike Rockefeller, Co-Chief Investment Officer of Woodline, manager of the Woodline | Spire funds, sits down with executives building tomorrow’s great companies. Candid, strategic conversations. For investors, by an investor. This is inSpired.
Given what we know about his condition and the virus, etc., that he had a very high probability of
dying. When you save any life, it's important when you save the President of the United States, it
became quite the story.
Regeneron is one of the oldest and largest founder-led companies in the S&P
500. It's up there with the giants like NVIDIA, Blackstone, Oracle, and Dell. It was founded in 1988
by Dr. Leonard Schleifer, its president and CEO, and Dr. George Yancopoulos, its president and
chief scientific officer. Len and George have been in their same roles for 38 years.
They thought we were going to sell maybe 100-something the first year, but we sold 800 million.
And it seemed like, oh my God, this is the real deal now.
Today, we sit down with Len to talk about Regeneron's history, its key products, and how its deep
pipeline will position the company for success in the future.
I don't think we get any credit for our pipeline because if we take your revenue projections for
Dupixent, you get all your value back from Dupixent, not to mention the $18 billion we have in the
bank.
For investors, by an investor. Conversations with executives building tomorrow's great companies.
You mentioned liver disease. And as I was going through your pipeline, and you have a couple
phase two assets for MASH.
Yeah.
Which ones are you most excited about?
Ones I haven't told you about. Stay tuned.
I'm Mike Rockefeller, co-chief investment officer of Woodline Partners, and this is inSpired. Well,
great to be here, Len.
Good to have you here, Mike.
Has it sunk in yet that you are coming up on 40 years since you founded the company?
You know, it doesn't seem like 40 years on the one side. And on the other hand, sometimes it
seems like a lot longer. But, you know, when you're doing something you love, time just passes.
Take us back to 1988 when you started the company, what the vision was, and maybe how that has
turned into what Regeneron is today.
Yeah. It's been a long time. And you mentioned Warren Buffett, by the way,
before we get to 1988. So a couple of people in my family keep track of who's the longest
continuous serving CEO of a large public company. And that was always Warren Buffett, Warren
Buffett. I just ran into Warren at a conference and I thanked him for retiring because that moved me
up in the longest serving CEO continuously of a public company. But back in 1988, you know, I
completed a lot of training. If you think about it, after college, I did seven years of training as an
MD-PhD with a fellow by the name of Al Gilman, great, great mentor of mine, Nobel Prize winner.
Unfortunately, he passed away a few years ago from pancreatic cancer. But I had great training with
Al, so I got both my MD and PhD. And then I decided that I still wanted to be a doctor, a real doctor,
not just a paper doctor. So I spent four years in residency with internal medicine training for a year
and then neurology training where I became a board-certified neurologist. I was on the faculty at
Cornell. I was doing research. I had a lot of grants, startup grants, NIH, American Heart Association.
But as I was reading the literature, all the exciting work seemed to be about molecular biology. And I
had been trained as a molecular biochemist, not a molecular biologist. I didn't do gene cloning or
any of that stuff. And then all the great papers seemed to be coming from this company, Genentech
or Jane Tech and Genentech, of course, as they call themselves. I said, what the heck is that? And I
said, well, that's interesting. there, a biotechnology company that are trying to come up with
treatments for important diseases, taking advantage of the new science called molecular biology
and molecular cloning. And so I had this notion about starting a company that would sort of try and
imitate what Genentech was doing, but do it in the context of neurobiology, neuroscience, because I
was a neurologist. And I thought that what were they working on? They were working on things like
human growth hormone. And then this company Amgen was coming along. They were working on
EPO and Neupogen. And I said, you know, maybe the nervous system is just as complicated as the
hematopoietic system. Frankly, obviously, I thought it was more complicated. And there was only
one nerve growth factor known at the time, NGF. And I said, you know, there had to be more. And if
we could clone them and make them and spritz them on people whose neurons were dying, maybe
we could treat degenerative neurologic diseases. And I started thinking about that. And my mentor
had called, Al Gilman. I said, Al, what do you think about this? He said, it's the stupidest idea he's
ever heard from me. And he says he's heard a lot of stupid ones over seven years of training. But
when he realized that I wasn't going to be talked out of this, he said, all right, if you're going to do
this, let's do it right. And he recruited a couple of Nobel Prize winners, Brown and Goldstein and
Arthur Kornberg and Eric Shooter. We all got together and said, let's do this. And so I started this
company called Regeneron for regenerating neurons. And the idea was to come up with new
neurotrophic factors. The only problem was I wasn't a molecular biologist and therein was a big
problem because the way to get this was through molecular biology. And so we had this meeting of
a bunch of scientific advisors and I said, well, how can we get a molecular biologist? Who's the
brightest, smartest molecular biologist? And they came up with some names and fortunately they
came up with George Yancopoulos. Now at this time, the company was really nascent. George
Sing, who at the time was at Merrill Lynch Venture Capital, bet on us by putting a million dollars into
the company. It was a big bet for George. He got a big chunk of the company for his firm, but he got
us started. And believe it or not, George is still with us today on our board of directors. He's a great
guy. And so I thought we had all the money in the world, a million bucks, you know, back in 1988 to
start a company seemed great. The advisors I was talking to identified Yancopoulos. All we had to
do was talk George into joining, which wasn't the easiest thing to do. George wanted to do it, but I
had to get past his dad, as it turns out. He was a child of very hard-driving Greek immigrants. And I
remember George saying, you know, let's have one more interview between us. I said, okay. I'd
already shown them we were going to build these labs how quickly, fast, and you could do an
academia. Literally on this campus, we took 10,000 square feet. We now own this entire
multi-million square feet campus. We had 10,000 square feet. It was from Union Carbide, who was
shrinking immediately post-Bhopal. Anyway, the last interview I came up and George said we
needed a restaurant and I couldn't see him in the restaurant. And I saw two people sitting and I
realized there was George and his dad. So I had to get past an interview. I was actually being
interviewed rather than the other way around. But at any rate, George joined and the rest, as they
say, is history.
You know, that's interesting because looking at your company versus other founder-led companies,
you actually have two founders who have been leading this company for 38 years. How has your
relationship with George been so successful for so long?
Yeah, it's a great question. I'm married for 51 years to my wife, Harriet. And
she's my, I would say, my out-of-work wife. And I like to think of George as my in-work spouse. and
the common theme is that in every relationship there has to be a saint. I guess I'm going to argue
that I'm the saint in those two relationships that are very long-lasting. Look, from the very beginning,
I realized that there were two aspects of building this enterprise. One is sort of the science, the guts
of the business, the molecular biology, cloning these things, doing the science, and the other was
building the business around the science, funding it, you know, beg borrowing and what have you,
they say, to get the money. And I would say we've had a pretty healthy focus where each of us sort
of know what we have to do, but we rely on each other for what we do. And so I interact greatly with
George on the science. He's a genius, so it's hard for me to keep up, but he interacts a lot with me
on the business side. And together, we've managed, because we've had a common purpose. I
mean, common background. He's also an MD, PhD. And we knew what we wanted to do. We
wanted to use science to make a difference in patients' lives.
Were there any key decisions along the way that really changed the direction of the business?
Yeah, there were quite a few. Remember, this is hard to believe, but for the
first 25 years of our existence, we lost money every single year. And I'm not talking nickels or dimes,
I'm talking millions and billions. So for 25 years, we lost money. So the key decision we made is
despite a lot of people, including the ilks of people like you in the investment community, not you in
particular, but the analysts, the investment community, our shareholders, even our board, you know,
pick something, focus, and let's get it across the finish line. And I think that the best decision that
George and I made is we weren't going to do that. We weren't going to bet the entire company. It
always sounds great, a Hollywood kind of a thing. You bet the entire company on something. Well, if
we'd done that, we'd been out of business. We were going to bet on the science, build a foundation
of lots of different technologies, and not fall into the trap of trying to bet everything on one molecule.
Because we had NT3 and BDNF. George actually cloned the first novel neurotrophic factor since
NGF. And we thought we were going to spritz it on patients with Lou Gehrig's disease. We'd cure
them. we'd get box seats at Yankee Stadium behind first base and sail off into the sunset in a matter
of years. But obviously that didn't happen. But we kept saying, we're going to survive. And when you
meet up with a guy like George, it's pretty easy. You know it wasn't a matter of if, it was a matter of
when. So I've just viewed my job as making sure we got to that when.
What have been your top moments?
At Regeneron?
Yes.
Yeah, my top moments at Regeneron. Well, you know, there were so many, it's
hard to recount them. I mean, clearly, just opening up the labs and realizing we were in business
was kind of amazing. The IPO in 1991, sort of a big moment. Doing this multimillion dollar deal to
really get us going with Sumitomo Chemical, big moment. Treating our first patient with one of our
neurotrophic factors, even though it didn't work out, that was sort of a big moment. But the defining
moment from a business point of view probably came in 2011. We were sort of heading down the
home stretch trying to get EYLEA approved, which we had already approved ARCALYST a few
years before, but that was for a very rare disease, although though it's actually selling quite a bit
right now. Kiniksa's taken it over and doing a pretty good job there. But we didn't have a significant
product that could keep the company going. And, you know, 25 years, people were running out of
patience, I think. But in 2011, we knew we had the data. We'd submitted it to the FDA. And sure
enough, they gave us in the summertime a CRL. I can't even remember. We've had so many CRLs
in recent years and past that it's hard to remember what they felt was missing at the time. I think it
was something related to manufacturing again. But my dad at the time was 99 and a half. And he
had been driving the car until he was 99 and was in great shape. But he started to go downhill in the
fall of 2011. And we didn't get the drug approved. And he kept saying, "Len, when are you going to
get that drug of yours approved?" And right around Thanksgiving, we got the FDA approval. And a
few days later, my father passed away. It was almost as though he was hanging on to see that
happen. But that was a great moment, a confluence. Not great, obviously, losing my dad, but seeing
him, being able to see our success at that age and knowing that we knew we had something. I
remember going to the J.P. Morgan, I think it was called the Hambrecht and Quist Conference at the
time, in early January 2012. We had just launched the product, and people thought that we were
going to sell, I don't know, $5 million. But we sold, like, in the first three months, something like $80
million. And then they thought we were going to sell maybe 100-something the first year, but we sold
800 million. And it seemed like, oh, my God, this is the real deal now. We're a real company. We're
treating lots of patients. We're changing people's lives. That was pretty insurmountable times.
It's funny. When I was flying out to interview you, I told my kids, I have four
young kids, and I said, I'm interviewing the CEO of Regeneron. And they said, oh, you know, who's
that? What are they? And I said, well, you know, EYLEA? And they said, no, we don't know EYLEA.
Dupixent? No. I said, do you remember when the president got really sick and he got on TV and he
said he was feeling better because he took the Regeneron? I said, that's Regeneron. They said, oh,
yeah. So that might be their top moment, a small sample size. But that was definitely a top moment.
That was an interesting story. I got a call from, I think it was Mark Meadows
who originally called, from the chief of staff at the time. And they said they wanted to know. We had
just announced, I think on the Tuesday, this was like on a Thursday, just announced that we had
some really interesting data that we kind of knew this was going to work. This was a monoclonal
cocktail for COVID. And they said that somebody in the White House wanted to get treated. Could
we give it to them? I said, it's not the way it works. You can't just give an unapproved drug to
somebody, some random person in the White House. You've got to tell me more, and we got to see
whether or not the person could qualify for a clinical trial because we were very strict. We just
weren't giving it out. We had to participate in our trials. That was the ethical and, frankly, moral thing
to do. And finally they admitted that it was the president. And that, of course, changed everything.
And I said, look, we can't ask the president of the United States in the middle of a pandemic to
participate in a clinical trial, come down to the site on Tuesday and we'll draw your blood and wait. It
just didn't make sense. So we had to come up with a way that we could get him the drug. And I told
him, the only way that could happen is if the FDA approved it. And we haven't even asked them
about it. They said, don't worry about that. We'll take care of the FDA. I said, well, you say that, but I
got to submit it. And they said, that'll all be done within a matter of hours. Seemed like that was
done. And I remember them saying, well, when are we going to get the stuff? And I said, well, it was
being packaged because it was manufactured in Rensselaer, New York. And we've chartered a
plane. And we're going to send that plane down. Well, when's the plane going to get here? When is
it going to get there? I said, well, they're going to fly to Dulles. and tell us you got to fly to Reagan.
It's much closer. I said, you can't just fly a private jet into Reagan. You know, this is post 9/11. You
need 48 hours. You tell your pilot, just head straight to Reagan. What's his tail number? We'll have
the military sort of part the way. So I knew this was the serious stuff. And then I had to deal with this
wonderful doctor, Sean Conley, who was the White House doctor. I mean, he wasn't equipped to
deal with a president who was sick from a pandemic virus. Very nice guy. I had to tell him how you
mix it, you hang the IV, you get it in there, blah, blah. And sure enough, we get it into him late
Thursday night. At this point, it's been told publicly that given what we know about his condition and
the virus, et cetera, that he had a very high probability of dying. And they moved him to Walter Reed
shortly after they gave him the infusion in the White House. But it worked like a charm. Within 24
hours, he had turned the corner. And then, you know, sort of our lives changed a little bit because of
sort of the publicity, you know, when you save any life, it's important when you save the president of
the United States, it became quite the story. But the bottom line is we were able to save a lot of lives.
And you did it very quickly. You mobilized. It was very impressive.
It was really amazing.
Yeah. Maybe back in EYLEA. So 2011, it got approved. Most successful
ophthalmology drug in history. You got an approval for the HD. And so for many years, it was an
important growth driver for Regeneron. Recently, we've had biosimilars with the 2 milligram. So the
franchise has been declining. As you think about the next couple of years, do you see this as sort of
a stable business? Do you think there's a path back to growth?
Yeah, I think there is. I think right now we're at about 50-50 in terms of our dollar sales and HD
versus EYLEA itself. As that some of the EYLEA gets eaten up by biosimilars coming along, but
some is getting transferred to HD. So I think HD will be able to be a growth in and of itself.
And then maybe on Dupixent, your other blockbuster, your IL-4/13, more than a blockbuster, I think
it's one of the biggest drugs in the world.
It's one of the top drugs in the history of the business. It's the most prescribed drug by
dermatologists, pulmonologists, allergists, gastroenterologists in terms of a biologic. It's really, you
know, it's taken off because it's a great drug.
When did you start working in this area of type 2 diseases?
So that was a long time before. George recently showed me some slides. I can't
remember how far back, but a long, long time ago. In some respects, before he even came to
Regeneron, he had thought about the switch factor and IL-4. And he was an admirer of Bill Paul at
the NIH, who had sort of popularized IL-4 as a very important switch factor changing IgG to IgE
production. So it's probably a decade or two before that he started thinking about it. Even when it
got first approved, we had slides saying all these different conditions we thought that it would get
approved in. And then eventually the genetics sort of backed all this up that we had done this all
right because you could predict now with our genetic database what indications would work.
So you have nine indications.
Yeah. I can't even keep track of them.
It seems like there's still a lot of penetration left to go in each of the
markets that you're in. And I'm sure you're hearing the sell side start to ask questions about the
future of the drug. And some of them are saying that they think Dupixent could do over $30 billion in
sales by the end of the decade. Do you think that's reasonable?
Well, as polite and as friendly and as much as I admire you, Mike, you know
that I don't succumb to making predictions about future sales. Because I don't like to make
predictions about things that I don't have any more information than you do. You can look at all the
same information I have and you can make your best guesses. But I will say this, it's continuing to
grow. It's annualizing, I think, based on the last quarter, just the first quarter this year, just under $20
billion. It is not even highly penetrated. I think it's under 20% in atopic dermatitis and less elsewhere.
With new entrants, with Lilly's product and other products, you're starting to actually expand a little
bit. You're not fighting over the same market share. So we're actually still growing this market. And
we're very under penetrated in so many of the indications. I can certainly say I think growth, being a
growth driver is an easy bet.
Yeah, I had to try. It does look like it's very possible. You also have some next generation antibodies
in the same area. Which ones of those do you think will be most meaningful?
Yeah, so once again, we don't try and make singular predictive bets because you
start to fall in love with your own predictions. If you think the Mets are going to win or the Knicks are
going to win the championship, you start to fall in love with that. And that's okay if you're a fan. But if
you're running a business, you don't want to be a fan of your molecules. You want to make sure we
bring all of them along and the best will rise. But so what do we have going as possibilities there? I
mean, we have with Sanofi, they're looking at how to give more like with hyaluronidase and things
like that, how to give more of Dupixent so you can get a greater spacing between doses. we have
what we call Supi Dupi which is a long acting version that targets the IL-4 receptor, same target as
Dupixent. that's not officially yet in the collaboration but the rules of the road if it's the exact same
target we can't develop it on our own and neither could Sanofi so we basically have to discuss if and
how and when we put this into the collaboration, but that's coming along, and I'm sure we'll be able
to work something out where we bring that forward. We have long-acting IL-13, which we're moving
along extremely rapidly, long-acting IL-4, and we have some bispecifics as well. So we have a
whole pipeline of things. We also have new thoughts on, we think we can cure allergy now. That's a
bold statement, but I think we can back it up when we get our next generation of molecules, which I
hope will be around the end of the year or early next year, into the clinic as a way to knock out IgE
cells specifically. I think we've sort of done some proof of principle there already. And so there's a lot
for us to go in the type 2 immune space.
You put up some interesting data with Lynozyfic and Dupixent in severe food allergy. How come
you're not moving forward with that one?
Well, we did get a proof of principle there, but we think we have a better one,
a better way of doing this. So the idea there was, let's kill off the immunoglobulin-producing cells.
and we used BCMA by CD3 and that killed off all the immunoglobulin-producing cells. The IgG went
down, the IgM went down, the IgE went down. And the concept was, well, let's prevent any IgE from
coming back by giving something like Dupixent, which it worked. We could get 90-something
percent of the IgE gone and it wouldn't come back, but it does take a long time for the IgG to come
back. George and the gang had something even better, which could destroy only the IgE-producing
cells by some clever trick, which we haven't told the world about yet, which is not so obvious. So I
think that rather than spending a whole development program on something where we think a year
behind it is something even better, that's the luxury, by the way, of having a long-term perspective.
The problem with this business, okay, is that number one, it's hard, and number two, it takes a long
time, and number three, it's very expensive. So the very expensive part comes from people like you
who pay for all this innovation, because we know the Europeans don't pay for the innovation. We
can talk about that. But so if you're going to pay for it, the trouble is your time horizons, maybe not
Mike, who's been around for 100 years, but others of your ilk, their timeframes are much shorter.
And so the question is, how do you square a circle where the time to do really important things is
measured in half decades and decades, yet the time that you guys work in are sometimes
milliseconds occasionally or as long as you which some of you consider long term as a minute on
the other hand there are some that have been with us since our IPO who really do take a long-term
perspective we have we can't if you succumb to those time pressures this is why the you wind up
doing wrong the bad things this is why you get so many failures in our industry. It takes time to do
things right. And you can't just say, well, I got to have one. If you've got something better, you got to
bring that along. So we have either the luxury, the wherewithal, or the foresight, whatever you want
to call it, we're going to do things right. And if some take longer than others, that's okay.
You have a very deep pipeline of over 50 things that you're trying to get
right. So it's really exciting. Maybe to start on the late stage pipeline, because you have some big
phase three programs in areas like anticoagulation, multiple myeloma, complement. Which one of
those you think is most under appreciated in terms of Regeneron kind of changing the trajectory
over the coming years?
Well, and obesity, I think you've neglected. This is another big one. You know,
once again, how I see the world may not be how you guys see the world. And I don't think we get
any credit for our pipeline. Because if you look at what the, if we take your revenue projections for
Dupixent, you get all your value back from Dupixent, not to mention the $18 billion we have in the
bank. So there is a disconnect that people aren't paying enough attention to the pipeline. Let's start
with obesity, just because I think that the way you asked the question, which ones are people
ignoring? People are getting a little bit tired of hearing about the next obesity drug that has a little bit
more weight loss, or maybe it can be taken a little less frequently, or maybe it's oral. The question is,
how do you really change this? And does it make any sense for Regeneron to go in this game?
Well, one of the ways to change it, we thought, was to invent a GLP that could actually lower
cholesterol at the same time as you lose weight. If you lose 50 pounds on Zepbound or Mounjaro or
Wegovy, whatever it is, you barely move the needle on your bad cholesterol. If your LDL was 150
when you started, maybe it's 145. It needs to go from 150 down to 50 or less. And so we wanted to
invent a GLP that not only caused weight loss, but lowered cholesterol. And of course, we realized
we had one, which was Praluent. And if we could overcome a very hard technical task of getting
these together, co-formulated in a volume where you could just give it the same way, you wouldn't
even know the Praluent is in there, then effectively we would have a drug that did both. And
everybody misunderstands what we're trying to do here. We are not trying to sell more Praluent this
way. We can talk about how we're going to sell more Praluent, and we can talk about how Amgen
lost an antitrust jury case 400 million to us. We can talk about that market. But that's not what this is
really all about. This is about selling a GLP. And because we have a GLP that now lowers your
cholesterol. So you can take Lilly's GLP or you can take Novo's GLP or you can take somebody
else's. But none of them are going to lower cholesterol. Why not take ours? And I think doctors will
like that. And so we get zero credit for that, even though we're well on our way here. We licensed
our GLP from Hansoh. So, by the way, in their study, they had much less GI toxicity than tirzepatide
did in a similar Chinese study, yet had the same weight loss or more. So the question is, do we think
we have at least as good a GLP? Maybe we've got a better one. But when we combine it with
Praluent, we have a total new class of drugs. It's as though we invented a GLP that could also lower
cholesterol. So you went to your doctor and you wanted to lose 50 pounds. And they said, by the
way, if you lose 50 pounds, you still have to get your cholesterol down. But I have a GLP that does
both. Why wouldn't you take that? especially if you could do it in the same injection and hopefully at
the same or close to the same price.
How hard of a technical challenge is it combining those two?
It was not easy, but we've done it.
And when can you be in the clinic with that?
Well, so we're in the clinic with the GLP. We have to get, the way this works
is that once you get that approved for obesity and for diabetes, then it's easy selling because we're
just doing, talking about a combination product. We just have to show that the PK hasn't changed,
and it won't. There's no reason. The hard part was doing the proprietary formulation and getting this
to work together. That was difficult, and it really had unexpected solutions there. So we own
Praluent in the U.S., and we have the proprietary patents on how to combine these things. So that
loss is going to go very fast. We're enrolling these trials. They enroll like butter, obesity trials. So I
think people are missing that completely.
What else are they missing?
I think that many have ceded the myeloma space to J&J. They're formidable.
We know them. They're really good at what they do. But at the end of the day in cancer, we think we
have a better drug that's maybe more convenient, perhaps less toxicity. We like our data a lot. we're
going to commit and this is a 30 or 40 billion dollar space um we're even thinking about
monotherapy in frontline so we're very excited you're going to see a ton of work come from us
making big commitment that we obviously just recently got approved in the last line we'll get some
data next year in two plus I would think we'll call it then we'll get some data after that in earlier stage,
and we've even got data in light-chain amyloidosis, in high-risk smoldering. This is a real big
opportunity to simplify and change the paradigm. So that's a big one. I don't think we get much credit
because everybody is seated at the J&J. These things can change pretty quickly.
I don't think we're getting credit for our anticoagulants. Okay.
That's a big market.
That's another $30 or $40 or $50 billion opportunity, especially because the
number of people who actually take the DOACs is much lower than who actually should because of
the fear of bleeding. And we have two entries there, two antibodies. So like a 1 and 1A, if you will, if
you're a horse racing person. You get two horses in the race, not just one with different
characteristics. And so we're going to have, I don't know, between half a dozen and a dozen phase
3s going and all sorts of indications by this summer. Some are already underway, whether it's in
post-knee replacement, whether it's in cancer, whether it's in DOAC ineligible for atrial fibrillation,
DOAC eligible for peripheral disease. I mean, massive big bet there.
How are they different from the oral factor 10s that are on the market and the oral factor 11s that are
in development?
Right. So if you look against the factor 10s, what we see from preclinical data
is we can get the same or more anticoagulation, and the genetic supports that with a much lower
bleeding risk. The non-catalytic site antibody has really a low propensity. We'll see if it even has an
increase. And the other is very mild, but you get better anticoagulation. So once again, the DOACs,
they're just not used because of this bleeding problem. In terms of the other factor 11s, if you look
preclinically, you'll see that, once again, you know, we just don't make singular bets. We make really
good antibodies. We have better anticoagulation and no reason to think we'd have any difference in
bleeding than either the small molecules or other antibodies. So, maybe I should pause and point
something out. I will say this. I have watched our industry evolve since I got into this business in
1988. You know, you got a lot of value back in 1988 if you had a group of smart people and a
prestigious scientific advisory board and an idea. And then this, what I call this sliding lever, moved
along in different places. sometimes you had to be you had to have preclinical data then you had to
have phase one data say then you had to have proof of concept and and it kept sliding around and
and then it's eventually what you got to have be in phase three to get value then of course people
realize well maybe you got to have a successful phase three then oh my god you got to get past the
FDA and then you got to get it to be commercial, and then you got to get past the payers who are
really difficult and the Europeans who I call the non-payers. And then you got to worry about
competition now from China and everywhere else. The world has changed. We had a massive head
start on Dupixent compared to the rest of the world. EYLEA, people have been chasing EYLEA for
10 years. No one's been able to come up, 15 years. No one's been able to beat EYLEA. But I think
those days are sort of numbered, numbered in the sense that you won't have the kind of lead that
you might have had if you come up with something out of the box, because people catch up now so
quickly. The tools are out there. So we like to do two things. One is we like to have a lot going on. So
instead of one $20 billion product, maybe we have four, five, $5 billion products at a time where it's
easy to be more predictive. And who can do that? Only people who can put 50 things in the clinic
with another half a dozen or more every year going into the clinic. So we think that that strategy of
doing as much as you can broadly and accepting the fact that you'll have competition sooner is
probably the best strategy that works. Now, that's, of course, very self-serving, Mike, because
nobody else does research like George and his team. So I think that we have a competitive
advantage now in this new marketplace where building a company on one single blockbuster like a
KEYTRUDA or Mounjaro or Dupixent is going to get harder.
Yeah. It does seem like you are getting more credit for your C5 franchise and MG and PNH, but
you've also put up great data there.
Yeah, I forgot to mention that. That's it. That's the beauty of having so many
things. Our C5 franchise, I think, has got the best-in-class data. We've shown that for PNH, you
really need to push the limits a little further than just the antibody alone. So the antibody plus the
siRNA we've shown can really take people who are not fully controlled by looking at their LDH, for
example, which is a measure of intravascular hemolysis. We've shown that you can do better. So
we're waiting for the final data on that. But we've already shown in myasthenia gravis, you don't
need all that. And just the siRNA alone, which can be given quarterly and get the same kind of data,
that's going to be, I think, a very competitive in a marketplace that's really growing.
The one area that we haven't seen data for that franchise is in geographic atrophy.
Yep.
Million patients in the U.S., so a lot of opportunity.
Big opportunity there. That's more speculative, I would say, but we have to do
the experiment because they've shown that you work intravitrally. we think most of the C5A comes
from the liver. So you want to block this systemically. But we also have a plan to block it intravitrally
as well with a better, cleaner antibody that's not pegylated and going to have some of these immune
problems. So the reason these drugs haven't taken off is because they have these toxicities of these
occlusive vasculitis. And they may cause wet AMD to boot. So it's not been a clean class or they
would have done a lot better I think because even though it's only at 20, 25 slowing that's pretty
important if you can do that safely because you just don't want to have your the retina to atrophy I
mean it's a big issue so anything you can do to slow that down safely is a winner so we'll see there
once again you know these are bets we'll make we don't bet companies on these things, but we
have so many different ways to win. We have some really cool stuff we haven't talked about. I think
we're going to turn the world a little bit upside down in some of fatty liver disease. Our genetics has
given us approaches and ideas that are just, I think, going to sort of maybe revolutionize that space
a little bit. We've got a genetics target that's given us a great leg up on glaucoma. We're looking at
that. We've got another genetic based target, which we're starting very soon on Sjogren's disease
and several other of these fibrotic type immunologic diseases. I mean, it just keeps going and going.
And we haven't even talked about our Regeneron Genetics Center, which has got
the largest collection of data, which is extremely interesting. And we've been struggling, but we're
trying to come up with an idea. We've been struggling how to take a real advantage outside. I mean,
we use it every day for discovering and developing drugs, validating pathways, all that. But we think
there's a health tech business there too that we can, because, you know, we have one of the largest
databases in the world where you link genomics and soon proteomics. and with electronic medical
records, and with all the AI companies. I think it's going to be very interesting how we can do this.
Some cool stuff, by the way, you can do with proteomics. If we took your blood, we could tell you
how old you are. Now, I could pick your pocket and look on your driver's license so that it's not that
big of a deal, but we could do it from your blood. But we could also tell you not only how when you
were born, we can tell you how you've aged. So you might be 40-something, but you might be
60-something because you haven't treated your body right or genetics are not so good. Or you could
be 20-something. So you can find very interesting correlations between what's going on in your
blood and what's going on in your genome. So, for example, you might be at very high risk for
Alzheimer's disease. but we can tell you whether or not you are, despite this high genetic risk,
whether you have a 100% chance or a 0% chance of actually getting the disease by looking at your
blood. There's so many powerful things we're beginning to realize when we start to study genomics,
proteomics, and electronic health medical records. So trying to figure that one out too. You know,
we do a lot. We're ambitious, but there's so much to do, so it's exciting.
Yeah. You mentioned liver disease, and as I was going through your pipeline, you have a couple
phase two assets for MASH.
Yeah.
Which ones are you most excited about?
The ones I haven't told you about. Stay tuned.
The leading MASH company, Madrigal, just in-licensed a PNPLA-3 for MASH from Arrowhead. And
you have one as well in phase two. Is this an interesting target?
Yeah, it is an interesting target, particularly for those who have this fairly
common mutation. We know Bill Sibold, by the way, quite well. We like Bill. We know him from his
days at Sanofi where we work with him. And he seems to have done a good job. You know, nothing
lasts forever, Bill. We're coming after you.
You're known for pioneering human monoclonal antibodies. That's, you know, I mean, you do it
better than anyone.
I would say George is known for that.
George is known for that.
He does it better than anyone.
Give you some credit also.
Yeah.
Interestingly, when you look at your pipeline now, a quarter of it is in siRNAs.
Yes.
What is special about that modality that is a quarter of the Regeneron pipeline?
Yeah, there are just, you know, targets. Well, let me back up. First of all, we
love platforms. Monoclonal antibodies is a platform. siRNA is a platform. Gene editing is a platform.
And there were other platforms coming along that we're very interested in. The main attraction of
siRNA is its ability to address targets that are not otherwise draggable easily, let's say, by a
monoclonal antibody or even a small molecule. So that's what's particularly. I think people do tend to
misuse technologies. You know, TTR is a good place to use it. Putting an siRNA in the eye to try
and lower VEGF would be a dumb thing to do. But there are places where you really can't get to
targets where siRNA can get you there. And we've been working with Alnylam on some CNS
targets, which are very interesting. I can never remember which ones we've told you about, which
ones we haven't, so I won't get myself in trouble. But that's the main advantage. You can quickly try
and address targets. And, of course, they remarkably, and nobody would have believed it, have this
incredible long half-life that they can work.
Anything in the early pipeline that we should be asking you about?
You know I won't get much credit so why bother to educate the rest of the world
I think I threw one at you glaucoma the uh fibrotic immunologic diseases Sjogren's and others that's
a very interesting one I told you that we got something really interesting in the the MASH world, we
got a lot I mean we put half a dozen or more every year into the clinic and 50 in the clinic so.
It was amazing seeing that child at the White House.
Really amazing.
Yeah.
You had talked about Regeneron's Genetic Center, and you're a leader in technology and data. How
are you using artificial intelligence right now in your R&D?
Yeah, so two ways. One is the obvious way that any business could use. If
you've got to write a protocol that's this thick, well, AI can write a first draft of that in a minute. Rather
than have somebody prepare me for Rockefeller's hard questions, I can ask AI to do it. But that kind
of what I call, quote, unquote, busy work is what AI is particularly good at. But if you know how AI
works, and I've got a real lesson from this from George because he thinks about this stuff and he
really, this all is intuitive to him. I have to think on it hard. But, you know, it's not really thinking. It's
statistically putting things together just based on what it's trained on but and you know it might come
up with a a new drug based on a small molecule scaffold or something but do we need it to design
an antibody hell no we got our humanized mouse makes human molecule antibodies by the
thousands and in fact the AI people all came to us wanting to get access to our collection of
structures and antibodies so they can train. I mean, so we don't use it to discover the actual drugs,
but we use AI in our genetics to find the right correlations, what's the right relationship, and it can do
some of these big data tests faster and more powerfully than old methods could do that.
Do you see that evolving over the next several months or years?
Yeah, I think that we're looking about how to take advantage of AI and our data set, these millions of
people, and see if we can't get more into the management of health care, not just by drugs.
Interesting. M&A. So you've taken, I would say, a different approach versus
a lot of your peers, which is just focusing on technologies and platforms, as you mentioned, often
early stage, smaller deals. Do you see that strategy evolving as the company continues to scale and
grow over the coming years?
Yeah, it's a good question, Mike. I don't think our strategy will evolve
because I don't think it has devolved or it's never really changed. We are interested in any and all
opportunities. We prefer things that are platforms. We prefer working with people who are
like-minded and want to work with us where we can be additive together and one and one can
literally make three. We want to make money and what we do um this notion that that this is free
because you're taking it from your balance sheet and you can non-GAAP it or do something all that
to us is so maybe a driving factor people talk about their M&A capacity you know, I don't think of that
as a proven strategy destroy value you show me companies that have done that well. You know the
one that's done it the best? Once, which is Sanofi with Dupixent. And they'll admit that. That was a
great partnering kind of a thing. But competing for late stage or approved assets, there's not much to
that because you're spending $10 to turn it into $6 frequently. And that's because people are so
desperate. We literally have seen things that we thought were worth just to pick an arbitrary number,
six, and people willing to pay 12. That's just crazy for us, especially because we have such a rich
pipeline of our own. So if there was a great asset, I mean, we've got $17, $18 billion in the bank and
we've got a lot of capacity. If there was a great asset that we saw value in that others didn't, Yeah,
we would do it. We're not constrained by size. People don't really understand how all this works. We
don't tell Nouhad Husseini, who is a great head of BD, hey, this is what you can spend this year, go
out and spend it, and we're desperate for a phase three or something like that. We just look at the
whole universe of things and what makes sense for us. And I just think it's a far more rational way of
doing that. To me, you should view all this as one. That is, our goal as a company is to get products
that make a difference to people, and that will help people and it will help our shareholders. If it
comes to my research, which is most likely for us, that's more efficient, more predictable. But if we
have to go outside, we have no problem with that.
So could a large deal or even a merger ever make sense for a company like Regeneron?
Sure, but it'd have to be value creating. And that's the hard part, why it's
unlikely, but it'll have to be something that we see that's not visible to others at a price that makes
sense compared to what others are willing to pay. And we've been involved in some of these
mid-sized kind of discussions, but everybody pays these crazy numbers. It doesn't make any sense.
So you've been leading this company for almost 40 years. what does the next chapter look like for
you personally and for the company whenever that time comes so that you can ensure that
Regeneron and its culture endures?
Yeah. You know, founder-led companies really, Mike, are different. George and I
have been leading this company for a long time, and it is our life's professional work. We do this
24/7. We slightly keep different hours. So when I'm at home, George is maybe still in the lab or
coming home. He's calling me or I'm calling him when he hasn't. And we're talking all the time and
we're loving what we're doing because we were just so excited about the prospects of it's like living
the dream of making a difference in people's lives and in doing that in a productive way with the
appropriate financial rewards. I think it's great. But no man lived forever. And so we are developing
talent on a constant basis. I want to do it. I know George wants to do it as long as we feel we can be
the best people to be in the job that we're in. And when we're not, we have a deep bench of people
that I think can take our place. But I like to think that there's a way about doing things, there's an
ethical approach, there's a patient-first approach. I mean, I hear about some of these companies
that, you know, I won't use names of people who the FDA wants to withdraw a drug because the
data was manipulated according to the FDA and there's safety concerns. And they're still fighting
whether or not to take it off the market. It's like they're in the widget business to me. I mean, they
must have their own perspective on these things. But there are companies like that. That's not who
we are. We like what we're doing. I think we're still doing it well. I don't think that people fully
appreciate the difference the way a founder-led company is managed versus the, what I, you know,
we're not renters, we're owners, so to speak. You know, you have a CEO or a CSO, they normally
have, what, a five-year horizon or something like that. You know how many CEOs I've worked with
at Sanofi, by the way?
How many?
Eight. Eight.
Wow.
So you know that's not who we are and so we like the what we do and we think we're good at it and
we want to keep going but as I said we'll know when it's time to let the young bucks take over.
You've done an incredible job. Before I let you go what advice would you give to the next Len who is
thinking about leaving the lab and starting a company?
Well I think the first thing I would do was find a George. That may be
impossible because they probably broke that mold. But in terms of general advice, I would have to
say you've got to have the right, the long-term perspective. Do not make singular bets. Ignore all the
stuff that you hear from the analysts. I used to get in my early days, and sometimes I still do it
because I can't resist a good fight, but some of the analysts who have these crazy views of
Regeneron. You've just got to ignore all that noise. Even the shareholders, you can't ignore them,
but you have to educate them that we're not here to make you money this quarter. You want to bet
on whether or not when we turn over a trial, that's your business and that's okay, and you can make
that wager with any ways that you guys can make those wagers. But I would say to somebody focus
on the long term, focus on the science, focus on what you're really trying to do is make a difference
to patients. You really are not in the widget business and have a really strong moral compass. There
are going to be some down times where you've got to be willing to say this is not right I'm not going
to do this and you've got to resist all those pressures.
Great advice. Thank you for all you've done for patients and for shareholders, Len. Appreciate the
time.
Thank you, Mike. It's been a pleasure knowing you. You've been doing this for decades, but you
don't look like you've changed. So kudos to you.
Maybe we have a couple more years left in us.
Yeah, I hope so. Great to see you.
Thank you.