Dupixent drives up Regeneron spending on contract manufacturing

In the third quarter, Regeneron spent $111m (€100m) on collaboration and contract manufacturing, as compared to $80m over the same three-month period during 2018.

Robert Landry, chief financial officer at Regeneron, explained the reason for the increased spending on a conference call with investors to discuss the results.

Landry said, “The year-over-year increase in cost of collaboration and contract manufacturing was primarily due to recognition of manufacturing costs associated with higher sales of Dupixent​ (dupilumab)​.”

Dupixent is a Sanofi-partnered biologic used in the treatment of atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyposis. Third-quarter sales of the drug totalled $636m, up almost 150% over the same period of 2018.

Regeneron manufactures dupilumab at its own facility in New Jersey, US, according to an assessment report released by the European Medicines Agency. The formulated active substance is then stored and ultimately transferred to an unidentified finished product filling site.

The increase in spending on collaboration and contract manufacturing seen in the third quarter is part of a longer-term trend. During the entirety of 2016, Regeneron spent $105m on collaboration and contract manufacturing, less than its expenditure on the services in the third quarter of 2019 alone.

Spending on collaboration and contract manufacturing ticked up to $195m in 2017 and continued rising to hit $254m the following year.

The outlay over the first nine months of 2019 has already exceeded that prior record, coming in just shy of $305m – 68% higher than the amount spent over the first nine months of 2018.

Given the link between Dupixent sales and spending on collaboration and contract manufacturing, there are reasons to think Regeneron’s outlay may continue to rise beyond the level seen in the third quarter.

Analysts think annual sales of Dupixent could rise to $4bn by 2022 and go on to exceed $8bn in 2024. Extrapolated across a full year, Dupixent ‘s performance in the third quarter would amount to annual sales of $2.5bn, suggesting their is still ample scope for revenues and spending to increase.