Regeneron Pharmaceuticals (רג'נרון)
Analytical review · Quarterly report for the period ended June 30, 2026 (Q2 2026)
Bakshi Finance — Family Office | Research Depth: Comprehensive
What this review is based on. Regeneron's quarterly report on Form 10-Q for the quarter ended June 30, 2026, filed on July 30, 2026; the earnings releases for the last six quarters; the annual report on Form 10-K for 2025; and three Form 8-K filings from July to October 2026 (an acquired in-process R&D charge, performance awards to management, and an amendment to the Sanofi agreement). Market data: closing price on October 9, 2026; Bank of Israel representative USD rate of October 9, 2026. The share count used for market value is from the report's cover page (102.95 million on July 23, 2026).
Company Profile
Regeneron Pharmaceuticals is a biotechnology company based in Tarrytown, New York. It was founded in 1988 and has been led since then by its two founders: CEO Leonard Schleifer and Chief Scientific Officer George Yancopoulos. At the end of 2025 it had 15,410 full-time employees. Most of its medicines are antibodies developed on its in-house platform, VelociSuite.
The company has three main sources of revenue. Dupixent — a medicine for asthma, atopic dermatitis and other inflammatory diseases — is sold by Sanofi, and Regeneron receives a share of the profit. EYLEA and EYLEA HD — injectable treatments for retinal diseases — are sold by Regeneron in the U.S. and by Bayer outside it. Libtayo is an antibody for cancer treatment. According to the company, it has 16 approved medicines, four of them with more than $1 billion in annual sales, and about 50 candidates in clinical development.
The founders and early shareholders hold Class A shares with 10 votes per share, which carried 14.9% of the voting power at the end of 2025. The five largest shareholders together with the CEO hold about 31% of the common stock.
Financial Performance
In the April–June 2026 quarter, revenue rose 17% to $4,291 million and operating income rose 20% to $1,294 million. Net income under generally accepted accounting principles (GAAP) fell 7% to $1,297 million. The difference in direction is explained by two items below operating income: lower gains on securities ($62 million versus $250 million), and a 15.1% tax rate versus 8.4% in the prior-year quarter, when a tax reserve was released after an IRS audit was settled.
Where the growth came from
Almost all of the growth came from the Sanofi collaboration. Global Dupixent sales, reported by Sanofi, rose 38% to $6.0 billion in the quarter, and Regeneron's share of the profit rose from $1,282 million to $2,033 million. Sales of the products Regeneron sells itself rose only 1%: EYLEA HD grew 52% and Libtayo 30%, but the 2 mg EYLEA fell 45% because of competition from biosimilars and patients moving to EYLEA HD.
Three ways to measure profit
The company also publishes an "adjusted" (non-GAAP) profit that excludes stock-based compensation, gains and losses on securities and one-time charges. Over the last 12 months it came to $47.03 per share, versus about $40 per share under GAAP. In our calculation, if stock-based compensation is kept as an expense and only the securities gains and the Limerick manufacturing-interruption costs are removed (at the pre-tax level, using the period's effective tax rate), profit is about $36.5 per share. All three numbers are correct — they answer different questions.
| $ millions | Q1-25 | Q2-25 | Q3-25 | Q4-25 | Q1-26 | Q2-26 |
|---|---|---|---|---|---|---|
| Revenue | 3,029 | 3,676 | 3,754 | 3,884 | 3,605 | 4,291 |
| Share of Sanofi profits (net) | 1,018 | 1,282 | 1,456 | 1,486 | 1,451 | 2,033 |
| Global Dupixent sales (Sanofi) | 3,666 | 4,345 | 4,857 | 4,940 | 4,880 | 5,998 |
| EYLEA + EYLEA HD, U.S. | 1,043 | 1,148 | 1,111 | 1,083 | 942 | 1,009 |
| Libtayo, global | 285 | 377 | 365 | 425 | 438 | 489 |
| Adjusted EPS ($) | 8.22 | 12.89 | 11.83 | 11.44 | 9.47 | 14.29 |
Over the last three years revenue rose from $13.1 to $14.3 billion, but operating income declined from $4,047 to $3,578 million, mainly because research and development spending rose (from $4.4 to $5.9 billion). Net income rose over the same period thanks to financial income and gains on securities — $946 million in 2025 alone. Over the last 12 months operating income was back at $3,843 million.
Balance Sheet & Capital
On June 30, 2026 the company held $17.8 billion in cash and marketable securities. Debt: about $2.0 billion of notes and a $720 million finance lease. Net cash is about $15.1 billion, roughly one fifth of the market value. Shareholders' equity: $31.7 billion; debt to equity: 0.09.
Capital return: the company repurchased $2.2 billion of its shares in 2023, $2.6 billion in 2024, $3.4 billion in 2025 and $2.0 billion in the first half of 2026. The diluted share count fell from 115.1 million in 2024 to 106.0 million in the latest quarter. In 2025 the company began paying a quarterly dividend, currently $0.94 per share. As of June 30, 2026, $2.5 billion remained under its repurchase authorizations.
Cash flow in the period: free cash flow in the first half of 2026 was $1,421 million, versus $1,741 million in the prior-year half. Most of the gap comes from higher receivables: the Sanofi receivable alone rose from $1.61 to $2.27 billion in six months, alongside the jump in the profit share that had not yet been collected. Repurchases and dividends ($2.16 billion) exceeded free cash flow, so the cash balance fell by about $1.0 billion.
Segments — Revenue Sources
Regeneron reports a single operating segment. The available breakdown is by revenue source, and two types need to be distinguished: product sales, against which there are manufacturing, marketing and selling costs; and shares of collaboration profits, which are profit after the partner has already borne the selling costs. That is why the Sanofi profit share weighs much more in operating income than in revenue.
| Q2 2026, $ millions | Q2-25 | Q2-26 | Change | Share of revenue |
|---|---|---|---|---|
| Share of Sanofi profits (Dupixent and Kevzara) | 1,282 | 2,033 | +59% | 47% |
| EYLEA + EYLEA HD, U.S. | 1,148 | 1,009 | −12% | 24% |
| Libtayo, global | 377 | 489 | +30% | 11% |
| Share of Bayer profits (EYLEA outside the U.S.) | 383 | 227 | −41% | 5% |
| Manufacturing reimbursements from partners | 193 | 191 | −1% | 4% |
| Other products and other revenue | 293 | 342 | +17% | 8% |
The Sanofi profit split: in the U.S. profit is shared equally; outside the U.S. Regeneron's share rises gradually from 35% to 45% with sales volume. In the latest quarter Regeneron received 33% of Dupixent and Kevzara sales as net profit, after deducting $253 million repaid to Sanofi for development costs it had funded in the past. According to the company, that balance was fully repaid by the end of June 2026, and the deduction will no longer appear beginning in the third quarter.
Competitive Position
Dupixent is the central asset. According to the annual report, its main U.S. composition-of-matter patent expires on March 28, 2031, and in Europe in 2029 with possible extensions to 2034. In the report the company lists existing and future competitors in each indication: JAK inhibitors and IL-13 antibodies in atopic dermatitis, IL-5 and TSLP antibodies in asthma, and oral drugs and multispecific antibodies in development.
EYLEA faces two fronts: branded competition (Roche's Vabysmo) and biosimilars of 2 mg EYLEA, including Amgen's Pavblu in the U.S. Patent proceedings continue in Europe and the U.S., and two of the European patents were revoked in opposition proceedings (one is under appeal). The company's response is moving patients to EYLEA HD, which allows less frequent injections — in April 2026 an extension to up to 20 weeks between injections was approved. According to the company, a pre-filled syringe for EYLEA HD is in process with the FDA, with possible approval by the end of 2026.
Libtayo competes in the PD-1 antibody market against Merck's Keytruda and Bristol Myers Squibb's Opdivo. Its U.S. composition-of-matter patent expires in 2035. On the pipeline side, 2026 also brought negative results: a Phase 3 trial of fianlimab (LAG-3) in melanoma did not reach statistical significance, and development of itepekimab (IL-33) was discontinued.
How to Think About This Company
Regeneron in 2026 is two companies inside one report. One is a partner in the profits of Dupixent, one of the world's best-selling medicines, with sales of about $20.7 billion over the last 12 months. The other is a biotech company that sells its own eye and oncology medicines and invests about $6.5 billion a year in research. To read the reports, the question to ask every quarter is: how much of the profit comes from each?
The Sanofi profit share is larger than total operating income. Over the last 12 months Regeneron's shares of Sanofi and Bayer profits came to about $7.5 billion, while the company's operating income as a whole was $3.8 billion. As a rough calculation, this means that direct product sales, after production, selling and the entire research budget, do not cover themselves. That is not unusual for a biotech investing in its pipeline — but it is the right way to read the structure.
There is a date on the calendar. Dupixent's U.S. composition-of-matter patent expires in March 2031. The company itself addresses this: in the new ten-year performance award to the CEO and the Chief Scientific Officer, signed in September 2026, compensation depends on annual revenue of $10 to $30 billion from new products approved over the coming decade, and the company explicitly cites "headwinds from increasing biosimilar and branded competition to existing products." The maximum award could reach 5.6 million units, about 5.4% of the shares.
The October 2026 amendment to the Sanofi agreement bears directly on this question. The companies agreed to co-develop four new long-acting Regeneron antibodies that act on the same biological mechanism as Dupixent (IL-4 and IL-13). Sanofi will pay Regeneron $1 billion upfront and up to $7 billion more subject to milestones, and global profit will be shared equally. Development costs above the budget cap will fall on Regeneron. At the same time, Regeneron dismissed its lawsuit against Sanofi over access to commercial information on Dupixent.
The next quarter will look different because of one accounting item. For years Regeneron deducted part of its Dupixent profit share to repay Sanofi for development costs it had funded — $930 million in 2025 and $530 million in the first half of 2026. According to the company, the balance has been fully repaid, and the CFO described the effect as "a meaningful step-up in collaboration profits beginning in the third quarter." Anyone comparing the coming quarters with earlier ones needs to separate this change from growth in sales themselves.
The second franchise is shrinking, at a pace the company does not quantify. U.S. sales of EYLEA and EYLEA HD fell from $5.97 billion in 2024 to $4.38 billion in 2025, and fell another 12% in the latest quarter. EYLEA HD is growing, but does not offset the erosion in 2 mg EYLEA. According to the company, competition has hurt EYLEA sales and will continue to weigh on them, and "the magnitude and duration of such impact is presently unknown."
The U.S. government is a direct player. In April 2026 the company signed agreements with the U.S. government: prices no higher than those in other developed countries (MFN) in the Medicaid program for its wholly owned products and for future medicines, direct sales of Praluent through the TrumpRx website, and supplying the gene therapy Otarmeni free of charge in the U.S. In return it received an exemption from Section 232 tariffs through January 2029. The company writes that the agreements may lead to lower prices, but does not quantify the effect.
Net income in 2025 was also built outside the business. Operating income declined two years in a row, but net income rose, because other income jumped to $1.7 billion — mostly gains on securities the company holds, including shares of biotech companies. Management itself excludes them from its adjusted figures. Anyone examining profitability over time needs to separate profit from operations from profit from the investment portfolio.
The balance sheet buys time. $15 billion of net cash and free cash flow of about $3.8 billion a year allow the company to keep funding research, acquiring assets and returning capital without depending on the debt market. The question the balance sheet does not answer is what return that money will earn: on research, on acquisitions and on share repurchases.
This framework is intended to structure analysis, not to produce an investment conclusion. It does not participate in the decision — the decision is the reader's.
Risks & Monitoring
Risks that emerge from the filings
- Concentration: the Sanofi profit share was 47% of revenue in the latest quarter and 36.5% in 2025. Dupixent's U.S. composition-of-matter patent expires in 2031.
- Competition for EYLEA: biosimilars of 2 mg EYLEA in the U.S. and worldwide, branded competition, and open patent proceedings in Europe, the U.S. and Korea.
- U.S. pricing policy: the April 2026 MFN agreements, the Medicare Drug Price Negotiation Program, and tariffs under Sections 232 and 301.
- Legal proceedings: U.S. Department of Justice False Claims Act cases (support of patient-assistance foundations and EYLEA price reporting), five states that have joined, insurer suits and shareholder actions. The company cannot estimate the range of possible loss.
- Manufacturing: two main manufacturing sites (Rensselaer, New York and Limerick, Ireland). The production interruption in Limerick cost about $176 million in the first half of 2026.
- Pipeline: Phase 3 failures in 2026, and research and development spending that rose from $4.4 to $5.9 billion in 2023–2025.
- Dilution and control structure: stock-based compensation of about $1 billion a year; performance awards of up to 5.6 million units to the founders; Class A shares with 10 votes.
Items to monitor in the Q3 report
| # | Item | Latest reading |
|---|---|---|
| 1 | Share of Sanofi profits without the development-balance deduction | $2,033 million in Q2, after a $253 million deduction |
| 2 | Global Dupixent sales | $5,998 million (+38%) |
| 3 | EYLEA + EYLEA HD, U.S. | $1,009 million (−12%) |
| 4 | Accounting treatment of the $1 billion Sanofi payment | Not yet reported |
| 5 | Sanofi receivable and free cash flow | $2.27 billion; first-half free cash flow: $1,421 million |
| 6 | FDA decision on cemdisiran in generalized myasthenia gravis | November 2026, according to the company |
| 7 | Phase 3 results for cemdisiran plus pozelimab in PNH | Q4 2026, according to the company |
| 8 | Effect of the pricing agreements with the government | Not quantified |
Scenario Framework
The scenarios below are descriptive, not predictive. They contain no prices, no probabilities, and do not rank outcomes. Their sole purpose is to organize the conditions that would need to hold for each state to materialize, so they can be checked against upcoming filings.
Scenarios are descriptive, not predictive.
- If the Sanofi profit share rises in coming quarters by the amount of the deduction that ended, without a new development balance building up
- If EYLEA HD growth outpaces the erosion in 2 mg EYLEA and total U.S. sales stop declining
- If cemdisiran and other medicines are approved and begin generating revenue that diversifies the sources of profit
- If one of the long-acting antibodies from the Sanofi amendment advances to Phase 3 before 2031
- If Dupixent keeps growing, but more moderately than in 2025–2026
- If U.S. EYLEA and EYLEA HD keep declining at a similar pace and Libtayo keeps growing
- If research spending stays within guidance and the pipeline yields a few approvals each year
- If share repurchases continue at the pace of recent years
- If new competitors to Dupixent reach the market and slow its growth before 2031
- If EYLEA erosion accelerates with more biosimilar entrants or competition for EYLEA HD
- If the pricing agreements with the government are expanded or hit prices more than reflected in the filings so far
- If the legal proceedings end in material payments, or clinical results add late-stage failures
Analytical Lens
The six questions below are identical in every company review we publish. They are deliberately open and do not lead to a single conclusion. Their role is to let the reader examine the company along the same six dimensions as any other company.
Key Observations
1. In the April–June 2026 quarter Regeneron reported revenue of $4,291 million (+17%) and operating income of $1,294 million (+20%). Its share of Sanofi collaboration profits was $2,033 million, 47% of revenue, and sales of the products it sells itself rose 1%.
2. U.S. sales of EYLEA and EYLEA HD were $1,009 million in the quarter, down 12%. In 2025 they totaled $4,385 million, versus $5,968 million in 2024.
3. According to the company, the development-cost balance owed to Sanofi was fully repaid by June 30, 2026; $930 million was deducted from its profit share for it in 2025, and $530 million in the first half of 2026. In October 2026 the companies signed an amendment that includes a $1 billion upfront payment to Regeneron.
4. The company holds $17.8 billion in cash and securities against $2.7 billion of debt and leases. Free cash flow over the last 12 months was $3,760 million, and in the first half of 2026 the company repurchased $2.0 billion of its shares.
Bakshi Finance operates as a Family Office for qualified clients only. Mr. Yaron Bakshi held a licensed investment adviser license in 2008–2023. As of the date of publication, the company does not hold an investment advice, investment marketing or portfolio management license.
This document is intended for research and professional study purposes only. Nothing herein constitutes a recommendation to buy, sell, hold or carry out any transaction in securities. Nothing herein substitutes for advice that takes into account the data and needs of each person. Every decision is the sole responsibility of the investor.
Past performance is not indicative of future results. Data were drawn from official sources: the quarterly report on Form 10-Q for the quarter ended June 30, 2026 (July 30, 2026), the earnings releases for Q2 2025 through Q2 2026, the annual report on Form 10-K for 2025 (February 4, 2026), and Forms 8-K of July 6, September 30 and October 6, 2026. Filings published after this date are not included.
Review for qualified clients — Family Office
The full analytical review of Regeneron (REGN) for the quarter ended June 2026 is available to Bakshi Finance premium clients.
The review includes a 10-section analysis, "How to Think About This Company" paragraphs, a structured scenario framework, and a six-dimension Analytical Lens.
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