Regeneron: New York State of Mind

Regeneron is the story of biotech, writ large on a ledger of visionary risk: two men, working out of a New York City apartment, place a big bet on the obscure science of nerve growth factors and end up building a business that today is touted as the millennium's next Amgen, with biotech's best long-term prospects for transition to the big leagues of Big Pharma.

The story line is a long and twisting one, extending 20 years from the company's launch in 1988 to the commercialization of its first product, Arcalyst, for a rare autoimmune disorder, in 2008. What is ironic—not to mention suspenseful—is how a near-death experience with the science of nerve growth factor forced a re-invention of the company around related process technologies that are spawning a rich legacy of innovations in areas tangential to Regeneron's original core mission.

So what could have been an epilogue became, through a double dose of forward-looking insight and initiative, a prelude to today's nosebleed high stock price—the ultimate symbol of market success. In the last five years—one-fifth of Regeneron's life as a company—its stock price has gone in only one direction. It was $20 per share in 2008. At press time in late May it hovers around $250.

Regeneron's staying power, expressed through the company's unwavering pursuit of not just scientific but also technological innovation, derives from the unique partnership formed between two individuals: founder, president and CEO Leonard Schleifer, and founding scientist, president of Regeneron Laboratories, and chief scientific officer George Yancopoulos. Two core beliefs cement the relationship. The first, attributed to Yancopoulos, is a commitment to developing new technologies in the service of drug discovery and development. The second, attributed to Schleifer, is a commitment to recognizing and then leveraging the value Regeneron creates – making deals and forming partnerships that enable the company to continue investing for the future. The fraternity seems to work. Last year, TheStreet's annual reader survey named Schleifer 2012's Best Biotech CEO. "After 25 years, and now being perhaps the longest CEO serving in the business, it's nice to be viewed as an overnight success," jokes Schleifer.

Regeneron is headquartered in Tarrytown, NY, 30 miles up the Hudson River from New York City. The company has three marketed products on its books—Arcalyst, an orphan drug; Eylea, a blockbuster eye product; and Zaltrap, a cancer therapy—plus a pipeline full of monoclonal antibodies, several in late stages. Regeneron entered the black in 2012 for the first time, as a profitable biotech. This milestone was long in coming but rested on a firm base, with crucial support from Big Pharma. After years spent playing musical chairs with pharma partners, Regeneron struck a sweeping platform technology deal with Sanofi in 2007, following an ex-US development and commercialization deal with Bayer in 2006 on aflibercept, which would become Eylea.

The story of Regeneron—a portmanteau of the words "regenerating" and "neurons," with "gene" in the middle—is one of a company working to balance the pursuit of cutting-edge scientific discovery and development, with the commercial prospects necessary to keep the bioreactors up and running. It's also about the determination to engineer failure into an adaptive trait for success.

Early days

Regeneron had an early advantage in attracting interest from Big Pharma firms anxious to supplement their in-house pipelines. Schleifer signed a deal with Amgen in 1990 —two years after founding the company—and Regeneron went public in '91, raising $96.1 million. The Amgen deal was based on Regeneron's neurotrophic factors, and a belief that injecting nerve growth factors could regenerate neuronal stem cells, or basically regrow brain cells. Six years later, Regeneron's lead brain-derived neurotrophic factor (BDNF) would fail in a Phase III trial with ALS (or Lou Gehrig's disease) patients. But the 50/50 profit-sharing deal Schleifer had negotiated with Amgen would become his signature, despite the fact that the BDNF candidate, and the other nerve growth factors, never made it to market.

In Yancopoulos's telling, that kind of deal, now fairly commonplace, was unprecedented at the time. Other companies approached Regeneron about its growth factors, but they all "wanted to partner by essentially buying them from us and giving us a lot of money up front, and a little royalty," says Yancopoulos. "Len said, 'No way.' And that's one of those rare times a little old biotech company stood up to a big company and made such a deal." In addition to 50/50 profits, Regeneron's partners, past and current, provide the vast majority of funding for clinical development, which can run into the hundreds of millions of dollars. "Last year we spent $600 million in R&D," says Yancopoulos. "And about three-quarters of that is funded by our partners."

It's convenient to frame Schleifer and Yancopoulos as the dual forces of business and science, respectively, but that's not exactly the case. Schleifer is a licensed neurologist; he received his MD and PhD in pharmacology from the University of Virginia, and then left for Cornell University Medical College. Following his residency, Schleifer, working as an assistant professor at Cornell, kept up with the medical journals and was fascinated by some of the work that companies like Genentech were doing.

But the new biotechnology companies Schleifer was reading about were ignoring his chosen field. Schleifer told his thesis advisor at the time—Alfred Gilman, a biochemist and later, in 1994, a Nobel Prize winner—that he thought a biotech company focused on neurobiology and neurological diseases might make some sense. But Gilman shrugged him off. "[Gilman] said, 'Look, let's forget about that stuff. Get back in the lab, and do what you're well-trained to do,'" says Schleifer. When Gilman realized Schleifer wasn't giving up on the idea, he decided to help by recruiting experts for Regeneron's Scientific Advisory Board. Gilman joined the company himself, as a director, in 1990.

One of Schleifer's neurology professors, Frank Petito, had a well-connected father (also named Frank Petito) who had served as chairman of the board at Morgan Stanley. Schleifer probed Petito about potential backers for his new venture, which led to a meeting with George Sing, who was working at Merrill Lynch Ventures. Sing helped Schleifer think through some of the business issues, but he respected the intellectual project and wasn't the kind of VC who thinks he knows more about science than scientists. Over Chinese food, Schleifer and Sing scratched out a deal on the back of a napkin, and Sing agreed to give Schleifer $1 million to start the company.

Regeneron’s ’Trap’ products: Zaltrap, Eylea, and Arcalyst.

When the lead Regeneron/Amgen growth factor candidate failed a decade later, Edmund Debler, an analyst with Mehta & Isaly, characterized Regeneron's situation as "grim," in a New York Times article. "Very rarely do companies get a second chance, no less a third," he told the paper. But he also called Regeneron, in the same article, "one of the best research entities in the biotech world," adding that, "they just have not been able to translate that research prowess into a drug."

Indeed, it would be another decade before Regeneron finally got its first drug approved, in 2008. Schleifer's early vision of cloning nerve growth factors, delivering them to patients' brains, curing a few neurological diseases, and sailing off into the sunset, did not come to pass. "The two biggest surprises for me were just how long it would take to translate good research into an approved drug that you could actually sell to patients, and how expensive it would be to do that," says Schleifer.

Regeneron's failure to bring the nerve growth factors forward could have been the end of the story. Instead, the team of scientists led by Yancopoulos kept learning from and building on their findings in the lab, which led to new areas of development. Perhaps most importantly, Yancopoulos's team invented new process technologies to facilitate more sophisticated experimentation and discovery. "I can directly trace how the things that we're discovering now started with ideas that we had 25 years ago," says Yancopoulos.

Queens connection

George Yancopoulos was in his late 20s when he got a phone call from Schleifer, in 1988. "Len was working out of a one-bedroom apartment on the Upper East Side [of Manhattan], trying to start up this company. And people said I was crazy to be talking to this guy," he recalls.

A Queens, New York native and son of first generation Greek immigrants, Yancopoulos laid the groundwork for his academic career at the Bronx High School of Science, where he was valedictorian. He went on to matriculate at Columbia University, receiving an MD and PhD in biochemistry and molecular biophysics. As a PhD candidate, Yancopoulos worked in the lab of Fred Alt, a geneticist. Alt had recently joined Columbia from MIT, where he'd done his own post-doc work in the lab of David Baltimore, a Nobel Laureate and National Medal of Science recipient. As an early member of Regeneron's Scientific Advisory Board—a who's who of science including several Nobel laureates and National Academy of Sciences inductees—Alt says the call was put out among the board to help find a lead scientist. "I went back and mentioned it to George," says Alt, who is currently a professor of genetics at Harvard Medical School. "I didn't normally lead my students into industry, but it seemed like a very special circumstance for the right person," says Alt.

Yancopoulos has a slightly different recollection. "I remember Fred sent me up to visit David [Baltimore], to talk me out of it," he says. "My hero, my scientific grandfather, sat me down and said, 'George, you have such a promising future in science. You can't walk away from this. If you go and do this crazy thing, you'll never be heard from again.' And I remember walking out of his office, sort of quaking and nervous, and thinking, wow. But then I thought, if it doesn't work out, I'm sure I'll be able to find something else to do."

Upon accepting the job with Regeneron, as founding scientist, Yancopoulos walked away from a faculty position at Columbia, a $2 million grant, and eight years worth of research funding to roll the dice with Schleifer, who had dreams and ideas but not much money. Yancopoulos and Schleifer agreed on the business proposition, which was to put science in the driver's seat.

Schleifer is also from Queens, "about a mile or so" from where Yancopoulos grew up, he says. Both men exhibit a certain New York City frankness and grit. They argue a lot. "We recognize that we're in this together, and we try and come up with a unanimous view on the path forward," says Schleifer. "If we don't both agree, we argue it out until we do agree."

Core principles

They agree about the importance of taking risks as a company. At the JP Morgan Healthcare Conference in January, Schleifer told attendees that to stop taking chances in R&D is to initiate a company's decline. "Some people enjoy adventure and don't see risk and failure as endpoints. It's just something along the way," says Yancopoulos. "If you're afraid of it, then you avoid things that have a high risk of failure."

There's a difference between risk-taking and outright temerity. Regeneron built itself a safety net by constantly improving the technology and processes it uses to discover and assess potential drug candidates, which allows its scientists to safely step out on the high wire. "There's been a singular vision since day one about combining cutting-edge biological science and developing cutting-edge technology that together would provide the opportunity for an endless supply of clinical candidates," says Neil Stahl, Regeneron's SVP, research and development sciences.

Yancopoulos says Regeneron's approach to developing technology in the service of science comes in large part from Fred Alt's lab back at Columbia. "As soon as I started hiring people, I tried to put in place a system where technology was at an even level with the science," says Yancopoulos. The goal was to "not just provide a technological service, but to develop better technology."

Tech-enabled research

Regeneron's current success is due in large part to the persistent development of new tools, which enabled the company to build on the failure of nerve growth factors as products, without starting over from scratch. The technology narrative also illustrates the company's approach to drug discovery, which is to begin with an important biological insight, and to develop technologies that can address those insights with drugs to cure disease.

In the beginning, Yancopoulos and his team developed cloning technologies to study orphan receptors on the surface of cells, to identify the factors that bind to them. Once those factors are identified, they can be studied to uncover their biologic function. This process led to Regeneron's first clinical candidates, the nerve growth factors.

While working on the nerve growth factors, Regeneron's scientists discovered a way to engineer a new kind of blocker, which would "trap" specific signaling proteins in the body, and prevent them from binding to their natural receptors. At the same time, Dan Kastner at the NIH, and Harold Hoffman, at the University of California, San Diego, were studying patients that presented flu-like symptoms—and sometimes more severe symptoms like hearing loss or nerve damage—as a result of mild temperature change. The disorder, called cryopyrin-associated autoinflammatory syndrome (CAPS), is hereditary, and Kastner and Hoffman were involved in mapping the gene that caused it, according to Yancopoulos.

Kastner and Hoffman's research pointed to a genetic mutation that caused an excess of interleukin-1. Regeneron was in the early stages of developing its VelociGene platform, which allowed Yancopoulos and his team to put human genetic mutations into mice, to reproduce the disease. Through a collaboration with Kastner and Hoffman, Regeneron tested the genetic theory by creating mice with CAPS, and then treating them with an interleukin-1 "trap." The mice were cured, which gave Regeneron the confidence to do clinical studies in human patients with CAPS. The result was Arcalyst (rilonacept), the first drug on the market to treat the condition. Patients with CAPS have to keep taking Arcalyst, but it's curative, or nearly so; it decreases patients' symptoms by 80 to 90 percent, says Yancopoulos.

There aren't many patients with CAPS, only a few hundred in the United States, and the drug isn't considered a huge commercial success. But for Yancopoulos, it was incredibly satisfying. After meeting with patients who'd been cured by the drug, "that alone, if we hadn't made a nickel, is more gratifying than anything that most people could ever do in academia," he said.

Yancoupolos credits "a think tank of key people" at the company, including Neil Stahl, Drew Murphy, Aris Economides, Sam Davis, Nick Papadopoulos and "a slew of others" with bringing the Trap technology forward. One of the Traps became Eylea, a blockbuster eye treatment indicated for wet age-related macular degeneration. Another became Zaltrap, for metastatic colorectal cancer. Those two products transformed Regeneron, and provided a first real taste of the commercial side of the drug business, after 20-plus years of waiting for a breakthrough.

Winding road to market

For small biotechs, the commercialization process can be a catch 22. Everyone wants to be first to market, but if you're dealing with new mechanisms and novel drugs, the pharma partners necessary to fund late-stage development and drive commercialization efforts want proof that it will work. But to get that proof, you need the late-stage clinical data.

Eylea (aflibercept), a Trap designed to block vascular endothelial growth factor (VEGF), was approved at the end of 2011. The drug competes directly with Genentech's Lucentis (ranibizumab) and also with off-label Avastin (bevacizumab). Yancopoulos says Regeneron "might have been the first people, or right there [with Genentech]...to consider using a VEGF blocker" for macular degeneration in the mid-1990s. Lucentis beat Eylea to market by five years, but not for scientific reasons.

Regeneron was a much smaller company in the mid-90s, and totally dependent on a partner to bring drug candidates forward. At the time, Regeneron had a partnership with Procter & Gamble, and P&G didn't like the VEGF trap for the eye. "They said there was zero commercial opportunity, and though we could model it in an animal, nobody else had done it in man, so there was no proof of concept in man," says Yancopoulos. P&G refused to put aflibercept into clinical development, and missed out on Eylea, a product with sales that now exceed $1 billion. "They turned it down for three years in a row," before ownership reverted back to Regeneron, says Yancopoulos.

Worse yet, no one else wanted to touch it because it had been rejected by P&G; Eylea was considered a failed molecule. "We tried to incrementally push it forward with minimal resources...but we had no resources," says Yancopoulos. By this time, Regeneron had developed a second version of the VEGF Trap, which would become Zaltrap (ziv-aflibercept). Schleifer and Yancopoulos went out to pitch the pair to partners, and no one was interested.

In 2003, Genentech published data in support of its own VEGF blocker for cancer, and then the phones started ringing at Regeneron. "All of sudden all the people we had pitched started to call us up," says Yancopoulos. "And they said, 'You know that deal you proposed for the VEGF Trap for cancer? We'll take it.'" Schleifer told them that ship had sailed. "Len said, 'Sorry, you're going to have to add a couple zeros,'" says Yancopoulos.

Schleifer convinced Aventis to take on both VEGF Trap indications, for cancer and the eye. After Aventis merged with Sanofi, the company eventually said they didn't want to pursue the eye indication. Schleifer responded that the eye indication was in the middle of clinical trials, and agreed to let Sanofi out of the deal if it would provide a little funding for the trials. The result was that Sanofi handed the rights to the eye indication back to Regeneron, "and paid us $25 million to go away," says Yancopoulos.

A year or two later, Genentech published data on Lucentis, its VEGF blocker for the eye. "Now all of a sudden everybody's calling us up again," says Yancopoulos. But this time, Schleifer demanded full rights in the United States, and licensed the drug to Bayer ex-US, with a 50/50 profit share. "People were literally willing to give us another $200 million for the US rights, and Len is saying, 'I don't think so,'" says Yancopoulos.

Schleifer says the basis of his deal-making is to recognize and then communicate the value of his company's offering. "I knew that George and his team were the most unique innovators in the industry, and that I should value that innovation very highly and demand fair transactions so that we, Regeneron, could share in those rewards in the short, medium, and long term," says Schleifer. "Plus I cared about what was going to happen five or eight years later...because I wanted to be around for the long haul. Our signature was that we weren't going to do anything unless we got to split the profits."

Culture as incubator

An old industry yarn holds that doctors make lousy CEOs. Schleifer heard it repeated after he started Regeneron. "I always used to respond by saying, 'Well what about Roy Vagelos over at Merck? Isn't he an MD?'" Vagelos joined Regeneron as chairman of the board in 1995, and Schleifer says he talks to him almost every day.

Regeneron is no Merck, and Schleifer and Yancopoulos are fine with that. There's a sign on the wall in the Tarrytown headquarters that reads, "We won't let bureaucracy block good ideas." Schleifer says Big Pharma has it's own challenges, including a hugely expensive sales and administration base, making it difficult to grow organically. "And they don't have an obvious way to connect people to the success of the organization," says Schleifer. "We connect our employees to the success of our organization by having the opportunity to be involved and watch a product go from beginning to end...and of course, being rewarded by being an owner in the company."

In 2012, Regeneron was voted the number one biopharmaceutical employer in a Science magazine survey (Genentech came in third), and was named Biotech Company of the Year by Scrip Intelligence. Bob Terifay, Regeneron's SVP, commercial, began his career at Searle Pharmaceuticals, headed up oncology sales and marketing for Millennium, and bounced around a couple of small start-ups, before joining Regeneron. He says it's a place where people want to come to work. "The offices are intermingled with the labs," says Terifay. "We're there with the scientists, we work with them. If you want to ask something about a drug, you can walk down the hall and find the person who discovered the target."

Schleifer rejects the idea of virtual biotech companies. "I thought [virtual companies] was the dumbest idea I'd ever heard of," says Schleifer. "The weaknesses in much of what we do are the transition points; discovery to preclinical, preclinical to clinical, process development to manufacturing, clinical to submission, and then to commercialization. Each of these handoffs is inherently inefficient because the knowledge has to be transferred. If you don't control all of this, you're going to create greater inefficiency, and expand timelines."

Scaling up, moving out

In the wake of Eylea's breakout success, and to prepare for what Regeneron hopes will be a steady stream of new antibodies hitting the market in the coming years, the company is expanding its headquarters in Tarrytown—formerly a Union Carbide site—as well as its manufacturing facilities in Rensselaer, NY. Schleifer is the co-chair on Gov. Andrew Cuomo's Mid-Hudson Regional Economic Development Council, and he scored an $8.5 million tax credit from the state to keep his company in New York. Just five years ago, Regeneron employed 682 people; in the spring, it surpassed the 2,000-employee mark, and continues to grow.

Regeneron has a sales force of 75 to support Eylea in the United States. Terifay says the company's emphasis on technology in R&D carries over into the commercial realm. "All of our material is on iPads, so the reps use iPads in promotion, and then at conventions, we've moved toward interactive digital panels," says Terifay. Regeneron isn't doing branded DTC for Eylea as of yet, but "we have a lot of direct-to-patient materials...and general disease awareness programs on wet AMD," says Terifay.

Since the primary US payer for Eylea is Medicare—due to the age of most wet AMD patients—much of the company's reimbursement activity is focused on the physician's office, to "ensure that patients get access to therapy, that the right claims forms are used, and that claims are processed in a timely fashion," says Terifay. "Right now, we have no access problems with Eylea."

Undercutting your competitor on price goes a long way with payers. "I think the fact that we came in at $100 less per injection than Lucentis, and that we're dosed less frequently, has met with great success in terms of the physician's image of the product, and also in terms of the commercial payers' receptivity to the product," says Terifay. Commercial payers make up roughly 20 percent of the market for Eylea, he says.

Terifay adds that Bayer "has no say about anything we do in the United States," and that the Eylea pricing decision was made independently of Bayer, although Bayer is responsible for determining the price outside of the United States. Regeneron approves the final ex-US price on a joint committee, says Terifay.

Pricing backlash

Regeneron's adventures in commercialization have not all come up roses, however, particularly with respect to Zaltrap's price. In keeping with the terms of its 2003 deal with Aventis (now Sanofi), Regeneron has co-commercial rights to Zaltrap worldwide, except in Japan. Last fall, the Memorial Sloan-Kettering Cancer Center in New York City announced that it would not prescribe Zaltrap due to price, and publicized its decision with an op-ed in the New York Times. The op-ed authors—three doctors from the cancer center—said their decision was a simple one: "The drug, Zaltrap, has proved to be no better than a similar medicine we already have for advanced colorectal cancer"—Avastin—"while its price, at $11,063 on average for a month of treatment, is more than twice as high." Arguing that ignoring the cost of care has become untenable, the authors write that "when choosing treatments for a patient, we have to consider the financial strains they may cause alongside the benefits they might deliver."

The article got a lot of press, and a few weeks later, Sanofi announced that it would offer a 50 percent discount on the Zaltrap product. Terifay declined to comment on the Zaltrap decision specifically, but said that "pricing is not just a quantitative exercise...you can do a trade-off analysis with market research with physicians, and determine that you can command such and such a price," he says. "But there's also a qualitative reaction that comes from the healthcare community and from payers, and I think, more and more, you have to take that into consideration."

Terfiay said that in the case of Zaltrap, "we determined that Sanofi already had a pre-existing infrastructure for oncology, and given the size of the second-line colorectal cancer marketplace, it didn't make sense for Regeneron to field it's own sales force." As the distributor of Zaltrap, Terifay says, "Sanofi is ultimately responsible for pricing decisions," and Sanofi also led the decision to offer the discount, he said.

From traps to antibodies

Despite Regeneron's success with the Traps—Zaltrap pricing snafu notwithstanding—Yancopoulos wasn't satisfied. The VelociGene technology allows researchers to manipulate the mouse genome at high-throughput speeds, and the VelociMouse technology expedited the generation of genetically engineered mice, using embryonic stem cells, to research the function of single genes. In 2006, the NIH selected the VelociGene platform as the anchor of its Knockout Mouse Project, who's mission was to target some 3,500 genes, one at a time, to understand their biological function and relationship to specific disease.

But those technologies, despite improving significantly on the state-of-the-art, and enabling the development of the Trap products, still had limitations. So Yancopoulos and his team invented the VelocImmune technology to create fully human monoclonal antibodies. The VelocImmune mouse is an elegant solution to problems with creating antibodies, in that it enlists the mouse's immune system in selecting the best antibody, in vivo. When the molecules are cloned out of the mouse, they're optimized for humans because "we replaced six million base pairs inside the mouse DNA, with human DNA, to allow the mouse to make antibodies that would be fully human...but selected by the mouse to bind to the target," explains Stahl. The difference between "humanized" and "fully human" antibodies in this context is that with "humanized" antibodies, "they still have in the range of three to five percent mouse DNA and mouse protein," says Stahl. "Whereas ours are fully human because we took the entire human genomic region encoding the target binding variable domains of the antibodies and put it into a mouse; there's only human sequence there, and no mouse sequence."

Regeneron's newest platform technology for creating fully-human monoclonal antibodies led to its biggest deal to date. The collaboration, again with Sanofi, was first signed in 2007, and essentially pays Regeneron to continue its research on monoclonal antibodies, and test them in the clinic. In 2009, the collaboration was expanded to provide $160 million a year, for seven years, including another $30 million for manufacturing expansion costs in Rensselaer. In return, Sanofi has the right to co-develop and license promising antibodies, on a 50/50, profit-sharing basis, globally.

Several of these antibodies have already reached Phase III trials. Alirocumab, an antibody targeting PCSK9—"the biggest target in cardiology right now," according to Stahl—is the closest antibody to market, according to Michael Aberman, Regeneron's VP of strategy and investor relations. Like the orphan drug Arcalyst, the idea for PCSK9 followed a biological insight from academia; a study published by Helen Hobbs in the New England Journal of Medicine linked a genetic mutation to very low cholesterol levels. Aberman says he expects alirocumab to launch in 2016, and sarilumab, a Phase III drug for rheumatoid arthritis, around the same time, followed by dupilumab, for asthma, soon after. Regeneron has entered clinical trials with over a dozen antibodies already. The company's next stage of growth depends on the VelocImmune platform, the latest iteration of Regeneron's self-made technology.

The object lesson: break the creative paradox

There's a paradox inherent to any creative pursuit that depends on generating a commercial return: if the primary objective is to make money, then creativity is constrained by narrow, prescriptive pathways proven to meet that objective. On the other hand, creativity allowed to flourish in a vacuum, unencumbered by a sense of market need, usually leads to failure—it may be spectacular or brilliant, but it's a failure nonetheless.

No one understands the commercial imperative more than two New Yorkers like Schleifer and Yancopoulos. Even though Schleifer says "science and innovation is probably more important than the business side of things," he knows the science can't proceed without the business. Regeneron's science is succeeding over the long term, because Schleifer gave it time to grow; he didn't fret over short-term failures, because he was confident in Yancopoulos, and in himself, and he wanted to build a business, not create a flash-in-the-pan payday. "To be successful, continually successful, you have to be investing in the near-, mid-, and long-term constantly," says Schleifer. "Companies rot when senior management no longer cares about the long term."

Yancopoulos, in choosing a career in industry over academia, brought the best aspects of the latter to bear on the former. Too much focus and constraint in R&D is "anti-science and anti-biology...it goes against how things work," he says. Scientific discovery is tangential; it's the side path that brings you, unexpectedly, out into a beautiful vista, says Yancopoulos. "That's why there's so much failure [in R&D], because the straight path doesn't lead you to success."

In May, Regeneron bought back the rights to two novel ophthalmology antibodies it invented, from Sanofi. They paid a combined $20 million upfront, and will pay a combined $45 million in milestones, if the PDGF and ANG2 ophthalmology indications succeed in the clinic. "If we execute on our goals, if we are successful with what we want to achieve with PCSK9, if we're successful with our IL-4 and our IL-6 receptor antibodies, and if Eylea delivers what we hope it can deliver, then I believe we will have a good stock performance," says Aberman. "There are all kinds of risks associated with that, but it's a thesis you can hang your hat on." If those plans don't work out, Schleifer and Yancopoulos are confident that something else will.

Ben Comer is Pharm Exec's Senior Editor. He can be reached at bcomer@advanstar.com.