Regeneron Pharmaceuticals Inc.'s first-quarter earnings left consensus estimates in the dust, as higher-than-expected sales of age-related macular degeneration (AMD) drug Eylea (aflibercept ophthalmic solution) drove the company to profitability for the first time in its 24-year history.

Shares of the Tarrytown, N.Y.-based firm (NASDAQ:REGN) gained $11.49, or 9 percent, to close Thursday at $138.60. The stock has climbed nearly 160 percent since the first of the year, helped largely by the strong launch of Eylea.

Sales of the AMD drug totaled $124 million for the first quarter, soundly beating consensus estimates of about $90 million and more than doubling the initial more conservative estimate of $59 million. Even better, the drug appears to be faring well so far against Roche AG's established AMD drug Lucentis (ranibizumab) and cheaper off-label use of Avastin (bevacizumab), which features a similar anti-VEGF mechanism as Lucentis but is approved for cancer.

In the few months that it's been on the market, Eylea (formerly known as VEGF Trap-Eye) has managed to penetrate about 10 percent of the anti-VEGF market for wet AMD, including off-label Avastin, which comprised about 60 percent of that market, Leonard S. Schleifer, president and CEO of Regeneron, told investors on the firm's earnings call.

During the first quarter, about 40 percent of Eylea patients were new to anti-VEGF treatment. The remaining 60 percent had switched from other therapies, with the majority of those patients – about 60 percent – switching from Lucentis and the rest switching from Avastin. The most common reasons to switch therapies, Schleifer said, were continued retinal edema despite treatment, non-optimal response to Lucentis/Avastin or a preference for less frequent dosing and doctor visits.

Eylea, which demonstrated similar efficacy to Lucentis in clinical trials, is designed for dosing every two months following an initial three monthly injections. Lucentis and Avastin both require once-monthly injections.

Still, initial sales projections for Eylea came in on the conservative side. Even with a less frequent dosing label and a lower per-injection cost vs. Lucentis, there were worries that Regeneron's drug might have trouble competing against the much cheaper Avastin, especially after a head-to-head study showed that Eylea provided only a modest efficacy benefit over Lucentis. (See BioWorld Today, Dec. 6, 2011.)

And, even though Regeneron nearly doubled its full-year 2012 guidance for Eylea revenue to the $500 million to $550 million range, the company is maintaining caution. For one, patients who started on the drug in the first quarter will be finishing up their first three months of treatment and will be moving into the less frequent dosing regimen. Also, Regeneron noted an influx of patients who had been waiting for an alternative therapy; those figures might not be as high for the rest of the year.

"We've tried to take into account the switches, the dosing reductions; we've tried to take into account discontinuations, share of new patients, etc., etc., etc.," Schleifer said, calling the firm's updated guidance "the best bet we can make."

Many analysts, however, are expecting full-year U.S. Eylea sales to top Regeneron's guidance. Piper Jaffray's Edward A. Tenthoff is projecting 2012 sales of $639 million, while Jonathan Aschoff, of Brean Murray, Carret & Co., is forecasting $653 million because "we firmly believe that Regeneron has borrowed a few pages from the Alexion playbook of soft guidance followed by a beat and raise."

Aschoff is referring to Cheshire, Conn.-based Alexion Pharmaceuticals Inc., another firm that has defied biotech's recent trend of disappointing launches with its orphan drug Soliris (eculizumab). (See BioWorld Today, July 22, 2011.)

Regeneron's Eylea guidance does not include any potential revenue from the drug in central retinal vein occlusion (CRVO), though the PDUFA date for the supplemental biologics license application (sBLA) is Sept. 23. With an estimated 30,000 patients in the U.S., CRVO represents a much smaller population and will involve shorter treatment duration. "So we see this as an opportunity to broaden the label," said Robert J. Terifay, senior vice president of commercial. "But the real market opportunity will continue to be AMD."

Eylea also is in Phase III testing in branch retinal vein occlusion and has complete enrollment in a Phase III program in diabetic macular edema.

Sales of the AMD drug made up more than half of the company's $232 million in first-quarter revenue, with the rest coming from net sales of Arcalyst (rilonacept), which totaled $4 million, and from $97 million in collaboration revenue from partners Bayer AG, which shares ex-U.S. rights to Eylea, and Sanofi SA, which is advancing monoclonal antibodies from Regeneron's pipeline.

But it was Eylea that made the biggest difference to the bottom line, pushing Regeneron's earnings into the black. The firm reported GAAP net income of $12 million, or 11 cents per share. Consensus estimates had projected a loss of 24 cents per share.

Schleifer, who founded Regeneron in 1988 and was joined shortly thereafter by George Yancopoulos, the firm's chief scientific officer and lead inventor of Eylea, took a moment to remark on the event, calling it a "true milestone." He told investors that the firm expects to hit non-GAAP profitability for the full year.

Regeneron has several regulatory events coming up later this year. In addition to the Eylea sBLA in CRVO, the firm is gearing up for a May 8 advisory panel and subsequent July 30 PDUFDA date for an sBLA for Arcalyst in the prevention of gout flares in patients starting uric acid-lowering therapy. And the FDA has set an Aug. 4 PDUFA date for Zaltrap (aflibercept) in metastatic colorectal cancer patients. Zaltrap is partnered with Paris-based Sanofi.

In the development pipeline, the firm has a number of monoclonal antibodies based on its VelocImmune platform, including REGN727, an antibody to PCSK9, which recently showed promising Phase II data in LDL cholesterol reduction.

As of March 31, Regeneron had cash and marketable securities totaling $695 million.

Weak Q1 for Celgene on Flat Revlimid Sales

Celgene Corp., of Summit, N.J., posted a weaker-than-expected first quarter, with revenue of $1.27 billion missing consensus estimates of $1.32 billion, largely due to flat quarter-over-quarter sales of multiple myeloma drug Revlimid (lenalidomide).

Sales of the drug totaled $861 million – $489 million in U.S. sales and $372 million ex-U.S. – short of the $888 million projected by analysts. Celgene attributed most of that miss to Medicare rebates, though Cowen and Co. analyst Eric Schmidt noted that the third straight quarterly miss could be "an indication the drug is on a different growth trajectory." He added that the upcoming decision by the European Committee for Medicinal Products for Human Use on a front-label expansion for Revlimid looks to be a key milestone.

First-quarter sales of breast cancer drug Abraxane (nab-paclitaxel) reached $104 million, a 41 percent jump attributed to the product's re-launch. Celgene set a goal of achieving blockbuster status with Abraxane by 2015 after acquiring the drug through its 2010 buyout of Abraxis BioScience Inc.

Celgene's other product sales were $186 million for myelodysplastic syndromes drug Vidaza (azacitabine) and $78 million for multiple myeloma drug Thalomid (thalidomide).

Its non-GAAP revenue for the quarter totaled $484 million, or $1 .08 per share, short of consensus estimates of $1.13 per share. As of March 31, the company had about $2.3 billion in cash, though it dipped into some of that cash in a Thursday morning deal with Epizyme Inc., of Cambridge, Mass., in which the big biotech agreed to shell out $90 million up front in a broad epigenetics partnership. (See BioWorld Today, July 1, 2010, and April 26, 2012.)

Shares of Celgene (NASDAQ:CELG) fell $4.99 to close Thursday at $72.92.

In other earnings news:

• Amylin Pharmaceuticals Inc., of San Diego, reported sales of newly launched once-weekly diabetes drug Bydureon (exenatide) of $6.9 million for the first three months of 2012, falling short of the $9.5 million projected by analysts. But the biggest hit to the firm's first-quarter earnings was the absence of cost-sharing reimbursements from Indianapolis-based Eli Lilly and Co., which decided to terminate the companies' long-term exenatide agreement last year. The firm posted total revenue of $153.7 million and a net loss $99 million, or 66 cents per share, missing consensus estimates of 30 cents per share. Most of the increased expenses came from the launch of Bydureon in the U.S., which Amylin is now handling with its own sales force. The firm reported selling, general and administrative expenses totaling $110.3 million for the quarter, a 71 percent increase over the same period last year. Net product sales totaled $150.6 million, including $120.6 million in twice-daily Byetta (exenatide), a 6 percent decline over the same period last year, and $23.1 million for sales of Symlin (pramlintide acetate). As of March 31, Amylin had about $315.3 million in cash, including proceeds of about $203 million from last month's public offering. The company's shares (NASDAQ:AMLN) fell 63 cents to close Thursday at $25.57. (See BioWorld Today, Nov. 9, 2011, and March 9, 2012.)

• United Therapeutics Corp., of Silver Spring, Md., reported first-quarter revenues of $204.2 million and a net income of $70.8 million, or $1.32 per share, beating analyst estimates of $203.8 million in revenue and 93 cents per share. More than half of the firm's revenue came from sales of pulmonary arterial hypertension drug Remodulin (treprostinil), which totaled $110.5 million for the quarter. Tyvaso (inhaled treprostinil) reached sales of $70.1 million, while Adcirca (tadalafil) sales totaled $22.3 million. As of March 31, the firm had $745.9 million in cash. Shares of United Therapeutics (NASDAQ:UTHR) closed Thursday at $44.54, up $1.41.