New York drugmaker Regeneron has ridden booming sales of blockbuster eye med Eylea and a partnership with Sanofi to strong growth in the past. But in a year marked by challenges to its ophthalmology workhorse, Regeneron's highest-paid executives took a major hit to their pay.
CEO Len Schleifer raked in $21.46 million in 2019 compensation, a 20% reduction from his $26.52 million the previous year, according to a proxy filing.
Regeneron shifting a big chunk of Schleifer's equity compensation to stock from options accounted for most of the drop. The CEO's option award fell by nearly $10 million to $11.7 million, but he made up for part of it with $4.98 million in stock awards, up from a total of zero in 2018.
Schleifer's base salary of $1.38 million was a slight bump from the previous year's total of $1.33 million. His additional compensation—including use of the company's jet, home security, insurance and 401(k) contributions—was cut more than half to a little more than $338,000.
Meanwhile, Chief Scientific Officer George Yancopoulos, another regular on biopharma's highest-paid executives lists, snared $20.66 million in total pay in 2019––also a drop of nearly 20% from the previous year's $25.38 million. Yancopoulos' options and stock award totals matched Schleifer's, and his base salary bumped up slightly on the year to $1.17 million.
Yancopoulos also saw a drop in his additional compensation to $212,000 from nearly $400,000.
Regeneron sported another strong year of growth in 2019 on the back of blockbuster eye drug Eylea and shared sales of immunology star Dupixent. But a critical juncture for the New York drugmaker is fast approaching with Eylea competitors lining up and Sanofi rejiggering the pair's long-standing antibody partnership.
In October, Novartis scored a FDA nod for its wet age-related macular degeneration drug Beovu, challenging Eylea and Roche's Lucentis in the lucrative market. Despite early blockbuster potential and doctor enthusiasm, though, Beovu faced a major setback in March after the FDA updated the drug's safety profile to include risks of intraocular inflammation and retinal artery occlusion.
Novartis' drug still managed to rake in $35 million in the fourth quarter. That new safety warning could help Regeneron keep Eylea growing beyond the $7.54 billion it earned in 2019.
Meanwhile, Regeneron is facing a portfolio shift in the restructuring of its longstanding partnership with Sanofi. The novel coronavirus pandemic scaled back that plan, however, as one of the meds involved showed promise in treating COVID-19 patients.
Earlier this month, the partners opted to rework their agreement on PCSK9 med Praluent but chose not to rejig their Kevzara arrangement while it's in COVID-19 testing. The drugmakers had initially decided to divide up rights after the two drugs' underperformance stifled profits for both drugmakers.
In January, Regeneron said it would eliminate 15 field and supporting staff positions as part of the decoupling.
Regeneron will take over U.S. commercialization rights in the new Praluent deal and receive a royalty from Sanofi on sales abroad, effective April 1. Meanwhile, the centerpiece of the drugmakers' partnership––Dupixent and its $2.32 billion in sales in 2019––will remain a 50-50 split into the foreseeable future.
Even as the partners held off on reworking their Kevzara deal, the IL-6 inhibitor hit a major roadblock in clinical testing to treat COVID-19 earlier this week.
Sanofi and Regeneron announced Monday they would scale back a late-stage trial of Kevzara after early data showed negligible results in treating "severe" COVID-19 patients requiring oxygen therapy, but not more intensive treatment.
The phase 3 stage of Kevzara's U.S. coronavirus program will now include only patients rated as "critical," meaning they require ventilation or ICU care. The phase 3 trial will also strip out a 200-mg dose, which showed little efficacy at the phase 2 stage.