Once again, Regeneron ($REGN) CEO Leonard Schleifer and his R&D chief George Yancopoulos are among the highest-paid executives in the industry. For running the fast-growing biotech last year, Schleifer netted $47.5 million, and Yancopoulos garnered $40.3 million in his drug development role.
That puts both men far ahead of Big Pharma chiefs such as Pfizer’s ($PFE) Ian Read and Novartis’ ($NVS) Joe Jimenez, and even farther ahead of fellow biotech CEOs, including Gilead Sciences’ ($GILD) John Martin.
Regeneron is well aware of that fact, and it spent many pages in its 2016 proxy statement laying out the company’s shareholder returns against its rivals (higher) and its growth in returns compared with executive pay increases (much lower). The board’s compensation committee even figured up Schleifer’s direct compensation as a percentage of Regeneron’s market cap: 0.08%, in case you were wondering, down from 0.20% in 2011.
There’s also a helpful graph that plots CEO pay against shareholder return at a variety of other biopharmas--and though Schleifer’s compensation is at the high end, as in at the right-hand edge of the graph, Regeneron’s TSR percentile is outdone only by Alnylam ($ALNY), Alkermes ($ALKS) and Incyte ($INCY).
Regeneron doesn’t hand out stock awards these days, preferring to use stock options as an incentive tool. Options made up at least 90% of Schleifer and Yancopoulos’ total compensation, at $43 million and $36 million, respectively.
Cash-wise, Schleifer collected a $1.2 million salary and a $2.88 million bonus, while Yancopoulos took home $1.02 million in salary and a $2.45 million bonus. Their perks were fairly modest and included disability insurance, 401(k) matching contributions, tax and financial planning, and “secure car transportation” as required by the company’s security policy.
Regeneron relied mostly on its ophthalmology drug Eylea to deliver sales growth last year, and it delivered, with a 47% increase in global net sales from 2014. Total revenue grew 46%. The company expanded its manufacturing to keep pace with Eylea demand, and added office and lab space at its Tarrytown, NY, headquarters.
Meanwhile, the company’s much-anticipated launch of PCSK9 drug Praluent, in partnership with Sanofi ($SNY), hasn’t moved as quickly as expected. The drug has a head-to-head competitor approved at virtually the same time, Amgen’s ($AMGN) Repatha, and the two have been battling for formulary placement with payers. But despite discounts and rebates, many payers are limiting use of the meds to patients who meet particular criteria, complicating the prescribing process.
Plus, the drugs’ high prices--more than $14,000 on a list basis--has made some doctors reluctant to prescribe them, at least until outcomes trial results come through. Both drugs are in testing to see whether their LDL-lowering power extends to preventing actual cardiovascular events such as heart attack and stroke.
If they do--and by a significant margin--uptake is expected to accelerate. Whether Eylea can continue racking up such impressive growth numbers in the meantime should help determine Schleifer and Yancopoulos’ paychecks next year.
- see Regeneron’s proxy
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