Regeneron expects $56M IPR&D charge tied to cell therapy pact

Regeneron expects $56M IPR&D charge tied to cell therapy pact

Regeneron’s first-quarter earnings are expected to take a $56 million hit tied to in-process research and development costs for a freshly inked autoimmune deal with Sonoma Biotherapeutics.

The $56 million IPR&D charge is a one-time, pretax figure forecast to land on the company’s first-quarter earnings for this year, which will be shared May 4. The amount is expected to bring down net income for the quarter by about 42 cents per share, according to a Securities and Exchange Commission filing dated April 10.

The charge is related to a $75 million upfront fee Regeneron just paid for a licensing deal with Sonoma Bio that was announced at the end of March. Regeneron paid $75 million in cash plus a $30 million equity investment and is also giving Sonoma Bio the chance to make up to $45 million in potential biobucks.

AbbVie reported a similar charge last week, taking a $150 million hit to earnings. IPR&D charges can relate to any acquired R&D activities that come from asset acquisitions such as upfront, opt-in or milestone payments from collaboration or licensing agreements.

Sonoma Bio, a regulatory T-cell-focused company, will work on up to four therapies for Regeneron in ulcerative colitis, Crohn’s disease and two undisclosed indications. Regeneron can also opt for a fifth indication.

Regeneron reported $3.41 billion in revenue for the fourth quarter of last year and $12.17 billion for full-year 2022.

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