Regeneron denied having an 'aversion' to mergers and acquisitions after analysts questioned the company's decision to remain largely inactive amid increased dealmaking by larger pharmaceutical peers, according to a July 30 earnings call.
During the second-quarter earnings call, a Raymond James analyst asked Regeneron executives to explain their stance on mergers and acquisitions as the company’s cash reserves approach $18 billion. Regeneron CEO Leonard Schleifer responded that his reluctance is limited to overpaying for acquisition targets. “We have been involved in many of these interested transactions and we have seen people pay far more than we think the value would justify,” Schleifer said. “We are not allergic to any external opportunity. We look at them all, but we are pretty disciplined in trying to create value with these transactions.”
Schleifer said Regeneron could pursue both small and large deals if they benefit shareholders over the long term. The comments came shortly after BMO Capital Markets analysts published a note responding to Regeneron's second-quarter report, titled “Time to Deal? Financial Strength & Flexibility Make Now the Time.” The analysts wrote, “Larger M&A would come from strength, not desperation,” citing significant cash reserves, financial flexibility, and recent research and development setbacks as reasons for potential deals.
In the past 14 months, Regeneron has reported failures in late-stage trials for itepekimab in chronic obstructive pulmonary disease and fianlimab in melanoma. The company’s ability to address challenges resulting from these Phase 3 failures may improve as its financial position strengthens. By the end of June, Regeneron had fully reimbursed Sanofi for development costs incurred by its French partner—$929.7 million last year and another $595 million paid off during the first half of 2026—eliminating this ongoing expense.
Regeneron's revenue from its collaboration with Sanofi rose 51% to nearly $2.2 billion in the second quarter. Global net sales of Dupixent increased 38% year-over-year to an all-time high of $6 billion. The company also reported record quarterly sales for Eylea HD in the U.S., as well as global sales growth for checkpoint inhibitor Libtayo.
Despite strong performance from Dupixent, questions remained about other aspects of Regeneron's partnership with Sanofi. In a note released Thursday before the earnings call, Truist Securities identified building trust within this relationship as an area needing attention. On its investor call, Regeneron reported early discussions with Sanofi regarding updating their alliance based on changes since their initial partnership began two decades ago.
“We were quite a different company. The rules of the game were a little bit different,” Schleifer said about when Regeneron first partnered with Sanofi in 2003. “We have to, I think, get together and be open-minded, and ... have a relationship that reflects where the companies are now. I’m cautiously optimistic that we can get there.”
