You've always been sort of a disruptor in the pharma industry. You've had discoveries in so many different areas — ophthalmology, you had gene therapy recently approved. You've done work in immunology. Can you talk a little bit about your approach to R&D and also how that's evolved over the years as your company has evolved, now that you have more mature drugs on the market and the landscape has obviously changed so much in the last few decades?
You know, that's a great question. As you heard from the intro, but from earlier speakers, the way the industry largely works right now, it's driven by discovery in small biotech companies, each one working on one project. There's thousands of these companies. The odds are against each and every one of them. Less than one in a hundred ever comes up with an approved drug. And the bigger companies then acquire them, and that's how the industry survives. So, Regeneron historically and still now is very different. So what we do is we do essentially all of our R&D internally or in close collaboration with our partners. And what we've tried to do in our history, and you alluded to some of it, is in order to really make change, in order to come up with a new kind of cure for, you know, the world's leading drug to fight and reverse blindness due to macular degeneration or diabetic eye disease, or the world's leading drug to fight asthma or atopic dermatitis, or the world's leading drug for skin cancers. How do you do that? If you really want to do something disruptive, you have to create a whole new technology. So, what we did time and time again at Regeneron is we invented entirely new technologies that are now much more widely used throughout the biopharmaceutical industry to solve individual problems. So, we were world leaders in a technology known as soluble receptors. One of the first biologics classes — you heard from Chris Klopp — used to all be small molecules. Now it's getting more and more biologics. One of the first big classes were soluble receptors. We were pioneers there. That led to Eylea, the world's leading drug to fight blindness. We then became world leaders in antibodies by making a mouse. We genetically humanized a mouse. So the mouse was 5% human; its immune system was entirely human genes. So it became a factory to make fully human antibodies. And that led to more than a dozen drug approvals, including many of the world's leading drugs, for example, to fight asthma, atopic dermatitis, eosinophilic esophagitis. So to really make change, you really need to create a whole disruptive new technology that opens up new drug classes. We also were pioneers and the first to put bispecific antibodies into the clinic. You mentioned gene therapy for hearing. So that's what we do time and time and time again. We commit to investing a lot internally to create a disruptive new technology which we can then use as a platform over and over again to deliver a series of new drugs that could not have been delivered before. Those cures could not have been delivered using existing technologies.
So you have to come up against the realities of the health care system, and there's been a lot of conversation today around cost and how we pay for this. You have a drug that you're developing for muscle preservation in weight loss, and that really had some impressive results recently, showing that it reduced the amount of the actual — people retained more muscle when they used it in combination with the weight loss drug. But weight loss drugs have really struggled to get insurance coverage. So, how do you look at some of these things you're developing, particularly within the confines of insurers not wanting to spend more money? How do you see these things actually taking off in some of these areas at this point?
Right. Well, what you alluded to, just in case people don't know, the GLP is obviously an incredibly important advance, but 30 to 40% — more than one-third of the weight you lose is actually muscle. I mean, I'm sorry, I don't want to take a weight loss treatment where I'm losing a third of the weight in muscle. And so, we have agents that we can combine there that can actually maintain your muscle. So all of the weight that you lose is fat. We think that that can deliver even more benefit than just the GLPs alone. But how do you pay for this? So the one thing that we can say is the drugs that I mentioned — world's leading drugs, you know, for eye disease or for asthma or atopic dermatitis or eosinophilic esophagitis — they're all pretty fairly priced drugs. They're on the lowest end of the spectrum. And the way we make profit — so there's two ways. Unfortunately, success is so rare. It has to be paid for, and this is why particularly the rarer the disease, the costlier the drug. So, you know, you come up with a treatment for a really rare orphan disease, some people are charging three, four million a patient because somebody has to pay for it. You can't do the R&D — the R&D is so expensive, somebody has to pay for it, it has to be paid for. At the end of the day, we've been so productive that we have a lot of drugs that treat a lot of people. So for example, Dupixent is the most widely prescribed antibody on the planet for the most number of diseases. So we can charge a relatively low price and still make profits that allow us to do R&D. Same thing with a very fairly low-priced drug treating millions of people. So if you treat millions, you can drop the price. This is also why the GLPs can be so low, because so many people take them. The companies can make their profits. But if you cure a rare disease, generally to pay for it, you have to charge a lot of money for the cure. Somebody has to pay for these. That's one thing that we have to understand. I want to get back to that in a second. We are in a good position because we've been so productive over the years that sometimes we can do something really unusual and extraordinary that has never happened in the history of the industry. So we developed arguably one of the most effective gene therapies ever approved by the FDA. This takes genetically deaf children and gives them normal hearing. It's life-changing. You guys may have seen some of the stories here. I mean, you take a kid who can't hear anything — all totally normal. They can hear their mother say that they love them. They can start dancing to music. It's really, you know, I'm incredibly honored and proud that our company was able to deliver this. But there's only hundreds of these kids born every year. So to have made money off it, traditionally you'd have to charge three, four million dollars a child. What did we decide to do? We gave it away for free. Why? Because we thought it was the right thing to do, and because the robustness of our pipeline and so forth allows us to pay for these technology developments. But the key thing for us is that we don't intend to make — and this gets back to what I was saying about our goal — is to build disruptive new technologies that can change the world, and we don't have to make the money on the first thing that is produced by that disruptive technology. So it's not like, oh, we invested all this to come up with the gene therapy to cure deafness and our goal was to give it away for free and we'll never make any money on it. You know, the rest of our pipeline will pay for it. Our dream, our intent, and the whole strategy that we have is what we invented there — the world's most successful gene therapy. We can use that elsewhere. We can start applying it to cases where we may be treating millions of people. We can now charge fair, low prices and still make the return. But the first example, we can pay for it ourselves. And that's what we choose to do over and over again.
Have you heard from any of your peers like, 'Hey, why'd you do that?' You know, making us look bad.
Well, Chris said something great, I think, in his talk. So many of us get into this for the right reasons. And he also pointed out some people forget why they got into this. I mean, my origin story or founding story is very much like Chris — at the same age, 13. My beloved grandmother developed Alzheimer's, and I went into science because I wanted to cure my grandmother. And I think so many of us in healthcare throughout the industry got into it for all the right reasons. Every once in a while, you know, because of the necessities of running businesses, sometimes you lose your way or whatever. But I think that, you know, most peers, they were astonished. But they really, you know, one of the reasons we did it was not only to send the message about Regeneron, but to send a message about our industry. Our industry used to be the most admired industry on the planet in the heyday of Roy Vagelos and Merck in the '70s and the '80s. And I want to get back to that, and I want people to remember that there's nothing more important to us than our health, our wellness, and that of our loved ones. God forbid your child or your mother or your grandfather have one of the 30,000 diseases that Chris mentioned that have no treatment today. What do you do? You resort to prayer. And you know, I'm a very prayerful, you know, religious guy, but that doesn't cure disease. Okay, who cures disease? Our industry cures disease. So we were also trying to send a message and remind people that our sometimes and often actually very maligned industry is the industry that delivers miracles to the children who are suffering from cancer, or to the mothers who are suffering from some other disease, or to the grandparents. And we as a country, as a society, have to put more value in this industry and learn — which I think Chris very articulately talked about — how, you know, his efforts are to figure out how to better control health care costs and deliver, you know, better access and so forth. But if anything, improving the power and the delivery of cures, because as he said, most diseases today, all you got is prayer. We need a strong industry here. We need to attract the best and the brightest young kids. I mean, I went into this because people were admiring people in my position. You know, people in my position don't get that much admired anymore. I think we want the next generation to want to be the inventors, the discoverers of the cures for the next set of diseases. We got to elevate this industry in the hearts and the minds of this country so it's strong, so that we can actually help more people.
