Friday, December 3

Trump just received Regeneron’s experimental COVID-19 treatment. Here’s the inside story of the biotech and its 2 billionaire founders.

  • Regeneron Pharmaceuticals is at the front of the pack in the race to develop a coronavirus treatment.
  • President Donald Trump received an injection of the experimental treatment Friday after he was diagnosed with the coronavirus, the president’s doctor said.
  • The US Food and Drug Administration has not approved the treatment, which is still in clinical trials that started in June.
  • A description of early data released on September 29 suggested the antibody drug holds promise as an early treatment option. But the ongoing studies will need to confirm that potential.
  • The drug, called an antibody cocktail, was built in record time, using technology developed over the New York biotech’s 32-year history.
  • Here’s the inside story of how Regeneron rose to the drug industry’s top ranks, led by founders Leonard Schleifer and George Yancopoulos.
  • For more stories like this, sign up here for our healthcare newsletter Dispensed.


One of our best hopes for fighting the coronavirus pandemic may have started with a signed napkin in 1988.

On that napkin, a neurologist named Leonard Schleifer scribbled the basics of a deal to start a new biotechnology company. His dinner companion, George Sing, a banker at Merrill Lynch, agreed to give Schleifer a million dollars in funding to launch the business.

Thirty-two years later, that company, Regeneron Pharmaceuticals, is a leader in the race to curb the coronavirus pandemic. Its experimental COVID-19 treatment was injected into President Donald Trump, the White House’s physician said Friday. 

Regeneron began testing its coronavirus drug in people in June. The drug is based on the disease-fighting proteins known as antibodies, and Regeneron quickly developed it using technology it’s been honing for more than two decades and previously used to successfully treat Ebola.

A description of early data released on September 29 suggested the antibody drug holds promise as an early treatment option. But ongoing studies will need to confirm that potential.

Regeneron hopes the drug will not just help the sick recover from COVID-19 but can also protect healthy people from getting infected, acting like a short-term vaccine. If the drug works, Regeneron aims to have hundreds of thousands of doses available by the end of 2020.

Producing a successful coronavirus treatment in under a year would be the latest validation of the unusual approach that Regeneron and its executives have taken to the biotech industry. Over the past three decades, the biotech’s cofounders have pushed Regeneron into the drug industry’s top ranks, developing seven approved medicines, employing more than 8,000 workers, and making themselves billionaires.

They’ve also taken a long-term mindset and spent decades building their own research tools, a marked contrast to rivals that quickly get gobbled up by giant pharma suitors.

“From the very beginning, as long we could support it financially, we were intent on being very broad-minded about our work and our technology development,” said Neil Stahl, Regeneron’s executive vice president of research and development in a July interview. “Because you never really know exactly where the big successes are going to come from.”

Read more: Customized drugs designed to prevent and treat the coronavirus are storming into the clinic. Here are the top drugmakers crafting antibody treatments, which are set to play a key role in halting the pandemic.

‘If you’re so smart, why do you make so little?’

Schleifer was working as a neurologist in New York City when he got the idea for Regeneron. He wanted to study brain diseases at a basic, genetic level and craft drugs using those findings. The name was a portmanteau of the company’s initial goal: regenerating neurons to tackle brain disorders.

After securing his first million dollars, he turned to finding a partner and came across a young biology professor at Columbia University. George Yancopoulos graduated at the top of his class at Columbia and was valedictorian at The Bronx High School of Science, where Neil deGrasse Tyson happened to be a classmate.

The 28-year-old scientist had recently landed a $2.5 million grant to jump-start his own lab. But his father — a Greek immigrant who raised his son in working-class Queens, New York — implored him to look beyond academia. “Exactly how much of that $2.5 million goes into your pocket?” Yancopoulos later recalled his father asking him in Greek. “If you’re so smart, why do you make so little?”

That’s when Schleifer called. By 1989, Yancopoulos had bailed on Columbia to join Schleifer as Regeneron’s chief scientific officer, setting up shop in Tarrytown, New York, about 20 miles north of Manhattan.

Regeneron was also cofounded by Eric Shooter, a Stanford University neuroscientist who served on the biotech’s board until 2014.

Regeneron suffers early failure with ALS drugs

From the beginning, the biotech took a different approach to science. While many biotechs are secretive, Regeneron’s researchers were encouraged to publish early and often, said Stahl, who joined in 1991. That allowed scientists at the company to build their reputations, while also attracting more young talent.

Its early research helped the company gain some attention and raise $91 million in a 1991 initial public offering.

Dr. Betty Diamond, the director of molecular medicine at the Feinstein Institutes for Medical Research, described Yancopoulos as “an extraordinary guy.”

“I think people recognized early on, both in academia, the venture-capital world, and anywhere else, that he’s somebody who you put your money on,” she told Business Insider in July. “And it’s paid in dividends.”

Diamond has followed Regeneron’s work for decades as a longtime antibody researcher who runs her own lab in New York.

But creating medicines wasn’t as easy as they hoped, particularly in aiming to treat neurological disorders like ALS, also known as Lou Gehrig’s disease. Two of its early drug candidates failed to help patients in clinical trials.

The company cold-calls an industry legend, persuading Roy Vagelos to join

The company soon shifted its focus, prodded by an industry legend.

In 1994, Merck CEO Roy Vagelos was looking for his next opportunity, as the drugmaker required executives to retire at 65.

Roy Vagelos

Roy Vagelos

Wikimedia Commons

Vagelos was an icon in the Greek community and among pharmaceutical firms. When Yancopoulos was pursuing a career in academia, his father brought him articles about Vagelos, who was also the son of Greek immigrants.

Prodded by Yancopoulos’ father, Schleifer cold-called Vagelos. The Merck CEO didn’t pick up, and Schleifer left a message, Yancopoulos recalled.

“I said, ‘Len, you know we’re never going to hear back,'” Yancopoulos said. “And sure enough, a week later, he comes to me and says, ‘George, Roy called back.'”

Vagelos, who’s still Regeneron’s chairman at age 90, steered the company to focus on research outside the brain, where it was easier to develop treatments.

Regeneron was also building its own technology that became the engine of its labs. Through the 1990s and the 2000s, Regeneron developed a way to genetically engineer mice, effectively giving them human-like immune systems. Researchers could use these mice to identify potent antibodies, or virus-fighting proteins that could be harnessed as treatments.

Science experiments like these caused many investors to scratch their heads, SVB Leerink biotech analyst Geoffrey Porges said in July, as they wondered how these findings would actually make medicines that could be sold.

A biotech gets its blockbuster, as Regeneron soars and mints billionaires

By 2010, Regeneron had more than 1,000 employees and a market value north of $1 billion. But it still didn’t have a blockbuster drug, a medicine that can rake in $1 billion or more in annual sales.

That came in November 2011, when Eylea was approved to treat an eye disease that often causes blindness in the elderly. Regeneron turned a profit for the first time in 2012. The drug brought in $1.4 billion in US sales in 2013 and has kept growing since then.

“In the early days, really through much of the company’s existence, I think they would have been happy to have been sold,” Porges said. “But when Eylea came along and they saw it was truly better, I think they had more confidence about their long-term value.”

The US Department of Justice is suing Regeneron, accusing it of making kickback payments to a patient charity to boost Eylea sales. In a June 24 complaint, the DOJ said top executives knew about the scheme and lied about it. Regeneron says the claims are meritless and plans to fight them.

Regeneron’s stock has soared over the past decade, and it’s grown from 1,200 workers in early 2010 to 8,100 at the beginning of this year.

That explosive growth made Schleifer, Yancopoulos, and Vagelos into billionaires. Schleifer made $672 million in salary and cashed-out stock from 2009 to 2019 and still holds about $3.7 billion in Regeneron stock, a Business Insider review of regulatory filings found. Yancopoulos made $462 million in that same period and holds a company stake valued at $1.6 billion.

A company spokesperson said all full-time employees receive stock-based pay, mainly through option awards. 

“Many employees have done very well under this model, rewarding and reflecting their contributions to the long-term success of the company,” the spokesperson said in a July statement.

Research projects that began decades ago started to pay off. Regeneron’s first few approved drugs, including Eylea, were discovered using what it called trap technology, which it pioneered in the 1990s. Its most recent drugs come from another idea conceived in the ’90s: its engineered mice.

Ebola and MERS serve as a ‘warm-up’ for the coronavirus

Regeneron used its customized mice to respond to previous viral outbreaks, building experimental medicines to treat MERS, a disease caused by a coronavirus that first broke out in the Middle East in 2012, and Ebola, a particularly deadly disease that has affected parts of central and western Africa over the past six years.

It took about 10 months for Regeneron to have a drug ready for human trials in Ebola, which proved to be successful in reducing deaths. It took just five months to reach the same stage for its coronavirus treatment.

Kyratsous Christos

Christos Kyratsous, Regeneron’s vice president of infectious disease and viral vector technologies.

Courtesy of Regeneron

“MERS and Ebola were kind of a warm-up to prepare us for what we are doing now with COVID,” Christos Kyratsous, Regeneron’s vice president of infectious disease and viral vector technologies, said in a June 17 interview.

When the first New York coronavirus cases were reported in Westchester County, where Regeneron is headquartered, the company found itself at the epicenter of the crisis. In working in the middle of a pandemic, Regeneron dealt with a “logistical nightmare,” Kyratsous said, requiring researchers to come in staggered shifts throughout the day and night.

The labs were running 24/7 at peak times, Stahl said. He shared one photo of a late-night celebration among scientists after running a successful experiment.

Regeneron coronavirus research laboratory shot

Regeneron scientists celebrating a successful laboratory experiment in the hunt to develop a COVID-19 treatment.

Regeneron Pharmaceuticals

To come up with its prospective coronavirus treatment, Regeneron turned back to its mice. Scientists attached a critical chunk of the coronavirus onto another type of virus to infect the mice and then sorted through thousands of antibodies, screening them in lab experiments to see how well they combat the virus.

It took Regeneron about 75 days to go from infecting mice to selecting antibodies. Then, it passed on information about the antibodies to its manufacturing plant in upstate New York. 

Some effective treatments have emerged six months into the outbreak. Clinical trials have found the antiviral drug remdesivir speeds up recovery times for hospitalized patients, and the steroid dexamethasone lowers the risk of death for the critically ill needing oxygen support. 

Read more: How 13 top drugmakers are sprinting to develop a coronavirus vaccine or treatment that can halt this pandemic

But these repurposed drugs carry modest benefits — they weren’t designed to fight this specific virus. Antibody drugs are custom-built against this coronavirus and could also address the massive need to treat patients earlier before they wind up in the hospital.

Scientists are also investigating other treatments based on the blood of survivors, like plasma transfusions. If these are effective, they will be limited by the amount of donated blood available from COVID-19 survivors. Producing antibody drugs doesn’t rely on donations.  

Vaccines — the gold standard in halting infectious diseases — face a higher regulatory bar, since they will be used by millions of healthy people. Antibody drugs could be a “bridge to a vaccine” by being ready by the end of 2020.

While many other drug companies have brought similar speed to developing antibody-based drugs, Stahl touted the company’s ability to work on both research and manufacturing as an advantage. Several hundred people across the company worked to accelerate the program, working on everything from immunizing mice, to testing antibodies, to scaling up manufacturing, and working with regulators, Kyratsous said.

Right now, the company is enrolling several thousand volunteers to test its antibody cocktail. The drug is being tested in infected people and to see whether it can prevent infection in people who have most likely been exposed to the virus, like someone living with a sick person. Regeneron aims to have results before the end of this year and to have hundreds of thousands of doses available if it works.

Regeneron is facing intense competition

The race for coronavirus therapeutics underscores the intense competition Regeneron is facing, as more biotechs and pharmaceutical companies have become experts at working on antibody-based treatments.

Eli Lilly beat Regeneron to the clinic in June with its own antibody drug. Other companies like Vir Biotechnology and AstraZeneca are expected to test antibody therapies this summer.

That’s playing out beyond the coronavirus, too. The drugmaker Sanofi has had a partnership with Regeneron to discover and bring new drugs to market. The duo’s work produced the anti-inflammatory treatment Dupixent, which they project will become one of the top-selling drugs of all time.

But last year, Sanofi announced it would wind down the partnership, which had existed for more than a decade. Sanofi executives said they were confident in their own antibody capabilities.

The biggest question facing Regeneron is common in biotech: What’s next? Last year, as Regeneron kept sliding down to a valuation close to $30 billion, the SVB Leerink analyst Porges questioned whether the company was at risk of becoming “the TiVo of biotech.”

Regeneron was excellent at making antibodies in the way TiVo excelled at recording TV shows. But competition was catching up, he said.

Investors are betting on Regeneron, sending the stock soaring

For now, investors are betting on Regeneron. Thanks to a bump for companies work on coronavirus treatments, the stock is up about 50% this year, reaching a $60 billion valuation.

Some of that increase is thanks to a setback that hit a key competitor to Eylea. Proposals to reform Medicare, which would have hurt Eylea sales, fell by the wayside amid the pandemic.

Schleifer and Yancopoulos are both in their 60s, and Stahl said they’d given no hint of a plan to retire anytime soon. Still, he said he wasn’t worried about the next chapter of Regeneron, because the company is stocked with talented scientists.

At the same time, Porges said some of Regeneron’s unique approach to innovation should be credited to the cofounders, and he does think it would fade if they departed.

“They are having the times of their lives,” Porges said. “If there ever was a case for cryopreservation, it’s Len and George.”

This story was originally published on July 8 and updated on October 2 to include President Donald Trump’s use of the experimental drug.

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