DEAR FELLOW SHAREHOLDERS,

2018 was a milestone year that marked 30 years since Regeneron’s founding. During these three decades, we stayed true to our mission of harnessing the power of science to bring important new medicines to people with serious diseases. Our long-term commitment to science and technology has resulted in seven approved medicines, a clinical product pipeline of 20 candidates across therapeutic areas, and a strong engine for future discovery and innovation.

We continue to receive important new regulatory approvals for our products. This included the September 2018 U.S. Food and Drug Administration (FDA) approval for our first immuno-oncology therapy, the PD-1 inhibitor Libtayo^® (cemiplimab-rwlc) Injection for advanced cutaneous squamous cell carcinoma. In October 2018, we received FDA approval for Dupixent^® (dupilumab) Injection in asthma, which followed its 2017 approval for adults with atopic dermatitis. In March 2019, Dupixent was also approved for adolescents with atopic dermatitis. In addition, in August 2018, we received FDA approval on a new dosing regimen for EYLEA^® (aflibercept) Injection in wet age-related macular degeneration (AMD).

Together with our ex-U.S. collaborator Bayer, we continued to bring EYLEA to more patients, achieving a record $6.75 billion in global net product sales for 2018. EYLEA continues to have opportunities to help more patients in need. In 2018, we reported positive Phase 3 results in patients with diabetic retinopathy and are expecting FDA action on our submission for this indication in May 2019.

Dupixent achieved $922 million in 2018 global net product sales, as recorded by our collaborator Sanofi, and has the potential to be a ‘pipeline-in-a-product’ as it targets Type 2 inflammation, which underlies many allergic diseases. In 2019, the FDA accepted for Priority Review our submission for a third Type 2 disease, chronic rhinosinusitis with nasal polyps, which has a target action date of June 26, 2019. We are studying Dupixent in a broad development program in other Type 2 allergic conditions, including eosinophilic esophagitis and peanut and grass allergies.

Our robust immuno-oncology portfolio, anchored by Libtayo, is beginning to show important potential. Libtayo is being studied as a monotherapy as well as in combination across various types of cancer. We are also encouraged by our broad bispecific development program, including clinical-stage CD3 bispecifics and our new class of costimulatory bispecifics. At the most recent American Society of Hematology meeting, we reported promising results from early clinical trials of our CD20xCD3 bispecific in certain advanced lymphoma patients. We believe these approaches may be able to extend the benefits of immunotherapy to more patients in need.

These are just a few highlights from our innovative, growing pipeline that spans therapeutic areas with high unmet need, including eye diseases, allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, musculoskeletal diseases, infectious diseases, and rare diseases.

Developing innovative technology and pursuing basic biological research that drives the drug development process continues to be a priority. In 2019, we will be celebrating the fifth anniversary of the Regeneron Genetics Center^® (RGC), one of the world’s largest research efforts on the genetic causes of health and disease. As of January 2019, the RGC had sequenced exomes from more than 500,000 volunteers and paired that data with deidentified health records, enabled through collaborations with health record pioneers like the Geisinger Health System and the UK Biobank. In March 2019, we were proud to share

some of this valuable work with the world when the first batch of sequencing data from the UK Biobank initiative was made publicly available to the global research community.

We believe that our commitment to long-term science and innovation brings value to patients and shareholders alike, and we are committed to reinvesting a significant share of our revenues to this effort. In 2018, total revenues increased 14 percent from 2017 to $6.7 billion, and we were able to reinvest 33 percent* of our revenues back into our R&D efforts. Revenue was driven by continued EYLEA growth, the launch of our new products, and collaboration revenues. GAAP net income for 2018 was $2.4 billion, or $21.29 per diluted share, compared to GAAP net income for 2017 of $1.2 billion, or $10.34 per diluted share. In 2018, our non-GAAP net income increased 38 percent from 2017 to $2.6 billion, or $22.84 per diluted share.** Our balance sheet remains strong, and we ended the year with $4.6 billion in cash and marketable securities.

The Regeneron team continues to expand, and we now have more than 7,300 colleagues across seven sites. We are expanding our presence in Rensselaer, NY, and in Ireland, where we have our Industrial Operations and Product Supply (IOPS) teams, and we opened a new office in the United Kingdom to support our global regulatory and clinical needs.

As part of our long-standing commitment to operating as a responsible corporate citizen, we continue to foster the next generation of scientific innovators, support sustainable communities, and run our business with the highest standards of ethics and integrity. We are a leader in supporting STEM (Science, Technology, Engineering, and Math) initiatives that reward and inspire promising young minds, including providing $100 million over ten years to support the Regeneron Science Talent Search, the nation’s oldest and most prestigious high school science competition. To learn more about our commitment to corporate citizenship, please review our second annual Responsibility Report.

We are proud of the work we do every day to find new solutions for people with serious diseases but know there is much more work to do. We are confident that if we continue delivering important advances through innovative science and technology, we will achieve a diverse portfolio of medicines and sustainable, long-term growth.

Sincerely,

Leonard S. Schleifer, M.D., Ph.D.		George D. Yancopoulos, M.D., Ph.D.		P. Roy Vagelos, M.D.
Founder, President and Chief Executive Officer		Founding Scientist, President and Chief Scientific Officer		Chairman of the Board

REGENERON PHARMACEUTICALS, INC.

777 Old Saw Mill River Road

Tarrytown, New York 10591-6707

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The 2019 Annual Meeting of Shareholders of Regeneron Pharmaceuticals, Inc. (the “Company”) will be held on Friday, June 14, 2019, commencing at 10:30 a.m., Eastern Time, at the Westchester Marriott Hotel, 670 White Plains Road, Tarrytown, New York, for the following purposes:

The board of directors has fixed the close of business on April 17, 2019 as the record date for determining shareholders entitled to notice of, and to vote at, the Annual Meeting and at any adjournment(s) or postponement(s) thereof.

Pursuant to the rules of the Securities and Exchange Commission, we have elected to use the “Notice and Access” method of providing our proxy materials over the Internet. Accordingly, we will mail, beginning on or about April 26, 2019, a Notice of Internet Availability of Proxy Materials to our shareholders of record and beneficial owners as of the record date (other than (i) those who previously elected to receive proxy materials by e-mail, (ii) those who have previously asked to receive paper copies of the proxy materials, and (iii) shareholders who participate and hold shares of common stock in the Regeneron Pharmaceuticals, Inc. 401(k) Savings Plan). As of the date of mailing of the Notice of Internet Availability of Proxy Materials, all shareholders and beneficial owners will have the ability to access all of the proxy materials on a website referenced in the Notice of Internet Availability of Proxy Materials.

The Notice of Internet Availability of Proxy Materials also contains a toll-free telephone number, an e-mail address, and a website where shareholders can request a paper or electronic copy of the proxy statement, our 2018 annual report, and/or a form of proxy relating to the Annual Meeting. These materials are available free of charge. The Notice also contains information on how to access and vote the form of proxy.

As Authorized by the Board of Directors,

Joseph J. LaRosa

Executive Vice President, General Counsel and Secretary

April 26, 2019

TABLE OF
CONTENTS

TABLE OF
CONTENTS

WE SEEK YOUR INPUT ON OUR BOARD

The composition of our board of directors reflects our core principle of “science first”: over half of our directors are members of the National Academy of Sciences, and our board members include two Nobel laureates and holders of many scientific awards. By having our board of directors heavily populated with top-science talent, we signal to our shareholders and employees our seriousness about the Company’s dedication to science and its core competencies and primary value driver. Our board also includes individuals with experience building shareholder value through all stages of corporate development, as well as governance, financial, and policy expertise. Five of our board’s current 12 members are diverse by gender, race, or national origin.

Please refer to “Proposal No. 1: Election of Directors” for additional information.

WE SEEK RATIFICATION OF OUR AUDITORS

We pay close attention to the requirements applicable to us as a publicly traded company, including those relating to the audit of Regeneron’s financial statements by our independent registered public accounting firm, PricewaterhouseCoopers LLP. In this proxy statement, we are asking you to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.

Please refer to “Proposal No. 2: Ratification of Appointment of Independent Registered Public Accounting Firm” for additional information.

ANNUAL MEETING INFORMATION

VOTING INFORMATION

Director since: 2016

Age: 56

Independent

Scientific Society Memberships

Other Public Boards

Experience and Qualifications

Dr. Bassler is currently the Chair of the Department of Molecular Biology and the Squibb Professor in Molecular Biology at Princeton University, and a Howard Hughes Medical Institute Investigator. Dr. Bassler has previously served as the President of the American Society for Microbiology, as well as on the boards for the American Association for the Advancement of Science, the National Science Foundation, and the American Academy of Microbiology. She has been elected to the National Academy of Sciences, the American Academy of Arts and Sciences, the Royal Society of London, and the American Philosophical Society, and has received many scientific honors, including a MacArthur Foundation Fellowship, the Lounsbery Award, and the Shaw Prize for Life Science and Medicine. Dr. Bassler received her B.Sc. from the University of California, Davis, and her Ph.D. in Biochemistry from Johns Hopkins University. She served as a Postdoctoral Fellow and Research Scientist at the Agouron Institute in La Jolla, California, before becoming a faculty member at Princeton University. Dr. Bassler served as a director of Sanofi from November 2014 to July 2016 and currently serves on the board of directors of Kaleido Biosciences, Inc.

Dr. Bassler’s extensive research experience and her scientific and academic career and accomplishments, as well as her experience as a corporate director, led to the board’s decision to nominate Dr. Bassler for reelection to the board.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2017

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 1991

Age: 78

Independent

Scientific Society Memberships

Experience and Qualifications

Dr. Brown holds the Distinguished Chair in Biomedical Sciences, a position he has held since 1989, and is a Regental Professor of Molecular Genetics and Internal Medicine, and the Director of the Jonsson Center for Molecular Genetics, at The University of Texas Southwestern Medical Center at Dallas, positions he has held since 1985. Drs. Brown and Goldstein jointly received the Nobel Prize for Physiology or Medicine in 1985 and the U.S. National Medal of Science in 1988. Dr. Brown is a member of the National Academy of Sciences, the National Academy of Medicine, and Foreign Member of the Royal Society of London. Dr. Brown retired as a member of the board of directors of Pfizer Inc. in 2012.

Dr. Brown’s distinguished scientific and academic background, including his receipt of the Nobel Prize for Physiology or Medicine in 1985, and his significant industry experience gained through his service on the board of directors of the Company and of a leading pharmaceutical company, led to the board’s decision to nominate Dr. Brown for reelection to the board.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2016

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 1988

Age: 66

Experience and Qualifications

Dr. Schleifer founded the Company in 1988, has been a Director and its President and Chief Executive Officer since its inception, and served as Chairman of the Board from 1990 through 1994. Dr. Schleifer, together with Regeneron’s founding scientist, Dr. Yancopoulos, built and has managed the Company over the past 31 years. Dr. Schleifer is a licensed physician and is certified in Neurology by the American Board of Psychiatry and Neurology. With over 30 years of experience as Chief Executive Officer of the Company, Dr. Schleifer brings to the board an incomparable knowledge of the Company, significant leadership experience, and an in-depth understanding of the complex research, drug development, and business issues facing companies in the biopharmaceutical industry.

Dr. Schleifer’s significant industry and leadership experience, as well as his extensive knowledge of the Company, led to the board’s decision to nominate Dr. Schleifer for reelection to the board.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2016

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 2001

Age: 59

Scientific Society Memberships

Experience and Qualifications

Dr. Yancopoulos joined Dr. Schleifer in 1989 as founding scientist of the Company, and together they built and have managed the Company since then. Dr. Yancopoulos is currently President and Chief Scientific Officer, and has served on the board since 2001.

He received his M.D. and Ph.D. from Columbia University. Dr. Yancopoulos was the 11th most highly cited scientist in the world in the 1990s, and in 2004 he was elected to be a member of the National Academy of Sciences. Dr. Yancopoulos, together with key members of his team, is a principal inventor and/or developer of the seven FDA-approved drugs the Company has developed, EYLEA^® (aflibercept) Injection, Praluent^® (alirocumab) Injection, Dupixent^® (dupilumab) Injection, Kevzara^® (sarilumab) Injection, Libtayo^® (cemiplimab) Injection, ZALTRAP^® (ziv-aflibercept) Injection for Intravenous Infusion, and ARCALYST^® (rilonacept) Injection for Subcutaneous Use, as well as of its foundation technologies, including the TRAP technology, VelociGene^®, and VelocImmune^®. As one of the few members of the National Academy of Sciences from industry and as an author of a substantial number of scientific publications, Dr. Yancopoulos has a distinguished record of scientific expertise. Dr. Yancopoulos also brings to the board his experience in building and managing the Company, his in-depth knowledge of the Company’s technologies and research and development programs, and his proven track-record for envisioning successful long-term strategic directions and opportunities.

Dr. Yancopoulos’s significant industry and scientific experience, as well as his extensive knowledge of the Company, led to the board’s decision to nominate Dr. Yancopoulos for reelection to the board.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2016

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 2017

Age: 58

Independent

Other Public Boards

Experience and Qualifications

Dr. Coles has served as Chairman and Chief Executive Officer of Yumanity Therapeutics, LLC, a private company focused on transforming drug discovery for neurodegenerative diseases, since 2014. Prior to this, from 2013, Dr. Coles served as Chairman and CEO of TRATE Enterprises LLC, a privately held company. Dr. Coles served as President, Chief Executive Officer and Chairman of the Board of Onyx Pharmaceuticals, Inc., a biopharmaceutical company, from 2012 until 2013, having served as its President, Chief Executive Officer, and a member of its board of directors from 2008 until 2012. Prior to joining Onyx in 2008, he was President, Chief Executive Officer, and a member of the board of directors of NPS Pharmaceuticals, Inc., a biopharmaceutical company. Before joining NPS in 2005, he served in various leadership positions in the biopharmaceutical and pharmaceutical industries, including at Merck & Co., Inc., Bristol-Myers Squibb Company, and Vertex Pharmaceuticals Incorporated. In addition to having previously served as a director of Onyx and NPS, he was formerly a director of Laboratory Corporation of America Holdings, Campus Crest Communities, Inc., and CRISPR Therapeutics AG.

Dr. Coles has been a director of McKesson Corporation since April 2014 and serves on the Compensation Committee and the Finance Committee of its board of directors.

The experience of Dr. Coles as a seasoned executive and corporate director with extensive knowledge of highly regulated biopharmaceutical and pharmaceutical companies, as well as his in-depth knowledge and understanding of the regulatory environment in which Regeneron operates, led the board to conclude that Dr. Coles should serve as a director.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2017

Regeneron Common Stock Beneficially Owned as of April 17, 2019

Director since: 1991

Age: 78

Independent

Scientific Society Memberships

Experience and Qualifications

Dr. Goldstein has been a Professor of Molecular Genetics and Internal Medicine and the Chairman of the Department of Molecular Genetics at The University of Texas Southwestern Medical Center at Dallas since 1977. Dr. Goldstein is a member of the National Academy of Sciences, the National Academy of Medicine, and the Royal Society of London. He also serves on the Boards of Trustees of The Rockefeller University and the Howard Hughes Medical Institute. Drs. Goldstein and Brown jointly received the Nobel Prize for Physiology or Medicine in 1985 and the U.S. National Medal of Science in 1988.

Dr. Goldstein’s extensive research experience, his distinguished scientific and academic credentials, including his receipt of the Nobel Prize for Physiology or Medicine in 1985, and his substantial understanding of the Company gained through his service as a director since 1991, led the board to conclude that Dr. Goldstein should serve as a director.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2017

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 2010

Age: 66

Independent

Other Public Boards

Experience and Qualifications

Ms. Poon is an Executive-in-Residence in the Department of Management and Human Resources at The Max M. Fisher College of Business at The Ohio State University, where she served as Dean and the John W. Berry, Sr. Chair in Business from 2009 to 2014. Prior to joining Fisher, Ms. Poon spent eight years at Johnson & Johnson, most recently as vice chairman and worldwide chairman of pharmaceuticals. At Johnson & Johnson, she served on the company’s board of directors and executive committee and was responsible for managing the pharmaceutical businesses of the company. Prior to joining Johnson & Johnson, Ms. Poon spent 15 years at Bristol-Myers Squibb Company, a global pharmaceutical company, where she held senior leadership positions including president of international medicines and president of medical devices. Ms. Poon serves on the boards of directors of Prudential Financial, Inc. and The Sherwin-Williams Company and the Supervisory Board of Royal Philips Electronics.

Ms. Poon’s extensive expertise in domestic and international business operations, including sales and marketing and commercial operations, and her deep strategic and operational knowledge of the pharmaceutical industry, led the board to conclude that Ms. Poon should serve as a director.

Board and Committee Membership—2018 Attendance

Prior Voting Results — 2017

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 1995

Age: 89

Independent

Scientific Society Memberships

Experience and Qualifications

Prior to joining Regeneron, Dr. Vagelos was Chairman of the Board and Chief Executive Officer of Merck & Co., Inc., a global pharmaceutical company. He joined Merck in 1975, became a director in 1984, President and Chief Executive Officer in 1985, and Chairman in 1986. Dr. Vagelos retired from all positions with Merck in 1994. Dr. Vagelos served on the board of directors of Theravance, Inc. from 1996 to 2010. Dr. Vagelos is a member of the National Academy of Sciences, the National Academy of Medicine, and the American Philosophical Society. During his tenure as Chairman of Regeneron and previously as Chairman and Chief Executive Officer of Merck, Dr. Vagelos developed an extensive understanding of the complex business, operational, scientific, regulatory, and commercial issues facing the pharmaceutical industry.

Dr. Vagelos’s tenure and experience with the Company and Merck, his extensive knowledge of the pharmaceutical industry, his substantial leadership experience, and his significant understanding of the Company led the board to conclude that Dr. Vagelos should serve as a director.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2017

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 2016

Age: 64

Independent

Scientific Society Memberships

Experience and Qualifications

Dr. Zoghbi is currently a professor in the departments of Pediatrics, Molecular and Human Genetics, and Neurology and Neuroscience at Baylor College of Medicine, the director of the Jan and Dan Duncan Neurological Research Institute at Texas Children’s Hospital, and an investigator of the Howard Hughes Medical Institute. She has been elected to the National Academy of Sciences, the Institute of Medicine, and the American Association for the Advancement of Science, and has been awarded numerous recognitions for her work, including the Pearl Meister Greengard Prize, the March of Dimes Prize in Developmental Biology, and the Vanderbilt Prize in Biomedical Science.

Dr. Zoghbi earned her B.Sc. from the American University of Beirut, received her M.D. from Meharry Medical College in Nashville, Tennessee, and completed her pediatrics residency and a joint residency in neurology and pediatric neurology at Baylor College of Medicine, where she then pursued postdoctoral research training in molecular genetics.

Dr. Zoghbi’s extensive research experience and her scientific and academic career and accomplishments led the board to conclude that Dr. Zoghbi should serve as a director.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2017

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 2003

Age: 76

Independent

Other Public Boards

Experience and Qualifications

In 2008, Mr. Ryan retired as the Chairman of the Board of Prudential Financial, Inc., one of the largest diversified financial institutions in the world. He served as Chief Executive Officer of Prudential until 2007. Prior to joining Prudential in 1994, Mr. Ryan served as President and Chief Operating Officer of Chase Manhattan Bank since 1990. Mr. Ryan managed Chase’s worldwide retail bank between 1984 and 1990. From 2008 to 2013, Mr. Ryan served as a non-executive director of the Royal Bank of Scotland Group plc. Since 2009, Mr. Ryan has served as a director of Citizens Financial Group, Inc., a retail bank holding company that became publicly traded in 2014, and currently serves as its lead director, chair of the Compensation and Human Resources Committee, and a member of the Nominating and Corporate Governance Committee.

Mr. Ryan’s substantial leadership experience as a chief executive officer of leading companies in the banking and insurance industries, and his extensive business experience and financial expertise, led the board to conclude that Mr. Ryan should serve as a director.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2018

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 1988

Age: 69

Independent

Experience and Qualifications

Since 1998, Mr. Sing has been a Managing Director of Lancet Capital, a venture capital investment firm in the healthcare field. From 2004 to 2015, Mr. Sing served as Chief Executive Officer of Stemnion, Inc. (currently known as Noveome Biotherapeutics, Inc.), a biomedical company in the regenerative medicine field.

Mr. Sing’s extensive healthcare and financial expertise as a healthcare venture capital investor and biomedical company chief executive officer, his executive leadership experience, and his substantial knowledge of the Company led the board to conclude that Mr. Sing should serve as a director.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2018

Regeneron Securities Beneficially Owned as of April 17, 2019

Director since: 2011

Age: 59

Independent

Scientific Society Memberships

Other Public Boards

Experience and Qualifications

Dr. Tessier-Lavigne has been the President of Stanford University since 2016. Before assuming his role at Stanford, he served as the President of The Rockefeller University and a Carson Family Professor and head of the Laboratory of Brain Development at The Rockefeller University from 2011. Previously, he served as Executive Vice President and Chief Scientific Officer at Genentech, Inc., which he joined in 2003. He was a professor at Stanford University from 2001 to 2003 and at the University of California, San Francisco from 1991 to 2001. Dr. Tessier-Lavigne is a member of the National Academy of Sciences, the National Academy of Medicine, and a fellow of the Royal Societies of London and Canada. Dr. Tessier-Lavigne is a member of the Board of Directors of Denali Therapeutics Inc., and previously served on the board of directors of Pfizer Inc., Agios Pharmaceuticals, Inc., and Juno Therapeutics, Inc.

Dr. Tessier-Lavigne’s distinguished scientific and academic background, and his significant industry experience, including experience in senior scientific leadership roles at a leading biopharmaceutical company, led the board to conclude that Dr. Tessier-Lavigne should serve as a director.

Board and Committee Membership — 2018 Attendance

Prior Voting Results — 2018

Regeneron Securities Beneficially Owned as of April 17, 2019

BOARD STRUCTURE

Pursuant to the Company’s Certificate of Incorporation, the board of directors is divided into three classes, denominated Class I, Class II, and Class III, with members of each class holding office for staggered three-year terms. There are currently four members in Class I, five members in Class II, and three members in Class III. The respective terms of the directors expire (in all cases, subject to the election and qualification of their successors and to their earlier death, resignation, or removal) as follows:

BOARD MEETINGS AND ATTENDANCE OF DIRECTORS

The board held six regular meetings in 2018. All directors attended at least 75% of the total number of meetings of the board and committees of the board on which they served. According to the Regeneron Board of Directors Corporate Governance Guidelines, board members are expected to attend the Company’s Annual Meeting of Shareholders. All of the directors then in office attended our 2018 Annual Meeting of Shareholders.

PROCEDURES RELATING TO NOMINEES; BOARD SUCCESSION PLANNING

The Corporate Governance and Compliance Committee will consider a nominee for election to the board of directors recommended by a shareholder of record if the shareholder submits the recommendation in compliance with the requirements of our Guidelines Regarding Director Nominations, which are available on our website at www.regeneron.com under the “Corporate Governance” heading on the “Investors & Media” page.

In considering potential candidates for the board of directors, the Corporate Governance and Compliance Committee considers factors such as whether or not a potential candidate: (1) possesses relevant expertise; (2) brings skills and experience complementary to those of the other members of the board; (3) has sufficient time to devote to the affairs of the Company; (4) has demonstrated excellence in his or her field; (5) has the ability to exercise sound business judgment; (6) has the commitment to rigorously represent the long-term interests of the Company’s shareholders; (7) possesses a diverse background and experience, including with respect to race, age, and gender; and (8) such other factors as the Corporate Governance and Compliance Committee may determine from time to time.

Candidates for director are reviewed in the context of the current composition of the board of directors, the operating requirements of the Company, and the long-term interests of shareholders. In conducting the assessment, the Committee considers the individual’s independence, experience, skills, background, and diversity, including with respect to race, age, and gender, along with such other factors as it deems appropriate, given the current needs of the board and the Company to maintain a balance of knowledge, experience, and capabilities. When recommending a slate of director nominees each year, the Corporate Governance and Compliance Committee reviews the current composition of the board of directors in order to recommend a slate of directors who, with the continuing directors, will provide the board with the requisite diversity of skills, expertise, experience, and viewpoints necessary to effectively fulfill its duties and responsibilities.

BOARD AND COMMITTEE SELF-ASSESSMENTS

On an annual basis, the board of directors, the Audit Committee, the Compensation Committee, and the Corporate Governance and Compliance Committee conduct self-assessments to ensure effective performance and to identify opportunities for improvement. As the first step in the self-assessment process, directors complete a comprehensive questionnaire, which asks them to consider various topics related to board and committee composition, structure, effectiveness, and responsibilities, as well as satisfaction with the schedule, materials, and discussion topics. Each committee, as well as the board as a whole, then reviews and assesses the responses and presents its findings and recommendations to the board of directors. The results of the assessments are then discussed by the board of directors and the respective committees in executive session, with a view toward taking action to address any issues presented. Results requiring additional consideration are addressed at subsequent board and committee meetings, where appropriate.

While this formal self-assessment is conducted on an annual basis, directors share perspectives, feedback, and suggestions year-round, both inside and outside the boardroom.

SHAREHOLDER RIGHTS TO REMOVE DIRECTORS FOR CAUSE AND TO CALL SPECIAL SHAREHOLDER MEETING

Regeneron’s charter documents give shareholders the rights to (i) remove directors for cause by an affirmative vote of at least 80% of the outstanding shares of all classes of capital stock entitled to vote for directors; and (ii) call a special shareholder meeting upon the written request of at least 25% of the total number of votes entitled to be cast by shareholders.

DIRECTOR INDEPENDENCE

The board of directors has determined that each of the following currently serving directors is independent as defined in the listing standards of The NASDAQ Stock Market LLC and our Corporate Governance Guidelines: Bonnie L. Bassler, Ph.D., Michael S. Brown, M.D., N. Anthony Coles, M.D., Joseph L. Goldstein, M.D., Christine A. Poon, Arthur F. Ryan, George L. Sing, Marc Tessier-Lavigne, Ph.D., and Huda Y. Zoghbi, M.D. These individuals are affiliated with numerous educational institutions, hospitals, charities, and corporations, as well as civic organizations and professional associations. The board of directors considered each of these relationships and determined that none of these relationships conflicted with the interests of the Company or would impair their independence or judgment. The board conducts executive sessions of independent directors following each regularly scheduled board meeting.

The board of directors has determined that each of the current members of the Audit Committee, Messrs. Ryan and Sing and Dr. Coles, qualifies as an “audit committee financial expert” as that term is defined by SEC rules, and is independent as defined for audit committee members in the listing standards of The NASDAQ Stock Market LLC and SEC rules.

In addition, the board of directors has determined that each of the current members of the Compensation Committee, Ms. Poon, Drs. Goldstein and Zoghbi, and Mr. Sing, meets the additional independence criteria applicable to compensation committee members under the listing standards of The NASDAQ Stock Market LLC and qualifies as a “Non-Employee Director” pursuant to Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code.

BOARD LEADERSHIP AND ROLE IN RISK OVERSIGHT

The board of directors recognizes that one of its key responsibilities is to establish and evaluate an appropriate leadership structure for the board so as to provide effective oversight of management. Since 1995, the board has separated the roles of the Chief Executive Officer and the Chairman of the Board, with Dr. Vagelos serving as Chairman and Dr. Schleifer serving as President and Chief Executive Officer. Dr. Vagelos’s extensive leadership experience, his business acumen, and his deep understanding of the healthcare industry have made him an invaluable resource to both the board and Dr. Schleifer. The board has determined that this leadership structure is appropriate for the Company at this time.

The board executes its oversight responsibility for risk management directly and through its committees, as follows:

EXECUTIVE COMPENSATION PROCESSES AND PROCEDURES; ROLE OF COMPENSATION CONSULTANTS

The Compensation Committee is responsible for overseeing the Company’s general compensation objectives and programs. We describe below under “Compensation-Related Matters — Compensation Discussion and Analysis — Our Compensation Processes” the role of the Compensation Committee, as well as the role of our executive officers, in decisions regarding executive compensation (particularly with respect to our Named Executive Officers).

The Compensation Committee has the sole authority to retain its own third-party compensation consultants, and in 2018 utilized the services of Frederic W. Cook & Co., Inc. (“Frederic W. Cook & Co.”), an independent compensation consultant. Advice and recommendations provided by Frederic W. Cook & Co. relate to both executive compensation (discussed in the section “Compensation-Related Matters” below) and director compensation matters (discussed in the subsection “Compensation of Directors” below). As discussed further below, the Corporate Governance and Compliance Committee has adopted a policy requiring the annual review of non-employee director compensation by an independent compensation consultant and separately engaged Frederic W. Cook & Co. for that purpose.

Management also retains another compensation consultant for its own use. In 2018, management used the services of Radford, a compensation consultant focused on the technology and life sciences sectors. Radford provided various consulting services to us, including analyzing the competitiveness of specific compensation programs; preparing surveys of competitive pay practices (including the Market Composite Data discussed in “Compensation-Related Matters — Compensation Discussion and Analysis” below); and assisting management in the development and analysis of executive compensation recommendations. Reports prepared by Radford that relate to executive compensation may also be shared with the Compensation Committee, the full board, or another committee of the board.

OVERVIEW

In November 2018, the board of directors, upon the recommendation of the Corporate Governance and Compliance Committee, approved a new compensation program for our non-employee directors and the Chairman of the Board (the “New Compensation Program”), as discussed further below. The New Compensation Program became effective in December 2018 following court approval of the previously disclosed settlement of two shareholder derivative actions (the “Settlement”). The terms of the Settlement are described in Regeneron’s Current Report on Form 8-K filed on October 12, 2018. In approving the New Compensation Program, the board of directors considered the analysis and recommendations of Frederic W. Cook & Co. This analysis took into account, among other matters, the market practices of companies in our Peer Group, other relevant industry and market data points, Regeneron’s long-term compensation philosophy, and the terms of the Settlement. The awards made under the New Compensation Program comply with the terms of the Settlement, including its limitations on annual cash and equity compensation for the non-employee directors and the Chairman of the Board.

At Regeneron, non-employee director compensation is subject to annual review. The Corporate Governance and Compliance Committee makes recommendations to the board of directors regarding, and the board of directors determines, the compensation of non-employee directors. The Corporate Governance and Compliance Committee evaluates the appropriate level and form of compensation for non-employee directors and recommends changes to such compensation to the board of directors when appropriate. Directors who are Company employees receive no additional compensation for serving on our board of directors or its committees. In determining compensation recommendations for the non-employee directors, the Corporate Governance and Compliance Committee considers, among other things, the qualifications, expertise, and demands on our directors, practices of similar companies in the biotechnology industry (including the Peer Group), and any comparative information provided by Frederic W. Cook & Co. In addition, in November 2018, the Corporate Governance and Compliance Committee adopted a policy requiring the annual review of non-employee director compensation by an independent compensation consultant for a term to extend to no fewer than five calendar years following final approval of the Settlement. The Corporate Governance and Compliance Committee engaged Frederic W. Cook & Co. for this purpose. Frederic W. Cook & Co. conducted its first such review in 2018 and provided its recommendations to the Corporate Governance and Compliance Committee concerning the non-employee director compensation to be awarded with respect to 2019.

The process governing the compensation arrangements of the Chairman of the Board is described under “Compensation Arrangements of the Chairman of the Board of Directors” below.

NON-EMPLOYEE DIRECTOR COMPENSATION PHILOSOPHY

Our philosophy for non-employee director compensation is simple: to attract the most highly qualified directors with a diverse skillset who will serve as stewards of the Company’s long-term prospects and scientific focus. With this in mind, our non-employee director compensation program emphasizes equity compensation primarily in the form of stock options, which reward increases in stock price, over cash fees. The board of directors believes that this emphasis is consistent with the Company’s long-term business orientation and has helped ensure alignment of directors’ interests with those of Regeneron shareholders. Under the New Compensation Program, we have introduced value-denominated equity compensation awards (granted in the form of stock options and a relatively small percentage of restricted stock units (“RSUs”)), resulting in a nearly 50% year-over-year decrease in the reported grant date fair value of the 2019 non-employee director equity awards, and have increased the annual cash retainer by $35,000 per non-employee director. These features of the New Compensation Program are meant to, among other things, ensure greater stability in reported non-employee director compensation on a year-over-year basis. The board of directors believes that the New Compensation Program is consistent with Regeneron’s philosophy for non-employee director compensation.

CASH FEES AND MATCHING GIFT PROGRAM

In 2018, each non-employee director received an annual retainer of $55,000 and an annual committee retainer of $10,000 for each standing committee of the Company’s board of directors on which the director served. In addition, each chairperson of each standing committee received an additional annual retainer of $10,000. Compared to cash compensation of non-employee directors in our Peer Group, the 2018 annual retainer for board service was below the 25th percentile and the additional retainers provided to our committee chairpersons were below the median.²

Under the New Compensation Program, each non-employee director receives an annual retainer of $90,000. The annual committee retainer and the additional retainers provided to committee chairpersons remain at $10,000 (as described above). Compared to cash compensation of non-employee directors in our Peer Group, the annual retainer under the New Compensation Program would have been below the 75th percentile if paid in 2018.

Non-employee directors are reimbursed for their actual expenses incurred in connection with their activities as directors, which included travel, hotel, and food and entertainment expenses. In addition, directors are eligible to participate in the Regeneron Matching Gift Program, which is also available to eligible employees. Under this program, the Company matches contributions made by directors and employees to eligible tax-exempt organizations up to an annual maximum amount of $5,000 per director or employee.

ANNUAL EQUITY AWARDS

The Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan

As amended and restated and approved by the shareholders in June 2017, the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan imposes limits on non-employee director awards. The Plan requires that during any calendar year commencing with the 2018 calendar year, the aggregate number of shares subject to one or more awards granted to a non-employee director in a year may not exceed 12,750 shares, except that during the first calendar year in which a non-employee director serves on the board of directors, such limit will be 34,000 shares. In addition, during any calendar year commencing with the 2018 calendar year, the aggregate number of shares subject to one or more awards granted to a non-employee director then serving as chairman of the board of directors in such year may not exceed 25,500 shares, except that during the first calendar year in which a non-employee director serves as chairman of the board of directors, such limit will be 68,000 shares. For purposes of applying this limit, the Plan treats a full-value award (i.e., an award other than a stock option or stock appreciation right) as an award of one and one-half (1.5) shares for each share actually subject to such award, and an award of a stock option or stock appreciation right as an award of one share for each share actually subject to such award.

2019 Equity Awards

The January 2019 annual equity awards to our non-employee directors were made in accordance with the New Compensation Program. In 2018, the board of directors (upon the recommendation of the Corporate Governance and Compliance Committee) determined that the targeted aggregate grant date fair value of such equity awards would be set at $600,000 per non-employee director and consist of stock options with a grant date fair value of $480,000 (or 80% thereof) and RSUs with a grant date fair value of $120,000 (or 20% thereof). On January 2, 2019, each of the then-serving nine non-employee directors received an equity award comprised of stock options representing 3,784 shares of common stock (with a grant date fair value of $480,031) and 323 RSUs (with a grant date fair value of $119,962). The aggregate grant date fair value of these equity awards was $599,993 per non-employee director.

The Corporate Governance and Compliance Committee recommended the approval of, and the board of directors approved, the terms of the January 2019 annual equity awards after consideration of the review, analysis, and recommendations of Frederic W. Cook & Co. Such analysis focused on, among other matters, the market practices of companies in our Peer Group, other relevant industry and market data points, Regeneron’s non-employee director compensation philosophy (including its emphasis on long-term incentives), and the terms of the Settlement.

Terms of Equity Awards

The exercise price of a non-employee director stock option is equal to the fair market value of a share of common stock on the date of grant (determined as the average of the high and low sales price per share of common stock on the NASDAQ Global Select Market on the date of grant or, if such date is not a trading day, on the last preceding date on which there was a sale of the Company’s common stock on the NASDAQ Global Select Market).

Under the New Compensation Program, a pro-rata portion of each equity award (i.e., each stock option and RSU award) equal to the portion of one year that has passed from its date of grant vests on the date of the Company’s first annual shareholder meeting following the date of grant, and the remaining portion vests on the first anniversary of the date of grant. The RSU awards contain mandatory deferral provisions, according to which the shares underlying the RSUs will generally not be delivered to the non-employee director until the earliest of (i) the termination of the non-employee director’s service as a member of the board, (ii) the seventh anniversary of the RSU grant date, and (iii) the date of a change in control (as defined in the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan). A non-employee director may, subject to compliance with applicable tax rules, elect in writing a maximum deferral period longer than the seventh anniversary of the grant date. Stock options awarded to non-employee directors prior to the adoption of the New Compensation Program (including those reported in the Director

Compensation Table below) become exercisable as to one-third of the shares on the anniversary of the date of grant in each of the three subsequent calendar years. Other than as discussed below, the vesting of equity awards is generally subject to continued service on the board, and stock option awards generally expire ten years following the date of grant.

To the extent they remain unvested and outstanding, equity awards granted to a non-employee director continue to vest following the retirement of that director provided applicable conditions relating to the length of the director’s service and the director’s age have been met. If a non-employee director’s service as a member of the board is terminated as a result of his or her death, all of the director’s equity awards will immediately vest in full.

To the extent they remain unvested and outstanding, equity awards granted to non-employee directors become fully vested automatically upon a change in control of the Company. Each non-employee director has the right to nullify this acceleration of vesting, in whole or in part, if it would cause the director to pay excise taxes under the requirements of the Internal Revenue Code.

EQUITY AWARDS TO NEW DIRECTORS

Under the New Compensation Program, any newly elected non-employee director will receive an initial equity award with an aggregate grant date fair value equal to 5/3rds of the aggregate grant date fair value of the most recent annual equity award to a non-employee director; and, with respect to the annual equity award to a non-employee director in respect of the first year of his or her service, the aggregate grant date fair value of such annual award will be prorated based on the date as of which the non-employee director first becomes a member of the board of directors. The January 2018 prorated annual stock option award to Dr. Coles (shown in the table below) was granted prior to the adoption of the New Compensation Program; in accordance with the guidelines then in effect, the number of shares of common stock underlying such award was prorated based on the date of which Dr. Coles first became a member of the board of directors.

COMPENSATION ARRANGEMENTS OF THE CHAIRMAN OF THE BOARD OF DIRECTORS

On December 31, 1998, we entered into an employment agreement with the Chairman of the board of directors, Dr. Vagelos. Pursuant to the terms of his employment agreement, Dr. Vagelos receives an annual salary of $100,000 as a non-officer employee.

Under the New Compensation Program, the board of directors determined that the 2018 annual equity award to Dr. Vagelos would consist entirely of stock options and set the targeted aggregate grant date fair value of such award at (but no more than) ten times the aggregate grant date fair value of the corresponding annual equity award for our non-employee directors. As in prior years, Dr. Vagelos’s 2018 stock option award reflects, among other things, the key contributions that Dr. Vagelos makes as the Company continues to develop into a fully integrated biotech company with multiple class-leading products, as well as Dr. Vagelos’s crucial role as a trusted advisor to the CEO, other senior managers, and the non-employee directors. It is also designed to incentivize further contributions and ensure Dr. Vagelos’s continued service to the Company in the future.

The 2018 stock option award granted to Dr. Vagelos vests ratably over four years subject to his continued service and contains change-of-control provisions consistent with those described above for equity grants to non-employee directors. Pursuant to the terms of his employment agreement, if Dr. Vagelos dies or is disabled during the term of his employment, all stock options granted to him by the Company will immediately become vested and exercisable. In addition, the stock option agreement with Dr. Vagelos relating to his 2018 stock option award provides that the stock option award will continue to vest following his qualified retirement (as defined in the applicable Company policy; Dr. Vagelos currently meets the policy requirement).

In 2018, we paid a $125,000 filing fee relating to the Hart-Scott-Rodino (“HSR”) filing for Dr. Vagelos, as well as a tax reimbursement of $120,101 to Dr. Vagelos to cover Dr. Vagelos’s imputed income associated with the filing fee payment. The filing and the associated filing fee were triggered under the HSR regulations as a result of Dr. Vagelos’s then-current and anticipated future total holdings of Regeneron stock exceeding a specified threshold. The Compensation Committee determined it appropriate to pay these amounts because the HSR filing obligation resulted from equity awards granted to Dr. Vagelos under the Company’s compensation program and the price appreciation in Regeneron stock acquired by Dr. Vagelos over a period of time during which he made substantial contributions toward such appreciation. The Compensation Committee also recognized that Regeneron had required Dr. Vagelos (as well as other directors and senior executives) to hold Regeneron stock under the Company’s stock ownership guidelines and encouraged alignment of his interests with those of Regeneron’s shareholders through share ownership.

The following table and explanatory footnotes provide information with respect to compensation paid to Dr. Vagelos and each non-employee director for their service in 2018 in accordance with the policies, plans, and employment agreement described above:

OVERVIEW

Regeneron is committed to good corporate governance, which we believe promotes the long-term interests of shareholders, strengthens the accountability of the board of directors and management, and helps build trust in the Company. The following chart summarizes key information regarding our corporate governance.

Board and Other Governance Information	20191
Size of Board	12
Number of Independent Directors	9
Separate Chairman and Chief Executive Officer
Majority Voting in the Election of Directors
Director Resignation Policy
Number of Meetings of the Board of Directors Held in 2018	6
Independent Directors Meet in Executive Sessions Without Management Present
Code of Business Conduct and Ethics Applicable to All Employees, Officers, and Directors
Annual Board and Committee Self-Evaluations
Stock Ownership Guidelines for Directors and Senior Executives
Active Shareholder Engagement
Shareholder Right to Remove Directors for Cause
Shareholder Right to Call Special Shareholder Meeting

CODE OF ETHICS

The board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors. You can find links to this code on our website at www.regeneron.com under the “Corporate Governance” heading on the “Investors & Media” page. We may satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or controller, or persons performing similar functions, by posting such information on our website where it is accessible through the same link noted above.

SUCCESSION PLANNING AND TALENT DEVELOPMENT PROCESS

Under our Corporate Governance Guidelines, the board of directors is required to periodically review with our CEO Regeneron’s plan for succession to the offices of the CEO and other senior executive positions. In 2017, the Corporate Governance and Compliance Committee, at the request of the board of directors, commenced a multi-year formal succession planning and talent review, which includes succession planning for the CEO and other senior management positions. In 2018, the applicable committees of the board of directors advanced this formal review by focusing on certain assigned functions and roles within the Company. As part of this process, the Audit Committee reviewed functions and roles within the Company’s finance, information technology, and real estate & facilities management organizations,

while the Compensation Committee and the Technology Committee reviewed functions and roles within the Company’s commercial organization and the Company’s research & development and global development organizations, respectively. Implementation of the succession planning and talent review plan has continued in 2019.

In addition to formal succession planning, directors also have exposure to Regeneron leaders through board and committee presentations and discussions and informal events and interactions with key talent throughout the year, both in small group and one-on-one settings.

CORPORATE RESPONSIBILITY

Regeneron’s mission is to use the power of science to repeatedly bring new medicines to patients. We are committed to operating responsibly, communicating transparently about our impacts, and engaging all stakeholders in our mission. We strive to “do well by doing good” and have been publicly disclosing information about significant corporate responsibility matters since 2014.

In 2017, we conducted a review of our approach to Environmental, Social, and Governance (ESG) issues. We have used these insights to identify three focus areas for our responsibility strategy:

In 2018, we began the process of setting strategic goals, which we plan to share in our 2019 Responsibility Report. As part of this process, we conducted a responsibility materiality¹ assessment to prioritize the ESG issues that matter most to our business and stakeholders. The outcomes of our materiality assessment have been disclosed in our Responsibility Report and will inform our responsibility strategy and reporting.

We also formalized our responsibility operational structure in 2018. We established a Responsibility Committee comprised of cross-functional business leaders and amended the charter of the board’s Corporate Governance and Compliance Committee to expressly delegate board oversight of corporate responsibility to the Committee. The board of directors’ policy is to take into consideration the long-term interests of the Company, its shareholders, and other stakeholders, including patients, employees, the healthcare community, regulators, partners, suppliers, and local communities. Under our Corporate Governance Guidelines, the Corporate Governance and Compliance Committee is responsible for overseeing the Company’s key corporate responsibility initiatives, including those expected to have a significant impact on the Company’s ability to deliver sustained growth. The Committee also conducts a periodic review of environmental, social, and governance matters, and management has the responsibility for formulating and implementing such initiatives and matters.

Improving the lives of people with serious disease. Our business model is founded on scientific innovation. At Regeneron, we deliver growth by inventing therapies that address serious medical conditions and have a life-transforming impact on patients’ health. To date, we have brought to market seven FDA-approved treatments and have 20 product candidates in development, all of which were homegrown in our laboratories. Our support for patients extends beyond the labs to disease education and awareness efforts, product support services, and our commitment to drug access and responsible pricing.

Fostering a culture of integrity and operational excellence. We are committed to being a top biotechnology employer that attracts and retains highly talented and motivated people, and facilitates a diverse and inclusive workforce where people feel safe, engaged, and supported. At the end of 2018, 48% of our employees, and 37% of those in leadership positions, were women.

We believe that creating life-transforming medicines should go hand-in-hand with a healthy living environment. In 2013, we created ambitious, five-year environmental sustainability goals for four major focus areas: carbon, waste, hazardous chemical waste, and electricity.

When setting these environmental sustainability goals, we chose targets that we would have to stretch to achieve. We are proud to have achieved our carbon reduction and waste diversion goals, as shown in the table below. Although we attained notable reductions in our electricity and hazardous chemical waste, we had not fully achieved the initial goals in these areas by 2018. This was largely due to our substantial growth over this five-year period; since 2013, the Company has added one new site in the United States and three others in Europe. This expansion of our infrastructure resulted in our electricity reduction rate coming just under target. Similarly, we increased our lab space to accommodate our significant R&D investments, which resulted in a corresponding increase in the lab equipment that generates hazardous chemical waste. Much of this added equipment runs autonomously, contributing to a lower reduction in hazardous chemical waste per lab employee than targeted.

In 2018, we conducted a comprehensive review of our environmental programs to better understand the strengths and opportunities across our operations. This work will inform our next generation of responsibility goals, which we began to develop in 2018 and on which we will begin reporting in our 2019 Responsibility Report.

We are equally committed to conducting our business responsibly and ethically. This is demonstrated through the range of policies, practices, and initiatives we have implemented, encompassing compliance, anti-bribery and corruption, responsible sales and marketing, ethical clinical trials, and product quality and safety.

Building a better future. We are a long-standing supporter of science education and make major philanthropic investment to inspire future innovators, including our 10-year, $100-million commitment to the Regeneron Science Talent Search, the nation’s most prestigious pre-college science and mathematics competition. Science, technology, engineering, and math (STEM) education represents more than 93% of our corporate philanthropy grants made in 2018, not including medical grants and matched funds.

In 2018, we also held our second annual Day for Doing Good, a company-wide day of service that had 55% employee participation. We are proud to be recognized for the second consecutive year as one of the 2018 Civic 50 by the non-profit organization Points of Light, distinguishing us as one of the 50 most community-minded companies in the United States.

For more information about our responsibility efforts and results, please refer to the 2018 Responsibility Report available on our website.

PUBLIC POLICY ENGAGEMENT

We are committed to adhering to the highest ethical standards when engaging in any political activities. Reflecting this commitment, in 2016 the board of directors (upon the recommendation of the Corporate Governance and Compliance Committee) adopted the Company’s Corporate Political Contributions Policy, a formal written policy that, together with our code of business conduct and ethics, sets forth our policies and procedures on political contributions and political activity. The policy is available on our website at www.regeneron.com under the “Culture of Integrity” heading on the “Citizenship” page.

REVIEW, APPROVAL, OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS

The board of directors has adopted a written policy for the review, approval, or ratification of related person transactions. The Company considers transactions (or a series of related transactions) in which the Company is a participant, the amount involved exceeds $10,000 in any calendar year, and a director, officer, more than 5% holder of our voting securities, any immediate family member of any of the foregoing, or any related entity of any of the foregoing has a direct or indirect material interest to constitute related person transactions. The policy provides for a standing pre-approval of transactions with any passive institutional shareholder who holds more than 5% of our voting securities, transactions where all shareholders receive proportional benefits, and certain transactions with Sanofi. With respect to any new transaction that is deemed pre-approved, the Audit Committee receives a summary of each such transaction and retains the ability to require that one or more of such transactions be subject to the standard approval procedures. The policy also requires that the arrangements relating to a permanent, full-time employment of an immediate family member of a director or executive officer hired by the Company be approved in accordance with the policy. In addition, in the event a person is or becomes a director or executive officer of the Company and an immediate family member of such person is a permanent, full-time employee of the Company, no material, outside-of-the-ordinary-course-of-business change in the terms of employment, including compensation, are permitted to be made without the prior approval of the Audit Committee (except, if the immediate family member is himself or herself an executive officer of the Company, any proposed change in the terms of employment are reviewed and approved in the same manner as compensatory arrangements of other executive officers).

The board of directors has determined that the members of the Audit Committee are best suited to review and approve related person transactions. Accordingly, each related person transaction (other than a transaction that is deemed pre-approved as described above) must be reviewed and approved or ratified by the members of the Audit Committee, other than any member of the Audit Committee that has an interest in the transaction. Under the policy, the Chairman of the Audit Committee is delegated the authority to approve certain related person transactions that require urgent review and approval.

When reviewing, approving, or ratifying a related person transaction, the Audit Committee will consider several factors, including the benefits to the Company, the impact on a director’s independence in the event that a director or his/her immediate family is involved in the transaction, the terms of the transaction, and the terms available to unrelated third parties or to employees in general, if applicable. Related person transactions are approved only if the Audit Committee (or the Chairman of the Audit Committee pursuant to delegated authority in the circumstances noted above) determines that they are in, or are not inconsistent with, the best interests of the Company and our shareholders.

TRANSACTIONS WITH RELATED PERSONS

Collaborations with Sanofi

As the beneficial owner of 23,523,269 shares of common stock of the Company, or 21.8% of the common stock outstanding as of April 17, 2019, Sanofi is considered a related person of the Company.

In 2018, Sanofi funded $682.5 million of our development and other costs (including $417.2 million of commercialization-related expenses) under the Amended and Restated License and Collaboration Agreement (the “Antibody License and Collaboration Agreement”). In addition, in 2018, we recognized other Sanofi collaboration revenue of $103.5 million, which was primarily recognized in connection with reimbursements by Sanofi for commercial manufacturing activities. In 2018, we also funded an aggregate of $47.7 million of Sanofi’s Phase 3 development costs for Praluent^®, Kevzara^®, and Dupixent^® under the Antibody License and Collaboration Agreement. In 2018, we and Sanofi shared losses in connection with commercialization-related activities for Praluent, Kevzara, and Dupixent, which resulted in us funding $227.0 million of such costs in the aggregate. In 2019, Sanofi has continued to fund the agreed-upon worldwide research and development expenses incurred by us and Sanofi, we have continued to fund certain Phase 3 development costs, and we and Sanofi have continued to share certain commercialization-related revenues and expenses under the Antibody License and Collaboration Agreement.

In 2018, Sanofi also funded $154.4 million of our research and development expenses under the original Immuno-oncology Discovery and Development Agreement (the “Original IO Discovery Agreement”) and $157.4 million under the Immuno-oncology License and Collaboration Agreement. In addition, in 2018, we recognized other Sanofi collaboration revenue of $231.4 million, which primarily consisted of the recognition of a portion of the deferred revenue from the upfront payment received in 2015 as well as revenue adjustments arising from the Amended and Restated Immuno-oncology Discovery and Development Agreement (the “Amended IO Discovery Agreement”). Effective as of December 31, 2018, we and Sanofi entered into the Amended IO Discovery Agreement, which narrowed the scope of the existing discovery and development activities conducted by us (“IO Development Activities”) under the Original IO Discovery Agreement to developing therapeutic bi-specific antibodies targeting (i) BCMA and CD3 (the “BCMAxCD3 Program”) and (ii) MUC16 and CD3 (the “MUC16xCD3 Program”) through clinical proof of concept. The Amended IO Discovery Agreement provided for Sanofi’s payment of $461.9 million to us as consideration for (x) the termination of the Original IO Discovery Agreement, (y) the prepayment of certain discovery and development activities conducted by us regarding the development of certain therapeutic bi-specific antibodies, and (z) the reimbursement of costs we incurred under the Original IO Discovery Agreement during the fourth quarter of 2018. In 2019, Sanofi made such $461.9 million payment to us pursuant to the Amended IO Discovery Agreement, and we and Sanofi will continue to share certain development expenses for cemiplimab under the Immuno-oncology License and Collaboration Agreement (as amended effective as of January 7, 2018 by the letter agreement discussed below). In addition, if Sanofi elects to co-develop a BCMAxCD3 Program antibody and/or a MUC16xCD3 Program antibody under our immuno-oncology collaboration, Sanofi will initially fund almost all of the development expenses incurred in connection with the development of such BCMAxCD3 Program antibody, for which Sanofi will be the principal controlling party, and half of the development expenses incurred in connection with the clinical development of such MUC16xCD3 Program antibody, for which we will be the principal controlling party.

A description of our antibody collaboration and our immuno-oncology collaboration with Sanofi is set forth in Note 3 to our audited financial statements for the fiscal year ended December 31, 2018 included in the 2018 Annual Report under the heading “a. Sanofi — Antibodies” and “a. Sanofi — Immuno-Oncology,” respectively.

In 2018, we recorded $25.1 million of revenue primarily related to a percentage of net sales of ZALTRAP^® (ziv-aflibercept) Injection for Intravenous Infusion and manufacturing ZALTRAP commercial supplies for Sanofi under the amended and restated collaboration agreement relating to ZALTRAP.

Amended and Restated Investor Agreement with Sanofi; 2018 Letter Agreement

In January 2014, we entered into an Amended and Restated Investor Agreement with Sanofi, which was subsequently amended effective as of January 7, 2018 by the letter agreement discussed below. Pursuant to the Amended and Restated Investor Agreement, Sanofi has agreed to vote its shares as recommended by our board of directors, except that it may elect to vote proportionally with the votes cast by all of our other shareholders with respect to certain change-of-control transactions and to vote in its sole discretion with respect to liquidation or dissolution of our company, stock issuances equal to or exceeding 20% of the outstanding shares or voting rights of common stock and Class A stock (taken together), and new equity compensation plans or amendments if not materially consistent with our historical equity compensation practices.

In addition, we are required under the Amended and Restated Investor Agreement to appoint an individual agreed upon by us and Sanofi to our board of directors. Subject to certain exceptions, we are required to use our reasonable efforts (including recommending that our shareholders vote in favor) to cause the election of this designee at our annual shareholder meetings for so long as (other than during the term of the letter agreement discussed below) Sanofi maintains an equity interest in us that is equal to the applicable Highest Percentage Threshold (as defined below). This designee is required to be “independent” of Regeneron, as determined under NASDAQ rules, and to not be a current or former officer, director, employee, or paid consultant of Sanofi. The current Sanofi designee, Dr. Coles, was elected by the board of directors in January 2017 and by the shareholders at the 2017 Annual Meeting as a Class II director with a term expiring at the 2020 Annual Meeting.

Under the Amended and Restated Investor Agreement, Sanofi also has three demand rights to require us to use all reasonable efforts to conduct a registered underwritten offering with respect to shares of our common stock held by Sanofi from time to time; however, shares of our common stock held by Sanofi from time to time may not be sold until December 20, 2020 (other than with respect to an aggregate of 1,400,000 shares, as to which we have agreed to waive such “lock-up” during the term of the letter agreement and of which 1,042,732 shares remained available to be sold as of April 17, 2019). These restrictions on dispositions are subject to earlier termination upon the occurrence of certain events, such as the consummation of a change-of-control transaction involving us or a dissolution or liquidation of Regeneron.

Pursuant to the Amended and Restated Investor Agreement, Sanofi is bound by certain “standstill” provisions, which contractually prohibit Sanofi from seeking to directly or indirectly exert control of Regeneron or acquiring more than 30% of our Class A stock and common stock (taken together). This prohibition will remain in place until the earliest of (i) the later of the fifth anniversaries of the expiration or earlier termination of our Antibody License and Collaboration Agreement with Sanofi or our ZALTRAP collaboration agreement with Sanofi, each as amended; (ii) our announcement recommending acceptance by our shareholders of a tender offer or exchange offer that, if consummated, would constitute a change of control involving us; (iii) the public announcement of any definitive agreement providing for a change of control involving us; (iv) the date of any issuance of shares of common stock by us that would result in another party’s having more than 10% of the voting power of our outstanding Class A stock and common stock (taken together) unless such party enters into a standstill agreement containing certain terms substantially similar to the standstill obligations of Sanofi; or (v) other specified events, such as a liquidation or dissolution of Regeneron.

Effective January 7, 2018, we and Sanofi and certain of Sanofi’s direct and indirect subsidiaries entered into a letter agreement in connection with (i) the increase of the development budget amount for cemiplimab set forth in the Immuno-oncology License and Collaboration Agreement and (ii) the allocation of additional funds to certain proposed activities relating to the development of dupilumab and REGN3500 and non-approval trials of dupilumab (the “Dupilumab/REGN3500 Eligible Investments”). Pursuant to the letter agreement, we have agreed, among other things, to amend the definition of “Highest Percentage Threshold” to be the lower of (i) 25% of our outstanding shares of Class A stock and common stock (taken together) and (ii) the higher of (a) Sanofi’s percentage ownership of Class A stock and common stock (taken together) on the termination date of the letter agreement and (b) the highest percentage ownership Sanofi attains following such termination date of our outstanding shares of Class A stock and

common stock (taken together); and to grant a limited waiver of Sanofi’s obligation to maintain the then-existing Highest Percentage Threshold during the term of the letter agreement in order to allow Sanofi to satisfy in whole or in part (a) its funding obligations with respect to the cemiplimab development costs under the Immuno-oncology License and Collaboration Agreement for the quarterly periods commencing on October 1, 2017 and ending on September 30, 2020 by selling up to 800,000 shares of our common stock directly or indirectly owned by Sanofi (of which 477,641 remained available as of April 17, 2019) and (b) its funding obligations with respect to the costs incurred by or on behalf of the parties to the Antibody License and Collaboration Agreement with respect to the Dupilumab/REGN3500 Eligible Investments for the quarterly periods commencing on January 1, 2018 and ending on September 30, 2020 by selling up to 600,000 shares of our common stock directly or indirectly owned by Sanofi (of which 565,091 remained available as of April 17, 2019). If Sanofi desires to sell shares of our common stock during the term of the letter agreement to satisfy a portion or all of its funding obligations for the cemiplimab development and/ or Dupilumab/REGN3500 Eligible Investments, we may elect to purchase, in whole or in part, such shares from Sanofi. If we do not elect to purchase such shares, Sanofi may sell the applicable number of shares (subject to certain daily and quarterly limits) in one or more open-market transactions.

In 2018, Sanofi elected to sell, and we elected to purchase (either in cash or by issuing a credit towards the amount owed by Sanofi), an aggregate of 226,153 shares of our common stock pursuant to the letter agreement. In 2019 to date, Sanofi elected to sell, and we elected to purchase (either in cash or by issuing a credit towards the amount owed by Sanofi), an aggregate of 131,115 shares of our common stock pursuant to the letter agreement.

A more detailed description of the letter agreement with Sanofi is set forth in the 2018 Annual Report under Part I. Item 1. “Business — Collaboration Agreements — Collaborations with Sanofi.”

Stanford University

Effective September 1, 2016, Marc Tessier-Lavigne, Ph.D. became the President of Stanford University. In 2018, we made payments to Stanford University of approximately $336,000 in the aggregate relating to (i) services provided in connection with certain clinical trials entered into in the ordinary course of business and (ii) a medical education fellowship grant. In 2019 through the end of the first quarter, payments in respect of these services amounted to less than $1,000 in the aggregate.

OTHER

Indemnification of Directors and Officers

Our Certificate of Incorporation provides that, to the fullest extent permitted under the New York Business Corporation Law, no director or officer of our Company shall be personally liable to the Company or its shareholders for monetary damages for any breach of fiduciary duty in such capacity. In addition, our Amended and Restated By-Laws provide that we shall indemnify our directors and certain of our other personnel against expenses (including attorneys’ fees) and certain other liabilities, including judgments, fines, and amounts paid in settlement, arising out of or incurred as a result of legal actions brought or threatened against them by reason of their position in our Company, subject to certain qualifications and provided that each such person acted in good faith, in a manner that they reasonably believed was in our best interest, and, where applicable, not unlawful. Subject to the provisions of our Certificate of Incorporation, our Amended and Restated By-Laws, and the New York Business Corporation Law, we may also advance expenses of the individuals entitled to indemnification.

INTRODUCTION

The Audit Committee has appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019. PricewaterhouseCoopers LLP (or its predecessor) has audited the Company’s financial statements for the past 30 years.

The board of directors has directed that the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2019 be submitted for ratification by the shareholders at the Annual Meeting. Shareholder ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2019 is not required by the Company’s charter documents or otherwise, but is being pursued as a matter of good corporate practice. If shareholders do not ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2019, the board of directors will consider the matter at its next meeting.

PricewaterhouseCoopers LLP has advised the Company that it will have in attendance at the 2019 Annual Meeting a representative who will be afforded an opportunity to make a statement, if such representative desires to do so, and will respond to appropriate questions presented at the 2019 Annual Meeting.

INFORMATION ABOUT FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Aggregate fees incurred related to services provided to the Company by PricewaterhouseCoopers LLP for the years ended December 31, 2018 and 2017 were:

Audit Fees. Audit fees in 2018 and 2017 were primarily for professional services rendered for the audit of the Company’s financial statements for the fiscal year, including attestation services required under Section 404 of the Sarbanes-Oxley Act of 2002, technical accounting consultations related to the annual audit, and reviews of the Company’s quarterly financial statements included in its Form 10-Q filings.

Audit-Related Fees. Audit-related fees in 2018 and 2017 were for professional services rendered in connection with the Company’s adoption of the new leasing accounting standard and new revenue recognition accounting standard, respectively.

Tax Fees. Tax fees in 2018 and 2017 were for tax planning and advisory services.

All Other Fees. All other fees in 2018 and 2017 were for annual subscriptions to accounting resources and, in 2017, also for an annual subscription to tax resources and professional services rendered to a non-U.S. subsidiary of the Company.

The Audit Committee has adopted a policy regarding the pre-approval of audit and permitted non-audit services to be performed by the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP. The Audit Committee will, on an annual basis, consider and, if appropriate, approve the provision of audit and non-audit services by PricewaterhouseCoopers LLP. The Audit Committee has approved a general provision of $75,000 for accounting advisory and other permissible consulting engagements. Management is responsible for notifying the Audit Committee of the status of accounting advisory and other permissible consulting engagements at regularly scheduled Audit Committee meetings and, if the Audit Committee so determines, the general provision is replenished to $75,000. The Audit Committee did not utilize the de minimis exception to the pre-approval requirements to approve any services provided by PricewaterhouseCoopers LLP during fiscal 2018 and 2017.

AUDIT COMMITTEE REPORT

We have reviewed the audited financial statements of the Company for the year ended December 31, 2018, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and met with both management and PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, to discuss those financial statements. The Audit Committee has discussed with the Company’s independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301: Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (the “PCAOB”), which include, among other items, matters related to the conduct of the audit of the Company’s financial statements. The Audit Committee also discussed with the independent registered public accounting firm their independence relative to the Company and received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by PCAOB Rule 3526 (Communication with Audit Committees Concerning Independence).

Based on the foregoing discussions and review, the Audit Committee recommended to the board of directors that the audited financial statements of the Company for the year ended December 31, 2018 be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 for filing with the Securities and Exchange Commission.

We have appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019. This appointment was based on a variety of factors, including PricewaterhouseCoopers LLP’s competence in the fields of accounting and auditing.

The Audit Committee
George L. Sing, Chairman
N. Anthony Coles, M.D
Arthur F. Ryan

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of April 17, 2019, the number of shares of the Company’s Class A stock and common stock beneficially owned by each of the Company’s directors, each of the NEOs referred to below under “Executive Compensation,” all directors and executive officers as a group, and each other person or group of persons known by the Company to beneficially own more than 5% of the outstanding shares of Class A stock or common stock, based upon (unless indicated otherwise) information obtained from such persons, and the percentage that such shares represent of the number of outstanding shares of Class A stock and common stock, respectively.

The Class A stock is convertible on a share-for-share basis into common stock. The Class A stock is entitled to ten votes per share and the common stock is entitled to one vote per share. We have determined beneficial ownership in accordance with the rules of the SEC. Except as otherwise indicated in the footnotes below, we believe, based on the information furnished or otherwise available to us, that the persons named in the table below have sole voting and investment power with respect to all shares of Class A stock and common stock shown as beneficially owned by them, subject to applicable community property laws. We have based our calculation of percentage of shares of a class beneficially owned on 1,911,354 shares of Class A stock and 107,727,418 shares of common stock outstanding as of April 17, 2019, except that for each person listed who beneficially owns Class A stock (and for directors and executive officers as a group), the number of shares of common stock beneficially owned by that person (and by directors and executive officers as a group) and the percentage ownership of common stock of such person assume the conversion on April 17, 2019 of all shares of Class A stock listed as beneficially owned by such person (or persons in the case of directors and executive officers as a group) into common stock and also that no other shares of Class A stock beneficially owned by others are so converted.

In computing the number of shares of common stock beneficially owned by a person (and by directors and executive officers as a group) and the percentage ownership of common stock of such person (and by directors and executive officers as a group), shares of common stock subject to options, RSUs, or other convertible securities held by that person (and by directors and executive officers as a group) that are exercisable or releasable as of April 17, 2019 or are exercisable or releasable within sixty days after April 17, 2019 are deemed to be outstanding. Such shares are not deemed to be outstanding, however, for the purpose of computing the percentage ownership of common stock of any other person.

SHAREHOLDER COMMUNICATIONS

The Company has established a process for shareholders to send communications to the members of the board of directors. Shareholders may send such communications by mail addressed to the full board, a specific member or members of the board, or a particular committee of the board, at 777 Old Saw Mill River Road, Tarrytown, New York 10591-6707, Attention: Corporate Secretary. All such communications will be opened by our Corporate Secretary for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service, or patently offensive material will be forwarded promptly to the addressee. In the case of communications to the board or any individual director or group or committee of directors, the Corporate Secretary will make sufficient copies of the contents to send to such director or each director who is a member of the group or committee to which the envelope is addressed.

TABLE OF CONTENTS

REGENERON’S OVERALL APPROACH TO COMPENSATION

Our Company Mission and Business Model — Sustainable Growth through Innovation¹

To understand the compensation of our “Named Executive Officers” or “NEOs,”² it is important to consider our overall approach to compensation and to appreciate how closely we tie our pay practices to our mission, strategy, and business model. As a science-driven company, we have set out to create an environment where the highest-quality fundamental drug research thrives and where dedicated teams of the best and the brightest can discover, develop, and commercialize new medicines for unmet medical needs.

Our mission is to use the power of science to bring new medicines to patients — over and over again. Our long-term commitment to science and innovation is critical to achieve this mission. Equally important is our ability to engage all of our employees in our mission and to create an ownership culture that guides our employees to operate for the long term. We have designed our compensation program with this in mind: to sustain our business model and drive our product pipeline.

The design and application of our compensation plans (including our reliance on stock options as a primary long-term employee incentive) have been consistent since the Company’s inception. We use stock options because we view them as inherently performance-based and aligned with our shareholders’ interests: no amount of time will make a stock option deliver any value unless the company’s stock price increases. This is why we have favored options over full-value equity awards (such as performance stock units or restricted shares), as full-value awards provide value to employees even when shareholders get nominal or negative returns. In addition, stock options reward our employees for increasing shareholder value over the entire 10-year option term, which we believe is consistent with the drug-discovery/development cycle. We also believe that the performance-based nature of stock options is enhanced for companies like Regeneron whose stock price is directly impacted by pipeline developments.

Last year, over 90% of the employee equity grants were made to our employees who were not NEOs.

However, we recognize that we may need to adapt as circumstances change and, therefore, periodically assess our approach to compensation in light of our business objectives, feedback from our shareholders, and market practices. Our goal is to apply the same kind of rigor to compensation that is emblematic of our approach to science and business matters, and to adjust our compensation program based on our evolving business needs. Following a comprehensive review and based in part on shareholder and employee feedback, we supplemented our annual equity awards in 2018 with highly targeted grants of restricted stock to certain key employees to promote employee retention and reward performance. We will continue to balance consistency and flexibility in our compensation decisions.

Our Compensation Philosophy — Reward All Employees for Value Creation

Our compensation supports our core strategy to create and advance a high-quality, internally developed product pipeline. The pipeline is directly created by our talented employees, and their engagement and commitment are a key driver of pipeline success.

Our equity program is focused on all employees. We award equity-based pay to all employees to ensure that when we deliver for patients and for shareholders, everyone shares in the potential upside growth. In addition to a comprehensive annual equity program covering all levels of employees, we award initial equity grants to all new hires, primarily in the form of stock options. Last year, approximately 90% of the employee equity grants (both based on grant date fair value and number of underlying shares) were made to our employees who were not NEOs. The broad-based equity program ensures that all employees can share in our future potential in the same way as executives.

We focus on long-term growth through internal innovation. Our compensation model and company culture underpin this strategy.

Our Company Culture

Our compensation model has been instrumental in furthering a culture of loyal and motivated employees with an entrepreneurial spirit. In each of the last five years, our attrition rate was less than half the industry average. For example, our 2018 turnover rate was 7.1% compared to an industry average of 17.9%,³ with turnover of our scientists ranking the lowest of all of our employee groups. We continued to retain employees well above the industry average and to attract new talent.

Stability, consistency, and scientific focus have been important not only to our compensation model, but also our governance. We are led by the longest-serving founder CEO in the S&P 500. He, and our exceptionally stable management and scientific teams, have been the stewards of our long-term approach, and we believe that they are part of the formula for our success. In addition, by having our board of directors and senior management heavily populated with top-science talent, we signal to both employees and investors our seriousness about the Company’s dedication to science and its core competencies and main value driver.

We also believe that our compensation model (including the use of stock options as a primary long-term employee incentive) has helped us establish a culture where employees focus on our mission and the drug-development process. The emphasis on the long term is a core Company belief, consistent with our history of growing through innovation and through a pipeline of internally developed medicines. It also reflects our philosophy of “doing well by doing good,” which encompasses our approach to operating responsibly (including by not using product price increases as a growth strategy) and our commitment to patients.

Over the last 10 years, we brought six important medicines to patients and obtained regulatory approval for four additional key indications for these products.

Further, many of our employees effectively invest in Regeneron’s future by holding their option awards long after they vest and could be exercised for a gain. We think this exemplifies our employees’ belief in our future and the long-term ownership culture that we have created with our compensation program. Similarly, our CEO and CSO have generally held their vested, in-the-money option awards until nearly the end of the full 10-year option term.

Our Performance

Our compensation program underpins our strategy of delivering sustainable, long-term growth through continued innovation. We believe the success of our compensation program and our performance (both financial and operational, in particular with respect to our pipeline progress) are best judged from a long-term perspective. We provide an overview of our key accomplishments in the last five years below. In addition, to give our shareholders an opportunity to assess last year’s performance, we highlight our achievements in 2018 in the subsection “Compensation Discussion and Analysis — Components of Executive Pay: What We Pay and Why We Pay It — Annual Cash Incentive.”

Over the last five years, we delivered on our strategic plan and made great strides as we brought four important new medicines to market; obtained regulatory approval for several new indications of our flagship drug, EYLEA^® (aflibercept) Injection; advanced multiple new product candidates into clinical development; grew revenue and earnings; diversified our revenue stream; and strengthened our balance sheet. Operational and financial performance highlights from this period include those listed below.

Operational Performance Highlights

New Indications for EYLEA. We obtained U.S. Food and Drug Administration (“FDA”) approval for three additional EYLEA indications (diabetic macular edema (“DME”), macular edema following branch retinal vein occlusion, and diabetic retinopathy in patients with DME), and grew EYLEA net product sales in the United States by 135%, to $4.1 billion. Importantly, we achieved this growth without resorting to price increases. Our commercialization efforts also resulted in EYLEA becoming the market-leading anti-VEGF therapy approved across a broad range of retinal diseases.

Newly Approved Treatments. We brought four important, novel treatments to patients — Praluent^® (alirocumab) Injection (2015)*, Kevzara^® (sarilumab) Injection (2017)*, Dupixent^® (dupilumab) Injection (2017)*, and Libtayo^® (cemiplimab) Injection (2018)* — each of which was both discovered and developed by Regeneron.

Additional Dupixent Indication. We continued to make progress fulfilling Dupixent’s “pipeline-in-a-product” promise by obtaining FDA approval for Dupixent as an add-on maintenance therapy in patients with moderate-to-severe asthma aged 12 years and older.

Other Advancements in Dupixent Clinical Program. We made considerable progress in further clinical development of Dupixent. We reported positive results from a Phase 3 study in adolescent patients with moderate-to-severe atopic dermatitis and two pivotal Phase 3 studies in adults with inadequately-controlled chronic rhinosinusitis with nasal polyposis, and advanced Dupixent into additional studies in pediatric patients with asthma (Phase 3), pediatric patients with atopic dermatitis (Phase 2/3), eosinophilic esophagitis (Phase 2/3), grass allergy (Phase 2), and peanut allergy (Phase 2).

Advancements in Immuno-oncology Programs. We made great strides toward our goal of developing a diverse and comprehensive immuno-oncology portfolio. In addition to the launch of Libtayo as discussed above, we are developing Libtayo in several other indications, including non-small cell lung cancer, cervical cancer, and basal cell carcinoma. We are also excited about our bispecific antibody programs, including REGN1979, REGN4018, and REGN5458, which advanced into clinical development for B-cell non-Hodgkin lymphoma, ovarian cancer, and multiple myeloma, respectively.

Pipeline Progress. We completed 61 clinical trials, including 17 pivotal studies, and advanced 15 product candidates into clinical development. As of December 31, 2018, we had 21 product candidates in clinical development and had 57 clinical trials ongoing.

Human Genetics Initiative. We launched Regeneron Genetics Center^® (the “RGC”), our human genetics initiative, the objective of which is to expand the use of human genetics for discovering and validating genetic factors that cause or influence a range of diseases where there are major unmet medical needs. Since its founding, the RGC has entered into a number of important collaborations, including those with the Geisinger Health System and the UK Biobank, and had sequenced almost 500,000 exomes (the portions of a genome that code information for protein synthesis) as of December 31, 2018. The RGC already made discoveries that helped advance Regeneron’s pipeline. Notably, the RGC provided human genetics validation and guidance for indications for evinacumab, REGN3500, Dupixent, and other earlier-stage programs. The RGC also discovered new targets for which we now have new molecules and therapeutics candidates, such as our new NASH target, HSD17B13, and our corresponding preclinical RNAi therapeutic being developed in collaboration with Alnylam Pharmaceuticals, Inc.

Human Capital Management. We more than tripled the size of our workforce, from 2,336 to 7,384 full-time employees, while continuing to sustain an engaging culture that drives innovation and maintaining an attrition rate at less than half the industry average.

Company Recognition. We were recognized four times as the No. 1 employer in the global biopharmaceutical industry by Science magazine, named five times as one of the “100 Best Companies to Work For” by FORTUNE magazine, and named four times as one of the world’s top 10 Most Innovative Companies by Forbes.

Financial Performance Highlights

Revenue Increase and Diversification. Our progress with expanding our portfolio of internally discovered and developed marketed products translated into an increase in our revenues by 138%, to $6.7 billion. We also took important steps toward greater diversification of our revenues. In particular, in its first full year on the market (2018), Dupixent generated $922 million of global net product sales (as recorded by our collaborator Sanofi).

Strengthening Our Financial Condition. Our cash, cash equivalents, and marketable securities grew by 236%, to $4.6 billion, and we solidified our financial condition by repaying all of our outstanding convertible senior notes and purchasing outstanding warrants we issued as part of a 2011 financing transaction.

We also obtained additional financial flexibility by securing a $750 million revolving credit facility, which remained undrawn at the end of this period.

Deployment of Capital to R&D. Over the last five years, we deployed an aggregate of $9.2 billion to research and development, excluding the additional $3.5 billion deployed to our R&D projects directly by our collaborators over this period. Importantly, our R&D spend was focused on organic growth driven by our internal pipeline, rather than growth through acquisitions.

Key Performance Metrics

Revenues ($ millions)		Global Net Product Sales of EYLEA* ($ millions)		Global Net Product Sales of Other Products** ($ millions)
Cash, Cash Equivalents, and Marketable Securities (as of year-end)		Number of Marketed Products (as of year-end)

*Bayer records net product sales of EYLEA outside the United States.

**Sanofi records global net product sales of Dupixent, Praluent, Kevzara, and ZALTRAP.

In this period, our stock’s performance approximated that of the S&P 500 Index, but, despite progress in many key areas of our business as described above, our stock underperformed the S&P Biotechnology Select Industry Index. Over the 10-year period ended December 31, 2018, we delivered stock price appreciation of 1,934% and outperformed both the S&P 500 Index (2008–2018 total shareholder return of 243%) and the S&P Biotechnology Select Industry Index (2008–2018 total shareholder return of 315%). While we cannot predict the performance of our stock price in any particular time period, we believe that if we continue to deliver operational, pipeline, and financial results, the creation of shareholder value and stock price appreciation will follow.

Regeneron 5-Year TSR vs. S&P Indices*

*TSR data reflect total returns (stock price appreciation and, if applicable, reinvested dividends).

Delivering Growth and Managing Dilution

In the last ten years, the number of our employees increased by over 700% and we created nearly 6,500 new full-time jobs. This degree of growth cannot be realized without an impact on our all-employee equity program. In recognition of the impact of our growth on the use of equity, commencing in 2013, we started to reduce the number of options granted per employee, including to our CEO, by approximately 54% between 2012 and 2018. This allowed us to maintain our annual burn rate at levels we consider reasonable for a high-growth company without sacrificing our core business principle that equity participation by all employees supports innovation that drives growth. Consistent with our all-employee equity award strategy, approximately 90% of the employee equity grants in 2018 (both based on grant date fair value and number of underlying shares) were made to our employees who were not NEOs.

The relative stability of our recent burn rate (i.e., the burn rate resulting from all equity awards made in a particular year) despite increasing headcount and maintaining a program with full employee participation is shown below for the period between 2012 and 2018, in which we implemented year-over-year reductions in the option grants per employee discussed above.

Regeneron Stock Utilization vs. Headcount*

CEO Pay-for-Performance Alignment

Only a small fraction (5%) of our CEO’s direct pay⁴ is not directly correlated to performance, with 95% of his direct pay consisting of performance-based (“at-risk”) compensation. The high proportion of at-risk pay has been a consistent and defining feature of our CEO compensation structure. In contrast, the percentage of CEO at-risk compensation in our Peer Group is significantly lower, at 81%.⁵

CEO equity compensation declined in 2018, with equity grant date fair value that was 3% lower and 7.5% fewer options than in 2017. Looking at our CEO pay and performance from a longer-term perspective, over the last six years (the period in which we reduced, on a year-over-year basis, the number of stock options granted to our CEO as well as per employee) our total shareholder return was 118% but our CEO’s total direct compensation declined by 14%. Importantly, in line with our dilution-based approach to setting equity compensation, we did not attempt to make up any decline of our stock price in any of these years by granting our CEO a greater number of options to reach a target “value.” To the contrary, we have been steadily reducing the number of his options in the last six years (by 15% versus the prior year in each of 2013, 2014, 2015, and 2016; by 5% in 2017; and by 7.5% in 2018), just like the grants to our other employees, in order to manage our overall burn rate.

6-Year Change in CEO Total Direct Compensation vs. Cumulative Total Shareholder Return*