Regeneron Pharmaceuticals Inc. (REGN)
Analysis of Revenues
Difficulty: Advanced
Revenue Recognition Accounting Policy
Product revenue consists of U.S. sales of EYLEA, Libtayo, and ARCALYST. Revenue from product sales is recognized at a point in time when Regeneron’s customer is deemed to have obtained control of the product, which generally occurs upon receipt by the distributors and specialty pharmacies. Regeneron’s written contracts with its customers stipulate product is shipped freight on board destination (FOB destination).
Regeneron sells its marketed products in the United States to several distributors and specialty pharmacies. Under these distribution models, the distributors and specialty pharmacies generally take physical delivery of product. For EYLEA and Libatyo, the distributors and specialty pharmacies generally sell the product directly to healthcare providers.
The amount of revenue Regeneron recognizes from product sales varies due to rebates, chargebacks, and discounts provided under governmental and other programs, distribution-related fees, and other sales-related deductions. In order to determine the transaction price, Regeneron estimates, utilizing the expected value method, the amount of variable consideration that Regeneron will be entitled to. This estimate is based upon contracts with customers and government agencies, statutorily-defined discounts applicable to government-funded programs, historical experience, estimated payer mix, and other relevant factors. Regeneron reviews its estimates of rebates, chargebacks, and other applicable provisions each period and records any necessary adjustments in the current period’s net product sales.
Source: 10-K (filing date: 2019-02-07).
Revenues as Reported
Regeneron Pharmaceuticals Inc., Income Statement, Revenues
USD $ in thousands
| 12 months ended | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | 6,710,800 | 5,872,227 | 4,860,427 | 4,103,728 | 2,819,557 |
Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-12).
| Item | Description | The company |
|---|---|---|
| Revenues | Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss). | Regeneron Pharmaceuticals Inc.’s revenues increased from 2016 to 2017 and from 2017 to 2018. |