Q4 2019 Earnings Call

A little bit of an update. We went through this strategy and prioritization.

Size is an x-com throughout the back end of last year. I will just say simply thank you to the x-com for thinking Enterprise as we outlined. The strategy was quite clear that we wanted to allocate more of our Central expertise in four business units and increase the accountability with that the impact was that we became Dead Redemption brother from 14 to 10 executive committee positions. It was of course, there was some personal impact that has structural. I want to thank those on the X, that would leave the organization but contributed in a very energetic way to making sure that we have a strong Legacy from their work and we can get done what needs to be done over the future of what additional role pumps in there is that you digital officer feeds which was a a hybrid role with medical what we've done is single it out and we've done that because I think we're a little dog

Trying to No Agenda on the digital.

Understanding and language capability internally. So in the short-to-medium term that role have a bias towards helping us improve our user experience in life science management. Internally, we can skip on to the next slide. Thank you overall, you know some very strong underlying performances specialty dog tries to 23% and it hides and 11% in uncle and 7% in rare diseases are based on performance indeed a general medicines am declining or talk about how stabilizing a little bit later, you know, we are beginning to see the impact, of course at the VP in China and the continued decline in diabetes, although moderating and I'll touch on that I've seen several performance, you know continues to stay within the boundaries of all Mister High single-digit a strong.

Of course, there is a phasing.

And some other bits and pieces that we can get to but fundamentals very strong in vaccines. And of course consumer, I think recognizing that it's a little bit overdue after making it a stand-alone and giving it agility and speed and optionality and we took ahead on the zantop recall amongst other things over all this is on you shame we will report figures I think in q1 in this shape and we will give you figures quarter for 2019 so that you can make a more accurate comparison. What do that ahead of time. We went to the next slide and dupixent in particular, you know, 152% growth, which is an incredible performance a truly incredible medicine will spend a few slides on that going a little bit deeper script Trend up TRX up over 100% already as we enter wage.

20/20 so the underlying

Demand is really where it needs to be. We feel that we're well on our way to delivering on that overall ambition that we have and realizing is 2.7 billion and you know, we're not even fully launched yet. I think it gets forgotten will cover it that really were principally only atopic dermatitis and with asthma and other indications coming off so so I did sell vaccines we talked about it was a very strong Q4 and the line is good and then on the pipeline, so let's mention the BT Ki for a moment. I thought you know, I think depending on what you read for the future value of the market in multiple sclerosis or indeed to be cell depletion part of that package. I think General consensus would be around about a 20 billion dollar market place in the near-term future for multiple sclerosis.

The goal So within that depending on the creepiest another piece of the penis. There is a chance that ultimately about half that market maybe even close to 10% will be in the cell depletion. You know Rita is a quite an important moment for us. We had flagged it but a couple of markets day back in December, we hoped that it would get to a good place in a 16. It's met its primary endpoint and and a a safety profile within our expectations. So with that said will be the oral that crosses the blood-brain barrier in Ms. Have a shot at doing something incredible with the microglia for example, so we did we setting ourselves up very very well indeed to do something off of town for patients and something.

I would say confirmation.

The company it just comes through Friday 3 in the right way do be just at the end. You know, we internal touch on this have three studies that have been kicked off. So we feel that the news flow will just get stronger and stronger and stronger. So we mentioned the rollout of do pic sand and you know, the last few quarters have been averaging incremental Europe kind of over a hundred million. The quarter expectations are and I think it's also worth mentioning out T-Rex are strong. There is a little bit of a patient assistance reset in January, maybe even a February. So whilst we expect to see a little bit on the dollar side there. We were very bullish about what twenty-twenty looks like and we know will gather momentum and we know underlying demand is very very strong. So lost in 34 countries still only predominantly dead.

uh atopic dermatitis

We've got 89 more launches, I think or something like that to go with the light to the FDA is accepted you pick some priority review in the Pediatric indication not released for the children benefit. But actually, you know, this is just another reminder of how important safety is in this disease area and why it's important that positions can have confidence as can parents and children in having the right safety profile. And if we think we're very definitely unique we submitted in a topic in China a while. We sort of transform our business in China, you know towards a specialty one and that will play a significant part moving on biologic leadership for duplex and took all Specialties is a very real thing. We are already number two in the market in terms and you think along humor has been around I think we have a real life.

The expectation to be the leading biologic in the dermatologist's office likewise in Alex.

Already the leading player in mbrx and it reflects very well on the overall profile of this medicine and then finally announced, and then pulmonology, you know time lines of you know outperforming the the aisle fives in this class so that you have here is a really unique medicine you have added an incredible amount of time with the news floated car and you have what is market leadership or positional specialty leadership positions that you really don't get too unless you have a winning profile off just to go another slide further interview fix and the last five and you pick some but I think it's worth spending a few moments on you know, we're really starting to put together the real evidence offered to patients and subscribers, you know, there's been a little bit of misinformation floating around about from our competition dupixent have a game.

Right up to the footsteps as the first dose. I'm not across the number of important.

Ten points, you know, and in that we can include legion's Edge quality of life, you know, this medicine works very very quickly another reason why it's becoming the leader each of the position populations off after the first dose of you you can see that it's separated from Placebo and I think it was Kronos are pivotal study. I just wanted to be in no doubt about how fast it worth the impact that it has on patients, you know, there's also insurability point which I think the longer more mature these markets become in biologics. You can see that choice is a response that is maintained an over a long period of time you have to think a hundred and forty eight weeks that you can see there and we've just added I think it was married where we presented three-year data on continuous incredible efficacy. So, you know, the foundation stones are very very strong for what we're doing to do pigs and across multiple.

Talk with multiple indications on multiple professional teams groups moving on add to vaccines.

You know as I get to know vaccines better, I'm delighted and in some ways privilege to be involved in this part of the business, you know, we are growing High single-digit Beyond across every single area. We play with vaccines, you know, two of our areas p p h and influenza we are close to the equipment of months status, you know, we're close to two billion euros, and I think that says a lot about how the business is performing in his run. We're very happy to see this broad growth we make so that's in the Q&A, but you should also know that the team has offered up its expertise in coronavirus tornado with other governmental institutions to make sure that anything and everything we can possibly do we'll do and we hope on one particularly strong and we hope meaningful initiative to be able to know something in the next cell phone.

In flu, we have a very successful differentiation strategy.

See, you know, improve vaccination rates are part of it and it's very important that I think people understand that there's still some way to go actually in some markets to make sure those that really need to be backstage get another opportunity for us. And then on the value upgrades peace, you know, we are expecting these to be a significant program in the coming years. And I said hi desk you I'd be launched in the US three blocks an HD expansion to Europe where we're fully differentiated and haven't been available. So far is going to be an essential part stores in to

Maybe on 2 diabetes, you know, we've been a double-digit decline and and not because of a lack of excellent work or volumes of continued to be impressive but the price. Particularly the US has has taken its toll now whilst, you know minus 8% is still significant. It is moderating and I think that's an important thing to understand about on the line business to know that the drags on the business start to slow down. So we're moving on the top line. It is real growth that is not been a it down and I look forward to getting to that point and if it's to point out the impact on the VP on a Merle in China chose not to Tender I didn't need to and any impact of that is already in our assumptions for 2020 the full impact the web reduction for animal log from July 19th.

And we make a joke.

Renee on the risks of biosimilar competition across the garage in franchise all of them already contained within on these things as in China to start with a Merle, but it's worth mentioning just to take you back for a second. You know, if you go back and look at what we said at Q3. We were quite explicit that there would be a Q4 impact on price that would be taken off because the prices have changed and the inventory was already in play and that's okay. We're right where we expect it to be there were no surprises there. Now the we guided to a 15% decline products and other pro-family and we're again right pretty much where we expect to be. I think it's worth saying and and this is going to be a little bit more complicated because of course of this difficult and and complicated challenge to China and and Beyond the borders with coronavirus, you know as a problem ma'am.

It's not is.

We are trying to make sure that we can still support and provide medicines for patients across China. It is a priority. We're pulling out all the stops. Like I'm sure all companies are wage a little bit of context. We start the year on the demand side just to share some of the a couple of comments that we picked up strongly from the vbp. So Thursday, we're not declaring any type of Victory. We did say a Q3. We hope to grow volumes throughout the year that will come and just gather Pace. We hope that that will help us offset suck just from the straightforward price cut. It's a little bit complicated cuz we'd like to show low as we go through a quarter one into Q2. We'll see how easy that is to bring it out based on what else happens given the coronavirus and the impact but but we we like to think that we studied quite well I mentioned do you think it's already been submitted by dead?

Probably had problems and fabrazyme were approved. And that's Again part of our move towards specialty over the long term in China.

Let's see my house. Maybe I'll just finish here to say, you know, there's an attack impact is real and accounts, you know, for more than half of the fiber optic line in to 4:19. You know, there is we are multi local business and it's one of our Global Brands and we took a hit and you know, we will talk to get back to where we need to this year. That's for sure. But with some of healthy pruning and some how she took some increased regulatory requirements, you know, we'll just use some time to make sure we get the business fit for purpose for the long term making excuses. We can do more damage or desires to get back on or above the industry growth rate. And we want to gather momentum as we go further along a last time. I'm not on a slide, but I'm also very calm.

Send you into this role. I've spent quite a bit of time understanding what are environmental effort is in the company in some ways renewable energy Wastewater management. We're doing an incredible job at sanofi in not a story well-told, but it's reality. We thought about sharing something on climate or theater missions that this will actually defer it to to know the reason then we would rather put out here some very real objectives as we think we can deliver. It's quite clear looking across our peers and further and more wives that there's a lot of aspiration and hope in where people are by 2025 and Beyond I think we're asking the team to spend some time to properly calibrate what is actually going to be achieved on what time line and we'll share that with you and Q2. If not before then with that. I think I'll hand to John Reed and I look forward wage.

To bring this background after John and John Baptiste job. Thank you Paul for good morning good after.

Everyone at least an update you up several important pipeline advances at sanofi. What's particularly striking is that these have all occurred since we met a capital markets day which remind you one or two months ago. It speaks to an R&D organization that is gaining real momentum as we deliver with Pace on our new strategic framework at sanofi are indeed.

Bill States, I wish to share concern our brain penetrate BTK inhibitor 1684 Ms. Do Fix-It our best in disease antibody for type two inflammatory diseases and wage recently acquired engineered interleukin-2 molecule. 47074 email oncology. I'll start with dtk is the saying goes. I don't like the issue is the favorite among my children where in this case the molecules are the snow people portfolio are my children, but if I had to pick one item to highlight, it would be the positive proof of concept with are failing brakes BTK inhibitor 168, which is really tremendous news for us.

We spent some time at a capital markets day explaining why we believe the profile this oral small-molecule could position it to be the best in disease treatment option for patients across the multiple sclerosis Spectrum. Well the new data we haven't had absolutely support our huge excitement. Let me remind you of the concept here.

So

What is it that makes our BTK inhibitor different first when you look at B, TK, we know from Human genetics that BTK is required for B cells to function second. We know practical studies that B cells are an important Target for treating Ms. With an oral drug like 1 6 8 we can shut off but not kill the wiesel's we think that I am waiting wiesel's is preferable. So we do not kill the details. We just put them to sleep for a while this contrasts with the potent piece of the pleading agents such as ocrevus rituximab over to this point of differentiation could potentially be highly important in clinical practice of a patient developed an infection while on treatment and you need their antibody response to bounce back quickly.

So you may say to me. Well John there are other than the others and development and some are three. However, I would remind you that 1 6 8 has an advantage among more advanced.

Kate hinders because it crosses the blood-brain barrier. Remember that we established the CNS exposure in phase one with receptor occupancy and CNS pharmacology studies.

That brings me them to the second key mechanism for BTK in addition to its expression in B cells. BTK is also expressed in Resident inflammatory cells in the brain microglia growing evidence suggests that these microglial cells are responsible for the persistent inflammation in the brains of Ms. Patients particularly in Progressive forms of disease find hitting BTK. We can quiet the microglia as a second point of intervention in addition to silencing B cells in both the periphery and in the CNS, hen suspect to improve upon the efficacy of other BTK Inhibitors that are not impenetrable.

The final point of differentiation and this is also hugely important is that one six eight appears to be an exceptionally selective inhibitor. And as a consequence we did not see in fact, the one the off-target safety issues experienced by some competitor molecules. So the wonderful news today is that our hypothesis is supported by the results of the things to POC data and relaxing. Yes. I'm limited in what I can disclose today but suffice to say we will we did need the primary endpoint which was a reduction in the number of new gal illenium enhancing representative reasons at 12 weeks as detected by MRI additional. He's secondary brain Imaging studies also show promising results.

The candy out. Of course, is that these Imaging endpoints our surrogate markers?

What the results give us the confidence to go forward and we have pulled the trigger on the initiation now of our phase 3 trial program, which we expect to start around mid-year month in addition to meeting the primary endpoint. The safety profile is consistent with what we saw on phase one suggesting it very well tolerated medicine importantly no patients discontinued treatment due to Adverse Events and also currently 95% of those patients eligible have rolled into an open line extension phase and remain on study drug.

Look forward to presenting the full results in an upcoming conference.

As an aside we achieved POC with this molecule. Just one year after we submitted r a n d and we anticipate starting to pay three program less than two years from IAD. So this Thursday the streets are renewed commitment to delivering the emergency where we see the potential to transform the practice of medicine. We will move fast and we will invest to deliver within a space that reflects the urgency the patients feel.

the magnitude of

Medical need is Illustrated. It's like twenty more than 1.2 million Ms. Patients in the USA and u v alone of which roughly one-quarter have Progressive forms of life issues with therapeutic options are few or none.

With the Dual mechanism of our brain penetrate BTK inhibitor with actions, not only peace sells but also a microglia and coupled with his potentially well-tolerated safety profile. I think we have the opportunity to deliver the best in disease molecule across the entire spectrum of Ms. Including relaxing Ms. Primary Progressive and secondary Progressive.

We will now move swiftly with our comprehensive pastry program the data of the proof-of-concept study have defined are precise dose for the pastry studies. And as soon as the bills are packaged at that dose and they shipped the sides will be ready to start.

You also know from the slide that we we using a bungee our own medicine as a comparator in the relaxing Ms. Study, which you can take as a clear signal of our confidence in this molecule in terms of timelines where your target regulatory submissions in the 2024 to 2025 timeframe beginning with relapsing-remitting season.

You know, so nobody has a proud tradition in Ms. But what you may not know is it to nobody has the number to Patient share globally. So we have the tradition and the expertise to make this potentially transformative drug a major commercial success if we deliver the game-changing profile to which we aspire

Let's move now to the star of the Shinobi portfolio can fix in like twenty one. We talked in December and the capital markets day about the potential for patient benefit wage digital type to meet employment or diseases Beyond atopic dermatitis as and nasal telling poses. We're you mixing is already approved. We have systematically explored wage opportunities for new pics and using machine learning and AI mining public data and leveraging our proprietary real world evidence database and we call Darwin where we have access to around a 450 Jillian live medical records.

In dermatology, we identified three additional indications where we see a strong biological rationale for testing to fix it. And where we have obtained anecdotal evidence and striking Thursday. It's from investigators studies. These indications are chronic spontaneous urticaria and bullous pemphigoid. Each of these is a allergic skin disorder that severely impacts the quality of life for patients in total. We estimate there are over four hundred thousand patients with these conditions in the USA alone would be eligible to receive a biological. So the news today is that we have started registration studies in each of these three indications. The time lines of the studies are relatively rapid and if positive we'd be in a position to bring you to a regulatory approval over the 2021 to 2022.

and Beyond

We're also starting a new study and bronchopulmonary aspergillosis and continue our ongoing programs in COPD. And in you said if they like esophagitis with estimated submissions in 22-24 time bring it back this year. We will obtain data from part A of our people study in Houston affiliate esophagitis, and we also plan to start a public trial and just stop in pediatric patients.

Close here. We really are just at the beginning of our journey with new pic sent with the potential for this medicine to become the standard care across multiple diseases were typed in relation playing the role.

We we just like 22. I'm delighted to welcome synthorx into the synovial the organization and to move their lead asset door 707 into our faith one portfolio off or acquisition of the company closed on January 23rd for those less familiar door. 707 is an elegant solution to the conundrum of Il two Olympic on that has beneficial effects in the immune ecology setting but which unfortunately also results in unacceptable toxicity.

What's in Thornton?

The team Authority 707 was to conjugate irreversibly a single Peg chained to a specific site in il two such as the molecule retains the ability to bind to check data and Gamma trains of the oil to receptor, but not the unwanted Alpha Chang as a consequence for 707 selectively stimulates proliferation of tumor-fighting factor T cells and natural killer cells what it is Floyd's unlike some competitor approaches is the output immediate stimulation of immunosuppressive regulatory T cells off as well as the ioc to stimulate you sent bills. Does avoiding the vascular leakage side effects associated with Native aisle to

Access to Thor 707 provide Shinobi with the basis for multiple ioio combinations including essentially every show we have in our pipeline as well as those of other companies we seat or 707 as an amplifier of the cancer-fighting immune Engine with broad potential for accommodation with other biomolecules.

Examples first we can potentially use this approach to enhance the activity of checkpoint Inhibitors in patients with solid tumors to use the familiar automobile analogy, when you take the breaks up the tumor fighting tears for the checkpoint Inhibitors such as our little unfortunately for many patients. Nothing happens is they do not have sufficient numbers of T cells in their tumors. Essentially. They have no gas in the tank of the immune engine off with or 707. The concept is to expand selectively CD a positive killer T-cells and thereby fuel the immune engine. So the checkpoint Inhibitors have a better chance of working wage to begin the one B portion of the ongoing clinical studies Authority 707 very soon where this non Alpha dial two will be combined with pd-1 inhibitors.

A second example about which I'm even more excited is combining 7 to 7 with our emerging Pipeline and T selling Gaithers. These are multi specific antibodies that bring the tumor and T-cell together package you selling killing the tumor adding door 707 should keep the T cells deliberating and help them to survive longer in order to get the job done.

and then

A third and final example arises from the fact that 4707 stimulates impressive increases in NK cells and patients. So a clear near-term opportunities is for us to combine this. With our anti c-38 antibodies to touch the map which works in part by recruiting NK cell to kill myeloma cells together. This combination could potentially bring better efficacy to patients with myeloma.

On top of that. We have an emerging pipeline by specific and multi specific NK selling Gators, which helped bring NK cells into the tumor again, we expect or 7:07 to amplify of activity of our educational engages for both solid and hematologic malignancies.

Any interested time I better move on now, but I hope it's abundantly clear that we're enormously excited about it the most of opportunities this molecule brings and The Wider synthetic platform where I work folio.

I bought a closed now. It's like 23 which shows the rich clinical and Regulatory news flow. We expect in the next twelve months a particular note with respect to first-time new drug approvals. We expect them and it meets this year used to talk to Matt or anti c-38 antibody for myeloma and a complement pathway inhibitor for hemolytic. Anemia. You can see we have a lot to talk about over the period as we build a momentum in our snow pea our needs our new organization. And for this reason I am delighted will be able to bring you much more information in an R&D day that we are organizing in June which Paul will provide more details later. So with that I handed over to John Baptiste, thank you very much on site 25 month. We delivered it takes Olympian deliberations of fourth-quarter held by The Accelerated sales performance or described on the efficiency initiatives.

As a consequence to 4.7%

Treats and self-confident enough to be white rose in excess of twenty percent. We should not deliberate or the cheap despite the downward pressure now goes margin from pricing and mix effects including the bulbs in China or efficiency is clear in both the DNA on the car and the line which declined by 1.4% and 0.7% respectively in the quarter with these predictions were achieved with increased investments in our key growth drivers on in our little bike ride.

There was a line that would like to draw to your attention is other operating income and expense. There are a couple of elements which initial here in the fourth quarter of 2019. We recognize the one-time non-cash income related to a change in France appointment or retention regulation. But we also recall that one of the provisions in our customer sales in vaccine don't Reserve higher rate of the u.s. Passport, you know signal publication. That's why overall on the quarter-hour blue. I was not affected by one time affect. This is a very solid on qualitative divide delivery, which make us confident that we should pursue our margin expansion in 2020.

so

Oh, I'd line reflects our accounting for the original want to turn on the lights here in the quarter increased 241 million versus 65 in Q4 2018 as a collaboration move the country into personality remind you that this figure includes three components ignorant share of the profit and loss of the alliance reimbursement by Santa Fe of commercialization expenses incurred by regeneron on reimbursement by regeneron outside of development cost to break down of these components for the full year. He set out in a new disclosure in our financial statements on a we will provide this on an annual basis going forward.

So moving back to the guy with the tax rate on share count broadly unchanged our business group. I close to 22% in the quarter looking to twenty-twenty. We expect them to keep tax rate to be maintained at around 22% on average business fourth quarter APS was slightly negative reflecting additional impairment charges related to an update Samsung pack for 1.2 billion on $159 million respectively. It's the only payment on the update reflects the continue traveling sales trajectory compared with our expectations. I'm I'm take the total increment into your 22.8 3526 shoes that I was not spending initiatives help emerging to improve by 120 basis points in 2019 27% but we have plenty of opportunity to drive further efficiencies across the organization on we plan to deliver an additional 2 billion of settings by 2022 wage.

both

Extension on this sales growth consequently. We are confident that we are on track to deliver all target of the margin service person by 2020 turn on July 27th. We proposed lifting the dividend to 3:15, which represents the 26th annual increase. The growing dividend is part of our government as you well know since our typical marketing. I'm twenty-four free-cash-flow PPI as defined during the same Capital Market day in December. Well, when I outlined mission to increase this important metric to run six billion by 2022 and increase of around fifty percent since 2018, we're looking at the slide you could conclude long as we have met our objective three years old, but it's not exactly the right reading. I'm certainly thrilled to see the excellent response of our teams to our focus on cash generation because yep,

What would be a good success but I mean they vary.

Of the progress we can achieve but it's achievement. However in 2019 include includes roughly five hundred million of one-time benefits actually partially belong to 20 28, especially earlier than expected flu vaccine collection from customers in the US later Supply your payments in the u.s. Due to a system issue. So please take it into consideration in your model. So we practice for these factors if we get through with a bit approximately approximately 5.5 billion or normalized basis, which is a good performance compared with the prior-year on. Which is well on track to meet out if you do free cash flow Target on 529. So if you met or exceeded each of its financial performance of the 2019 Olympics efficiency on the other delivery of genetic. Yes, I think speak to the new culture developing across the organization.

Looks like thirteen we have stepped out for your guidance for 2029 CTS to grow by around 5% at constant exchange rate. You should note that this compare with the slightly restated back on 590-7029. But the adoption of RS 16 easier will reduce are restoring business by two sets with respect to correct around 1% positive S8 on January average exchange rate. When looking at your models, you should keep in mind that our broad profile during the year will be impacted by several important pictures and Pooja want to dance I'd include have a full year impact from BB in China this film any impact your on your comparison to the first line now in addition to the office you want to do it on 20 billion-euro sales Edwin in the first half as a result of the Zantac recall.

on the upside we expect

Listen to be sent on vaccines on growing efficiency benefits consistent with the objectives V. I like to the Towson so taken together these factors suggest that our gross will be waited to home phone calls. In addition. You should note that we Face a high basis for comparison in the first quarter of 2020 as a result of the strong 22% growth. We reported in China in June 2019 with that I would like to transfer back to Paul. Okay. Thank you. Thank you to John Reed. Maybe just the last couple of comments off in a 2019 has been a year of I think a decisive actions across the portfolio and we are gathering momentum on the growth drivers wage was seeing some momentum in the pipeline. It's a pleasure to spend a you know, a disproportionate amount of time on the science and we hope that going forward as confidence bills and you suck.

Continue to deliver an auto finance.

Told that we can spend even more time on the times with the news flow because that's in in the end what it's all about and we've simplified the GB you structure and we hope that that will turn into an enabler for increasing our momentum further in terms of operational delivery. We will push on in terms of the efficiencies and productivity gains off, you know, we are played out what we think we think we'll get 30% in 2022 and you know, that is what we're aiming for and we all take the measures wage. So to get the last but not least until mentioned it. I think they are indeed a in June I think is June 23rd in London. Hopefully that makes sense given the other events going on around the time and hoped it that's appreciated. We we look forward to spending time with people at that day John be there with his team. You can see the bench strength. You can also get a sense of some of them.

She just going on Beyond interests.

Diseases and other therapeutic areas. I think I'll be really fascinating session well worth attending. So I think with that thanks to the presenters. We have Team here and happy to get into a q-and-a. We will now open the call to your question as a reminder. We would ask you to limit your questions to to.

Thank you. If you wish to ask a question, please press star one on the telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key question comes from line of Palm Isle City. Please ask your question. Yes. Thanks, sir. Good afternoon. Old City two questions, please one for John and one for John Baptiste. Can you juice on 168 tell us where you want to present the data if all things go well and when it comes to some of the side effects that are afflicted your comprised mainly elevated liver enzymes. Can you just confirm that that has not been a feature of the data that you produce so far? I really like you can't go into the data into much detail today, but just on on that. Any any comments you can make and then secondly John Baptiste on cash generation. Thanks for the explanation on the on the six billion in the 100s. But even taking those one-off the way free cap still pretty impressive.

At 5 and 1/2 billion. So can you just remind us where the biggest buckets opportunity are and where your team is focused on improving cash generation coming quarters and years at Santa Fe wage.

So. Thank you for your question. You know, I'll have the BT Ki question to John but you know, we are the most important thing for us now is to make sure that we preserve the Integrity of the data and through its presentation. So, you know starting off on a journey of sharing bits and pieces. I don't think it really helpful to anybody but I understand why you ask in John is try to give as much as possible John. Did you want to add anything else? I think anything just says again, there were no terminations or discontinuations rather in the study all patients completed the full course and of those that are eligible to move on 95% have chosen to move on into the open line extension and are continuing on study drugs. So we've been delighted with what we've seen so often or I can't comment on the particulars of the assessment that will have to wait for the for a conference and in terms of conferences. We'd like to present it off.

Opportunity there are a few conferences coming up, but that's all subject to the the organizers and whether we can sneak into a breakthrough presentation or something like that on short notice.

Yes, Peter, you know typically it's it's a very good response. And you know, I apply things that I've done in the past that living with a team on the also with with our my colleague regular free cash flow meetings really attract. Well, she's going you know, it's it creates a real movie Edition. Everybody understands about cash is very concrete and initiatives are flourishing all over Santa Fe in in New Jersey and portraits everywhere so many buckets. Of course, it's the it's the Improvement in view. I smart spending some time leads to Improvement also in common terms wage goes from two topics. We are improving significantly our cat extent it can be, you know, small things like improving when our suppliers are delivering the good to us dead.

Yeah, so it's really it's a traditional old tracking of of the cash, which is starting its.

Because the beginning of the journey it's very important to us because without the gross we are planning to accelerate like in vaccines like in biologics which are which are products with them longer transformation time in the in the plant is a with inventory with gross. It's very important that we become very skillful in containing our our inventory. We are not good-looking to appear so we have marketing for improvements and we are going to deliver seats Improvement in the next two years.

Thank you next question.

The next question comes from the line of Joe Wilson from Credit Suisse, please ask your question. Thank you. I have one on the multiple sclerosis franchise and one on D pics sent on the multiple choice. I noticed that you've chosen Aubagio with your competitor for your BTK. I wonder if you can tell us how you're thinking about this franchise in that you'll be TK won't come to the market until after Aubagio has gone off patent and then you've also chosen a very tough competitor in the sense that you may have chosen against a what will be a cheap generic at the time that you've launched. So if you could just tell us how you're thinking about the multiple sclerosis franchise really between now and the BTK and how you would manage that transition and my second question is just trying to get a bit of a feel for what you found with your initial D T C and dupixent. I believe you started it towards the end of last year has it lived up to expectations? Yep.

What should we be thinking of in terms of that sort of cost going forwards many. Thanks.

Thanks, Joe, maybe a couple of comments and I'll hand to Bill who who built the version I think so, you'll have a deeper Insight. I think you know, ultimately the the transition is less complex than I think people would imagine if we get to market with the right time the right time line with the right product profile. I think we'll bring something that is fundamentally game-changing in this space and you know, and that's a fact now off the bridge depending on when you have a way where it go we think is manageable and you know retaining the expertise and you can you imagine the people vote medical and Commercial areas want to be involved early. If you look like you're in the right place on the BTK then see no issue with bridging. We always do a banjo

Would have a generic competition in that.

Time frame and you know and you know this we've built that into understanding of the twenty twenty-five b r y objective. So we just think it's more of an opportunity than less but you might want them to that and you want to talk about it BT send Kar do pic sand and although its ability days in terms of what it takes over a period of time invested in DTC in New York. Give some quick highlights on the yeah. Sure. Thank you for calling. Thank you Joe. So as Paul II we have we spent the last eight years building in Ms. Franchise and then John showed on his life. And globally we're number two in market share with the franchise. It has you know, that's taken a lot of work as Paul said the the bridging isn't such a big deal with our perspective every we've gotten excited team. We've got a lot of activity going on in a specialty part of the business as well. So, um, there's plenty to keep people busy, you know to go to the question.

Of using a bajio as the comparator for the BTK we've seen it in recent Ms. Studies that have bought you has been used as

People have compared against Aubagio because it is really in many ways of standard of care in the oral space. It has volt only product that's demonstrated an effect on disability into trials. And for that very reason we are comparing the BTK to that. We have set the bar high but not going to shows the confidence that we have in the brain penetrant BTK of our so it makes perfect sense bother you as a well-tolerated defective product. We believed that 50 k is going to be really become the standard of care in multiple sclerosis. So I think it's a good compared to their regarding fixing DTC. I think I'm trying to perhaps some of the asthma that started more in Earnest last year. We've been conducting DTC specifically television in a d as well. Yep.

And then we believe very effective. It's something that we have in

Continue to invest in going forward. I think you've seen in the important lever. And this is building to be a mega brand and we'll have that presence in in both the indication and it continued in expanding fashion. Thanks Bill. Very good things true next question.

The next question comes from amount of Florence. This is ask you a question.

Good afternoon. Gentlemen, thank you very much for taking my question. Is this from two quick ones? 141 Fortune first off. I knock could you elaborate a bit on uh, when you believe that you should see the contributions from higher volumes, they're white but weeks seems to be more impacted with them as I pull and if you could give us an ID of how do you see the impact on an areal? Could it be the same thing as opposed to other products and last question on China? Maybe if you could tell us if you see any potential disruption on this Theory I am giving the corner of a crisis and then a quick one for John on the Isle thirty-three this year. You will have the proof-of-concept try read out the.

my tities as the Pix and profile

Quite attractive. What do you need to to see in terms of if you can see or or side effect profile tolerance to remove forward with this product off Central how we will position it. Thank you very much.

Thank you for coming to Olivier in the moment just on the disruption. I tried to set up front because you know the you know, we started the year well and we'll making putting Patients First and what we do it is difficult to predict what will happen over the next few weeks.