Q1 2020 Earnings Call
[music].
Ladies and gentlemen.
Thank you for spending by.
Welcome to the Sanofis first quarter tiny tiny earnings conference call.
I'd now like to turn the call over to Phoenix Slusher from Sanofi Investor Relations. Please go ahead Sir.
Thank you good morning, and good afternoon to everyone on the call.
Thank you for joining us to review Sanofi third quarter results.
I hope everyone is safe and remaining healthy during these unprecedented times.
As usual you can find the slides to this call on the investors page of our web site at Sanofi Dotcom.
Moving to slide two I would like to remind you that information presented in this call contain forward looking statement that involve known and unknown risks uncertainties and other factors that may cause actual results to differ materially I refer you to our form 20-F documents on file with the SEC and also our documenting the all budget.
Jim All new vessel for a description of these factors.
With that please advance to slide three.
Our speakers on the call today.
All Hudson Chief Executive Officer.
We'll CIBIL executive Vice President specialty care Sanofi Genzyme.
And John but is this RDR executive Vice President and Chief Financial Officer.
Paul will review the first quarter business performance.
We'll provide an update on the big sell in the quarter and geologist will then review the financials.
After concluding remarks, we will close with the Q and Asian during which we will be joined by the members of the Executive Committee with that I'd like to turn the call over to Paul.
Well good morning, and good afternoon to everybody.
Taker, let's take a moment to look at.
How would dealing with coated 19 as an organization first.
One of them as they were used words is unprecedented and it is certainly a views but these are very complicated times and I think we are responding incredibly.
Incredibly as an organization I couldn't be more proud actually of the response of each and every one of the attorney fees more than a 100000 employees everybody stepped up to the plate everybody's putting the patient at the heart of everything we do despite challenges.
We have clearly like most companies reinvented, how we work to in this Q1.
And strangely that's almost perfectly aligned with what we outlined into play to win strategy meeting.
Back in December and capital markets day, we're fully remote but continue to function recruiting patients for studies, we're delivering on our objectives.
We've let comes from the old behaviors, which has a new CEO in a wonderful organization.
Described as a hidden gem, it's been a privilege to see.
How we've blown away the politics are just focusing on trying to do a very best across the business and included 19.
As for manufacturing and supply, we mobilized our unique strengths and kept 100% although sites operational and leverage our global sourcing in order to avoid any product shortage.
We had careful and meticulous business continuity plan planning, which has allowed us to continue with our studies and enabled our field force to be fully digitally engaged and with physicians and with healthcare professionals in general in fact, just add our own organizations completed over half a million hours of digital training.
Which has been a good use of their time during this crisis almost standards in good stead as we modernize the company going forward.
We've done this whilst offering our gratitude and our support for the safety and effectiveness of over 20000 employees, who work everyday on our industrial sites across the world.
We've added to that a premium so thank them for them for their work in providing these essential medicines through difficult times.
So Kevin NTS allowed everybody in the organization to focus on the behaviors that are essential for our strategy and it's clearly not the setting we would like to have chosen to accelerate the culture change in the company, but we must take advantage of that to do the best for those patients need on medicines now and those that we think we'll need on matters in the future.
So what about our quite right now.
We take on this responsibility to buy totaled 19 point.
By investigating therapies for patients right now now clearly, but kevzara and eyedrops broken momentum to one specifically intended to 590.
Lost they don't form a large part of our future in terms of any benefit from doing this the critical thing was mobilizing the organization to make sure that if they did have some application that they were.
Inventories will build and we were ready to do apart.
We will do our best to protect the public in the future with two vaccines I'll come to those in the moment, but right upfront we're looking for Kevzara.
To work in patients hospitalized wants to be in respiratory complications and we'll get the data on that imminently, whilst it's a long shot is the release, we can do to try and follow the biology and other experiences across the world from investigators.
Also supporting the debate Joe with their solidarity trial. In addition to the two Sanofi sponsored trials evaluating the anti viral effect of hydrochloric win.
So we've offered already 100 million doses to around 50 countries pending at demonstrating that we have an effect.
And last week, we announced that we would partner with luminosity, it's on a home.
Diagnostics located 19, and we hope that could even be available soon as quota for this year why do that well there's a lot of.
Companies and academics working on Kevin 19 testing very few working on at home, we think the new normal in 2021 will require people to be able to tested home if they get symptoms the unsure or they just want to overcome any type of anxiety.
The test that takes somewhere between 530 minutes will enable.
So developing two complementary vaccine approaches.
Is a huge opportunity for organization I want to try and outline and where we are on what it could mean for helping the globe get back to normal and later next year.
Early as I think it was February 18th we announced a collaboration with BARDA on to develop a protein antigen vaccine candidate and in late March we added a second program to develop Ana and more in a vaccine candidate collaboration with translate buyer.
Now there is a lot of activity in the vaccine sector and I think the Whr last count was 76 active tribute 19 vaccine projects.
Let's be really honest very few of the sponsors of the 76 programs have the expertise or the capacity to produce the vaccine as required scale.
Sanofi pasta as one of the world leaders in vaccine is probably one of the very few companies with significant expertise and scale.
Well unprecedented challenges also require us to think even bigger and therefore, we entered into a collaboration with our partner GSK.
An unprecedented alliance of two vaccine Giants and you know it's interesting to partner with what has been on many times a competitor.
But we need to do this together our protein antigen approach is based on Synnex license back to the virus expression platform as the basis for slew block. So its proven in addition to our proven technology and experience will also leverage prior development work on a SaaS vaccine that has demonstrated encouraging immunogenicity in animals GSK.
Thanks for that part will contribute the approved pandemic, so three adjuvant, which they will be able to manufacture at a large scale that in itself is incredibly important.
Existing manufacturing capacity in place for Dave up 600 million doses and looking to double list anytime over a million doses available by mid 2021.
We're planning to initiate clinical studies in Q4, Twentytwenty and incur approval in mid mid to second half of 2021.
Our M&A vaccine approach provides the second shot on goal based on innovative technology with the potential for accelerated development.
Now it doesn't mean interconnect with M&A vaccines faster, but even with significant funding for BARDA is unclear. How soon on the M&A vaccines can be produced at an industrial scale required to protect the public.
Our collaboration partner translate buyer has significant investment in M&A capacity in place today already that can be applied towards the vaccine.
Scaling up from a turn capacity up to 360 million doses by each 120 21.
Target initial clinical studies Q4, 20, aiming for approval in late 21 account stress enough on that point.
The debate has been about vaccines were confident that we will get there there has been enough debate about and base ability to make billions of doses and for the record. We have 10000 people producing over billion doses right now of our own vaccine portfolio. This is not easy to do and we did two incredible standard and I think we're going to play a major part in one of these two of coal.
As if not both to get us back to normal next year.
Let me add to Dupixent.
I've said many times is an absolute privilege to be involved with this madsen even in challenging times.
We have seen incredible performance right across the board.
In Q1 were 130% up 776 million and you know that is almost entirely.
I am driven a bill Seabold will go on later to talk about at Trx, and then be Rx development to give you some confidence in that number.
But that number is in great position.
On a stable business offering absolutely fantastic benefit to patients and it's again, a real cribbage to seek continue to grow.
On a constant exchange rate basis, our sales and business EPS grew by 6.6 to 10 and 15.6% respectively.
About half of our first quarter sales and profit growth was driven by Kevin impact patient structure, concomitant meds and our trusted consumer health plans. We do expect however, most of that to unwind at during quarter two.
Our focus on efficiency is also delivered strongly with Opex down 2.9% versus Q1 29 team. So overall in terms of the fundamentals to take us to where we need to go.
On our commitments posts capital markets day, we're in good shape.
Our new GBM structure delivered in Q1.
We're selling into the new rhythm of course, we've done a lot of it remotely and virtually which again a great learnings efforts going forward specialty care performed particularly strongly led by Dupixent, but we also saw good growth across other key franchises.
In General Medicine, we saw moderation in sales decline, notably in diabetes and vaccines delivered solid growth. Despite a tough comparator from prior year. We can comment on that later consumer health unit, so consumer stocking more than offset the anticipated headwinds.
So, let's go a little bit into specialty care.
Up 31% with growth across the franchises, we expect roughly a 3% three percentage point contribution from cobot overall, given some more detail on that now.
Jason again was the star performer continue to grow well in excess of 100% year on year.
As Bill will describe in the second Dupixent growth was almost entirely due to demand and not related to credit by.
Maybe a word unsold Liza we launched in the US just before the lockdown occurred.
Full launch as expected after the crisis, so we're being.
Appropriately conservative for Don deployment.
Between now and then.
Bandshell was disproportionately affected by table by specialty pharmacies relax restrictions, a little and we're allowing MF patients stackable refill early we would expect this key to this effect to unwind in quality.
Rare disease tends to see order pacing impacting individual quarters and this quarter was no exception also with some contribution from travel time in Europe.
Maybe ill hand to bill because it's important netting to get.
A deeper understanding of why we're confident in where Dupixent is through Q1 and why we're confident in where we go from here as bill over to you.
Thanks, Paul.
You said depicts and performance was strong in Q1, adding again, nearly 100 million euros in sales versus the prior quarter and this was despite the impact from co say co pay assistance programs in the us that typically affect Q1 sales each year.
As you can imagine we've analyzed our 776 Q1 sales performance very carefully for any toby related stocking impact including longer scripts in our assessment is that for Dupixent. The impact is negligible. So im pleased to say that global growth of 130 per se.
Rent versus Q1 2019 reflect underlying demand. This strong global demand was seen across all three main indications delay the asthma nasal polyps and we're also pleased with our ex U.S performance now contributing greater than 20% worldwide to pick on sale.
Obtaining approvals of new indications and widening the addressable age group is implicit in our 10 billion Euro sales goal and we're pleased to report that all key regulatory milestones are on track. The most near term milestone is the FDA action date at the end of May for six to 11 year old.
Now with moderate to severe eylea.
In a moment I will share the data we recently presented from the supporting study looking a little further ahead, we expect the part a read out from the pivotal phase three study and eosinophilic esophagitis in the second or third quarter, followed by the pivotal asthma readout six to 11 year old in the fourth quarter.
And lastly for our line extensions, we discussed last quarter are underway are underway and next slide.
This slide shows the supporting pediatric data I mentioned on the previous slide, which we believe supports to pick the best in class profile.
On April 5th at the Revolutionizing a topic dermatitis virtual conference or Rad, we presented data from our pediatric study in the six to 11 year old group. This data further reinforces dupixent safety profile, which is already established in adults in adolescence.
The children studied in the trial had suffered with AG for most of their life with the majority of their body covered by lesions.
After 16 weeks about three times as many children on Dupixent and topical corticosteroids achieve skin clearance and reduction in per right its or edge compared with topical corticosteroids alone. We believe that data really matters to prescribers and we look forward to the FDA regulatory decision in there.
Age group with a PDUFA date of May 26.
Next slide please.
I know you all will want to hear about how the cobot crisis is impacting the effects and I'll try to address this for you on the next couple of slides here.
Let me, let me remind you that the type two pathway is not involved in viral defense mechanism and the selective blockade a buyout for anti IL 13, which drive the efficacy and safety profile of detect and does not suppress the immune system. Importantly, this is increasingly recognized by age.
CP and recent market research indicates that Dupixent m. away as a preferred systemic option by prescribers in the challenging current environment. The data showing here supports that Cps are comfortable not only to maintain but also to initiate patients on dupixent during the covidien.
Right.
This data refer specifically to 80 therapies.
When you look more broadly across dermatology, others other surveys such as the spirit.
Global insight wave three dermatology report from April 2020.
Shows that dermatologists assessed the risk benefit profile of Dupixent favourably, when compared to type one agent or JAK inhibitors, especially during the Kobe crisis. We believe this is due to depict since differentiated safety profile.
Next slide.
So what does this mean for depicted in the coming month.
This is an unprecedented situation for all of us of forecasting is challenging but I'll share our thinking on the dynamics for Dimmit dupixent in the coming month based on our market research and the data and trends that we've been observing in recent weeks and Dave.
Dupixent total prescriptions have been resilient and there are several factors that give us confidence that this will continue to be the case.
At home administration, and no requirement for lab monitoring our clearly an advantage in the current situation.
Around 80% of dermatologists are extremely comfortable continuing patients on dupixent therapy, the tele medicine.
And we are seeing no change to length of prescriptions. So the trx dynamics are unchanged and not inflated by patient stocking.
Inevitably.
Covance 19 has resulted in slower new patient additions in recent weeks overall, we see about a 60% reduction for in person Doctor visits and this is only partly compensated by increased have tele medicine. This is expected to result in a slower rate.
Of new patient starts importantly, we are still gaining new patients and NBR axes are currently running at 86% of what they were between February 14th and March six reflecting increased confinement levels. So in other words NBR actors are down 14% versus pre.
Confinement levels looking forward, we're confident that patient additions will normalize once patients are being seen more regularly by Cts. So to conclude patients are continuing to receive depicts entering this unprecedented time and as the situation eventually eases weve technic patient starts to normalize all.
Thanks, Bill Thank you very much.
It's incredible I mean, it is a super meds and of course, but to see MB Rx just down what was at 14% versus pre confinement.
Cuba, just released some data that it was minus 42% if I remember correctly on average across therapeutic areas. So dupixent continues to defy.
The the normal thinking testimony to its efficacy and safety profile. So so thats built to given this but for the details let so let's move now to general medicine.
It sounds decline moderated to below 4% and this speaks to the resilience of our portfolio incidence of course chronic therapy is globally.
I would assume we would assume that Jim at so we're about a two percentage point contribution from cobot related buying many establish medicine, so little bit extra stocking.
Diabetes saw year on year decline moderate to 1.2% the lowest level in more than three years and whilst I accepted the may have been some additional buying.
It's great to see that we are starting to see what we outlined at the end of last year would be the beginning of the trough of our business and we can start to think about.
Bottoming out and coming back.
This product showed modest growth outside of China.
And of course was impacted by the BBP come to this in a moment.
And looking ahead, we expect image rebuild to reverse in Q2 as Sean but piece will discuss later.
We also made good progress on our play to win strategy streamlining and simplifying our portfolio through divestment of separate Phil on the restructuring.
The problem agreement, which was executed.
Maybe a little more detail on China.
Overall sales declined 14% impacted by BBP.
So let's start with the BBP impact as we guided you Publix inoperable family sales declined as a consequence of GBP by 50%, 54% and 33% in the quarter at constant exchange rate.
The good news. This is really important I think the good news with the volume uplift. We predicted is materializing public some capital shipments were up 69%. Despite the very tough base and what was a high Q1 in 2019.
Encouraging, especially as we look into next year in price impacts that will wash out.
Kevin impacts in China, as the mix chronic disease treatments up strongly on longer prescriptions and patient stockpiled ore as hospital drugs have been a little bit more negatively affected.
The non dvp part of our China business, including vaccines grew at 15% speaks again to the resilience of the current portfolio.
At the feature of our business in China is building a specialty franchise and it's on track Parliament launched in March two picks and under review a D and additional launches planned this year, including Fabrazyme and outdoors line in rare disease.
Switching gears to vaccines.
Which delivered solid growth despite a tough year on year comparison.
In Q1, we saw growth of 3.7% against exceptionally strong Q1 last year, where sales were up 20% and let's not forget that included a 450 basis point contribution from phasing in Japan. So the 3.7% is just the beginning of we're excited about the rest of the anthrax vaccine.
Marginal impact to pay that almost neutral to be honest as uptick in flu demand was offset predictably by reduction in trouble vaccines as restrictions came into effect.
Overall, very pleased with the performance, which puts vaccines on track to deliver aplin taxing up 33% is China as inventory build up ahead of the reopening a pointer vaccination centers the end of February and seem rapid recovery post lockdown.
And include ready for expected had demand.
Second half based on greater public awareness of vaccination benefits. So there is also a little bit we think maybe an opportunity.
Early or accelerating availability in prison high days for the elderly following and expect to Q2 approval for getting some very positive signals that.
On to consumer health.
So sales up 4.2% and.
This includes approximately a six percentage point contribution from Tobin related pantry loading as customers Trust our over the kennametal is when dealing with the crisis situation.
The main benefit from our customer stocking is seen in the cough and cold and pain category is driven by especially strong demand in Europe, because we don't have the scale of that business in the U.S. and its European driven notably.
The household name brand dollar grant in France.
Q1 performance reflects the anticipated headwinds, including the effect from the zantac voluntary recall in the fall of last year on the portfolio cleanup you won't see on the like for like the unwind as until we get closer to Q3 at Designtex piece.
To provide the promise update on off switch opportunities, we held meetings with the FDA on theology and prominently whilst we can't doubles detailed of course these areas remain somewhat competitive or development plan is on track and there are no changes to the timelines that we previously communicated.
Meanwhile, we continue to transition to a standalone business and we're on track here too remember going back to capital markets day, we set our real focus for consumer health was to unencumber it to put the agility back into it and to be accelerating our growth through the remainder of 2021.
The expectation of being close to or on market growth before the end of year if possible.
With that recap I will hand over to John but just to give the financial update jumped up to.
Okay. Thank you Paul good morning, good afternoon to Youre.
On slide 22, as Paul said, we're going to grow at 6.6% growth in the first quarter around half of it being related to the coded impacts with inventory building and terminals.
If we strip this site sales growth would've been in line with our expectations driven mainly by Dupixent.
We expect to incremental could impact to reverse mainly in the civil quarter.
When we move further down but generally we again delivered and their liberates held by incremental revenue impact on by our efficiency initiatives.
As a consequence b Y grew by around six incorporates a quarter on there will be wide margin increased by 220 basis points.
Similar to sale you should considers a broadly half of the increase in B. Riley margin resulted from the various impact due to the credit cards.
Importantly, we delivered on our savings in the quarter as we continue to work towards our targets of 2 billion savings by Twentytwenty too.
As a result, our DNA on R&D line reflect efficiencies of 2.1% on 4.3% respectively in the quarter.
Among zeros aligned I would rotary Arts insurance operating income and expense on the associate line, most of which increased significantly versus the prior period.
Alright reflects our accounting for the original run monoclonal antibody alliance here I would flow in the quarter increased to 243 million versus 75 million in Q1 29 team.
It's a collaboration further improved profitability.
I remind you so let's figure includes three components or share profitable on low storage interim reimbursement of commercialization expenses incurred by ridge interim on the reimbursement by rich interim of our development costs.
Regarding the extra shared slight increase reflects our equipped to your accounting share for general profit, including a true up in Q1 printing 19 for actual reported results.
Slide 23 takes a closer look at our coastline.
Beginning with gross margin, we saw a decline of 18 basis points at constant exchange rate despite productivity gain on the strong growth of specialty care. So they can was mainly due to price reduction in China on topics on the approval as a result of GBP.
Impact will continue through Twentytwenty.
On Opex, combining a journey on R&D declined by 2.9.
The reduction in expense was driven by sitting from our approach position on smart spending initiatives.
Cobot impact will broadly neutral as some expense reduction was balanced by extract cost associated risk of it.
On slide 24, we delivered.
The increase in free cash flow in the quarter with the help of some facing benefit but also when those divestments.
In total free cash flow more than doubled again, so central you're increasing 18.
Excluding onetime tractors, we continue to make progress against the mid term drivers of free cash flow. We have previously highlighted studies, we increased sales and margin, we improved our working capital and we prioritized investments.
Based on our underlying progress on the change in mindset across the organization I'm increasingly confident we will meet our Cogs between proofreader slow by 50% by 2022.
On slide 25, I want to give you a sense of the likely business dynamics in the second quarter.
Company sales are expected to decline at the low single digit rate versus Q2 2019.
As a first quarter impacts of coffee the reverse.
When we look at this at the first at the level of how different businesses were in pharmaceuticals, we expect to see a reduction of in channel inventory build in.
In vaccines, so recovery in China on global demand for flu vaccine should continue but we will see significant adverse impact from reduced cargo vaccination on the postponement of pediatric recognitions on boosters.
In two cheap we except to see we expect to see significant negative impacts from the unwinding of consumers stockpiling on the reduced consumer traffic and comments.
We also expect to Delever further opex efficiency through too.
The net impact if we take the first on second quarters together.
Is that we expect our first half performance to be on track to achieve our full year guidance.
My last slide I confirm our full year guidance for Twentytwenty business appears to grew by around 5% or TR.
The impact of Forex is expected to be negated by minus one to minus 2% based on April ever exits and great.
Finally, I would like to say that we remain confident on delivering for financial targets that we set out at our capital market.
We've got a return to call back to coal.
So thank you John that test I think I think we are adding Q1, we do expect it some of its unwinding Q2, we will be on track to deliver our guidance are doing anybody to to not fully appreciate that.
So it can moments like this that we have to stand back and take a look at our entire portfolio and see how we're positioned to because this is not clearly a short term event and it will move through Twentytwenty Ronan will play a part there as you know so just taking a quick look I mean, we we have a portfolio.
Its diverse and also resilient with opportunity to deal with this isn't just about is keeping moving in challenging times. This is about making sure. We have the right balance at the same time like I said earlier, it's not the way I would have liked to have learned that but it's clear that we have.
The capabilities the skills and the people to execute on our strategy.
I would also add the speed element, which is we're going to keep after things return to some type of normal I think will be an advantage because of the we have a background of entrepreneurial.
DNA that I think is unique and how to replicate in other places.
Depiction of course in specialty is going to be the pella delivered major benefit across arranges inflammatory mediated diseases diseases.
And I think bill mentioned without suppressing the immune system. While start was always the case, it's going to become an increasingly more competitive advantage.
Given the new entrants that Tom make that claim.
We have also kevzara and we would love to see some benefit.
Again to remind everybody we've increased the manufacturing so that would there have to studies readout positively.
We haven't built into our financial modeling, but we certainly would love to play a part in helping patients suffered cap.
Ask a jen Matt we have this broad range of chronic disease treatments and a global portfolio essential.
Which will help lift the standard of care in emerging countries and we think we'll be essential.
And vaccines, what can I say, a world leader with a differentiated free portfolio and we're leveraging our know how and manufacturing capacity.
Repeated enough our ability to manufacture at scale will ultimately be the winning criteria to who can help the most.
People, when we actually come to delivering vaccines.
Consumer well, we supplied the medicines needed by patients to cope with the mild symptoms are set them on for example dollar from.
And as and when this pandemic eventually subsides, we think ADVATE compelling strategy right across each of our Gpus, which is why we set them up display.
Dupixent is really a great example, it shows it's critical to understand the driver pathways and disease and our unique understanding of T. Two biology allows a precise intervention, we do not tradeoff efficacy and safety.
So I just want to move a little bit to to the BTK. You know we hosted a call yesterday first time for us to do something on that scale. We've put it out that is present, some bottom scientific reflection on our phase two data NMS, but the BTK onesix eight but over a thousand people connect.
Just shows us when we moved towards these new tools courageously.
You know we can move incredibly quickly.
We also know add that we think we have this unique unique dual mechanism of action.
Not only just on the periphery, but inside the CNS nothing we went a long way to demonstrating that yesterday of course, we have to have the phase three programs and we'll have somewhere in the region of 4000 patients involved in those and that's going to be significant itself. There was an expression used for those that were on the call yesterday.
That this may end up being best in disease, not just best.
In class and we can see that being the real possibility.
After even a short period of time, and 90% reduction and lesions phase to the for phase three data looks good I think we will be mold and competitive for the injectable infused anti Cdtwenty is we know almost without exception that when efficacy is as good as patients will always choose or.
How BTK I wont sixeight potentially impact cymbeline mechanism of touched on this a little bit, but I think we have a chance to go after.
In the first real treatment truly effective in progressive forms of the disease and more to follow on that.
So I think perhaps I'll need to just a little bit of pipeline momentum.
To finish my last slide.
There was excellent momentum building in R&D can feel it at the conversations I can see why we're accelerating.
And we've just done already but we delivered on our promise with the PUC data for the P.T.K.
We have delivered the virtual presentation of our pediatric dupixent data and of course, the Soc Liza U.S. approval on in the upcoming quarter, you can expect multiple approvals across specialty care and vaccines lookout in particular, the dupixent in pediatric vehicles and the expansion of our differentiated Cree portfolio in Europe.
In the EU.
So please.
We also expect several important pivotal trial readouts, including the our team of study for some pizza and the other include cost todays alpha in palm and submit them up in basal cell carcinoma.
By way of and final word I'm looking forward to our R&D day events on June 23rd where you know the headline should be nice unclear for everybody. We aim to tell you what makes Sanofi R&D unique.
It will be a virtual event of course because of what we face.
But I think once again, an opportunity to show you some of our bench strength of some of our science to get connected to more people from R&D because of the virtue of being virtual and we're already become increasingly more proud of what theyre working on.
So to close the message you've heard today is I think a clear one we're absolutely executing on our play to win strategy, we're taking a leadership position in managing in combating the cobot pandemic, we are on track to deliver our financial targets for Twentytwenty.
Beyond that with that Felix over to you to start the QNX.
Thank you Paul.
We will now open the call to your question.
As a reminder, we would ask you to limit your questions to each.
Thank you operator.
We will now begin the question and answer session anyone who wishes to ask a question. The press Star then one under touched on telecom.
Hematological furniture vendor. Thank you.
Thank you mr. him with yourself from the question can you give me per store to.
Participants on requested to Usone handset asking your question.
Anyone that has a question superstar and one at this time.
First question from at home is from the lineup Graham Parry from Bank of America. Please go ahead.
Great. Thanks for taking my questions and sufficiency on vaccines related to the fact that you're preparing fleet capacity at for a second half increasing demand can you help quantify that's a little bit similar sort of step up do you think you got more kind of level of capacity expansion and can you perhaps engage in for this.
20 2021 season.
Then secondly on your David vaccine and the solves one vaccines that were originally developed state was targeting spike protein.
Let's see some in vitro and animal and evidence of fat antibody in G. store vaccine induced enhancement and that's what we see a risk sanofi familiar with from the Danny vaccine. So can you just talk us through in those caveats programs at what it is you are actually doing too and avoid and hands for tissue sample animals.
I will say you're going to be having to provides regulators et cetera. Thank you.
Thank you Graham appreciated.
I'm going to hand to David just may be on your first question about.
Our capacity to deal with perhaps increase in flu and 2021.
I think it's probably be easy to say that were not over sharing because it creates a competitive situation David may feel comfortable adding a little bit more but I wouldn't go there and then David.
If you could reflect to bid on the saws learning and and what perhaps about the vaccine induced enhancement piece.
Yeah, Thanks say Graham.
On the flu capacity. So we have ordered more eggs for this season, because we anticipated that the market is going to growth and that's actually turning out there to have been a very good decision. So it gives us some leeway even on all eight base. The vaccine and then we have also short term some upside.
On a flu blog.
We are limited only by the filling capacity. So this means that we think mid term.
The flu market is actually also going to increase probably substantially because you really want to prevent.
People are having.
Hello.
While you have Kobe still circulating, especially in the winter months because these once they start to overlap that becomes very dangerous and it's going to fill up the hospital, we were kind of escaping the flu season on the Cobiz now in Europe and in United States that we just came out of the flu season. That's why the healthcare services has not both is there but for the.
For the next winter, that's going to be a significant issue.
On your second question on cover that the forest vaccine. The 80 effect is in effect that you can see potentially with any vaccine. So I think all the companies will have to whats right for that that they are of course, the discussions with regulators on going on this one.
Okay. Thank you David.
Next question goods.
Our next question from Oh lineup will for Boxcar comes with Morgan. Please go ahead.
Hi, Thanks for taking my question may be a in a sort of question on packing capacity system I think into the U.S. at market 169 million stated the vaccine a ship.
Do you have any idea how many actually getting to patients in ATDC seems to think has said that patient to getting vaccinated. So is there a potential uplift from more people actually taking on what is already in the in the market place from you and and others.
And second question just on consumer.
And just thinking about continued demand we see flu season.
Generate.
Their consumer businesses.
During that ability, particularly coking coal, but but other things like that and then Dave Kistler, just your 14 actually.
It is a bit of the pilots that could this be a benefit for from may through the rest of this year as well thanks very much.
Okay, Richard Thank you so much.
David to use Gan on the capacity and the doses that perhaps and still in the system and not been used on whether thats still ask whether they're still in play.
Yes, Hi, Richard.
You have seen that we have doubled the sales in Q1 and that is clearly in the effect of people having vaccinated longer at more people. In fact, we have seen that there were more shots in arm in the script data around the claims data.
So we expect indeed that this is going to continue for the upcoming flu season. We also see in the summer Southern Hemisphere that we're also seeing an uplift off injection.
Alan Tse see beyond pantry loading do we see any of the.
Momentum continuing.
[noise]. So thanks for the question Richard at this stage, we're not anticipating to see a significant aquilex across the various categories.
There may be one or two very specialist areas. For example in the vitamins in new space, where you might actually have seen a new habit created during the selling prices.
Most of the Odisi products that have seen pantry loading answer.
We described that are our treatment products. So of course, if they're not used for treatment during that period. They will stay in the medicine cabinet. So.
Current projection is that we will see the uplift kind of evaluate over the next quarter or too with no significant.
Just in terms of the seasonality you talk to bounce.
We did see.
Hi, good cough and cold season in January February.
In the US it was not a very good cough cold season in for the manufacturers in Europe on of course, the Moxy will significantly increase customers on could see the corporate epidemic.
Thank you collect next question.
Our next question right on the phone is from the line of vertical content from taking please go ahead.
Hi, there it's piece of adult head from city.
Two questions. Please strategy.
And the picks and the cool you could have some key internal projects you were focused on early this year benchmarking the most important roles incentive fee to the industry.
Defining a go forward structure for gene therapy in rare diseases.
Both in terms of EQT technology going to back and whether you go organic inorganic hybrid wondering if you will be willing to provide an update here.
Combined annual on the size or ability to pursue BD and the current environment and a much quicker for Bill I'm. Currently go wrong, what I think some at least as split for U.S. pharma is roughly 40% commercial 40% Medicare 20% Medicaid just given the importance of dupixent through the Sanofi growth story near term on the risks to the commercial book of business.
It's from rising unemployment could you, perhaps just below that time talking about the relative exposure for dupixent to commercial and just what you're trying to do over to above what you said in your comments to minimize the disruption to future initiations of therapy. Thank you.
Thanks, Peter I'll come to Bill in a moment on that.
As the gene therapy question, Yes, we've said that we would look in those buckets I'll I'll be Frank.
Hi contractual.
Agreement with my previous employer did not allow me to be involved in anything to do with gene therapy until the end of that the very end disturbing beginning in March so.
So we've been accelerating that work now I can play a more apt to grow.
We are starting to get to the decision points on.
How we want to deploy our can you tell you develop excitement and enthusiasm. There's also some very good in house projects that need.
Okay renting.
And some capabilities that need adding.
Our plan is to provide a more detailed look as we get to the half year results, but you have to forgive me I was not allowed really to be involved until just a number weeks ago at built over to you for the.
The commercial book of business, which is higher I think than them Peter was suggesting certainly and then.
What are the implication to the unemployment.
Yes, Peter Thanks for the question and as Paul said it is it a little higher so the Dupixent is really a commercial story for the most part you're looking at.
Over 70% of it is commercial so you know.
Higher than across the rest of the portfolio that we have.
And I think.
Not knowing where unemployment is going and obviously, it's up we see that that is going to have an impact.
Cross.
The industry on depicts and you know the dynamics that you'll see as a.
Shift and patients, perhaps towards Medicaid or health exchange marketplace or any of the uninsured programs now we have in place.
Very strong programs that help patients if they are at any risk of missing doses et cetera, we have strong patient assistance programs et cetera. So we feel that from a coverage of ensuring first of all that patients have access to therapy that work that we're at that we're in good shape I think.
Its a.
At this point too early to tell how many patients are going to end up making that shift and we know it's not a real efficient shift at this point. So if somebody is going from commercial to Medicaid just in general across the industry because of the unemployment it's not an instant it's not an instant effective takes place so that will work.
We'll have a little bit better view of in time.
The comment I would make just in general as.
About depiction of weathering this weathering the storm so to speak as we've seen.
As a real resilient trx is.
Hearing from the physicians they are very.
Comfortable in maintaining and even starting patients on dupixent. During this and I think a lot of that has to do with their broad experience with it today and the strong safety profile. So we think that.
As far as products go during this togut crisis.
We continue to see the strong interest in depicts into numbers are.
Holding up well, we say as I talked about some of the impact on MDR X, but trx is there and other survey work that we're doing are suggesting that physicians are really continuing to turn to this show labelling ill leave it at that.
Thank you Bill and next question.
The next question from a phone is from the line up learn how to play from GBM. Please go ahead.
Hello.
My question.
One on the fixed income on one on sort of recovery more generally firstly I think you mentioned in your Clearvale today, it's still not take full and.
So my question is whether you think that can be more challenging less challenging maintain that momentum.
Then you could get to a propaganda tighter and given the unique.
Thank you compete.
And then secondly, and yes that is geographic differences and the way that any parts of their business.
The contract like John Thanks.
Okay. Thank you. Thank you Laura.
So maybe bellatrix, a stab I mean it might my.
Then threats you did the.
Depictions resilience is is very specific it is.
It is easy to initiate and there's a high degree of confidence leased and pulmonologists setting the competitive set.
It's a little bit more complicated to get started so there is a high degree of comfort and initiating with with Dupixent I think the.
I think the additional thing to consider is what is going you know I'm going to be liked because most of these offices that plan you know to entry year migrations to a blend the telemedicine and face to face to maximize capacity.
You know there rushing to that now and I I wonder whether the new norm for.
For medicines like Dupixent and beyond have an opportunity to access a much greater eligible population than they would have done pre because of the leverage of digital tools.
Bill joint or make any initial comment or look at any geographical differences.
No look regarding with asthma we.
We've seen that.
There's been more continued patient visits to Pulmonologists office. During this time, we think that a little got coming out of this and through this the profile of depictions really what is going to continue to make it a product for physicians to turn to so now that competitive dynamic still going to be it.
There should pick them, we think as the best profile in the space. So I think that I think that it is just going to be can business as usual from a competition perspective and.
But pulmonologists seems to be a little bit further ahead than dermatology in maintaining office visits.
As the juggling the them just mode while wides.
Sort of look you know it is really very much dependent on the type of restrictions that are being imposed listed on what time scale. You know, we're seeing you trying to come back consult to come back quite strongly in general.
But it's not 100% back it's continuing to add opportunity everyday and open up more places I didn't think where any difference in terms of the scale of that opening up I.
I don't think we've had any.
Medicine that is disproportionately scepter geographically versus the more we expect them to achieve.
I am optimistic the when we come back to new normal we'll have more opportunity in it for patients eligible patients to get access to the right and that's something Dupixent will sit.
As a leader in that group next question.
Our next question from the homes from the line offline tested us from Societe Generale. Please go ahead.
Good afternoon. So office this from so citizen Hot two quick questions.
First of all on the on your clinical trial program and could you tell us if the trials, which are expected to readout h. too are still on track or if you make appearance from delay understanding youre emotionally our portfolio or youre cancer I prefer not to lead the.
Sales and my second question, maybe for somebody is just.
Just to double check regarding your for your guidance and do we have to understand software to the softer Q2 that too.
I like it in your slides do you anticipate a kind of her recovery in Q3, and then kind of back to normal in Q4, just to double checked. Thank you.
Okay. Thank you flow wrong, So John Reid, maybe you could give an update on.
Sort of regulatory milestones and whether they have moved or not and what are what we're doing to deploy broken the cobot studies on our and the ongoing studies.
Yeah, Thanks, Paul and thanks for until the question.
Well I would say you have this has been sort of certainly a moment of pride for me as the head of R&D to see our team has stepped up our clinical development team has done a heroic job to both start randomized clinical trials for purposes of exploring drug refurbishing opportunities for combining cobot night.
Team as well as to keep patients on study, where a pipeline molecules are concerned and ill just give some examples first I would mention the speed with which the clinical development in ops team have executed on the Cobot 19 studies.
They've started three randomized clinical trials, one for kids or two per hydrochloric with record speed from.
Concept the first patient randomized can you just three weeks.
Then the second with respect to the ongoing pipeline, we've been using a variety of digital tools and adopting new ways of working and our team have managed to keep more than 90% of patients on study and they've managed to come to your recruiting patients to ongoing studies the method used.
To achieve this progress of course of included there's been a diversity of thing, but they have included direct to patient shipping of investigational products organizing in home infusion Barbie drugs to avoid visits to medical centers using tele medicine per patient assessment conducting site visits virtually using video conferencing.
Conducting remote site inspections using smart glasses.
And just shifting with agility to clinical sites located in geographies that are less impacted by the pipeline.
I'd also say that supplying the trials with investigational product.
We've managed to keep our CMC teams working on site.
And thanks to their heroic efforts by the CMC team knows Sanofi studies have suffered any interruption of tree investigational product supply or drug supply chain staff has also worked overtime to package label and successfully ship the products to good study so altogether.
You know, we're we're in pretty good shape. There are some studies, where the ability to recruit new patients has been slowed but with few exceptions, we're on track to labor.
The programs that Weve, featuring a capital market days.
Paul if we have time I could give their view of the milestones with first quarter in terms of their pipelines progress.
Yeah, I think you know you Mike I think if I remember correctly. The question also include the Fitusiran.
Component, maybe you could just mentioned weather act on that.
Yeah. So so in hematology produce Ram we have for ongoing phase three studies to those are now fully enrolled the other two were very close to being rolled we're down to just a handful of patients I think it's two for one in April the other something like that.
Team have done.
Pushing that forward.
With dipped below one we have.
The study is 85% moving into the phase three is 85% recruited.
We.
Have not yet started treating patients would be investigational product, we're extending the run in period, where you establish a baseline annualized bleeding rate before starting the new therapy because of the of the co. Good pandemic, we've decided to postpone there by a couple of months, we hope to be.
The dosing patients who have already been randomized in liquidity to the study by a middle of the year and I would also say with cutting your team lever on hematology and giaimo or complement pathway him antibody as who timberland they'd be allay has been submitted for coal to go.
He was either hemolytic anemia with the FDA. It's also been filed in Japan, and we also have achieved the recruitment fully we fully recruited the follow on randomized study.
For that same indication. So you know overall hematology, we're progressing well.
Thanks, John So when we're not really expecting you to Miss any of our pre stated deadlines, where and if the situation continues and we slowed down little using the new tools, we expect to accelerate.
Chip to be on or ahead.
I think John used the word heroic in is indeed that I think between our industrial Affairs group and our ongoing clinical development team, it's really quite exceptional.
Giambattista I think there was a part of question P., which was around the unwinding in Q2 and trying to describe the full quarters.
Due on to make a quick comment.
Yeah, Yeah, Florence. Thank you very much I should quit two aspects. So first that we have any critical portfolio in kind ofi to maybe get a these crazy because if we see that we ever.
Very good response.
And your rights mix too for the situation. So simple one is a mindset for proficiency studies no weld rooted in kind of him to fit to win plan, but give us flexibility to reinvest.
For accelerated growth or to modulate.
The way, we navigate with our Opex savings so yes.
Don't have ER I mean fight a more than you what will be the context in its true, but what I'm convinced that the teams are really in the right mindset to maybe get by this crisis hung up on meet expectations, we're expecting our guidance.
Thank you. Thank you.
Thank you.
Next question.
The next question from the lineup Skyler from Cowen. Please go ahead.
Thank you I've two questions.
What specifically is your mark manufacturing capacity for a cab Sarah in units and how quickly can this be delivered should trial show benefit. So that's the first question.
And second question, Paul superb marketing is one of your many skills. How do you assess the effectiveness of virtual marketing versus face to face marketing for instance is virtual marketing only half is likely to generate a prescription three quarters is likely and how does it differ for a new product versus.
An existing product thank you.
Okay. Thank you.
Felipe is a is fully connected.
I think we have a question around.
Kevzara manufacturing again, I'm not quite sure how much we share, but if you on the line would you like to answer.
Okay. So feel really does not on the line. Okay I apologize so you know.
We we had worked extensively of course, providing enough treatment after the rheumatoid arthritis population and beyond and.
No. We finished the medicine here in Europe, taking drug substance from us.
We.
Stepped up as soon as we knew.
This may or may not play a part so.
But took all of manufacturing to the maximum now this is the biologic of tools. So we would be in the hundreds of thousands of people it could be treated.
I'm not in the millions, but we would be in a good position I think.
For critical patients if that is what indeed, the evidence as well have to wait and see what the outcomes Odyssey, whether we have.
The right efficacy and then look at the type of patient and know what the needs.
The whether we can match the needs.
And your other question is into one Steve about about marketing and digital marketing.
So the two aspects for it I guess the first one is you.
You know we.
There was always done under appreciation for digital marketing.
But.
It was basically on both sides remember physicians will not always craving. It at least we thought in that moment too and I think we all sort of come around to realize in this new world that the appetite for healthcare professionals to get information digitally has also increased increase exponentially I think we've always weight.
As if thats the right word digital contact at a lower.
Impact ratio to the faced base that we all believe that the ideal is a blended.
Mixture of high touch what we call I touch and high Tech digital and face to face every time, we should allow us by the way. If these credits just stick with us to be more efficient to lower the overall cost to serve a healthcare professional or to broaden our reach at the same cost and I think were optimistic about what that could mean because deliver.
And then I'll be a why objective and yet still maintaining a world class service to those that require from us.
Okay. So next question.
Our next question from nickel is from people will turn from Morgan Stanley. Please go ahead.
Yes. Thank you not taking my questions have a couple that's on the get better location and the impact on the consumer has kept pace. So we're seeing a consider a consolidation in consumer healthcare and are seeing us in lining up so conglomerates.
Would you consider acquisitions in this space and basket I kind of needless to say.
Hi acquisition.
Would you consider that this would be to disappear.
The context, where you are causing LG business and ER and given the need you have to two investments on the pipeline.
As someone question is on the operating costs, there was that assumption that because of 19 situation.
Down then covenants actions will lead to some level of cost savings across organization.
So based on what Youre seeing so how do you expect just listening to the material.
And that was the areas.
Okay.
I've had to increases in London, Oneq and Thats, we may be overlooking and the you got an aspect of your project the city that could you accelerated delayed a eventually come so because of covered 19.
Okay I missed the last question T., but I'm sorry, I you can he lost some of your question.
Okay, sorry that I missed it wasn't just operating costs.
And Vicki, but you could impact potential on the because 19 I just looked on Sixtym sauna, Okay, and and Dan you put the show.
Okay, because if they need that's got missing okay our agenda.
So so maybe I'll just give you a short shop answer to the consumer health question, you sort of asked that I'm sort of self I think.
You know, we outlined that capital markets day that we that we wanted to unencumber the business make a standalone.
We'll see back into it that it makes it sound decisions and to move at a higher speed with an ambition of getting.
Back to and then beyond industry growth rates hopefully by the end of the year.
I think our focus is really on that and I think you know that takes enough energy and we think we have enough in hand add to do that and to get to a very good place.
It's from a taste in terms of Opex opportunities savings.
Anything you want to add you didnt mention earlier.
Yes.
Just kind of hot summer colors to what I was saying.
We have of course some less.
Costco because of of traveling or maybe in country or because the sales reps are not to troubling either.
But it's a bulk of the cost if you'll bear on by the way the first quarter Hilado power for instance, a plane competition was already.
Her with I would to me personally to become sold so.
On the towards balance by extra cost of trials mask, a reimbursement to employees or to go through to go to work.
Hello to care for their children to be a to be looked after so there were plus and minuses, but it's not really a it's not for the materials in the Q1 looking forward I think to your point is very interesting because I see a lot of opportunities to boost our plan to achieves a 2 billion.
By Twentytwenty too and that's what we are working on.
Thank you so mathias.
Next question Phil.
Our next question from definitely some Jeffrey apart from STB, Inc. Please go ahead.
Thank you very much for taking the question a couple first on Dupixent very strong quarter congratulations.
But perhaps a few utilizing the MPLX. So could you tell us how you were tracking to your 10 billion dollar target 10 billion Euro target given that trajectory and then secondly on the R&D side.
Just a couple of logistics questions ill go to three stilt ongoing in asthma second.
The thought about completely or for that matter Tim on that.
Recall that given what we're learning about the inflammatory syndrome. Thanks.
Okay. Thank you, Jeff So John will continue on that can't believe used to Tim them up.
Yes.
I'll take a stab at the because for Bill you know the we haven't drawn a direct line from Q1 M.B. Rx to 10 billion I think what we would say is the at 776 misread <unk> million in the 12 quarter from launch I think you know anybody would have to accept.
This is an outstanding performance and you know if we continue to mass, albeit a slightly lower rate right now, but better than industry in better than almost any other medicine and be Rx trx, our strong growth you've seen the data already in April.
Got it is also holding up so you know or 10 billion aspiration is built on that of course, and having a best in class profile safety and efficacy, but adding the data to that as you can see any indications.
We have something like 89 launches of indications or in countries.
Over the next 12 months so.
Very competent remain very confident in that ambition.
For the Io 33.
I think you question is it it's in the pipeline update you know of course, we've explored it in a few indications I think as we sit here and looking at CPD. There are very few.
Biologics Oh, no biologic sincere PD.
The team is taking because it's such a heterogeneous patient populations, taking a look at.
Some sub big data to to decide when and if we push on because we can add some value and I think if we can add some clinical value we will and that's that's in the works.
Bill anything to add to those two points.
Now regarding the Dupixent, absolutely confident in the ambition of this product.
Great.
Yeah, good well, Phil I mean, they maybe the best signal statement, we've heard a whole cool. Thank you for that a me too.
John capabilities to Tim them out good 19.
Yeah, Jeff. Thanks for the question. The you know I think more and more others and appreciation that there's a vascular component.
To the Kobin story when at least it comes to patients who are experiencing even more severe.
In terms of the of the path allergy.
Whether those agents would be the right solution. However, I think.
It is to be debated.
At least.
What little I think the signing of a community knows about it.
And then thinking about them specific mechanisms have kept levy and supremo mab enjoyable.
We don't we don't see necessarily a great fit there.
So we haven't just we were not planning to conduct refurbishing studies at this point.
I think maybe a broader question is even for the or for the general medicines Broaddrick.
We had better antithrombotic, whether some of those might be considered in the medical management of some of these patients given the.
The emerging appreciation for the vascular component.
Great. Thanks, very much pressure.
Yeah no. Thank you thanks, Jeff and next question.
Your next question from a phone is from the line of five tier two Goldman Sachs. Please go ahead.
Hi, Good afternoon, two questions. Please up before I know you crack of spoke to you guys are being kind of big conservative in talking about the flu capacity for the euro.
Paul if you could give us some magnitude or if the demand reports there could you to 50% more doors is could you doubled your kind of number to prove vaccine you Sally beauty getting a normal year or any kind of magnitude to be has four ish.
And then secondly, pulling your opening remarks, you described the cats are how fortunate the as a long short.
And this is recovered 19, obviously just wondering if that is based on any kind of early data you might have seen or was it just being cautious given you haven't done for the kind of phase one for kept all right in this indication. Thank you.
Thank you.
David why didn't mean taken another crack at flu capacity for the season.
Well I gave you might have missed the beginning of the question of Graham. It goes very much in the same direction and we do not give details on the blue capacity will be cafes that we do have an upside.
On a base, but also of course on flu block.
The only limiting currently block that we have to further stated outpaced the short term b filling that capacity, we're working on Dave and then midterm. We have of course, a more capacity, especially also coming from that because a lot. But we're also opening up and you vaccine plan for a prison high dose next year in the United States on that.
Factory can produce for the whole world, but we don't give details surveys for competitive reasons.
As for your second point incomes are up maybe it's just word choice I mean, I tried to say from that.
We are working on vaccines, because we think that is very much within our control trying medicines that have previously approved for different indications you know is always going to be a little bit serendipitous.
I think you have to accept that.
We watch like everybody else, the emerging publications and the data and the anecdotes and they experiences and you know as we already have hydroxy chloroquine in the mix you know I can tell you that that you know one day, we get some encouraging news another day, we don't.
All I can say is as a team we try not to speculate.
And then hopefully really eminent we'll get some type of.
Readout from our own studies and no better way, we stand you know I I can tell you. We you know how much we'd love to have an effect right and but I'm just pragmatic. So you know it's a it's a fingers crossed situation.
I'm sure is for all the Iosix manufacture to try and workout what we can do but no. We are we're just waiting for the evidence and then and then you know I've said earlier, where rise to the challenge of manufacturing of both.
Back to nail hydroxy, torgrim, and and Kevzara and see where we can get too.
Okay next next question.
Your next question is from the lineups and Shutler far from Barclays Capital. Please go ahead.
Thank you for taking my question. The first one the wouldn't be push on the taste.
And regarding Opex I remember you indicated guiding us.
That's for.
One person to Opex decreased to four this year next year tools in Q1, you'll realize minus 2.9% and you alluded to extricating, Romania realized in the future so easy.
All this sri persons or new direction, we have to take into account only yearly Daisy. This is my first question and the second question, we got you regarding and.
Well he does vaccine capacity.
He up to 6 million doses, you're ready to too.
Is it on top of your global are kept equal or you'll vaccine business or would it be that you're going to some of the although vaccine.
Anything on top of how do you plan to.
He is acting manufacturing a weak flu a increasing.
From a h. to and from the so he has after.
Thank you.
Okay.
Thank you very much as shown that teeth or Opex management I think it's worth.
You know restating, our philosophy on that and also that we take the opportunity where we can too.
Investing growth opportunities, but the from the fundamental underlying maturity of cost management is essential to our long term equity stories to.
From a testament to comment.
Yes.
Here's something like 40 for Christian to clarify completely.
Before between we had to one person growth plus 1% growth guidance on I've, a rich or four or for the years.
To come but this is he has been dropped with our seem to capital market day, Oh, We just said, but we would be delivering on our 2 billion euros savings by Twentytwenty too.
So is the 2.9 Petrus seeing in Q1, a trend but not at all.
So Paul let's just explain.
We are very happy to reinvest so say being sent to accelerate our growth engines in there beyond dupixent.
On behind a vaccine each time, we count so no it's not a trend on we will be modulate tea.
Our I'll spend a but we will be delivering on I was having to make sure. We can show growth on Medicaid.
Any of them down up the other market.
Thank you.
Hi, David I'll I'll come to you and just one observation for me as being a relative newcomer to vaccines is interesting how there were a lot of questions around the opportunity cost of manufacturing Kevin on team vaccines versus flu. We don't thing. That's the case was there it'll give you more detail.
There are not enough questions about what I said upfront there was 76 vaccines in development and there's almost no capacity.
For those two to do anything meaningful scale, which is why it's so important where we stand and then our relationship with GSK to probably be the only company that can get that significantly David do you want to comment on the the opportunity cost on flu is it rail is it not.
Yeah. Thanks.
Thanks for the question a very good question. So it's not going to cannibalize, our food or capacity why is that and we have a large additional capacity that we can upscale a in a very short amount of time and we're already looking at you know doing that.
Together with our partners.
That's for the recombinant vaccine. So our ambition is to go from the current 100 600 million doses that we have an iron based on U.S. territory to go beyond the 1 billion in 12 months, including also the capacity have with a union in Japan, and then on that.
Messenger and aid in fact Tremblay bio has been working seems quite some time on ups scaling the production process because their first candidate. This on cystic fibrosis, which is inhaled and you need larger amounts of messenger on a on the cystic fibrosis, Kansas Therefore.
For for the vaccine candidates.
They are already producing at underground batches now we're moving to 250 Grand benches and it is assumed that towards the end of year beginning of year. We go kilogram matches and that would allow us to significantly upscale two hundreds of millions of those it. So we are confident that the we will be able to.
Deliver on large scale, we are of course, adding filling and packaging capacity as we speak.
In our internal network, but also investigating possibilities with vmoso.
Thank you David appreciates it okay, maybe the last couple of questions.
Our next question from the phone is on the line of Seamus Fernandez from Guggenheim Securities. Please go ahead.
Oh, thanks, so much for the question so I'm, hoping that on the back inside you can help us understand a little bit of what the.
The fine, suggesting in terms of the durability of immunity.
And then in terms of the efficacy dynamic.
You know, whether we should be thinking more of that that traditional vaccine.
DMR approach is likely to be meaningfully different.
And then the second is really on the BTK. One it's one of the housekeeping question possible could you share the lesion count data, which I think what the secondary endpoint I'm not sure. If that was shared and then Paul just finally, if you could just update us on your business development priorities in terms of and the size of transaction that you've seen.
And just how youre thinking about the current environment.
More or less challenging or or or about the same. Thanks.
Okay. Thank you.
Finishing strongly that Seamus with a number of question so.
David maybe come to on the first two John feel free to add if you'd like to but.
Aspect, some george ability of immunity.
And then likely went up between traditional approach and M&A.
So thanks for the question, it's really a very complex question to answer right now because you're just at the beginning of it having said that I think what we can say is on the recombinant platform the back of ours platform.
We do know weighs on three block of course, which is a registered vaccine based on the platform. We have seen a very good durability. So we hope obviously that it's going to be the case also for the coming with a candidate on messenger and aimed they're our first candidates.
That being developed by another one on CMBS is your ability also looks good but of course, we have to be careful on lender on a there is no commercialized the vaccine so far based on the platform. The platform is clearly very promising there is no died.
We have also as I outlined.
Before the collaboration with translate bio, but we just need to be stay humble and we need to see phase three data and the same applies to the efficacy. So it's too early to tell.
David.
I would say your second part of your question the P.T.K. I.
Hi, lesion counts haven't shared that data yet so we will do in the future they'll be.
Quite a lot of news flow as we go through the next Congresses et cetera, what are the form there and on that.
What I can say, however, as I am I like the enthusiasm in the question you know, we talked about it little bit yesterday, and a little bit in the opening today, but.
You know, we really do you think we're gonna have best in disease, and all of those things, including lesion count will become important you know 4000 patients in phase three studies that you get to see or you know.
So how seriously we intend to go after this.
After BD priorities you.
You know we are as you would imagine active in many fronts. While it is in challenging times from a pandemic.
And it doesn't change our strategic interest in a number of opportunities you know, we'd like to think about adding some cool science to augment to amplify existing pipeline assets on his call. We as recently as yesterday about this so you know will continue to try.
And make progress and.
And deliver that.
You asked me sort of my own level of prioritization. It is more focused on adding to the science.
And earlier in discovery and development than later I think we have enough.
To navigate the next few years and to manage our commitments through 2025, and then some so really building out the pipeline earlier is gonna be and every approaches so surprised but it's just the treat to but.
Maybe last question Felix if you feel we have time, if yes, you're free to stop me there yeah. Okay. Unfortunately, we are approaching the full hour. We know we have a lot of questions still on the line, but operator last question Jade.
Last question from a phone is from the line up anymore capacity I'm from Bernstein. Please go ahead.
I think much taking my questions Bill My point is investing so look a couple for David Please.
Just a little covered 19 vaccine I was one of the adult which approach you think would actually deliver more durable antibody response, either recombinant M&A and then cards that let's begin with X, but it seems like optimizing marni vaccine, there's been a trot an era.
So how our Sanofi and try to they actually approaching this optimization.
Taking a little bit more time than some of your peers for a reason.
And then my second question is just on the trouble vaccine so down 20% in once used just wondering when did you actually start to see the main impact from corporate 19, just trying to get a sense of declines we could expect TQL beyond so any color you could provide the.
You know on what's incorporated into your guidance or travel Alan just antimony for adult boosted the same type of our commentary would be great. Thank you.
So David look certainly going to be asking you to to bring his home on these questions first of all on shore ability again, if you have the.
If you want to recap that but the M&A optimizing is an interesting long.
Hey, you know, particularly when you look you know with the experience in the company's that other than what the opportunity could be for us as a standout even if later.
Yeah. Thanks for your out on the optimizing being a trial and error of course as I said before messenger on a is still young technology in vaccines. So I think there is like in all research a little bit of the trial and error in there and messenger on a itself is not the whole.
Recipe you also need to lift the nanoparticle and that's something that were trying to optimize as we speak. So yes were taking a little bit of time to do that.
Regarding the travel vaccines clearly.
The Q1, the impact was relatively soft because you remember that we do travel restrictions started to hate I would say kind of second week of March.
So clearly Q2 is going to be lower end Q3, now we all don't have a crystal ball when travel is going to start picking up again, that's it's hard to say, but our assumption is that and the upside we see on flu is probably gone that you know compensate for that insights that we.
I have on travel and potentially boosters because people see their doctors less.
If the consignment measures are being you know kind of lower than people can come back and go once either doctors again, then travel on boosters or from historic normalized very quickly at the there might for booster certainly be a catch up opportunity as well like we see already for pediatrics.
Where there's a lot of catch up ongoing already in China. After the opening up again. So so that's where we are so we still think through our guidance of mid to high single digit growth.
Okay.
Thank you. Thank you.
If we have a last question if it's a yet so no I'm so happy to take it was a short on Felix.
Yes, the deflation from Dominic lung from credit Suisse. Please go ahead.
Hello, It's actually Joe Wilson, and it's a broader question what key like I'd like to finish with I'm, just thinking of the legacy Olaf.
Right. If iris do you think and given the fact that you've got an unusual geographic mix, you've got much more exposure to emerging markets and rest of world in some of the other companies.
Do you think as we exit to go through next year, we're going to see we should be thinking of governments with less money, having to be more restrictive and more price pressures I, rather like we had after the financial crisis in.
Yeah Post 2008, 2009, well what do we think of health care is the new military spending and everybody actually wanting to spend more in healthcare and you benefiting thank you.
Well, thanks chair or what a great question.
To finish on a comparison to military spending.
I I can I give you view at this point clearly none of those have a crystal ball on that what I can tell you.
Is that sentiment towards the company at least and perhaps even the industry has changed a little in terms of people come until is relying on those quite heavily.
In terms of trying to find solutions to re purpose medicines to accelerate vaccines. So I think I am I think how we respond that has been a good did manage to shows that you know we are trying to do the right thing. We are purpose driven than we do want to collaborate.
So I think some good will come out of that how that sustains us given what so many countries will be some of them as a difficult.
Economic circumstances, they've done a phase we will see I think we stand of pulled by the value we deliver of all medicines and I think it trying to touch on it earlier, but our portfolio is is a good mix and resiliency and innovation, which we think it's going to play a disproportionately positive growth in returning like.
To normal we think that will still be rewarded so we're confident in our longer term guidance with that thank you to everybody. We confirmed well on track to Twentytwenty, we've been as transparent as we can be about the upsides. We've had some kobin 19, our underlying cost management and delivery of both.
Vaccines and indeed of Dupixent continued.
Continues to impress I think a mix is right and our people are showing themselves in a way that I've never had to actually see before in terms of commitment energy entrepreneurship and tenacity and we're going to make sure that we keep a lot of that to keep moving in doing good things for patients and for those.
Investors. So thanks to all the team and thanks, everybody the dial them without Phoenix will bring it to conclusion.
[noise] like to thank you very much for everyone. Please don't hesitate to a contact the IR team show further question. Thank you.
Operator that come protocol.
All right well congrats on the conference is now over Frankel parts isn't hard core.
Okay. Thanks.
Bye.
Your next few into sustained.
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