Q2 2020 Sanofi SA Earnings Call
Ladies and gentlemen, thank you for standing by.
Welcome to Sanofi seemed testicle into Q2 Twentytwenty fundings.
Well I like to technical other to either Sheffey Johnson from Sanofi Investor Relations. Please go head to Madam.
Thank you.
Good morning, and good afternoon, and good evening to those joining us from Asia to review second quarter results [noise].
As usual you can find the flights to this call. It on the Investor Page Oh website at Sanofi Dot com looks like.
I would like to remind you that information presented in this call contain forward looking statements.
Both known and unknown risks uncertainties and other factors that may cause actual results to differ materially.
I refer you to our form 20-F, <unk> on file with the FTC and also our docking won't always used goods.
For a description of these risk factors.
If you could peak Wolf just light sweet.
Our speakers on the call. It today, a whole lot sent chief Executive Officer.
<unk> Executive Vice President and Chief Financial Officer.
Oh, the review the second quarter business performance after which.
The review the financials.
After concluding remarks, we will close with a <unk> session during which we will be joined by members of the executive committee with that I'd like to check the multiples [noise].
Well good morning, good afternoon.
Everybody. Thank you to eight.
Very happy to have you on the team a leading I also welcome [laughter] 42, so they see.
Let me start by saying that I'm delighted to go performance in Q2, Oh monetization has worked incredibly hard to keep the business running in challenging times, what everybody and ensuring that the supply of medicines to patients continues.
She brought organization focusing keeping up on them and so on the transformation journey.
I'm just going yeah absolutely.
Looking at all potential because I've seen a you know I've seen some of the news this morning I understand.
People are balanced skew and a recognition of the regeneron want all [noise].
Well it is technically importantly, we can talk about it.
A little bit later I do think it's important for everybody to realize that that's been an incredible amount of what's going in to making sure that our transformation continued.
In one of the most challenging times for any company. So I'm proud that I'm also very pleased with how we're executing on what that's going to mean to the future. This company.
So she doesn't have any related trading patterns. This year as opposed to pull on some so they see joining a two to needs to be seen in light of the hope here. Some presenting here. The first topic is that an abuse or the best way of describing all performance.
Well first off sales increased by 2% driven by Dupixent was to let the truly outstanding results growing at double digit rate up a probably quota we're going to multi till later, which is absolutely remarkable perhaps unparalleled in the context of the pandemic.
Our entire especially business has been payer Brazilians and continues to grow.
Clearly, we did experience significant headwinds from cobot seen elsewhere. So when you patient adds to file a procedures and some vaccinations I love it in pharmacy traffic compounded in Q2 by the reversal it because it related stocking we saw in Q1.
We finished June stronger than we started in April and to be bumped up early indicators in July come from the June was not a one off so we're in reasonable shape.
We delivered 9% business EPS growth in the first household 5.4% if you strip out the gain from the revaluation of the Regeneron shares that we retained a one time.
We made continued strong progress on a cost savings target until about two weeks, we'll tell you more about this little bit later.
Cancer remainder of 2020, we remain confident to deliver <unk> full year guidance again that is not something everybody is able to say in Q2, and hence raise our projected business Dps growth target put 20, 26% to 7%, including the effects of the Regeneron a shot reevaluation [noise].
So the financial metrics catch a much of the achievements of course, but not all.
Let me highlight also the significant progress in the transformation about company.
For new appointments to the Executive Committee and they've means Executive Committee is now complete than I believe ready and able to deliver and accelerate the transformation that we're all.
We divested our regeneron stake raising nearly $12 billion to be redeployed.
And we're pleased with how that was executed I should remind everybody again that we had little additional rights beyond the stake in terms of controlled it was simply a financial play and as such we think they revenue could work harder for us elsewhere in the scientific agenda.
We made substantial new investments in opex in facilities and some commitments the how we'll try to school map and it's somebody piece will address was delivering sustainable efficiencies.
We also showcase the potential of a pipeline through as soon as a virtual R&D day, but it's just another moment eight so sort of celebrate some of the hidden gems, which are becoming more than just jams and and b to demonstrate our ability and agility to be able to execute even during a pandemic even completely virtually.
[noise], we keep delivering on that as R&D milestones and we had to face we stopped for all brain penetrant be teekay <unk>, we've got exciting new clinical data on to pick some including a is enough to like a salt to try to us and see if Pee Dee Ann succeeded in relapsed multiple myeloma.
And of course, we entered the clinic for all first in class quite specific to five southern and he mode.
We continue to strengthen our leadership in select therapeutic areas with several transactions this quarter will touch on those a little bit slate. So.
So I want to focus down to pick some was delivered a remarkable performance during the second quarter well on track to deliver all 10 billion plus sales ambition.
Second quarter was strong quarter across all three main indications with 70% growth globally, and we added more than 80 million sales versus the prior quarter and sales annualizing at close to 3.5 billion euros already I, maybe touch on the profile in the next slide in a moment, but you know.
When I look across what I'm seeing from all of the new innovations across the industry in Q2, I mean, you're right in saying that it is the single biggest grow a right across the entire industry in Q2, some you'll try to prove me wrong, but the intent is important for you to know that this medicine is profile it continues to be.
Absolutely outstanding.
[noise] does this mean, we're not affected by the locked down well of course, we work, but our team have worked incredibly hard not only in working with digital and E.
Detailing and measures to try to make sure we get this new patients in.
But also making sure we supposed to patients and the physicians equally.
I know youre eagleeye, the will to spotted a slowdown in sequential growth outside the U.S., but just to be ready specific two factors accounted for this in Europe, we experienced that inventory drawdown, whereas in Japan of course, we have to absorb the 20% price cut as of April.
Let me emphasize we also added new patients during second quarter in Europe, and Japan, So underlying growth will become more visible in coming quarters. When we also expect to get an additional boost from a country launch program with 89 planned launches in Twentytwenty on track and in fact were about 35.
And was 54 to go and feeling very confident about our ability to deploy those.
Oh U.S. launch in pediatric a topic dermatitis is off to a strong start with already over 500 unique prescribers have to do picks.
We achieved an important regulatory milestone in the quota, but from Sanofi, China strategy and for the Dupixent franchise with the approval in idle 80 in China now, it's what five working days I think since the approval and we've had close to 200 patients now well not for me at least in mind.
The standing it's a record you know we except for some patients will have been you know prepped and ready and waiting, but still a very strong leading indicator.
The quarter also marked by several important development milestones.
Milestones, which we expect to support the future growth did you pick some as highlighted on Dupixent R&D event, we're building out the range potential indications in the near term we have an important read out with the results of our pediatric Optima study chewing Council.
So I mentioned earlier, you know there was something a incredible about dupixent and its profile. This the the detail around the U.S. performance. For example is really supports the thought that it continues to make incredible progress in the U.S.. We have continued to add new patients to treatment.
I feel for setup ascribe as rapidly adopted to eat detail and like I mentioned in the period of looked on a more than half the dermatologist indicated that they would be comfortable to prescribe to new patients by Tele medicine.
Now that looked on is easing we're seeing a return to the in office patient visits.
Dermatologists visits are still only 60% to pre cobot levels, though prescribers are adapting to the new situation on in light of our Q2 performance. We're confident that we'll be able to continue to add new patients in the coming months and I think you know kudos to the entire U.S. team and a brand forward and bill civil because we manage.
To continue to make progress in the physician's office, where something some about competition has struggled.
The rebound in EMEA Rx we've seen in June is a leading indicator that supports our thinking for the four weeks ending July 10th MB Rx is still somewhat below the Q on average, but NB Rx trends from early July for the support our confidence that the new patient starts will normalize as the crisis situation begins to ease.
If I turn to Trx Trx grew by 15% over the first quarter with no meaningful impact from the inventory change there was millions of Trx shows we've been successful imitating patients on treatment and this is exactly as we expected I'm reflects dupixent comedian.
Home administration lots of immunosuppression unlocked a requirement of love monitoring.
I'd also remind you of what we discussed in the last quarter. When we surveyed dermatologists they assess the risk benefit profile of Dupixent favorably compared to type one agents or JAK inhibitor has joined the Toby prices with the high levels of treatment satisfaction and dermatology dermatologists willing to prescribed by Tele medicine.
We expect this resilient trend until next to continue even in a second wave.
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I would turn out to the launch of Dupixent in China, which is critical critical step actually for Sanofis pivot to specialty care in China.
Let me stop I recognize an incredible work about team built broken the number of regulatory and commercial records with an approval time to just six months from submission and importantly, a launch just 25 days from approval.
This I'm reliably informed is how the previous record a 50 days for a biologic ICL cosentyx.
With our first prescription written on July the 22nd we are already generating revenue. So let me try and Dimensionalize the dupixent opportunity in China as the first biologic for adult 80.
In the first instance, we will target about 50000 patients who don't need to rely on a public reimbursement scheme.
So at least the full potential this will require us.
As to seek and audio listing and we think at the earliest in Twentytwenty too we estimate the accessible population will grow to around 150000, idols, however, with increasing coverage and affordability and we could reach multiples of the 150000.
The market develops we will have a better idea of the truthful potential to put that into context. I think we have approximately 150000 patients worldwide on Dupixent right. Now so you get a sense of the scale of what the opportunity could be for Dupixent.
How do we execute well we are ready to launch in a large number of major hospitals will be leveraging sophisticated digital models to reach prescribers as we move through the process of and audio listing over the next couple of years, we will open up the bigger opportunity and of course will be looking to expand into young age groups and additional indications for dupixent in China with as much.
It is six additional into launches until the anticipated by 2025.
So this is just the start of a new journey for Dupixent one of the key reasons why we're very excited about our prospects in China over the coming years.
[noise] excuse me.
Let's dig a little more into our Brazilian specialty care performance, but we delivered 17% sales growth in the quarter.
Dupixent was of course, the core driver and we are nearly at the point, where quarterly sales are reaching blockbuster level.
On quality also contributed solid growth due to the tires and our legacy portfolio. The so clearly the launch which was one week before the lock down was a virtual launch on the qualitative feedback from prescribers, who are the is very strong.
CMS announced a unique J code for so pleased that will be effective from October. The first 2020, an important development for patient access.
We are now preparing to roll this out in Europe. Later this year following that approval we hope in May.
Every week, we saw a return to growth in red blood disorder, Despite continuing competitive.
Sorry elsewhere, we saw a return to growth in red blood disorders, Despite continuing competitive pressures on a look type.
Badger benefited from a combination of things, but not least some phase favorable pricing a little bit of high demand and some patients stocking or lemtrada sales continued to decline.
Both due to competition, but also likely due to Kevin 19, given this route of administration, but also mode of action rare disease was broadly stable and sales were driven by new patient starts offset by Miss doses in particular due to the Confinements in Europe as well as all the phasing in rest of world.
On vaccines. The story is really all about readiness for a record flu season second quarter sales declined as we had anticipated as our U.S. franchise was heavily affected by tibbett, especially adult boost as an extra and of course, our travel vaccines.
I think though looking across the industry I'm pleased with how the team in vaccines has delivered despite the challenges and I think comparatively which is what we have to make in difficult times I think they've done a really excellent job.
These impacts more than outweighed positive drivers, which included double digit growth in our PPH franchise, driven by a 72% uplift in protect same penntex seem in China. Following the reopening of vaccine centers in February and a 40% growth in food or deliveries in the southern hemisphere.
Looking ahead, we are planning for a new record flu vaccine sales in the northern hemisphere demand is up pretty strongly and we've already shipped office doses in the U.S. with the expectation we will deliver around 80 million doses based on the strength of pre season orders.
This is the first time actually that we have been first to launch in flu in a season for the last three years a whilst it that is important is perhaps a very good leading indicator for our ability to execute and to manufacture even very challenging times.
In Europe, our teams have been able to accelerate the launch of SQL. The in several markets are high dose quadrivalent vaccine targeting the elderly.
Overall, despite some continuing cobot impacts we are expecting a strong vaccines performance in the second half driven by unexpected high food demand and catch up on pediatric vaccinations.
On the other hand, touchable meningitis and boost the vaccinations may really depend on cabin 19 compliance in the second off.
To general Medicine.
This is where we faced the biggest impact from the ongoing pandemic, but as sales decline of 12.7% in the quarter and since we have some positive stocking effects in Q1, a decline of 8.2% in a tool.
Performance in China reflected the impact to the VBP on Publix and up provoke the good news, though is that volumes continued to be strong that are up mode and 60% consistent with the first quarter. This is encouraging as we look into 2021 on price impacts begin to wash out.
In diabetes, the single digit declining glargine moderated due to solid overall growth in the rest of the world established products declined by 16% to the inventory build the first quarter reversed and has the effect of the confinement delays.
Delayed elective procedures.
For instance, we lost a 100 million euros sales year on year of Lovenox and Synvisc as both hospital based products were affected by delayed procedures.
We do expect those procedures to take place at some point.
Consumer healthcare sales were negatively impacted by lower in person pharmacy traffic Q2 sales performance reflected several moving parts. In addition to the pandemic with sales down 8% in the quarter and just under 2% to the up here now if we strip out the impact to the voluntary recall of zantac first half sale.
This would have been growing about 1.6%.
A bit more reflective of the effort being made and consumer business.
Q2 sales benefited from a strong U.S. spring allergy season, but the overall picture reflected the reversal of the pantry loading which boosted sales in the first quarter.
As what does the impact of reduced consumer foot traffic in pharmacies.
Obviously these factors were not unique to Sanofi as market research data suggests the PC market contracted by around 8% to 10% in April of mix.
Looking ahead as mentioned the domestic effect will annualize at the end of Q3 and importantly, we continue to progress on establishing CDC as a standalone business I'm also excited about the new leadership coming on board come back to this in a moment.
If I turn next to the pipeline the quarter was marked by positive proof points from for all priority. Another late stage pipeline assets, which we highlighted in Oh for plus one to come tomorrow virtual R&D events I know many easier closely followed our progress, but I would like to take this opportunity to enjoy some of the messages.
The underpin our confidence in those assets.
So they probably nine we believe we have at least a year ahead of the competition.
Both the agency and the Roche compounds have shown profiles with their own individual challenges that could mean that the tolerability of these compounds may not be suitable for this hormone receptor positive breast cancer population.
Let me remind you that we have initiated our first pivotal study in September last year, that's expected to read out in the first half of Twentytwenty long.
We will initiate our second pivotal study in first line in the coming months.
On the BTK Onesix site, we are confident now expectations of the efficacy of this compound and has potential to be competitive in the market and MRI data has found to be predictive of reductions in relapse.
And then remitting multiple sclerosis, and is widely recognized as an excellent surrogate marker and this is well of course supported by the literature. We believe the phase three efficacy outcome of the BTK. Once excite is substantially more de risked than is widely appreciated.
On the two surrounding business. It was there along with committed to substantially improving the current standard of care and anticipate offering greater protection and allowing the more active fly for hemophilia patients at a substantially reduced treatment burden.
I also remind you that we have the fifth and final R&D event tomorrow that will focus on the set them up.
Hi, potential MTR speed monoclonal antibody.
Mission is to provide RSV prophylaxis for oil infants with one injection.
At R&D day, we set a new strategic framework based around unique pop homes pathways patient insights and capabilities. We also indicated that we will continue to externally add to our pipeline. If we can find transformative medicines in areas for us to focus in specialty care and vaccines, which meets these full key.
Because of differentiation.
With that we've been amongst the most active in the whole industry in terms of PD and Twentytwenty in the past month alone. We struck too early stage deals to bolster our oncology and immuno inflammation portfolios with key audits and time era, and we've expanded our M&A vaccine collaboration with translate buyer.
The novel target some platforms with these collaborations brings.
To summarize the bringing to Sanofi should give you a sense of how we have being guided first by groundbreaking science as well as huge unmet patient need and we build on our innovation capacity. There also they also hopefully give you an exciting glimpse into the future of medicine.
So the my final slide I would like to provide an early glimpse of 2021, which is shaping up to be very important and productive year for our pipeline in terms of read outs.
To Powerphasedt on Rita R&D day, this sort of this sort of size simply wouldn't have been possible a few years ago.
Let me to read the details in interest the time, we'll just point you to a couple of highlights in term of pivotal results I'm really looking forward to the readout of seven seven pivotal studies, including offset a five nine in second and third line metastatic breast the phase three results about two key hemophilia process Fitusiran and bid so is there a one.
Third dupixent chronic spontaneous urticaria improved ago nodule Rs for soak Liza, we're expecting the first of three pivotal studies in newly diagnosed multiple myeloma unfold tirelessly. The second study in first on non small cell lung looking at the will come of population.
We should provide access to a much slaughter opportunity than based on the initial study in patients with a high PDL one expression seen this year.
In addition to seven pivotal studies, we will have multiple proof of concept data.
Typically point to Ventless stop oral brain penetrant, Tcs inhibitor, where we expect a key readout in GBA Parkinson's. It will also be a busier fall innovative oncology portfolio.
And with that I hand over to jump up too.
Thank you Paul Good morning, good afternoon us on slide 18.
Sales were down 3.4% interest on quarter inline with our guidance for low single digit decline.
While the other half view wide grew by 5.3 person.
I'll now review I margin increased by 200 basis points.
Through the lines of the piano you will identify that why is the gross profit was down the increase in view I was driven by lower opex as well as lower although current operating income and expenses. So let me explain it affects using the following slides.
On slide 19.
Looking first at our gross margin, we so 100 on 60 basis points reduction into this one quarter to 70.4 overall first half of the your gross margin was 71.3 person.
So let me go into somebody doesn't evolution of our gross margin in Q2 benefits from specialty care gross productivity gains over uncertainty million in the quarter, where more than offset by the impact of price reductions in China on Plavix on approval as a result of BBB almost all by geographic mix considerations.
Including the expected you with diabetes pricing pressure on lower vaccine sales in the us.
When we look forward so the impact will talk to under license with fourth quarter of the implementation of these program began in December 2019.
Meanwhile, so tailwinds from specialty care growth and gains should continue.
However, keep in mind that our gross margin is typically lower into second half.
In the first half due to product mix with a higher proportion of vaccine sales because of flu season on this will be even more so this year, but we expect to be a recalled flu season.
So when we look on slide 20.
At our Opex combined DNA on R&D improved by 10.2% into second quarter on by 6.7 person for the first six months.
So reduction in expense was mainly driven by R&D priority position on efficiencies.
You should note that while R&D expense benefited from our decision in 2019 de prioritize diabetes on cardiovascular.
Underlying spending on our ongoing pipeline programs continues to increase.
So consequently.
We still expect our annual R&D budgets to trend towards getting on to your we have previously highlighted.
On the civil and half R&D spending should be around the level of h. to 2019 spending.
In his Jenny Zhou improvement was driven by our smart spending initiatives on by lower expenses associated risk of it no w. struggle I will give you more detail in a minute.
Slide 21 takes a closer look of the evolution of our view on margin improvements into first half.
When you read discharge from the lift was rides the removal of equity accounting for regenerative had a 90 basis point adverse impact on our view on margins.
Against this restatement base of 25.3.
Cost savings added 100 basis points.
Sticking out thinking I will be why margins 26.3.
Underlying increase was further enhanced by the revision Jay known to retain regeneron share.
So that we landed at 27.3. So we are glad we delivered on underlying margin improvement in the face of headwinds from Covidien BBB.
It speaks to the change in mindset, we are driving across the business, but most importantly, we noted some of them out.
So on slide 22 looking forward. It is important to note that the exclusion of equal to Tensing for original does not deter us from our previously communicated view I margin ambition of certainty person by Twentytwenty do you remember if we go to market. This certainty person by Twentytwenty too, but that was relying on.
On a run 100 dips.
Coming from a geographic reach.
Division in regimen.
So we keep so certainty persons.
Even though we have no.
Sold these participation.
We also remain committed to delivering our view on margin margin target of greater than 72 person by 2025.
With this in mind me give you an update on our progress to accelerate the efficiencies.
On slide 23.
As you know we plan to better over 2 billion in cost savings by 22 in Q2 of these football we expect to run 500 million to come from reduced spend in the primary line businesses around 1 billion from a range of smart spending initiatives on a further 500 million from operational excellence.
The first half of Twentytwenty alone, we have achieved around 990 millions of savings.
We'll 60% of old Twentytwenty to target.
We made good progress across all potential sources of savings.
The biggest opportunity for savings in smart spending, which is net finance on procurement colleagues work as a team to system. They believe reduce our cost base. This is a game changer on here, we delivered approximately 270 million of savings into first half, including Cobiz related savings.
Digging deeper into our smart spending initiatives, we achieved double digits reduction across a range of expense categories, which are highly I'd like to into lower problems as slide including travel from the promotional materials. You can also see that we have kept our with tertiary site by you assert well both of them being reps reps.
This is but I mean, it's interesting to see those the breadth of those bench as a number of whole suppliers of has been reduced by 14 persons.
So these initiatives cuts across the entire organization, which again supports a change of mine since we have introduced as part of Opex and we constructed.
I would also add also some of the figures were lower due to covet for example travel expenses all of these expenses on supplier by mentions were on track for sequential reduction in Twentytwenty, even before the fundamentals in fact, a total of the totals 970 million of savings, we calculate but only $110 million was associated with.
Some of it.
On top of how savings on slide 24.
We have also made inroads with our objective to streamline the established product tell which we announced the market in December 2018, we have kids a number of whole product. Some of these by close to assert to around 220, although target is to reduce these two around 100 by 2025.
Hey, jure simplification of the business will enable greater focus on our growing products in terms of tail divestments. We have previously you announced the sale of separate filma, although smaller products.
As a twentytwenty we have received approximately 600 on 80 million in cash proceeds.
On slide 25, we delivered strong increases once it gets fully for the first half of that.
Mainly driven by our solid business performance on spending initiatives for just flew more than doubled begins its MPL you have into into team.
To provide further context walk us through evolution I wanted to highlight we've benefited from around 800 million of onetime benefits, including hotel divestments I previously mentioned on the timing of receivables on tax but.
Excluding these benefits within that you've heard a stronger underlying performance from agreement fully confident we will meet all target to improve free just moved by 50% by 2020.
On slide 26, I want to give you a sense of the likely use those dynamics into sort of quarter.
When we look at the level of whole different businesses, while in pharmaceutical we expect to see a recovery in new patients thoughts on elective procedures, but not yet to previous levels.
We expect to strong momentum to the extent to continue.
In vaccines, we expect from flu demand in North America on a partial recovery in overall vaccine, but trouble vaccines will clearly continue to be impacted.
We will work closely any decisions to look to reopen schools and universities after the summer, but could impact our vaccine sales beyond trouble.
In consumer healthcare, we expect to see increased consumer traffic in pharmacies in most of the us on Europe.
Emerging market activity is likely to remain subdued.
As far as Opex is concerned we will continue to deliver on efficiencies, but of course, we would expect reinvestment spend in sales and marketing to pickup in specialty care on vaccine.
Overall R&D spend in the second half is likely to be similar to the second half of 2019, reflecting increased investment.
Priority assets on platform. That's why we think opex will be slightly down the niche to go through 2019 or flat.
Well. This is our current expectation we want to acknowledge so continuing uncertainty associated with some of it especially with the continued rising is a number of infections in the U.S. and disciplined way spikes on Lockdowns, we're seeing in some parts of Europe.
Our guidance assume a backdrop of some local look down where we should we would expect to see a more pronounced impact on our resulted countrywide.
Replied looked arms with.
Again.
On my last slide as Paul mentioned before we are feeling increasingly confident about.
Delivering on our performance subjects even twentytwenty.
Consequently.
We are adjusting for your guidance with Twentytwenty, because if you view route by route seeks to 7%.
Yeah.
The impact of foreign exchange is expected to be negated by minus from 4% based on the July of marriage exchange rate on this compares with estimated currency impact we communicated as we go first quarter results of between minus one on maintenance.
As you see we walk the talk on we committed to deliver on our plan.
With that I would like to from Mexico to Paul. Thank you gentlemen, taste walking the talk.
As normal.
Thank you for a very clear explanation of why we're on track and why we're likely to exceed our initial guidance.
To deliver and also deliver our mid to long term potential ambition.
I think its was just remembering again a lot of companies have tried to work through the crisis I think what's unique about this company at least at least feels for me is that we launched an ambitious plan to transform the company last December and we continue that transformation I hope those that have been following as closely certainly to R&D operational.
Excellence and you know and shaping up our team to go forth and deliver on this I think you can start to see it happened. So it would have been perhaps easy for the organization to sit back and just trying to keep keep getting this is not what's happened here.
It gives me even more confidence in how we're emerging from the transformation with a common and single minded purpose and and we really will deliver on it I think it's been.
A difficult time, but I think it's been very inspiring for me and for everybody that's been part of it.
So.
I think this one or two things that are worth mentioning not only we transforming not only will we at delivering in line and with a better full year outlook. We've also been working right at the front line on vaccines in particular and.
You may have seen in the news. This morning, we announced the that deal with the UK government for 60 million doses in partnership with at GSK. We're in very late stage conversations with the European Union and of course with US and we would hope you know if those things go according to plan to be announcements not.
So far away, but what it does tell me having been involved in a lot of this as well myself is that the appreciation for the role will likely to play with our recombinant Buck the buyers platform is becoming more and more important for many so whilst speed was considered them thing right at the beginning we have accelerated not only that we have even more.
Your confidence that ups onshore ability or even our efficacy will give something that is pretty unique in this space. So we're going to play a part which is why would now in the phase of starting to be able to communicate the deals that was striking because in the end will be one of the few companies that can deliver the number of doses.
And to try and get to places globally that others call because of that cold chain.
Plunges and other things.
So let me just switched to two last things one that's very important to me, but we've deferred at previous calls.
I mentioned.
Obviously with diligently integrating our EPS SG into all play to win strategy and my own personal journey on this has been.
You know everybody's rushed to to Mark is down on some of the key obvious indicators.
I think what's more interesting about how we're going to try and do it at Sanofi is how we bet.
The things that we consider important and unique to a healthcare company into the everyday work of what people do it won't be getting us just to make progress on CEO to of course, we are making progress when we commit the left on.
The Paris agreement. However, it is very important for us to leverage our road in health care, we're seeing it in cabinets to make sure that we.
Can deliver things that you can't do in just simply any other industry.
We will address the main points access affordability supplied continuity, which has never been more important diversity integrity and inclusion and whilst you know for many of these have been words on slides, it's not going to be the case for US we've had good and strong conversations with our board not least.
Our new board member leased Kingold joins us as the former CEO of the UN global compact the world's largest corporate sustainability initiatives and they're asking us to raise our game in these areas and break new ground. We will work in that through as an executive Committee and we will bring what we think all unique things to us as a healthcare.
Money.
Later in Q3.
My last slide.
It has been great to complete the team.
We have up to do and we had to be.
Very aware of the skills and capabilities, we needed to complete the team.
Weve I'm delighted that we were able to promote from within Toma Trump Toledo vaccines business.
I think he is already demonstrating perhaps the most challenging time, what it's like to lead in that business and doing incredibly well delighted to have them on the team briefly on over there are new head of digital is a systemic data guy and understands what it's going to take to reinvent healthcare, it's not a signature.
Hi, a press release type of roll it is a real root and branch improved productivity efficiency and deliver better healthcare outcomes Roland.
I had a tough that now on the team dedicated as Julie about on while joins us from us to load of West She is a digital for us.
Global markets here and I think it's time to consumer helped to take.
More assertive stance in the online sector, and we hope will help with volume growth as well and of course, not see big foot joins us as chief people officer.
Question was recently in the last business, a low margin business of was.
Awarded divesting inclusive people leader in Europe. So we found ourselves in a situation really adding to the exciting capabilities we already have.
Got it wouldn't normally be important for you I guess in your models for me and for what we're trying to do not transformation. It's incredibly important that the new talent raises all gain allows us to continue to deliver on.
Patient first agenda ill decided to change the practice of medicine. So.
With that.
I think I'll handover to Q and a.
Correct. So we will now open the call it to your questions to get ready as a reminder, we would like to ask you to limit your questions queued up.
We will now begin the question answer session anyone who wishes to ask a question Mark Bristow and one other question Talison you will see with shown to come from that you're going to the Keith.
Mr. Mobiuss said from the question Q you may dial into participants all requested choose only headsets and asking the question anyone who has a question May press star one at this time.
First question comes from the line of Richard Vosser with JP Morgan. Please go ahead.
Hi, Thanks for taking my questions first question on consumer and whether you give us an updates on the ITC switches and with the change in need so that business does that signal that changes and since you said the business and the call about compared to the capital markets Day, and then second question.
Just thinking about the savings being made some tightening.
And.
And on the line, obviously very impressive so just all the savings and how many assays or how much as I do think well that will be sustainable.
Toward what learnings can you.
Gets to drive more savings and you seem to be running pretty ahead of plan. So how should we think about backings and add the plans and and driving towards your margin target. Thanks very much.
Okay. Richard Thank you I'll toss the second part to some battista in a moment, but upfront you know.
The change in leader is unrelated to the strategy Allen mains decision to to explore other opportunities.
Just gave us a moment to reflect on what we needed in what we could look like going forward the regulatory conversations.
Pretty much with the FDA uniquely at continued to progress positively.
We are gaining confidence the so a bit of a way to go but we're gaining confidence.
We are quite bullish about what it could look like in the launch, particularly Tama fluency. All this combined in the sort of late 24 25 horizon, we think could really be a significant you know that can change the trajectory, perhaps even hub as is the fastest growing consumer in that timeframe.
Perhaps the difference would be with Julie joining us is that you know a deeper customer insight and a.
Additional first mindset may if you put yourself full would take a couple of years, we'll probably be the minimum expectation to take advantage of Rx to OTC switches. So.
I think we've got stronger in that context, so feeling quite confident about that giambattista savings.
First of all of congratulations from Richard on how you did that and then what would it mean next.
Well.
Thanks, Richard but.
As you know I don't like to be behind schedule. So it's normal is at three remove we move fast on the on that.
On that aspect and are we still have a much more to do.
So so savings related to covered I guess, it will there will rebound because a leading to a our salesforce going back on the field on everyone going back on the field like everyone.
It's nothing do with our global journey on the without those.
Related savings, we want to hit the 2 billion target on we are marching in that direction with both of the definition.
As you know, we we have been some some of the things, which we have entered.
As public now.
Into discussion with our unions on out to rightsize broker.
Company on a little discussions are going on in France, and Germany in many other countries and.
They will help really hitting our targets.
I have two billions on those if we grow the better.
Okay. Good thank you.
Next question.
The next question comes from the line of Pizza of adults with Citi. Please go ahead.
Yes, I can speak with Citi.
Mumbo Jumbo. These please just.
I will simply just on the savings achieved so far would you give us a ballpark percentages to how much has been ploughed, what we've invested back in the business.
Secondly to pull the Thomas.
We know seasonal flu vaccines in Europe around five to 10 years a shot.
Go recent industry Cobiz contracts signed in the U.S. around $20, a shot not totally understand that you're not going to go into the specifics of the contract you signed with the UK government today, but just in terms of bookmarking book ending.
The likely Kb boxing price, although to price points. Good bookends for us to use and then if I may very cheaply because I knew requires a one word on so what is the price point you going into with Dupixent in China. Thank you.
Okay. So maybe.
JV and few wanting to.
Take care another guy.
Yes, Peter on a on the thing what do we reinvest what you can imagine with a with the growth we deliver on the defense with what we're looking at behind vaccine.
We are we thought that this is for investments are quite significantly on.
As you know.
We are not limiting ourselves in terms of for reinvestment because we are piloting so global performance. We've done on coal point, which is to deliver our view on margin targets in 2014 too.
Second half of the your if you will see as I mentioned.
Some other investments, especially in R&D.
We have already so since our rigs as indirect cost which is in our opex.
In Q2, we have a so DTC campaigns, we have the as you increase in the sales force activity.
Behind a decent so all of this mix of both of the Reinvestments are on weekend pilots, what we want to see trickling down to the to the bottom line.
Depending on a on those trends of whether it triggers in term of growth.
We will go in like the on that we have room, we have room of maneuver to do that.
And can shanties Tom.
Price.
Moving menu price BBAMS corrects the question.
As you know very when we're not disclosing details to other utilities and the ones that I see.
What I can still seeing dumps nothing could be 19 pricing is that as you know we've committed to do.
Hi, seeing buddies, affordable and but the neighbors access to the lump of physician Thats every button to us.
However, I want on so today, but it's very important for us to speak about the sustainability Olive garden and vessel, we want to make sure that the we would we do it will be an assistant had been weak moving follow up and but do we will.
Of course that will be a beat molla inflammation as the president of the development of the next couple of things.
As for the question on the prices Dupixent in China well.
So around 22000.
Your annual treatment costs that price, maybe a little bit lower due to the patient access programs.
And of course, we a couple of things from under one is we have the LDL.
The two away so that will be another opportunity to discuss price some show and we really do believe we have incredible potential in China.
So so exciting times at seem to Dupixent. Okay next question.
Your next question comes from the line of Graham Parry with Bank of America. Please go ahead.
Thanks for taking my question say sessions on sleeve vaccine say, you talked about potentially up to sell uptake Cumberland based in the U.S. I think that's up about 20% on last year and if you can send US right and then because of the increased demand that they may see you anticipating best of pricing on top of that as well and if you can.
To help us understand and the mix benefits here as well that you could get on price at some gains to the more into the chipset high de Sac scenes and then secondly on you'll said you just hinted that youre talking about starting first line studies in coming months does that mean, you have the CDK Foursix combination data in house now and the snow.
When do you expect hitting for might we see that extend Lee. Thank you.
Okay. Thank you Graham so may be Tama.
To you I think we are at a question about volume and also importantly, a question on potential mix.
Thank you very much for the question Graham So indeed.
We've been really to the 80 million disease.
Target for the U.S. might get to know which is a significant increase you mentioned that if I recall correctly decremental, 20% additional volumes, let's say about it it's in the ballpark of which with targeting at that Jerry multi thought Bcf unison 9000 ended, but we keep increasing our capacity in the U.S. we the.
And you facility coming available next year or some sort of beyond the U.S. So it's very important that we hold their idea or on the who issue we have diesel fuel recognition.
Average rent increases we are planning for the coming for years and indices network will be delayed but here.
Now in terms of managing and the evolution of the product mix obviously.
It's not important to have more flu vaccine, it's important to up more through differentiated vaccines, because that's what large above the word these extra you're looking for and the University. It's important to a prospective randomized can you could try and differentiated vaccine against standout those vaccines and prove look and frozen I do the two such products that they must receive Debbie funds.
And in plus 50 cities.
We are going to further increase the supply of these two different youd ondeck.
Your rate than the old food volumes growth in terms of again, so you can imagine but.
The beneficial.
Back to dust off of margin.
Okay.
Thanks, Tom.
Sean.
Maybe we'd like to take the second question.
Here's John.
Yes, again can you repeat your question please.
The question.
Oh, sorry.
Yeah. It saves Justin I think you're talking about starting the sets and fixed line studies in coming months I just wonder if you have the CDK for six combo data.
In house that Weve I think is that the head start in that study and if not when do you expect kitten for might we see that day track Stanley.
Yeah, Yeah, we we have data we wanted to have a bit more but recruitment has been slower in the kobin situation.
Right now at the point of doing the internal analysis habit meeting back after this to review.
So we think eminently, we'll be able to make a decision on that.
The in terms of an external presentation I don't have specific date for you on that.
Okay. Thank you John Thank you.
Next question please.
The next question comes from the line of Joe Wilson with Credit Suisse. Please go ahead.
Thank you just a follow up a quick follow up on the flu.
A question that we just had.
Assuming that there's so much demand will see much more if you will flu delivery in the third quarter than the fourth quarter. So just checking that this is likely to be.
Really.
Amazing third quarter because of that.
The second question is the elephant in the room about U.S. healthcare reform.
I noted that the price differentials dupixent.
He is less than some of.
Dermatology products between the U.S., Cindy you, but I wonder if you could just tell us what do you think might happen to you and maybe not.
Me use a bit about potential U.S. healthcare reforms with particular reference to international reference pricing. Please.
Okay.
Todd.
Yes.
On the first action so regarding through Joe what's important to have in mind, you that last year, you remember that the strain selection was done that it'd be later stage by individual but not the gains. This year trend solution has been on time and as mentioned before we have been the first went through stopping the marine duties in the us.
On a week ago. So so indeed compared to last week's makes sense as Tom got trends to up to three doses Q4 food categories.
Hi, Joe to the question on.
The I think your offense executive order.
A discussion from last Friday, I think you want.
As a few things jumped to mind you know one as a company you could take it probably twice, but we are a little less.
Exposed in the U.S. compared to some of the other big players.
I think secondly up quick read done there is not a great load of detailers for that much in but a quick read is that it may be more towards.
Happy.
Weather challenges may be and I think again, where even less exposed.
Versus our peer group and the rest of the industry.
I think on Ipi you know, it's it's two convenient headline I mean, it's a bit of of blunt instrument people want to compared to our prices. You know this at any to expand this to you and others, but that conveying a price to a country, where the price may be lower on the zero access and the society is struggling to get us.
Innovation is not WIDIA truthful comparison or no.
The lack of understanding of rebates in the United States to what the actual net prices all.
So I find that.
There's a lot to talk I think the first thing I would say is not expecting any impact from these conversations this year.
As for pre election, so it's a very convenient subject matter.
We do believe in reforms that help the out of pocket.
Particularly the elderly and the pharmacy and not.
Moving money around between different actors in the chain, if we thought we'd be open we.
Certainly rebate reform for example, and making sure that those that needed get it in their own pocket is much more important to us and we support those so I'm I'm a open minded to what will happen, we just need more detail and as always if there's some stimulus maybe something good also can come from it but well less exposure.
Is that it's not affect to a total almost at the moment.
Next question please.
Okay.
Next question comes from the line of people Blucora with Morgan Stanley. Please go ahead.
Thank you thought taking my question maybe to come back on flu vaccine you quantified.
The increase but do you mean, the U.S. could you comment on that the rest that's nothing new staff and then back to your reps do you have enough volume to addressing increasing demand.
And do you anticipate initial stage although productions.
Yes.
And maybe a quick one on guidance.
It seems that upgrade of the guidance.
Resi principally he did one that you had on their lead variation as the ratio of Caf.
Yes, and then with improvements in the that's would highlight.
That's right and that's been just given some great.
Okay. Thank you.
Hello.
Two question.
Thank you both fluidics U.S. is a good question and indeed, it's important to look at it because we see increasing flu vaccination coverage not just in the U.S., but on two of the world, especially in Europe, you've seen probably about over the best two to two years.
I would say that momentum all European ministers of health of understood the importance of increasing through VCR and up just a we could be 19 Bunny make and the fact met the most at a please call throughout new once that out so the most at risk.
Of the 19 that is extremely important to make sure that everybody's these particular against implemented the disease.
Just to make sure ventless because on net of the when they buy from his position. So so we are to come back to numbers.
Question, we are of ethanol expecting a significant decrease in every part of the will.
Definitely annual up and indeed from a supply perspective, we're expecting to deliver a significant degree no just in United rentals ex us.
To be admitted to the to meet that demand.
Final question defend especially with the but we've got to be a shortage.
That will be a a little bit to Kristen Buena looking a pipe out to be able to see that and what I can see that.
And if you best on even at least we have significantly upscale.
In December abilities.
Make sure the two to take into the demand that we have received we will make sure that we are there and we are delivering on time I did see good for me to commence while the other suppliers, but I do expect of inexperienced home Millstone, maybe test with Btwenty from season.
In Q.
So it seems to question comes back to the one off and the guidance I think it probably under appreciated the good work that's going on to try to make sure that were in line, particularly when I look across the industry at such a challenging time, but maybe you'd like to add a comment.
Yes, because I think it perfectly right it's more important.
It's more important to to consider our twentytwenty too.
Underlying.
Great that's on the under one of these here.
On whether it means not because.
Staying uncertainty for sometime I seen some underlings I've done in fact, it went to 29 on that and we are we going to these are certainly person.
What it means it is on you're asking which part of the business, where it's a part of the businesses the human Park.
Which is the most important.
It is it showing that the confidence on the liquidity was a team which is being built around the pull.
They are pulled leadership on.
Means that we hold the real firmly Sanofi on sector, we will not get the rail.
Really on a on Thats sends a message Rudy.
What make us confident you got to as a team really understand on sees what we want to achieve better science early science to really trigger innovative medicines.
Well said.
Taste the.
We are well aware of commitments, we made externally for 22 and 25. So we were whilst we're going to the transformation whilst handling.
Pandemic, how these what's in our control effectively we are.
Is still sticking to what we've committed.
To 22 in 25, and we hope to see our journey to that so.
While the points while made on Twentytwenty I think at a long term commitments as JB set of that become the most interesting. Okay. Next question. Please.
The next question comes from the line of from the rest to hand with interim health. Please go ahead.
Hi, there thanks for taking my questions.
Couple of them picks and please.
<unk> on the limited investment behind it picks and saying Q2.
General on antibody lines profit was a bit lower demand for cost it and say has there been any mattoon investments behind Dupixent in Q2 for example, the trying to launch and more importantly, when should we thinking about the investment phase starting to platts.
That is probably right away, but but at that point, which presumably expect depicts in profitability to really take off so good.
<unk> around timing that would be helpful. And then on fluid as you mentioned that since that time and in a few years, where you'd been fast and being generally leads to better price is it fair to assume that the 9% price rises you've taken on the differentiated vaccines that the majority of that I'd like to stick.
Okay all right.
Some good questions in that before I come to watch enough to keep us on the maybe I'll try to fill on on the investment levels going forward on.
Dupixent.
Maybe on the food I think first.
As you know in.
In these not done I mean for Twentytwenty.
You should look at Susan Idols project in view is 100% switching from idols tribal land.
What regular.
Which setting would you have in mind.
Increase.
So I would say roughly yet.
Days on the the fact that we have studied alignment.
Coming on the road vessel.
We expect some.
Hi increases last year defined it extends our reach we view the bidding on though the final injuries.
So I think it.
But again the best measure.
Okay. So I'm I made as toasted abilities connect to the trauma tastes any comment on the investment levels through Q2.
To end Dupixent.
Yes, as I said, we are investing behind a gun to be turned on in Q2, there were significant both buffalo cost on a on opex increase or.
You're right to say that its of the end of it we're going to growing by cutting the census growth because that will just at the beginning of it.
What I like when I see the profile of the drag on that.
Looking at a when do we.
Get it created throw B. Riley margin on a it's quite exciting to see.
Speed, we are we see the improvements so thats the right balance right now.
Hey, Bill.
Yeah.
Yeah no. Thanks for the question look as Paul had said.
We are growing a.
Product here that is truly transformational and we have launches that are going on all throughout the year 89 launches in 2020 alone and as Paul said were 35 launches enemy at 54 to go so when you're building a global brand we are absolutely investing for a launch success.
All over the world.
And we continued in the U.S. with investments in DTC et cetera, we feel as though.
These are all important investments to drive what this brand can become.
Yes. Thanks.
As a sad thing would be not to be of due to be able to afford it on the re our that's why we are so determined the is as strong determination. We show in our city plant is ready to make that happen.
Yeah, well I'd look I'm going to add to that too as shown on T. said it in Evan. This is an opportunity to remind me you'd like us to be accretive as fast as possible.
The truth is we are building for the long term, but just in phone Caveating Bill touched on it too you know when you're adding specialty capability you know the marginal cost as much. So it's not like routing primary care field forces.
We you look at the data that's coming out if you look to the us into Philip consult to try to state if you look.
This is.
At best in class first in class data and we have to rise to meet that we have to be efficient when we have to make choices elsewhere in the portfolio to do it because we to remind you we've already committed to what our business shake needs to look like you know that as well.
We told from capital markets day.
But you know where these additional investments are modest by comparison, they will come but they will become because we'll be first and best in class and adding new patient population.
Okay next.
Question.
Your next question comes from the on them, we markup idea with Bernstein. Please go ahead.
Great. Thanks, very much for taking my questions quite a few but.
Just another one for Tomas the U.S. PPH franchise so.
The strong decline in Twoq, you, while the rest of world bounce back quite nicely. So should we assume a similar outcome in the U.S. in Q3 and could you just talk a little bit about what you've seen in the U.S. market.
In July so the DTA franchise that'd be helpful. And then my second question just on the BTK. Some of the room is on the potential Principia acquisition I know you called comment.
Specifically on that room, but given the level of confidence in the asset internally, how does Sanofi think about the economics of the product today and what an opt in from considering a change your thinking about allocating capital to ensure that you maximize the value of that product. Thank you.
So I'll, maybe relative with the last from first absolutely nothing to say about any room as that you read about anything.
I will repeat we're very excited about the BTK.
We think it's going to be.
A major part of our future we.
Just on it the data we think is under appreciated actually at the moment when we look forward to working through the full phase threes and demonstrating that we.
We have a great partnership so add that continues.
Tama essential first I'll call, you getting plenty of attention to.
Sorry, just again, so okay [laughter] shield and thank for the equation me Matt.
Starting point.
We believe we'll pause for a second that look into.
Your question is it but they didn't think combinations and divestment that in Q2, and I think it's no secret to see first that the word the PSC Commission vaccine is mezzaluna 20 different supplier.
This is something limitation of member providers and as you mentioned, yes, we have a negative specimens in Q2 year on year in the U.S. to put it gets a CAD was talking about minus 22% of BPH arranger on two of these unit basis, a quite interesting to look at any point increase.
Most of the will end in Europe, but he wrote was also heat or by the convenience vision. So couple of points I'd like to two for the drug into these when we look at the U.S. BPH put it ranged from it I think first on pharma is always related so interesting to look at the definitions of these product Cringing unit, that's just maybe.
The CMS reflect ranged from the from the competition and I think that we have to be Shai I thought about up I'm as we've done extremely well in the second quarter healthier.
Regardless of the second pointed to is the fact that DC.
On the quality busy that of course, the Threed front month.
The heat we have had from that could be 19, but let me station differs a lot on the month to month perspective, and we does going to extremity debt I would say, we stuck to April we that Cvs impact compared to last year. We ended the cropped up in June we that we that increased business last year, So I think thats trending well.
The.
If I missed it especially of course of the Nobel than one Europe, it's Keith those new both need to be that can indeed, and I think thats been significant number of course or maybe you could as efficient as with CDC to make sure that models and parents in euro bring back when you move on to the vehicle proceeds to make sure that goes up with active before that could be 19.
With interest.
Okay.
Thank you Tolmar next question please.
Your next question comes from the line of Peter Welford with Jefferies. Please go ahead.
Hi, Thanks for taking my questions to firstly, just on the back to the virus vaccine Toby 19.
Thanks for the details on the timing I Wonder if you could come from a will this be just investigating in phase one to one dose regimen or will you will still be investing a to doug's read you been as well.
And could we also see will that be a cohort that excludes on excludes the accident or whether it will all the cohorts into the accident as a matter of course.
And then secondly, just on clay side, so that you discontinued the the combination with live Tayo in myeloma I would you comment whether there's any change your thinking regarding that combination in solid team as I'd also an update perhaps on the uses saw calista and some of your other combinations whether or not this does any data were inside.
You got from that study you told I have any other indications. Thank you.
Okay. Thanks, Peter John I'll come to an 11 about so because and.
Tire.
Before.
Back to virus number of doses taking.
Forward and with or without the AD shipment.
Thanks, Thanks for question and I used is also.
But the timing of.
Next thing.
So thats what affected the actual ER regiment, I would say and the need for that event.
Other than to you to the death of the phase one fit was that we tend to stuff.
And bill and Thats looking good.
Thank you.
We expect to actually attitude was regimen in yen linked to the fact, but a cool enough ATERAS addiction without coming from naturalization disease. Upon that condition, we have not to show I told about how long. It we remain so so every thing we've seen inc. actually be immunity.
On the other areas as we've seen everywhere.
Seems to indicate that we go through the regiment and Thats, what we should count on and I think thats the standpoint it manufacturer.
For the same reason, we also expect to need and engagement. So so thats why its very important partnership with GSK and I played by and for them to have all companies, bringing up into it and we believe at the event would be a killer.
So my bet would be on two disease, we that you've done.
Hello.
Final point, maybe on the that can come to date.
Until we get the R&D D. and we were seeing that will be stopped the faced we had some as possible and then I think you can somebody that estimates proceed but he's not anymore in January.
Keith when you blend but in December.
We are aiming to selecting the right.
And we want to study the phase three in the first hasn't.
Okay. Thank you John Reid, maybe you could come together.
And.
I hope it has a question so please and live tie a combination.
Yeah. So.
You know as you know there has been a theory that CD 38, the targets or can we use a might have a broader role to play as an immune checkpoint. Good so that was the hypothesis that.
We were testing in these combination studies.
And did small signal seeking studies across a indications.
So, although all date or not yet in so far we've not seen a compelling evidence that this is going to be an attractive combination for going into a variety of types of.
You saw that already image logic malignancies. So at this point it doesn't look like the hypothesis cdthirty eight having that brought role.
Across a number of malignancy used bearing out the caveat I would just say as it were still managing those studies for a couple of the indications.
I think more broadly in terms of SARC Liza and the recent.
Data from our Akiva trial, we continue to see a differentiated profile for this molecule, which has a different mechanism of action compared to some of the other molecules that also target cdthirty eight and a that was born out in the like human data with the superior hazard ratio compared to.
Similar studies similar drug combinations of therapeutics that had been conducted in this second line population. So.
We remain very bullish I would say on on the the quality characteristics of assert leaves them. We look forward to some of the data and the frontline setting in in treatment naive patients as they begin to to emerge next year.
Thank you John or maybe we get time for one more question I think.
The next question comes from the line of Geoffrey Porges SBB Live Bank. Please go ahead.
Thank you very much appreciate your squeezing me.
The question people you you built out your management team and are well underway with with restructuring the business could you talk about.
Do you view your organization.
Operationally strategically and financially in a position to do a substantial acquisition not the sort of tuck ins the doing.
Because clearly you have the balance sheet capacity.
Then just a follow up question on but.
John if you could perhaps give us and insights into the basal cell carcinoma.
Readout and when you think that you could be a position to file there.
Particularly interested in whether there was benefit in the form of stable disease in the patients who are the non responders.
How quickly thing those responses are typically a pretty nimble Jeremy thanks.
Thank you for the question John will come to an amendment on the BCC.
Let me try to break your question into two parts.
Thank you touched on it or we do have the right team has a capable inefficient do we have the financial I think you tried to say I guess, where I'm heading is I'm very confident in the executive team and indeed increasingly at all levels of the organization, we have new people to come in still of course.
Our disciplined and our ability to execute on to execute in Lima strategy is growing all the time. So you know the organization is responding much faster than I would've expected, which allows lots of opportunities for us.
All first responsibility is to deliver a minimum of what we've committed to externally.
As for M&A, and I think you biased towards sizeable instead of tuck in I can't remember the exact language.
You know.
Upfront, we have great financial potential as we are I think we have a great mid stage pipeline thats going to come through the middle of the decade.
I do think when you look at Austin Forex deal and our recent collaborations we are if we have a choice there will be much more in that scale of the single mid digit at billion deals just because we want to go out to science that can break new ground that can set.
The pace.
And if possible.
Also add value to our existing pipeline in combination with for example, with oncology. So we feel we now have to do anything more different to that too.
Outperform and build something quite special in terms of financially capabilities and scientifically.
In reverse order.
So so I think where I.
I think thats, probably the most I can say right now at John.
Do you have any common on ER basal cell.
Yes. Thanks, a quick question I'm not going to be able to answer all your questions, but just to recap in that study population. The overall response rate was approximately 30% and the durability was impressive about 85% of patients who achieved a response remain.
Remained.
Make maintain that response for for over a year. So the be activity we felt in this.
So I get my population of patients who had already built hedgehog inhibitors and so therefore very aggressive disease. We felt was a worthy of moving to a submission of the supplemental be away. So bad that are used in the works.
We do plan to do that in terms of the the I think you asked about how rapidly do we see responses I would have we would have to get back to you on that we we don't have those data Andy.
Okay, well, thanks very much thank what I will follow up on that last point.
I think of bringing us to close as you'll start to just drop off the yet.
I'm millionaires I've prior to year end I'm thrilled with the progress we're making.
The quality of to work being done the scientific transformation in the company the expense discipline.
And at the somewhat obsessive nature in delivery of Dupixent against unmet medical need and what it means talk business and I think that is the right balance I think we've covered a lot of ground and most of it we've covered.
At least 30 or 40% of ensuring a pandemic. So we haven't settled on just keeping moving we have continue to accelerate the underlying fundamentals many of which won't see until time passes but as you do I think you'll start to see the momentum building and weren't exactly at the right I stops ahead of where ipos.
I think that we'd be at this point. Thank you to the team for everything I've, everybody gets a little bit of a break and thank you to everybody a that joined on the whole. Thank you.
Ladies and gentlemen, the conference is now over thank you for choosing chorus call and thank you for TV Basin. You Me Conference you May now disconnect your lines Goodbye.
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