Q1 2021 Sanofi SA Earnings Call
<unk> a distinct advantage over the maternal immunization candidates as half of the infants hospitalized or simply born before the start of the first RSV season.
We are looking forward to the full data publication from the melody trial and the readout of the medley phase two three trial in the coming months.
We are planning regulatory submissions to start in 2022, which is one year faster than planned and I'm proud of the organization and for our collaboration to make this possible.
On slide seven and staying on the pipeline, but focusing on oncology with sort of a busy quarter of positive news flow supporting our progress to rebuild our oncology franchise.
Bill will tell you a little more about the Q1 launch performance in Cleveland and the tire.
Want to take a moment to discuss with you the encouraging interim phase one day that we showcased as a late breaker at ACR. This month for SA ER 245, formerly known as Thor 707.
These data demonstrate that we can dose it's medicine, even higher than we ever thought possible.
Further validates why we believe we have the best in class non Alpha IL two.
We're delighted to host you at our much anticipated ask event on June 4th while we're unable to provide the detailed agenda of the event today due to the Africa regulations.
Ecology as a long term commitment to Sanofi and I'm confident we can deliver outstanding patient benefit and compete successfully in this space.
Turning to slide eight and with 2025 and beyond in mind, we continue to deploy our capital.
To deploy capital to drive R&D transformation across our pipeline as highlighted here with three recent acquisitions and three recent business development deals focused on our priority areas of immunology and oncology, allowing us to bolster our capabilities in areas, where we continue to strengthen our competitiveness.
With applications in both oncology and immunology, the acquisition of titled Therapeutics fit, particularly well within our R&D strategy.
The title mrna platform provides a novel approach to reprogram immune cells inside the body to genetically modify the patient's own immune cells to attack the cancer.
On slide nine before we enter into the G. At the Q1 GB you updates.
Wanted to highlight as Sanofi is favorable position in the U S and China.
Where drug pricing is a focus of the governments health care priorities.
While we may learn more about the details of the health care agenda of the new U S. A new U S administration. Soon we also acknowledge the anticipated new round of volume based procurement in China, which we expect to be implemented during the remainder of the year.
Specifically in the U S. Our portfolio is not only growing fast, but shifting increasingly towards specialty care at approximately 60% of this business through the commercial channels at.
At the same time, we continue to see the exposure to U S insulin pricing pressure gradually diminishing.
We believe Sanofi is well positioned to actively participate in the ongoing policy discussions in the U S. With the goal of making the health care system work better for patients by lowering out of pocket costs. The medicines, they need while maintaining an innovation driven market based environment.
Now turning to China, where sales grew 8% in the quarter Bill will tell you more about the accelerated launch depicts them well.
Well I would like to remind you of the commercial potential of the launches of two Jay on Palo and due to their differentiated profiles.
We will maximize the value of these brands leveraged by our digital customer engagement tools and this large Chinese market.
We continue to expect Sanofi to gross sales in China in 2021, driven by launches helped by our agile business model and despite the potential impact from the expected D. B P. Later this year.
With that I'm now turning it over to the GPU heads to provide more details on their respective businesses that start first with the pixel and bill over to you. Thank you Paul starting with you pictured on slide 10 sales surpassed the 1 billion euro of blockbuster Mark for the quarter. This new record in sales is the reason.
A lot of continuous strong U S demand absorbing the usual net price adjustment at the beginning of the year, including co pay assistance programs.
Ex U S sales were extremely strong reaching 24% of global sales in the quarter and crossing the 250 million Euro Mark now annualized.
Annualized on their own at 1 billion euros. This was all done against the backdrop of additional COVID-19, Lockdowns, mainly in Europe, and the U S patient visits continued to be around 80% of pre COVID-19 levels.
As we progress into 2020, one we are planning to unlock additional growth opportunities for do picks and expansion as we seek regulatory approvals for expansion into younger populations due to its demonstrated favorable safety profile.
Our ambition to drive penetration in the younger populations will be accelerated by the anticipated FDA and EMA decision for six to 11 year olds in their respective asthma indications and the pivotal data in six months to less than six year olds with atopic dermatitis now expected in the.
Second half of 2021 several months earlier than originally planned as enrollment completed much faster. In addition, we are looking forward to the readouts in prego nodule Arris and chronic spontaneous urticaria in 2021 two additional dermatology type two inflammatory diseases with high unmet need.
As you can see we are building a worldwide Mega brand, but he picks and we remain well on track to achieve our greater than 10 billion Euro peak ambition on slide 11, Let me provide you with a snapshot of the continuing execution of depicts and in non U S markets, where we saw particularly strong growth in the first quarter as mentioned a moment.
Ago.
To be successful with your picks and we were always confident that we would win worldwide and we are seeing great momentum emerging across the globe.
In Europe adult a day is reimbursed throughout the EU five with continued expansion into respiratory indications as well as younger populations underway in Germany, who picks. It holds the number one new patient market share position in asthma.
Moving to other attractive markets in the rest of the world in Japan over the past 12 months, you picks and has become the number three pharmaceutical product and volume growth and similar to Germany. Now holds the number one new patient market share position in asthma moving to China. It depicts and a top adult atopic dermatitis launch has.
The accelerated following its inclusion on the N R. D. L. As of March 1st the initial uptake following the N. R. D. L. Inclusion has been strong with greater than 1000, new patients starting treatment in March exceeding our own expectations. Our teams in China are driving hospital listings in key cities and improving awareness across.
Patient and physician communities.
The next key milestones on our journey to unlock the picks and blockbuster potential in China include the expected decision for <unk> in adolescence with ABB in mid 2021.
Wrapping up on depicted on slide 12, I would like to draw your attention to the success of depicts and specifically in the respiratory indications of asthma and nasal polyps. The chart on the right demonstrates how well the brand resonates with U S Allergists and Pulmonologists over the past two years due picks and has become the leading respiratory.
Biologic in the U S in new to brand prescriptions in its approved indications.
Now why is such a success in respiratory clearly it is because of the picks and consistent safety and efficacy profile and we are resourced to win.
Type two inflammation drives greater than 80% of uncontrolled persistent asthma and depicts since unique mechanism of action inhibits IL four and IL 13 targeting underlying type two inflammation.
Asthma patients on depicts and have shown rapid and sustained lung function improvement as well as progressively declining.
Exacerbation rates. In addition, certain patients with chronic rhinosinusitis with nasal polyps on depicts an experienced significant reduction in nasal polyp size nasal congestion severity and the need for systemic corticosteroids <unk> surgery. All of this we believe is driving depicts since M. B Rx.
Growth within respiratory as it reaches pre COVID-19 levels, and we are looking forward to expanding into potential additional respiratory indications.
Advancing to slide 13, and turning to the specialty care franchises beyond depiction.
The rare disease franchise continued to deliver gross in the first quarter with higher sales in all reported regions. We are the global leader in Pompe disease, and we believe that adequate close todays alpha will establish a new standard of care for the disease.
The FDA has notified us that Purdue has been extended for three months to August 18th we will be ready to launch this important medicine and expect broad market access globally, which underlines our 20 year dedication to this patient community.
Within our neurology and rheumatology franchise, a baggio confirmed its resilience with sales in the first quarter broadly stable absorbing a high base for comparison in the entry of competition.
<unk> product sales were 24 million euros in the first quarter consistent with the prior three quarters strategically both lemon Trotter and Kim Zara had been deep prioritize with respect to commercial support.
Rare blood disorder gross in the first quarter was marked by the anticipated lower sales to our collaboration partners Sobey and we expect the lower sales. So two sobey to dampen our performance throughout the remainder of the year.
Excluding the sales to sobey the franchise grew as much as 5% supported by increased sales of our products and completely as Paul alluded to earlier in his comments. We are encouraged by our oncology launches Sir please download tayo oncology sales grew strongly in the first quarter up 26% more than offsetting the <unk>.
China decline following entry of generic competition in Europe, which began at the end of March My final Slide Slide 14 provides a snapshot of the progress we are making in bringing innovation to patients with rare blood disorders. As you know we have a number of molecules that have the potential to transform patients' lives, including <unk>.
<unk>, which is developed for people suffering from cold agglutinin disease, a rare disease with no approved therapies indicated to treat this disease. Following the complete response letter we received from the FDA in mid November 2020, we had been working collaboratively with both the FDA and our CMO partner to resolve the agencies' concerns and we are now.
Planning to resubmit, the <unk> BLA with the FDA in the second half of this year.
Turning to our hemophilia programs I am pleased to highlight that we are continuing to make steady progress in bringing the two saran to all hemophilia patients as a potential treatment option.
As of today, all health authorities relevant to the program have approved Reed dosing of the two saran and a majority of patients have resumed dosing, we intend to share data from our initial pivotal trials at medical conferences in the coming quarters. Following our interactions with the FDA. We are planning for a U S submission in the second half of 2012.
Two once data from their revised dose regimen are available among.
Among the other advances let me just point you to the initiation of phase III pediatric studies for Alpha, formerly known as bill or one, which underlines its favorable target profile and well understood mechanism of action in hemophilia, a with that I hand over to Thomas to update you on the vaccines business.
Thank you Bill our vaccine business was an important performance driver for Sanofi in the quarter with growth of observed in all three core segments thirst, a world leading pediatric combination vaccine franchise delivered one more than us would be in a funeral sales in the quarter.
With 15% growth globally, and particularly strong U S. Penta sales performance driven by the timing of the shipment to the U S. CDC.
Second strong demand for flu vaccines in the cell phone Mr drove 24% growth from these contracts.
We believe these specimens and serve as a strong indicator for continuously green prove vaccination coverage rate.
Based on the preorders to date in the Northern Hemisphere campaign, we are confident in delivering another year of strong flu vaccine sales.
Third our manager at this franchise is off to a good start with block plus 12% growth simple.
Posted by the launch of main Quincy in the U S I.
I remind you that main question quite C is the only FDA approved quite driven Meningococcall vaccine indicated for all persons above two years of age.
Finally, I'd like to share with you a few important milestones that are coming very soon.
The first one is another rigorous now while it's actually sales promo joint venture with Merck will not be reported within all sales line. We are very excited to bring the first example in pediatric commission of vaccines in the U S. Market. This is expected to come in the second quarter of this year.
With this product newborns in the U S. We finally have access to the convenience of a 61 vaccine reducing the number of shows given to newborns.
The second milestone is another important part of kind of David with the expected start of our first M&A flu vaccine trial phase one trial, which we're on track to initiate in the middle of this year.
These milestone do come on top of the exciting news regarding NUCYNTA, Matt, but we just have both talked about.
Yes, if he might be designed to provide protection for all in from entering the first RSV season.
With a positive readout of the middle of the Phase three trial now already in house, we will send me the debt. Therefore, these potentially breakthrough product one year earlier than anticipated.
This puts and should provide us with a two season need ahead of the competition a real game changer here.
Let's move on to slide 16.
Yeah, I want to provide you an update on the progress of our COVID-19 vaccine development programs. As you know in February we initiated a new phase II trial for adjuvant day to reconvene in vaccine candidate developed in collaboration with GSK.
These dry rapidly reached full enrollment and we now expect the phase two results into the coming weeks.
If the results are positive we are planning for prompt start of the phase III trial with vaccine expected to be available from quarter four this year.
In March we initiated the phase one two trial for M&A candidate vaccine done in collaboration with translate bio.
We're now expecting to show the results with you in Q3.
At the same time, we are obviously progressing up I can't go to work on the so called variance.
To make sure that we can address the need for a sustained response to the global COVID-19 funding me on the non game on an ongoing basis.
With this I hand over to David.
Thank you Tamara.
General Medicine, we are very pleased with the performance of I'll call brands in Q1.
As you remember I talked capital market day on February 5th we identified a number of core brands, which together delivered 4% gross during the period.
If you exclude hardware sales in the U S, which are now sold solely by it I don't know home I'll call brands portfolio grew more than 6%.
When you strip out the approximately four percentage point negative impact related to portfolio streamlining and a temporary supply constraints related to a pull guidance. The non core portfolio declined by only 6% during the period.
Gross of the car brands was mainly driven by Lovenox, which continues to benefit from inclusion in W. H soul guidelines for the treatment of utilized severe COVID-19 patients.
Two zero sales reached over 250 million euros for the quarter and moves on the trajectory to reach blockbuster status in 221 for the first time.
In China <unk> grew in book grew in both volume and sales and we continue to see gross and demand more than one year. After its inclusion in the BP.
We are excited about the early launch performance of colorant in Suzhou in China, and as Paul mentioned earlier, we believe that our launchers and agile go to market model.
Able us to drive gross in general medicine in China into a 'twenty one despite the potential impact from the expected next V P wave.
So to you and it looks like Jean which were combined with approximately 21 million euros insane as supposed to full year. Two of 20 are included in the list of 60 drugs, which was decided by the Chinese authority earlier this month and we expect the implementation of the next D. D. D wave you know in Q3.
Biologics, including Insulins were not included in the New V. P list at this time, but we don't keep Adrian insulin class may be reviewed by the Chinese authorities as well.
Two P M T of potential questions and our insulin business in China, not just sales were around 450 million euros for the full year two of 'twenty.
Zoo at the World differentiated label and supported by medical guidelines related to the usage of Basel incident.
I'm happy to highlight that as we speak we are already working on new patient starts with two zoo and switching patient uncontrolled on insulin 222 wins that I end the call over to Julie.
Thank you Lisa I'm.
I'm happy to share that we remain fully on track with the implementation of our strategic priorities and to focus on our gross brands as shared at the capital market day in February.
As you may have heard from our peers are ready at the beginning of the year was marked by a low incidence of cough cold and flu driven by social distancing measures across markets.
Actually the impact of the overall COVID-19 environment under C. T market third party market intelligence providers to reduce the retail market growth outlook for 2021 to around 2%.
On top of that the first quarter of last year set a high basis for comparison across many of Sanofi. So cheap that it's particularly again in cough and cold category as well as paint and origin due to consumers stocking up last year.
Consequently sales in Q1 this year were affected by lower demand in these categories more than offsetting strong demand for brands and wellness categories and through E. Commerce favored by consumers during the pandemic and which have been our key focus since the beginning of the year as part of our strategic priorities.
Importantly, we saw continued growth in the large U S market, where allergy sales increase driven by XI Bill, which was further supplemented by strong growth in digestive wellness.
Now have almost seven consecutive months of growth Sarah.
In the U S and all sorts of great momentum in all other.
I think the world.
Central and Eastern Europe. For example, we're also excited to announce the U S launch of <unk> 360 degrees with similar to do so.
And then factory 60 is an all in one heartburn solution that prevents any relief symptoms and will be available nationwide with full distribution in June this year with that I hand, it over to our CFO.
So on to sensor array monitoring on slide 19, now turning to our financial performance company sales increased two 4% into the first quarter, which helped to drive double digit EPS gross into period we.
We delivered another quarter of Kim the leverage supported by gross margin improvement, resulting from a favorable portfolio shift to specialty care products from the beginning of growing efficiencies within industrial affairs.
R&D spend increases.
Yes, it development cost.
It was offset by operational efficiencies and lower expenses on metro projects.
But you can expect to see R&D spend increasing meaningfully in the remainder of the year.
At the same time, our efforts to realize further efficiencies through smart spending initiatives have led to an incremental decline of approximately 1% in assuming.
In the quarter with in fact, an increase in selling cost to support the beat some expansion honest from decrease in G&A.
As we had highlighted to you already in March we benefited from a onetime payment from a grid a month from Midland receive from Daiichi sankyo related to a former but Kim collaboration in Japan.
<unk> is one time payment business operating income grew eight 4%, resulting in a margin of 29, 3% 100 basis points higher than the prior year.
In addition, our EPS growth was supported by the anticipated lower effective tax rate of 21%, which we guided to in February as part of the full year financial guidance.
Our rural business EPS.
151 euros reflects our leverage P&L on provides us with great confidence to achieve Alzheimer's alone took on a full year basis.
That was like 20, we believe that that was from performance in the first quarter puts us on the right path towards meeting email communicated midterm financial targets would be my margin of 30% in 2022.
I'll now trajectory into 2022, we're confident in our ability to drive performance with continued momentum from lipid centre liver, reaching up you know through further efficiencies specifically benefiting from improvements in industry on that first.
As for 2021.
This EPS growth of nine 8% in the first quarter, excluding the one time payment received from Daiichi It systems to talk to the year.
We have been able to consistently grow EPS from 2019, and 2020 on though in Q1 2021.
This is really reflecting the deep transformation, we are going through to deliver sustainable growth.
But I believe how your R&D spend is expected during the remainder of the euro to send our gross drivers on it.
And so our broad development program for our late stage pipeline to create future value.
Uncertainties remain pro business environment, mainly related to the pandemic from pricing policies in key markets.
But it seems that some of you.
We are getting better on better to navigate this pandemic.
On slide 21 submarine based on hours from Q1 performance, we are increasing and computer into the final from outlook for the remainder of the year, we maintained our expectation from a high single digit business EPS gross adds here.
When we turn to foreign exchange the impact is expected to be negative by minus 4% to minus 5% based on April average exchange rates.
This compares with estimated currency impact we communicated with our full year outlook in February of between minus four five on minus five five.
So let's open the call note the Q&A.
We've got it back to Heather.
Either click the voting icon at the bottom of your screen you will be notified when your line is open to ask your questions. At this time. Please make sure like you I don't know.
Microphone <unk>.
Or option to submit your questions by clicking the Q&A I'll Kim.
Kim screening people every day.
Okay.
Chris.
Yeah from the first question will be from pits.
Yep.
Okay.
Yeah, Thanks, very much people don't see.
Quick ones on the pipeline please.
Great to see the trial read out early.
Realize you can't talk to the day to say before publication, but you did host a rather detailed.
RSV R&D day last year.
And you gave a target clinical profile of at least 70% relative risk reduction and our street hospitalization. So just interest to feel how the day to place to that target profile.
Secondly on the mirror three I'm semester against physician's choice lots of focus obviously in the market.
Can you, perhaps help us handicap the study in terms of giving us a sense of the ESL one mutation status of the enrolled patients or the mix of prior treatment. So they received an earlier in the earlier line setting any color there I appreciate it.
And then lastly for John.
Just the car NK platform that you recently acquired looks really interesting just could you discuss why you think car NK it could be more exciting than car T and when we launch next few data points from that platform.
Okay. Thanks, Pete appreciate it.
So Thomas what are you prepared to share.
Thank you for the question Peter Peter Citi Madam.
You had mentioned a target product profile.
We are very excited by the latest news and therefore, we believe we have a clear product for registration and four clear impact on disease. This is why we are very happy to announce that we are going to submit this product a year in advance in 2022, instead of 'twenty two 'twenty three.
It means that he gives us at least two years versus the competition, which I'll come back to it he's met in any musician and I'll come back to why I don't believe it's competition, but we're very excited by the profile moving forward because it's going to be the theft product and I believe the only product in the coming decade, that's going to be a product that will prevent RSV.
In all intents.
Again, I think it's very important that highlight the importance of east RSV. The number one cause of hospitalization in North America or in Europe for audience Huh.
And as you've seen before 50% of the defense, but I'm going to ask Peter because of R&D are not born in season. So we really need to find a way to make sure that all of us keep a protected and it needs to be in or in Sun protection solution.
Meta in any position has been referred by some of your colleagues as you know very well it could work potentially.
Keep it up on in season, but if you have done in the spring or in the summer.
Probability, but you get my son antibodies transferred to keep and sustained protection for all of our interest is an ease. It every day. So we're super excited and we're looking forward to show mother's day, we do everything.
Thanks, Tyler So are we do think is game changing quite clearly and it's for all infants no matter when they're born I think that's very clear from tomo were excited about the data reading out and on the two yeah. The two seasons advantage to have a John Amira three mutation status. If you can and then maybe a comment I think it was.
I'm curious, but I wasn't I didn't hear it clearly.
Yeah Paul.
No a mere three I mean, it's an ongoing clinical trial so.
You know, we won't be able to say much about that until we're a data readout et cetera of course, we're collecting data on an ESR mutations.
And in the prior rounds of therapy will be reflective of what the eligibility criteria allow force. So I'm afraid I really can't give you much color on that.
And you'll have to wait for data.
On the <unk> platform the NK cell platform. Indeed, the reason that we think the NK cell platform has the ability to surpass the car T.
Is it really a couple fold one is the ease with which one can come up with allogeneic solutions. So universal one size fits all solution.
With NK cells requires no genomic engineering or in our case, it's a matter of selecting donors with a certain type of characteristic and expanding those sales and industrial scale.
The first product opportunity actually use unmodified NK cells, where the creators colleagues had already generated from very promising clinical data in the context of relapsed and refractory AML acute myeloid leukemia and showed very impressive data with patients who.
Were brought to complete remissions, some durability and that wasn't a completely unmodified cells.
Indeed going forward, we envision doing various types of genetic modifications, including car expression.
Second reason why we think an ACO platform is attractive is.
Because NK cells don't make some of the nasty cytokines that T cells, we believe there'll be a better therapeutic index.
Six for example.
It is not approved produced an appreciable levels by NK cells. So.
We believe we'll have a safer therapy as well.
Yeah.
John.
Thanks, Bill Great to have three pipeline questions by the way that's.
To kick off a hopefully will cause of even more of that focus over the coming months and years next question.
The next question is from Simon Epiphone Simon.
Hi, everybody and thank you for taking my questions sorry.
Sorry for a pipeline question, but at two two broad questions.
Firstly, obviously, an extremely strong start so yeah, even if you strip out the daiichi payment.
High comps from last year, just wondering maybe if you could talk to the reasoning for lack of a guidance of greater at this early juncture I. Appreciate it's early so maybe.
Things that we need to be aware of during 2021.
Referring to you from a increase from Congress at this point in France that maybe pushes.
Polls from from Nazis.
That would be helpful. And then the second question is on vaccine.
Typically it's COVID-19.
Michael you can help us.
Some you know the opportunity you can kind of see how the all COVID-19, recombinant vaccine given the safety issues that we've seen.
From J&J and Astrazeneca appreciate that small it is something you'd previously flagged 12 months ago using that methodology.
Yes.
Maybe if you can help them in a way do you see opportunity going forward and whether or not you know the fall.
The funding arrangement essentially still moving parts some profitability in 2022, and then just on messenger RNA Mcdonough two weeks ago extremely bullish on that platform talking about opportunities in other areas.
Maybe just talk to your level of confidence with respect to translate technology platform.
Being 12 months.
Collaboration.
And we do know from looking at Mcdonald's They couldn't pass from their RSV attack because it's not straightforward process. So maybe you can talk to you all.
Our expectations around them.
Peter.
So when you made upfront with a day list of questions and thank you for that.
Definitely a strong start to the year and early like you said I think what people are trying to figure out is if there's anything unsaid and it's really just about managing the business. So I'll hand, it to J P to give you. Some some context on that thank you. Thank you both are well.
It's an opportunity to two two.
For a more precise message maybe all on my side.
We want to create value for the long term. So I mean investing as we do in our early pipeline on the road running.
First free studies, our spectrum is.
We want to be so you will see some are some increase.
Our R&D spend.
Because as we said being capital market day in 2019 so.
That's where we want to spend their money on the assets, which are which are worth it.
As a point at which point, we are getting too so don't over read them in our early quarter one of the good results.
They are a long term trend, although we want to accelerate our value creation and really be able to deliver growth for the simple face of the plan.
Thank you Thomas there's a lot of the vaccine questions, we'd keep it quite sure because they get more questions in but it's over to you on what role I guess, what we have any broad comments on safety and maybe where we're at with to buy on their money.
So when COVID-19 first Simon.
It's a pandemic and let's be clear we have to be but that's we're learning every day. So that's true for all the different vaccines steps that are in there and we're going to keep learning every week, so but he chose it shows that as long as the problem. It's not so it's not sold and therefore, that's why we are feeling we are fully in with all three partnerships are doing for them.
For three from partners and we are mostly footing with our development of our two owned programs phase two coming very soon we will see the results of course will come back to you that you can do that we have a very strong collaboration with our with education than the ones that I meant to go to phase III Asap as soon as we have to face the wheels, and we believe it could be a very useful program.
We the volumes could mean in Q4, and we believe that where it would be a 2022 booster doses that would be required and would be down.
And then on M&A.
I think you you appreciated the Madonna vaccines day I did too I think it's showing the potential of this platform to actually create novel vaccines very exciting pet firms to be able to go into vaccines development territories that we couldnt go before because of technology, they're very excited about our partnership with trusted value as you know very well we're in phase II.
Right now on our COVID-19 are put up we'll get the readout in the in Q3, we are moving Colorado, South, especially but also in a few mrna.
But very confident in this partnership we believe it's a new frontier that theres been a crossover and will make us have a lot of new vaccines down the road.
Thank you Tomas Yeah, let's decide do I think we're very excited and very confident in a pandemic of course, all these emerging side effects and different things.
Part and parcel because of the speed in.
In a regular seasons like flu for example, the ball is even higher when the standards of care already approved.
Approved and it has to be beaten so we're.
We're optimistic I think got it from tomo and where we are with them on a day, but how we compete and how things will shake out. So maybe next question.
And the next question is from John I cant really tough.
Thank you very much for the question just maybe a couple on vaccines from one of them to be.
Thomas from on that.
Scenes congratulations on <unk>, it's only been about 25 years is there an opportunity for you to substantially increase your pediatric vaccine revenue because you have that picks or Alan and then secondly on <unk> you said in the past, we should expect pricing in the range of a pediatric I'm sorry of innovative vaccines, but could you just.
Give us a sense is that the full schedule of innovative vaccines or single doses, because they're obviously quite different I mean lastly, perhaps you could comment on where you are in the Pinto violent and inch program. It does seem that non interest doing well for you, but you seem to be behind the competitors in the panda violence and just wondering if.
Revenue for you is at risk long term as we think about models. Thanks.
Or did you just ask that they may be able to pick some question as well, but if you yeah, sorry, My bad my depict some question maybe for you Paul as is a lot of good things have happened with two picks them you've talked about C. O P. D. There's a whole allergy programs Oh Gee now that's been added and obviously theres some clouds over the.
Our competitors in that category, so why isn't and you're halfway towards 10.
<unk> 10 billion already why isn't the 10 billion wait too long given all those developments.
Well, maybe I'll take that one first for a stomach.
So it's all that long and everybody thought it was too high. So you know as we push on we take nothing for granted every day is game day would do pixel because we know the next few years, we know the IL 13, so half the answer literally missing the oilfield component, we know the emerging real world data and clinical data on.
Jack's so we know there's challenges we take nothing for granted we have a lot of work to do we have a incredible clinical development program. We're incredibly disciplined commercially just heard from bill what's happening in China. So you know.
You know, we've guided to 10 plus.
And maybe it's the plus our debt you're talking about and over time, maybe it will give you a bit more detail on that.
Maybe I'll go back to Bill if you want to out of that income at some quite detailed questions, but I think important questions on that.
<unk> on the Pennsylvania manage but I also think you should get to the pricing on the one and done thing.
Thank you John So on RSV Piscine, very clearly we are talking about the premium innovative vaccine full scheduled it's a windows treatment window, sorry, preventive measure or weakness of your math, but it's comparable to a food.
Scheduled because you want to make sure that you have to send them back from disease. So that'd be Ikea here on vaccine is thank you for the congratulations as you were mentioning it took a while.
But I think it's very important to mention that this is very important because we're gonna be able to bring 16, one in the U S. So.
So I'm not trying before and we're not successful to do it is.
He is going to be the first 16, one with very exciting antigens.
Of course pipe premium plays a role in there you probably remember that it's the JV with America and therefore, we are not booking into the same lines, but I think it's important to mention that it is a very important positive impact of course on the vaccines Leroy margin ratio.
And that the beeline in total value and absolutely that is expected to remain stable.
When you look at the plate penta sales versus batteries.
And of course, I I insist on the fact that our full year guidance you know gross for vaccine completely includes the non sales activity in the U S. What why we are very excited because what we've seen in the past is that 60 day, one there's a spike in one I've been able to gain market share significantly you know those have been announced two decades ago in Europe.
Very exciting, but we can provide those in U S and I think it's gonna be up all day I stop.
And finally in main main Panther.
Probably have seen that we are entering a main b program into phase one too right.
Right now so are we.
It gives you a hint on the fact that we're going to wealth meant that that right. After that so we are definitely following that Wayne I don't think are the two main Panthers are being developed out a significant concern when we're looking at the midterm sales why because we the main quick feedback we are launching now in the U S. We believe we have the best foreign one medical coding.
Vaccine Acw Y and that's gonna be a backbone that it'll be very important moving forward. We're now want to add the mismatch between the bittman per day.
Thank you Tom I appreciate it.
Next question.
We're gonna take Joe from Credit Suisse.
I think you had a few questions on your emerging drugs. I'm also pleased that we think that that's coming from and it's going to be big or ex U S. But you asked very quickly.
Is that a bolus of sales into new markets that you launch and is it underlying demand if you could just.
Tell us a little bit more about the question about Oh, that's safe.
And also your strategy change from it.
Oh, the amendment no really very differentiated.
You could be in the range would be adjuvant. That's C. S. C C indication, but clearly I use felt it at around the same time as Keytruda to say you Chris.
So it gets a little bit about your strategy going forward expenses.
Thank you John could you could you.
Just two quick other ones.
He just started from little bit more about why that was a good day, such a life full day drug Huh I've just sure. It wasn't anything to do with any of the data I have to say on that piece I Wonder if you could tell us about marketing costs going forward it was probably.
We go through the rest of this year, how realistic is it teams being able to keep that as low SG&A number.
You know actually decline rather than Chris.
Yeah.
Okay, well I'll just quickly take that could do for them.
I'm Bill then J B and we can provide more from the entity, but really were going for a broad patient population. There's been a request for more data it's been a very intelligent and positive conversation, there's a delay and of course, there's a lot of challenges worldwide for how everybody runs their organizations, but we're feeling very confident thank bill set upfront.
We're excited about what it will bring to patients Bill sounds Crazy times, it's very early I mean, yeah to be two months, who caught some people, but John I make any comments ex U S versus U S. In somebody's them anytime Yeah look I think it has to do with the ability to launch at a on a global scale quicker you know in the past you used to have to wait a long time to be at.
Launching a are in the various.
S geographies ex U S is off to a very strong start as well I think the important thing debt to kind of capture starkly. So is that now that we've had our second approval within 12 months in both the U S and the EU based on me I came a study results. So that's in combination with Katy.
We see the commercial potential increasing from about 13% of the market showed a 35% of the market. So I think if you look ahead. We you know this this unlocks they are the market from the U S launch that happened like simultaneous with the Lockdowns that took place them with the pandemic and so you know we're a very odd.
Let's talk about where the future has to hold with the market debt nearly tripling them with these new indicate pardon me new approvals regarding led Tayo, yeah, we really see it as a leap day being the leader in non melanoma skin cancer.
Thank the our recent expansions that we add including BCC.
It really is off to a I think a very strong start for us. So that's where we expect that we're going to stay and become our leaders.
Thank you bill to be marketing costs remained of the year.
Yeah, I think George question was also beyond maybe.
The remaining of the year because for this year. It's the same trend that we are really looking to go deep in G&A on a going on are stimulating our gross engines, but looking beyond Uh huh.
Short term.
Period, with a with a normalization of the situation of COVID-19.
We will not.
Just keep most.
Most of our games are linked to COVID-19, but.
We will go on without saving opportunities.
That will offset the natural rebound because yes, we will be back on the ground there will be some some cross kicking imaging but.
But that will be absorbed by our extra savings because I still have identified with the team's many many opportunities.
So.
Mid term we will see.
Some.
We will see some increase of the selling and general expenses not so much because of a post COVID-19, but because Google Seo topline growing or we will be preparing for launches of new drugs, and that's where we want to be but we think we have a we're in a very good spot to contain any rebound.
From a post COVID-19 area.
On going on with extra savings that will more than offset so it's since each restart our debt we will see.
Thank you Jimmy next question. The next question is from Graham from Bank of America from.
John.
Great. Thanks for taking my question. So I've got a couple of non senescent and one on your ship to say, Oh, I'm Sonesta and so obviously, we're expecting the marijuana CDK four six combo data fairly soon.
Lots of single arm studies say there just wondering what you think is an appropriate benchmark that investors should be easing to look at the response rate say for example, CDK 464 question second line combo trials have shown response rates ranging from mid twenties. Today 40 say is that the right sort of range, we should be referencing or would you point to differences in patient populations in the trials.
And then secondly event spend slide show Phase III start decision on early breast cancer in the first half and what are the gating factors and then what is that decision going to be based on and so you're getting interim looks at your a mere four charge yourself because I think final results sales were delayed till 2022 and then.
And thirdly on your ship to say had some monotherapy data presented by your partner evolution medicine at the ICR and I just wonder what your thoughts on the day to the profile opportunity in combinations for that product would be and your level of excitement about that project. Thank you.
Thank you Graham.
John a bunch of questions and I'm sonesta from including a response rates, if we're gonna shack and the gating.
Do you and I have a quick give a quick time Kim.
Yes, Thanks Graham the on the combination with the CDK four six inhibitor class I I think as you suggest simple restaurants plus cabo.
Tableau cichlid for example would be a good benchmark the thing that's a bit challenging there, though is that the number of prior lines of therapies and what those therapies were has a big impact on what the outcome might look like so you'll have to also normalize for that when you look at the data.
Regarding a mirror.
For the that's the.
The lead up to the adjuvant study.
We did get off to a slow start because of the pandemic, but.
I have decided that we will be able to get the answers we need with probably about half as many patients as we originally thought so that we won't delay moving into the adjuvant setting.
So we feel like we're where we're going to catch up essentially by virtue of being able to get to what we need with fewer patients essentially.
In that study.
And then what was your last question about tourism.
So ship.
Chip to chip.
Chip sales and ship to ship two I'm sorry, yes, so no.
Interrogation of the ship two molecule the partnership with the erosion medicines.
Very exciting for US we are doing combination studies right now with Amgen's K Ras inhibitor, which is.
One of the combos that at least pre clinically has been very exciting.
We have studies undergoing with other combination partners it makes sense, including.
Not only playing the signal transduction side of the equation with things like <unk> combos in Mexico, most but also looking at the possible immuno oncology angle by virtue of the fact that ship two does get recruited to the cytoplasmic tale of PD one.
PD one is activated T cells. So there's also.
A way to think of that another side of the coin here thinking about immuno oncology and that study is underway as well.
Thanks, John next question.
What will it take Richard <unk> from Jpmorgan Richard.
Hi, Thanks for taking my questions.
First question just on your picks and the fact that how have you seen the uptake and in this sort of pediatric <unk> patients relative to the early stages that you saw in that or is there any sort of except from severance that you're saying that that's great sales or something that can help us think the uptake potential there.
That's it.
This great second question on tax Reform, Paul You mentioned health care reform Bill just on that on the tax reform impacts then of course the tax rate is down this year to 21%, but how should we think about the U S impacts on Santa Fe, and then finally just back on the map.
I I think cash Thomas E. C. You suggested benefit across all types of bank debt all.
All types of patients can we just haven't always David the bed.
So very similar across those patients that can set a what we've seen in the in the phase two anything you can help with that would be great. Thanks very much.
Okay. Thanks, Richard So just quick clean preterm and Fulton when no ready, but some of it too.
Clearly a very good impactful all infants preterm I'm free to M C.
C N N G suite 19 asleep at the constant moving forward from two J B tax and how well are we going to manage any changes in the U S.
Yeah.
We're looking at what's happening currently so discussions are happening or we think.
Part of it will go through its look here, which parks in the meantime, we are clearly benefiting from a very positive trend in our older.
With.
Our tax our tech centers.
So all in all it's a bit early to tell you where he put alone but I'm quite.
Hopefully that we will go on.
Finding a new ideas.
To improve our effective tax rate in Q, and then bill do pixel uptake P. J D.
Strong just like it was in adults and I think it's just further proof of the really strong safety and efficacy profile of the product.
The 10-Q, maybe we have time for one more one more for the last one would be from Nomura.
No.
Okay.
Yep.
So we tried some time.
Thank you.
We look forward to seeing you again in the next results if not before.
Thank you.
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Uh huh.