Q2 2021 Sanofi SA Earnings Call
As V season, we're looking forward to sharing the positive data from the melody and met the study's with you in due course.
Substantial progress has been made with alpha and to to surround a potentially life changing treatments for patients with hemophilia I'm excited to present data from the phase III studies as early as the beginning of next year.
And finally with taller boot nib, wherein routing across our 4 phase III studies with greater than 95% of our patients retained on the phase 2 be open label extension study quite remarkable we remain convinced in the transformative potential of English step as a breakthrough treatment for patients living with the lysosomal storage disorders.
With our expectation the priority assets are potentially transformative value for the company as a whole than the starts revised focus on the LSD indications is that is to re prioritize the resource deployment on those priority assets listed on this slide Bill.
On those on the slide we have an increasing number of.
And Chris a number of other innovative molecules in our pipeline and we will introduce further priority assets too as the data continues to evolve.
Now turning to slide 7 Sanofi as diversity inclusion strategy as well embedded in our play to win culture with clear priorities regarding gender equality, we are on an encouraging path with 40%.
Under leadership roles held by women today, but clearly our commitment remains for women to hold 50% of those roles by 2025.
In the U S people of color now represent 31% of the Sanofi workforce and here our commitment is to align with the representation of our patient base by 2025, which is estimated to be around 37.
7%.
There was great work underway across the new PS organization with many best practice initiatives of how we include diverse communities and our workforce for example join Prime month in June many country organizations teams came together to drive local campaigns, providing LGBTQ I E plus communities with forums to create.
A culture of inclusion and equality at work can be on while we are encouraged by our progress. We recognize that we are nowhere close to where we need to be our journey will only be complete when Sanofi is workforce is fully ramped sensitive of our diverse society.
And now let me handover the call to bill to begin the second quarter business.
Bill. Thank you Paul starting with depicted on slide 8 depicts and delivered an outstanding quarter with accelerated worldwide growth of 57% driven by strong performance in the U S as well as in the ex U S markets.
Annualized at 5 billion euros.
And well on its trajectory to achieve our greater than 10 billion peak sales ambition through picks and added almost 200 million euros of income on incremental sales in the period versus the first quarter in spite of in office visits remaining below pre COVID-19 levels.
As we progress into the second half of 2021.
John we are excited about key milestones, which could make 2 picks and accessible to younger patient populations in both asthma and atopic dermatitis supported by its well established long term safety profile.
We are anticipating the FDA decision for 6 to 11 year olds in asthma as well.
Pivotal data in our <unk> trial below the age of 6 close to a year earlier than planned as enrollment completed much faster.
We also continue to advance the science into additional inflammatory diseases with the key Readouts and Craig on our Dolores and eosinophilic esophagitis expected. This.
<unk>.
On slide 9 let me highlight the positive results of <unk> in patients with chronic spontaneous urticaria announced today.
CSU bears the hallmarks of type 2 inflammation and is characterized by hives <unk> skin swelling and is associated with intense itch.
This chronic disease has a potentially severe impact on quality of life and is typically treated with anti histamines. However for up to 50% of people living with CSU their disease remains uncontrolled and estimated 300000 moderate to severe patients are eligible for biologics in the us putting this into context.
Next the eligible population is as large as the number of patients undo pixel globally today.
The topline results at 24 weeks from study day.
Of the Liberty Cupid trial program demonstrated that depicts <unk> nearly doubled the reduction in itch and early carry activity compared to standard of care alone.
<unk> trial also demonstrated safety results similar to the known safety of <unk> and its approved indications regulatory submissions are planned to begin next year Ah study B of the trial program a study of patients who remain symptomatic despite anti histamines and Omalizumab is ongoing with expected readout.
In <unk> 2020 to move.
Moving on to slide 10, and taking a closer look at our approved indications in the U S..2 Pixar has the potential to address the lives of over 3 million patients clearly we are only at the beginning of penetrating the large U S market with only 6% of the biologics eligible.
Patients treated today similarly in asthma and nasal polyps, we are only starting to unlock the opportunity and have a tremendous growth potential ahead of us.
Driven by our ambition to expand into the pediatric population, we have the opportunity to add an incremental 150000 young patient.
Patients in total and our core indications.
Separately, we are executing on a robust clinical development program in multiple adjacent type 2 indications, which could unlock additional growth opportunities.
These indications combined have the potential to address an additional population of 600000 patients.
Patients in the future.
Notably, let me remind you that we considered the type 2 COPD indication an upside to our peak sales ambition and therefore have not included this significant population and the patient number for the adjacent indications on this slide.
Advancing to slide 11, and turning to the other special.
<unk> care franchises, the rare disease franchise continued to deliver growth in the second quarter with higher sales in all reported regions and strong performance from our Pompe and fabry franchises growth rates have to be seen also against the backdrop of the second quarter of 2020 due to COVID-19.
When receiving treatment was very challenging for patients.
In Pompeii, specifically, we are looking forward to the FDA <unk> date for Abbott glucose today's alpha in August.
Our neurology and immunology franchise was down slightly as the Boswell continued to be resilient in the increasingly crowded Ms market.
Franchise showed strong.
Special growth of 14% outside the U S offset by the expected lower U S sales with recent competitive launches.
Their blood disorder grew 17% excluding sales to sobey franchise growth was mainly driven by increased sales of <unk> and <unk> in the U S. As planned sales to <unk> were lower.
Lower in the second quarter, and we anticipate this dynamic to continue into the second half of 2021.
As our presence in oncology is re emerging sales of the oncology franchise were up 25% supported by the encouraging uptake of <unk>, and Lyft, Tayo, which collectively achieved more than 300% growth with.
With that I turn it over to Tom Us to update you on the vaccines business.
Thank you Bill.
Vaccines delivered another strong quarter with 16% growth demonstrating that our business is progressively getting back towards pre pandemic trajectory.
The U S business performed particularly well growing 80.
Sent recovering from a low Q2.2020 in particular, the meningitis franchise that was already off to a good start in Q1.
We announced 2 important new product in the U S. This quarter main quite fee. The only FDA approved quadrivalent Meningococcall vaccine indicated for individuals above 2 years of age.
<unk>, the first and only exhibited between vaccines in the U S.
Outside the U S sales were negatively impacted by lower growth rates and by ongoing COVID-19 organizations that have been prioritized of are routinely musicians.
Flu at a solid fulfillment up 9% versus Q2 last year and.
We continue to plan for a record northern hemisphere flu season in terms of sales.
From a phasing perspective for this northern hemisphere season, we still expect around 50 for some of those sales to occur in the third quarter of the year.
Also we initiated a global phase III study flow recommit on COVID-19 vaccine candidate we assumed 2 connectivity.
And if I can even by Q4 this year to read out the data.
While our rolling submission process has already started in EU.
For the mrna COVID-19 vaccine candidate we continue to expect phase 1.2 data in Q3 of this year.
On Slide 13, let me explain our vaca <unk> will simplify.
Sufficient incentive recognition in the U S.
Prior to the <unk>, Inc. <unk> received a panther evident vaccine, that's a separate vaccine to protect against sickle disease.
Altogether. These represents 5 or 6 injections in the first 6 months of age this.
This is shown on the left part of the chart.
<unk> root vaccine.
We can now reduce the number of injections required from 5 or 6 down to 3 injections.
As you know ex evident pediatric vaccines have been launching of our western markets and I've taken a majority share within 3 years of launch.
We do expect <unk> to capture significant market share.
In the U S from both available per Devin and vaccines.
For your reference Fantast L. The Sanofi Pant evident to you as a brand represented around 2 third of our 2020 P. P. H U S sales.
Importantly.
Fantastic itself will not completely disappear.
Because of the booster regimen shown on the.
We as part of the slide.
In fact, we received vaccine for the primary vaccination will likely receive a panther sell booster dose to continue immunization with consistent antigen, meaning that while vaccine sales. We replace penta sales into primary series fantasy is likely to become the booster of choice at 80.
18 months of age.
<unk> commercialized through a joint partnership with Merck leveraging both companies existing commercial teams instead of setting up a separate infrastructure.
Sales are recorded by the joint partnership with Sanofi bookings, 50% of the profit I'm glad to share it with you, but this setup is profit making.
Low opt out.
Let's now talk about the Sanofi them out any center of excellent on the next slide.
We did recognize the potential of this technology before the COVID-19 pandemic signing the initial translate bio agreement in 2018.
From that time, we saw him out I need an additional tool in our vaccine to books.
If there was an increasing amount of center of excellence will accelerate the development and delivery of the next generation vaccines by bringing together for Android dedicated employees in both in the U S and France with end to end expertise from R&D to CMC and from manufacturing to regulatory filing.
We will be science driven.
From both and modified and where do you find them I need to get the best possible construct.
In parallel we have recently invested in a variety of vaccine factory very innovative new store concept versatile enough to accommodate ml and in manufacturing in addition to other technologies.
With this investment and in Miami.
And we're looking forward to delivering innovative next generation of vaccines beyond pandemic with ambition for a minimum of 6 clinical candidates by 2025.
With this I know endo virtually day for genomic medicines.
Demand in.
In General Medicine, we are extremely pleased with the performance of the second quarter.
T flex and execution of our strategy.
Our core assets delivered 12% growth during the periods. So 6 key brands knock off that portfolio reported solid growth in the quarter.
<unk> was up 25% and continued to benefit from inclusion in the WH soul guidelines for the.
With months of hospitalized severe COVID-19 patients. In addition to a low base last year due to deferred elective surgery.
<unk> grew 8% due to the launch execution in China and continued strong adoption in European markets to heal remains on track to reach blockbuster status.
Chris Plavix returned to growth in the second quarter and grew in both volume and sales in China up 8% and sales more than 1 year after its inclusion in the BBB.
On the other key brands, let me pause to differentiating data for Siliqua presented at Ada in June Solomon.
Study demonstrated in poor blood sugar control without great game for a patient on therapy with siliqua versus Premixed insulin.
We believe this provides us with your opportunity to further drive growth of siliqua in large markets, where premixed insulin are still widely used so broadly stable.
Sales performance of our noncore portfolio benefited from the pricing environment. This quarter offsetting the loss of revenues from our strategy portfolio streamlining initiatives.
Turning to China, Sanofi bus dissipated statistically the PDP weighted 5 billing for <unk> in June was implemented.
Stabilization expected in the fourth quarter.
We do not expect significant sales impact on a full year from the GBP <unk> 5, but we remain vigilant to learn about any potential mechanisms for the inclusion of the insulin class.
Part of the transformation of the General Medicine business continues.
The streamlining of all food products and the reduction of our domestic footprint and we delivered on these commitments.
<unk> product divested by the divestments and a more simplified infrastructure in European countries. Overall, we are confident in our strategy execution and on par.
To deliver on our commitments to stabilize sales by towards 25 as compared to the 2 twin keep pace with that and over the call to Chi.
Thank you D. Today, I'm very pleased with a return to growth in the second quarter, not only versus last year, but also on a pre COVID-19.
To beat them and I'm happy to say the strong performance is to a large extent the result of the new focus on our key brands and markets that we shared with you in February.
The double digit growth in the quarter also reflects a strong recovery of the CHP market against the low basis for comparison of the prior year when in person pharmacy traffic was significantly impacted.
And by the pandemic, coupled with the unwinding of the high inventory at the consumer level.
Our priority is put behind our wellness categories are driving growth with digestive wellness performing particularly well in the second quarter and led by our brands and David Jimmy now Buscopan dust collectors, whereas I sincerely I'm never care I'm.
I'm also encouraged by day.
Saturation of our sales to the E Commerce channel with significant growth from some brands and in key markets.
Importantly, we execute on our strategy to reduce the complexity of our portfolio. We recently signed a couple of meaningful divestiture agreement, which enabled us to increase focus on our strategic brands.
Another very important step.
Is that 2 day 10 legal entities have successfully successfully become standalone, which is in line with our roadmap to create a fast moving consumer health care entity with agile and adapt to the ways of working.
In summary, both the return to growth of our business in the second quarter as well as the advancements on our strategic roadmap.
Increase our confidence in the value of our business with that I'm happy to hand, it over to John for an update on transforming R&D.
Yeah.
Yeah.
Yeah.
Thank you Julie turning to slide 6.
Team now.
When I joined this therapy team in mid 2018, we set out to fundamentally transform our pipeline and bolster productivity of the R&D organization.
Moreover, we aim to accomplish this transformation with a flat or even declining budget by making the necessary tradeoffs.
Mandating far more focus.
Key to this ambition has been the rigorous prioritization of projects.
I am proud to say the productivity of <unk> R&D has doubled.
And this is reflected in the pipeline comparing the 2017 Sanofi portfolio with the 2021.
<unk> results, both in quantity and most importantly quality of molecules in development.
With respect to quantity, we've achieved an 80% increase in the number of enemies and development without increasing our budget.
And with respect to quality, 89% of our molecules in development now have.
Have a clear first in class.
Our best in class target profile.
A few examples of molecules that began their development journey. Since 2018 are listed here ranging from our oral selective estrogen receptor to greater Anderson Astral for breast cancer to our brain penetrant oral <unk> inhibitor for multiple sclerosis.
2 are exquisitely engineered extended pharmacology factor 8 replacement for hemophilia a ever.
Our non alpha interleukin 2 molecule for immuno oncology created using a recently acquired synthetic biology platform that I had been monitoring for a couple of years waiting for Derisking data that.
<unk> cited the competence to pounce on the opportunity.
In addition, our IraQ4 day greater in collaboration with Kim Europe recently achieved clinical proof of mechanism.
The reinvigoration of the Sanofi pipeline has been greatly accelerated through M&A with 6 innovative companies bolted on.
These are supplementing.
Our pipeline and importantly, adding drug discovery platforms contributing to improved research productive activity going forward.
Today, our drug discovery toolbox is much more diverse.
Beyond small molecules insulins in recombinant enzyme to AD platform didn't antibodies from Abilene fully human monoclonal.
That provide antibodies from Kai man synthetic biology, inspired recombinant proteins from <unk> <unk>.
<unk> delivered in vivo into selective types of sales using highly engineered nanoparticles from title Universal NK cell therapies for immuno oncology from key Adas and even new twists on small molecules.
From Principia.
Moving to slide 17.
Among our late stage oncology assets is <unk>, our oral selective estrogen receptor to greater or Serge.
This molecule has the potential to become a best in class endocrine backbone therapy for hormone receptor positive.
Breast cancer.
What makes <unk> best in class.
Well, it's all about the structure of the molecule setting empty nester and apart from competitors you.
You can think of Serge as having 2 components of core scaffold that binds the estrogen receptor shown in the box and.
And an arm shown in green.
Engages cellular protein degradation machinery to eliminate the estrogen receptor from sales.
Now Sanofi is the greater arm is a bit different from competing Serge, but our scaffold is entirely different.
As a result, <unk> possesses competitive efficacy, but without the.
That in fact baggage of competing Serge.
This best in class Tolerability profile really matters when treating early stage breast cancer, particularly in the adjuvant setting where women can be on therapy for 10 years.
We've launched a broad program to assess the efficacy and Tolerability Bam sonesta and across all lines of therapy from.
Some early belief.
Our fast to market opportunity is found in this study we call Amira 3 in late line metastatic breast cancer. This is a high bar challenge for EMS and Astro, particularly in a world where most women will have already failed an aromatase inhibitor combined with the CDK 4.6 inhibitor.
But it's.
Syed obsessed form Amira 3 could bring <unk> to market within 7 years, well ahead of standard industry cycle times.
We anticipate the event driven readout for a mere 3 in the second half of this year.
Our phase 1 data showed a respectable 36% clinical benefit.
Benefit rate, which rose to 64% for patients who have not already received bill best friend or a kinase inhibitor.
Treatment related adverse events were mostly grade 1 some great too, but unlike competing Serge no grade 3.
A mere 5.
Front line metastatic breast cancer.
<unk> compares CDK <unk> inhibitor Pavel cyclically in combination with either <unk> or an aromatase inhibitor.
We expect this trial to be fully enrolled faster than planned if the enthusiastic response from the investigator community continues at the current pace.
At <unk> last month.
Presented our pilot data, where AMC strength combined with tableau cyclic reporting an overall response rate of 34% and an impressive clinical benefit rate of 74% for this combination.
Again, our safety profile was consistent with best in class Tolerability.
Today, we are.
Are the only company, having demonstrated encouraging phase 1 combination efficacy data at the phase III dose.
For early breast cancer, our first foray into the adjuvant setting is set to begin towards the end of this year.
As announced at <unk>, we're pleased and honored to join forces with <unk>.
We build leading oncology cooperative groups working on breast cancer to conduct a seminal trial in aromatase inhibitor intolerant patients, whose tumors have high risk features.
Our study will put <unk> head to head against Tamoxifen.
While representing a subset of the adjuvant population this.
Some of the redesign affords the opportunity to reach the market relatively quickly by adjuvant standards.
Recognize that an estimated 30% of women with early stage breast cancer fail to complete the prescribed 5 years of adjuvant therapy due to tolerability challenges with the aromatase inhibitors.
Now on <unk>.
Study 18 gleaves.
I can point to several other examples of our progress in oncology.
That also occurred in Q2 <unk>.
First SAR 245, a potential best in class non alpha interleukin 2 molecule from this <unk> platform now being tested in several oncology indications.
And context, as monotherapy and as combination therapy.
In our broad phase II program, we are leveraging to 4 fives impressive ability to selectively expand effector T cells without undue expansion of immunosuppressive regulatory T cells by combining 245, either with or some.
Some implement or with Merck's <unk> lab.
In addition to 4.5 will be tested in combination with <unk> ADC competent antibodies, such as Cetuximab to leverage the impressive NK cell expansion that our molecule stimulates and patients a very well tolerated doses.
In the second panel.
SAR 81 is a trailblazing entrants into the frontier of checkpoint inhibitors partnered with beyond Biosciences.
<unk> targets <unk> to a checkpoint receptor bound principally on myeloid cells and NK cells as well as a subpopulation of PD, 1 negative exhausted T cells.
That molecule.
Chris entered phase 1 and we are anxious to combined 88, 1 with other molecules in our portfolio.
In the third panel.
<unk> first entry into cell based therapeutics is represented by the Universal NK cell platform with the objective to bolster our emerging focus on NK.
<unk> based Immunotherapies we.
We expect these university compatible NK cells to combine well with other molecules in our portfolio.
And finally in the fourth panel I would highlight our antibody drug conjugate molecules to submit a mab rep handsome.
Our potential first in class <unk> targeting ADC.
So now in phase III for advanced lung cancer.
<unk> aims to not only become the standard of care for patients with <unk> 5 high expressing tumors in second line post immunotherapy.
But also to become the cornerstone of therapy in first line non small cell lung cancer in <unk>.
<unk> with a PD 1.
Looking beyond lung cancer. This quarter, we started a basket trial and additional <unk> additional <unk> expressing tumor types, namely breast and pancreatic.
Yes.
My final slide slide 19.
The pipeline milestones expected for the second half of the year.
Combination it includes potentially registration, enabling pivotal trial readouts for <unk> in 3 new indications you've heard about 1 of those from bill.
We have pivotal trial Readouts also where our internally invented anti CD 38, antibody stark, Lisa and treatment nave frontline myeloma and for our <unk>.
Currently embedded oral <unk> estrogen in late line breast cancer and for <unk>, the oral B TK inhibitor acquired from <unk>.
Acquired from Principia, which will read out later this year for dermatology indication.
We also expect to put an additional 5 molecules into the clinic in the second half of 2021.
Including some really interesting multi specific antibodies.
Finally, I would mention with pride.
That the FDA approved exon items, all for the treatment of African sleeping sickness.
<unk> was discovered in our laboratories in Frankfurt and developed in collaboration with the nonprofit organization.
Drugs for neglected disease initiatives. It represents the first convenient oral therapy for African <unk>.
Myles stone and Sanofi has long standing commitment to eradicate this neglected tropical disease.
The FDA will issue a priority review voucher for this accomplishment.
And with that.
<unk> <unk>, our CFO John that piece.
Thank you John.
On slide 21, turning to our financial performance company sales increased 12, 4% since the second quarter, which helped to drive a $16.4 EPS growth from day period.
We are improving on our gross margin improving.
I hand, it in the quarter 70 bps at constant exchange rate, resulting from a favorable portfolio shift to specialty care products on efficiencies.
Just real sales.
<unk> more than compensated for lower gross margin into vaccines such was affected this quarter by quite a bit frictions with limited remaining shelf.
So slide due to the bundling.
R&D spending increased during the quarter driven by advancements of our priority assets. We also continue to add R&D spend from recent acquisitions with the suite deals closing during the quarter, partially offset by operational efficiencies.
Higher SG&A spending was driven mainly.
Reported investment in advertising and promotion behind those specialty care products, but also needs to be seen against the low level of spend 1 year ago.
Other operating income benefited from capital gains on portfolio divestments of around $50 million in.
In December last year, we booked $157 million.
<unk> is a revaluation of the retained regeneron shares.
Unless our EPS growth continues to be supported by the anticipated lower effective tax rate of 21%, which we guided to in February as part of the full year financial guidance.
On slide 22, we believe that our strong performance in the fourth.
Puts us on the right path towards meeting our communicated in term time, those targets financial targets with <unk> margin of at least 30% in 2022.
Driven by a 7% topline growth we increased the.
Margin in the first half of 2021 by women's EBITDA to 28, 3% a 160.
<unk> at constant exchange rate.
If you would exclude so product portfolio divestments relate to capital gains.
The other operating income and expense line booths in the first half of 2021.2021 day.
Underlying <unk> improvement at constant exchange rate reaches.
The 70 basis points since he's achieved solely.
Sales growth shifting product mix and efficiencies.
The underlying improvement in <unk> is expected to continue with <unk> as a primary driver. We now expect <unk> to be accretive to <unk> margin for the full year.
2022, instead of by the end of 2022 as previously communicated import.
Importantly, we also have plans in place to deliver significant cogs improvement onto pizza from 'twenty to 'twenty 3 onwards.
Yes.
On slide 23, I will now provide an update on our savings.
Savings initiatives I'd look to 'twenty to 'twenty, 1 we have achieved around $2.1 billion of cumulative savings, adding another $450 million savings in the past 6 months, we continued to make strong progress, especially in the area of smart spending we expect the COVID-19 related savings of 230 minutes I will not comment on so those need to.
Seen in addition to the overall 1 billion target.
Sitting with them.
So our personal excellence, we have generated many manufacturing and this will also be the main area for future savings to reach our goal of $1 billion next year.
We remain on track to achieve our target of $2.5 billion savings by 2022.
With most of this year or so amongst your savings to be reinvested behind our growth drivers on the <unk>.
Key programs in our hands.
Moving to slide 20 for free cash flow continues its positive trend compared to 2018 base. It has increased by more than 1 person. This is again driven by Sanofi solid business performance.
And smart spending initiatives.
The comparable period in 2020 benefited from larger asset disposals.
Not repeated in 2021.
In addition, we had significant cash outflows in the first half of 2021 to finance M&A and business development deals.
As a matter of principle we.
Formerly our midterm target concerning if we get flow, which we intend to continue to maximize to maximize white investing in science.
On slide 25, we summarize expected dynamics for the second half of 2021.
For Soma, we expect continued growth from <unk> symptoms and mid core assets.
For a little bit notes in particular, we expect growth rates to slow so.
The latest round of China, GDP will be implemented late Q3 to Q4. This year on uncertainties remain around the <unk> saloon class inclusion.
While vaccines, we expect another record flu season, the continued recovery of meningitis.
<unk>.
Lower post rate may affect EPS sales.
In consumer health, we expect to make further progress on business simplification similar to what we saw in the first half.
In terms of non sales items, we expect to continue improvements in gross margin with expansion of our pipe.
Our R&D spend is likely to trend in line.
With the increase in the first half.
On a separate topic, we plan to host a vaccine investor event in Q4 of this year, where we expect to discuss our industry leadership on our emerging pipeline.
On slide 26 based on the strong results of the first 6.
Lines a year, we are raising our guidance for 2021 business EPS, we now expect business EPS to grow around 12% at CER.
Outlook regarding frame since impact continues to be negative by -4% to -5% based on July of our rated since rates.
So let's open the call now to Q&A.
Hey.
I am back to waiver.
Thank you. So we will now open the call to your questions. As a reminder, we would like to ask you to limit your questions to 2 each to give as many people the possibility to ask questions.
But for the Q&A you have 2 options to participate up to 1 keep the Raytheon I come off the bottom with Alan.
Your screen.
6 months that you have been notified when your line is open to ask a question at that time. Please make sure mute your microphone or ups and care submit your question by clicking the Q&A I can at the bottom of the screen and your question will be read by a smell we bill take the first question.
Thank you Eva so let's start the Q&A.
Name with Peter there Bill at ticket pit.
Yeah. Thank you good afternoon people don't Citi 2 questions just the pool will be.
Realize it's not going to be today, but when is the earliest you might think to update the market on your midterm financial targets and he asked his question.
In light of day.
The business trends you're posting.
The fact that you can absorb the hit from the Regeneron stake disposal and increased R&D from M&A and you're now guiding to pick some being accretive sooner than previously expected. So just an update there and then very quickly just a quick strategic 1 for Paul.
Kols loved to pick some but a consistent message we hear is that.
The need for an oral efficacious oral with a with a safety safety safety and side effect profile is the biggest area of unmet need now Jackson on efficacy, but we could debate and probably agree that safety is not as clean as hoped so just.
Strategically outside of Jack's what would your interest it'll be to add.
An oral mechanism to your atopic dermatitis is that sort of profile it doesn't emerge over the coming years. That's the question do you think.
Okay. Thanks, so much maybe J b midterm guidance and how we're balancing investment in R&D and outperforming and haven't been enough to get them.
Yes.
Thanks.
As important to reiterate.
Conviction on.
Our midterm target that we said we will be trending towards 32 person be oi margin by 2025.
30% in 2022.
And this is for always the same reason you see how we move forward.
We reinvest our savings to stimulate the growth onto enriched your pipeline you will see more of that are on that.
While we are not looking at beating those expectations in terms of our margin because the priority is to reach another.
Of growth in the midterm, so its priority to the science priority to the pipeline priority to growth.
Thanks Peter.
Peter and answer to the question you know.
Depicts and sets a very high bar on safety and efficacy you've seen we've added CSU.
At least the data today.
We're very excited about the long term with 2 picks and you also know from what we presented and comfort with the fifth.
We're excited about some of our adjacent mechanisms to intermodal relative booting them.
We'll get into atopic dermatitis, and our IraQ40, great. It will also be an atopic dermatitis. So we recognize there may.
May be a place for it but but let's be clear I think to picks and sets a very high bar of course adjacent again, we have the ox 40 ligand injection with the camera acquisition, but no. We know patients will are very interested in all of those but we also know safety and efficacy of the number 1 reasons to choose we feel.
Over time, and we laid out in February the fifth we've got the full picture for whatever patient need will be but importantly safety and efficacy of the next decade plus.
Thank you.
The next question is from demand capacity and advanced them now.
Oh, great. Thanks, so much taking my questions are where macro part different from Boa.
So firstly just on CSU now that you've seen that at least the first part of the data has your thinking evolved into the potential eligible patient populations with GP could be used you know previously we've talked about xolair refractory patients and potentially populations would low iga. So whilst I. Appreciate you haven't seen part b of the data which will be key as.
King <unk> changed at all for the potential of GP in CSU.
And then my second question is just about glucose sided alpha in Europe.
What sort of the delay are we potentially looking at for approval I'm. Just curious what EMA has rationale here is how does it relate to the fact that they don't really see a.
Similar protein.
As you would think different glycosylation patterns as new substance and then just tied to that in terms of decision to ask for further consideration reflect a different pricing strategy for the product I E. If you were looking for a premium price versus miles that thank you.
Okay. Thank you.
Bill going to head towards Q4.
OTT CSU and the potential patient populations and partly puppy, maybe before you come back you had flagged when could come in on about 2 customers.
Yeah. So first of all thanks for the question you asked from a timing perspective, we would expect that the H M. P. Reexamination would take place sometime in the fourth quarter of 2021.
We're not going to comment too much on any of the specific details and we believe that it's a new active substance and.
From a pricing perspective too early to comment on pricing, but we think this is gonna be a leading product in pompe. It. So we would expect that.
It would.
Be recognized for that innovation. So then maybe switching to CSU I mean look first first of all we're really just excited about these results in this first phase III study of <unk> and maybe just to provide a little bit of.
The context here of where we think this system what the opportunity.
Opportunity is.
Starting with this is a indication that has really still really significant high level of unmet need and there's really been limited in the innovation and the place when you think about it.
The last positive phase III readout was.
In.
2013, so theres a lot of unmet need there and we have we know that a significant number of the patients are uncontrolled. So to give you just an idea of the size here. We think the biologic population should be about 300000 patients and those they have moderate to severe disease and they don't.
Don't respond adequately to standard of care, which is anti histamines alone now where the opportunity with the biologic is under under penetrated at the moment Omalizumab. We think it's about 15% of eligible patients that are currently treated with that and we expect that the penetration.
<unk> in this indication could double over time to near 30% now we also know that with Omalizumab that about half the patients are our uncontrolled. So we look at this as a couple of a few sources first of all there is the expansion of the market.
Profile that we think that is going to be better ours is has a strong safety profile depicts them no blacks no black box and it has at home administration. So we've got the right profile and large market low penetration.
Better profile, we're really excited about this hope that gives you an idea.
Of what the opportunity is.
Great very helpful.
Yeah. Thanks Bill.
So you know it's interesting to watch will be off treatment durability was.
Not that we'd ever recommended but it's interesting to see how we may be targeting some of the underlying mechanisms and so you see what I think it's going to be fascinating look forward.
To the part B and what that tells US because then maybe we have the complete picture and that's going to be very exciting for patients whose next.
The next question from Jo Walton at Credit Suisse.
John.
Oh, yes.
I've got 2 questions. Please 1 on the and kind of these vaccines and the use of adjuvant sales.
When you go back your original vaccine is an adjuvant stage, 1 and it is it a 2 injection regime, just trying to think how convenient it would be and whether you feel that you will have something.
Sufficiently differentiated that it could be widely used in our western markets, whether you feel that the existing vaccines. The Pfizer for example that just now so entrenched but.
The regulators are not going to be not interested in going for it.
Incremental approach.
Roach and my second question is just on the GP I see a few data excellent news that you've got such strong H.
On a.
Day to that do you think there's anything that you can use to go to.
And see how that would help I guess labor Kim Chi mouth, because as I understand it leopard Kim Humana.
That's a key element is that they can show.
Cash than it.
It is normally seen say I wonder how you feel about how you compare that thank you.
Okay. Thanks, Joe maybe Thomas do you want to comment on what I'll place could be and we have some pretty firm.
Sure.
So indeed I confirm the COVID-19, a regimen in primary use a 2 dose regimen, but you know what I can find it and we also testing distinct so reed booster possibility.
It would be then a 1.2 punch of men.
And what's interesting and we've communicated about it before is.
But we're looking at the ability for the potent adjuvant it platform to be a booster of any single pet film, but it's been used in the primary thing. So whether you received in early November with peso or whether you're receiving the money, but some are putting platform. We believe is a chance for our product to be windows booster.
These day almost stable.
Earthquake temperature before but of course as we mentioned before it's gonna be Q4 data. So we'll remain completely that that'd be good and then in Q4 will be the readout with the booster that AR and the primary factor and that will determine where we built main pump hallmark from this product. Okay. Thanks, Tom I think we're all expecting there's enough volume.
Of vaccines for Prime is there will be certainly as we go through the remainder of the year worldwide. In fact that we see our role mainly as a booster for David strong I think we're gonna play with instant pot and we're optimistic that that will be the case and that's I'm not sure it will but as a booster it would be a 1 dose.
On your other point on D P.
I can toss it to bill I think our data is very strong in CSU right and I think we've still got to get to Poppy I mean, we're really pleased with the data can't stress that enough and the size of the unmet need is significant really significant.
You know, we've said it before but.
Our free and the other IL <unk> teens, you know there are only half the answer you know, we're an IL $13.4 you've seen library, I think discontinued or failed from recollection and asthma and so you start to understand the importance of treating type 2 inflammation I think we have best in class frankly, built do you want to add something.
No I agree with you just you know the reed over it just supports our efficacy in a disease with edge and as Paul said IL 13, it's an incomplete profile right I mean it all comes it comes back as we think about this asset to the fundamental biology of the IL 4 IL 13, and we think that's just so key and you're seeing.
Ladies continue readouts in disease after disease that.
Rely on that mechanism of action so positive great opportunity for US just continues to fill in the picture for what the potential okay excellent.
Great. Thank you.
The next question is from Geoff Porges of hearings chop.
Thank you very much for the question.
Follow up on earlier question for some therapy.
Is the injection frequency and efficiency, our injectable administration as an issue in many of your competitors with large biologics have a doctor.
Got a profile to reduce the frequency of dosing.
Wondering if you have <unk>.
Totally up to potentially pursue that that would actually also actis lifecycle extensions.
And then I'm wondering if we could just talk a little bit more John about rails or somebody who didn't really highlight but you're going to have the pemphigus read out by the end of the year and to what extent.
As a different way what are you looking for in the Patrick is free to out that would potentially tell you about the likelihood of a drug succeeding in some of those much larger indications that you've talked about say asthma or atopic derm.
Bill a dosing interval duping.
Yeah look I think.
Thanks for the question first of all Yeah look you got to look at the whole profile.
You know because.
People are taking the product for efficacy first and foremost safety and then you look at convenience and that's why you know we've gone back to the jacks a bunch of times that may be a convenient way to dose, but it's going to be a if it makes it to market ever.
<unk>, a highly black box broad immuno suppressant. So you can have you could have something which is incredibly.
Convenient to take but if it is.
Has bad side effects, it isn't going to make it isn't going to make the difference. So we think that the profile that we have with <unk>.
EVAR continues to play itself out time and time again and every indication in every geography that dosing is not a challenge for us. It's the whole profile of the drug that people are looking at so we feel extremely confident in being able to compete with anyone who enters this market in the foreseeable future with the profile that we have including.
And frequency.
Well Bill you know we.
I think what surprised as most of you are surprised me when I joined the company is very rare that the first to launch in a major disease is first and best.
And you have to get your heads around that a little bit because we've touched on the 13th half yet.
And so we looked at.
E Black box, we look you know we look to cross when we say everybody has got something there.
They have to be working on or to communicate.
We have great safety, we have an excellent efficacy right across all these indications.
Normally.
Only that comes later in their disease, we've gone out front. It is the best Medicine. If you look at the development of the sales performance as we really crushed Q2 and go on it's basically stood on the top of safety and efficacy. It's an incredible profile I think we just have to accept that first.
First was best and that's unusual situation I know John Reals, a read across from firms like us to.
To potential other indications.
Yeah. Thanks for the question.
No real day is is has broad potential in several contexts, but pemphigus is.
So a classic auto antibody driven disease in our phase II data showed.
Tested the mechanism relative there and were quite impressive and thats what caused us to move into the phase III. We have similarly impressive data in another auto antibody driven disease, namely.
ITT.
Immune thrombocytopenic purpura. So a couple of examples there where the molecule has achieved proof of concept and we're in phase III for both of those indications and we're doing more in auto antibody driven diseases because based on the company's building data we've seen in those in terms of the.
Yeah.
And the extension then into some of the other indications.
I think there are some similarities in some cases.
And then there are differences in others.
And that's why we're doing the work.
We are intending to test <unk> across a number of indications the interesting thing about real.
Is that.
It has.
<unk> had several mechanism by which you can interfere with allergic and autoimmune activity blocking b cell receptor signaling blocking MCR receptor signaling is the 2 main mechanisms, but others as well so I think there's a strong rationale to.
To pursue real.
The proxies indications, it's nice to have an oral as well in our portfolio is.
As we try to probe some of these type 2 inflammatory landscape.
Thank you John.
The next question will be from Graham Parry Bank of America Graham.
Okay.
H D D.
Phase 1 day training costs at Mt.
David.
Alright.
Hi, Brian.
Yeah.
Okay.
David.
Got it.
Right.
Doug.
Okay.
Thanks.
Okay.
Yes.
Yes.
Okay.
<unk>.
Grammar.
Bill.
Maybe you want to dial back in.
First question, which I think losing them on average the next question heading towards him sonesta items.
It's hard for me to tell but.
But maybe tomo you'd like to talk about Weber at Monovalent Portabella M. On it yes. Thank you Ron and indeed as you noticed we started our first flu in that in their trial.
Bill.
China as you mentioned.
Few weeks ago.
The day that pretty soon.
Good and you need to learn as you'll remember that that's all.
And.
Try and after the COVID-19, 1 so starting from the 90 day, we want to compete aggressively which is why we asked at the central of expenses extremely important.
Evident, but indeed moving for a while and we'll build up on these in Q4 during the Investor day, and we are going to move a lot of all of that film switching to quickly bill and a few moving forward.
And then Kim.
Yeah.
So the next question will be from not to sell at Morgan Stanley Mark.
Yeah no. Thank you. Thank you very much for taking the questions first 1 on the restaurant and merits free.
If you do not see a super to in terms of efficacy data Fundable and then some of your competitors are getting a little bit broader than an entrepreneur. So I just wonder what your options are there relative to the ER.
AI intolerant patient group.
First question if I, if I may and then the second question just going back to Rosa and starting phase 2 trials in asthma CSU in any day could you sort of help us understand the approach here in terms of if you are a combination approach versus a sequential approach that would be useful as we sort of think about the broader.
<unk>.
Oh.
Okay, John Thanks, Bob and John comments on how much the restaurant and potential for superiority or not and filing strategy and then maybe on the combination approaches in Reals I'm not sure. There's much we can share on that at the moment, but maybe Texas.
M Sonesta them first.
Yeah. So on the Internet strength as you can imagine if the mere 3.
Steady should not show superiority, but should show a very strong profile.
Perhaps numerically better than 4 extra and we choose 1 of the.
Standard of care.
Care agents that are we believe the investigators are turning to a lot of in this population.
It'll really be a discussion with the regulators so that's.
Gonna be I think how we would see that playing out so I can't really give you a definitive answer to really be.
Dependent on the regulatory.
<unk> discussion.
In terms of the adjuvant.
There are a number of ways to tackle the adjuvant space.
And then we see different companies try to do it different ways.
Where we're compelled to focus initially on the higher risk patients that are more likely to have relapses.
<unk> that obviously can give you answers quicker.
And but it should be a more robust test.
The study that we designed an aromatase inhibitor intolerant.
That concept really emerged from the collaborative work we've done with these cooperative groups, which are the index.
Which are the.
The leaders in the field around how to do adjuvant studies and.
What are the patient populations with the greatest unmet need and so it's through combining.
Our best thinking with errors that we came up with this study as our initial entry, but that won't be the only adjuvant study will do wear.
We're planning others as well we are currently working those plans up but.
But we feel that this study we've.
<unk> a mere 6 is a great place to start and I would say so far the feedback from regulators as we've presented our plans here has been very positive.
Requesting essentially no changes in the design.
<unk> et cetera.
And what was that.
Combinations in asthma and other illnesses.
It's a bit too early but you.
He may have a view.
Yeah.
I think probably too early too early.
Early pontificate about.
What might be a <unk>.
Future combination therapy, let's see.
See what real as a monotherapy.
Strong rationale to believe that as a monotherapy.
Make a tangible difference in diseases like asthma based on the centrality of PTK.
In the immuno biology, and the cellular signaling mechanisms that are believed to be prominent.
So.
Let's get that done first and then we can think about where we go from there.
Thank you Patrick.
Thanks, John I mean, there was there is depending on how the profile of volume so as an add on opportunity clearly in some of those illnesses and that's not uncommon in treating asthma. For example, let's see let's see if we get to our next question.
Next question.
Some of our key actually yes morale.
Hello.
Hum.
It's N P and M D.
Thanks, and I'm glad Jean and mini lap Bill. Thank you Mike.
Yeah.
Thinking about downside.
And.
<unk> second question.
<unk>.
I was just wondering if you could talk about the drug drug interaction between PD.
CDK 4.6 and I remember at scale.
Everyone on pace, Timothy Thanks dependent decrease and how that exposure. So just wondering if you can.
And then anything more of that.
And how has that impacted your decision making across the price.
Thanks.
So.
Maybe a good chance of being an Olivier to talk about.
Lodging U S. Yes.
So Laura Thank you for your question. So there was no supply for US. This is something that we had.
And.
When I said the profile of the sales by day not mentioned at the beginning of the Europe <unk> February system in 17.
Incorporated.
<unk> was relatively minimal impact for 220 to 1.
I remind you that.
Sandy will have a 1 year exclusive.
So we view that as another competitor.
On top of about that now in this space. We of course are very significant early batesville.
Of course, 2 zero nothing factor now so everything is built in Ireland.
Thank you.
John Anderson as trend and drug drug interaction.
Interactions.
Yes.
We don't believe it's an issue we know that.
Our third as a mild to moderate ship induction.
<unk> is the label it proves the juice with moderate shipping losers.
Paolo also because of its toxicity.
While often has to be down dosed and about a third of patients at least day after skipped doses or reduce doses because of trying to titrate the.
They said the side effect profile of the drug so.
We feel that we're well within our comfort zone there at the 200 milligram dose we also know that.
We're well above the level needed to fully saturate estrogen receptors, we get that done at doses less than 150 milligrams. So we feel that.
We're in good shape, there and I think that would be validated by the phase 1 data that we presented at <unk>, just a couple of months ago.
<unk> pro showing.
Overall response rate and a clinical benefit rate that.
Leads us to be even more confident that this combo can go forward the frontline setting in which we're testing the combo I would say incidentally those studies are enrolling very well the investigative community is quite enthused.
Who's the Asics, so we hope to get them fully rolled ahead of schedule.
Thanks. John next question next question is from Peter Wilson, I'll call free Pizza.
Hi, yes, thanks for taking my question. So firstly, just thinking about next stop for a minute.
About the question about superior.
I'm curious if you see.
I think it's the Veronica study that was presented.
Lawshe.
Sales study curious on your view on the PFS rates with the safety study.
The 2 to 3 months and is that representative of what you believe the control on I.
If you don't get that is John.
Could achieve or is something we should be thinking about the next you will control patients perhaps different to what was reported in that study.
Secondly, then just depicts said obviously it could result in CSU in other trials coming I guess could you have to think about what are the.
The triggers in terms of your original trade what you set out for that hadn't been DNA what are the triggers.
<unk> revised stock.
CFT, obviously big indication now looks positive.
Do we have to see.
Balancing that.
Cash flow concerns here. Thank you.
Thank you Peter.
John I'll come to you Wendy.
Sonesta until rather specific Roche trial failure, which I'm not don't have at my fingertips. He may have a view.
On <unk> I think we laid it all out pretty clearly in December 19, first thing, we said 10 billion.
And I think the plus gets forgotten, sometimes and it shouldn't.
Secondly, the major patient population that was not included with COPD.
And you know with delight with CSU the scale of the population that comes into play on CSU is is equivalent.
Plus the dose that we're currently treating with 2 pixel.
And so you have to understand that's an event ultimately for this medicine.
Then beyond that COPD I mean, bill can give you some more stats, but it is there.
There are over 700000 patients with interrupted at a biologic eligible so bill John touch on.
That also has an additional trigger that goes beyond the 10, plus that's what had been communicated yeah, absolutely Paul and as I said.
In my remarks that COPD isn't included in look that's a really exciting opportunity for us.
And we have 2 assets that are actually there and sometimes I think we forget that we've got to pick them, which boy.
He will be addressing the type twos C O B C. O P. D population and then we have it a pack of Mab, which is our anti IL 33 again in partnership with Regeneron, which will have more of a non type 2 COPD focus, but also some a little bit of type 2 and <unk> and to give you the idea of the scale.
If you look at.
The type 2 disease, we think it's over 300000 patients and that's really really firmly where do become play if you add in that non type 2 former smokers.
Smokers, it's over 350000 patients so.
Between the 2 products.
That's a really really meaningful piece almost 700000 additional patients potential in an area, where there are no. Other therapies that are available biologics that is we know some of the IL fives or taking a look at it they've had mixed results there they'd be focused solely in the type 2.
We get but.
This looks like a great opportunity for us just to remind you will have to be a pivotal data expected in 2003 and pick them up in 2024. So we've got a lot to look forward to there just a comment if you allow me to talk about the greater than 10 billion.
Stay well.
There is so much potential and the indications that we have and what we've just talked about what we've really done we have an obsessive focus on execution.
And we have created a real global playbook for how we rollout each of these indications in each market around the world and.
What youre seeing in each of the markets that we're launching is similar uptake like we saw in the U S, which is just really really strong and I think it all goes back again to the profile of the product. It's the best product in each of the indications that we're in and that's going to help us get to the greater than $10 billion and with the addition of something like a COPD.
So I'll leave it there, yes, well said bill in this.
I've seen a lot of global executions, Chris This is really.
Top class what the team have done and it bodes very well for the launches of followed because it's not easy to do it but you're starting to see the world come online now to do pixel.
John I don't know, whether you had a comment on roche's a failed study.
I guess just to remind that the standard of care has been evolving in hormone receptor positive breast cancer.
The context in which we'll be testing <unk> in which we are testing is in a.
Largely a post.
PDK for 6 inhibitor world.
Just arent any data yet on A&P hormonal agents as mono therapies.
In this.
Both CDK 4.6 inhibitor class of patients or are they just aren't very many data ours will be probably the first.
Post semis assessment randomized clinical trial assessment.
Anderson therapies in that context, so it'll be.
I think setting a strong foundation for how to think about using molecules like <unk> the world's third class in that in that setting.
We.
Granted we.
We are.
Obviously, we can't predict what the PFS will be but I would just say that we are in an event driven study and the.
The study.
Has not reached enough events, yet so we are cautiously interpret that.
Sin.
But.
See how things settle out when the data emerge, but it looks like we're trending to.
PFS is more in the 4 to 6 months kind of window right now based on how the events are coming in.
Okay. Thank you John.
Next question. The next question, we have some Mr. Edmund.
And then bill up Guggenheim Chemo.
Thanks, very much can you hear me yes.
Yes, we got you.
Great. So just a couple of quick questions.
Why don't you just.
As quickly as it relates to <unk> III.
Just trying to get a better understanding.
Hi.
If you feel this trial is.
Warrants the amount of attention.
That is being afforded by the street. It seems like this is a small potential indication just wanted to get a better sense of it.
This should be viewed as altering.
<unk>.
The opportunity for <unk> strength.
If the trial should.
Cash and equivalent result.
And then separately.
As we think about the MFS opportunity.
Do you see this as an area of great enthusiasm when you presented the initial data.
Turing, hoping that we might see some follow up data at a medical meeting in that same population.
And where we see longer term data is that something that we could see either later this year or perhaps early next year validating that that strong early signal that we saw thanks so much.
Data. Thanks, Seamus So I'll give you I'll give you my view I guess on the military which is.
I think I think there is a convergence of things that make this.
Interesting.
<unk>.
For us it's a stepping stone in restoring our credibility and science, So I think.
And a disproportionate amount of attention for that because we have a lot of readouts coming over the next sort of 12 to 24 months and I think.
Obviously, everybody would like to see a positive not just for patients.
Secondly, we also don't think the if you like the business opportunity is significant it is the first step.
On a journey, we will learn a ton and we will understand we put everything on the table. We're doing all the studies, we have not hesitated because we've put things differently and then of course I think the conversation is juice somewhat by the fact that the competition.
We believe have been inferior molecules, but really trading.
The debates and trading the level of interest of consolidated comes early and I think everybody will be trying to to find an angle on that.
Just to remind you we're doing all of them pushing right across we're very confident in the science behind our molecule. We think it will be the winner this will be an important stepping stone.
But not the defining moment, but we are and remain optimistic.
Second question was on the ship to I think.
Did I hear that right.
So items that I missed that I Miss here.
Can you hear me yes.
Yes, sorry.
Could you repeat the question on TV.
Yes.
It was if.
If we might see some additional data.
Right.
With that same patient population, perhaps some either at a meeting later this year or perhaps.
Like in a in next year or something like that yeah, I don't Bill why don't why don't you comment.
Our plans for sharing data if you have them at your fingertips.
I've got a little bit here, I mean, where there isn't so much that's going to read out.
Additionally from the trial and we have acronyms, which is gonna be in October in 2021 and will be a prison.
Presenting some additional information.
We at.
EAA and in June we presented the <unk>.
Effective be teekay on.
Modulating microglia, driven neuro inflammation in Ms progression, that's a recent.
Presentation, we had for it so.
We the focus has been in getting all of our studies up and running.
We've moved extremely fast and I think we've really set the pace for all of the Teekay. Some you know as you know when we started this thing there wasn't so much talk about ATK and now everyone is adding there'd be teekay to try to catch up we believe that this is the best in disease.
Potential profile across the full spectrum of M. S. Brain Penetrant is brain penetrant is really really important and brain penetrant is important but achieving a pharma pharmacologically relevant.
Brain penetrant level is the most important thing other.
Otherwise.
You're just not going to see that effect and that's why we think it works across the broad spectrum of MF. So Ah <unk>.
Stay tuned for data.
Everything is progressing very well and the community is really excited and we are as excited as we were the day, we first mentioned it.
Thanks Bill.
And we.
We mentioned I think I mentioned up from the 95% of the patients in the open label extension, though.
Yeah, I guess in.
And then there's that stepped out where because of non drug related.
Uh huh events, so it's quite interesting for us because that's a good leading indicator we believe.
Leave I think bill just touched on the pharmacologically relevant.
Crossing of the blood brain barrier, you know is always when you're trying to be pioneering and you're going to have a great day at everybody's dusting off that'd be teekay and trying to find a way to come around the edges, but the proof of the putting won't be in the data.
We were way out in front and you know we recruited the.
Studies are pretty fast and in a pandemic so.
That's pretty exciting what is around the corner.
The next question is from Luisa Hector I'm doing very well.
And then thank you and maybe just final question Alan.
Your announcement.
The investment.
Center of excellence I, just wondered if you could.
That's 400 million euros.
In terms of Capex R&D spend and as I understand it is budget neutral. So I just wonder whether are there.
Can you specify.
Take care of clients that are being scaled down to allow for investments. Thank you.
The things things so much tomorrow.
So indeed as you mentioned it was about 400 million, you'll investment annually to exit in Arabia into an R&D of the next generation of vaccine as you mentioned.
<unk> fully financed through resource reallocation.
How do we do that we made a number of changes in our preclinical and early clinical programs. We don't disclose those targets you really.
And we are clearly focusing most of our investment O&M out any moving for a while as mentioned in the presentation, it's really a potential that we see.
Sure and that's why we're pushing for 6 because that gets late twenties when you factor.
Yeah, I think and we have towards the end of the year.
An investor.
Good day, we will try and share a bit more detail around that to be I didn't we split the capex opex. It's.
It's been either.
As many of you know.
It was a it's.
Cause pizza I think it says a lot about this organization you know we know how to do vaccine. So we've done extraordinarily well.
But we're not naive and if we see an opportunity we will go after and then actually when you start looking at the landscape, it's really about pivoting in a select number of areas. It's not right across the board, it's about going and getting stuck in pretty.
Fast because.
There's there's the distance.
Catch up is actually a manageable so.
It was a question of whether we had the courage to pick our areas and double down and I think we've seen that across the company frankly, but we're seeing it in mrna too and I think it says a lot about the leadership in vaccines that were not bill.
But they had buried in the sand okay.
Next question, we'll take the final question from care Patrick of Goldman Sachs skier.
Hi, Thank you Mark George is if these questions have been asked already.
My.
First 1 on China, and it shouldn't be the P M.
Our understanding is that yesterday, there wasn't meeting our international cash.
Next question around the table with all the key players.
It's got the plant and the feedback from our potential and shouldn't be BP I was wondering if there are any insights if you're able to share on from this perspective, what your base.
Chris because expectation today is and how we should think about the timing and the impact of this.
That's question number 1 and then secondly relative to euro it'd be I am just wondering maybe if you can provide us with some incremental details from a timeline perspective.
Kind of when we should expect this company to.
To be to be stand alone and what the plan is from your perspective on separating tariffs from China.
It really raising some capital out of it.
And this care Olivier.
Olivier Pvp, China, Okay, well. Thank you for your question you understand that I'm not going to comment on working meeting there with.
Certainties.
But we are when we see our assumption in the capital markets day at the beginning of the Europe. We incorporated of course, the impact of BBB or BBB likes you know so.
So of course, there is no surprise the exact mechanism on the scope.
I mean.
No no and we feel very confident given our Hartford garden, managing GDP no ability to grow volume or we have been able on <unk>.
<unk> took over the volume the first you have about more than 90% 90 zero and we continue to grow volume by the second year and you saw that.
Nothing in the quarter, so for us nothing unexpected.
Early in line there was what I shared with you at the beginning of the year. Thanks, Olivier J B Euro API yeah.
Thank you for this question I mean, it reminds us that we are effectively driving the transformation of the center for multiple fronts.
We are.
He is sitting up consumer health as a standalone unit, we are transforming.
Our commercial footprint.
Distributors versus subsidiaries in many regions. So it's many fronts on your API is 1 of them.
And it's fully on track, we said that in December 19th that we would be aiming to deliver in each 1.
1.2020 to be out there a carve out is happening as planned on the <unk>.
Financials are also as planned.
The activity is.
Improving strongly since we are are we.
We manage it as a standalone unit I mean getting ready for an IPO in 2020.
We are expecting to have a very small impact on Sanofi I remind you we don't do it when you have a plan.
He'll play, but we do it really to drive this deep simplification, we do across our across the board.
We also executed on our commitments on divestments of the long tail.
Antitumor of product both in Jamaica and in consumer health. So we are really executing transformation on multiple fronts. So thank.
Thank you very much yeah. Thanks, JP and thanks for the question too just on that last point about the simplification of the company you know what it's like when we I think he touched on it maybe some of the divestments.
You should expect to see us do things like that because there's a lot of things that we have levers to pull to simplify our business to make us more agile and more productive and that that's a real opportunities for us. So you should expect more of that the lights with the progress made in Europe Pi sales.
Says a little bit about the transformation that some.
I'm getting and how create if we can be at to create value. Maybe just before we just close the call down you know delighted with the financials for Q2.
Very pleased with how we're doing whilst I recognize everybody else had a low Q2 last year and the comps are all relevant I think our underlying.
Growth is something that is more resilient than perhaps gets picked up and you'll see that evolve over the rest of the year.
Raised guidance to you know with confidence and the financials at Dupee, well ahead of where any of your I think it would've expected them. We're delighted with the progress and we've added CSU, which I think was.
<unk>, a major step frankly in terms of addressable patient populations and.
In terms of the day to at least and our science moves on and of course, you've asked about Mary Youre asking about our roles that you're asking about these are the right things between the fall and into the first part of next year. This readouts publications and data and that's what we're about and that's sort of.
Piece that we're all excited about getting to on top of merely financials, although they take a lot of hard work to so thank you to everybody for your attention today and the transformation continues at Sanofi and we look forward to connect with you over the coming weeks and months.
Thank you Paul and thank you everyone.
The Pea yesterday.
Yeah.
Yeah.