Q1 2022 Sanofi SA Earnings Call
And unknown risks uncertainties and other factors that may cause actual results to differ materially I refer you to our form 20-F document on file with the SEC and also our document draw was used to come up even upsell for a description of these risk factors.
Please advance to slide four.
Our speakers on the call today are Paul Hudson, Chief Executive Officer, and John Reed Global head of R&D. The global business unit heads they'll sit boat Tohmatsu Yonks, Olivia Xiaomi and Julian answer phone and how about choosing to shut in young Chief Financial Officer.
For the Q&A you have two options to participate up to one click the raised hand icon at the bottom of your screen or option to submit your question by clicking the Q&A icon at the bottom of the screen with that I'd like to turn the call over to Paul.
Well, thank you Heather great introduction, and thanks to everyone for joining our call today I'm delighted to be here and together with the members of the executive team to take you through the updates on our business and our financial performance.
Let's start with Q1 sales view well, we're truly excited about the outstanding results in the first quarter. The strong performance of our businesses exceeded market expectations with eight 6% growth on the topline and EPS up 16, 1% our specialty care business continues to grow at a remarkable pace.
Just to pick some posted high double digit growth in the U S and strong ex U S sales now annualized and close to $2 billion.
We have once again accelerated all critical milestones with several new indications submitted in both the U S and the U in pursuit of our greater than 13 billion Euro sales ambition for do pixel.
Vaccines reported good business momentum with strong growth in P. P H and a further recovery in sales of travel and endemic vaccines.
In general Madsen's, our play to win strategy continues to pay off divesting noncore products and investing in transplant and other selected assets resulted in another quarter of growth for our core assets lie.
Likewise, the consumer health business is executing on the strategy outlined at our capital markets day on February 5th of last year, we delivered double digit growth rates across all key franchises are more than doubled sales in cough and cold.
Moving to slide seven into the third year now of executing on our play to win strategy. The strong set of first quarter results amongst another proof point of our focus on growth the constant improvement of our margin puts us on a clear trajectory to deliver on our midterm financial targets in the first quarter of 2022 EPS grew at.
Double digit rates once again R&D spend is now growing again as we rebuild the pipeline following a period of lower R&D investments due to the prioritization within specialty care and discontinuation of diabetes and cardiovascular activities.
Over the last two years, we increased our spending in R&D by 700 million in accumulative way funding the development of our priority assets and our recent bolt on acquisitions, such as Principia came up curious and title.
In the area of immunology, we are striving for industry leadership with an exceptional pipeline our pipeline spans across our key priority is tackling a broad spectrum of diseases with the most promising <unk> and offering modalities from injectable to oral and topical in addition to the pixel is the foundation.
The cornerstone in type two inflammatory diseases. We now have 10 molecules in development that could start to enter the market as early as 2025.
These programs include potentially transfer transformative medicines in specialty care areas, such as dermatology and respiratory representing highly attractive and growing markets with unmet needs, especially in COPD when no new mechanisms for disease management has emerged for more than two decades.
Our oncology and neurology portfolios continue to expand we aim to build these into industry, leading pipelines similar to our position in immunology, both through in house development and of course by targeted M&A and BD.
Advancing to slide nine I want to highlight some key R&D collaborations added during the quarter and I.
I will do that before I hand over to John to give us a quick update I would like to briefly mention the collaboration with Blackstone. This deal facilitates the development of South Korea as a sub Q formulation, which serves as another example of prioritization partnering soccer user going forward allows us to reallocate R&D investments to further expand our pipeline and to strengthen.
All growth areas. So in summary, a really strong first quarter for us here at Sanofi John over to you. Thank you Paul.
We continue to expand our pipeline through deals that add best in class science to our existing capabilities in.
In Q1, we announced three external collaborations that further supplement our pipeline.
First to build on our momentum with the antibody drug conjugate molecules to submit a mab wrapped Hansen our potential first in class C. Chem five targeting ADC. That's now in phase III for advanced lung cancer, We announced an exclusive collaboration agreement with CGM to design and develop adcs with potent payload.
<unk> for up to three cancer targets.
This collaboration will Synergistically combine our proprietary monoclonal antibody technology with sea Jens proprietary ADC technology.
Second with extends here, we established a strategic research collaboration to utilize machine learning technologies to accelerate the discovery of precision engineered medicines across oncology and immunology.
We expanded our existing relationship and are now accessing the accenture AI based small molecule drug discovery and their precision medicine platform spanning from chemical lead identification and optimization through to patient selection.
With machine learning this collaboration promises to accelerate our timelines for drug discovery, while also potentially pointing us to those subsets of patients most likely to benefit.
Our third collaboration is with IGN bioscience.
Their technology platform offers an exciting approach to developing multi valent.
<unk> M antibodies that can efficiently buying and stimulate the activity of cell surface receptors.
This unique platform has the potential to overcome historical limitations of conventional bivalent agg antibodies when seeking agonists of some class of receptors.
We've established an exclusive worldwide collaboration agreement to develop AGM antibody agonists against three oncology targets and three immunology inflammation targets.
For clarity these are not T cell engagement, but rather engineered IGN antibodies targeting in each case, a single cell surface receptor that we wish to activate on certain types of immune cells.
Advancing to slide 10.
And Sanofi, we believe in the mission of chasing miracles of science to improve People's lives.
The collaboration is depicted on this slide exemplify our journey towards this ambition in the context of childhood cancers.
One year ago, Sanofi announced its new corporate social responsibility commitments, which are fully embedded in our play to win strategy.
Within our strategic CSR pillar of innovating for vulnerable communities, we presented our ambition to develop innovative medicines to limit eliminate cancer deaths in children.
Today conducting clinical trials for pediatric cancers is challenging.
Due to several factors, including broad heterogeneity in terms of prognosis molecular features of the tumor Pepto biology current treatment strategies and scientific objectives. As a result, the design of clinical trials for pediatric cancers is challenged by several practical issues that must be addressed for ensuring trial feasibility for this.
<unk> group of patients.
That's why Sanofi has partnered with leading oncology institutions to advance innovative clinical trial designs.
Aided by the leadership of our head of oncology development, Peter Adamson, who was previously head of the pediatric oncology group, we move forward with a strong sense of purpose and with the objective of creating real impact for these young patients and their families.
Speaking of progress in oncology on slide 11, I'd like to summarize the advances we are making in building an innovative oncology portfolio now with 14 molecules in development compared to only five molecules just a few years ago.
Starting with shark, Lisa combined with Revlimid, Velcade and dexamethasone in newly diagnosed transplant in eligible multiple myeloma patients. The event driven MRO step trial is expected to read out in the second half of this year.
Initial data for frontline myeloma patients who are eligible for transplant with shared in a podium presentation at the Ash Congress last year, showing an unprecedented rate of MRV negativity pre transplant.
For <unk>, our oral selective estrogen receptor to greater or third we're pursuing a broad program to assess efficacy and tolerability in different lines of therapy.
We started our journey with exploratory phase <unk> studies, where we observed excellent tolerability combined with strong efficacy and robust harbuck target engagement with a once daily 200 milligram dose there.
And then as is often the practice in oncology drug development, we took a swing at the late line population of second line third line metastatic breast cancer patients where most of these women who have already failed aromatase inhibitor combined with the CDK four six inhibitor and unfortunately have few treatment options.
In the phase III trial, we call Amira three we did not observe a clearly superior efficacy benefit of <unk> <unk> compared to other endocrine therapies.
Full data will be presented at a conference in the second half of this year.
Now in the frontline metastatic setting the EMIR five study comparing CDK <unk> inhibitor payables sick lib in combination with either <unk> or an aromatase inhibitor is fully enrolled ahead of schedule.
And then for early breast cancer in the adjuvant setting we have joined forces with some of the world's leading oncology cooperative groups focusing on breast cancer.
Duct a seminal trial, an aromatase inhibitor in tolerant patients that have tumors with high risk features.
Our Amira six adjuvant study puts <unk> head to head against Tamoxifen and has enrolled its first patients.
While addressing a subset of the adjuvant population. This study design affords the opportunity to reach the market relatively quickly by adjuvant standards.
Additionally, at <unk>, we will present data for our ADC molecule to submit them and showing promising durability results for long term treated non small cell lung cancer patients.
The treatment duration observed so far is really quite remarkable tusa aims to not only become the standard of care for patients with <unk> high expressing tumors in second line lung and post immunotherapy.
But also to become the cornerstone of therapy in first line lung cancer in combination with a PD one.
In addition to lung and gastric cancer additional basket trials in <unk> expressing <unk>.
Tumors, namely breast and pancreatic are also ongoing and expected to read out in 2023.
Then finally I draw your attention to SAR 245, our potential best in class non Alpha interleukin two molecule that's being tested across five oncology indications as monotherapy and in combination with other medicines leveraging two four fives impressive ability to selectively expand.
<unk> effector T cells.
And natural killer cells without undue expansion of email suppressive regulatory T cells or eosinophils that cost side effects.
We anticipate early efficacy data starting in the second half of this year to inform our decisions for planning pivotal phase III starts later in 2022.
Now in the aftermath of the recent decision by BMS and Nektar to discontinue their collaboration on their Pegylated IL two molecule been pegged.
I want to remind you of the information we presented at <unk> in 2020.
Taking a slide from that Investor event, where we compared the attributes of next door's been pegged to our differentiated non alpha IL two so our two for five.
Now without going into details here. The bottom line is that we're not surprised that the nektar molecule struggled to deliver.
Unlike them pegged.
Synthetic biology platform from this <unk> acquisition.
It allows for precision pegylation of IL two at a single site.
Selectively and permanently blocks engagement of the alpha chain of the IL two receptor.
Our pharmacodynamic data generated in the clinic, thus far illustrate that SAR 245. Unlike the nektar molecule does precisely what it was designed to do namely 245 selectively expands effector CDA positive T cells and natural killer cells without causing.
Significant expansions of immunosuppressive regulatory T cells or abuse Senate bills that contribute to native IL two's toxicity.
Our clinical data show that the improved therapeutic index of SAR 245.
Allows us to dose more than four times higher and to dose more frequently than the nektar molecule, which we believe will drive greater efficacy.
Can dialogue during the Q&A about the best in class attribute to Sanofi as differentiated non alpha IL, two which now with the ball of the Nektar molecule has the potential to become the first in class next generation engineered IL two for immuno oncology.
On my last slide Slide 13, we provide a list of recent pipeline achievements in Q1.
What I'd like to highlight here is the external validation of our pipeline that we're receiving from health authorities, which have granted several accelerated reviews for our future medicines 28 in total across the pipeline with that I hand over to Bill Seybold.
Thank you John moving to our specialty care performance. It is exciting to see a strong start to the year with solid double digit growth in the first quarter up 18% with $3 6 billion euros in sales as mentioned by Paul earlier do pixel are truly transformative immunology Mega brand is blazing the trail.
For our immunology portfolio do pixel delivered once again, a stellar first quarter with sales of $1 6 billion euros growing over 46% from last year's Q1.
Five years ended two pick since launch of its first indication in atopic dermatitis in the U S. We are still only at the beginning of our journey with approximately 8% market penetration in adults.
Across all indications and age groups globally. There are now more than 430000 patients on therapy as highlighted at our immunology event last month, we expect to add at least $1 5 million eligible patients by 2025 with our anticipated new indication expansions more about the brand performance and Justin.
Minute.
Our oncology franchise grew at 7% in the first quarter driven by recent launches, including <unk> in key markets. As you know the strong launch performance was offset by Jeff Tana Lowy in Europe facing generic competition as highlighted by John We are excited about the rich news flow on our emerging oncology.
Portfolio focused on best in class and first in class assets.
Our rare disease business reported 804 million euros of sales in the first quarter driven by an increase in the underlying underlying patient base across geographies.
Continued strong growth of our Pompeii franchise up 9% was impacted by the effect of order phasing and the other rare disease franchises in the quarter.
Rare blood disorders grew 2%, despite lower industrial sales to our partner <unk> in the quarter of note <unk> sales were up 16%, mainly driven by the uptake in Europe , neurology and immunology sales remained broadly stable versus last year kept Zara had 61% sales growth due to higher demand in the U S, which was offset by lower sales of the <unk>.
So let me try to sales were in line with last year.
Moving to slide 16, let's focus on <unk> outstanding performance in the first quarter, notably Q1 dollars 22 represents the biggest gain in sales Q1 over Q1 since its launch in 2017 with more than 500 million euros of incremental sales compared to the same period last year, a key driver of.
The strong growth this quarter was the performance ex U S with sales up 70%, reaching almost half a billion dollars and annualizing at close to 2 billion euros in.
In the U S. I'd like to emphasize depicts and strong performance is even more impressive considering we are still below 90% of physician offices reopened since the start of the pandemic.
With this strong start we are on track to fully exploit further growth opportunities, including the exciting regulatory progress we have made around the submissions for new indications, including Prego nodule Arris eosinophil like esophagitis, a be in six months to five year old children as well as approval for six to 11 year old.
With severe asthma in Europe .
Moving to slide 17, the panels on this slide demonstrates the impressive leadership position of depicts and across type two inflammatory diseases not only does the strong momentum for the brand persist in 2022, but also seems to benefit from the dynamics in the marketplace with new molecules entering the space and the.
<unk> of the COVID-19 pandemic subsiding.
In fact, we believe that the additional treatment options for patients contribute to unlocking significant incremental growth potential for <unk> through market expansion as well as improved physician and patient awareness, we are extremely well positioned to further strengthen depictions leadership position in type two inflammatory diseases given.
Our unique motive action selectively targeting IL, four and IL 13.
We continued to demonstrate the efficacy and safety of depicts both in clinical and real world settings, treating adults and younger patients importantly, unlike the new entrants in dermatology or respiratory which have failed in type two inflammatory diseases, such as atopic dermatitis asthma and chronic rhinosinusitis with.
Nasal polyps do pixel continues to rapidly expand its leadership by adding new indications across the type two spectrum.
Now on Slide 18, let me highlight some of the next exciting advances in our rare disease business. Our leadership position in rare has been further reinforced by two recently launched innovative products next design and Zen design.
Only about two quarters into the launch half of the patients with late onset pompe disease in the U S are either already on next via design or are in the process of starting next design and we remain fully focused on making <unk>. The next standard of care for all appropriate patients as you may recall last quarter I highlighted.
Our launch opportunity with <unk>, the world's first and only therapy indicated to treat asset single myelin deficiency or <unk> in late March we obtained approval for <unk> in Japan, Sanofi is first therapy to be approved under the sakigake designation, which is the Japanese governance regulatory.
Fast track pathway to promote research and development of innovative new medical products addressing urgent unmet medical needs. We are now working with health authorities globally, including the EU and the U S to make this important medicine available for <unk> patients around the world.
Launches exemplify our relentless efforts to advance innovation and to bring life changing treatments to patients suffering from rare diseases. Our continued success in patient accruals drive strong demand across the rare franchises. This dynamic keeps us on a trajectory of mid single digit growth on an annual basis, despite the usual fluctuations quarter.
Over quarter, mainly due to order phasing in our global markets with that I hand over to Thomas to update you on the vaccines business.
Thank you Bill Q1 delivered six 8% growth in line with our mid to high single digit guidance. This performance was driven by the BPH franchise, where Pentax human China bounce back. We also saw a strong recovery from the <unk> and Damien vaccine franchise with the easing of travel restrictions.
It is reassuring to witness the strength of our vaccines portfolio when normal life conditions are restored. However, the COVID-19 opinion EOG remains unpredictable and local look down like the current way in Shanghai may temporarily impact our business.
In the longer term with COVID-19, becoming underneath we are confident that our prevalent booster vaccines will regain delivered via enjoyed pre pandemic.
To conclude on this slide I'd like to speak about flu and reiterate that we anticipate another record sales year for fluid in 2022, the 18% decline in Q1, which is traditionally a low quarter for flu sales was mainly due to high base last year. When we benefited from an extraordinary demand and some government Bill 50.
Due to COVID-19.
In addition, south hemisphere market, mostly using standout those vaccines, sometimes even with the <unk> formulation, while our strategy remains focused on differentiated high value influenza vaccines that have demonstrated protection beyond through.
Next slide please.
I am pleased with the tremendous progress made in the past few months to bring the first solution to protect all in defense against RSV.
Last month, the New England Journal Medicine, published the detailed results of <unk> pivotal trials and besides the $74 five efficacy already shared we are thrilled by the analysis showing a reduction of RSV related <unk> by 77%.
<unk> that RSV is the leading cause of hospitalization in infants and the most common cause of an LTI. We do believe <unk> will have a significant impact on RSV disease by providing protection for all intense.
As predicted last December during our vaccines and event Madison any musician is not as smooth ride. This was evidenced by the setback experienced by one of the met him any musician vaccines candidates that had to stop all phase III clinical trials.
Hey, good Atari authorities have understood the benefits necessary met can bring and will review other seating and exited a recession. The first one being EMEA.
We expect to receive the EMA decision later this year one year ahead of plan.
Vaccines recommending body are also highly interested by necessity men in the U S. S. CIP The advisory committee on immunization practices as a decade that charter to have their scope and competent monoclonal antibodies, putting them in a position to review and make recommendations on the sad and Mad once license in the U S.
Lastly, I am glad to share that our phase III study will start in October this year, each will generate that annual rewards hitting two of rainfalls and a strong data set supporting near term benefits and showcase its ease of implementation in the period take a musician schedules.
With that I am Dakota over to OTT.
Thank you Thomas moving to General Medicine on Slide 21, we are very pleased with our performance in the first quarter.
Innovative medicines sales were broadly stable to $3 8 billion euros, which included savings from industrial to fail.
Excluding the impact of divestiture and supply constraint Gen Med would have delivered slight growth in the first quarter.
The execution of our strategy continues to deliver as planned.
The focus on our core asset that has consistently generated positive results in the recent quarters.
Assets grew four 7% driven by double digit growth of Parliament, Mediatek Siliqua, Dai Mo globally, and the strong growth of <unk>, which achieved $41 million in saves 41 million Euro and saves both impacted by the lower performance of Lovenox.
Sales of non core assets were lower in the quarter in line with expectations. So a decline of four 2% reflected the impact of lower launches sales as well as the impact of GBP <unk> five in China on the <unk> and <unk> sales and product Divesture.
Which are key to our ongoing strategy streamlining efforts excluding.
Excluding the impact of Divesture of non core assets were down two 8% as you know we are vigorously and reducing the number of smaller product families with the objective to drive efficiencies and increased profitability.
So as I've mentioned before moving to slide 22.
Let's focus on the performance of our core assets in the first quarter.
Lovely Nook sales decreased eight two in the first quarter of 2022 impacted by a slowdown of COVID-19 related demand, especially in the rest of the world region.
And comparing the high base.
Packaged into 'twenty one.
Similar competition and supply limitations.
Impacting the performance.
<unk> sales were up six 3% with strong growth in Europe , and the rest of the world, partially offset by lower sales in the U S and China. The volume based procurement for insulin is expected to be implemented in may one with 22.
As discussed earlier <unk> was amongst the bidding winners.
A result in two zero.
Will enable us to deliver higher volumes, but at lower price.
As of now that's full year results, we expected that to total lodging sales to zero and launches to decrease by around 30% in China in 2022.
Looking ahead, we aim to establish two zero at the Battle ensuing of choice in the large diabetes market in China and expect to make 201 of all.
An important growth driver in China in December 'twenty, two and beyond.
We will share the results of in range of head to head study comparing Tuesday, Wednesday, gerdec using timing range as primary endpoints at GTT to model.
Ah well establish transplant franchise delivered a strong performance with sales up 39% driven by it as you look as well as the strong performance of Tango globally.
We continue to be excited about because your book innovative new core assets.
<unk> performance reflects our rapidly expanding pool of prescribing institutions as well as the pent up demand for <unk>.
C. G C G HD patients who have already failed multiple systemic.
Healthcare professionals continue to report positive clinical experience.
Hi, Laurence.
Sales delivered continued strong growth due to its performance in Europe , which was recently launched in Germany.
In conclusion the peso.
<unk> of our core assets in the first quarter reinforce our confidence to deliver on our ambition to grow op co I said mid single digit gagan over the period of 20 to 25 each.
<unk> to 'twenty General medicine sales in towards 25, excluding your API things.
And deliver roughly stable overall general medicine sales in 2022 as announced at 321 four year results with that.
And over the call now to Judy.
Thank you yeah, I'm very glad to report that in Q1 and for our second quarter in a row, we are trending above market growth.
Let's remember that until last year, we were losing share trending about five points below market in 2020.
Since Q4 and on a rolling 12 month basis as you can see on this slide data shows that we have more than close this gap.
This is ahead of our 2021 commitment which was to grow our priority brands above market as early as 2022 in key geographies.
The execution of our three strategic priorities is clearly paying off and while progressing we continue to raise the bar I'll come back to that on the next page.
First I would like to give you an update on the timelines of our Rx to OTC switches.
For shell, it's understandably in 2021, the FDA has been very busy with Covid related priorities earlier. This month, we received further feedback and we will start our AUT before.
Before the end of Q2.
No company has made it this far in determining this journey.
And this puts our estimated launch date in 2025.
For Tommy soon as shared we were ready to go but the prevalence of flu has continued to be very low.
All of our studies rely on enough people to contract. So that we can study their experience with the disease.
And we did we need at minimum two flu seasons.
Given these circumstances, we will not be able to progress to an actual use trailing 2022 as originally planned of course, we continue to examine all studies that can be done without incentives to keep the program progressing as a result, we estimate it to launch Tommy So into 2025 26 flu season.
You should note is that the business opportunity for switches remains the same.
On the next page.
Looking at our Q1 net sales performance.
I'm thrilled to announce that we have delivered a powerful 17% growth doubling more than doubling our cough and cold business and with a strong double digit growth in most of our categories and geographies also growing versus pre pandemic levels in Q1, 19 and 2020.
This strong performance is driven by first both resource reallocation informed by our strategic priorities and data.
Second and increase consumer understanding and creativity and the way our brands engage with consumers and third increased agility to capture market opportunities I'm very proud how our teams are responding to the current supply challenges ensuring maximum availability of our products given the current constraints that's been that needs. This.
Growth includes a favorable price effect of three points.
Looking ahead.
After it has very robust quarter, we expect the market to experience and more normalized growth now that the strong cough and cold season is ending the next quarter. We will also have a higher 2021 comparison base I am extremely proud of our Q1 achievements and my team and I continue to focus on further delivering on our strategic priorities that have proven to be working.
With that I hand, it over to our CFO .
Thank you Julie.
So in addition to higher sales in the quarter.
We were able to deliver on the liver H P&L.
Gross margin improvement of 160 bps at constant exchange rate.
<unk> from our February about portfolio shift to specialty care products ongoing efficiencies within industrial affairs.
Within Opex SG&A grew at a significantly slower pace themselves.
On the 16, 1% growth in EPS is all.
Also supported by a lower effective tax rate of 19%.
Turning to slide 27. In addition to the $3 33 Euro dividend proposed for 2020 2021 we have created incremental shareholder value.
It was a spinoff of your API, the leading player in active pharmaceutical ingredients.
The creation of your API announced in February 2020 is in line with some of his ambition to create a global leader in API to help secure API manufacturing on soup line capacities in Europe on the worldwide in a context of increasing shortages of medicines essential to patient care.
With this project.
Your API will gain agility as an independent company unlock its growth potential, particularly in the <unk> business.
This transaction is also in line with kind of play to win strategy to simplify its operations it.
It would be slightly positive <unk> margin in 2022.
Independents will not only your API to grow and become more efficient, but the development of its <unk> capabilities.
Also support center fee.
On its own development on production.
So we have already signed a five year manufacturing and supply contract on the <unk> agreement in October 2021.
European assets are now part of assets held for sale, we plan to host an accounting call on May 18 to provide further information on the de consolidation going forward.
Moving to slide 28, well committed to fully embedding sustainability play to win strategy and it is happening across the company.
In 2020, so finance team at linked the renewal of our 8 billion euro revolving credit facility.
Some of our key ESG targets on <unk>.
Eradicating polio.
Reducing our carbon footprint.
In March 2022, we're doing it again issuing our first system ability linked bond so.
So coupon amount is linked to one of our ESG access keep your eye at this time.
While we continue to progress on our ESG ambitions.
S&P global ratings has recognized us as one of the most sustainability committed companies with a specific distinction on our social profile wrong as leading into category of communities highlighting the recent 2021 creation of its global house human.
Indeed, Sanofi global health.
Aims to provide certainty of Sanofi is mid teens.
Cross a wide range of therapeutic areas two patients in 40 of the lowest income countries.
It's a great work from all of the teams.
Now on slide 30.
We update.
Luke unexpected business dynamics across sales on expenses for 2022.
On the left part of the slide you can see expected drivers of sales for cross sell or would you be used including the continuation of strong growth from <unk> record flu season.
Maintaining business momentum for the core product of CSC and Genmab.
As communicated before we expect to achieve priority brands to grow above market in key geographies, resulting in growth for the entire business, but only progressively nearing market rates.
At the same time, we also foresee overall GPU sales and genmab to stabilize.
So your API third party sales are currently consolidators in this business upon the plans your API listing Gen med sales will be reduced by that amount going forward.
Consolidation is planned in May 2022.
On the right part of the slide.
We expect gross margin to continue to improve due to product mix on efficiencies on the full year basis. However.
It will be weighted in the first half of the year.
R&D expenses are expected to continue to grow in line with our strategy.
As we keep streamlining our gen made on CLC business.
Expect now to generate approximately 600 million in capital gains with the majority of the disposals happening in the second half of 2020.
We estimate that our 2022 ETR.
To be around 19%, given the evolution of our product and geographic mix.
Estimate is based on current tax legislation.
On my final Slide Slide 21, we expect full year 2022 business EPS to grow in the low double digit constant exchange rate.
On our way to achieve our 2022 financial targets. We also guide to a bow Mount 30% for the year.
On foreign exchange, we see a positive currency impact of 4% to 5% based on the April 2022 average exchange rates I'm.
Now how many bags.
Paul.
Well, thanks, Jamie on the final slide before I touch on planned events, let's look back at Q1 that was rich with news flow, we presented our latest toddler booting of data and our emerging neurology pipeline the doctrines.
I took the 18 month data photometer bootable compelling because feedback received shows the difference of our beauty Cai is become is becoming really well understood.
We updated you on our immunology pipeline a few weeks ago.
And shared our strategy and ambition to more than quadrupling immunology franchise sales by the end of the decade, we are on a way to being recognized as the immunology company.
Turning to upcoming events, we are looking forward to telling you about the progress we're making to deliver on our CSR strategy. During our first E. S. G event planned for July the fifth since the approval of our new contract with society built in late 2020 within our organization. We have embraced these initiatives as part of our business priorities.
We also plan to hold an in person investor event on our hemophilia Red blood disease pipeline in mid July at this event, we want to highlight the full result results of our positive pivotal trial with an instructor Kung Alpha that has the potential to revolutionize factor treatment for hemophilia a patients.
We will also review the Tucson data disclosed thus far and the rules of boot in the phase II <unk> data just published in the New England Journal of Medicine.
With that let's open the call now for the Q and a.
Thank you so as a reminder, we would like to ask you to limit your questions to no more than two.
You have two options to participate.
And click the send icon at the bottom of your screen you will be notified by US. When your line is open to ask a question at that time, please make sure your microphone.
Microphone one.
Our option to submit your question by clicking the Q&A I can't emphasize enough the screen and then your question really right now of Panama.
Now, let's go to the first question.
The first question should come from Laura Sutcliffe UBS Laura.
Oh, Hello, hopefully you can hear me.
Yes.
Thanks for taking my questions.
Lastly are there any next steps and with the MAA, but what I am I hope with that space and yet the substance.
And if I'm right there and then secondly, maybe just if you have any any thoughts on what the past few months have taught on the appetite for our case at least in vaccines.
And the potential characteristics of the younger and based on market that'd be great. Thanks.
Yeah.
Okay. Thanks, Laura I'll come back to us.
Cost today is in a moment.
Tomo appetite for cabinet booster vaccines. Thank you well as you know very well the word and it's been clear for everyone. Now is indeed, having a bigger amount of supply and demand when it comes to COVID-19 vaccines, where.
But the pipe is now is to get the right level of COVID-19, boosters and as you've seen that we have had strong results in our third generation COVID-19 boosters, we are going to come with a second generation COVID-19, Bruce does that this quarter in Q2 2022.
Second generation being based on the beta that yet.
On which we are going to show data across multiple guidance and that's coming very soon.
And we believe that first and foremost we are going to provide our supply to the countries with whom we have partnerships.
That's very important moving forward to start business partnerships and of course, we make our bluestone available once license to all the different markets.
Once the markets.
Interested of course, we will make it available to them.
So that's as strong as we grew at when it comes to COVID-19 boosters.
Thank you Thomas Bill any comments on cost of debt no. Thank you for the question first of all look we are incomplete disagreement with.
What they have said.
So far we're looking at all all exploring all opportunities and we believe that we are on the right side of the science right side of the data and we believe that this is going to become the standard of care for Pompe disease right.
Thanks Bill.
So the next question.
Next question comes from Graham Parry at Copa Graham speak place.
Right Yeah. Thanks for taking my questions and so essentially was just on the guidance. So you've obviously had a strong quarter.
Capital gains guidance was upgraded by 100 million, but you can shift your full year guidance at all and it's not just the geopolitical uncertainty and ACC youll see flagging sort of gross margin benefits more first half and second half say, just what's sort of behind portion on the failure at the moment and then.
Secondly.
Ameritrade looks as if that's not coming until as many now and and then I think he said he didn't show clearly superior efficacy. So does that imply that there was some numerically positive trend that suggest that anything that we should be looking out for I guess from the Ministry and is making sure we didn't see the amira five six.
Settings and Keith.
Thanks, Graham JV guidance capital gains in gross margin.
Come on Graham.
It's only Q1.
So I love your confidence on there's nothing special to raise effectively it's early in the year on a I love the confidence you're showing the team on your right to do so.
Navigating crazy, but you can count on us to deliver in 'twenty, two and beyond so nothing nothing really to signal on this.
Okay. Thanks, J B, John could come in on the merits of it.
Yeah Graham.
So the data are base submitted for presentation at a meeting later this year and of course once.
Those are disclosed youll be able to see all the nuances and the subsets.
Your wildfire versus mutant et cetera et cetera.
We really have nothing else to report at this point other than what was already shared in the press releases that we do not see a statistically significant difference between the standard of care selected by physicians and it ebbs and expert in that late line population, which.
I think you know.
The experienced now is showing more and more of these patients.
Most of them have become estrogen receptor independent in their own in their cancer journey.
Thank you John .
As we head towards earlier lines of course, we're watching out for later this year as relative Tolerability profiles that'll be very informative because we know that's a key.
<unk> as we go earlier.
Question.
Next question comes from the amount of capacity at a bunch of them.
Oh, great. Thank you very much for taking my question. So my first question is just on.
Then the 17 lab trial. Please so you failed to achieve stat Sig reduction in hospitalization for RSV associated lower respiratory tract infection. So just curious.
If and how that really impacts your thinking on commercial potential for the molecule and you know what.
Feedback you've had so far as a result of that specific.
Data point would be interested to hear and then my second question is just on Russia, Ukraine, you mentioned the COPD Ms trials. So just curious.
How data timelines.
<unk> data timelines will not translate into shifts into filing timelines. So just and if you could elaborate a little bit on that that'd be great.
Okay. Thank you.
We're very excited about and a seven month data tends to protect.
Since Thomas.
Thanks for the question via mail indeed.
Very positive phase III trial, So let me, let me restate the death and come back then to the perception of the different folks we took two.
Again.
We have succeeded by showing 77% reduction against hospitalization in a prespecified phase II phase III endpoint, you know very well as we said multiple times that the phase III alone was not powered in order to be able to demonstrate a outcome.
Outcome on the secondary endpoint of his position, but we knew that we were doing phase II phase III that equals placebo and Thats way with ISP site.
And we've shared that data with regulators. We said there's every committee very very positive feedback again, there's not so many drugs from year. One if you implement this in full birth cohort formula one youre going to see three quarters less.
Utilization in newborns in the number one cause of hospitalization that land very well with peers with advisory committees. There are not so many projects where you can see what that formula one so that's where we add very reputation that data and it is not finished we are adding very soon and very exciting SP Congress in.
May 2022, so it next door and it would be some modest ashwin necessity met potential again very excited about the journey expecting market authorization in EMEA at the end of the year and moving forward for the downturn in 2023.
Yeah, I mean from my own learning experience as well on this and talking to people.
There's very few population health.
Interventions to deliver that type of impact that fast. So you can see why people are very excited about what that looks like.
John Russia, Ukraine to submission timelines are on track, but of course, there's been some challenges for all the companies actually in running clinical trials.
In such a difficult circumstance.
Indeed.
We are obviously conducting global studies for our EMS smaller kills told them what route nib.
About a roughly 11% of our sites are in Ukraine and Russia.
We're staying on track with our submissions through a combination of really heroic efforts that our teams are making to keep patients on study and those affected territories in Ukraine. For example, moving patients into the western parts of the country or into neighboring countries into clinical sites, where we have the study active.
And then we've taken mitigation efforts as well to expand recruitment outside those territories to.
Add extra patients in case, we lose some data.
But so far so good I would say and we are.
<unk> on track with the submissions that we've that we've shared previously.
Thanks, Tony.
I think John has mentioned already but it's a herculean effort by everyone.
At least to make sure the patients get the supervision that they are that they need but also to stay on track at a great privilege of being invited by by Bill and John to one of our investigator meetings global investigator meetings, just a few weeks ago to remind people of how important it is to deliver this and these studies so.
So everybody in the company doing what we can to make sure that not only do we help patients but of course, we don't Miss a timeline.
Next question.
Yeah.
<unk> question comes from Richard Buffet at J P. Morgan.
Alright, Thanks for taking my questions. Two please just on the mrna.
Vaccines development.
Firstly could you give us an update.
What's going on there and are we going to see an uptake in that program before the end of the year I don't think that was mentioned and then secondly, just on consumer that perhaps you could talk about the.
The development of the market in more detail and clearly a very easy comp in EG and cough and cold season, but.
How do you anticipate the market are being pressured by by the pressure on the consumer going forward and what sort of level should we think about thanks very much.
Thank you Richard.
I'm on a flu program up there.
All in and full speed. So as we have discussed before we are going to go. After the initial reasons that we had last year to go into phase two quadrivalent modifying them out in a flu product in <unk> 2020 to starting the phase one two trial, we are full speed on that and we want to make sure that we take this opportunity to.
And between last year results in visual stuff by keeping our studying more and NPS and marketing optimization. So very excited about the science. We are gathering in the ammonia center of excellence as you know when it comes to amount and if we development, it's going to be a journey, you've probably have seen retard. The recent phase II data.
From some of our competitors.
They show that there is still some way to go, especially if I look at the systemic adverse event in <unk>.
Terms of grade III that shows that there are still a lot of potential into the M&A opportunity, but we need to find the right adjustment on the <unk> as well as in Indiana, and that's the focus of our company.
Yeah. Thanks, Tom.
It shouldn't be lost on anybody that section that we Havent December 1st last year, we laid everything out really clearly and transparently and I think as I've said, a couple of times, we sort of predicted the tons as the competition would face you know and while we may have been a little bit late to the party on mrna suddenly we feel electric co writer doesn't actually on this.
And what it takes to go forward and differentiate itself.
We've come a long way in a year very proud of the team actually and I think we're going to positively surprise, everybody, which is always a good thing.
And now Julie market consumer market development of images, suggesting you had a great quarter, one but what's next.
Thank you very much Richard it seem to be an easy quarter, one, but still I I think what we can say is that of course as you mentioned with the cough and cold season.
Almost behind us.
Strong market growth and the performance of Q2, Q3, and Q4 last year, we believe that the market will go more to normalized levels now.
Now for US specifically, what I can say that even Q1 for US. This year was also a high single digit growth versus Q1, 2020, and even a double digit growth versus Q1 19. So again, we are above pre pandemic levels and this is where we want to continue by focusing again on a on a court.
Brands and core in key geographies. So we remain quite optimistic but yes, the market will go to more normal levels.
Thanks, Julie and well done on them.
Okay. Next question next question is from Tim Anderson at Wolfe Tim place.
Thank you.
A couple of questions. Please.
So on your third given the failure of a mere three and also the failure.
Recently by Roche are you just as confident as ever that this is the class a drug that's viable and will ultimately make it to market.
Do those two failures at at least a bit more uncertainty to the class.
And second question on consumer health, given the durability of your underlying pharma and vaccines business across that decade seemed like a great setup to divest consumer health.
What would be the reason for you not to get rid of it.
At this point.
And does the delay in OTC switch here with at least one program a complicating factor to that.
And when we get independent advance or in 2022 and what your plans are.
So Tim Thank you and great questions.
John do you want to have another go.
Yes, Tim.
From the beginning we felt that the sweet spot for the surge was going to be in the early lines of therapy, where we're confident that the.
That the estrogen receptor is really an important driver of tumor growth. So we remain very confident that that's the right place to use them. We took a swing in the late line knowing the risks associated with that but but really the early lines is where the real opportunity as well.
For patients and for the company.
Yeah, you know, there's still a lot to learn as we get to the Congresses in the second half of the year, we get more richness I think its clear I think you said it on the.
Later lines, we're going to be a challenge given the activity.
It's going to get really interesting on Tolerability No reason mechanistically why.
Pass car dwell earlier, but it's going to be really interesting for example, our newest competitor do they hold the same.
Challenges to the Tolerability into earlier lines and those are the things that will differentiate going forward since the class has efficacy in the earlier lines. You know then wouldn't it be interesting to see who the winners and we look forward to that too.
John Batiste you'd like to continue to answer the question on consumer so.
Over to you.
Well thanks for the question Tim.
I think of course, our position has not changed since December 19, without looking back you remember at the time, we had the same question.
What happened since well I think we are really really well.
Working on building, a stronger and better business and you've seen what Judy just exposed we are really on route to our really building a stronger asset. So that's our position is not it does not change and of course in the meantime, we go on with our accounting and it's happening.
It's happening well, bringing this level of autonomy and decision, making them really agility, which is a really a huge necessity in this business. So yeah, we're glad with with where we are right now so no change.
Thanks, so much.
The next question.
Question is from Peter adult at City Peter.
Thank you people don't Citi. Two questions just depicts interests are fantastic momentum globally.
But in the U S on that price calculation suggest low double digit pressure. So just wanted to better understand from.
The team, how youre, feeling about rebates and going forward.
Considering the IL 13 launches and perhaps a quick update on when you'll previously announced efforts to significantly improve cogs with the picks and when might we see that actually coming through in the P&L and then the second quick one a follow up to Grant's question I know you won't full flexibility to invest in the business and focus on the pipeline and you'll do that.
But at the same time I think everyone on the call knows that you're well set to come to be sale posture midterm margin and free cash flow target. So the question is are you planning on DMD later this year or early next year would that be the platform, where you'll midterm objectives could be revisited.
Okay. Thank you very much to pick some bill.
Great Pete Thanks for the question Q1, really it's just the anticipated.
The impact that you have from patient assistance programs and so forth on net sales and that's what we've historically seen in the first quarter and you see it pretty regularly obviously throughout.
The industry I mean, we are in a highly favorable position from an access perspective with the Texan, we plan for the long term.
Both of the product new indications competitors et cetera, So things are tracking as usual, though continue to be some.
Downward pressure on <unk>.
Gross to net but that's expected and theres nothing out of the ordinary here.
Yeah.
If I remember there were probably.
Probably a year away from the competition at least in your mind that he touched on it. Some competition is good in terms of the education and the noise in the market I think it's a great point, Paul I mean, we are counting on competition, we need competition to help grow the market, we need it and as asthma, we need it in a day.
We've seen it around the world where competitors have come into the market. It helps to accelerate growth and as the product with the best profile guests who wins. So that's what we're looking forward to it. Thank you bill.
That test.
Talks and the C III.
Yeah.
Nothing has changed on that front to remember it takes time to deploy you know different sites.
New process and.
It will be delivered as I said deploy between 22 and 23, So you will get and you will see.
That was a full impact starting in 'twenty four.
Okay. Thank you and I think I made I hope I got it right, but are you sort of suggesting we should have the CMT.
You know to do some reflection and think about what the future could be.
Good advice Pete is always from you we'll update you.
In time for any new investor opportunities for conversation, but but clearly the next chapter for the company as is coming down very fast in ASIC Simon builds around what we're doing you know it's.
It's important that we try and point you in the right direction, So watch out for that.
That's question <unk>.
I can ask.
Next question comes from Lisa Luisa Hector at Ehrenberg Luisa.
And thank you for taking my questions and I Wonder if we could touch on China, where you have strong place in the quarter.
So, perhaps a little bit of an update on lockdown.
And if the outlook for the rest of the year because you do have the positive side from new launches.
In the interim pressure on your SaaS or can we expect.
How do you teach price show the show.
Yeah in China.
Perhaps just to touch on the Blackstone deal very interesting that are there many other opportunities from your pipeline.
When we could see similar deals like.
Thank you.
Okay. Thank you Louise.
J B China growth.
Yeah.
Yes, we are we are quite a bit of caesars or even you've heard from a vaccine as a sub.
Rebound you've seen.
We're also performing quite well across the across the board in our different business units.
So this market is important to us on or will go on.
A player of volume you remember that we are I've been playing a game of a V B P.
Quite successfully winning when where we wanted to win.
Really getting our growth in volume, which makes us.
A stronger and stronger in China.
On maybe you had in mind.
Negative impact of Lockdowns on everything around Shanghai, and maybe I don't know you want to update us on the on this piece.
Yes, absolutely. Thank you Jami so you're.
You're right. We have you have seen a strong quarter on ph and the rest of the world and as I said it was driven by China.
Pantex Pentavalent combination he is doing within China, we're gaining market share.
And the various COVID-19, lockdowns, which is very difficult to predict duration and when would she T and follow along.
Of course, you can expect that during the exact duration of the lockdown.
People don't go to the point of vaccination Center and therefore, you have a an immediate drop however, we are taking here, but they get immunization less than six months old babies. So as soon as the lockdown easily move people go first and bring their new bonds. There. So it's going to be showing some shifts between quarter to quarter, but we catch up very quickly as soon.
As a.
Thank you loser as for Blackstone, clearly opportunistic, but we stay open minded I think I mentioned it in my upfront around.
Staying agile for these things and in many cases, we believe we have the best CD 38, but of course the market is moving to subcutaneous we're going to produce more data. We have differentiated. So the question was really a simple one what is an efficient way to be able to compete in a subcutaneous market over the upcoming years, when our data will accumulate very positively and <unk>.
Differentiated.
We have to be realistic that we know how to get a return, but we also know when it's best to do it ourselves and it's best to get some help to do it so.
You know I think it just shows how open minded we are frankly, but importantly that we think there is some opportunities.
South Asia, So we'll watch that as we go forward, it's quite exciting actually Okay next question.
Next question is from Cove point, Ken Goldman Chaos.
Thank you Phoenix.
Good afternoon team.
One for you just would love your updated thoughts on kind of the broader capital allocation M&A priorities.
Clearly.
Biotech valuations seem to have corrected a fair bit this year. So just wondering how you're feeling about using your balance sheet more aggressively over the course of the rest of this year any interest in potentially bigger transactions are still very much a focus from a bolt on perspective, that's kind of question number one.
Question number two for Julie plus 3% price increases that you are seeing it seems like that's kind of fairly consistent across the broader consumer.
Kind of what was reported so far but interested in your thoughts on how sustainable you think these price increases are going forward, especially as we look into 2023.
And then just lastly.
Given the newly announced partnership with Mclaren are you guys planning to host an investor event either on the cardiac of May are the 27th of March 27th of May.
Yeah.
Okay. Thank you. Thank you as always.
<unk>.
So as for M&A, well, nothing really changed for us either way I think we've been pretty disciplined we're looking to add to the pipeline I think we're building it out right. We're doing it in the right areas. It's clear that some prices have fallen, but it's always been for us about picking the right target and the right assets never been about size has always been about the right thing and that hasn't changed.
For Us I think not just stays you know business as usual you know we spend a lot of time on it and for good reason.
And if we see the right thing will move that's been the same since the very beginning of this since I've been here. So they may Costa is less but it's still only about how good the opportunity is.
Julie.
Price sustainability sure.
Thank you. Thank you for that question.
We're obviously very closely monitoring the situation because yes, we are increasing prices and we are all we are hit by actual raw material.
Increases et cetera, we're looking at competitor behavior of consumer prices and necessity.
And we are adapting our prices where needed, but always staying as fair as possible to our to our consumers and so to answer your question, Yes, I think what we've been doing now the plus 3% three points.
It will be consistent in that in the coming months, but there's something wrong again monitoring very closely right.
Thank you. Thank you Julie brand and you get the chance to answer a question. So.
And to talk about and maybe its just a few seconds about why the partnership.
Then you can answer this specific question on the dates but.
The partnership is important thing well there. Thank you. So good morning, good afternoon, everybody Brendan O'callahan, I'm, leading industrial affairs at Sanofi since Q4 of last year before which I led the biologics manufacturing organization since 2015, primarily supporting bill in the specialty care organization across the therapeutic areas that he's he's responsible for an immuno oncology immunology oncology.
G rare disease rare blood diseases. So we have not met before so maybe it's like a few minutes just to give you. Some perspective on my new scope for reference we were an organization that supplies almost 11 million patient doses every single day.
Close to almost 5 billion doses in a year, we work with teams across more than 65 sites in 32 countries supporting a portfolio of over 600 products in 20000, Skus supporting all of our business units.
Of course, we work very closely with John and his colleagues in R&D CMC to make sure we deliver on time launch and scale up of the pipeline assets right first time.
Our priority is in industrial affairs are very clear or support supply product reliably on time at the quality of our patients expect them at the most competitive cost we can deliver on.
And it's in these key areas of priority that we focus our improvement efforts.
And so as we looked at the various levers we have to drive improvements we saw inspiration both internally as well as from external experts, who can bring us a fresh perspective mindset and a set of capabilities to help us accelerate our improvement journey and that's why the partnership with Mclaren came about as you know they operate in one of the most competitive fast paced and high performance environments.
The ability to innovate rapidly leveraging both data and technology insights is key to make up to 2% difference that can separate first in last place on the racing grid.
They've mastered skills and precision engineering data analytics and cross functional team works best represented by the famous Pitstop capability, but we're also leveraging to help us maximize the utilization of our manufacturing asset base.
And through that to improve our productivity and clearly our cost efficiencies.
We started last year with a pilot delivered high single digit improvements in a select number of sites.
And we're expanding that this year to over 100 of our production lines, taking learnings from that which will then deploy across a full network reaching out over almost 300 production lines.
And with their mindset racing mindset, there focus on continuous improvements Macfarlane will help us to bring a strong sense of speed and competitively driven teamwork internally to our efforts.
So it won't Brendan Thank you took your opportunity.
Yes.
Yeah.
Joking aside it's quite important for people to realize that.
As we begin this modernization effort as an organization we.
We have more opportunity to some people fully appreciate externally to really improve productivity and efficiency and speed and cost internally.
And we can bring a sense of fun and aspiration to it too but at the heart of it will be a more efficient business more agile simplified portfolios and operationalized. So I think that as you know it's hard to properly articulate externally all the time how.
How big these opportunities are but as we move through R&D productivity.
We moved through our own internal opportunities attention is on industrial a fast and it can be exciting to do it too so a real big opportunity for US next question.
Next question comes from Florent Cespedes.
A few of them.
Yeah.
Judith.
There's some substitution unsecure much for taking my questions two quick ones first for <unk>.
And are you could you maybe.
Maybe give us an update on your case.
<unk> strategy in terms of Endesa placements for where were your stance or some color would be great.
Thanks, and second question, maybe a follow up on the situation in Ukraine regarding the clinical trials you.
You gave some examples.
The multiple sclerosis market, but could you elaborate.
The COPD front because you have.
I think trials, therefore depict sensitive <unk> trial in <unk> and also if you could snap.
I wanted to show any color on this front would be great. Thank you.
Great. Thank you Olivier.
Yeah. So thank you. Thank you floor. So let me give you a little bit of color on how we progressed in terms of simplification I would say that we are in line in the plan to sell a little bit in advance to all.
Up both in terms of geographic simplification, we now operate in roughly 50 country US would you be distribution model. So it's not any more notable products no small countries. We have simplified elasticity all geographic footprint and of course, it's too early but the preliminary signals that we get that's all.
Our relationship with new distributors is positive.
The simplification of our full year, which is absolutely key to simplify but also to decrease cost of goods starting into or 20 at the end of 2019 as you know we had more than 350 product families. So we are moving well.
In line with our plan with the objective.
To go to 125 at the end of this year and the women into a 20.
Two of 25 through both of course Divesture disc.
Discontinuation of products.
Putting so really in line with the plan and I think it's an important element in order to drive down our cost of goods and make the life of my colleague Dan and his people a little bit noisy yep. Thank you.
Again, just touched on it with industrial fast I think.
The teamwork, that's going on between the business unit heads industrial fast is really important to give us the opportunity to redeploy resources added to the bottom line with into R&D and I think we're really getting into a good you know.
Cadence on that John .
Back to clinical trials Ukraine.
Russia, but with specifics to COPD anything to add.
The answer is largely the same although I would say our exposure to see in terms of a risk.
Risk for COPD is a quite a bit lower in terms of the percentage of patients that are found in Russia or Ukraine.
So no change to a submission timelines.
We're doing our best to keep any patients we already have on the study on study.
I talked about before.
And making efforts to expand recruitment and other territories, so that where.
Or just basically covered if we lose some patient data.
Thank you very much.
Thank you Paul next question.
Next question comes from Mark Purcell at Morgan Stanley Mark.
Thanks, very much so two for me firstly could you help us understand the Brexit the CCAR five opportunity and replacing chemotherapy in lung and breast cancer and pancreatic cancer.
Five one of the targets and the Seaton collaboration and when should we expect the first ADC from that collaboration to move into the clinic.
And then the second question could you comment on the opportunity for if Rafa I don't want to.
Secondly, the Thunder away from the 13th of July .
He looks out its funding over 50% of patients with zero play, especially as mid teens for a doctor.
Should we think about in terms of a market share target in the factory space for Alpha and how fast could you achieve that target. Thank you.
Thanks Mark.
John breath of the AR to some minimum.
Opportunity.
We think the breadth is quite large because for starters <unk> five is expressed quite broadly in a number of adenocarcinoma is different percentages in different tumor types, but for those.
That are historically sensitive to agents that target microtubules.
Lung cancer gastric pancreatic breast we think the opportunity is it is quite extensive obviously, where we're doing the pile.
Pilot studies and some of those indications to really try to better understand that both as monotherapy and in combination with other agents. The most advanced being in the non small cell lung cancer.
So.
I think one of the things to watch for later this year is as we get some experience in frontline lung cancer in combination with PD, one where we are.
Substituting secam for some of the chemotherapeutic agent chemotherapy.
Chemotherapeutic agents.
We'll have a much better foundation for thinking about.
How are how broad that opportunity could be so watch for those phase two data towards the end of the year.
In terms of CGM, we haven't we have not disclosed what the targets are for that collaboration so I can't say more about that and it would probably be a very premature to hazard. When we might think we'd have a molecule in the clinic, but we're dedicated to moving that fast is it as quickly as we possibly can and into our engine.
Element.
Thanks, John .
F N or something else.
Okay.
Thanks for the question and I think you called it outstanding we are of the same belief.
I'll start with the again I agree with the New England Journal of Medicine with their statement that it would transform severe hemophilia a into a mild disease.
We think that when you can offer.
Normal for the first time.
Bleeding and a hemophilia a population that's something special that's something the market hasn't seen before so if you think about the market and he may prophylaxis segment.
Which are the he may factor prophylaxis segment hands down there should be no. Other factor that offers anything even close to what alpha will have the question on the market is going to be how does it evolve will it become a market that is demanding normal.
Or is it a market that is shifting towards convenience.
And Fortunately as a company we have another asset the two saran that covers the other side of the market as well yeah. We personally I think our belief is that you want to have the best outcome for patients that you can alpha is going to have the community start to think about what is possible.
In hemophilia, a hopefully a little bit differently than they ever have had too. So we're extremely optimistic well get into more detail as we come up to our event a little bit later this year.
Well, well said and Bill I think that's that's where we're going to be it's quite interesting isn't it really that it'll go convenience.
Or normal which have never been offered before monthly just one lucky enough.
Because to go beyond that inconvenience or with the new standards and then of course the other point is that on our nearest non factor competitor.
Weekly in 60% of the patients.
One factor so the share the real assumption, maybe I'd say that the assumptions you've put some pressure on newbuild at this the share goes beyond factor ultimately.
Depending on what the builders. So thanks, thanks for raising them.
Alright next question.
Our next question goes to Seamus Fernandez at Guggenheim Seamus.
Yeah.
Seamus do we to religion.
Seamus is not around.
Give it to Peter Welford that.
Actually yeah, sorry, Peter.
<unk>.
Definitely definitely.
So I'm so sorry.
Firstly just on the Sydney.
Acacia.
You said that you'd raise the capital gains do you like BCH now around $600 million I'm curious are those additional disposals, you've got coming from the consumer household from Mccann net portfolio and should we think of this is disposals that you had planned in prior years or would you sort of guided there'll be a cadence.
Alright, thanks very much.
Something that is going to be a more.
Additional gating for the additional simplification problems that we should think of on top of what we should talk about.
And then just going onto the staffing that you think should you be an ADC in the second half.
And obviously the U S a step change.
We also obviously have the.
The potential to have a U S T therapy Eaton Rapids with its head around here you should we think about potential use of <unk> for the 'twenty two to 'twenty, three where you can see that it's possible we'll realistically.
Recommendations, obviously from a separate from various European countries should we think of this as more of a 'twenty three 'twenty four and how are you.
And she laying the groundwork with some of the European countries getting feedback. Thank you.
Thank you. Thank you Peter Jumbo Ts couple of gains disposals and cadence.
You just have to read through through this debate.
We are deploying.
Deploying our strategy successfully.
So the cadence is very much linked to the effects that are we.
We are signing almost a deal a month on in a very good financial condition, so effectively the.
The impact is on the.
It would be to.
On the upside, but nothing else in there.
The relentless execution on not necessarily more or less all forgetting my doors here Chi. It's both we are really.
On top of a roadmap on executing the past, yes, it's an important point that isn't it because.
Everything is connected in the transformation of the company and sort of jump leapfrog to the to the future of Sanofi.
We have to look at IAA GPU to disposals to efficiencies to make sure that we can drive simplification in the company and the accountability around it and I think I do think it'll be.
Our long term strategy for us it just makes sense.
Okay Tomo, so maybe is coming from you on.
The in the southern North Sea season.
I like to think about acceleration and you.
But on near Sydney map, Peter we already exit everything from 'twenty four to 'twenty three.
We have regained one year I like the question, where do you think realistically, though remember that we're going to submit the file in the U S. In the second half of 2022 times.
Time for the regulatory body to review it and as you mentioned.
Charter, which is very important.
I'll come and then we look at the file so so I would expect knowing that obviously this isn't a disease that we're talking about a launch in 2023 for the first time stuff necessarily mab and <unk> and I would say from there on it's on your part.
Thanks, Tom and I think that's probably a good place to.
To bring this to conclusion, thank you to everybody for the questions and for their interest today.
By way of a few thoughts strong performance in Q1, you've seen it again look forward to updating as we get further into the year.
Pipeline progress again, so we're excited about what that's looking like in coming together, although I don't think we deliberately set out to talk to you about how well we're now running as an organization I think it's important to not Miss the fact that all of this productivity gains allows us to double down on R&D and <unk> and to prepare for launches.
The Pops didn't exist a few years ago, and I think that's getting that's pretty exciting for us because it means we can positively surprised so thank you to everybody for the time today.