Q4 2022 Sanofi SA Earnings Call
Speaker 1: simplification and accessibility, providing an oral one and done dosing option. Patients can be treated with no need for hospitalization and our regimen can also include the treatment of children.
Speaker 2: Looking ahead, 2023 will mark two major first-in-class or best-in-class launches for the first time in the company's recent history. We plan to launch Altruvio and Hemophilia A, a medicine with a compelling profile that is poised to capture market share both from factor and non-factor therapies. Equally exciting, we are ready to launch Bayfordis for RSV prevention in time for the next season, providing all infant protection.
Speaker 3: We expect to have two pivotal readouts this year as well, two pixin in COPD and solid root nip in relapsing remitting MS. For both, we hope to see breakthrough data sets, particularly in COPD. When you think about the huge unmet need and the challenges that patients and healthcare systems face, this could be a real game changer.
Speaker 4: With 27 earlier stage readouts from assets with first or best in class profiles, especially in immunology, we are set to deliver on our ambition to transform the practice of medicine.
Speaker 5: Although all research and development in our industry involves risks, we are committed to break new ground and to chase the miracles of science.
Speaker 6: Across the organisation, our teams have been relentlessly executing our plan over the last few years, and I want to take this opportunity to express my gratitude for all their hard work.
Speaker 7: During the 2023-2025 period, our action will be focused on our existing objective to achieve more than 32% POI by 2025. We are steadfast in our ambition to reach this target with new launches, continuous two-pixen profitability improvement and by further streamlining our portfolio.
Speaker 8: Now, what will lead us into the next chapter of our growth story? While 2026 and beyond is not fully laid out yet.
Speaker 9: We have previously guided you on growth targets for the second half of the decade for immunology and vaccines. Unlike any of our peers in the industry, we are in a unique position.
Speaker 10: with the portfolio uncompromised by a meaningful LOE exposure over this period.
Speaker 11: To fuel this next chapter of growth, we are confident in our improved R&D productivity, driving a pipeline made up of at least 70% biologics, with 90-95% of products being best-in-class or first-in-class. This lays a promising foundation for us to bring 3-5 products to market with 2-5 billion euro peak sales.
Speaker 12: potential each in the second half of the decade. Significant unmet need remains in immunology, neurology, oncology and vaccines where our science is gaining momentum as we continue to focus on winning product profiles including medicines such as Tolibrutinib, Idipacumab and Namlachilabab.
Speaker 13: On the next slide, let me transition to the business performance in Q4, which will be led by our GBU heads. Bill will start by highlighting dupixen's growth, which shone again in Q4, driving specialty care performance to new heights.
Speaker 14: Bill, thank you Paul. Q4 has been another extremely successful quarter for the specialty care with solid double digit growth.
Speaker 15: New Pixel remains the top driver of this growth, fueled by strong demand across indications, geographies, and age groups. In 2022 alone, we managed to add 225,000 new biologics eligible patients with the addition of asthma in the EU to treat 6-11 year olds.
Speaker 16: EOE in the US for 12 years and up, AD in the US for ages from 6 months to 5 years, and finally Pregonodularis in the US targeting adults with high unmet need.
Speaker 17: switching to rare diseases, I am pleased with our performance in this core GA, where we not only continue to add new patients in our LSD franchises, we are also starting to benefit from the contribution of recent new launches. I would specifically point out the quick ramp up of next-via-zyme and Zempozyme, where we have rapidly established a...
Speaker 18: significant impact we can expect from US generic entrants to Abazio beginning as early as March of this year. In Europe the first generic entrant is expected in the fourth quarter of 2023 based on confidential agreements Sanofi concluded. On slide 15 let me draw your attention back to Depixants growth trajectory.
Speaker 19: FET to reach 10 billion euros in sales in 2023. Q4 delivered another quarter of more than 40% sales growth globally. XUS sales are now annualizing over 2 billion euros. And incremental 3 billion euros were added in 2022 globally, also benefiting from the strong US dollar.
Speaker 20: Going forward, this currency benefit on a reported basis may not continue at the same rate.
Speaker 21: We keep making tremendous progress with our regulatory milestones. Not only did we launch Dupixent for PN in the US in the fourth quarter, but we also received approval for this indication in Europe in December , making Dupixent the first and only biologic available for the treatment of this dermatological disease.
Speaker 22: For chronic spontaneous urticaria, in short, CSU, we had already shared in January the submission to the FDA. This indication has the potential to add another 308,000 biological patients to receive treatment for a highly debilitating skin disease.
Speaker 23: If approved, we have the potential to add a population close to the size of the market targeted with Depixen and COPD. As a quick reminder, the usual dynamics around copay assistance programs that typically take place at the beginning of the year are expected to weigh on reported sales figures in Q1.
Speaker 24: Now, on the next slide, dupixens leadership amongst specialty respiratory biologics is depicted by the pie chart on the left side, reaching 37 percent NBRX share. More importantly, as you can see in the table on the right, the asthma biologics market in the US remains largely under-penetrated.
Speaker 25: Today, only 22% of biologics eligible asthma patients above the age of 12 receive an advanced therapy.
Speaker 26: And as such, represents an enormous potential for future growth with Depixin in this indication alone. In children, the opportunity to treat biologics eligible patients with unmet need is even higher.
Speaker 27: Furthermore, as Paul already mentioned, our teams are highly excited about depictions potential to become the first biologic to treat COPD, a devastating disease that has seen no innovation in the field for the last decade and is the third leading cause of death worldwide.
Speaker 28: On slide 17, switching now to some recent innovative launches in our rare disease portfolio, here are some great examples of how Sanfee's R&D transformation has translated to the expansion of our portfolio to address significant unmet medical needs.
Speaker 29: While the targeted patient populations for these products may be small individually, the importance of improving people's lives with these first-in-class therapies continues to reinforce our leadership and rare diseases.
Speaker 30: Specifically, in Q4 we have seen strong adoption of Zemphazine and Kebli-D, and Jemo has seen meaningful growth in new patient starts.
Speaker 31: Moving to my final slide, I want to zoom in on our expected upcoming launch of El Tudio.
Speaker 32: We see this medicine as an important future growth driver for Sanafee overall and building on our expertise in the greater than 10 billion Eurohemophilia A-Market.
With L-2BO, we have a best in class factor treatment with the potential to set a new efficacy standard by providing a near to normal range of factor 8 levels for most of the week coupled with its reduced treatment burden of once weekly dosing. With the PDUFA date later this month...
We believe Altubio will be the first breakthrough medicine to enable new daily lifestyle possibilities for he may patients.
To date, we are particularly excited about the positive physician and patient feedback we have received over the time of its development. In addition, the recent New England Journal of Medicine publication highlighted Altubio's potential to transform the treatment landscape for people with hemophilia.
With that, I hand over to Tomah to update you on the vaccine business.
Thank you Bill. Q4 vaccine says we're 1.7 billion euro, 16% down versus prior year as expected, owing to strong operational execution leading to the shipment of large volumes of flu vaccines already in Q3.
We delivered another record cells UFO flu driven by our differentiated vaccine. I will touch on this more on my next slide.
PPH cells were lower compared to the same quarter last year, due to the COVID-19 institution in China disrupting the routine infanvation at the center of care.
In addition, Vaxelli cells keep growing in the US.
Given it's a JV between Merck and Sanofi, those cells are not considered in our cell to be much more Markov
We continue also to observe progressive records we have booster and travel vaccines, but the latter have not yet fully reached their pre-pandemic level.
And finally, sales in the others category benefited from our COVID-19 booster with pristine beta in Europe . Depending on individual countries' supply arrangements, those revenues were either booked in the sales or in the other revenue lines.
Moving on to slide 20 for flu.
With almost 3 billion euro sales, we achieved another record euro flu sales in 2022, in a challenging vaccination environment, smart by both patients and provider fatigue.
Our strategy to focus on vaccines offering protection beyond flu is paying off and is driving the flu franchise growth.
Fluconidols and flu blood represent the majority of our flu sets since 2021 and do continue to grow. In the US, although overall vaccination rates decrease this season,
The senior market has been stable and Fludon IDO remains the market leader, gaining 4 points share in this segment.
In Europe , we observe a similar trend in those countries where we have launched the Delta after Germany in 2021, some regions in Italy and in Spain have awarded their influence attenders to a fuel dam to vaccinate their seniors in 2022, just providing the most vulnerable
the vaccine with demonstrated efficacy against post-fluid infection and its dramatic consequences.
Next slide please.
As we start the year, we are set to be the upper strong position in pediatric vaccines.
First, Vaxelis.
The first and only hexavalent PSX vaccine available in the U.S. reached 26% share of the three-dose primary series at the end of 2022, 18 months only after launch, gaining share from the pantavalent PSX vaccines. We expect vaccinoids to be the leading PSX vaccine in the very near future.
Second, we're getting ready to launch base 4.2 for the next RSV season, as soon as we get the license and ACIP recommendation.
RSV is creating havoc this season. It has put heavy burden on healthcare systems and emotional strain on families, which reinforces the value of base sources as a solution for an important unmet medical need.
We are working closely with the FDA to expedite review timelines given the urgent and met public health needs caused by RSV, and to ensure equitable access to BfR2s to protect all infants against RSV as soon as possible.
Finally, on the R&D side, as announced at our vaccine event in December 2021, we now have interim results of PCV21, RSV-Toler and meningitis B programs.
These interim results give us confidence on the path forward for these programs.
We will host a vaccine R&D event in the first half of this year to share detailed results and to give a broader update on our pipeline.
Very much looking forward to this event, I hand over the call to Orige.
Thank you, Thomas. Moving now to General Melson on slide 22.
The execution of our strategy continues to deliver as planned. In Q4, general matching sales decreased 3.7% to 3.4 billion.
The impact of the consolidation of EuroAPI third-party sales was minus 3.6 percentage points, while the impact of divestments of non-core assets was minus 0.7 percentage points.
Our core assets grew 8% in Q4 despite the decrease in Robinox sales, which continues to be affected by a low molecular weight apparent market, declined following high demand during the COVID period.
How strong brands, Talion, Tougeo, Timeoglobulin and Blavix all delivered WG-Gro.
Furthermore, the adoption of Resiroc was robust with more than 1,400 patients treated since 2001.
The non-core asset sales decreased 10.8% in Q4, reflecting portfolio streamlining and not to decline in the US as well as in China due to BPP implementation in May.
Moving now to slide 223.
For the full year 2022, general matching sales reached 14.2 billion euros. Importantly, our core assets were up 5.2%, in line with our ambition to grow our core assets with single digit Kaga over the period of 2020-2025.
Our call asset now represents 47% of Gen Med sales versus 43% in 2021.
Across our car brands, Traleon, Time of Loblin and Resirock perform well and we are specifically proud of reaching Bob Buster status for 2.0 for the first time.
This year our total margin sales, 2-0 and 0-0, we are down 10.7% in China.
VBP implementation in May 2022 impacted lot of sales as expected, but we saw a strong ramp up of 2-0, which benefited from a demand increase.
Looking forward, we remain confident in the performance of our co-assets.
Our constant franchise is expected to continue its growth path, driven by a restaurant, despite the loss of exclusivity of Moshe Bill in July in the US.
High-end strong performance should continue driven by Europe and China.
Soliqua was approved in China in January 2023, and we plan to launch in Q2 of this year. We'll work with Chinese authorities to get access to patients who are NLDL. In parallel, we will continue to leveraging the compelling Solimix data to source market share on Solquimix insulin in the rest of the world.
including China. The streamlining of the GenMed established product portfolios continues in Q4. We closed two further local deals in Germany and Spain ending the year with 122 product families from originally more than 300 in 2018.
In summary, our recent performance and streamline efforts give us confidence in our ability to further drive the share of asset sales to 60% of total general sales by 225.
With that, I hand the call over to Julie.
over to Julie. Thank you, Olivier.
The consumer healthcare market continues to post double digit growth in several of the categories with price contributing way more in volume.
Q4 was notably affected by the triple-demic with high levels of influenza COVID-19 and RSD across all geographies.
This high level of incidence drove consumers to purchase significantly more cough and cold and general pain remedies to protect themselves and their families.
The NoVTG participated in the strong Coffin-Colve momentum with our European portfolio. However, our absence from this segment in major markets like the U.S., where market dynamic has been very strong with over 30% growth, drove our latest rolling 12-month growth to the ex-slightly behind the market.
Nonetheless, I'm proud to share that Sanofi CHG has delivered a fourth consecutive quarter of double-digit growth on a rolling 12-month basis, with strong performance across digestive wellness, allergy, and cough and cold categories.
Our digestive wellness portfolio in particular continues to deliver outstanding results with 19 months of consecutive share gain.
On the organization side, we're also taking the next big step towards becoming a fully stand-alone business within Sanofi.
Effective January 1, 2023, all core functions such as finance, legal, HR, and digital have been integrated under the unique CHE umbrella.
These remaining functions are essential to the development of our integrated FMCH operating model. We further accelerate our agility and consumer relevance.
In particular, dedicated digital systems and the IT teams joining our CQ forces enabled us to initiate our disentanglement and further optimize and upgrade our roadmap with a clear end-to-end perspective.
As a result, Q1, 2023 onwards. We will be reporting results as a fully formed THC organization, carrying our full portion of the support function expenses that were shared across the organization so far and reflected in the section Other. JV will explain the details in a minute. For THC,
Taking full ownership of our P&L will enable us to tackle our opportunities and increase our competitiveness in order to further drive growth.
Moving on to Q4, Net Sales. We delivered 6.6% sales growth and 7.5%, excluding the impact of divestment as a result of our portfolio simplification.
Many of our major categories, digestive wellness, pain care, allergy, and cough and cough, generated meaningful gains during the quarter.
The Digestive Wellness brands I highlighted last quarter until Jeremy Nabousco, Panandu, and Alex continue to deliver outstanding growth maintaining their leadership position and expanding their market share.
Additionally, our leading local and regional brands delivered high growth. For instance, Yves, the number one general pain relief brand in Japan, has delivered phenomenal market performance and sales growth in Q4.
Strong marketing commercial and pricing execution have resulted in driving market share above pre-COVID levels.
Our cough and cold brands enjoy double-digit growth in Q4 and have been the largest contributors to our strong full-year performance. This is the result of robust consumer demand, coupled with a very relevant and impactful global campaign, Don't Hide Your Cough.
Rolled out across more than 30 markets with brands like Mikhail Solvo and Bissolvo in Europe or his bestie in Mexico.
The campaign drove significant improvement in brand equity, reached the highest brand of scores in the key countries and won a EuroAFFI award.
In summary, 2022 was another year of strong performance, growing 8.6% in net sales and almost 10% organically, while transforming our business into a standalone organization. With that, I'm handing it over to Zobatista or CFO .
Thank you very much, Juli. As Paul mentioned, I would like to pick a few drivers of our strong financial performance in 2022.
in spite of a challenging macroeconomic environment.
Fullyer company sales reached almost 43 billion euro, growing 7% at constant exchange rate. Adjusting for divestments on your API sales in the prior period, sales growth would have been 8.6%.
Other revenues benefited from higher back serve sales as well as COVID-19 vaccine-related revenues.
The growth margin improved by one...
180-busys points driven by product mix on efficiencies that more than offset increased cost of energy and transportation as well as higher labour cost.
Authority expenses grew roughly in line with sales, the majority coming from R&D to fund and expand our pipeline for future growth.
other operating income mainly driven by the regional property chair was up more than 25% per year due to the outstanding success of the big cent.
We also recorded capital gains from divestments to totaling 615 million euros in this line.
We continue to identify assets across GenMed and CHE that are non-core, and expect to generate capital gains from divestments of a similar magnitude in 2023.
As a reminder, the upfront payments on the regulatory milestone payment linked to the LIHTA-U license agreement are only recorded in our IFRS P&L.
Our BY margin reached 30% at constant exchange rate and 30.3% at published.
An improved effective tax rate of 19.3% on higher financial income also contributed to the business EPS growth of 17.1% at CER.
On slide 29.
Our pipeline being now mainly biologics, and our new manufacturing facilities becoming fully versatile, we have decided to combine vaccines on pharma manufacturing operations.
This will trigger new efficiencies and eliminate applications or will increase flexibility. This will be effective January 1, 2023.
CHE on the other hand is successfully implementing its standalone model, driving significant improvement in performance over the last two years. This year we have moved to the next level of autonomy by transferring remaining global functions. As such, beginning with Q1 2023, we will report a fully loaded segment PNL for CHE.
2022 comparable figures will be provided ahead of Q1 earnings.
To sum up, starting from Q1, we will present our division all business, PNL's categorized by BioFarma, consumer health care on other.
As a result, you can expect a much-enhanced CHE disclosure, allowing you easy peer comparisons. On for our team, benchmark will be easier and more compelling.
With support functions now largely allocated to the businesses, the section other will be significantly reduced. Turning to slide 30, reducing greenhouse gas emissions to net zero is an unprecedented challenge. With the consequences of climate change becoming very visible, it has become critical.
to set higher ambitions to effectively address these challenges.
At Teneufy, we are bringing forward the timeline of our ambition to net zero emissions to 2045.
Since Marks of 5-year acceleration versus our previous target, building on great work already done, for example, increasing our renewable electricity use and transitioning to a carbon neutral car fleet.
That has allowed us to already reduce emissions from our activities by 29% since 2019.
We also continue to work closely with our suppliers to reduce our scope 3 emissions.
These have come down 7% since 2019.
On slide 31, a gradually growing dividend remains an important element of our capital allocation policy and ranks only behind organic investment on business development in our priorities.
This is reflected in the fact that the company has consistently increased its dividend payments for the past 28 years.
For the year 2022, we announced that the borders proposed a plus 6.9% increase in the dividend to 3.56 euros.
Advancing to my final slide, we expect a full year of 2020's re-business EPS to grow in the low single digits at constant exchange rate.
On Forex, based on January 2023 average exchange rate
We see a current a currency impact of minus 3.5 to minus 4.5
Now we can open the call to Q&A.
So we will now open the call for your questions. As a reminder, we would like to ask you to limit your questions to two each.
So I want to repeat for the Q&A you have two options to participate. Option one, click the raise hand icon at the bottom of your screen and you will be notified when your line is open to ask a question. At that time please make sure you unmute your microphone.
Or option two, submit your question by clicking the Q&A icon at the bottom of the screen and your question will be read by our panelists. We have the first question please.
Great, thanks for taking my question. So first one's on tolibrutinib. So the FDA has had the hepatic assessment committee results since I think the end of September and your own data monitoring committee was happy to restart the recruitment in rest of world studies. So just what's holding the FDA back? Have you had any direct dialogue with them? And if not, when would that happen?
and do you think those discussions will define the label there? And then secondly on Befortis, just interested to understand why the FDA didn't give priority review given breakthrough therapy designation, you know huge epidemic. I saw in your press release that said you know you work there they would be working to expedite the review but what does that
FDA interaction if you can and expectations.
Yeah, Graham, thanks for the question. The OK, so the.
We're still
conducting the work that FDA had requested to try to gain a mechanistic understanding into why
A handful of patients out of over 2,000 on the studies have experienced liver injury. That work is ongoing. In the interim, as you know, three of the four studies are fully recruited. The two Gemini studies for relapsing remitting and the Hercules study for non-relapsing secondary progressive.
The Perseus study for primary regressives continues to recruit ex-US.
And so we'll keep working towards that ambition of understanding more mechanistically why a rare and occasional patient might have a liver issue. I would note that, you know, in the world of MS drugs, it's not uncommon for practitioners to have liver monitoring as part of the onboarding of a patient as they started.
there is no drug I think specifically designed for secondary progressive MS, you know, and progressive nature of the disease. So that study is recruited as you mentioned, primary progressive still recruiting, and it's not uncommon for additional steps and initiation. So, you know, really still a very compelling...
Toma, the question for you on will we make June ACIP based on the decision to give the standard review?
We are definitely going to launch this for two in the US in 2023, Graham. So getting back to your question, we are not going to speculate about the rational by the FDA. Clearly what's very important is that as you've pointed out after the approval in the UK, the latest?
there has been a clear understanding by the agency and as well by the ACIP of the importance of Befortuus to tackle RSD which is the number one cause of hospitalization in the US or in Europe or worldwide actually in the first year of life. So that's been clearly very important and fruitful dialogue. We're all moving forward to be ready for the launch.
And I clearly don't see and we've been working a lot also with the SAP members, you know, very well Good progress up and ready for the 2022 launch with bothreligious center and they say peer recommendation
Cool, thank you, Thomas. Next question? Next question will be from Peter from Jeffries.
Be there.
Hi, thanks for taking my question. So firstly, just on the consumer health, I think it's sort of the obvious question, if you like, in the sense, obviously, you've now got a fully loaded P&L. And certainly the use, I guess, by Julia, the word sort of roadmap forward. I guess, have you got sort of any update or thinking on your thoughts with regards to how much longer you think this business should remain within sanity and...
potentially on the future of consumer within Sanity. And then secondly, again, just strategically, we're on the decision to combine farmer and vaccines into biopharma. I guess curious, I understand sort of what you said, but I would even provide a bit more color on why now, I guess, for that. I mean, vaccines obviously in Sanity is a key sort of franchise, and I would be able to get to have better appreciated the value of it.
I'll make some comments and then Team Major Han if you want to jump in. On a pharma and vaccine combination, some of the platforms are coming together, mRNA, biologics as you pointed out. It's a decision already taken, it started and the work's been going on for some time.
in terms of converging platforms, shared services could be engineering, could be many things we're just already underway and of course the modular nature of the three cutting edge facilities we're building mean that we can move between antibodies and vaccines depending. So it's a sort of future state, we're getting organised now, we think it's more appropriate to do that and it will probably free up.
some synergies and opportunities for productivity gains. So sort of common sense for us. You want to add anything you guys?
I would just say for me it's a smart resource allocation which actually increases the ability to develop, launch and distribute first in class, then in class moving forward.
Next question. Next question. Sitchard Busser from GP Morgan. Hi, thanks. Thanks for taking my questions. The first question just on the flu vaccines and apologies if I missed it. I didn't really hear whether you anticipated a record flu season in 23. So perhaps you could talk about the expected drivers in the US around maybe a return to more vaccinations because of a bad flu season and price rises and in Europe do you see potential for increased penetration of high dose flu or beyond Germany, Spain, Italy, etc.
Thank you Richard. What should be coming to the moment on Martin? Toma, you predicted a record flu season every single year since at least I've been here so what do you have to say for yourself for 23? It's always nice to be recognized, thank you very much for that point. Moving forward, great question
for the flu NH23 season. So it's probably a bit early to give a guidance. Usually, I will tell you that at the Q1 earnings call. So a bit more suspense for the month of April . But definitely, we believe that we have the right assets with our differentiated vaccines to keep being the leader in the market.
There is some work to do on the vaccination rate. As we all righted, it's been, I would say, a soft vaccination rate this year in NH 2022. There has been disease, as we all have seen, but there is more disease coming back now than there is less COVID-19 virus circulation. I think we can work with the system to make sure that you have quality shots out there butables in the sw
these vaccination coverage rates do recover in 23 and 24 and that's the work we're on. Thank you Thomas. JB, margin, progression? Yeah, thank you. It's clear that with our target in 25 at 32%
we are aiming to go on improving our underlying performance for the company. So with an EPS growing in 23 as we are guiding at constant exchange rate, of course it means that in sight of the LOE of Obagio, we are looking at deep and important improvement.
of the underlying performance of the company. So yeah, all set, you can make the calculation with any PS growing as we are guiding, we are clearly aiming to reach out target of 25.
Thank you to both. I think just a quick additional comment. I think you need the chart shown today by Tom of the progression in the value of the flu franchise since 2018 is frankly staggering and while it's impressive the total performance the move to high dose has been really incredible as Tom mentioned.
the countries now that are making that standard of care in the elderly. We just showed you that the protection beyond flu itself is significant and meaningful for pay as well systems. I'm very, very proud of how the team delivered on that. And on the much expected in TB's touched on it, you know, we will swallow a banjo this year.
and continue on our journey of making a connection between 2022 and 2025 on BOI. I'm not sure that's always easily picked up suddenly this morning, but you know, it's our last LOE and I would strongly encourage some reflection on that because we are, as we exit 2020,
Okay, next question. This question is from Morgan Stanley .
Thank you very much for taking my question. I have just to first in terms of did fixing could you help us understand how to gauge the potential problems it's excess here in in COPD. I guess if we look back at other I or fires but not with did fixing in a significant enriched populations against the triple combination therapy. We're seeing rough.
to keep a progress support on back in December 19. As you sort of think about these sort of three to five new products, two to five billion euros of peak sales potential each, launching over the second half of this decade, could you sort of help us by identifying which you feel we should focus on?
a drug like the Ox 40 ligand for example, FaceDB data and in Q3, would that be one of them just to try and get some additional color there would be great. Thank you.
Okay, thank you. So John Reed, do Pixelant CIPD.
Well, listen, we're very excited about our COPD programs. We're the only company in the industry that has two assets in phase three development for COPD, which is a huge healthcare burden. As you know, some estimates are the third leading cause of death, a huge burden on healthcare systems and no new mechanisms have been approved.
rates has been affected by the pandemic and the overall rates are lower. We have monitored that in the unblinded total population and believe that our studies are adequately powered to show the statistically significant differences based on the effect sizes that we've assumed.
And so we remain confident in the studies going forward.
in the studies going forward.
I think also the lung function part of the equation two is something that is often overlooked in addition to exacerbations, but the lung function improvements that we've seen with both of these molecules have just been really rock solid, unequivocal. That's an important variable to also mention when you think about
what our prospects are for doing something meaningful for patients with COPD. Thanks, thanks, John . So we know there's no advanced therapies. I think inhale therapy is what we referred to in triple. And we, we know we passed a high hurdle on the interim. And so we know we have high expectations for the future.
in an ideal world, we'll have two advanced therapies and CPD that will be, well, incredible, frankly. I'm going to tell them up, I think you've mentioned yourself. That's starting to get very exciting. We're doing some very clever work around there. Getting...
some really interesting data now that we're getting first patients in and on nanobodies, L13 TSOP for example, TNF-F-6, I think we have three already in the in the clinic so that's pretty fantastic. You know we mentioned I think in the in what we circulated right at the end of the year that
with the 27 early mid-stage readouts. There's a lot there. To go all the back to 2019, we picked that list in 2019. And I think we've fed pretty well. I have to be honest. Both in Hemophilia, I think we've really exceeded our expectations for two rounds to come. I think we've...
done very well when the 7M up. I think we really made progress on the Dupix and LCM of course. And so I feel like the last three years as well we've been upping our game in improving our probability of success just by...
much more methodical, much more rigorous work, not it wasn't being done before, really upping our game. So as we pass through the sort of inherited readouts, let's say kindly, we start to believe our lot probes of success just improves because we get them better at it and in particular in the terminology.
I think we really will surprise everybody in immunology. You know, my belief is we fix it beyond we either win or we win, depending on the mechanisms that we bring alongside. So it's starting to get really exciting. Okay, next question. Next question, Lisa Echter from Burned. Oh, hi there. Thanks for taking my questions.
and who the kind of early target patients might be. And a second question just on business development. So just to check up on the horizon situation with the press release naming Sanity as being involved in preliminary discussions on an acquisition.
how active were you and why and should we expect more attempts at deals in this kind of price range? Thank you.
Okay, thank you. Bill, Altuvio, Louisa shares her excitement. What about the ramp up? And then JB, you want to comment on BDE and in particular Horizon? Thanks for the question. Look, we are really, really excited about Altuvio. It's not too often that you get to set a whole new standard of care of efficacy.
in a very well established category. Usually you're talking about incremental gains here and there, maybe some convenience gains, but with L2V0, you're allowing patients to be at near normal factor levels for the majority of the week. That's the first time that's been offered to patients. And we're going to be spending a lot of time, and are spending a lot of time in the community.
educating what is possible now. It's possible to return somebody from experienced bleeds or at a high risk for bleeds to bringing them to an almost near normal state. So you know I think what we're excited about in particular is to see what does that mean to the mobility, to the lifestyle, to...
to the KOL, as I'm sure you have. There's some that have their patients lined up ready to go. There's others that are saying, my patients are going to be doing this for their regular appointments over the next month. And that's when we'll have the discussion about switching. So we're really optimistic that this is going to be a great
launch, it's going to be a matter of getting our message out to everyone about now what's possible versus what you've settled for all these years.
Thanks Bill and that what's possible thing gets interesting because perhaps as we get a little bit further into the launch and physicians get the real experience of what it's like to give patients that near normal life then the weekly non-factors start to become a major consideration and we...
We might see some real opportunity for the JP, BD, M&A, Horizon. Yeah, thank you. Thank you, Edward. With BD and Global Lia Capital allocation, it's not changed. You've seen 25 deals going through BD and M&A, and they're mostly centers on early science.
or I could name also Ray Rocks that we would even though it's smaller than a Ryzen, it's opportunistic. If we see an opportunity where we can create value for shareholders, we would see it.
It's not always about the size because Horizon as a right price was a great opportunity to accelerate our journey to invest more in innovative science.
So no change of strategy, but always on the lookout to see the opportunity and try to create value for shareholders. Thanks JB and as you might be pointing out, at the right price there was an opportunity to do solve pipeline in terms of investment and
and to add other assets. But we're very comfortable where we are and the choices we're making. So, next question. Next question, Tim Anderson from VULS.
On dupixin and COPD, what level of effect size are the trials powered to show? That's the first simple question. The second question on the flu franchise.
Longer term. So Santa Fe's guidance is to double vaccine sales by 2030. I'm guessing influenza is likely the largest single segment within that. And I'm wondering if you can talk about COVID flu combination products specifically because Pfizer is talking about launching such a combo in 2025.
I'm wondering what your thoughts are on such a combo opportunity and what the timing is for a combo product from you guys.
Thank you. Thank you. I'll come to you in a moment, John , on the fixed size. We haven't shared that. So that is, and I don't think our partners are generally on have either. So we've designed what we think is a meaningful clinic.
clinically significant, clinically meaningful effect size, but we have not disclosed quantitatively what that is. Thanks John . Summer, doubling vaccines and Ankerby's flu, come on. Stepping, doubling vaccines, what does it mean for flu? I think it's at the heart of the question of Tim.
Definitely flu will grow, Tim. You're absolutely right when you move forward from now until 2030. There are a couple of important reasons. First of all, the fundamentals of the flu market are positive in terms of more and more people in the aging part of our population and therefore the 60 plus segment is increasing.
and more and more recognition of the importance of preventing the severe epidemic moving forward. So definitely it's going to grow. Now our positioning, as we said before, we believe we have the right assets to start from. That's how we're growing the business today with different different vaccines. But both.
the ability to protection beyond food, so an extra protection and doing it at a very good tolerability profile. Now moving forward, obviously we have a data-driven company. I'm sure you've seen some exciting slides from a company recently issuing results. These are projections without any data. We are looking at science where it's going to go. That's why we've initiated three mRNA QA...
if we have the right project profile from this segment too.
So it's really about first, let's look at the data. Can this product profile generate protection beyond flu? Can VB competitive assess standard flu or flu's an I go? Or is it just a me too standard flu? And then there's a big issue to get the NTI people's new recommendation in the critical 65 plus segments for flu.
So there's a lot we don't know yet. What we are sure is that we're developing the third generation of FEMAR and FIM, and the second generation working on thermostativity, total availability and this is administration. In a nutshell, T, if FEMAR and FIM doesn't work, we win, if FEMAR and FIM works very well, we will be also there. Thank you.
I'm not sure everybody fully appreciates the expectation of payers on protection beyond flu. I think the quality that's needed, the organisational history and expertise, I think it won't just be about flu in the end. It'll be because many of these people sadly pass from non-flu related complications. You have to match that data. We will see. We love to compete.
how those things go in time. Thank you. All right, next question. The next question is from Peter Verdull from CQ.
Yeah, thanks for the question. Two questions please for John and Paul. John , just on the NKCEL therapy platform, we've seen some disappointing updates from looking at the related to NKCEL expansion and durability in the specs. I just wanted to know, I understand.
whether you feel the Chiada's platform is differentiated and the outlook there for the NK cell therapy platform. And then secondly to Paul, forget what we think, but the market, I think when we hear you talk about play to win, I think the market gets it on immunology, they get it on.
vaccines and red disease. But when we hear you talk about playing to winning in oncology, it's very difficult to really buy into that. I just want to understand from you whether oncology is a sacred cow that you'll continue to invest in. Or is there a point where you'll take the difficult decision to say, look, we're not going to win here. Let's double down on where we could at and focus there. So just the outlook.
That platform really has three legs to the stool. All of which are progressing nicely. One leg is NK cell engagers. So these are bi-specific or multi-specific.
molecules that grab all of them, link in cell with one or more binders and then to the NK cell with typically two binders.
to activate the incase I'll introduce the killing. So the first of those is in the clinic for AML, acute myelitis leukemia.
The target CD123 and we haven't disclosed data on it, but the trials progressing well or in dose escalation
The other leg of the stool is the Alligenic, one size fits all universal NK cells. And that is also in the clinic also for AML, where prior to obtaining that platform there was proof of concept data already generated.
That's just sort of then KCEL 1.0 without genetic engineering, but we've established the capabilities to do the engineering on the cells for next generation products and you might have seen an announcement about our collaboration was scribe a company that has next generation, you know, meditating enzymes that we've been able to avail ourselves of those through that collaboration.
And then the third leg of this stool is our engineered lymphokines, which include various versions of IL-2 and IL-15. The most advanced of those is the so-called SAR-245 non-alpha IL-2 that...
has shown very excellent pharmacology, pharmacodynamic effects with typically elevations of endogenous NK cells of tenfold.
with extremely well tolerated doses. You know, we're continuing to really optimize schedule and dose around that.
and look forward to eventually combining the three legs of the stool in various ways for a variety of malignancies, starting with hematologic, but then advancing into solid tumors in time. It's early days. They're all three of those components are in signal seeking studies and we hope to have a lot more to say about it.
appreciate we're playing to win in rare, we're playing to win in vaccines, we're playing to win in immunology, that's quite a lot of playing to win. On on oncology I think we just have to be pragmatic and I think I hope you realize that we are with the setback with amstinestron you know let's also remind ourselves that was a medicine that had an effect that could have been
launched in some form but would not have competed the level so we would consider playing a went. So, you know, we have to set a really high bar for ourselves. And of course with RL2, retreating to phase one, two on the day, two, we may yet still come back and say something very meaningful that would be an interval reduction on that means in efficacy.
the ability to increase the doses, why, or reduce the interval, was one of the reasons why we took the decision to invest in it in the first place. But I think we have to concede that maybe our efforts are naturally moving towards an earlier oncology positioning. We're doing some very interesting things, setting a very high bar. John's just touched on some of it.
But it is earlier, so it consumes a little less investment, it allows us to allocate more towards the areas where we're having a really important effect.
We're not in areas because of history. You saw that when we exited diabetes and type 2 diabetes and cardiovascular. We're in it where we think we can make a massive difference and then we're all in. So you know that but we have to deliver the profiles of these medicines as they emerge. Otherwise we're not going to throw good money after bad coming as a me too late. That's the company we're leaving behind.
So we may go back to the magic a bit earlier in oncology, fair, and hope to surprise, but we are really playing a win across the areas that you mentioned. Thank you. Next question will be from Tishkana from Cowen.
Thank you very much. Actually, I was going to ask about cardiology in diabetes. Given the renewed interest in these categories, does Sanofi have any interest in reengaging in either of them? Presumably, Sanofi still has much internal expertise and could make that shift.
easier than just about any other company. So I'm curious if you've thought about that. Second question is for John . Your BTK inhibitor competitors in MS continue to claim they haven't seen liver talks in their studies. Curious what you conclude from that. Is it just a matter of time until they do? Is it the population they're studying? Perhaps it's a different geography.
or could there be differences in the molecules? Thank you. Steve, excellent questions. Let's all be clear. I think I'm gonna try and choose my words carefully by remembering them, but back in December 19, we said we're out of the me too late business. We did not want to be the fifth to market JLP one.
shows you where we think there are these populations where we trade somewhere between rare disease sort of levels, that we can have somebody who is still participate. You know, I think you know by now that we have a co-promotion deal on type one diabetes, which is much closer to immunology and rare in terms of patient profiles. I think...
What we declared was those huge big commercial deployments to be fifth to market. We're not going to be our game anymore. But I think we have, as you point out, a brilliant set of experiences in both cardiovascular and diabetes. And I think if we thought that it stayed true to our ambitions.
you know, we'll be interested in whether the VA want to add anything. No, I think you said it all and I think in some way what we have done with the edge of rock, I think, pools, our identity, you know, in an area of expertise that we are to win. Yeah, thank you. I think it's, it's
We've got expertise but we're not going to play that arms race in those other indications but we're well aware of our expertise. That's why companies are talking to us in those areas. But we will see. But immunology and rare, they're amazing capabilities this company has and so sweet spots in and around that work very well for us.
Sean, BTKIs. Yeah, I think one thing to remember is that nobody has by far the largest BTK program.
with well over 2,000 patients enrolled across four phase three studies. So we certainly have exposed far more patients than any of the other companies.
And so I'll leave you to speculate whether it's a matter of time and simply, you know.
Testing enough patients to adjudicate this issue. You're all aware, of course, biogen announced that they had some issues with their BDK inhibitor and were put on clinical, on a partial hold as well.
So let's see what happens as more patients over more time get treated with this class of agents.
Yeah, thanks, John . So I think we maybe add too much more. Come back to where we were. We're learning about this mechanism. And remember the goal is to try and break new ground on efficacy, in particular by crossing the blood-brain barrier. It may become a risk-benefit balance conversation often is an MS.
and other diseases. We think we can be very well placed on that. And John's already answered when we look left and right at the B2G landscape, you know, some excluded a lot of patients from their trial designs up front and some are too early really. So no, so let's just be really clear that we are in a...
We're navigating and I said we're navigating in a narrow corridor but still a way did not favor. Okay, next question. Next question. Matthew Wispen from Credit States. Thank you. Two questions if I can please.
The first for JB, a year ago or six months ago, you called out Depixant manufacturing savings as a particular driver of margin improvement. Can you tell us are we still on track and can you remind us of the timeline and the magnitude of the saving that you anticipate? And then one for Olivier, you've got a very large Gen Med business at Sanofi.
XUS pricing very rarely gets talked about, but we're seeing meaningful clawbacks in your home market of France also in the UK and the Summarian legislation in front of the European Commission about XUS or EU drug pricing moving forward. I'd love your thoughts on the pricing environment and whether those challenges are one of the contributors holding back earnings this year at
in all centers and we are switching progressively which will take time till 23, the end of fall of 23 and then as you know we have a high level of inventory so before it goes into the margin it takes a bit more time but effectively at the alliance level it's a significant improvement on the COGS, 600 million, half of us will be retaining the bottom line.
but it will improve the growth margin in terms of heat. So yeah, it's a good success story, and it's been deployed as we speak exactly as planned.
I'm in the carrot of trying to get to that real improvement and what it means for us given how quickly we're growing is really incredible and how it fuels the rest of what we'll do next. Olivier, PricingXUS. PricingXUS, so Matthew you mentioned it in the right way, the situation is very different in emerging markets.
and in Europe in the emerging markets, in some markets, although we face some price pressure, there are some markets we are able even to increase our price, especially in the countries that have weak currency, like Turkey, Argentina and a couple of others. In Europe , we face, of course, in the current environment, price pressure, but I will mention that we have a very broad portfolio. So we are...
The fact that GenMed is not relying on one or two assets but on a broad portfolio of course puts us in a better situation. The last point is of course given the price pressure that we face especially in EU, we continue of course to work on our go-to-market model in order to make it as efficient as possible.
in an environment where we know that of course the pie special will continue. Thanks, I will say and cover this to your team that the use of AI as well in helping us be very acutely aware of all of these moments has been some of the best I've ever seen, frankly. So we continue to develop those capabilities.
Next question. Next question from KU Parikh from Kerman Sachs. Hi, thank you for taking my questions. Hopefully you can hear me okay. Paul, just a big picture, one for you on capital allocation structure strategy. I know you've been asked this before on the call, but just kind of between horizon, I think reports, press reports earlier in kind of last week talking aboutying fund 82%?
potentially exploring a merger with Halion for the consumer health business. Just bring it up to speed on how you're thinking about the shape of the overall group, where you think it makes sense for you to kind of flex your balance sheet, and how you're thinking about areas of priorities.
over the next kind of six to 12 months. And then separately on kind of the BOI kind of guidance or kind of how we should think about BOI into 2023 or into 25 given the Obagio kind of hit in 23.
Are you still expecting BOI to grow in 23 over 22? Okay, Kia, thank you. JB, I'll give you the BOI question. On the capital allocation, we've been clean from 2019 saying that we're looking to add science where we can. We've done 25 BD and M&A deals, I think as JB said.
You know, we're not scared to leverage the balance sheet. You know, you saw it's public. We were in play for Horizon last year. It was opportunistic for us. If you remember, the Q2 was disappointing on execution and we're brilliant in Rare. We figured it was a good fit. We could make it work and it would unleash some things for us.
So you should know that we're not conservative if we think we can create more value for patients, for shareholders and for ourselves as a company. No hesitation. The gossip around consumer, it makes me smile because we're running a really great consumer business but I wouldn't be misled by that. We're very proud of what we're doing in consumer.
JP? Yes, well as we mentioned during these calls, there are several drivers which are helping us in our trajectory to 225. Of course the dupixent spectacular growth is a creative and has been accelerated with the acceleration of the reimbursement of the development balance with Regeneron.
But I mentioned also COG's improvements that we are working on. I could mention also some royalties we said to you could calculate looking at the food trees around projections as products on which we have significant royalties. So we have on top.
of the performance on the efficiencies we're going on working on on the underlying business. Yeah, we will go across zero-vigilou in 23 with an EPS guidance at constant exchange rate, which is low single digit, which I think makes it quite easy to see what it can look like in terms of B.O.I.
So you see we are now trajectory to 25 and we have multiple drivers to get there. Thank you. Last question from Richard's books. Come again.
Hi, thanks for taking my questions. Firstly, on flu vaccine, I just wanted to ask it a different way. Could you talk about how much performance this year was depressed by lower vaccine uptake, just so we can get a better understanding of how it rebounds next year? Maybe you could talk about the levels of returns, et cetera.
And then secondly, just sorry to push on the consumer again. Can you just update us where you are in terms of the TANF-LUS, CRLS, HEC, switch studies? I think there was some ongoing discussions over the clinical protocol from CRLS trials. So, wondered if that was resolved. There's a perception out there that progress of those trials is a gating factor to whether consumer will stay within the Sanafi group.
longer term so maybe I don't know if you can comment on that. Thank you. Okay, thank you. So Thomas, this is the last question. So, Floo? A few more words on Floo. So I'm not going to help you Richard to give 23 flu guidance quite yet. But what I can tell you is that the situation is a bit contrasted in between the two. So I think in Floo, what we see in the US is a
low VCR, I would say, but which we expect to increase in the coming years. I would say the fundamentals and the trend is looking good, but again, flow is a progressive uptake year on year. It's way too early to know. You know very well that the current VCR is also due to a...
That's a very interesting thing. I would say following the COVID-19 situation. I remain cautious there. Again, I think it's very important that we have the right assets. You saw the growth of our different digital portfolio, meaning that the impact was much more on the standard through product. And as you've seen, for example, on recently published results from one of our flu comp.
So more than 10 years of data with Fuson-I-Dose, an experienced commercial organization. We believe we have the right asset. Now let's wait for the pre-booking. Let's make sure we know a bit more about the season and the completion of the vaccine. Thank you, everyone. We'll be back with some more.
as normal. So thank you for that. Julie, switch update. Unfortunately, we don't really have an update. We continue to work with the FDA on the OTC approval for Cialis in the US and we're advancing on the execution of our strategy to lift the clinical hold.
including generating the necessary data that was requested. There's also no update on timing for TMSU as we continue to incorporate FDA's most recent feedback into our development program for 23. And as you all know, the current flu season, which continues to evolve, is very dynamic and we believe really underscores the importance of getting vaccinated, of course, but also the importance of quick.
but consumer access to medication like Temifil. So it is important not just for Sanofi, but for public health, so we continue. So thank you, Julie. It's good to get that question, actually, and the last couple of questions around consumer. Let's just be really clear. We're running a great consumer business. It's growing fast, fast in the market. We have launches to come.
exciting things to do switches I think represent over a billion in additional sales between them at peak and it's a fast peak as you know in consumer. Again I wouldn't listen to gossip we're really spending time just making sure we have the best consumer business and so that you can compare it to others and you can see why we're doing a great job. Thank you to the executive committee thanks to everybody that dialed in and gave us time.
We appreciate it. Look forward to connecting with you soon. We're well underway. Looking forward to 2023. And yeah, we'll look forward to seeing you at certain points of the calendar. Thank you.