Q2 2024 Sanofi SA Earnings Call - Q&A
It is an Ob IR team.
Speaker Change: Welcome to the Q2 2024 conference call for investors and analysts.
As usual you can find the science on Januvia Dot com.
Please turn to slide number three.
Speaker Change: Then we have the usual forward looking statements, we would like to remind you that information presented in this call contains forward looking statements, which are subject to substantial risks and uncertainties that may cause actual results to differ materially.
Speaker Change: We encourage you to read the disclaimer in our slide presentation.
Speaker Change: In addition, we refer you to the form 20-F on file with the U S ACC and our fence registration document.
Speaker Change: For a description of these risk factors.
Speaker Change: As usual, we will be making comments on our performance using constant exchange rates and other non <unk> measures.
Speaker Change: <unk> 9 million euros and for Q2 2024 unless stated otherwise.
Speaker Change: Turning to slide in before.
Speaker Change: First we have a presentation and then we'll take your questions. We have kept the presentation short as other companies report today and we aim at keeping the coals to maximum one hour.
Speaker Change: For Q&A, we have Brian wouldn't be here.
Speaker Change: So all of us and Julian to cover the global business units and why our general counsel.
Speaker Change: For the Q&A you have two options ensue raise your hand or submit your question using the Q&A function and with this I'll hand, you over to Paul.
Paul: Well. Thank you Thomas so much better when you do the <unk>. Thank you and Hello to everyone on the call our strong business momentum continued in the second quarter, we delivered double digit sales growth at CER and continue to execute on our pharma launches and we keep advancing our pipeline of new medicines, our growth was driven by a strong quarter for <unk>.
Paul: Seven years into its launch and the broad based performance of our new medicines.
Paul: Vaccine sales were stable when excluding the effect of last year's cabinet sales the sales of our paralleled the new name of our consumer health care business grew by 10% with the U S. Wellness brand Kunal is the main driver in the United States.
Paul: Based on the robust growth we've seen in the first half we are confident about the strong business outlook. The remainder of the year and that's why we are upgrading our earnings per share guidance for 2024, and Francois will provide more details in a moment.
Francois: Turning to slide six depicts reached a significant milestone for the first time sales exceeded the 3 billion euros Mark in a single quarter. This new quarterly sales record highlights continued strong volume growth across approved indications age groups and of course geographies.
Francois: Depictions growth of 29% in the quarter was fueled by its consistent and robust U S performance, giving the timing of July 4th holiday, we saw a slightly stronger volume trend at the end of June.
Francois: The rapid expansion in key markets outside the U S such as Japan, China, and Europe further boosted Q2 performance growing at almost double the pace as the U S.
Francois: Looking ahead, we remain excited by the near to midterm growth outlook to do pixel, which bolstered by a series of upcoming regulatory catalyst inside and outside the U S.
Francois: We recently obtained EU approval for COPD I'm looking forward to the U S could be for decision at the end of September which is expected to be a significant driver for depictions continued expansion.
Francois: We remain on track for our target of around 13 billion in 2024 in line with our low double digit compound annual growth rate goal set from 20, 23% to 2030.
Francois: Now on slide seven turning to our launches and how we bring innovation to patients.
Francois: After the quarter the growth of these new medicines increasingly contributes to our topline growth.
Speaker Change: <unk> explained the key contribution of these successful launches to the accelerated business dynamics in a minute.
<unk> G to patients converting from legacy treatments in Pompeii franchise remains a key driver.
Speaker Change: Most eligible patients in the U S and now on the new standard of care with <unk>.
And patients continue to convert outside the U S.
Speaker Change: Our trivia annualize its launch at the end of March growth rates remain very strong with highest sales predominant in the U S where it was driven by patient switches of which an increasing majority came from medicines other than a lock tight.
Speaker Change: Other medicines also the volume growth in absolute terms, including <unk> fast expansion in Europe and Japan.
Speaker Change: As expected before the sales in Q2 alone to the vaccine seasonality looking ahead to the upcoming RSV season in the northern Hemisphere, we remain excited by the opportunity for <unk> to advance towards ordering from protection and reached blockbuster status globally in 2024.
Sanofi: As the World leader in flu vaccine, Serbia as a pivotal role to play in bringing forward innovative solutions against this disease by addressing current challenges and building strategic partnerships in May we announced the new partnership to combine Novavax as COVID-19 vaccine with our differentiation differentiated flu vaccines with the goal to create a best in class combination.
Sanofi: This new combination will include all flu vaccines.
Sanofi: Proven efficacy and preventing infections and severe consequences, such as pneumonia and hospitalization and of course is received in a preferential recommendation.
Sanofi: We believe our truly differentiated combo vaccine will demonstrate favorable tolerability compared to current COVID-19 mrna based combination vaccine candidates.
Sanofi: Summit in driving higher vaccine rates.
Sanofi: To clarify we believe that combination vaccines developed by competitors that would compromise tolerability or premium level of efficacy with damage vaccine confidence and further impact vaccination rates negatively.
In addition, Sanofi will commercialize <unk> COVID-19 vaccine for next year and book the sales thanks to all.
Sanofi: Thanks to our leading commercial capabilities, we hope to be able to further drive broader acceptance of COVID-19 in mineralization.
Considering the recent public concerned about H five N. One avian influenza, we take responsibility and.
In pandemic preparedness with two pivotal programs.
Sanofi: Our egg based protein adjuvant vaccine is set to begin a study in Q3 and cut rates to a border and our mrna pandemic flu program will enter clinical studies in the coming months.
Sanofi: In summary, our commitment to innovation continues to drive our leadership in the flu vaccine market, ensuring we are prepared to meet current and future challenges.
Speaker Change: Well, let me conclude by highlighting a separate positive note relating to our ESG commitment time magazine recently ranked <unk> as the world's seventh most sustainable company across industries and first in pharma.
Speaker Change: This ranking reflects the progress of our integrated ESG strategy and thanks to our comprehensive carbon transition plan. We are now on track to meet carbon neutrality in 2030 in line with our science based target initiative commitment to achieve this target we picked some key decarbonization levels presented on the slide.
Speaker Change: For scopes, one and $2, 43% reduction of our activities with already achieved and we are targeting 55% reduction by 2030.
Speaker Change: So skip 310% reduction was accomplished so far we're aiming for 30% across the value chain.
I'll hand over to Francois <unk> our CFO.
Paul Good morning, and good afternoon to all let me start with our self development on slide 11, we have delivered robust results in the second quarter with 8% reported growth and even 10% at constant exchange rates, our growth is broad based across businesses and geographies and the hyper inflationary countries adopt new limited contribution.
Speaker Change: Turning to our rules.
Speaker Change: We are delivering quality rules as you can see on the right hand side. Our continued portfolio transformation is a key growth driver with strong performance from <unk> and the ramp up of our newly launched medicines.
Speaker Change: Other products also had a significant contribution.
Robin: Let's turn to slide 12 gross profit showed double digit growth in line with offset performance gross margin was slightly down due to unfavorable currency impact <unk> and COVID-19, Robin you last year.
Robin: At constant exchange rates, our gross margin has slightly increased mainly driven by improved product mix.
Robin: Total operating expenses were up by five 2% as we invest in marketing and sales to support launches and in R&D.
Robin: R&D expenses grew double digit when excluding the one time 200 million Euro reimbursements from <unk> related to <unk>. We are fully on track with the step up of our R&D spend by approximately 700 million euros Ishares Lum 2024 around seven 4 billion units.
Robin: SG&A expenses grew substantially less than sales growth generating a positive gross leverage impact on margin.
Robin: Business operating income grew eight 3% and business EPS growth was up by 4% driven by higher <unk>, partially offset by the higher tax rate of 21% as well as increased financing costs from higher debt.
Robin: Please turn to slide 13.
Robin: Based on our current performance in the first half of the year on a strong business outlook for the remainder of the year, we upgrade our earnings per share guidance for 2020 folk who stable at constant exchange rates.
Speaker Change: Let me now give you a little bit more color on some key considerations for the balance of the euro on behalf Tus, we anticipate the first shipment in the northern hemisphere to take place in Q3.
Robin: Regarding phasing Q4 sales are likely to be higher than Q3 ones based on regulatory approval of the two additional filling lines expected in September.
Robin: On flu, we anticipate a phasing with approximately 70% of sales in Q3 and 30% in Q4.
Robin: Sams for flu are expected to decline low single digits versus last year due to unexpected softer vaccination rates.
Speaker Change: Other items of similar to what we shared with you last quarter. So overall, we are pleased with our Q2 commercial and financial performance, we set a growth of 10% underlying improvement in gross margin further cost discipline and the continued modernization across the company.
This positive momentum in Q2, and the positive outlook for the balance of the year leads us to upgrade our guidance with that I hand over to Humana for further positive news on the pipe out. Thank you Francois.
Humana: Slide 15, we've achieved several milestones this quarter showing a continuous pipeline progress <unk>.
Speaker Change: <unk> for the treatment of COPD was approved last month in the EU and this is the first time depiction had been approved in the EU ahead of the U S.
Humana: Further as the only biologic medicine approved to treat COPD anyway.
Speaker Change: Now I'll TVA, which also.
Speaker Change: Under the name <unk>.
Speaker Change: We've received several accepted regulatory submissions, including priority review your depiction and Crs with MP and adolescence and Sox later in newly diagnosed transplant in eligible multiple myeloma with <unk> dates in H two. Additionally.
Speaker Change: Additionally, Ashish Saran RNA interference antithrombin for patient suffering from habitually.
Speaker Change: And B has been submitted in the U S with a likely regulatory decision early next year.
Speaker Change: In support of our drive to become a tech our Biopharma company. We formed our recent collaboration with formation buyer and open AI to accelerate drug development also supported by the collaboration with Dow horror to advance discovery and dragging it immunology target fitting perfectly with our near extra such program static a key target of immunology.
Speaker Change: Completing our focus on rare diseases, we've recently announced the development and commercialization agreement outside the U S with fulcrum for Las <unk> a M.
A map kinase inhibitor and in patients actual human.
Speaker Change: Humoral muscular dystrophy genetic neuromuscular disease characterized by progressive muscle weakness.
Speaker Change: This medicine is in phase three with an expected data readout either partner at the end of the year.
Speaker Change: Moving forward with neurology, we have two recently announced we have also recently announced our exclusive license rights of individual small molecule in phase one focusing on an area of huge unmet medical need Alzheimer's disease. These recent activities are helping us to replenish our early stage projects to ensure the sustainability of online.
Speaker Change: Next slide please.
The Ats meeting in May we presented high dose phase II data from the proof of concept withdrawal design study of rails, ibrutinib or advanced oral targeting by type two and non type two inflammation and moderate to severe asthma.
Speaker Change: A week 12 treatment with high days Rose in Britain. It resulted in a 36% relative risk reduction reduction in the loss of asthma control events compared to placebo.
Speaker Change: Turning to the 25% reduction observed in the late <unk>.
Speaker Change: <unk>.
Speaker Change: Additionally, we observed a rapid nominally significant and clinically meaningful improvement in asthma symptoms and quality of life with a well tolerated safety profile.
Speaker Change: These positive results demonstrate the potential of relative bruton habits in either arm.
Speaker Change: Uncontrolled asthma patients and are part of a broader set of studies to build on the positive phase III data in ATP and a regulatory submission expected later this year.
Speaker Change: Slide 17, turning to oncology and the recent <unk> meeting, we presented our important phase III data from the Emerald study and the newly diagnosed multiple myeloma transplant ineligible patients. The primary endpoint is <unk>.
Speaker Change: <unk> for the statistically significant reduction of 40% and disease progression or death of patients treated with sock, Lisa VR D versus the <unk>.
Speaker Change: Estimated 63, 2% of patients had no PFS event 60 months versus 45, 2% for patients treated with the audience.
Speaker Change: It's frontline use in transplant eligible patients with world potentially in a third indication stock Lisa with expected regulatory decision by September 27 U S.
Speaker Change: Several additional studies are currently on guidance either extend indications for <unk>, including the subcutaneous formulation.
Speaker Change: Slide 18 on my last slide.
Speaker Change: I would like to highlight the exciting upcoming new supply for the next 18 months in support of increased R&D productivity.
Speaker Change: We plan 12 phase III Readouts 13 submission nine regulatory decisions and we look forward to keeping you updated on the progress.
Before handing back to Paul I'd like to extend my sincere. Thanks.
Speaker Change: Every colleague in the R&D team for the work they do for patients.
We've undergone changes over the past months, we're well on track, but the pipeline of new opportunities.
Speaker Change: As we change the Americas assigns temporary people's lives.
Speaker Change: This hand back over to Paul for Q&A.
Paul: Well, thank aluminum funds, Rob will now the call to questions. As a reminder, we would like to limit your questions to one or two each.
Speaker Change: <unk>.
Speaker Change: These may remember, we're seeing many of you again early next week.
Speaker Change: You'll be notified when your line is open and ask the question at that time. Please make sure you Amit your microphone or option to submit a question by clicking the Q&A at the bottom of the screen. The question will be ready and bread pilots that will take the first question Thomas.
Speaker Change: I think your first question will come from the line of Graham Parry Bank of America.
Graham Parry: Okay, great. Thanks for taking my questions. So firstly on <unk> could you just confirm current guidance delaying it seems the existing capacity and 1 billion euros in sales with the approval of an expanded supply being upside to that and then can you clarify the scale of expanded capacity. So I think it towards that.
Speaker Change: Two lines, adding to one say can we just assume that's a tripling.
Speaker Change: And can we read that Youll phasing comment on day, four to say more in fourth quarter and third quarters to mean that you might not have the manufacturing of pre by the beginning of the season in September.
Speaker Change: And then secondly, appellate just wanted if you could update us to the timelines on which you expect to be able to clarify to the market reach of separation.
Speaker Change: Al versus spin and perhaps just help us understand the factors that go into the decision between the two.
Speaker Change: Stage. Thank you.
Speaker Change: Thank you I think it was five questions grandson.
Tomo: And then on what I need to do but anyway tomo over to you. Thanks.
Speaker Change: Thanks for the question Graham.
Speaker Change: Sure.
Speaker Change: A few elements to answer to your questions.
Speaker Change: First of all we're confident they felt this would it be a blockbuster in 2024 at the guidance that we provided and we are fully aligned with that.
Speaker Change: Remember the different messages with what I did previously the tag that in order to increase supply we.
Speaker Change: We need as you pointed out we had to filling line. We wanted to make sure that we are doing production at <unk> with our partner Zika and then we're submitting of course delegate until the application for the <unk> to approve those lines and do that so we are exactly on track with this plan I E. We have done particularly in it.
Speaker Change: As expected we have done 50 qubit season, so the avis and budget and we have submitted to the different figured it'll Abd all of the different regulatory applications for those line now it's in the end of the.
Speaker Change: Exactly but for the exact timing of the approval, which will enable the other order shipment of disease, but we believe that all the reason to be confident about the external legal process of those line and above the segment would be able to move fallout for the satellite.
Speaker Change: 2024 decision now in terms of.
Speaker Change: The Ah indication, we've pulled I need on the split and quarters between Q3 and Q4.
Speaker Change: Pointed out to the fact that we expect again within what we know today.
Speaker Change: Q4 sales above Q3 sales that'd be good ear, while it's a seasonal product there are some differences with flu for example, where you're at in flu vaccinations very early on in the season and but it <unk>.
Speaker Change: The all of the in season bond babies that are born in the month of October November December January February and March and that would still accounts for beacon.
Speaker Change: So with information we have today, we believe it is a nibble, we expect Q4 sales to be above Q3, so overall confidently moving towards the coming out of the season and again confirming the guidance.
Francois: It will be achieved blockbuster status in 2024, Thank you Francois appellate Graham on <unk> as well as the timing is concerned we confirm what we have said before which means we expect that transaction to take place at zero and used in the fourth quarter of 2004 could be potentially in the first quarter of 2025, but it would make a big difference I do confirm as ones that we are still in a.
Speaker Change: Very competitive process with basically three options two of them are public keys on IPO RSP not one of them is more the send to a private party. So that the game is still totally open as we speak with one objective, which is value creation for shareholders, maybe 200 pure little bits of the two main items that we're looking at is clearly the valuation.
Speaker Change: The value as of today or whatever we could extract tons of value in the future as well under different configuration, but it's.
Speaker Change: Essentially the value story, we are taking into consideration obviously the execution risk certainty of conjecture industries uncertainty. That's part of what we are looking at the good news I can share with you is that the process is anywhere between three different options very competitive so which mean that usually when you have a competitive process or in a bit.
Speaker Change: <unk>.
Speaker Change: Positioned to extract value. So we are very positive for what he has a quality assets.
Speaker Change: Okay. Thank you next question next question is consulting.
Tony Chang: Tony Chang from Barclay.
Tony Chang: Good morning.
Tony Chang: Okay.
Tony Chang: Certainly.
Speaker Change: Yes, we got you.
Speaker Change: Thank you. So just one from Barclays asking the question is why do they do.
Speaker Change: That's helpful.
Speaker Change: Can you please share with us.
Michael: Online for the total Michael.
Speaker Change: Flu vaccine.
Speaker Change: That's operational with no buybacks. In addition, how would you comment on that.
Speaker Change: Alright I'll.
Speaker Change: Hello, Hello vaccine.
Speaker Change: <unk> also noticed here have online if you go back to baseline.
Speaker Change: Great.
Speaker Change: Now what candidate provide potential formally or other overhead only our current product launch arm. Thank you. Thank.
Thomas: Thank you Thomas thank.
Hallie: Thank you very much hallie a few elements in your question.
Speaker Change: First point I understood you were questioning on the partnership with <unk> and more specifically about the combination vaccine where we are.
Speaker Change: You understood very well, we really want to make sure that there is no compromise neither on safety or efficacy and we believe that the combination is only worth if you at least as good or better than the best Standalone products separately, that's exactly what we want to do with the commission victory.
Speaker Change: It's a bit too early to talk to you about specific timelines, but the way we have not said anything about this but it's probably not correct to think that we're doing this partnership we want to go fast and we intend to stop clinical location. This year in 2020, Phil on this commission vaccine.
Speaker Change: That's for the combination vaccine <unk>.
Speaker Change: Two a couple of elements, which are very important first to fully read the questions on the <unk> project and you had a question about is it synergistic.
Speaker Change: So a few a few good points there on M&A flu.
Speaker Change: <unk> seen India, I kind of R&D, but we are moving our phase one ml and if Luke on one product to another product very simply fully in line with what we discussed at the Investor event last year, where basically we were showing what the third generation of mrna flu.
Speaker Change: Moving the needle basically first generation and Melanie flu are generating through tighter flow antibody, but the efficacy is not known and delivered a 50 is definitely not at the level of safety and Tolerability of the coupon standoff going through so that's why we claimed at that time, but we want to go to the next generation of Ami.
Speaker Change: That's exactly why we are doing with this new complex wanted to go to the next stage of the 90, because it'll not improving for Nokia doesn't appointed.
Speaker Change: And that's why we believe our approach to M&A and our approach on commission vaccine is the right. One of course, you've seen the difference with some other but there is a big compromised.
Speaker Change: And maybe on the efficacy we don't think it's a winning recipe less bad not lead you understand that putting all these together, we see a synergistic effect and not a cannibalization effect. We are leaders in feed today, who will be able again to tomorrow.
Thomas: <unk> Thomas next question.
Thomas: Your next question comes from the line Asa.
Seamus Fernandez: Seamus Fernandez than hunting.
Seamus Fernandez: Thanks very much for the question so.
Seamus Fernandez: I wanted to just.
Speaker Change: Drill into expectations for the COPD launch, hoping you could just provide us with a little bit of color on.
Speaker Change: The trajectory of growth, we saw very strong growth.
Speaker Change: From <unk>.
Speaker Change: So many other launch categories, but this is a uniquely large one.
Speaker Change: And just wanted to get some color there and then just as a <unk>.
Speaker Change: Separate question can you give us your thoughts on the where you think the CD 40 ligand asset has the most.
Speaker Change: Appropriate opportunity outside of multiple sclerosis. Thanks, so much.
Brian: Okay, Brian COPD.
Brian: Well. Thank you so much for the question Seamus we are really excited about COPD launch obviously, we just remind everybody that we just received approval in Europe first ever advanced therapy to be approved in COPD third leading cause of death worldwide really important moment for us in the company and certainly for patients as it relates to the uptake. The good news is we're already in this particular physician population of our day to day basis with asthma.
Brian: The good news is also this disease state as we've highlighted is driven by underlying type two inflammation and that is also very similar to asthma. So the storyline is still very strong the opportunity will furby will be for us to find these patients to make sure that we get them into the treatment centers to make sure that we are able to get them introduced the therapy soon but as we said we think that most of the growth will hit us.
Brian: In 2025 will begin to launch this year most of our growth to be in 25. Thank.
Speaker Change: Thank you human CD 40 logo, yes. Thank you for the question outside the multiple forms of multiple sclerosis, where this may be relevant.
Our confidence around the use of this.
Speaker Change: Note both in type one diabetes and then transplant.
Speaker Change: Stroke transplant rejection.
Speaker Change: This place where the balance sheet right.
Speaker Change: His question next.
Speaker Change: The next question comes from the line of Jo Walton with UBS.
Jo Walton: Thank you if I can return briefly to Bay Fotis I think we can work out for ourselves the level of demand in the U S.
Jo Walton: And assuming that you have capacity, how you might deal with that but can you give us a sense of where demand is building outside of the U S.
Speaker Change: We'll let the significant new countries that you can supply this year or will all the major markets really coming next year. So it's really trying to get a sense of the U S. Ex U S split and on Victoza round, which is now filed asset could you remind us what where you think that's going to fit in the hemophilia.
Speaker Change: Space. Please.
Speaker Change: Nice to hear you loud and clear Thomas.
Speaker Change: To your own pay for this.
Speaker Change #130: And on the geographies. Thanks for the question Joe you remember that last year, we were really focusing on three launch countries, namely the U S, Spain and France. So those of course will remain.
Speaker Change: In Branson, when you're moving fallout. In addition to these we will be opening this year a few countries I'm not going to name them also so I hope nobody will be distorted I forget a couple of them but.
Speaker Change: To tell you the Q1.
Speaker Change: We expect a few provinces in Italy to launch what Eaton programs, we expect Germany, you've seen this particular recommendation to move forward on recognition, we expect other European countries, such as Ireland, Belgium, and <unk>, which have also provided some recommendation. So that gives you a bit of an example of.
Speaker Change: We will expand this year on year, and maybe I'll just add that <unk> is not the reason.
Speaker Change: The upgrade in guidance today, so that's a positive overall I apologize for anybody who attended by Thomas' language Houma <unk> Hi, Joe Thanks for the comment on <unk>.
Speaker Change: Based on the mechanism of action, we believe that <unk> is applicable to all patients with hemophilia and will likely be used broadly I'll come back to in Atlanta second the real issue is the major unmet medical need today.
Speaker Change: Hemophilia, b, especially with inhibitors and I suspect that the.
Speaker Change: <unk> medication will be in that group, but will certainly extend more broadly it's important to remind everybody that this is a highly differentiated therapy with very clear data.
Speaker Change: Is that makes us a.
Speaker Change: Part of the landscape of the MSL layer treatment is that it's a low volume treatment wave really tolerable profiles of injections six to 12 times EBITDA compared to the manifold number of treatments.
Speaker Change: Father treatment categories, and importantly, there is no cold chain. Unlike antibodies. This is very easy to provide worldwide. So in many ways. This is a highly differentiated therapy and we are optimistic about it.
Speaker Change: Thank you.
Speaker Change: Have a great profile, we accept that there'll be some tailoring tight trading not uncommon with this patient population, but as already Greg.
Speaker Change: Compelling profile next question next.
Speaker Change: The next question comes from Tim Anderson with vault.
Speaker Change: Thank you.
Tim Anderson: Just on tall Oak Brook nib.
Speaker Change: Just update on timing and then really what.
Tim Anderson: What the most likely base case expectations should be.
Speaker Change: If I could distill it down to a single question do you think taller bruton able be approvable in some form or another based on the upcoming readouts or could it be a total of zero. Thank you.
Speaker Change: Okay. Thanks for the question.
Speaker Change: No update on the timing of timings as we discussed late August early September this year consistent with what we've said I'm mindful of course of our reporting obligations.
Speaker Change: <unk> and we will be deeply conscious of how we provide the data flow.
Speaker Change: Top of mind, just in terms of speculating on the outcomes of the trials of course, I can't do that but I have to say we're optimistic about.
Speaker Change: The path for these drugs and I would really point out simply that currently in multiple sclerosis is a huge unmet medical need in secondary progressive disease.
Speaker Change: Phase two.
Speaker Change: We have really interesting result, so.
Speaker Change: Going forward, we'll see the results very soon.
Speaker Change: We know that Mechanistically, we cross the blood brain barrier.
Speaker Change: A meaningful way.
Speaker Change: Find out when we get the results whether that is applicable to the readouts in the studies, we will see what that differentiation holds so.
Speaker Change #103: We stay on their original timelines next question.
Speaker Change #104: The next question comes from the line Haustein Luisa Hector Thereunder.
Speaker Change #105: Hi, Thanks for taking my question, So I don't do you pick and.
Speaker Change #101: Any more indication first.
Jeff: Festival with Jeff.
Jeff: And Doug could you speak to chunky, absolutely love to take.
Speaker Change #102: But that was the confidence there is an effect.
Speaker Change #106: So I'm just wondering how we should think about studies see will it be sufficient for approval what's the problem.
Paul: Paul Youre aiming for and how you put that into context to grow the pipeline will debate genetics that chart and then perhaps just a comment on the UC phase two when should you induction data in house.
Brian Dupee: Okay. Thank you Luisa, Brian Dupee indication expansions to Lucy I think everyone's going to talk a little bit about the profile potentially but just as you said and I like I Love. What you said when you talk to patients how much they loved the pixel and physicians how much they loved it picks it youre absolutely right dermatologists are excited about the potential expansion into CSU.
Speaker Change #107: We need the trial to read out positively and then we will file for this we by the way just to let you know our first launch in CSU is actually in Japan, a little bit earlier, this year and it's gone exceptionally well still early days, but again I think it further reinforces the profile that we bring to the dermatologist community who are trading multiple of these disease states that we have today. So again, we look forward for the data readouts and bringing this to.
Speaker Change #107: Patients all around the world.
Paul: Okay.
Paul: Louisa and I'd say, a voice and thank you for calling.
Speaker Change #108: We see molecule study, we have high hopes for.
Speaker Change #109: Efficacy and patient recession.
Speaker Change #110: Okay. Good.
Speaker Change #109: Until then thanks.
Speaker Change #109: Thanks for the question for that.
Speaker Change #109: We'll have seen as an example of the potency of the collaboration and.
Speaker Change #112: What we bring to the table and collaborations when <unk> comes to the table and immunology, we have accelerated the study by three months. We finished early we over performed.
Speaker Change #109: We're optimistic about both this disease cost and the differentiation of this tailwind, particularly.
Speaker Change #109: Based on it.
Speaker Change #109: Overall horsepower potency, but also its ability to distinguish between tier three and the Detroit three receptor, which make this a highly unique version of the tail what a molecule, but we anticipate results I think has been described in Q4 of this year and.
Speaker Change #109: We were using this trial to both guide dosing, but also indication.
Speaker Change #113: Just to call. It out we've enjoyed the relationship with our partner Teva and from this point on authorizing. The this result will pick up a battle on the phase III great. Thank you next question next question comes from the line of sight after.
Speaker Change #114: Also said that's at Bernstein presentation that on.
Speaker Change #114: Good afternoon, Francesco the strong bounce between two quick questions first a follow up on <unk>.
Francesco: The approval of the two manufacturing lines later this year could you tell us how do you see the capacity for 2025.
Francesco: We'll be twice.
Francesco: Current levels you up to date, so some color on this front would be great.
Speaker Change #116: Second question.
Oh man, which are in our view the most important phase two projects that will readout until the end of next year.
Speaker Change #117: Our portfolio would be great.
Speaker Change #116: Comment.
Speaker Change #118: Thanks, Tom Okray Fotis.
Speaker Change #119: They felt to slow we didnt give any specific number on capacity.
Speaker Change #119: If we have the.
Speaker Change #119: Hitting lines approved which we will.
I think we will be an institution in 2025 to progress into the demand. So I don't see any issue there of course, it's I understand.
Speaker Change #120: Short term focus on Omidria.
Speaker Change #121: But of course, you understood that.
Speaker Change #121: We need to build the amount of our time.
Speaker Change #122: <unk> is to be followed by a recommendation for diesel in every continually commenting but as we look at the site. One after another and I think we feel hampered from there onward capacity, which would be in Q and human the.
Speaker Change #123: Question about which is your favorite child.
Speaker Change #123: Thank you.
Speaker Change #124: Thank you for the question I wanted to pick out my favorite child, I will try and be brief and thoughtful about this answer which is finally, we've got a number of vaccine trials reading out in one as we get through this to forget those excellent vaccine trials readout towards the end of next year in terms of costs as you lay that we've got an excellent.
Speaker Change #125: Accompaniment to our ATP franchise with way ha.
Speaker Change #126: Autoimmune hemolytic anemia with Rosa Bruton, Ed that's an extremely extremely exciting result, Louisiana kindly refer to our <unk> product I think that is going to be exciting for us.
Speaker Change #126: Now and with Teva and then going into next year, the Iraq for that we've got in partnership to oral small molecule <unk>, one signaling inhibitor, which could be transformative we await.
Speaker Change #126: Yes.
Speaker Change #126: With great interest by protective efficacy and finally, and not least not forgetting our energy franchise.
Speaker Change #126: Alpha one antitrypsin a fusion.
Speaker Change #126: <unk> fusion protein is going to be an impact you can have an important milestone next year.
Speaker Change #127: Having missed out on purpose I just wanted to call out the all of our franchisees.
Speaker Change #128: Immunology neuro rack and vaccine are firing on full trust us. Thank you.
Speaker Change #128: Next question. The next question comes from David Whittingham nearing.
Speaker Change #128: Yeah.
Yes, thanks very much.
Speaker Change #129: Congrats on the strong second quarter execution. So I have two questions. Please first assuming it a pack of mab generates compelling results in phase III next year could you please characterize the magnitude or multiple.
Its sales potential in COPD relative to do B and COPD and second.
Speaker Change #129: Could you also comment Paul on China's interest in Bay, Fortis, and whether there is a potential path to launch in China late decade. Thank you.
Paul: Okay Brian.
Speaker Change #131: Okay. So first and foremost thank you so much for the question and references COPD as we have framed COPD before there was about 2 million patients across the G. Seven really that suffer as we talk about this kind of that high unmet need go D. If you will on that particular patient population, we're going to be bringing two therapies at least at this particular patient population do picks and as we said which is very soon.
Speaker Change #131: <unk> next at the second half as we shared with you before is largely non tax you will play in type two as well, but all previous smokers. So these two drugs are really going to nicely sit together and I think as we've contextualize this before roughly around $5 billion in peak sales across the two assets.
Speaker Change #131: You very much.
Tom: Tom a China peripheral this <unk> indeed, there is interest in China, <unk>, but let me maybe provide some some light on this.
Tom: As many.
Tom: MMC vaccines.
Speaker Change #133: In this specific case of immunization, we expect <unk> will be part of it out of pocket market.
Speaker Change #133: It wasn't a benign which means.
Speaker Change #133: Receive rent that we're starting from a base in China, where the <unk> is close to zero, we need. The next couple of years to build that up as you know that it will be sorted has been registered in China. So now we are in the phase of actually engaging with medical professionals defining the pathway moving forward the diesel in it and then.
Speaker Change #133: Activity Barron's.
Speaker Change #133: Don't forget market.
Speaker Change #133: And we learned in China.
Speaker Change #133: So the senior officials, who can see the interest.
Speaker Change #134: Building significantly so we look forward to opening the opportunity when it presents itself.
Speaker Change #135: Our next question. The next question comes from Gary Stephen Tang BNP Paribas.
Speaker Change #134: Okay.
Speaker Change #134: Alright.
Speaker Change #134: Okay.
Speaker Change #137: Hi can you hear me now yeah, we got you.
Speaker Change #136: Perfect. Thank you first question is just on vaccine jewelry aspiration in the mid single digit growth target.
Speaker Change #138: I'll say, the fortis blockbuster ambition, but there is a more refined low single digit decline for flu, which is probably a bit weaker. So the question is on kind of where are the other moving parts in vaccine job, which still support the mid single digit outlook is that purely just greater confidence in passing that back towards its about Buster target offsetting play or is there something else in the wider portfolio to think about.
Speaker Change #139: And then secondly, just on <unk>.
Speaker Change #140: Could you just talk to how the performance of the approved indications this is trending.
Speaker Change #139: Chip.
Speaker Change #141: Contribution to the unchanged.
Speaker Change #142: Target for this year and just whether there's any particular pockets of strength or weakness by by indication relative to your expectations in that number. Thank you. Thank you Gary I think we sort of touched on a relative.
Speaker Change #142: Moving parts from flu and photos and acceptable Tom any additional color to add.
Speaker Change #143: Yes, so Gary I don't think there's any magic recipe in there so a blockbuster status for <unk> low single digit decline on flu.
Speaker Change #144: We're not driven to our own government, which we expect will be pulled but more driven by the overall market performance in terms of lyubertsy generate we are at the end.
Speaker Change #145: Getting soon at the end of the pre booking season in North America, and we see.
Speaker Change #143: And with last year, but the year.
Speaker Change #143: The vaccination rates is probably on the sub side of things, which is why we've made that.
Speaker Change #143: The perspective on the other parts of vaccines.
Speaker Change #143: Well aligned with what we said before.
Speaker Change #143: Some slight growth.
Speaker Change #146: We see classical endemic product operative and on the other end of the pit and you know very well that way on the BLA perspective, we're doing well Zach cities in the U S is not booked in our self performance of where the product is doing well in the U S. It does not come in as a science, but malcolm's indeed, something so I was expecting.
Speaker Change #146: For the other part of it.
Speaker Change #148: Thank you and you said it yourself, but will likely gain share in the food market you've got the vaccine coverage rate is low. So it is the expectation operationally we're in good shape.
Speaker Change #147: Brian performance of two picks and currently approved indication.
Speaker Change #149: Thank you so much for the question, Gary first and foremost I'd say, it's heavily demand driven right now from a patient standpoint, we're in a great position where were seeing expansion not only in our core indications that we've been launched in but also in those core indications across geographies everywhere, we've launched into those new indications around the world. So I'd say, we're really benefiting again as Paul outlined.
Speaker Change #150: <unk> on the very first slide than it is to your X demand is all about new patients on therapy or patients staying on therapy across all of our indications and across all the geographies and that puts us really in a good position again to reconfirm as Paul said earlier, our guidance on depiction of around 13 billion for this year, and which sets us up nicely for the guidance that we've given of double.
Speaker Change #149: <unk>.
Paul: CAGR low double digit CAGR rate through 2030.
Simon Baker: <unk> next question. Please the next question comes from Simon Baker with Redburn.
Simon Baker: Hello. This is speaking on behalf of Brian Baker just.
Simon Baker: Just two questions from myself and one was about your onsite radios llama.
Simon Baker: And if you had any changes in your approach that would explain that better.
Speaker Change #152: Oh, the boarder portfolio. Thank you.
Speaker Change #153: Okay I missed the second question.
Speaker Change #154: I'm sorry, if you had any.
Speaker Change #155: Have there been any changes in your approach that would explain that funny.
Speaker Change #156: On the older portfolio.
Speaker Change #156: Okay. Thank you.
Speaker Change #156: On radio ligand therapy, who many of you want to make a quick comment.
Speaker Change #157: Thank you for the question. The reason of this of course is right Eli Guy on therapy is at a recrudescence of interest.
Speaker Change #157: We remain watchful in this space.
Speaker Change #157: Thoughtful about making moves into a truly differentiated therapy, but there is nothing that we currently have going on in our portfolio.
Speaker Change #158: Thank you very much.
Speaker Change #158: Just to add to that.
Speaker Change #159: We remain very committed to the core therapeutic areas. We've made tradeoffs to stay very focused so a broad answer to a very specific question. We would have to feel that with something compelling to make us want to go outside of what we do because we are really focused on the areas that we want to win and play.
Speaker Change #159: I think Olivier I don't know what prompts the question, but I do know that <unk> been in a radical modernization of the Gen med business in the scene.
Olivier: The benefits from that maybe one to share, but it'd be a secret source yes.
Speaker Change #161: So we are happy with the performance of the old portfolio even.
During the quarter.
Speaker Change #161: Some.
Speaker Change #161: Relative momentum on <unk>, which is a wind for language should reflect the fact that we.
Speaker Change #161: We had a very low base in.
Speaker Change #163: 223 and of course also to general availability of one of our competitive but stepping back I think we pay you know we benefit from Jeffery that we have been doing in bringing more focused on you know that the focus we have brought it in terms of simplification of our portfolio back four years ago.
Speaker Change #162: At the close to 400 product families. Now we are on one onward. We are benefiting also from the fact that we are simplifying our geographic footprint deciding to go to a distributor model and the last point is really about resource allocation.
Speaker Change #162: We have a direct.
Speaker Change #162: Our resources and we take out some of these sources on the thoughts on.
Speaker Change #162: The portfolio is that can drive growth.
Speaker Change #162: On the <unk>.
Speaker Change #166: So strong strong momentum, we move more and more in digital in order to make sure that we continue to take out some resources to maximize the value of this business. So overall very good trends very specific situation.
Speaker Change #162: In the U S.
Speaker Change #164: But we are all very happy with the developments, yes, I've got a couple of months Olivier and the team on this because this reinvention on this modernization the radical transformation was pretty extraordinary and we did hold a capital amongst a few years ago and talked about our ambition. We declared that we wanted to try and while the business out and start with turning to go through a more efficient way for not declare.
Speaker Change #164: Victory fall comment, there's lots of puts and takes but I would say.
Speaker Change #165: The indications early indications are great. So thank you for the question.
Speaker Change #165: Okay next question.
Speaker Change #167: Next question comes from Ben Jackson with Jeffrey.
Speaker Change #168: Hi, Thanks for the question so firstly on contracting for the VIX.
Speaker Change #168: Are you able to give us any color on how the discussions are positive and Gary.
Speaker Change #168: Considering the part D redesign, but also the potential third indication by then.
Speaker Change #169: And then does the September approval versus the Jade expectation of any implications for inclusion in formulation for.
Speaker Change #169: So next year.
Speaker Change #169: And then secondly, if I may.
Speaker Change #169: We sustained a qualitative read out for <unk> for testing.
Speaker Change #169: What gives you confidence in the differentiation of the assets.
Speaker Change #170: This commercial opportunity beyond perhaps be just very compelling real world data that we've already saved. Thank you okay, great. Thanks Ben.
Speaker Change #171: Brian given thank you so much for the question. So yes, obviously, we don't comment too much on how the negotiations are going with payers, but we always kind of remind everybody that we've been in this position for quite some time. We've worked very closely with these external stakeholders to share. Our ambition is to take this into a whole host of diseases driven by underlying type two inflammation and you can see obvious.
Speaker Change #172: From the results we've generated a very strong track record of the year. So we find ourselves in a very good position I think as we continue the negotiations for for next year and we do it each year. The second parts of your question is I think the best answer to that is again, we reconfirmed our strong commitment to around 13 billion for the year. So again, we are committed to have a strong COPD launch whenever it does come.
Speaker Change #172: But agnostic about we're committed to 13 billion for this year.
Speaker Change #172: You may choose not answered.
Speaker Change #173: Penn negotiations around CBD for 25 based on a deeper in September around in June yes, it doesn't really necessarily affect it as long as it's approved within this year you already negotiating for these indications within the next year. Thank you Thomas.
Speaker Change #174: RSV, yes.
Speaker Change #175: Yes, Ben Indeed, there has been some recent communication.
Speaker Change #176: Competitive manipulative body against RSV, a couple of points I'd like to say about these SR fluid as you pointed out there was absolutely no debt as yet Nathan <unk> noise.
Speaker Change #177: You can see so there's not much to say in detail, but I can tell you, though is I can talk about our product and what its doing very well you have seen that we have a very strong pristine safety profile and you've seen that we've demonstrated efficacy nothing one try not into trial.
Speaker Change #178: While after trials in clinical studies and in dividends Cindy and thank you to go back to the last CIP fabrication in June.
Speaker Change #179: They were showing that actually the effectiveness the points again lets be position, where 91% and 98% as measured by the CDC networks. So I think that the.
Speaker Change #179: That said that we would add is very significant now of course moving forward, if and when we're going to see some that are coming down the road from competitor I think is going to be interesting to look at what is the exact 55, because we are talking about the most untapped population of the universe.
Speaker Change #180: So very interesting to see what is the exact efficacy data, especially when it comes to split the position and of course, we want to look at the duration of protection on these terms duration of protection, we're very confident about the best artist profiles.
Speaker Change #181: Because we have seen from the previous studies from Aqua beta that the half life of besotted is significantly higher and longer than the effect of the coming companies. So delighted to have some competition. If it has to bring more and more awareness about the importance of putting some protection. However, I think that there will be some did.
Speaker Change #180: <unk> products and I do believe that the fact that we have done the formulation and the design of a project that gives.
Speaker Change #180: Give you the exact amount of quantity or the exact Keith to get the best protection is paramount to the success of <unk>.
Speaker Change #180: Next.
Speaker Change #180: Next question, maybe the last question.
Speaker Change #180: Okay. The next question comes from is it globally grew with discern.
Speaker Change #180: Yes. Thank you two short questions first on the other revenue line into the P&L.
Speaker Change #184: Seen less dynamic this quarter, but they'll want to read too much into a quarter is there any chance you can guide us towards or we should see other revenues moving towards the end of the year and maybe for the following years and then second question on Sox, Lisa as you're moving closer to the launch of a very significant indication so far.
Speaker Change #184: The drug is only.
Speaker Change #182: $1 billion in cells, if we annualize where it is but the Ambrose indication is probably at least a couple of billion in potential.
Speaker Change #183: Could you maybe share the the kind of cost and resources, you're putting behind that.
Speaker Change #186: Yes, coming launch and how you see competition versus <unk> that should have Cpus data coming later, so Q, maybe read the EBIT you, having one year.
Speaker Change #186: The launch ahead of competition and so.
Speaker Change #186: How big could be the opportunity for the drug.
Speaker Change #188: Thank you Eric two little questions most of it will transform thanks.
Speaker Change #185: Thanks for asking the question on auto revenues, Indeed, you're absolutely right difficult to read it by the quarter and we had the weak revenue amount in the second quarter, but it doesn't mean much at the end.
Speaker Change #192: I can confirm that we expect for the full year 2024 to be around the same level as what we have experience at least as far as disposal.
Speaker Change #187: Consume that too than we had been the producers which is about half a billion of euro of four.
Speaker Change #187: As a consequence of disposals. So some expectation this year and 24 than what we have seen in the past.
Speaker Change #187: Maybe you could kick off console players on brand finish yes. Thanks for the question.
We remain bullish on chocolate, obviously, it's prevalent it's case in transplant ineligible patients.
Speaker Change #189: But we're looking forward to staying in the very short term the outcome in transplant eligible patients as Youll give stock Lisa the broadest possible indication profile. The second point I'd like to talk about is the fact that the subcutaneous formulation study will come next year, which will provide much more.
Speaker Change #190: <unk> and potential sales is at Liza in multiple combination indications going forward. Thank you, Brian do you want to add to the resource and I think well first I'll start with the performance. So as you saw in the quarter. We saw really strong performance again and again. This is really important it sets ourselves up nicely as we expand our indication it sets ourselves up nicely because you talked about Dara there, but actually.
Speaker Change #191: The class a CD 38 is really the strongest class there in that class continues to grow and that's great. We talk about the pie growing bigger, but then what we've seen is our strong growth is because we continue to do very well and continue to take share in the areas, where we have been approved so as we look to this next expansion to first line therapy very soon.
Speaker Change #191: We're really excited about that and we're resourcing it appropriately to be able to take share and to be able to continue to grow this great asset for these patients with multiple myeloma. So we're excited alright, great. Thank you.
Speaker Change #193: The last question comes from the line of Pete, but do it with the city.
Speaker Change #193: Pete.
Speaker Change #193: Yeah.
Speaker Change #195: Sorry jumping from one conference call together can you hear me.
Speaker Change #193: Yes.
Speaker Change #194: One for human and one for Paul Please.
Speaker Change #193: <unk>.
Speaker Change #196: Cool just to follow up on toilet Bruton. It just given the absence of randomized phase two data for <unk> can you remind us why you are optimistic in this setting or is it just that it crosses the blood brain barrier very well and is against placebo and then Paul maybe I'll continue to at least swinging the bat little.
Speaker Change #197: Consensus at about 865 of earnings into next year points to a very nice double digit rebounding growth.
Speaker Change #198: Stock trading on just 11 times now I realize this is not affordable order guidance called for 25%, but hopefully I can tell you cant resist thing something or giving us a sense.
Speaker Change #199: The level of comfort with where consensus sits on other big swing factors COPD big quarters Gen Med, but just wanted to keep a tighter view on where expectations set for next year in the.
Speaker Change #199: Germany of growth for the remainder of the decade. Thank you.
Speaker Change #200: Okay well.
Francois Graham: I don't want to disappoint yuzu chunk between Coles thinking you could get reserve reveals that would be about 25%. So Francois do you want to start there I can't Beach.
Speaker Change #202: It's not the time to talk about 20 to 25 two.
Speaker Change #203: 2024 can start with that as you can see we are very positive about it.
Francois Graham: No I am in a position to fully confirm the fact that we have a very positive the same positive AUM to 425 that we had before and even.
Francois Graham: <unk> gives us.
Speaker Change #204: The good performance that we had the niche one gives us further comfort on our expectation for 2025, which you can see is one is 2024 is actually the have you done that the rebound is happening around us and we sold to them and just to help you a bit as well in terms of building blocks for 2025, we do expect to have a solid top line growth again, we will have.
Speaker Change #204: Some positive development in terms of gross Martinez a consequence of a positive mix, we do expect to be around flat in terms of R&D spend and with tight control of SG&A. So we'll offer.
Speaker Change #205: It has really given us control.
Speaker Change #205: And two because we have provided before for 2025. Thank you Francois human Levered two to bring us home on tolerated, yes, and thanks for the question.
Speaker Change #206: The answer is pretty straightforward IP.
Speaker Change #206: A little more nuanced.
Speaker Change #207: Insofar as the pathophysiology of secondary progressive diseases, clearly immunological and are again existing therapy, albeit not well used.
Speaker Change #207: Very focused on immune response, and remember we believe celebrating differentiated not only three blood brain barrier permeability, but its effect on the.
Speaker Change #207: The profile of kinases that hits and importantly.
Speaker Change #207: The potency on the economy, the bottom lines and we believe it's a great drug working on targeting in an appropriate indication.
Speaker Change #208: Okay, well, we'll get the data soon enough we will find out okay well. Thanks for that last question Pete our strong business momentum continued in the second quarter, we delivered double digit sales growth at CER, we continue to execute on our pharma launches we kept advancing our pipeline of new medicines, we upgraded our 2024 EPS guidance. Thank you.
Speaker Change #209: Connecting we know it's a busy day for you we've tried to keep it short out of respect we look forward to connect with many of you on Monday and Tuesday of next week. Okay. Thank you.