Q4 2024 Sanofi SA Earnings Call
Speaker Change: You have joined the meeting as an attendee and will be muted throughout the meeting. This meeting is being recorded. As usual, you can find the slides on tenovo.com. Please turn to slide number three.
Speaker Change: Thomas to cover our global businesses as well as Roy our general counsel and Brendan head of manufacturing and supply.
Speaker Change: But the Q&A you have two options in June ratio and submit your question using the Q&A function.
Speaker Change: With this I will hand, you over to Paul.
Speaker Change: Well. Thank you Thomas Hello, everyone on the accrual we made significant progress in 2024 towards becoming a focus science driven biopharma companies are strategic progress was emphasized by the decision to sell a controlling stake in a pillar and further prioritize R&D on.
Paul: On the business, we achieved double digit sales growth with strong contribution from launches. This included photos that achieved blockbuster status in its first full year of sales.
Andy: Andy we're pleased with the positive phase III results of the tooth Saran Rosa Bruton, Abe and solid business.
Andy: Provide the foundation for potential launches this year underpinning all sustainable growth.
Andy: Im thrilled about the phase II <unk> trial that is ready to move to phase III pending regulatory feedback.
Andy: We'll share more pipeline details later.
Andy: Looking at Q4 on slide six we reported double digit sales growth for the third consecutive quarter supported by our key drivers vaccines to pick some pharma launches.
Andy: Taking a closer look at the launches on slide seven in Q4 by photo sales was high as those in the first nine months of the combined.
Andy: We now have expanded RSV protection to more than 6 million babies around the world.
Andy: In hemophilia and increasing number of patients switched to <unk> from both factor unknown factor therapies, we're seeing strong patient benefits and sales reached almost a quarter of a 1 billion euros. In Q4, we are confident in our expectations that <unk> will become a blockbuster this year.
Andy: Moving to slide eight depicts and exceeded the targeted 13 billion euros in sales driven by the demand for more than 1 million patients globally in.
Andy: In Q4, <unk> grew by 16% from strong prescription trends in all geographies.
Andy: In the U S depicts and continued its leadership in new to brand prescriptions across all indications in line with the first nine months of the year U S sales growth in the quarter reflected fewer business days compared to prior quarters and the normal year end gross to net adjustments.
Andy: Countries outside the U S. Two picks and delivered more than $3 5 billion euros on a full year basis and COPD. We are in the early stages of the launch of mistake positive feedback from patients and prescribers, we expect the inflection point to be sure and COPD to become an important credit driver due to the large unmet medical need.
Andy: As we expand the benefits of <unk> to more patients. We're pleased with the continued work on new indications, including <unk> for children in the EU CSU outside Japan, and BP globally. You use is increased penetration in approved indications and further geographic expansion are all important future drivers for duplex.
Andy: Moving to slide nine 2024 marked a sales record for our vaccines business crossing the 8 billion euro milestone up by 13, 5%.
Andy: This performance was driven by pay for us offering a marked reduction in hospitalization across more than 20 countries with all infant program.
Andy: We are the only RSV mab with real world data showing greater than 80% effectiveness in more than 100000 babies. Our flu franchise was resilient keeping its status as the world leader.
Andy: 2020 full sales exceeded initial expectations driven by our differentiated fluzone high dose flu a flu block.
Andy: In Q4, we also made significant progress with our vaccine pipeline with the start of six new vaccine studies, including the phase III studies for our new <unk> <unk> 21 in children.
Andy: Our R&D efforts in vaccines continues to be recognized by health authorities with the FDA granted fast track designation to our three new phase 123 programs.
Andy: I am pleased to share with you Sanofi is remarkable achievement in the 2024 access to Medicine index, we have improved our ranking of moving from 8% to third place underscoring our commitment to global health.
Andy: Important factors for this result governance of access R&D and product delivery.
Andy: Sanofi Global Op unit plays an important role by delivering critical medicines from the impact from portfolio to 30, low and middle income countries ending on such a positive note I would like to take this opportunity to thank all Seneca and so that continued commitment to improve the lives of millions of patients.
Andy: I'll now hand over to Francois <unk>, our CFO for more details on the financials. Thank you Paul and Hello to everyone. Before I begin just a reminder, that our Q4 and full year results reflect our new reporting scope, excluding our pillar <unk>.
Francois: In the quarter net sales decreased by 10, 3% at constant exchange rates to $10 6 billion euros, marking our third consecutive quarter of double digit growth.
Francois: As mentioned earlier by Paul growth was driven by new product launches as well as <unk>.
Francois: Gross margin was 74, 3% down slightly from the previous year, primarily due to the absence of <unk> revenues in 2024.
Francois: Excluding this COVID-19 impact on gross margin increased by 0.8 persons.
Francois: Increase in operating expenses was driven by R&D, reflecting a high activity level in the quarter and brought us in line with our commitments for the full year.
Francois: Business EPS was $1 71 euros, mainly reflecting a lower gross margin and increase in R&D and a higher tax rates following the OECD peel off to implementation.
Francois: Now turning to our full year results net sales increased by 11, 3% at constant exchange rates to $41 1 billion euros, driven by our new product launches, including <unk>. It became a blockbuster as well as do peaks and that exceeded our ambition of 13 billion euros in sales growth.
Francois: Gross profit grew by 10, 3% at constant exchange rate was $31 1 billion euros with a gross margin of $75 seven persons on gross margin declined slightly due to the absence of any COVID-19 revenue in 2024, and the remaining impact of the ore body jewelry.
Francois: R&D expenses increased by 14, 6% at constant exchange rates to seven 4 billion euros fully in line with our ambition to step up investments in our pipeline in 2024.
Francois: SG&A expenses increased by four 5%, providing an attractive gross leverage benefits.
Francois: Business EPS increased by four 1% at constant exchange rates to 712 euros exceeding our full year guidance, we landed at 2020 for business EPS more than six percentage points above our initial guidance at the beginning of the year. This.
Francois: These results reflect our ability to drive strong growth, while investing for the future and while carefully managing our cost base at the same time.
Francois: Looking ahead to 2025, we would like to provide an overview of anticipated key business dynamics, which may be helpful for modeling purposes.
Francois: As a reminder, at the beginning of the year, we expect to see the usual impact from the annual reset of insurance deductibles, which leads to higher with TD session of our Copay assistance program for specialty medicines in the U S market.
Francois: We anticipate only modest headwinds from the introduction of changes to Medicare part D and <unk>.
Francois: We continue to simplify our portfolio of medicines, and we expect around 250 million euros, a sales reduction from disposals.
Francois: We expect <unk> to grow further with additional penetration on geographic expansion.
Francois: Gross margin is expected to increase in 2025, R&D expenses will be slightly up as there was a one off.
Francois: Item last year.
Francois: <unk> will also slightly increase in preparation for upcoming launches and we expect capital gains from portfolio simplifications to be again around 500 million euros.
Francois: Our effective tax rate should remain broadly stable compared to 2024.
Francois: For 2025 guidance, we have decided to expand our disclosure by providing centers growth. In addition to EPS growth from 2025, we project sales to grow at the mid to high single digit percentage at constant exchange rates. This guidance now excludes any impact from hyper inflation, which accounted for about.
Francois: One eight percentage point offset the growth in 2024.
Francois: We estimate a positive foreign exchange impact on sales of approximately plus 2% to 3% in 2025.
Francois: Business EPS growth is expected to grow at a low double digit percentage at constant exchange rates.
Francois: Foreign exchange and before share buyback impacts.
Francois: We estimate a positive business EPS impact from currency of.
Francois: Approximately plus 2% to 3% as well.
Francois: Shifting to our free cash flow in 2024, which was mainly impacted by three one offs first the impact of price cuts of Lantus in the U S. In each one for one $1 1 billion euros Cigna the entire elimination of all factoring of receivables for $1 4 billion euros unsold and unfavorable.
Francois: Exchange rate impact of 0.8 billion and all of its resulting in a closing free cash flow of 6 billion euros.
Francois: We expect our free cash flow ratio to be back to our historical levels steadily over 2025 and 2026.
Francois: The slight increase of our net debt at the end of 2024 reflects our strategic investments, including the acquisition of in bricks as well as our value proposition to shareholders in the form of a growing dividend.
Francois: Our net debt to EBITDA ratio, which is actually pretty close to a net debt to <unk> ratio was 0.7 times at the end of 2024. This showcase these low gearing ratio and an optimal balance between strategic capital allocation and financial flexibility.
Francois: In 2025, Sanofi will receive a cash consideration in the high single digit in billions of few rules from the <unk> transaction at the earliest in Q2, while retaining a significant sticking to company above 48%.
Francois: Let me conclude by confirming our existing capital allocation policy.
Francois: <unk> focus is to invest in our business to drive growth demonstrated by our increased investment in R&D last year as well as ongoing investments in manufacturing in AI and digitalization as well as in certain marketing.
Francois: We will continue to explore external growth opportunities to strengthen our foreign existing therapeutic harass on potentially cover wide spaces.
Francois: In all our external investments, we maintain strict discipline and focus on value creation for shareholders of preference remains of our investments in a range of $2 5 billion euros each.
We are committed to maintaining our double a credit rating in the short to medium term.
Francois: In line with our commitments to shareholders Sanofi intends to execute a share buyback program of 5 billion euros in 2025.
Francois: These repurchases will be conducted preferably through block trades in the open market shares required will be canceled and we'd have an accretive effect to <unk>, earning per share mitigating impact of the <unk> dilution.
Francois: This commitment underscores our confidence in Sanofi future and our commitment to delivering long term shareholder value.
Francois: Our proposed dividend of $3 92 euros per share for 2024 marks the <unk> consecutive year of dividend increase sales are reflecting the emphasis we put on shareholder reward and the dependability of our dividend policy.
Francois: As the proposed dividend and the share buyback combine that we will reward shareholders with earned most 10 billion euros in 2025, it would be a record year in terms of shareholder return for Sanofi.
Speaker Change: I'll now hand over to <unk> to provide an update on the progress of our innovation pipeline.
Speaker Change: Thank you Francois 2020 for accelerating the transition into a company with increased focus on science with a pipeline starting to deliver meaningful benefits to patients and healthcare systems.
Speaker Change: And great opportunity for our company.
Speaker Change: We presented convincing clinical trial results, our recent medical meetings, including the celebration Epinasty MFS relative net ICP FHA stranded in the failure.
A molecule from our pipeline that we are preparing to launch this year.
Speaker Change: As we look holistically at R&D productivity scientific publications in high impact journals and depend our commitment to developing science and bringing new medicines and treatments to patients. We have an increasing trend of high impact publications and we now plan to closely tracked as leading indicators of improved productivity over time.
Speaker Change: Our pipeline has continued to deliver positive results, including eight positive phase III Readouts in 2024, we've initiated 18 mid to late stage study with seven phase III and six new molecular entities moving into the clinic.
Speaker Change: This increased level of activity is the main driver of R&D spend Francois covered earlier.
Speaker Change: On the regulatory side, we've made substantial progress with 'twenty, one acceptances have a regulatory submission including to the new millennium.
Speaker Change: Three new molecules that hit some of these are benefiting from priority review.
Received 14 approvals supporting the ongoing new launch.
Speaker Change: Please turn to the next slide.
Speaker Change: We're pleased with the significant price estimates.
Speaker Change: Yes makes the stock Liza in 2024, including approvals of the Emerald study in the U S and EU last week.
Speaker Change: During the Ash meeting data was presented in the frontline treatment option in multiple myeloma patients eligible and ineligible for autologous stem cell transplant.
Speaker Change: On the left we have the PFS curve.
Speaker Change: From the HD seven study recycling added to a standard frontline combination demonstrated a 43% improvement in PFS based on a hazard ratio of <unk>.
Speaker Change: We're very pleased to start leasing continues to shine in terms of patient benefit by offering a new standard of care.
Speaker Change: On the right we referenced the Iraq clear phase III study of subcutaneous at Liza meeting based co primary non inferiority implants. In addition to confirming the safety profile.
Speaker Change: Additional data from ongoing studies in combination with different standards of care and across multiple lines of treatment will support a broad application for subcutaneous administration, which we think will bring new benefits to patients and healthcare systems.
Speaker Change: Regulatory submission is expected in the first half of 2025.
Speaker Change: On slide 21, our commitment to rare diseases remains steadfast relative return I just wanted the new additions to this portfolio with potential in ITT and far beyond.
Speaker Change: At Ash, we shed the phase III data in IPP with relevant Britain in meeting its primary endpoint of a durable pilot response, and 23% of patients compared to zero percent on placebo at week 25.
Speaker Change: In addition, a platelet response defined as a platelet count achieving at least 50%.
Speaker Change: <unk> are a platelet count between 30% to nine per liter <unk> 59 per liter. The double from baseline was achieved a 65% of our patients after only 15 days of treatment.
Speaker Change: As <unk> seen intrinsically addresses the underlying immunological mechanisms of the disease.
Speaker Change: Instead of just boosting platelets to say some existing mezzanine.
Speaker Change: It compares an improvement in the quality of life.
Speaker Change: Clinical symptoms of fatigue, even in non durable responses we.
Speaker Change: We anticipate global approvals this year and launch as it regulatory reviews or I'm getting an EU, China and in the U S with a <unk> date at the 2019.
Speaker Change: In addition, we now have meaningful benefit in Weihai agg formulated disease from our phase two program with ITG for being shack for the first time.
Speaker Change: We're evaluating the move into phase III with at least one of these indications.
Speaker Change: As we remain committed to Randy we believe <unk> can bring significant patient benefit as we unleash the potential of clear traffic immune modulation.
Speaker Change: On slide 22, our partner Teva recently announced positive <unk> phase <unk> results in IBD IBD remains an important unmet medical need in immunology, where we are underrepresented today.
Speaker Change: <unk> represents a meaningful opportunity for Sanofi to begin to bring new science and benefit to <unk> patients.
Speaker Change: Continuing in immunology and far beyond.
Speaker Change: We see a statistically significant and clinically meaningful benefit in ulcerative colitis, and crohn's disease with all endpoints Matt.
Speaker Change: Ferring pleasingly competitively within the <unk> class.
Speaker Change: It is the first and only tailwind.
Speaker Change: Demonstrate benefit in Crohn's disease patients achieved strong placebo adjusted responses across both indications as high as seven 4% clinical remission in UC and 34, 8% endoscopic response in Crohn's disease, both at the high dose level tested.
Speaker Change: Combined with a favorable safety and Tolerability profile the positive results offer an opportunity to advance the program into phase III development and potentially offer an improved outlook for patients with moderate to severe inflammatory bowel disease relatively soon.
Speaker Change: Additionally, data will be presented at the <unk> meeting later this month.
Speaker Change: I'd like to conclude with my usual news play slide now with 2026 news flagged for the first time, we plan 12 phase III Readouts 15, regulatory submission and 13 regulatory decisions in multiple jurisdictions, increasing increasingly capturing the improving value.
Speaker Change: Importantly, we also see the intensity of the niche client base over the coming two years building on an earlier comment about focus on improving R&D productivity, the cadence and the volume of the R&D drumbeat continued to quick.
Speaker Change: We look forward to updating you on our progress as I regularly say, we remain humble in the face of disease and regrettably not everything will work. However, I am optimistic that the impact of talented science focused teams coupled with our increasing exposure to breathtaking digital technology will drive this unique pipeline in our core.
Speaker Change: Cypress therapy areas and the service a patient.
Speaker Change: Yes.
Speaker Change: I would like to thank all of my brilliant R&D team members and colleagues across the company to the positive progress made this year, we R&D chasing American science to improve People's lives with the.
Speaker Change: This I hand back to Paul for Q&A.
Paul: Well 10-Q human Thank you Francois will now called two questions. As a reminder, we'd ask you to limit your questions to one or two each and I've said this every time.
Speaker Change: As a part you'll be notified when your line is open to ask your questions at that time. Please make sure you mute your microphone or option to submit your question by clicking the Q&A icon at the bottom of the screen. You question. We read by panelists now will take the first question. Please yes. The first question will be from <unk> Bank.
Paul: Thanks.
Speaker Change: Hi, guys. Thanks for taking my question on the buyback.
Speaker Change: Comment on the rationale for the size of 5 billion.
Speaker Change: <unk> you might start the buyback.
Speaker Change: And then any color on plans for the rest of your policy.
Shane: This is shane.
Shane: Just latest thoughts on M&A targets.
Shane: And then stage therapy area.
Shane: Chad.
Shane: Perhaps I could move to vaccines.
Shane: So I'm asking the question.
Shane: Maybe on the pneumococcal vaccines to the phase III entry.
Shane: Very exciting, perhaps a bit more color.
Shane: On what Youre looking to show in Phase III, and how you see the competitive landscape because there are others coming glitch with vaccines.
Shane: At higher data 24 that she wants and how do you see a 'twenty one valent vaccine.
Shane: Thank you.
Speaker Change: Thank you Luisa counted eight questions. So.
Speaker Change: Okay, so buyback sizing timing proceeds.
Speaker Change: Over to you for.
Speaker Change: Cyclical results.
Speaker Change: The rationale for the 5 billion actually we wanted to mitigate part of the dilution of our pillars. So I think that we are addressing that with a $5 billion. What we did is went was to listen to you as analysts and <unk> shareholders as well and we found that 5 billion was actually the amount of debt on which there was a consensus as well on your side is the starting point, we expect to start the share buyback.
Speaker Change: We don't offer next week actually all relatively quickly the rest of the proceeds it's part of our capital allocation you. So thats first and foremost we want to invest in our business, which is what we did in R&D last year, which is what we do is went on the permanent business.
Speaker Change: Manufacturing there will be more coming in central marketing ahead of third quarter.
Speaker Change: Quite a few launches coming in obviously, we are looking as well.
Speaker Change: Very seriously at <unk>.
Speaker Change: Some of those opportunities BD and M&A without any pressure because we are a strong growth outlook ahead of us.
Because we have a strong pipeline as well.
Speaker Change: We will then just covered a few minutes ago, but that being said we have a strong balance sheet as you could see we have a limited amount of debt at the end of 2004, so which gives us a certain number of opportunities, but we don't feel any pressure to go crazy on M&A on BD. So we will remain very disciplined.
Speaker Change: One of the few possibility to complement whatever we have enough pipeline to remain focused will be essentially on our four therapeutic areas, which you know plus potentially some white spaces once again without putting some pressure on always focused on creating value for shareholders.
Speaker Change: Thank you Thomas PCB 21 competitive landscape. Thank you and with indeed, Sanofi was very pleased to announce the start of the phase III program.
Speaker Change: <unk> 'twenty, one but on product.
Speaker Change: Study is progressing as per plan.
Speaker Change: In total we are expecting to include more than 7000 tons into the overall pace repo at mobile only and in line with a question.
Speaker Change: As you know very well first of all it's exactly at the fluctuating to jet Sanofi vaccine.
Speaker Change: King <unk> fault essentially all of the energy.
Speaker Change: The segment, both segments, where we are very well positioned with our portfolio and it will be nicely complementary its a big space today universe fancy and about 70% of the moat.
Speaker Change: Business altogether and basically as per the competitiveness of the program I think I have a couple of things first of all.
Speaker Change: PCB 21, Columbia, Youre going to be the first VNC vaccines against clinical <unk> slightly enter into Nash any physicians could you. The first one with more than 20, <unk>. So I think that the pension with a starting point as you've noted also fund our December announcement, we have announced.
Speaker Change: Refocusing of the alliance with our partner SK, which means that it's a starting point. It is not an ending point, we start with picking in 'twenty, one and of course.
Speaker Change: It has to be competitive or have other market data I thought we would keep going up with more and more balances. So we appreciate obviously about other companies are working on other companies in this space, but we do believe that we are very well position to start a significant entry into the test and we'll remain competitive.
Speaker Change: Were accepted.
Speaker Change: The first as you said over 'twenty, one 'twenty one balances.
Speaker Change: He is adding the pediatric market, which is the biggest segment.
Graham Parry: Okay. Next question next question is from Graham Parry from Belfast.
Graham Parry: Alright, thanks for taking my questions. So firstly on <unk> just the gross to net adjustment in fourth quarter can you just clarify that was just a one off adjustment catch up fit channel mix rebate.
Graham Parry: Rebate levels stayed the whole year of 2025, and just the extent to which that drive the $150 million year I missed is that just the majority of that.
Graham Parry: Compared to say invoicing days.
Graham Parry: And then just any comments you've got solved them.
Graham Parry: How that could progress into 2025, and then secondly on pay Fortis, just given pleasure often map potential for approval to ship possible inclusion in the season.
Graham Parry: What are you assuming in your guidance for the year.
Graham Parry: On May 14.
Graham Parry: Expected <unk>.
Graham Parry: And then finally on Taylor breached and if you could just update us on the indication that you're expecting for Taylor <unk> bin non relapsing SPM message is it's classically defined all relapsing Sps you are discussing or is there any potential hit to get that broader label set on progression independent of relapse activity.
Graham Parry: Keith.
Graham Parry: Thank you Graham Brian <unk> gross to net to 25 got it. Thanks, so much Graham for the question and I'll first start off by reiterating what Paul said in his opening remarks, we couldnt be more pleased with depictions full year performance delivering greater than $13 billion.
Graham Parry: As you guys know we provided the target of 13 billion for the year, 23% growth as previous year and again underlying demand driven is what's happening here. So we have strong <unk> growth across integrated locations and across geographies and thats. The same actually for Q4 before it was really strong performance with double digit growth in terms of sales and <unk> and it's just exactly as you said.
Graham Parry: I think you said it in your question. It was really due to the Q4 net sales reflect some one off items in the U S. So there is some true ups there and of course, there's a little bit of the fewer business days, there is a little bit of each of the two mixes, but overall again really this doesn't affect volume we're in a really strong position as far as volume goes and now having 2024 behind us it even further reinforces our commitment.
Graham Parry: To our longer term guidance that we provided so we feel like we're in a very good shape exiting 'twenty four entering 'twenty five.
Graham Parry: Youll see the script trends since we started the year, so very encouraging already faithfulness guidance tomo and competitive set.
Speaker Change: So thanks for the question Graham first of all maybe before we switch on to 'twenty to 'twenty five.
Graham Parry: A couple of thoughts on 2024.
Graham Parry: <unk> be above the FERC also <unk> first truly all stance.
Graham Parry: We have reached close to $1 7 billion.
Graham Parry: Sure.
Graham Parry: Precedented.
Graham Parry: Do you think immunization launched in the Easter we have significant conditions EBIT.
Graham Parry: Point of sale capabilities now.
Graham Parry: Point of the capability of the product because you've seen but not only will it be about the sense, but most importantly, we are very happy about the impact we have seen a limited edition in the newborn population now moving fallout from 2000 22025, we.
Graham Parry: We see further growth in 2025.
Graham Parry: That's <unk> when you look at the limitation on the number of countries. If we can go to not penetration in some markets and does a couple of more markets, notably in Europe, or Asia, where we could grow in the coming in the coming year in 2500 <unk>. So obviously, we also recognize that not competition coming down the road.
Graham Parry: No government kind of TBD, but could come in 2025, we expect.
Graham Parry: Okay.
Graham Parry: In 2025 in the U S.
Graham Parry: As we discussed before I think first the first impact would be the fact that we will talk more about the importance of unreserved prevention. So between the raise the importance of the awareness.
Graham Parry: <unk>, that's the testing and then of course, whether that would be more competition down. The road. We believe that we have a competitive profile with <unk>. We have an extensive amount of goodwill dividend you've seen many countries swing 80, or 90% on an expedition and you've seen the very pristine safety on a large scale.
Graham Parry: At this point I need will be felt this would be fall out. So I think thats on the haynesville the dividend from the competitive side, but we have a suite with a significant other slides.
Graham Parry: We believe we are well positioned to grow.
Graham Parry: Okay.
Graham Parry: Thank you Tom.
Graham Parry: Total Britain and potential label yeah. So.
Speaker Change: Thanks for the question, Greg Halliburton that has been submitted in line with our.
Graham Parry: Previous guidance last year.
Graham Parry: Excited about the data that celebrate that as you suggested secondary progressive Ms and we are equally excited about the readout later in the <unk>.
Graham Parry: This is a demonstration of that.
Speaker Change: Amethyst commitment.
Graham Parry: Wavering commitment specialty products.
Graham Parry: No Sir.
Speaker Change: Next question next question is from Seamus Fernandez from Guggenheim.
Seamus Fernandez: Hello, Thanks, very much I'll, just go simple and try to abide by the one question request. So actually the question is for Paul and whom on.
Speaker Change: Sort of simultaneously if you each wouldn't mind operating up the catalysts that you're most excited about.
Speaker Change: In 2025 in particular I think most investors anticipate the results of the <unk>, most eagerly, but love to just kind of hear your thoughts on maybe your top three.
Speaker Change: Perhaps they might differ slightly it would be fun to hear that as well. Thanks. So much.
Speaker Change: Alright, so the old which is your favorite child.
Speaker Change: It's the one that told me most recently.
Speaker Change: <unk>, maybe when you start yes.
Speaker Change: I'll be very quick top three I think.
Speaker Change: Excited about.
Speaker Change: The launch of <unk> in COPD, which my.
Speaker Change: Allow that colleague Brian has already talked about I think bringing it.
Speaker Change: It's a permanent antibody from Avalon side that for patients with <unk> looks like it will be very exciting.
Speaker Change: And reinforcing our position in pulmonary inflammation and immunology.
Speaker Change: I think it's an exciting time.
Speaker Change:
Speaker Change: <unk> as we continue the quickening drumbeat.
Speaker Change: Particularly in disorders, like asthma, and hidradenitis Suppurativa and finally, I'm very excited about the ongoing activity around.
Speaker Change: Completely internally generated by specific activity <unk>. So those are my story, but it would be remiss of me not to comment on our three launches that are coming out.
Speaker Change: I am excited about all of our phase III.
Speaker Change: Programs just to give it.
Speaker Change: The quality of what we're putting in.
Speaker Change: We're more comfortable comes out of course, the normal risks around that.
Speaker Change: Probably a bit of overlapping with us.
Speaker Change: It's in fact come up <unk> game changer, former smoke because I think that is.
Speaker Change: It's going to be a really interesting and I could pick from three or four other things, but on the latest stage I think its primary progressive Ms with totally prudent.
Speaker Change: Daryl a big deal and I think we can go a bit deeper into the phase II, but it's exciting year for us.
Speaker Change: These mid high single digit growth a strong rebound in EPS and pipeline catalysts.
Speaker Change: Where we wanted to go top line pipeline.
Speaker Change: Next question, Yes next question from Peter when funds from Jefferies.
Peter: Hi, Thanks, taking my questions.
Yes.
Peter: Firstly, just on <unk> could.
Peter: Could you just comment down space.
Peter: In terms of you said growth for 2025 can we expect U S growth is what is your.
Peter: Assumption for 2025.
Peter: Walk through the garden is the actual doses that you shipped to the U S or indeed other markets that they need to use all the steel doses at the moment that are outstanding that are particularly likely to be used during the first part of the year as the season continues.
Peter: And then secondly, I just wonder if you can comment on the debt.
Peter: Potential for lids sexy make that.
Peter: Catalyst it pushed into 2026 is that does that reflect any changes to the data you're waiting or any change of the phase two or is that purely just timing from the point of view have recruiting and getting sufficient data on both the decision and ask the phase III. Thank you.
Speaker Change: All right Peter Thank you.
Speaker Change: Some of them before this U S growth of doses shipped yes. Thanks for the question we don't provide the.
Speaker Change: <unk> shipped <unk> to.
Speaker Change: To each country, but I can still give a bit more color.
Speaker Change: 25 vessels, what I frankly thought so I think what's at the heart of your question for 2024.
Speaker Change: The growth in 2024, and what does that mean.
Speaker Change: How should you think about two new insight. So first of all we had a significant increase in supply in 2020, all the teams have been a month can be working on both sides of the partner to deliver that that has enabled us to deliver in Q4 2024 and <unk> to cover for the 2020 needs and the Q1 2020.
Speaker Change: Five needs because as you know very well <unk>.
Speaker Change: The flu and therefore, you have babies being born engineering February in some market chip. So there won't be RSV musician in January February and March and we've seen to date in Q4 'twenty is there any thoughts about that.
Speaker Change: What accounted for.
Speaker Change: I still believe but when it comes to penetration and that is an opportunity to increase in the U S. In the coming out of course as always when it comes with VCR.
Speaker Change: <unk> of Seb.
Speaker Change: There is a lot.
In the U S is doing very well so we'll know more in the coming few weeks, but when you look at the profile of the product. We believe that there is a good space on the politically fill up.
Speaker Change: Thank you Tom three mainland second Mick.
Speaker Change: As I said thanks.
Speaker Change: Asking the question.
Speaker Change: We're very proud of <unk>, combining the potency of TLLP, an all star team.
Speaker Change: Best in class first in class unprecedented molecule, where the best finite data that's out that.
Speaker Change: Specific question was about the implications of the move into <unk>.
Speaker Change: <unk> I just wanted to I want to take a step back I think.
Speaker Change: <unk> adopted a new discipline. This is part of our.
Speaker Change: Freedom now.
Speaker Change: We're an organization that is robust and our use of data and what we've done as you can see by outlining and Dimensionalize Inc.
Speaker Change: <unk>.
Speaker Change: Pipeline timing, what we've tried to do is align that beautifully with clinical trials.
Speaker Change: All we're doing.
Speaker Change: There is no implication for <unk> in fact, our commitment both moderate to severe asthma as well as high risk asthma.
Speaker Change: Underlines the importance of this potential molecule.
Speaker Change: To both increase the efficacy of healing and possibly drive durability. So simple answer to your question we remained Super company.
Speaker Change: It is really a chronic swelling.
Speaker Change: Product given in particular on harvest Susquehanna.
Speaker Change: I spent 35 years and I think this is a real.
Speaker Change: Incredible opportunity for the next question.
Jo Walton: Next question from Jo Walton from UBS.
Jo Walton: Sure.
Jo Walton: Thank you can you hear me.
Jo Walton: Yes.
Jo Walton: Excellent.
Jo Walton: Mike two questions. Please.
Speaker Change: Firstly can I push you a little bit more on vaccines.
Speaker Change: Perhaps you can give us some idea of what you think the penetration today and relevant infants.
Speaker Change: In the U S and what that would be compared to some of the.
Speaker Change: Early pediatric vaccines, just to give us a sense of what the upside for the market there is.
Speaker Change: And also within vaccines can you tell us.
Speaker Change: A bit more about the proportion if you will sales that go to let's say adolescents.
Speaker Change: With mandate.
Speaker Change: Because I think people all CFO wells.
Speaker Change: Whilst everyone is going to be a light the choice to have a vaccine going forward, perhaps some of the mandates that really pushed people to vaccination may weaken anything to do with individual choice and you do tend to see lower vaccination rates.
Speaker Change: I'd like you to discuss that a little bit in more detail. If he could and could you also just please tell us a little bit more about health care reform in the U S. Your assumption of how much more youre going to have to pay for the part D for those patients who are in catastrophic cover.
Speaker Change: And whether you see any offsets in terms of increased volume from lower patient co pays more adherent for example for things like <unk> and the elderly.
Speaker Change: Okay.
Speaker Change: Thank you Francois <unk> and Lula.
Speaker Change: <unk>.
Speaker Change: Some very specific questions Tom I'm not sure that you can answer them, specifically, but you can certainly that what you think.
Speaker Change: I cannot answer specifically for you Scott that's why I think broadly could maybe some of the bundle.
Speaker Change: What I mean by that.
Joe: Joe and back to your first question on the population in the U S.
Joe: It will be two day in January it would be premature because I said before you have you have the full debt a few weeks after injection and we know very well that.
Speaker Change: Z mutation that <unk> seen in January February and March.
Joe: Early to say.
Joe: I would expect that a significant percentage of the U S. Our best call.
Joe: Ah protected against <unk>, but.
Joe: Which means more than the majority.
Joe: Well the noninterest Jewish.
Joe: But it's way too early to be a bit more precise way to look up at one or two earnings calls and we grew a bit more.
Joe: Give you more idea of our federal home today, but there is.
Joe: Any organization coming into the market. It takes two or three years to pick in terms of DCF. So I think that's what we should expect for the product.
Joe: Especially as the whole category.
Speaker Change: On your second question, which is very different.
Joe: On the S&P just add only sense.
Joe: Corresponding to mandated.
Joe: Potentially mandated musicians in the U S.
Joe: Understand well the question is coming from a bit early there I would say that if you want to have an idea.
Joe: The musicians Youre talking about.
Joe: Some boosters in addresses and some shots.
Joe: That's the reason so many and we are still however, if youre looking at the health of your question I personally do not believe.
Joe: Monday.
Joe: Volatile.
Joe: Situation, we're making a big difference into the destination coverage rates. So we're not specifically worried saw that.
Joe: It's something we are monitoring as a feed but when you look at the benefit risk of fall product meaningful alone.
Joe: This is another disease, those onetime utilization very clear in terms of safety.
Joe: And benefit.
Joe: Okay.
Joe: There are some decisions that will happen in the coming few months of what does it maybe let's see let's not terminate the disease, but where there are not mandatory.
Joe: Jason.
Joe: I do not foresee a major impact analysis.
Joe: Maybe you are unsettled.
Joe: Frankly speaking on the Medicare part D. As I said, we expect a modest impact it has been fully built in 2025 guidance on but just obviously you talked about the volume elasticity of the reason is very difficult to assess but we don't expect to see if he came from positive volume in FCC.
Joe: But maybe I'll, let Brian complement what I said, yes, I think as far as what they were a little bit less exposed versus some of the other organizations as well based upon the nature of our portfolio getting more innovative medicines and vaccines that you tend to have a little bit less exposure there as well you see a lot of our business even for fixing that we've said 70% of our business really primarily comes from commercial versus again in the government channel.
Speaker Change: But nevertheless, I think Joe you hit the nail on the head a little bit what we haven't seen yet as well, we actually have a little bit of volume improvement based upon the 2000 annual out of pocket cap for patients with <unk>, which could lead to improved compliance for patients as well. So that's really to be determined but that could be a potential slight offset if you will but we feel like we're in a very good position.
Joe: We entered 2025.
Speaker Change: Okay. Thank <unk> next question next question is from Richard <unk> from Jpmorgan.
Speaker Change: Hi, Thanks for taking my questions. Two please one on I'm going to tell them that just as we think about the asthma data that's coming up in the 12 week dosing could.
Speaker Change: Could you just talk to your level of confidence that you'll see no detriment detrimental reduction in efficacy that.
Speaker Change: Through the data.
Speaker Change: And then secondly question on H back them up.
Speaker Change: Obviously it depicts in COPD has a broader label the launch is going exceptionally.
Speaker Change: Exceptionally well.
Speaker Change: From the script trends, but what implications does that have said that residual opportunities that come up.
Speaker Change: In COPD, thanks very much.
Speaker Change: Okay.
Speaker Change: Thanks Richard.
Speaker Change: Two quick.
Speaker Change: Thank you for your great questions. So.
Speaker Change: Just categorically.
Speaker Change: I'll just I haven't seen the data just to be clear, but I would expect based on the pharmacogenomics around <unk> and atopic dermatitis condition, which is both clinically is lapping in passengers geologically overlapping I.
Speaker Change: And I Didnt expect any drop off a week 12 in fact, what we saw with Emily is progressive increase throughout the duration of atopic derm package set of its 52 week side actually.
Speaker Change: Comfortable that the Pharmacodynamic half life of and believe we will continue to grow throughout.
Speaker Change: At close of asthma.
Speaker Change: <unk>.
Speaker Change: We remain.
Speaker Change: Seriously awaiting the outcome of the Amazon asthma.
Speaker Change: Result, which should be this half of the year.
Speaker Change: And then specifically talk about spectrum.
Speaker Change: Just to challenge a little bit of the.
Speaker Change: The underlying premise of the question.
Speaker Change: Yeah.
Speaker Change: Appropriately rewarded with a broad label that <unk> with type two inflammation and Bronx chronic bronchitis.
Speaker Change: The population of former smokers, there's a very substantial one.
Speaker Change: Won.
We let the science with both genetically and in terms of characterization of the patients while IL 30 series accretion has substantially increased.
Speaker Change: And broke alveolar lavage.
Speaker Change: So actually if anything the opportunity is very substantial in the form of smokers.
Speaker Change: This half.
Speaker Change: Significant.
Speaker Change: Morbidity and mortality.
Speaker Change: IPD and we remain steadfast in our view that as a success scenario, which we'll know fairly soon the combination of products will reach a peak.
Speaker Change: Hold on a $5 billion yet Brian.
Speaker Change: Yes, I'd like to complement that with again like other therapeutic areas or disease states that we've gone in with our immunology portfolio again, we are the first mover into the marketplace. So the bio penetration rate today is again, just what we're doing with Ebix in CBD number one and so as we go in there with both of these agents, we're going to be able to continue to grow patients I think on those therapies, but just nicely as you said this is.
Speaker Change: To open up the population and across the two we've shown you that two by two before in the past <unk> plus two picks and we'll open up the opportunity to reach more than 80% of the COPD population again around 2 million patients. If you think about it across the G. Seven if you will so so they're both uniquely sit in unique places they overlap ever so slightly I think in the above 300 <unk> level in the type two COPD.
Speaker Change: Patient population, but I think the complement of the two really showed that we're going after this disease state from all angles, because there will be different patient populations that will benefit from both trucks. Brian just a quick addition, before you go back to coal which is.
Speaker Change: I just wanted to remind everybody.
Speaker Change: <unk> talked about west and the highest NFL and the lowest in the whole population equally in terms of relative risk reduction and we do have a lifecycle management strategy.
Speaker Change: With Crs with MP.
Speaker Change: Sure.
Speaker Change: <unk>.
Speaker Change: Dori is now being rolled out.
Speaker Change: Conjunction with.
Speaker Change: Extremely valued partners whichever.
Speaker Change: Thank you, Richard allowing human opportunity to hijack Nicole next question. Please.
Speaker Change: Next question is from fitness from question Okay.
Speaker Change: Okay.
Speaker Change: Good luck.
Speaker Change: Okay Duston will assist us from Bernstein two questions. Please.
Pipeline first one F&B budget with a long list of phase two products.
Speaker Change: So how will you manage the R&D budget going for what's a good problem 12, but any color would be great.
Speaker Change: My second question is for Thomas.
Speaker Change: We see more and more.
Speaker Change: These projects on the on the pipeline and on the useful stable.
Speaker Change: Alright.
Speaker Change: Phase III in the areas.
Speaker Change: Total nerds could you maybe elaborate a bit even though your 2026, but how would you see these projects are nicely.
Speaker Change: With the addition to your existing.
Speaker Change: The franchise, thank you and your phone.
Managing the R&D budget.
Speaker Change: So just sort of prolonged afternoon.
Speaker Change: For 2025, we expect to moderately crews in terms of R&D spend and investment, but don't forget that this comes to 900 million plus increase in 2024 by 23.
Speaker Change: Don't forget to you, though that obviously I think is the case every year, we have the projects being completed and new projects coming in and new clinical trials.
Speaker Change: We are comfortable with the amount that we have for qualified with a slight increase over 2024 once again.
Speaker Change: $900 million cost increase for 2026, we have not provided any indication for the time being we're working on it.
Speaker Change: Thank you alright, good Thomas Thanks for the question for the Wall. Indeed, I like the way you framed the question, Phil we really control to beat in resi Sunshine. So the first half was the default.
Speaker Change: As we just talked about being able to call.
Speaker Change: And as I stated before we want to make sure that we complement that with an RSV total approach.
Speaker Change: Second season, and thereafter, as well as with Enel, which are moving forward with respect to combinations.
Speaker Change: RSV toddler candidate Youre talking about indeed, when phase III 2026 renewals will be an important one one I'm, particularly excited about this one because it really complements very well with.
Speaker Change: On <unk> first season, you'll get your newborn predicted with better signals.
Speaker Change: <unk> you want to make sure that you're able to pull back and look at.
Speaker Change: Complete protection I E. The thing anything, but an implantable product.
Speaker Change: <unk> is the immunity and to Cleveland nothing is lower risk for heart disease, but also.
Speaker Change: Let's pellets OLED, which is why we're going for us in front of that approach.
Speaker Change: We think it makes a lot of sand they are a significant burden of disease in <unk>.
Speaker Change: At one year two years three years of age and we believe that we have.
Speaker Change: Step four does that have any competitive competitor in this area. That's why we're so excited about it.
Speaker Change: <unk>. Okay. Next question. Please next question is from David Risinger from Leerink David.
David Risinger: Yes, thanks, very much and <unk>.
Speaker Change: Congrats on all of the strong business momentum so.
Speaker Change: My two questions are first one amount of <unk> sales are factored into 2025 sales guidance.
Speaker Change: Should we expect topline press releases on phase III trial results or what we need to wait for.
Speaker Change: You to provide updates on them in conjunction with.
Speaker Change: Quarterly results calls thank you.
Speaker Change: Okay. Thank you <unk>.
Speaker Change: Maybe I thank for the question David.
Speaker Change: As you know very well, we've announced last year.
Speaker Change: We know the banks to make sure that.
Speaker Change: We are really looking for and building what we believe could be a competitive nothing competitive, but winning teekay for flu and COVID-19 competition. We always highlighted a couple of things that I would like to stress again yesterday first of all the big <unk>.
Speaker Change: So we need to get to the right Commission that can influence the need and we believe this market to be well served needs to ensure that the right level of 50 <unk>.
Speaker Change: Jesse.
Speaker Change: Making sure that we have to almost every day and of course, when you have two winning leaders and true with <unk> and <unk>.
Speaker Change: <unk> that's why we've added people that we have received fast track designation for both phase one two trial.
Speaker Change: Then we have new vaccine.
Speaker Change: First in 2025, 26 months, although I'm going to start commercializing <unk> first and foremost in the U S.
Speaker Change: In 2025.
Speaker Change: Firstly is to learn about the COVID-19 market. It will be our first time in the U S. So we need to understand sort of always in the market.
Speaker Change: Are they on COVID-19, and you felt like the fact that there is a home. So actually you picked up to enable COVID-19 vaccine.
Speaker Change: Is indeed conservative to the marketplace, you know very well that data PD USA date in the U S. For this product in April so, let's make sure that we first moved forward to the pizza delivery, we have and of course, we have not disclosed any target specifically for COVID-19 in 2025 and 2026, but as you know very well. This has been already included.
Speaker Change: The guidance that has been shared with us well again, it's going to be progressive learning building on the market and then what are you launching at scale a combination yes. Thanks, Colin I think you said in February I mean, it would be interesting to have a known mrna COVID-19 opportunity.
Speaker Change: A lower burden, we have note from a safety perspective and that leads to.
Speaker Change: Stronger choice will fund out it could be what changes the COVID-19, VCR rate, which has been collapsing we certainly think so.
Speaker Change: You'll remember what it was like to get.
Speaker Change: Yes.
Speaker Change: Safety challenges on Loopnet okay.
Speaker Change: Over to you are you going to do press releases with Phase II, Let me start with a very simple comment that we are very conscious of materiality.
Speaker Change: Requirements, we will remain great stewards of that that's the very first point beyond anything else.
Without speaking specifically about clinical trial, we're also conscious of the embargo requirements of major.
Speaker Change: Meetings, and we need to be very thoughtful about that so we will absolutely not commit to publishing topline phase II data as they come except by that material or.
Speaker Change: As part of a broader story.
Speaker Change: Please.
Speaker Change: Watch the broad story development.
Speaker Change: Around R&D and pipeline is down a bit as we got we're now becoming a science company.
Speaker Change: Okay. Next question next question is from Peter <unk> from BNP exam.
Speaker Change: Hello, how are you.
Speaker Change: Okay.
Speaker Change: It's <unk> from BNP Paribas Exxon.
Speaker Change: Good question.
Speaker Change: Hulu just until <unk>.
Speaker Change: Really interesting asset in light of your data and you see and I am particularly crowds.
Speaker Change: Also given the market seems describes all of the value of this cost to competing assets.
Speaker Change: Recent parallel checkpoints, a biomarker that strategy is being keenly sort so I'm just seeking confirmation from you and your partner Teva.
Speaker Change: Mark will be deployed.
Speaker Change: Our phase III program timings on earnings on the Phase III start and whether you are considering going beyond IBD and your clinical development program and then a very quick one for Francois on depicts and just simply on profitability dynamics in light of the COPD launch accelerating volumes in the manufacturing changes that youre, putting through the simple question first.
Speaker Change: I'm not asking for numbers, but just will 2025, b a significant sort of gross margin driver.
Speaker Change: As it relates to depiction or do we need to be a little more conservative and wait until 2026.
Speaker Change: In Q the Biomarkers.
Speaker Change: Hi, Peter and congratulations I should start by saying.
Speaker Change: The.
Speaker Change: Kelvin I story.
Speaker Change: We didn't know we did a great deal around the tailwind.
Speaker Change: Quiet until the science speaking I'll speak for itself.
Speaker Change: Based on preliminary data, we are very excited about how competitive our molecule is.
Speaker Change: I don't share necessarily youll cow alcohols.
Speaker Change: Feedback.
Speaker Change: Status of the capital required by our market base.
Speaker Change: Stratification as our obligatory option, but of course, we are we are active.
Speaker Change: And thinking about how we design our phase III trial, the maximum value for patients and in terms of lifecycle management options.
Speaker Change: We are working diligently with all.
Speaker Change: Our partner Teva to establish the best path forward with lifecycle management options.
Speaker Change: More on this space.
Speaker Change: In February.
Meeting them.
Speaker Change: With that ill hand, David.
Speaker Change: Francois I'm, Brian next question.
Speaker Change: Peter on the question of gross margin, let me give you a little bit.
Speaker Change: Insight so Stephanie if you look at it for the five years ago, we were four to five percentage points lower than our peers in terms of gross margin.
Speaker Change: There's a long way because if you look at it in 'twenty four we were basically at par with appeals, which gives a good your discretion of the way, we manage our portfolio and we manage them efficiency program as well in 2025, we expect to see some further progress in our gross margin.
Speaker Change: <unk>, which is partly coming from duplex, but does not only by the way our growth even in 'twenty four and this is a <unk> 25 in the coming years.
Speaker Change: I'd say, we have a duplex independent just to increase our gross margin. So it's a combination of factors, but there is a fair contribution from <unk>, but its not how did you pick and I must say.
Speaker Change: <unk>.
New product countries have a contribution to it as well.
Speaker Change: Okay, Peter will allow a little bit more time.
Speaker Change: The next call given the length of the new title right. Next question. Please next question is from Steve Scala from TD Cohen.
Speaker Change: Thank you so much.
Speaker Change: <unk> has the best in class profile held up when the data is cut by biologic naive and biologic experienced patients. So that's the first question and secondly are you highly confident FTA will not ask for additional data such as the <unk> data for approval of <unk>.
Speaker Change: And as the every week monitoring for three months likely to be what's in the label. Thank you.
Speaker Change: Okay, I think it was trying to.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: Well I don't want to.
Speaker Change: Combined the discussion at <unk> later this month in terms of biologically nave and biological experience.
Speaker Change: If I asked it to say that we warmly invite you to the Academy Tang.
Speaker Change: Come and see the.
Speaker Change: <unk> of our data I think you'll be pleasantly surprised.
Speaker Change: And then very specifically with.
Speaker Change: PFS.
Speaker Change: S VNS.
Speaker Change: As you know.
Speaker Change: Where we.
Speaker Change: I can tell you with the FDA.
Speaker Change: <unk>.
Speaker Change: Encouraged us to submit.
Speaker Change: S. Vms now as United results of the <unk> that comes out later in the year you can infer exactly what the data says that requirement will be for a CMS in that regard of course.
Speaker Change: Any decision is subject to regulatory.
Speaker Change: Final active review.
Speaker Change: And then with respect to the label and monitoring I think youll see that.
Speaker Change: The FDA will it's here pretty closely.
Speaker Change: The phase III clinical trial protocol that standard and this kind of space intensive intensiveness in regular monitoring.
Speaker Change: And we anticipate that it will play out.
Speaker Change: In the label.
Speaker Change: We should be upfront and straightforward inside the side I think we support.
Speaker Change: The decision by the regulators to provide the most.
Speaker Change: A thoughtful and safe cost for patients to take this.
Speaker Change: Disease modifying drug.
Speaker Change: Thank you [laughter] amendments question. Please yes.
Speaker Change: Next question is from Emmanuel Papadakis from Deutsche Bank.
Speaker Change: Thanks Second question and then a couple of hospitals.
Speaker Change: Maybe a question for pumps wall on the outlook for oil.
Speaker Change: Broker margin.
Speaker Change: Talk a little bit about sequential margin leverage than.
Speaker Change: We should see revenue growth beyond 2025.
Speaker Change: We obviously have some financial.
Speaker Change: <unk> take into account of a genuine co development.
Speaker Change: Line, some royalty bond pumps, just your thoughts on where the steady modest margin improvement in the midterm.
Speaker Change: He is a reasonable assumption and then maybe a question to whom it on one of the handful of phase two interesting phase two data points.
Speaker Change: But Linda Sunset.
Speaker Change: CNS the phase one data last year showed moderate efficacy.
Speaker Change: Essentially it's a combination.
Speaker Change: Opportunity with biologics.
Speaker Change: And we did just wants to say so but it could be seen what are you hoping to see in that.
Speaker Change: Is the plan to take it forward now as a biologic combination phase III. Thank you.
Speaker Change: Okay.
Speaker Change: So let me just I don't want to give the guidance, but directionally I can help you a bit obviously, we expect.
Speaker Change: A strong level of growth in the coming years suddenly the world. So that's.
Speaker Change: The gross margin should continue to increase as well over the next coming years and as I said earlier R&D.
Speaker Change: Early to say because it depends on what's the readout will be in the coming months.
Speaker Change: Directionally.
Speaker Change: You can expect that there will be.
Speaker Change: Two declining growth for <unk>.
Speaker Change: But the sales and marketing Paul could increase a little bit.
Speaker Change: Early heavy program coming in you were mentioning one important item which is the.
Speaker Change: While contributing with regeneron.
Speaker Change: Of the reimbursement for R&D, there, which is coming at the end of 2000 since the beginning of 2007. So this will put a little bit of pressure probably in 'twenty seven.
Speaker Change: That being said not in absolute value antibody with <unk>, increasing in absolute value each and every single year, but there is a possibility that it could.
Speaker Change: Be a little bit under pressure as a percentage of <unk>.
Speaker Change: <unk> seven from what we can see to the.
Speaker Change: Let's not forget that we I wasn't like them that are coming in like two <unk> royalties, which she is going to grow significantly in the future as well. So I think thats directionally. That's what I can tell you without once again I'm not providing guidance for the medium term in terms of the line.
Speaker Change: I think I think you mentioned dimension of Dnb.
Speaker Change: But as I just mentioned so I think that is.
Speaker Change: An important point to consider.
Speaker Change: <unk>. Thanks.
Speaker Change: Thanks for the question.
Speaker Change: So firstly.
Speaker Change: Leasing south last year that data on track as.
Speaker Change: As we always committed to releasing that in the first half of this year and Thats exciting.
Speaker Change: Just to Dimensionalize that for you yes of course.
Speaker Change: There is a logic for it to be used in combination treatment strategy, particularly in the modern era.
Speaker Change: <unk>.
Speaker Change: <unk> seen the accommodation.
Speaker Change: <unk> blockade can both increase the efficacy leg.
Speaker Change: Ah surpassed efficacy link and also provide durability, but I just want to be clear as well as combination therapy remember therapies now, becoming a premier immunology powerhouse and we have network that can totally where we can combine our molecules to generate greater value for patients.
Speaker Change: Just to be clear and clock psoriasis.
Speaker Change: Not only is that optionality for combination therapy, depending on the results well certainly consider consider using it as monotherapy.
Speaker Change: Pre biologic and small molecule <unk>.
Speaker Change: Nevertheless, I should remind everybody however that rheumatoid arthritis.
Speaker Change: Read out later in the year and Thats, an even more classically TNF mediated disorder, we're excited to see that in monotherapy and combination therapy and there are further indications supporting AR.
Speaker Change: A broad lifecycle management strategy in immunology.
Speaker Change: Yes.
Speaker Change: The IRI data will be important.
Speaker Change: TNF driver.
Speaker Change: I think the question was also what are you hoping to see.
Speaker Change: If safety is right combination of opportunity is significant and then we will see a lot of as well.
Speaker Change: We look forward to that Okay. Next question. Please next question from Charlie Chen from Barclays.
Speaker Change: Okay.
Speaker Change: Got it.
Speaker Change: Okay. Okay. So we'll come back to you.
Speaker Change: Sorry.
Speaker Change: A lot of money.
Speaker Change: Oh. Thank you. Thank you.
Speaker Change: On behalf of Nics.
Speaker Change: Going back to pay for this.
Speaker Change: This device hung so we're ordering and can you talk to Paul Thanks, well go next.
Speaker Change: Very helpful.
Speaker Change: Just trying to on the former but more about how much of it.
Speaker Change: Well that is almost a week.
Speaker Change: Thanks.
Speaker Change: And how do you consider the pricing.
Speaker Change: We have over here.
Speaker Change: In 2024, we saw a slight price increase by 5%.
Speaker Change: That's helpful.
Speaker Change: Pediatrics.
Speaker Change: You keep this trend or would you consider the price slightly differently.
Speaker Change: For the next season due to weather.
Speaker Change: The potential competition.
Another question on Florida vaccine business.
Speaker Change: Obviously, there's a lot of attention on long island.
Speaker Change: Sure.
Speaker Change: Are you.
Speaker Change: And about like.
Speaker Change: Vaccine hesitancy of impacting you.
Speaker Change: How widely publicized.
Speaker Change: Yes.
Speaker Change: There are no changes in policy.
Speaker Change: Great.
Speaker Change: Two great questions. Thank you very much Shirley.
Speaker Change: First of all on <unk>, maybe a couple.
Speaker Change: Point on your question on the ordering patterns.
Speaker Change: First of all from an ordering pattern perspective, I think it is very important to be clear that <unk> is not flu. So the product is not changing every year.
Speaker Change: Seasonal product because of that even though he organization much more focus on some part of the year is the same political youre wrong. So you don't have the same playbook effect.
Speaker Change: But I think that's an important differentiator in mind, having said that more specifically for 2025 I think.
Speaker Change: Does that in your question was about the fact that.
Speaker Change: First mover advantage I would say yes.
Speaker Change: Just because of the <unk> again, if you look at our political qualified we have unprecedented dividends.
Speaker Change: <unk> showing massive.
Speaker Change: Sure <unk>.
Speaker Change: And for new bonds in countries that use <unk> and by the way not just end up in.
Speaker Change: In addition in countries that have decided to go although it than we had before so I think that's an important factor to look at now.
Speaker Change: <unk> will be.
Speaker Change: Maybe specifically for 2025 and a little bit of assessment without just because.
Speaker Change: If you look at the U S market physician addition of <unk>.
Speaker Change: <unk> this year.
Speaker Change: But we did have really appreciate it.
Speaker Change: The safety profile and now that guest was update we are able to deliver whenever they want it to be 25%. So we can follow up.
On the price point of <unk>.
Speaker Change: With all this in 2025.
Speaker Change: We are seeing the situation as a.
Speaker Change: No illusion of price points in 2000, and I think we wait on hold there.
Speaker Change: On the second part the second question, sorry about your AD Unvaccinated Nancy I.
Speaker Change: So I don't think we are in the position to make a lot of conjecture, but the future.
Speaker Change: At this point I think that are important and that is to your question.
Speaker Change: First of all he's vaccine it tends to be a cancer.
Speaker Change: <unk> seen instances of concern any vaccines Ed on the planet, but also the fact that actually when there is a vaccine existence. There is less plus Asia and there is multitude interestingly and thats, what I want to close these points, it's interesting to see that as a real failure of soft flu vaccination coverage.
Speaker Change: Right you still come back of influenza in the U K in France, and Japan, and many other markets will actually be days, an increase when the severity of the nimble office position due to winter. This winter I think it's a good wakeup call and if that Canadian it goes too much the wrong way, we will see more and more disease.
Speaker Change: So we need to motivate king we are welcoming mitigate about those about the safety.
Speaker Change: And we feel confident about the future due to the quality of our product. Thank.
Speaker Change: Thank you next question, Yes next question from Alex <unk> from Stephens, Inc.
Speaker Change: Okay.
Speaker Change: Yes. Good afternoon. Thank you two questions first on <unk>.
Speaker Change: Any chance to get a better understanding of what your ambition is with our with the drug. It's it's a two player market, whereas the other guys I think 95% market share.
Speaker Change: So if you are successful.
Speaker Change: <unk> chosen the gap could be an exceptional opportunity for you, but it was the first about data and now you have to date. It was down about formulation you will sooner formulation. So probably the remaining question is the willingness to invest and support on the commercial side.
Speaker Change: The relaunch or stronger launch based on those data so where are you. What's the market intelligence is telling you is it's too late is it becoming much too much your market or youre, not having too much time.
Speaker Change: Given patent.
Speaker Change: Black stone royalties anything to help us understand whether it can be a blockbuster for sure, but a multi blockbuster maybe and the second question very short one given the current dynamics with <unk>.
Speaker Change: Is that one year next blockbuster no later than this year. Thank you.
Speaker Change: Well.
Speaker Change: I'll take the second part of it will be a blockbuster this year <unk>.
Speaker Change: I'm sorry.
Speaker Change: Lisa ambition, yes, and thank you so much for the question I think you've framed it really nicely. If you look at that CD 38 marketplace. Again. This is a marketplace, where they are physicians like the CD CD 38 target for multiple myeloma, we estimate that that marketplace could be somewhere in the range of $16 billion by 2030 timeframe. When now as <unk> said, we had a real.
Speaker Change: Strong drumbeat of new information coming out of course really favorable that I think putting us in a first line therapy, but also the recent data that we have for the on body device on body device and I think that's not to be underestimated. The sub Q formulation offers a significant advantage in terms of patient and nurse experience utilizing an on body delivery device.
Speaker Change: We believe this could ease of use and reduce some of the treatment burden along with a strong efficacy and safety that we provided so we absolutely do not think its too late we absolutely believe we have all of the elements we need now to compete in the marketplace. We're investing behind this asset as we said before and we believe it's going to be a multiple blockbuster, yes, maybe I'll just just said.
Speaker Change: Tubular blockbuster this year, so pleased with potential blockbuster next shift and Brian.
Speaker Change: The on body device opportunity for us to manage multiple patients simultaneously is still from our oncology.
Speaker Change: Office perspective, still a major advantage because we do have great data, we do have an incredible medicine these things matter.
Head to head race, Okay last.
Speaker Change: Question I think yes last question from me kind of Adobe <unk> from Santander.
Speaker Change: Hello, everyone. Thank you for taking my question wanted to ask you regarding your outlook on tariffs. The Trump administration has openly stated that it has been considering places and carries on both Apis and pharmaceuticals right. Now we know that the tariff talk look it's still a bit uncertain, but could you give us some light on how you are.
Speaker Change: Top line or operating income could be affected if either two 5%, it's universal tariff site implemented or more aggressive 75% of salaries to China are applied and in more qualitative terms, how could you protect yourself against these measures.
Speaker Change: Cost potentially increased production activity in the U S right.
Speaker Change: Try to ration for any potential medicine shortages.
Speaker Change: <unk>.
Speaker Change: Oh, he can't do photo speaking just a couple of comments first of all is difficult for us to comment on something thats not real today. So very very good equipment just be aware of the fact that we have a significant industrial base in the U S, which is about 25% of what we market where money is coming from the U S. So we are a little bit under indexed versus al.
Speaker Change: Commercial presence now but.
Speaker Change: Once again very difficult to comment on something.
Speaker Change: Platinum for discussion.
Speaker Change: Okay. Thank you very much Francois thank you to everybody for.
The comments, we've got a busy year I think ahead of US we made significant progress in 2024, we have created our EPS guidance twice that we continued to advance to becoming a focused science driven Biopharma company and.
Speaker Change: And as we enter 2025, we provided you guidance today, including mid to high single digit sales growth expectation and a strong rebound in earnings as well as a solid outlook for our pipeline. So thank you for your interest in Sanofi and with this we'll now towards thank you.