Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q1 2013 Earnings Presentation
41 slides from Sanofi Sa's earnings presentation, May 2, 2013
Slide 1: Q1 2013 Results
Q1 2013 RESULTS May 2, 2013
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their under
Slide 3: Agenda
Agenda Key Highlights ● Christopher A. Viehbacher, Chief Executive Officer Business Performance ● Hanspeter Spek, President, Global Operations Financial Performance ● Jérôme Contamine, Executive Vice President, Chief Financial Officer Q&A 3
Slide 4: Key Highlights
KEY HIGHLIGHTS Christopher A. Viehbacher Chief Executive Officer 4
Slide 5: Key Genericized Products Represented Only ~€260m of Sales for a Second Quarter
Key Genericized Products Represented Only ~€260m of Sales for a Second Quarter in a Row Key Genericized Products(1) - Quarterly Sales (€m) €813m €752m 3.2% of sales €399m €257m €259m Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 One quarter to go before the impact of Key Genericized Products(1) becomes mi
Slide 6: Growth Platforms Grew by +8.6% in Q1 2013 and Reached 71% of Sales
Growth Platforms Grew by +8.6% in Q1 2013 and Reached 71% of Sales Q1 2013 growth at CER Emerging Markets €2,719m +6.5% Diabetes Solutions €1,542m +19.6% Consumer Healthcare €811m +3.1% Vaccines €697m +15.9% Animal Health €554m -3.1% Genzyme(1) €493m +25.5% Other Innovative Products(2) €157m +13.7%
Slide 7: Q1 2013 Sales Affected by U.S. Loss of Exclusivity of Eloxatin and FX
Q1 2013 Sales Were Affected by U.S. Loss of Exclusivity of Eloxatin® in August 2012 and by FX Fluctuations(1) Sales €8,870m €9,040m €8,511m €8,526m €8,059m -2.8% at CER(2) Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 (1) Reported sales of Eloxatin® in the U.S. were €321m in Q1 2012 but only €8m in Q1 201
Slide 8: Loss of U.S. Exclusivity of Plavix and Avapro Impacted Business EPS
The Loss of U.S. Exclusivity of Plavix® and Avapro® Impacted Business EPS by €0.42 in Q1 2013 Loss of Exclusivity of Plavix® & Avapro® in the U.S.(1) "Other Revenues" "Income from Associates" €426m Impact on €297m Q1 2013 Business Net Income: €98m €562m (2) €18m Q1 2012 Q1 2013 Q1 2012 Q1 2013 Resid
Slide 9: Q1 2013 Business EPS Better than Q4 2012 Trough
As Anticipated, Q1 2013 Business EPS Was Better than Q4 2012 Trough Business EPS €1.83 €1.67 €1.46 €1.17 €1.22 -29.0% at CER(2) (1) (1) (1) (1) Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Sanofi expects to resume Business EPS growth in H2 2013 (1) With the retroactive application of IAS19R (2) On a repo
Slide 10: Recent Regulatory Approvals Have Resulted in Six New Product Launches
Recent Regulatory Approvals Have Resulted in Six New Product Launches Products Indications Launch Status ® Metastatic Launched in the U.S. in August 2012 Colorectal Cancer EU roll-out starting in late March 2013 Prevention of Poliomyelitis Launched in Japan in September 2012 ® Relapsing Forms Launch
Slide 11: Important Study Releases and Regulatory Milestones in the Last 4 Months
Several Important Study Releases and Regulatory Milestones Achieved in the Last 4 Months Clinical Data Releases Regulatory Milestones ● Eliglustat tartrate - Phase III in ● Lemtrada™ FDA file acceptance in MS Gaucher disease (ENCORE) ● Aubagio® positive CHMP opinion in ● Dupilumab - PoC in Ato
Slide 12: Additional Phase III Readouts and Regulatory Decisions Expected Throughout 2013
Additional Phase III Trial Readouts and Regulatory Decisions Expected Throughout 2013 2013 Expected Headline Phase III Data Releases Q2 Q3 Q4 ● New insulin glargine formulation in Diabetes (EDITION I & II) ● Otamixaban in Acute Coronary Syndrome (TAO) ● JAK2 inhibitor in Myelofibrosis (JAKARTA)
Slide 13: Composition of the Executive Committee as of July 1st, 2013
Composition of the Executive Committee as of July 1st, 2013 Christopher A. Viehbacher Jérôme Contamine Elias Zerhouni Chief Executive Officer Executive VP President Chief Financial Officer Global R&D David-Alexandre Gros Peter Guenter Pascale Witz Olivier Charmeil Executive VP Executive VP Executive
Slide 14: Business Performance
BUSINESS PERFORMANCE Hanspeter Spek President, Global Operations 14
Slide 15: Emerging Markets Represented >1/3 of Total Sales
Emerging Markets Represented >1/3 of Total Sales and Delivered Solid Sales Growth in Q1 2013 ● Q1 2013 Emerging Markets sales of €2,719m, up +6.5% at CER ● Strong growth in Diabetes, Vaccines and Genzyme ● Lower sales of Generics and Oncology products ● BRIC sales of €975m, up +10.7% at CER Q1 2013
Slide 16: Double-Digit Growth of our Diabetes Franchise for Nine Consecutive Quarters
Double-Digit Growth of our Diabetes Franchise for Nine Consecutive Quarters ● Q1 2013 Diabetes sales of €1,542m, Quarterly Sales (€m) up +19.6% at CER ● Strong performance of Lantus®, up €1,338m +21.3% at CER ● SoloSTAR® accounted for 57.0% of U.S. sales (vs. 51.1% in Q1 2012) ● Strong growth in Eme
Slide 17: Consumer Healthcare Showed Steady Performance Except in China
Consumer Healthcare Showed Steady Performance Except in China in Q1 2013 ● Q1 2013 sales of €811m, up +3.1% Q1 2013 Sales (€m) at CER ● Double-digit sales growth of several €368m leading brands (Doliprane®, Dorflex®, Enterogermina®) ● Lower sales in China due to reduced trade inventory levels and on
Slide 18: Merial Performance Reflected Lower Sales of Frontline
Merial Performance Reflected Lower Sales of Frontline® in Q1 2013 ● Q1 2013 sales of €554m, down Quarterly Sales (€m) -3.1% at CER ● Companion Animals sales of €374m, €554m down -5.3% at CER ● Frontline® impacted by unfavorable weather conditions, increased competition and weak economic environment
Slide 19: Genzyme Rare Diseases Growth Accelerated in Q1 2013
Genzyme Rare Diseases Growth Accelerated in Q1 2013 ● Q1 2013 Rare Disease sales of Quarterly Sales (€m) €171m €473m, up +20.5% at CER driven by €149m supply recovery and growing number of patients on therapy €112m €116m ● Fabrazyme® sales reached €92m €92m doubling in the U.S. as well as in Western
Slide 20: A Promising Entry in the Large MS Market
® A Promising Entry in the Large MS Market TEMSO(4) ● Aubagio® Q1 2013 sales of €20m ● Encouraging U.S. launch trends(1,2) RELAPSE 31% ● TRx broadly tracking Gilenya® DISABILITY 30% ● >83% of patients switched to AUBAGIO® were most recently TOWER(4) on IFN-beta or Copaxone® RELAPSE 36% ● Positive CH
Slide 21: Vaccines Deliver a Strong First Quarter
Vaccines Deliver a Strong First Quarter Quarterly Sales (€m) ● Q1 2013 sales of €697m, up +15.9% €697m at CER ● PPH sales of €270m, +15.9% at €617m CER driven by favorable phasing of +15.9% at CER Pentaxim® rollout in China and IPV campaign in Japan ● Influenza sales of €119m, +34.8% at CER from suc
Slide 22: Financial Performance
FINANCIAL PERFORMANCE Jérôme Contamine Executive Vice President, Chief Financial Officer 22
Slide 23: Q1 2013 Sales Impacted by Patent Cliff and FX
As Expected, Q1 2013 Sales Were Impacted by the Residual Effect of the Patent Cliff and by FX Q1 2013 Sales (€m) €8,511m -€553m €212m €8,059m €464m -€151m ® Q1 2012 Key Copaxone Growth FX Impact Q1 2013 (2) Genericized and Others Platforms Products(1) (1) Key genericized products include Lovenox® U.
Slide 24: Q1 2013 Performance Impacted by Unfavorable Currency Headwind
Q1 2013 Performance Impacted by Unfavorable Currency Headwind in Japan and Latin America Quarterly Currency Impact (in % change) Sales Business Operating Income +6.4% +8.0% +8.2% +5.8% €561m €235m €277m €486m +4.0% +2.4% €120m +1.9% €187m +2.1% €166m €61m -2.5% -€212m -4.5% -€154m Q1 2012 Q2 2012 Q3
Slide 25: Q1 2013 Reflects Plavix/Avapro LoE but Good Cost Control
Q1 2013 Reflects the Impact of Plavix®/Avapro® U.S. LoE but also Illustrates Good Cost Control (1) €m Q1 2013 Q1 2012 % Change % Change (reported €) (CER) Net sales 8,059 8,511 -5.3% -2.8% Other revenues 98 426 -77.0% -76.5% Cost of sales (2,536) (2,608) -2.8% -1.1% Gross profit 5,621 6,329 -11.2% -
Slide 26: Q1 2013 CoS Ratio Slightly Better than FY 2012 Average
Q1 2013 CoS Ratio Slightly Better than FY 2012 Average(1) Cost of Sales (%) ● Slightly lower Cost of Sales (CoS) in Q1 2013: €2,536m, down -1.1% 31.5% 30.6% at CER ● CoS ratio slightly up in Q1 2013 vs. Q1 2012 reflecting: ● Loss of sales from Key Genericized Products with relatively low CoS ● Relat
Slide 27: Rigorous Control of R&D Expenses While Investing in Phase III Trials
Rigorous Control of R&D Expenses While Significantly Investing in Phase III Trials R&D Expenses (€m) ● Q1 2013 R&D expenses of €1,155m, down -0.6% at CER reflecting: €1,172m €1,155m ● Ongoing multiple Phase III trials (e.g. alirocumab, new insulin glargine formulation, JAK2, sarilumab) ● Lower expen
Slide 28: Increase in SG&A Expenses Driven by New Product Launch Costs
Increase in SG&A Expenses in Q1 2013 Driven by New Product Launch Costs SG&A Expenses (€m) ● Q1 2013 SG&A expenses of €2,129m, up +2.7% at CER reflecting: €2,116m €2,129m ● Sales & Marketing investment in product launches (e.g. Genzyme MS) ● Tight control of G&A expenses down -4.8% at CER ● Lower SG
Slide 29: Q1 2013 Business EPS Reflected Residual Impact of the Patent Cliff
As Expected, Q1 2013 Business EPS Reflected the Residual Impact of the Patent Cliff(1) €m Q1 2013 Q1 2012 (1) % Change % Change (reported €) (CER) Business operating income 2,344 3,441 -31.9% -27.4% Net financial expenses (140) (169) - - Income tax expense (591) (848) - - Effective tax rate -26.5% -
Slide 30: Free Cash Flow Affected by U.S. Loss of Exclusivity of Plavix and Avapro
Free Cash Flow Affected by U.S. Loss of Exclusivity of Plavix® and Avapro® Q1 2013 (€m) -7,440 -7,719 - 301 -345 +1,459 FCF -401 +1,158 -133 Net Debt (1) Net Cash from CapEx Acquisitions Share Repurchase Other (3) Net Debt (1) Dec 31, 2012 Operating & Licensing Mar 31, 2013 Activities (2) Net debt d
Slide 31: Sanofi Expects to Resume Growth in H2 2013
Sanofi Expects to Resume Growth in H2 2013 1 Solid performance of our Growth Platforms representing 71% of sales 2 As expected, Q1 2013 Business EPS impacted by exclusivity losses in prior year 3 Continued good cost control illustrated by Q1 2013 OpEx 4 Guidance for FY 2013 reaffirmed 5 Significant
Slide 32: Appendices: R&D Pipeline
APPENDICES R&D Pipeline SANOFI
Slide 33: Late Stage Pipeline – Pharma & Vaccines
Late Stage Pipeline – Pharma & Vaccines Phase III Registration eliglustat tartrate N Insulin glargine Quadracel® Fluzone® QIV IM Glucosylceramide synthetase inhibitor New formulation Diphtheria, tetanus, pertussis Quadrivalent inactivated Gaucher disease Type 1+2 diabetes & polio vaccine; 4-6 y of a
Slide 34: Early Stage Pipeline – Pharma & Vaccines (Phase II)
Early Stage Pipeline – Pharma & Vaccines Phase II N N iniparib (BSI-201) FOV1101 fresolumimab Platinum-resistant ovarian cancer (2L) FDC prednisolone/cyclosporine TGFβ antagonist Metastatic triple negative breast cancer (mTNBC) Allergic conjunctivitis Fibrosis SAR3419 N N SAR279356 (F598) N SAR29283
Slide 35: Early Stage Pipeline – Pharma & Vaccines (Phase I)
Early Stage Pipeline – Pharma & Vaccines Phase I SAR153192 N SAR260301 N SAR252067 N Streptococcus pneumonia Anti-DLL4 mAb PI3K β selective Anti-LIGHT mAb Meningitis & pneumonia vaccine Solid tumors PTEN – Deficient tumors Crohn’s disease & Ulcerative colitis GZ402674 N SAR405838 (MI-773) N SAR11324
Slide 36: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 8 4 2 0 14 Diabetes Solutions 0 0 0 1 1 Cardiovascular Diseases 3 1 2 0 6 Immune Mediated Diseases 2 4 1 2 9 49 Infectious Diseases 0 3 0 0 3 Ophthalmology 4 1 0 0 5 Rare Diseases 2 0 1 0 3 Age Related Degenerative
Slide 37: Expected R&D Milestones
Expected R&D Milestones Product Event Timing Lemtrada™ (alemtuzumab) Expected CHMP decision in RMS in EU Q2 2013 Sarilumab Start of additional Phase III studies (COMPARE and ASCERTAIN) in RA Q2 2013 New insulin glargine formulation First Phase III headline results in diabetes (EDITION I & II) Q2 201
Slide 38: Appendices: Finance
APPENDICES FINANCE SANOFI
Slide 39: Business Net Income Statement
Business Net Income Statement First quarter Group Total Pharmaceuticals Vaccines Animal health Other Q1 2012(1) (1) € million Q1 2013 change Q1 2013 Q1 2012 change Q1 2013 Q1 2012(1) change Q1 2013 Q1 2012(1) change Q1 2013 Q1 2012(1) Net sales 8,059 8,511 (5.3%) 6,808 7,316 (6.9%) 697 617 13.0% 554
Slide 40: Reconciliation of Business Net Income to Consolidated Net Income
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million Q1 2013 Q1 2012(1) change Business net income 1,613 2,424 (33.5%) Amortization of intangible assets (775) (833) Impairment of intangible assets (10) (1) Fair value remeasurement of con
Slide 41: Consolidated Income Statement
Consolidated Income Statement € million Q1 2013 Q1 2012(1) Net sales 8,059 8,511 Other revenues 98 426 Cost of sales (2,539) (2,622) Gross profit 5,618 6,315 Research and development expenses (1,155) (1,172) Selling and general expenses (2,129) (2,116) Other operating income 71 206 Other operating e