Slide 1: Q2 2019 Results
Q2 2019 Results SANOFI July 29, 2019
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 Olivier Brandicourt Chief Executive Officer Financial Results Jean-Baptiste de Chatillon Executive Vice President, Chief Financial Officer R&D Update John Reed Executive Vice President, Global Head of R&D Olivier Charmeil Executive Vice President, China & Emerging Markets Karen
Slide 4: Key highlights
Key highlights Olivier Brandicourt Chief Executive Officer
Slide 5: Sanofi continued to deliver sales and Business EPS growth in Q2
Sanofi continued to deliver sales and Business EPS growth in Q2 Company sales Business EPS €8,176m €8,628m €1.25 €1.31 +3.9% +4.8% at CER(1) at CER Q2 2018 Q2 2019 Q2 2018 Q2 2019 CER: Constant Exchange Rates 5 (1) Q2 2019 sales increased +5.8% at CER/CS; Constant Structure adjusting for disposal of
Slide 6: Solid sales growth rate at constant structure in Q2 2019
Solid sales growth rate at constant structure in Q2 2019 Q2 2019 Company sales +5.8% at CER/CS €8,497m €8,176m -€142m €8,034m +€638m -€175m Q2 2018 EU Generics Adjusted for U.S. Lantus®, Pharma(2) Q2 2019 Disposal(1) EU Gx Disposal(1) U.S. sevelamer Vaccines & CHC at CER CER: Constant Exchange Rates
Slide 7: Strong momentum of Specialty Care and Vaccines in Q2 while Primary Care GBU performance declined
Strong momentum of Specialty Care and Vaccines in Q2 while Primary Care GBU performance declined Q2 2019 sales by Global Business Unit Growth at CER/CS(1) Company Sales €8,628m +5.8% Sanofi Genzyme (Specialty Care)(2) €2,292m +20.9%(3) Sanofi Pasteur (Vaccines)(4) €1,021m +24.7% Primary Care(2) €2,2
Slide 8: Double-digit growth in Emerging Markets supported by portfolio shift to Specialty Care and Vaccines
Double-digit growth in Emerging Markets supported by portfolio shift to Specialty Care and Vaccines Q2 2019 sales by geography Consumer Total sales Specialty Care Primary Care Vaccines Healthcare Growth at CER/CS €2,620m €3,844m €1,021m €1,143m €8,628m Global Sales +22.1% -5.2% +24.7% +1.1% +5.8% €2
Slide 9: Outstanding performance of Dupixent drives accelerated growth of Specialty Care in Q2
Outstanding performance of Dupixent® drives accelerated growth of Specialty Care in Q2 Specialty Care franchise highlights in Q2 €2,620m +22.1% Rare Blood Disorder Cablivi® sales reflect strong U.S. launch; Eloctate® impacted by U.S. competition €291m +2.2%(1) €2,071m Immunology €548m +166.3% Dupixe
Slide 10: Dupixent continues to see strong double-digit growth in NBRx from all specialties in the U.S.
Dupixent® continues to see strong double-digit growth in NBRx from all specialties in the U.S. U.S. NBRx by specialist(1) • Strong sequential NBRx growth(2) across all specialists: Adolescent AD launch • +23% dermatologists 2,000 Asthma launch • +22% allergists Branded DTC TV launch • +69% pulmonolo
Slide 11: High growth of Vaccines in Q2 largely due to continued recovery of Pentaxim in China and strong Booster sales
High growth of Vaccines in Q2 largely due to continued recovery of Pentaxim® in China and strong Booster sales Q2 2019 Vaccines sales evolution • Vaccines sales of €1,021m, up 24.7% €22m €1,021m €40m • PPH vaccines sales grew 41.5% to €502m €148m • China Pentaxim® sales of €83m reflects recovery and
Slide 12: Primary Care GBU sales decline in Q2 reflects pricing pressures and remaining impact from LoEs in U.S. market
Primary Care GBU sales decline in Q2 reflects pricing pressures and remaining impact from LoEs in U.S. market Primary Care GBU sales (by geography at CER/CS) • Primary Care GBU sales €2,281m, down 10.4% • Diabetes(1) sales €865m down 13.3% €2,482m €2,281m -10.4% • U.S. sales down 17.5% to €461m; U.S
Slide 13: CHC growth rate moderated by non-strategic brand divestments offsetting solid performance in Digestive
CHC growth rate moderated by non-strategic brand divestments offsetting solid performance in Digestive Q2 2019 CHC sales by categories • CHC sales up 1.1% to €1,143m reflecting growth in the U.S. (+5.5%) offset by lower Europe sales (-2.8%) • Digestive category growth up 10.1% driven by strong €147m
Slide 14: Another strong quarter in Emerging Markets in Q2 2019
Another strong quarter in Emerging Markets(1) in Q2 2019 Geographic breakdown of Q2 2019 sales €2,851m €2,164m U.S. EUROPE €322m €889m EURASIA(4) ROW(3) +8.4% -7.5% +13.4% +4.3% €553m of which €690m AME(5) €1,132m LATAM ASIA(2) €709m +1.7% CHINA +13.5% +12.3% +17.1% Emerging Markets sales of €2,724m
Slide 15: Strong growth in China continued in Q2 due to diversified portfolio with Specialty Care and Vaccines as key drivers
Strong growth in China continued in Q2 due to diversified portfolio with Specialty Care and Vaccines as key drivers Sanofi China Q2 sales breakdown • China sales €709m, up 17.1% • Vaccines and Specialty Care strong contributors Aprovel® • Stable sales of Plavix® and Aprovel® despite impact €75m from
Slide 16: Several potential approvals for new drugs and additional indications over next 12 months
Several potential approvals for new drugs and additional indications over next 12 months 2019 2020 Q3 Q4 Q1 Q2 Dupixent®(2) in Atopic Dermatitis in adolescents (EU) Fluzone® QIV HD for ≥ 65-years old age group (U.S.) Potential Dupilimab®(2) in Chronic Rhinosinusitis with Nasal Polyps (EU) approvals(
Slide 17: Financial results
Financial results Jean-Baptiste de Chatillon Executive Vice President, Chief Financial Officer
Slide 18: FX benefit on sales in Q2 mainly attributable to strengthening U.S. dollar
FX benefit on sales in Q2 mainly attributable to strengthening U.S. dollar Currency impact Company sales(1) Business EPS +€131m +€0.00 +0.0% +1.6% -€0.08 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2018 2019 2018 2019 (1) Main currency impact on Company Sales in Q2 2019: US Dollar (+€168m), Japanese Yen (+€23m),
Slide 19: Improved BOI in Q2 despite increased Other Operating Expense as mAb collaboration reached breakeven
Improved BOI in Q2 despite increased Other Operating Expense as mAb collaboration reached breakeven €m Q2 2019 Q2 2018 % Change (CER) Net Sales 8,628 8,176 +3.9% Other revenues 352 305 +9.2% Gross Profit 6,211 5,830 +4.7% Gross margin % 72.0% 71.3% R&D (1,588) (1,475) +5.4% SG&A (2,462) (2,499) -3.1
Slide 20: Q2 gross margin benefited from favorable geographic and product mix; R&D growth compensated by SG&A control
Q2 gross margin benefited from favorable geographic and product mix; R&D growth compensated by SG&A control Gross margin ratio(1) Operating expenses €4,050m 71.3% 72.0%(2) €3,974m +0.1% at CER €1,475m €1,588m 71.7% +5.4% at CER R&D €2,499m €2,462m SG&A -3.1% at CER Q2 2018 Q2 2019 Q2 2018 Q2 2019 CE
Slide 21: FY 2019 business EPS guidance increased
FY 2019 business EPS guidance increased FY 2019 Business EPS Approximately +5% at CER(1,2) Between +1% and +2%(3) FX impact on Business EPS based on July 2019 average exchange rates (1) Compared to FY2018 and barring major unforeseen adverse events (2) FY 2018 Business EPS was €5.47 21 (3) Differenc
Slide 22: Increasing Focus in R&D
Increasing Focus in R&D John Reed Executive Vice President, Global Head of R&D
Slide 23: Next chapter in the evolution of Sanofi R&D
Next chapter in the evolution of Sanofi R&D Vision Strategy Long-term objectives(1) • An industry innovation leader • Allocate resources to priority • 80% first or best in class bringing transformative therapeutic areas • 70% biologics solutions to patients • Leverage multiple therapeutic • 70% inte
Slide 24: Significant progress made on executing our R&D strategy in H1 2019
Significant progress made on executing our R&D strategy in H1 2019 • Announced discontinuation of 13 development and 32 research projects • 92% of development projects now in specialty care and vaccines Prioritization • Refocus of CV and diabetes research(1,2) • Restructured Regeneron IO, Alnylam, a
Slide 25: Increased research focus on Specialty Care and Vaccines while rigorously prioritizing development spend
Increased research focus on Specialty Care and Vaccines while rigorously prioritizing our development spend Evolution of pipeline projects Research(1) Development(2) 83 122 70 109 20 13 35 Primary Care 67 Specialty Care 94 44 Vaccines 65 13 12 9 8 Dec 2017 July 2019 Dec 2017 July 2019 (1) Number of
Slide 26: Majority of NMEs are wholly-owned and expected to result in improved Corporate profitability
Majority of NMEs are wholly-owned and expected to result in improved Corporate profitability Initial Submission NME Mechanism of Action Indication Timing (2) isatuximab anti-CD38 mAb 3L RRMM (ICARIA) 2019 fitusiran(1) RNAi therapeutic targeting anti-thrombin Hemophilia A & B 2020 sutimlimab anti-com
Slide 27: Building pipeline momentum with recent positive data read-outs across multiple assets in Q2
Building pipeline momentum with recent positive data read-outs(1) across multiple assets in Q2 Franchise Program Data read-out Scientific Forum • ICARIAmm phase 3 results (2) ASCO, EHA isatuximab • Phase 1b optimized infusion time(3) EHA Oncology anti-CEACAM5 • Proof of concept results(4) ASCO fitus
Slide 28: Isatuximab met primary endpoint of prolonging PFS in RRMM demonstrated by pivotal ICARIAmm study
Isatuximab met primary endpoint of prolonging PFS in RRMM demonstrated by pivotal ICARIAmm(1) study PFS (probability) • ICARIAmm is first phase 3 trial to evaluate an anti-CD38 1.0 0.9 in combination with Pd in RRMM 0.8 Isa-Pd mPFS 11.53 mos • Longest PFS observed in this population 0.7 • Consistent
Slide 29: Isatuximab demonstrated a positive and consistent effect on progression-free survival in all subgroups
Isatuximab demonstrated a positive and consistent effect on progression-free survival in all subgroups in ICARIAmm(1) Number of Hazard ratio Isatuximab was associated with reversal of significant Subgroup patients (95% CI) renal dysfunction(2) Favors Favors Isa-Pd Pd Isa-Pd Pd Isa-Pd Pd Baseline eGF
Slide 30: Isatuximab is being developed with the standard of care across the multiple myeloma treatment continuum
Isatuximab is being developed with the standard of care across the multiple myeloma treatment continuum Relapsed Refractory MM (RRMM) Newly Diagnosed MM (NDMM) HR-SMM (43%)(1) (47%) (1) (2%) (1) 3L+ RRMM 2L Transplant Ineligible Transplant Eligible Epidemiology (13%) (30%) (23%) (24%) DPd (U.S.) KRd
Slide 31: Anti-CEACAM5 achieved positive PoC; phase 3 expected to start by the end of 2019
Anti-CEACAM5 achieved positive PoC; phase 3 expected to start by the end of 2019 Best relative tumor shrinkage CEACAM5 ≥50(1) • Interim analysis in heavily pre-treated patients(2) Best relative with NSQ-NSCLC CEACAM5 ≥ 50% tumor shrinkage (%) 40 • ORR = 25%, DCR (PR + SD ) = 62.5% 20% • 10.5% grade
Slide 32: Fitusiran has the potential to be the first treatment indicated for Hemophilia A and B
Fitusiran has the potential to be the first treatment indicated for Hemophilia A and B with or without inhibitors Program update Potential differentiated profile • Durable efficacy and low ABR (median 1.08)(1) • Fitusiran utilizes RNAi to down-regulate • >60 subjects treated with fitusiran(2) anti-t
Slide 33: BIVV001 is a potential best-in-class factor therapy for hemophilia A patients
BIVV001 is a potential best-in-class factor therapy for hemophilia A patients BIVV001 Factor VIII activity(1,2) • First FVIII to break the VWF-imposed t1/2 ceiling Mean plasma FVIII activity (IU/dL) • Novel fusion rFVIII protein with XTEN polypeptides and FVIII binding VWF D3 domain 100 • Proof of C
Slide 34: Nirsevimab is being developed with the ambition to be the first RSV-preventative immunization for all infants
Nirsevimab(1) is being developed with the ambition to be the first RSV-preventative immunization for all infants Strong Phase 2b data in healthy pre-term infants 29-35 weeks(3) • 90% of children worldwide expected to be infected with RSV before the age of 2, >80% of infants hospitalized are otherwis
Slide 35: R&D momentum driven by execution on strategy and positive data read-outs
R&D momentum driven by execution on strategy and positive data read-outs Accelerating transformation of R&D with shifting focus to specialty care and vaccines Building capabilities in digital platforms, gene therapy and biologics Positive data on priority programs in Rare Blood Disorder, Oncology, a
Slide 36: Key highlights
Key highlights Olivier Brandicourt Chief Executive Officer
Slide 37: Q2 performance drives continuation of new growth phase
Q2 performance drives continuation of new growth phase New growth phase net sales (in % at CER) • Important R&D milestones achieved in the quarter • Improved growth profile extended into Q2 2019 6.3% • Accelerated growth contribution from Dupixent® 3.9% 4.2% 3.9% • Opex growth of 1% in H1 2019 0
Slide 38: Finance appendices
SANOFI Finance appendices
Slide 39: Net debt evolution in H1 2019
Net debt evolution in H1 2019(1) €19m €3,834m €2,850m €18,705m €17,628m €631m €705m (2) Net Debt Free cash flow Acquisitions & Restructuring Dividend Other Net Debt December Licenses net of & Operational June (3) (3) 31, 2018 Proceeds from Excellence 30, 2019 disposal of assets (1) Credit ratings re
Slide 40: 2019 currency sensitivity and Q2 2019 currency exposure
2019 currency sensitivity and Q2 2019 currency exposure 2019 Business EPS Currency Sensitivity Currency Variation Business EPS Sensitivity U.S. Dollar + 0.05 USD/EUR - EUR 0.10 Japanese Yen + 5 JPY/EUR - EUR 0.02 Chinese Yuan + 0.2 CNY/EUR - EUR 0.02 Brazilian Real + 0.4 BRL/EUR - EUR 0.01 Russian R
Slide 41: Business Net Income Statement – Q2 2019
Business Net Income Statement – Q2 2019 Second Quarter 2019 Pharmaceuticals Consumer Healthcare Vaccines Others (1) Total Group € million Q2 2019 Q2 2018 Change Q2 2019 Q2 2018 Change Q2 2019 Q2 2018 Change Q2 2019 Q2 2018 Change Q2 2019 Q2 2018 Change Net sales 6,464 6,250 3.4% 1,143 1,115 2.5% 1,0
Slide 42: Business Net Income Statement – H1 2019
Business Net Income Statement – H1 2019 First Half 2019 Pharmaceuticals Consumer Healthcare Vaccines Others (1) Total Group € million H1 2019 H1 2018 Change H1 2019 H1 2018 Change H1 2019 H1 2018 Change H1 2019 H1 2018 Change H1 2019 H1 2018 Change Net sales 12,726 12,199 4.3% 2,399 2,353 2.0% 1,894
Slide 43: Consolidated Income Statements
Consolidated Income Statements € million Q2 2019 Q2 2018 H1 2019 H1 2018 Net sales 8,628 8,176 17,019 16,074 Other revenues 352 305 674 533 Cost of sales (2,767) (2,720) (5,385) (5,265) Gross profit 6,213 5,761 12,308 11,342 Research and development expenses (1,587) (1,475) (2,972) (2,755) Selling a
Slide 44: Reconciliation to Business Net Income – Q2 2019
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – Q2 2019 € million Q2 2019 Q2 2018 Change Net income attributable to equity holders of Sanofi (87) 762 (111.4%) Amortization of intangible assets (1) 559 541 Impairment of intangible assets (2)
Slide 45: Reconciliation to Business Net Income – H1 2019
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – H1 2019 € million H1 2019 H1 2018 Change Net income attributable to equity holders of Sanofi 1,050 1,778 (40.9)% Amortization of intangible assets (1) 1,116 999 Impairment of intangible assets
Slide 46: Research & Development appendices
Research & Development appendices
Slide 47: R&D Pipeline – New Molecular Entities
R&D Pipeline – New Molecular Entities(*) Phase 1 Phase 2 Phase 3 Registration (Total : 19) (Total : 7) (Total : 6) (Total : 2) SAR441344(**)(1) BIVV001(**)(5) SAR440340(**)(12) SAR422459(**)(14) avalglucosidase alfa isatuximab Anti-CD40L mAb rFVIIIFc – vWF – XTEN(6) Anti-IL33 mAb ABCA4 gene therapy
Slide 48: Additional Indications
Additional Indications(*) Phase 1 Phase 2 Phase 3 Registration (Total : 5) (Total : 17) (Total : 23) (Total : 4) SAR439459 + cemiplimab(**)(1) dupilumab(**)(1) isatuximab + cemiplimab(**)(1) Dupixent®(**)(1) isatuximab Dupixent®(**)(1) Anti-TGFb mAb + PD-1 inh mAb Anti-IL4Rα mAb Anti-CD38 mAb + PD-1
Slide 49: Expected Submission Timeline
Expected Submission Timeline(1) fitusiran avalglucosidase alfa SAR156597 nirsevimab(**)(7) NMEs RNAi anti-thrombin Neo GAA IL4/IL13 bi-specific mAb Respiratory syncytial virus mAb Hemophilia A/B Pompe Disease Systemic Scleroderma sutimlimab olipudase alfa efpeglenatide(**)(5) venglustat SAR440340(**
Slide 50: Pipeline Movements Since Q1 2019
Pipeline Movements Since Q1 2019 Additions / Moves Removals from Sanofi pipeline isatuximab SAR341402, insulin aspart ZynquistaTM(**)(3) (sotagliflozin) Registration Anti-CD38 mAb 3L RRMM (ICARIA) (U.S.,EU) Rapid acting insulin Type 1/2 Diabetes (EU) Oral SGLT-1&2 inhibitor Type 1 Diabetes (U.S.) Me
Slide 51: R&D Pipeline Summary – Total Projects
R&D Pipeline Summary – Total Projects(1) Phase 1 Phase 2 Phase 3 Registration TOTAL Immuno-inflammation 2 8 7 2 19 Oncology 11 7 7 1 26 Rare Diseases 0 4 3 0 7 Rare Blood Disorders 4 0 3 0 7 Multiple Sclerosis and 3 3 2 0 8 Neurology Diabetes 1 0 1 1 3 Cardiovascular Disease 0 0 1 0 1 Vaccines 3 2 5
Slide 52: Expected R&D Milestones
Expected R&D Milestones Products Expected milestones Timing SAR439859 (SERD) Proof of concept study read-out in metastatic Breast Cancer Q3 2019 Dupixent®(**)(1) EU regulatory decision in Atopic Dermatitis in adolescent patients Q3 2019 sutimlimab Proof of concept study read-out in refractory Immune