Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q3 2017 Earnings Presentation
39 slides from Sanofi Sa's earnings presentation, Nov 2, 2017
Slide 1: Q3 2017 Results
Q3 2017 Results November 2, 2017
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 Dupilumab Commercial and Development Update ● Bill Sibold - Executive Vice President, Sanofi Genzyme Financial Results ● Jérôme Contamine - Executive Vice President, Chief Financial Officer Additional Participants for Q&A Session
Slide 4: Key Highlights
KEY HIGHLIGHTS Olivier Brandicourt Chief Executive Officer
Slide 5: Company Sales and Business EPS Grew at CER
Company Sales and Business EPS Grew at CER Company Sales Business EPS €9,028m €9,053m €1.79 €1.71 +4.7% +1.1% at CER at CER Q3 2016 Q3 2017 Q3 2016 Q3 2017 CER: Constant Exchange Rates 5
Slide 6: YTD Sales Slightly Higher Despite Significant LoEs
YTD Sales Slightly Higher Despite Significant LoEs 9M 2017 Company Sales €315m -€133m €26,364m €1,228m €26,182m +1.2% €24,954m at CER/CS(4) 9M 2016 BI CHC / 9M 2016 Sales(3) Fx 9M 2017 SPMSD(1) CS (2) LoEs: Losses of Exclusivity (2) 9M 2016 Sales at Constant Structure (1) Primarily includes SPMSD (€
Slide 7: Specialty Care and Vaccines Delivered Strong Growth while Diabetes Declined in-Line with Expectations
Specialty Care and Vaccines Delivered Strong Growth while Diabetes Declined in-Line with Expectations Q3 2017 Sales by Global Business Unit Growth at CER/CS(1) Company Sales €9,053m -0.2% (2) Sanofi Genzyme (Specialty Care) €1,390m +13.9% Sanofi Pasteur (Vaccines) €1,916m +7.2%(3) Diabetes & Cardiov
Slide 8: Strong Performance in Emerging Markets Offset by Diabetes and Established Rx in Developed Markets
Strong Performance in Emerging Markets Offset by Diabetes and Established Rx in Developed Markets Q3 2017 Sales by Franchise Developed Markets Emerging Markets Total Growth at Growth at Growth at Sales Sales Sales CER/CS(1) CER/CS(1) CER/CS(1) Specialty Care €1,633m +12.5% €1,390m +13.9% €243m +5.3%
Slide 9: Specialty Care Delivers Another Quarter of Double-Digit Growth
Specialty Care Delivers Another Quarter of Double-Digit Growth Global Specialty Care ● Specialty Care franchise up +12.5% (+13.8% YTD) Franchise Sales ● Dupixent sales reached €75m in the U.S. €1,633m €1,517m ● Kevzara captured 15% NBRx market share of €698m subcutaneously administered IL-6 in mon
Slide 10: Sanofi Pasteur Performance Driven by Strong Growth in Europe and Emerging Markets
Sanofi Pasteur Performance Driven by Strong Growth in Europe and Emerging Markets Sanofi Pasteur Sales ● Vaccines continue to deliver strong growth, up +7.2%(1) (+11% YTD) €1,916m €1,867m ● Pediatric franchise(2) grew +21% supported by Emerging Markets (+36%) ● Flu vaccines up +1.8% +7.2% at CER/CS
Slide 11: Global Diabetes Sales Decline As Expected and Appellate Court Orders New Trial for Praluent
Global Diabetes Sales Decline As Expected and Appellate Court Orders New Trial for Praluent ● Global Diabetes sales declined -10.0% at CER Q3 2017 Global Diabetes Sales Growth at CER ● Toujeo sales grew +23% to €198m driven by strong performance in Europe and EM ● FDA granted tentative approval for
Slide 12: U.S. Diabetes Franchise Payer Coverage Update
U.S. Diabetes Franchise Payer Coverage Update Payer Coverage U.S. Commercial and Medicare Part D (as % of Lives covered(1,2)) 80% 80% 13% 7% Commercial - Decision pending 21% 7% 11% 20% 15% Commercial - Non-Preferred 68% 56% 67% 58% 67% 47% Commercial - Preferred 94% 90% 2% 2% 5% 5% Medicare Part D
Slide 13: CHC Growth in Emerging Markets Partly offset by Increased Competition in Developed Markets
CHC Growth in Emerging Markets Partly offset by Increased Competition in Developed Markets Q3 2017 CHC Sales ● Emerging Markets sales grew +6.7%(1) to €411m Growth at CER/CS ● Growth across all categories ● Performance driven by Brazil and Russia ROW €159m (-0.6%) ● European sales down -1.2% impacte
Slide 14: Growth in Emerging Markets Driven by China and Russia
Growth in Emerging Markets Driven by China and Russia €2,297m €3,442m EUROPE U.S. €303m €797m -1.6% EURASIA(4) ROW(3) -3.7% +25.5% -3.1% €941m €572m ASIA AME(5) +9.5% €676m +4.0% LATAM +1.6% Emerging Markets(1) grew +7.3% at CER/CS(6) All growth at CER/CS unless specified otherwise (3) RoW: Japan, S
Slide 15: Dupilumab Commercial and Development Update
DUPILUMAB COMMERCIAL AND DEVELOPMENT UPDATE Bill Sibold Executive Vice President Sanofi Genzyme
Slide 16: Global Rollout Underway
Global Rollout Underway Weekly TRx since launch ● Dupixent U.S. launch trend ahead of other recently launched biologics in dermatology ● Cumulatively over 23,000 patients prescribed 3,000 since launch 2,500 ● Over 7,100 HCPs have prescribed 2,000 ● ~70% of target physicians are repeat prescribers 1
Slide 17: Positive Phase QUEST Study for Dupilumab in Asthma
Positive Phase 3 QUEST Study for Dupilumab in Asthma(1,2) LIBERTY ASTHMA QUEST ● Dupilumab Phase 3 QUEST study confirms Primary endpoints safety and efficacy profile in uncontrolled Reduction in severe persistent asthma(1) asthma attacks at 52 weeks(5) p<0.001 ● First biologic to demonstrate both re
Slide 18: Positive Phase VENTURE Study Further Strengthens Dupilumab's Clinical Profile in Asthma
Positive Phase 3 VENTURE Study Further Strengthens Dupilumab’s Clinical Profile in Asthma(1,2) ● Dupilumab significantly reduced maintenance LIBERTY ASTHMA VENTURE Primary endpoint and FEV1 improvement OCS use in severe asthma patients corticosteroids ● 80% of dupilumab patients reduced OCS use by m
Slide 19: Financial Results
FINANCIAL RESULTS Jérôme Contamine Executive Vice President, Chief Financial Officer
Slide 20: Strength of the Euro Resulted in an FX Headwind in Q3 2017
Strength of the Euro Resulted in an FX Headwind in Q3 2017 Currency Impact Company Sales(1) Business EPS -€403m -€0.10 -5.6% -4.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017 2015 2016 2017 Note: Company sales and Business restated in 2016 to reclassify Vaxserve
Slide 21: Business EPS Stable at CER but FX Movements Impacted Reported Performance
Business EPS Stable at CER but FX Movements Impacted Reported Performance €m Q3 2017 Q3 2016 % Change % Change (reported €) (CER) Net Sales 9,053 9,028 +0.3% +4.7% Gross Profit 6,540 6,519 +0.3% +5.0% Business Operating Income 2,911 2,945 -1.2% +5.1% Business operating margin 32.2% 32.6% - - Effecti
Slide 22: Slight Increase in Business Operating Income Despite Increase in R&D
Slight Increase in Business Operating Income Despite Increase in R&D (1) €m Q3 2017 Q3 2016 CS % Change (CER/CS) Net Sales 9,053 9,478 -0.2% Other revenues 340 259 +37.5% Gross Profit 6,540 6,833 +0.2% R&D (1,341) (1,245) +10.7% SG&A (2,314) (2,461) -2.1% Other current operating income & expenses 16
Slide 23: Further Progress on Cost Savings Largely Offsetting R&D Spend
Further Progress on Cost Savings Largely Offsetting R&D Spend Gross Margin Ratio(1) Operating Expenses €3,655m 72.1% 72.2% €3,706m +2.2% at CER/CS(2) 71.7% €1,341m €1,245m +10.7% at R&D CER/CS €2,314m €2,461m -2.1% at SG&A CER/CS Q3 2016 Q3 2017 Q3 2016 Q3 2017 CS CS(3) (1) Gross Margin is calculate
Slide 24: Net Debt Evolution in 9M 2017
Net Debt Evolution in 9M 2017 Net Debt -€389m FCF -€924m €5,165m €4,156m -€1,950m €4,062m -€3,710m €8,206m -€1,009m €6,961m (4) Net Debt (1) Net Cash from CapEx Net Share Acquisitions, Net cash from Dividend Other Net Debt (1) Dec 31, 2016 Operating Repurchase Licensing, Net CHC/Merial Sep 30, 2017
Slide 25: Confirming 2017 Business EPS Guidance at CER
Confirming 2017 Business EPS Guidance at CER FY 2017 Business EPS Broadly Stable at CER(1,2) Between -1% and -2%(3) FX impact on Business EPS based on September 2017 average exchange rates (1) Compared to FY2016 and barring major unforeseen adverse events (2) FY 2016 Business EPS of €5.68 (3) Differ
Slide 26: Closing Remarks
CLOSING REMARKS Olivier Brandicourt Chief Executive Officer
Slide 27: Executing on our 2020 Strategic Roadmap
Executing on our 2020 Strategic Roadmap 1 Focused organization driving expense discipline 2 U.S. Dupixent launch performing ahead of expectations 3 Reported best-in-class dupilumab Phase 3 data in asthma 4 Diabetes 2018 U.S. contracting in-line with expectations 5 Progressing our pipeline and advan
Slide 28: Invitation to Sanofi's "Sustaining Innovation" Events
Invitation to Sanofi’s “Sustaining Innovation” Events December 13, 2017 December 15, 2017 Paris - France Boston - U.S. Registration Day ends at Registration Day ends at 8:00am 2:30pm 8:00am 2:30pm Analyst meeting(1) to discuss Series of Sanofi’s R&D strategy and Q&A sessions development pipeline Ple
Slide 29: Appendices: R&D Pipeline
APPENDICES R&D PIPELINE SANOFI x
Slide 30: R&D Pipeline – Pharma & Vaccines
R&D Pipeline – Pharma & Vaccines Phase 1 Phase 2 Phase 3 Registration SAR440340 N SAR438335 N dupilumab efpeglenatiden N dupilumab VaxiGrip® QIV IM Anti-IL33 mAb GLP-1R/GIPR dual agonist Anti-IL4Rα mAb Long-acting GLP-1 receptor agonist Anti-IL4Rα mAb Quadrivalent inactivated Asthma & COPD Type 2 Di
Slide 31: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase 1 Phase 2 Phase 3 Registration TOTAL Oncology 3 1 2 0 6 Diabetes 1 2 2 0 5 Cardiovascular Diseases 2 2 0 0 4 Immuno-inflammation 2 3 0 0 5 30 Infectious Diseases 0 1 0 0 1 Rare Diseases 0 2 3 0 5 Multiple Sclerosis, Neurology, 3 1 0 0 4 Ophthalmology Vaccines 2 6
Slide 32: Expected R&D Milestones
Expected R&D Milestones Products Expected milestones Timing dupilumab U.S. regulatory submission in Asthma in Adult/Adolescent patients Q4 2017 Dupixent® Start of Phase 3 trial in Atopic Dermatitis in 6-11 year-olds Q4 2017 Dupixent® Start of Phase 3 trial in Atopic Dermatitis in 6 months to 5 year-
Slide 33: Appendices: Finance
APPENDICES FINANCE SANOFI x
Slide 34: 2017 Currency Sensitivity
2017 Currency Sensitivity 2017 Business EPS Currency Sensitivity Currency Variation Business EPS Sensitivity U.S. Dollar - 0.05 USD/EUR + EUR 0.13 Japanese Yen + 5 JPY/EUR - EUR 0.02 Chinese Yuan + 0.2 CNY/EUR - EUR 0.02 Brazilian Real + 0.4 BRL/EUR - EUR 0.02 Russian Ruble + 10 RUB/EUR - EUR 0.03 C
Slide 35: Business Net Income Statement
Business Net Income Statement Third quarter 2017 Pharmaceuticals Vaccines Others Total Group € million Q3 2017 Q3 2016 Change Q3 2017 Q3 2016 Change Q3 2017 Q3 2016 Q3 2017 Q3 2016 Change Net sales 7,137 7,225 (1.2%) 1,916 1,803 6.3% 9,053 9,028 0.3% Other revenues 72 69 4.3% 268 198 35.4% 340 267 2
Slide 36: Business Net Income Statement
Business Net Income Statement Nine months 2017 Pharmaceuticals Vaccines Others Total Group € million 9M 2017 9M 2016 Change 9M 2017 9M 2016 Change 9M 2017 9M 2016 9M 2017 9M 2016 Change Net sales 22,648 21,729 4.2% 3,716 3,225 15.2% 26,364 24,954 5.7% Other revenues 221 191 15.7% 638 386 65.3% 859 5
Slide 37: Consolidated Income Statements
Consolidated Income Statements € million Q3 2017 (1) Q3 2016 (1) 9M 2017 (1) 9M 2016 (1) Net sales 9,053 9,028 26,364 24,954 Other revenues 340 267 859 577 Cost of sales (2,853) (2,776) (8,523) (7,746) Gross profit 6,540 6,519 18,700 17,785 Research and development expenses (1,341) (1,221) (4,008) (
Slide 38: Reconciliation of Consolidated Net Income to Business Net Income
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income € million Q3 2017 Q3 2016 Change Net income attributable to equity holders of Sanofi 1,567 1,674 (6.4%) Amortization of intangible assets(1) 434 403 Impairment of intangible assets 19 21 Fair va
Slide 39: Reconciliation of Consolidated Net Income to Business Net Income
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income € million 9M 2017 9M 2016 Change Net income attributable to equity holders of Sanofi 8,305 3,919 111.9% Amortization of intangible assets(1) 1,424 1,280 Impairment of intangible assets 31 73 Fai