Sanofi

This meeting is being recorded. 2023 results followed by a Q&A session. As usual, you can find the slides to this call on the investor's page of our website at sanofi.com. Moving to slide three, I would like to remind you that information presented in this call contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. I refer you to our Form 20F document on files with the SEC and also our document d'enregistrement universel for a description of these risk factors. With this, please advance to slide four. Our speakers on the call today are Paul Hudson, Chief Executive Officer, Jean-Baptiste de Chatillon, Chief Financial Officer, Oumman Achrafian, Global Head of R&D, and Julie van Ongeval, Global Business Unit Head, Consumer Healthcare. The Global Business Unit has Brian Ford, Thomas Triomphe, and Olivier Charmet will join for Q&A, to which you have two options to participate. Option one, click the raise hand icon at the bottom of your screen, or option two, submit your question by clicking the Q&A icon at the bottom of the screen. And with that, I'd like to turn the call over to Paul.

Well, thank you, Eva, and thanks to everyone for joining our call today. Before we discuss this quarter's highlights, I want to start by updating you on other announcements we made this morning. We've reached an exciting moment in the transformation of our company here at Sanofi. Our play to win strategy is working and we've made significant progress over the past years to transform our R&D efforts with a sharp focus on best in class or first in class medicines and vaccines. These efforts are reflected in our results. We're driving solid performance, seeing strong market demand for recent launches, and advancing our innovative pipeline. Sadovia has delivered an unprecedented cadence of positive news and data readouts this year. We see significant growth potential in our pipeline and increasing our R&D investment accordingly to ensure we fully capitalize on the growth opportunities ahead of us. Oumar Esrafian, our new head of R&D, will share his vision and first impressions in a few minutes. This morning, we're also announcing an important next step in our journey, our intention to separate the Sanofi consumer healthcare business at the earliest in Q4 2024 through the creation of a publicly listed entity headquartered here in Paris. This milestone is a win-win. It allows Sanofi to become a pure play by a pharma company. We'll be more agile, more focused on our key areas of strength. At the same time, it allows Sanofi CHC to be in a better position to pursue its own business strategy, resourcing in capital allocation. You'll hear more from Julie Van Angeval later on the call. We're excited by these new developments that will unlock value, coupled with the current strong business momentum with increasing sales from our growth drivers in specialty care and vaccines, no meaningful LOEs until the end of the decade, and expected benefits from accelerated investments in R&D. We will discuss these strategic announcements in more details later on the call, but let me now turn to a brief review of the quarter three results that exemplify our successful strategy execution towards sustainable growth from innovative medicines. We delivered another quarter of double-digit growth in specialty care, mainly driven by the outstanding success of Dupixent and our performance in rare diseases. In vaccines, sales exceeded 3 billion in the quarter, supported by the unprecedented demand for Bay Fortis. We continue to lead the influenza vaccines market with our successful differentiation strategy around premium products such as flu zone high dose. General medicine sales were lower due to price erosion in most markets, including in the U.S., and we continue to divest non-strategic products. Our standalone consumer healthcare business continued its positive performance in the past quarters. In summary, the underlying strength of our growth drivers more than offset the expected impact from our Baggio generic entries. As a result of our continued strategic execution, almost two-thirds of sales are now coming from specialty care and vaccines. Moving to slide eight and the impressive uptake of our key launches, Altuveo is capturing 40% of all the switches in the US haemophilia A market at the end of Q3. And the number of total patients more than doubled versus Q2. During the quarter, Altuveo was also approved in Japan and Taiwan. There is tremendous momentum for Pape Fortis, which we believe to be one of the fastest uptake of any pediatric immunization ever. And it has resulted in unprecedented demand across the launch regions. Our teams are working around the clock in contact with all the stakeholders to secure supply to protect all infants against RSV. For TZL, we're making steady progress around patient screening and enrollment in our support program. This month, phase three data from the PROTECT study was presented at ISPAD in Rotterdam. showing the potential to slow the progression of stage 3 type 1 diabetes. The full data set was also simultaneously published in the New England Journal of Medicine. We are hopeful to be able to expand TZL's current label, leading also to a significant upside of TZL's commercial potential. As a result of the successful sales ramp up in the quarter, we're raising our sales expectations for these three innovative medicines to exceed 500 million euros combined in the second half of 2023. With sales of more than 2.8 billion euros in Q3, Dupixent reported another quarter of impressive growth. The strong brand performance continues to be fueled by demand across all geographies, newly approved indications, and demographics. Total sales are now annualizing at more than 11 billion euro, and we remain very excited about the growth outlook for this unique medicine. As many as 750,000 patients are now benefiting from access to therapy with Dupixen. During more than six years since its initial launch in AD, Dupixen has set a very high bar for both efficacy and safety, including for patients as young as six months. We continue to build on this remarkable body of evidence with the recent inclusion of five-year atopic dermatitis safety data in the U.S. and the EU labels. And we are persistent in our ambition to lead with science to address larger patient populations through label expansion into new indications based on our deep understanding of the type 2 inflammatory pathway with Dupixent. On site 10, we continue to drive growth with our differentiated flu vaccines that now make up more than 70% of the total flu sales. As highlighted during our Q2 call, the flu vaccines market is increasingly competitive, especially for standard-dose flu vaccines, coupled with vaccination rates that remain below the pre-pandemic level. Despite these unfavorable market dynamics, we expect to deliver flu sales in 2023 at a level that will be among the top three in Sanofi's history. We remain confident in future cell dynamics driven by the demand for vaccines that offer protection against the severe consequences of flu. Moving to slide 11, we continue to leverage external innovation in building up our leadership in immunology. Earlier this month, we announced a major collaboration with Teva on a novel anti-TL1A therapy with a differentiated target profile. Phase 2B is currently ongoing, and while time will tell if we deliver on the target product profile, we believe this molecule has the potential to be best-in-class treatment to address unmet medical need in the large market of inflammatory bowel diseases. Similarly, in vaccines, we entered into an agreement with Janssen Pharmaceuticals earlier this month to develop and commercialize a potential first-in-class candidate against extra-intestinal pathogenic E. coli, also known as XPEC. A large Phase 3 trial is already ongoing. E. coli is a significant cause of sepsis, mortality, and antimicrobial resistance in older adults. As the number of cases is rising in an aging population, a novel expect vaccine represents an excellent strategic fit with our portfolio of marketed products and pipeline candidates. We aim to leverage our expertise in vaccines to make this solution available to protect a broad population of seniors above 60 in the future, comparable to the protection of adults against shingles or PCV, for example, today. I now hand over to Jean-Baptiste for a brief look at the Q3 financials.

Yes, thank you, Paul. Moving to slide 13, on looking at our year-to-date performance, sales grew 3.9%, driven by the strong performance of DuPix and Sarkisaz, strong recovery of the booster vaccine franchise, and by our six recent launches. R&D expenses grew 1.6% at constant exchange rate, and benefited from a favorable comparison, as we booked some provisions following the termination of the Amstel-Nestron program last year. The BOI margin decreased 0.6 percentage points to 31.4 due to the significant impact from the OVAGIO LOE, our last significant LOE until the end of the decade. We are also analyzing the LIPTA-EU agreement including a faster repayment of the antibody alliance development balance, now at 20% of the Regeneron profit. EPS was up 4.9% during the first nine months, helped also by the financial income due to higher interest rates on investments. On slide 14, we are providing an updated H2 business outlook. We expect dupixen to continue to grow, driven by demand, while Obagio cells are expected to be impacted by the entrance of generic players in Europe in Q4 on top of U.S. and Canada. Our expectations regarding the split of flu cells between Q3 and Q4 are now 70% on 30% compared to previously two-thirds on one-third. Total GenMed cells are expected to decline in the mid-single-digit range. Importantly, as mentioned by Paul earlier, we have raised our expectation for sales from our three new launches combined to exceed 500 million euros. On the P&L, we expect the final COVID revenues of 400 million euros in Q4 to be booked in the vaccine's other revenues line. OPEX should continue to grow at constant exchange rate, driven by investments behind our key launches, increased R&D spend, as well as costs related to CHE standalone. And changed are our expectations on capital gains on annual tax rate. In Q3, we recorded around 100 million euros of capital gains. Based on the ongoing strong performance of the PICS and supported by the recent launches, more than offsetting the of the pricing headwinds, especially in GenMed, we are reaffirming our full-year 2023 guidance with EPS to grow mid-single-digit at transport exchange rate. On a reported basis, we continue to experience headwinds from currency, approximately minus 6% to minus 7% for the full year based on October average exchange rate. I now hand back the call to Paul.