Sanofi

You have joined the meeting as an attendee and will be muted throughout the meeting. This meeting is being recorded. Good morning, good afternoon, and good evening to everyone. Thank you for joining us to review Sanofi's fourth quarter and full year 2022 results, followed by a Q&A session. As usual, you can find the slides to this call on the investors 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 file with the SEC and also our document d'enregistrement universel for a description of these risk factors. With that, please advance to slide four. Our speakers on the call today are Paul Hudson, Chief Executive Officer, Oumala Shrafian, Global Head of R&D, Jean-Baptiste de Chatillon, Chief Financial Officer, and the Global Business Unit heads, Brian Ford, Thomas Triomphe, Olivier Charmet, and Julie Van Angeval. For the Q&A, 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, everyone, for joining our call today. Before we discuss the Q4 highlights, I want to start by updating you on another announcement we made this morning. Francois-Xavier Roger will join Sanofi, taking over the role of CFO effective April 1, 2024. I'm very pleased to welcome him at Sanofi. He's an accomplished and widely recognized finance executive with a proven track record in accelerated value creation. In fact, some of you may have met him already before, either in his role at Nestle or in the past at Takeda. He'll take over a finance organization that has been significantly modernized under JB's leadership over the past five years. JB has been instrumental for the successful execution of the first chapter of our play-to-win strategy and creating the growth opportunities ahead of us. With JB at the helm of our finance team, we have consistently delivered healthy top-line growth over the last years, a significant BOI margin improvement, and €2.7 billion of cost efficiencies that were all reinvested behind our growth drivers and pipeline. He also worked closely with Olivier and Julie on the simplification of GemMed and the standalone of our consumer health business, two critical projects that have delivered significant value for the company and shareholders. Many of you may not be aware about JB's longstanding personal commitment to charity work. He decided to devote the next stage of his career by leading a renowned French-based foundation, and I'm 100% certain of the positive impact JB will continue to have on people's lives. I would like to take the opportunity here to warmly thank him for his dedication and leadership. He's been a great partner to me, and dare I say it, a friend, and to the rest of the executive committee. Thank you, JB. 2023 marked a pivotal year for Sanofi, as we became a development-driven, tech-powered biopharma company. Our core growth drivers in specialty care and vaccines continue to deliver. The main driver remains Dupixent, which continued to deliver stellar performance in all approved indications and across geographies. Dupixent added €2.4 billion to the top line, or €2.8 billion as a constant exchange rate. 2023 also marks a very successful year for our vaccine business, with the launch of Bay Fortis, a real moment for our strategy and execution. In general medicines, our core assets kept growing. GBU sales were lower overall due to net price erosion, and we continue to actively manage our portfolio and divest non-strategic products. Moving to consumer healthcare, the business delivered more than 6% growth, driven by priority brands and the recently acquired QNOL, which is an excellent strategic fit for our business. As you know, last quarter we announced our intention to separate our CHC business following our earlier decision to create a standalone unit to fully unlock its value. This will also allow us to better focus time and resources as a pure-play biopharma company. We're in the process of reviewing potential separation scenarios and still believe that the path most likely to maximize shareholder value would be through a capital markets transaction to create a public-listed company headquartered here in Paris. Subject to market conditions, of course, the separation could be achieved at the earliest Q4 2024. In a nutshell, the strong performance of Dupixent and our key launches more than offset the anticipated impact of the loss of exclusivity of Abagio, our last major LOE for the remainder of the decade. Excluding Abagio, the underlying sales growth of our business was 8.1% in 2023, a fabulous underlying growth trajectory. Moving now to slide seven, which perfectly demonstrates our ability to be laser-focused when it comes to launch excellence as we turn Sanofi into a launch engine. Bay Fortis, Altuvia, and TZL generated sales of more than €700 million in 2023, far exceeding our expectations. Bay Fortis faced an unprecedented demand. While we've already been able to protect almost 2 million babies, this first season clearly confirmed the importance of our all-infant protection strategies. Ultuvio is capturing more than 50% of all switches in the United States hemophilia A market. And T-Zield created great excitement amongst clinicians as the first and only therapy to delay the onset of type 1 diabetes. These three transformational medicines joined a growing number of Sanofi's new product launches since 2019. New products generated over 2.2 billion euros in 2023 across different fast-growing therapeutic areas. These launches will add to our top line next to Dupixent for many years, and again keeping in mind that we will not face major LOE for the rest of the decade. As we remember from our R&D day on December 7th, we believe that we have everything it takes to become the leading immunology company. In addition to the recent pharma launches, we have a record number of medicines in our pipeline with potential blockbuster status, including three with the potential for over 5 billion in peak sales. We expect these launches to exceed 10 billion euros of sales by 2030. At the same time, Dupixel will keep being a once-in-a-career and a life-changing medicine, continuing to deliver a low double-digit sales growth CAGR until 2030. And finally, our growth driver vaccines will continue to power us forward with its leading positions in RSV, flu, pediatric combination vaccines, and other franchises, bringing more than €10 billion in sales by 2030. Moving to slide nine, we're very excited about Dupixent's potential to become the first biologic to treat COPD. And with our partner Regeneron, we're making rapid progress in submitting applications for approval in Europe, the U.S., and also China. And let's certainly not forget it's a PECIMAB or anti-IL-33 monoclonal antibody, which holds additional potential for COPD. Recent phase two results of this asset were highly encouraging, and the two large phase three trials are now nearing completion of enrollment. Pivotal results are expected in 2025. Together, Dupixent and Tepecumab have the potential to address a large COPD population with a limited overlap. We believe that these two medicines combined could have a peak sales potential of greater than €5 billion in COPD. Let me now share with you some of our key priorities for the year. Number one is to keep being laser-focused on the best-in-class launches. We're working closely with our partner AstraZeneca and regulatory authorities to increase the supply of Bay Fortis for 2024 and 2025 to meet this tremendous demand. For Altuveo, we continue to capture patient share in the U.S. haemophilia A market and drive geographic expansion after a very promising start in Japan. And for T-Zield, we will increase our efforts around the patient screening and enrollment in our support programs. And of course, the launch preparations for Dupixent and COPD are well underway. Number two, we keep moving swiftly on our pipeline priorities. We expect Tolly Bruton in phase three data for both relapsing remitting and secondary progressive MS around mid-year. We will initiate the planned trials for many of our promising immunology, neurology, and vaccine assets. Finally, on cost reallocation, we announced a few months ago a new set of efficiency initiatives across the biopharma business that will free up operational resources to support the accelerated R&D investments and unlock value creation opportunities. We continue to target savings of up to €2 billion from 2024 to the end of 2025 to fund innovation and growth. To sum it up, 2024 is a year of investment in science, including a lock-off pipeline, and positions for a strong EPS rebound in 2025. Let me conclude by highlighting some of our commitments to the fight against climate change. We're making clear progress on our trajectory to reach carbon neutrality by 2030, exemplified by our leveraging renewable electricity and expanding our eco-car fleets. As a reminder, our ambitions in 2030 and 2045 are vetted by the SBTI, the Science-Based Targets Initiative. We attended COP28 in Dubai last December in a push to elevate the need for stronger collaboration across healthcare systems. We are active contributors to the Sustainable Markets Initiative and have the privilege to lead the Patient Care Pathways Working Group, where we focus our efforts on how to reduce carbon emissions from health systems while improving health outcomes for patients. Well, I now hand it over to Hooman, Head of R&D, who will share more insights into our R&D priorities and milestones for this year. Hooman.

Thank you, Paul. As we discussed with you in December at our R&D day, Sanity delivered an unprecedented cadence of positive news and important data readouts last year across major projects with blockbuster potential. By increasing our investments in R&D, we intend to fully capitalize on the growth opportunities ahead of us by prioritizing pipeline assets with meaningful growth potential and extending the opportunity to successfully launch meds. This year, we look forward to several important regulatory milestones and readouts from our pike. As already mentioned by Paul, we expect regulatory milestones with dupixin and COPD and pivotal readouts for tolobrutinib and relapsing MS and secondary progressive MS, as well as rilzabrutinib in ITP. For amyloid tilobab and rilzabrutinib, we're excited to learn the outcome of important phase two results in asthma later this year. Separately, we're preparing to submit the recent positive phase two results of Sarkozy and first-line transplant ineligible myeloma patients to FDA approval and expect the pivotal data for subcutaneous administration before year end, which would bring additional upside for Sanofi in this large market seeking convenient treatment options. As you will recall from R&D day, we highlighted our ambition to increase the number of phase three projects by 50% across immunology, neurology, and vaccines over the next two years, A significant number of these pivotal trials have already started to dose their first patients, including the first amlatilumab phase 3 trial in AD and phase 3 trials of prexelumab in both relaxing MS and secondary progressivants. We are progressing well and are evolving at the right pace as we expect to have more than 35 projects in phase 3 by 2025. Turning to phase 2, we are fortunate to have and initiate a significant number of projects presented at the R&D day, One example is Frexilumab in type 1 diabetes, where we started with a study assessing different doses and routes of administration. We're sticking to our strategy of combining strong, innovative science with opportunity to address patients' major unmet needs. You can also see the proof points of our progress in R&D productivity by moving our major assets, such as the oral TNFR1 signaling inhibitor and Lincecumig into mid-stage. They both fit our portfolio by providing promising solutions for multiple indications. We believe the increased R&D investment in pivotal pay-through programs and key phase two trials will offer long-term returns and benefit patients and shareholders. This is the essence of the play-to-win strategy. Moving on to slide 16, we provided a granular and concrete sense of areas that we are changing in Sanofi R&D, a recent investor event in New York. First, we talked about peak investments. Through dispassionate, data-driven evaluation of our pipeline, we're investing in only our winning late-stage assets to underwrite the long-term growth of Samsung. Accordingly, we'll drive our late-stage opportunities by launching multiple phase three trials in parallel. We need to increase investment in these long-term opportunities for us to drive real growth and value for our shareholders. And we will do that in a disciplined way. The second theme was that we must earn the right to do that. We're going to deliver portfolio focus across our breadth of platform sites and TAs. We continue to have the right to win in oncology, but in a focused way. We're uniquely positioned to win in immunology and inflammation. We have deep provenance in immunology, and it's a self-fulfilling prophecy that this leads to developing better immunology drugs and also doing research in immunology. Finally, pipeline sustainability. Although we've made good progress to improve our R&D productivity with a focus on greater quality, we now have to step it up by leveraging both in-house research and external innovation. Slide 17. As a great example of external innovation, let me take just one minute to talk about our recently announced acquisition of Inhibrix. It fits perfectly with our rare diseases portfolio overlapping with our immune-mediated respiratory franchise. As underlined at R&D Day, we continue to drive our successful R&D and keep our eyes open for immune-mediated disease in the periphery of what we do. When it closes, this deal will add, in Hembricks 101, to our portfolio, a recombinant human alpha-1 antitrypsin FC fusion protein for the treatment of alpha-1 antitrypsin deficiency, an inherited rare disease of the lungs and liver causing progressive tissue deterioration. The phase one trial showed strong data with a best-in-class profile, thanks to sustaining normal AAT levels and aiming for a better compliance to a potential monthly dosing regimen. The current standard of care is a plasma-derived AAT, leaving patients without sufficiently effective, well-validated treatment. As across our other rare disease therapies, we're committed to patients with AATD. The next readout is expected in 2025 for a potential launch in 2027 with a potentially rapid approval following FWL fast track designation granted last May. The blockbuster potential behind this asset is predicated on use by both existing patients and by the anticipated use by increased number of de novo patients that could benefit from the treatment. With great pleasure, I now hand over to the GBU heads to go through the respective business performance.