Sanofi

Welcome to the Q1 2024 conference call. You can find the slides to this call on the Sanofi.com investors page. I'd like to remind you that the information presented in this call contains forward-looking statements, which are subject to substantial risks and uncertainties and may cause actual results to differ materially. I encourage you to read the disclaimer in our presentation. In addition, I refer you to our Form 20F on file with the SEC. and our document d'enregistrement universel for a description of these risk factors. I'm pleased to welcome our new CFO, Francois, to the presentation, and Francois will be followed by Hooman, our head of R&D on the pipeline. For Q&A, we have Brian, Olivier, Thomas, and Julie to cover the global business units, and Roy, our GC. For the Q&A, you have two options to participate. In Zoom, raise your hand or submit your question using Q&A. This will be explained later on a slide. Let's turn to the business. We are next to the start in 2024 with 7% sales growth in line with our fast-moving portfolio transformation. The growth was driven by launches, including new and existing indications for Dupixen, and this performance fully underpins our 2024 UPS guidance at CER. Dupixen continued to increase penetration in all approved indications, and we saw performance diversify further across all geographies, plus, of course, the usual U.S. reset of insurance plans. Farmer launches were led by Nix Weizheim and Altubia, with more details to come a little later. Launches also boosted the performance in vaccines, which they thought was making further progress, including in countries in the southern hemispheres. In consumer health, growth of 9% reflected the consolidation of the QNR acquisition, as well, of course, as organic growth. We're progressing the plan to separate this business, as discussed in the past. Overall, we're pleased with the ongoing portfolio transformation, which is becoming more visible. also in our cost lines with more resources going into the pipeline and less into SG&A. This is exactly the development we set out last year when we announced the next chapter of our strategy. Before moving on, I'd like to extend my thanks to all the Sanofi colleagues for their dedicated work and their commitment to patients, chasing the miracles of science to improve people's lives. Dupixen continues to perform a strong demand-driven growth. Fearing sales of more than 2.8 billion euros in the first quarter, sales of this unique medicine increased by 25% globally, fueled by the accelerated growth from indication expansions in the ex-US markets, where sales grew as much as 51%. With now more than 850,000 patients worldwide, the strong contribution from countries like Japan, China, and Germany highlights the tremendous growth potential for Duprixin across all indications and geographies. In the U.S., sales exceeded €2 billion in the quarter, up 17%. And as we can see every year, U.S. growth reflects the impact from the customary dynamics of the annual reset of insurance plans. Almost eight years into its initial U.S. launch, they topped with dermatitis. This effect underscores the large size and rapid growth that depicts them with its leadership positions in new prescriptions across all five approved indications. As we look ahead to Q2, we remain very excited about the outlook for Dupixent's outstanding commercial success across all geographies, supported by a regulatory progress towards launching multiple new indications in major markets. And with our strong Q1 performance, we're extremely confident in delivering our previously communicated objective of around €13 billion in sales for the full year. As one of the leading medicines in immunology, respiratory is a core disease area for Dupixent, well ahead of any other competing biologic medicine. Dupixent has established and maintained a distinct leadership position in new prescriptions amongst pulmonologists across asthma and chronic rhinosinusitis with nasal polyps in the US. We believe in the growing importance of pulmonologists in adopting biologics to treat respiratory diseases. We're also confident that their growing familiarity with dupixin in type 2 inflammation will play a key role in the adoption of dupixin as the potentially first advanced therapy in COPD in more than a decade, if approved. We also continue to build a growing body of scientific evidence around dupixin in addressing airway inflammation. In the VESTIGE study, which was recently presented at the Quadruple AI Congress, dupixin demonstrated reduced airway inflammation and mucus plugging in functional respiratory imaging in S. We have an ambition to potentially introduce a new standard of care with dupixin in COPD for patients with type 2 inflammation. As you may recall, significant regulatory progress has been achieved with dupixin's potential in COPD across key markets. We are preparing for a potential launch in the U.S. as early as late June, if approved by the FDA, and plan for additional potential approvals in Europe and China by the end of the year. We're excited about the outlook for Dupixent's potential to become a breakthrough medicine for COPD, a leading cause of death worldwide. Dupixent is well positioned to potentially address the high event need in COPD with a strong clinical profile across two large phase three studies and more than seven years of real-world evidence data on safety across five approved indications. Dupixen addresses unmet medical need of a well-defined population of roughly 300,000 patients in the U.S. alone whose disease is driven by type 2 inflammation and uncontrolled despite standard of care therapies. COPD is a historically difficult disease area and a heterogeneous disease with multiple development failures in the last decade. Over time, many patients become resigned to their medical condition. With an experienced team that has a track record of development and commercial excellence in respiratory disease, We plan a targeted approach to drive the awareness and identification of COPD with type 2 inflammation among patients and pulmonologists. As we have seen with our launches across other major indications, the adoption of Dupixen as the first and only biologic in the COPD indication will require some time initially, and the inflection of cells growth is most likely to come in 2025 after the U.S. launch. We are confident that, if approved, COPD will become the next major growth pillar for Dupixent. And together with our second potential blockbuster developed for COPD, it's Ipecumab, we continue to expect peak sales of more than €5 billion for both products combined. Let's now move to the new launches, as Q1 further demonstrates our ability to execute successful launches and bring new medicines to patients. This quarter, all our new launches, including Wake Forest, made up close to a billion in sales, or 9% of our total biopharma business. Bayfordus continued its global rollout in the quarter with a launch in the Southern Hemisphere countries of all infant protection programs in some Australian states and Chile. As RSV is seasonal, Bayfordus will have a sales pattern like what many of you know from flu vaccines. And as Pfizer grew strongly from new patients, as well as patients converting from older medicines in the Pompey franchise, we're pleased with the overall growth and franchise sustainability. Ulterio is soon annualizing its launch. It has seen continued strong uptake, with most of the growth coming from other factor medicines than a lock tape, and even some uptake from patients not on factor medicines. It showed us how innovation can help to revitalize haemophilia and grow syncope's total share. Other launch medicines also did well in growth in absolute terms, including sarcleza approved in multiple myeloma. Taking a closer look at Bayfordus, What we're really focused on and proud of is the impact on improving public health and benefit to thousands of families. We've now real-world results from last year's implementation of broad immunization programs in the U.S., France, and Spain with Bayforders. The results are strikingly impressive. You can see the dramatic reduction of hospitalizations by the numbers on this slide. These real-world results are either consistent or even better than those from the clinical trials. The U.S. CDC recently published their effectiveness data for Bay Fortis at 90%. And in Europe, we've seen similar results for hospitalization reduction across France and Spain. Overall, following the first season in the three launch countries where Bay Fortis is used for all-infront protection, this means that nearly 40,000 hospitalizations have already been avoided for families. This is the impact that matters most. This also provides a perspective for Bay Fortis Global Health Benefit as we plan to launch in additional countries in H2. Together with AZ, we're working with the regulatory authorities and extending the manufacturing network to make Bayfordus more available for the upcoming season, as we're glad to see such enthusiastic demand. We're confident that where we will meet anticipated customer demand and look forward to extending all infant protection programs in the upcoming Northern Hemisphere RSV season. On my final slide, I wanted to highlight some progress in our ESG ambition exemplified by the work of our global health unit. Since its launch in 2021, the essential medicines from our GHU portfolio have supported close to 550,000 patients suffering from non-cumulical diseases in 31 countries with the objective to reach 2 million NCD patients by 2030. An additional differentiator is the meaningful work done by our teams to help building sustainable healthcare systems through partnerships with the ministries of health, trains of healthcare professionals, and our impact investment fund focused on supporting exclusive startups and businesses. I now have the great pleasure to hand over to Francois, our new CFO.

Thank you, Paul. I'm pleased to have joined the team here at Sanofi earlier in April, and I'm looking forward to interacting with all of you in the future. Sales were up 7% in the quarter. As Paul mentioned, growth was driven by our ongoing portfolio transformation towards biopharma medicines, with Dupixent sales up by 25%, and the new launches, including Befortis, up by 150%. Excluding the impact of Obagio loss of exclusivity and COVID-19, growth was 12%. This analysis does not aim at removing all headwinds, but simply illustrates what the new Sanofi may look like in the future. Our gross margin at 73.5% was down by 2.6 percentage points, mainly due to Obagio and due to the absence of COVID-19 vaccine sales this year. In addition, the quarter was impacted by a one-off inventory adjustment to reflect declining standard costs. R&D expenses increased by 12% at constant exchange rates, in line with our ambition to invest more in our pipeline. Resources are being deployed to advance less-stage immunology and neurology projects. SG&A increased by less than 3% below half of sales growth, illustrating our strategic reallocation of resources. Our business operating margin decreased to 27.2%, mainly due to the gross margin decline, the step-up in R&D expenses, and an increase in the profit sharing with Regeneron. As expected, EPS was down 7.4% in Q1, also partly impacted by a higher tax rate. Just one word on cash flow. It will be impacted in 2024 by our lower business operating income and by the phasing of rebate payments in the U.S. related to prior year sales. Let me now give you some additional information on our coming quarter. In Q2 2024, we expect Dupixent and the new pharma launches to grow further while we continue to see the impact of the Obagio loss of exclusivity in Europe. Of note, we don't expect any Bfortus sales in Q2 due to early delivery in Q1 in some southern hemisphere countries, while shipment in northern hemisphere countries are not expected before the second half of 2024. For the full year 2024 sales outlook, we expect Dupixen to reach around 13 billion euros and the vaccine franchise to grow mid-single digit, with Bfortus anticipated to reach blockbuster status. The Obagio loss of exclusivity will continue to impact the top line, mainly in H1. Finally, planned divestments will lower ourselves by around €300 million over the year. For the full-year P&L, we expect our gross margin to decrease slightly due to Obagio and the absence of COVID-19 sales and revenues this year. OPEX is expected to grow, with about €700 million step-up in R&D, while SG&E expenses are expected to remain stable. Finally, our tax rate will increase to around 21% due to the implementation of the OECD Pillar 2. We confirm our full-year 2024 expectation of a low single-digit decline of our business EPS at constant exchange rates. Excluding the impact of the higher tax rate, the full year 2024 business EPS is expected to be roughly stable. On foreign exchange, we see a negative currency impact to EPS of around 6% based on April 2024 average exchange rates. As a reminder, we continue to anticipate strong business EPS rebounds in 2025, And as we have mentioned earlier, in 2024, we are transforming the company for long-term value creation. With that, I now hand over to Oumam.

Thank you, François. We've seen substantial positive pipeline progress already in Q1, where we continue to deliver a consistent news flow of clinically important data in scientific publications and congresses. For ExcellaMaps, encouraging phase 2 data in most risk ratios, It was recently published in the New England Journal, but updated with data from the 48-week open-label extension, which were presented last week at the AAN conference, supporting our commitment to MS patients. In atopic dermatitis, we have the potential to further establish our leadership with amlatilumab, where we presented the Phase IIb data at AAD. where a largely sustained effect of amlitalimab on atopic dermatitis symptoms was demonstrated after 52 weeks of dosing. Later, I will further talk about the data presented from these two pipeline projects. On the regulatory side, we've reached an impressive pace of approval with two of them for Dupixent and multiple indications within different countries. FDA discussions regarding Dupixent's SDLA in COPD are ongoing. under the priority review process, as Paul has mentioned. As usual, it's always possible that the FDA could require additional information to complete the priority review of our submission to finalized labeling. As a reminder, there is currently no biologic treatment approved in COPD, underlining our commitment to make Dupixent available to as many patients as possible as quickly as possible, and supporting the ambitions for Dupixent that Paul has already outlined. Amlotelemab, our non-depleting OX40 ligand monoclonal antibody, has shown potential best-in-class efficacy with a durable clinical response rate after 52 weeks from the stream AD phase 2B study. The responder percentages reflected in the IGA 0-1 and the EC75 scores, which are both surrogate endpoints for AD, were maintained and still significant, in fact, following the withdrawal from the drug at week 24. As you can see from the bar chart, that's week 52, results on and off medicine are similar, which shows the persistence of response suggesting the potential normalization of inflammatory T-cell activity and potential effect on type 2 and non-type 2 biomarkers. These important data support the viability of the 12-week extended dosing interval, which will improve the patient's treatment paradigm and potentially expand Sanofi's presence in AD and beyond has been interpreted by some to hint at potential disease-modifying activity. The opportunity of treating patients by treating this core central pathway with consistently good safety in both parts of the study signals that amlitalimab has the potential to reach much beyond AD and become the pipeline in a prompt. The cleanest AE profile in this class may reflect the importance of non-depleting mechanisms differentiating amlitalimab. The enrollment of all four studies phase 3 studies, is on track for the first regulatory submission expected in 2027. Now switching to Frexelamab, our CD40 ligand antibody, high-efficacy, non-lymphocyte-deflating potential MS treatment, also has a pipeline and a product potential with multiple indications under development. Most importantly, in relapsing remitting MS, the 48-week data from the Phase II open-label extension study has shown a sustained reduction of disease activity monitored by mean number of gadolinium-positive type 1 lesions occurring, appearing at each MRI. As you can see on the bar charts, patients who have switched from the placebo arms to the Frexalamab arms, both IV and subcut, have shown an impressive decrease of disease. It's important to mention that nearly every patient on Frexelomab IV had no new lesions presented at a near-to-zero annualized relapse rate at 48 weeks. Eighty-seven percent of participants completed the extension, and Frexelomab once again proved to be well-tolerated with an acceptable safety profile. Phase III studies on relapsing remitting MS and NR-SPMS have been initiated, and the first regulatory submission is expected in 2027. Prexelomab has the potential to provide additional benefits to patients and extend Sanofi's presence in multiple sclerosis. Switching gear now, turning to Rilzabrutinib, our oral BTKI, one of our 12 priority medicines. As you can see, we're developing this medicine in multiple indications, such as in ITP, in rare hematological diseases, but also in our main key therapeutic area, immunology, including asthma and chronic spontaneous urticaria. We were pleased to announce earlier in the week a positive readout of the LUNA3, phase three study in ITP, a rare autoimmune bleeding disorder characterized by abnormally low levels of platelets, persistent and disabling fatigue, and increased hemorrhage. These results confirmed the positive phase two data with additional details to be presented at forthcoming medical meetings and a regulatory submission later this year. Alongside this positive news, we also received more Phase II data on asthma, this time at the high dose, confirming the previous positive trends. We are very excited by the opportunity to present the data at the ATS conference next month. We can't wait to see it. Positive data in the third indication CSU were presenting in February at the AAIAI annual meeting with phase 3 starting later this year. These data sets are important stepping stones of our R&D transformation journey, emphasizing our commitment to rare diseases and to unlocking the important potential for BTK inhibitors, and also highlighting the value that our experience in immunology can bring to the development of a medicine that started its life in another company. Having recently reshaped our overall oncology strategy, we want to cover this in a little greater detail. Our strategy is one of selectively investing areas where we believe we have a chance to make a meaningful difference based on our expertise in immunology. Our aim is to focus on critical, unmet medical needs for patients, benefiting from immune mechanisms and related mechanisms of action, such as our NK cell engagers and using our technologies and platforms with the ABCs or the nanobots. I would like to end this slide on the positive news for the cancer community, where we are pleased by the recent positive U.S. development supporting the use of minimal residual disease, or MRD, as clinical endpoint in myeloma. Recognized by the FDA, this can potentially bring new effective treatments to patients earlier. We currently have Sarkleta RCD38 with a best-in-class potential and approvals in more than 50 countries as an option in the relapsed myeloma setting. Last December, the readout of the ICSIA study marked the fifth positive Phase III study, and second positive in transplant-eligible newly diagnosed multiple myeloma patients, where 77% of patients reached MRD negativity versus 67% in the comparator arm. The Sarclisa group had a 60% higher chance of achieving this data. Additionally, we had the MROS Phase III study, which was positive, and we look forward to sharing the latter in an upcoming medical congress To end my part of the presentation on a positive note, showing our ongoing commitment to deliver clinical data in the service of patients, I would like to highlight the upcoming Phase 3 and Phase 2 readouts, as well as regulatory submissions occurring in 24 and 25. News flow will increase and become busier as we move into 2025, supported by the step-up in R&D investments that Francois just mentioned. I'm enthusiastic and impatient at the same time as the news flow keeps on getting richer and better. Thanks to the clinical studies, we're constantly starting. With this, I hand back to Paul.

For sure enthusiastic and impatient, I can confirm that. We'll now open the call to your questions. As a reminder, we would ask you to limit your questions to one or two. As you can see, you have two options for Q&A. Hit the raise hand icon. You'll be notified when your line is open. So do remember to unmute or alternatively submit your questions through Q&A function. And our question will be read out by us. Over to you.

The first question will be from Peter. Well thought from Jeffries. Peter.

Hi, hopefully you can hear me. Thanks very much for the question. Can we just start off with the depiction and just thinking about the momentum we've seen, but equally then the more important is the new indication, COPD. I just wanted to sort of square up some of the very positive commentary I guess we heard on the potential for this indication, obviously significant unmet medical need, but also some word of caution just not to get too ahead of ourselves. I guess certainly challenges we've done, a lot of doctors seem to think that CFUD patients, they already know whether they have type 2 inflammation in many cases or not. So if you can talk about, you know, from your point of view, what the challenges are here and why, you know, we shouldn't expect at least initially a potential bolus of patients given they currently have, you know, no other options available and potential challenges, I guess, when you think about that. And then if I could just add a second question just quickly to Francois. You mentioned on the gross margin just with regards to a one-time adjustment. Would you need to just go into that a little bit more detail? And is that very much one-time for the first quarter? And perhaps you could do a possible quantified if it would help. Thank you.

All right, Peter. Thank you. Brian Dupixen, 2PD.

Yeah, thank you so much for the question. Really, you know, as we get ready for the launch in COPD, first and foremost, it all starts with the patients. And I think what we've seen with this brand is that by going into diseases that are driven by underlying type 2 inflammation, we've really opened up new treatment opportunities for these patients and really transformed a lot of patients' lives. I think, as Paul mentioned, over 850,000 patients already on therapy. Many of those actually happen to be asthma sufferers. and are treated by the pulmonologist community. So as you can imagine, as we've spoken with pulmonologists, they're extremely excited about having potentially a new option to treat these patients that, quite frankly, are on the highest dose of therapy. And that's why I think to contextualize them, these patients are on the highest doses of therapy and still exacerbating. So you have to contextualize that the right way. And then you saw our reductions in both the Boreas and the Notice trials, how effective they were at actually adding reduction in exacerbation rates of 30% and 34%. So, you know, we're very positive about this. I think the challenge with this particular patient population is probably less about the patient population and more about the fact whenever you bring a new therapy like this in more than 10 years, biologic ramp will take just a little bit of time. Even though there's a burden of disease there for the patients, it will take a bit of time to get these physicians used to using biologics. That said, the pulmonologist community does use biologics today, so we feel like we're in a good spot in preparing the marketplace really quite well, but excited about bringing it whenever it comes to the marketplace.

Thank you, Brian. Hooman, anything to add?

Hi, Peter. You asked a very specific question about the patient burden of disease and patient population. I just want to be clear about how we develop this molecule, both in Boris had noticed, we were very specific about our stratification strategy. We thought very deeply about the EO's concentration of the blood, and specifically the phenol. We stuck to our knitting very specifically on what we saw in the phase two, and that reflected in an outstanding reduction in exacerbations in our phase three studies. I think it's really important to recognize the side effect that goes forward. that our development strategy is laser-focused to enable launch in the highest unmet medical need population. And that's what we've done. So that's why we have confidence in the way this population launch will expand.

Let me just add, I think Brian touched on it too, but remember, and I have to give Regeneron some credit for really pioneering in AD with us back at the beginning, but they were strong on that. We had to really build out the education around these things, re-enter new areas You have to do the proper amount of education and work, make sure the right patients are identified and get supported. And that's why I think we've shared that we expect an inflection point in the business evolution more likely to be in Twitter.

Good afternoon, Peter. So the question on the inventory adjustment, it's a one-off essentially for Q1. What happened is that our standard costs are moving down, which is actually a good news for the medium term. But we have to revalue as a consequence of that our existing inventory to the lower standard cost. And this is a one-off adjustment that we booked in Q1. We don't expect to get much of it in Q2 and Q3 and for the balance of the year. And it was relatively sizable because it was close to half of the gross margin decline in Q1, so which means that we can expect that our gross margin should not see the same negative deviation versus last year as we progress further into the year. Thank you. Next question.

Next question is from Louisa Hector from Berenberg.

Louisa? Hello. Thanks for taking my questions. I wonder if we could just get an update on consumer factors that will determine your exit strategy and the timing and pros and cons of the different exit routes for maximizing shareholder value. And then I wanted to ask on real the Brutonib. So good data in ITP, just how you think about that sales opportunity and also the asthma. So the phase two positive for the high dose, I think in asthma, any more color around the safety profile and how you can proceed in asthma. I think the next step was phase two B, but then any more color on the endpoints, trial design, and that stepping stone to phase three. Thank you.

Okay, good. Francois, it's you.

Yes, Louis there. Francois speaking. So I'll take the question on consumer. As of now, we want to keep all options open, which means basically you can consider that we can consider a potential spin-off, an IPO, probably partnering as well with private equity. So we keep all options open with one single idea, which is to maximize value creation for shareholders. So I don't want to comment on the pros and the cons of each of the option for the time being, given that we are working with a very open view for the time being. But we'll keep you posted as we progress further into the year. But don't be worried. This is about creating value for shareholders.

Did you have any quick comment about where we're at in terms of technically being ready?

Sure. I mean, first, I can confirm that we're excited and that we're on track. And to give maybe a little bit more of color on the practical side, all our system cloning activities that had to happen successfully happened actually just last week. And moreover, we're well advanced in determining the scope of all the transition service agreements, which are very important as well. And in the meantime, we continue to focus on our three strategic priorities as we execute our overarching mission to make self-care as simple as it should be. So we're well underway.

Thank you both. Good questions on rilzabrutinib. Hooman, I don't know whether, Brian, you want to comment on potential value in ITP, or Hooman can either, but Hooman, do you want to start off with... Let me start.

Actually, Brian and I will tag team this one. Louisa, thanks for the question. So let's... You have a two-part question. There was ITP and asthma tolerability, so I'll just hit those very directly. I think that there still is a major medical need in ITP. As you know, 50% of patients remain undercovered for care, particularly in terms of a lack of stability of platelet count. They also suffer very substantially from fatigue. Rilzabrutinib is something of great joy for me personally, having treated these patients. The beauty of this treatment has a number of elements. One is it obviously prevents production of B cells, hence the BTKI, the Bruton tyrosine kinase inhibition, but also prevents phagocytosis of those platelets and reducing their platelet count. So mechanistically interesting compared to standard of care today, which undercovers 50% of patients, but also in some cases requires relatively extreme dietary modification. RILS offers real opportunity, 0.1, 0.2, 0.3, You asked about tolerability. To date, what we've seen has been gratifying in terms of RILSA's tolerability in every aspect. So that's pretty exciting. And then your question about asthma is super clear. We presented our low-dose asthma data last year. As you know, we were excited by that data. The opportunity for RILSA to become the first oral advanced asthmatic treatment is remarkable, but it has the potential to change the paradigm of of how we treat asthma compared to what we have today. All I can say is that it is with very substantial pleasure that I will invite everyone on this call to come to the ATS meeting to hear the outcomes of our realtor study, which we could not be more thrilled in sharing. With that, to dimensionalize market, I'm going to hand over to my twin, Brian.

So I think, you know, it's a really good question. I think as you saw on R&D Day when we really started to talk about the 12 assets, this was one of those assets we talked about. So the slide I think that was presented earlier was really impressive to show that in three potential indications, CSU, ITP, and then asthma, you know, this can be really differentiated versus the competition in each of those therapeutic areas. Now, specifically as it relates to ITP, and maybe I'll go a little bit broader and just say in rare blood space, We actually think that this could be potentially a blockbuster across both ITP and Weha combined. But contextually speaking, I mean, if you think about the two of them, obviously ITP will be a little bit bigger than what we see in Weha just based on the size. I think there's about 50,000 patients we see as being eligible for ITP. So really excited about this differentiated profile and bringing it to patients as soon as possible.

Thank you. I'll be in San Diego at ADS for the weekend between other meetings. So I'm looking forward to seeing the data presented too. Next question.

Yes, next question from Grumperi from Beaufort. Grum?

Great. Thanks for taking my questions. So the first one is just on tolabrutinib and just thinking about scenarios for the readout for the data there. Just given the low likely analyzed relapse rate that you're going to see in the control arm if you assume it's going to be similar to evabrutinib, Do you see that there's a thought process here that perhaps actually progression would be the better primary endpoint? Is there a possibility here to change the statistical analysis plan for those relapsing studies to disease progression? And alternatively, in the event that you didn't see that you met the primary endpoint on the Gemini studies and you do hit the endpoints in the progressive trials. Do you think that this could be something which would be priced higher in the market for that smaller overall MS patient population, but just as a progressive MS drug? So that's first one, Taylor Brutonib. Second one, Bay Fortis Supply. You said you can make this a blockbuster this year. I think my understanding was that that's sort of based on what you know you definitely have for supply, but you're working on increased supply. So perhaps could you sort of dimensionalize or quantify the upside here from bringing more supply on through the course of the year? I think if you just assumed you're able to satisfy the U.S. birth cohort alone, that would be a billion and a half euros or so. And you did talk about launching an additional market. So perhaps help us to dream a little about Bay Fortis revenue for the year. Thanks.

Okay, we'll help you dream a little in a moment, Graham. But first that, well, maybe there too.

So before Paul breaks out into song, I'm going to just tolerate and thank you for the question, Graham. Deeply thoughtful as always. So first part of the question was on scenarios. As you know, there's a bunch of scenarios. We have two relaxing, remitting trials running Gemini 1 and 2. We've got Hercules and Perseus. I think going into all the permutations of those scenarios is challenging, but let me just be, let me just dimensionalize this across those indications. Firstly, in terms of relapsing remitting, you make an excellent point about previous failures, particularly in comparison to Abagio. Let me just remind everybody very briefly on this call that in terms of penetration across the CSF, biophysical properties, and actually some of the biological properties we've seen with tolobrutinib. These are outclassed in some cases by two log orders, any of the other molecules in the space. Even Brutinib's primary biological capability is very substantial. Second point I'll remind you when we talk about mechanism is compared to some of our competitors out there, patients who come off standard of care. and go on to tolibrutinib have a continuing reduction in their neurofilament light. These two parameters make us optimistic about the, yet cautious in the role of tolibrutinib both in relapsing and progressives. Point one. In terms of your specific question, which you asked about endpoints, of course you're right that in 2024, ARR is currently the endpoint of choice. However, most of the community and most of the physicians that are looking after these patients will point you to the fact that actually composite confirmed disability progression is much more important to the patient's And, indeed, many of the endpoints that are currently being used use a relapse-independent progression rate. So the short answer to this question is we'll see where we get with Gemini 1 and 2, but I would strongly suggest that the regulator and the patients care deeply about disease progression, and we are well-powered to address that question. On the progressive disease, we're very substantially hopeful because of the data we've discussed before. And, of course, there is no Abagio comparator available. in that population. I think that provides you with a nice wrap-up of tolerableness. I'm going to hand over to Brian on that.

Yeah, I think the question on price is really the question on value, I think, more than anything else. It starts with, you know, there's no more differentiated program, I think, in MS for sure than this tolerableness program. So we'll see what the scenarios are. It's hard to guess today what the final scenarios will likely be, and we'll determine the value based upon that. We'll comment on price probably at that particular point, but not now.

Thank you, Brian.

Thomas, BayFortis Supply.

Exciting topic. So where we are on BayFortis. First of all, you've seen the strong performance in Q1. I start by reminding that point with a significant amount of sales above 180 million euros just in Q1. I'm mentioning that to highlight the fact that it covers not only NH23-24 last shipment for North Hemisphere, but also the first shipment of South Hemisphere with two South Hemisphere countries where we have started the launch. So that's the first part. As you have seen also, we've mentioned through Francois that we will not expect sales of BF2CQ2. It has nothing to do with supply, simply related to the fact that we were able to actually ship the South Hemisphere supply in Q1 and not in Q2. And of course, the rest of the set for this year will come with an up and down in Q3 and Q4. Now, as for the half of your questions on supply, we are full speed. Both AstraZeneca and us are working on extending our industrial network, as we have mentioned before, together. We have already added, of course, packaging lines. We are adding filling lines, as we have discussed together. And as we speak today, we are, every single day, filling new B42 series for the coming season. We're going full speed, as we discussed also. Of course, while we are currently manufacturing and filling a dosage, it will then depend as to the release of this product, as per the speed of approval of these two filling lines by the regulators, notably USFDA and EMA especially. So we believe that with all the elements we're putting together with our partner, we'll be able to have this supply release in due time for the coming northern emission system, which is why we are very confident in our ability to reach blockbusters to this. To be more specific beyond that, will be what we will discuss together at the Q2 earnings poll, when we'll have more news from our supply perspective and decisions with regulators.

Yeah, and thanks, Thomas. And I think everybody else is doing very best to because the demand is so significant. Q2 is a much better moment to give you much more facts as we have them, frankly. Next question.

Next question from Tim Anderson from Wolf. Tim?

Hi, this is Brian, not for Tim. Just two quick ones from us. After the EPS reset in 2024, you talked about a strong rebound in 2025. Consensus has growth being around 15% in 2025. Any comment, even if only directionally, on that figure? I know you might not say anything right now, but anything you might want to call out, such as uncertain variables that might jump out. And then a second question on OX40. You've said previously that this might be your most important pipeline drug, similar to Dupixent, but you capture full economics. Just want to ask how de-risked do you think this asset is at this point? in terms of how phase three trials might read out and whether you can confirm that there might potentially be an earlier readout, potentially in 2025.

Okay. Thanks, Brian, asking for a friend. I would say, Francois, any comment? I mean, to be clear, I don't want to put you on the spot, but we just said strong rebound. So is there any other color you can give?

No, Brian. What I can tell you, I don't want to quantify the EPS rebound, but we are very confident about it. I think we have the building block starting with the growth profile that we have today. And if we – you put aside already, even you can see it in the first quarter of 2024, some of the exceptional items and negative ones like Obadjo and the comparison base for – the COVID-19 sense, for example, we are already on a very strong platform in terms of growth today, and which gives you a fair illustration of where we can be in 2025. But I think it's too early to quantify it today, and I wouldn't apply to give guidance for 2025 at this point in time.

Thank you. Hooman, or it's fully like that?

Yeah, let me respond to this very briefly. Presented the data earlier. Super excited by the data. Three points. Remember, this is a biologic, which has been in a large number of patients. Bless you. It's likely to be extremely safe, particularly compared to anything else that's out there. It's highly well tolerated. The dosing interval, extremely interesting. And importantly, off-drug disease suppression is important. So there are only three comments to make on this. One is you said how optimistic are we? Very optimistic. But we're optimistic because it may also have the opportunity, and this has been echoed by external commentators, to have the potential to reduce atopic march and the progression of disease, particularly in those with early atopic disease, point one. So number one is we're bullish for that reason. Number two is mechanistically it's kind of interesting, right? Because it progresses both Th2 as well as Th17, Th22 pathways, which impact on a broad ethnic set of populations. So number two is it de-risks from that perspective. And number three is Clearly, we're taking it forward in a multiplicity of indications, some of which we'll read out this year. So the quick answer to your question is we're driving the studies as hard as we can. We've got four phase threes in flight. We'll drive them to completion in an orderly manner as possible. And we, bearing in mind it's a biologic, feel optimistic that we've been able to quantify its risks and benefits.

Great. Thank you.

Next question.

Yes. Next question from Emily Fuchs from Barclays. Emily. Great.

Hi, thanks for taking my question. The first is just piggybacking off of the earlier Dupixent launch and COPD answer. You know, the contrasting thought between that the biologic ramp is going to take some time, but that pulmonologists are very familiar with Dupixent, obviously. As you're thinking about this launch, is this one that is going to require a great deal of incremental promotional spend? And then on Altubio, you mentioned taking share from therapies other than Alactate. Are you seeing more share take from Hemalibra? as that did decline in the U.S. in the quarter. And then, you know, a big focus of their call yesterday was on the potential competitive threat from MIMATE. You know, are you seeing that as a potential threat to Altubio, or do you see that more as posing a threat to five specifics? Thank you.

Okay. Brian, over to you, CPD Ramp. And I think the challenge is, if Pomodoro just knows two picks already, why should it take so long, and what will be the cost of doing it?

Yeah, I think there's a couple things in there. And so I think just as we said before, as you bring in a new therapy like this to any patient population, You've got to educate the patient population. You've got to educate the physicians. You know, there's a lot to be done there to where it's not just to come in and take share game. It's going to be one of those things where it's biopenetration. We've seen this very well in atopic dermatitis. As you see in AD, here we are. We're, you know, nearly eight years in, and the biopenetration rate is 11%. So it takes time. It takes effort. The good news about cost, and I think the expense, is if you think about it, we're very efficiently set up because we're already set up across the alliance, actually, deeply in the pulmonologist offices across all countries. So from an OPEC standpoint, there will be a lot of efficiencies there because this will be our second indication in the same offices. So we, of course, will spend to support this launch. It's absolutely a critical launch to reach as many patients as possible, but we certainly see some efficiencies there in the way in which we're set up.

Thank you. I'll to you, Cher, any questions coming from non-factor and a comment on MIMEI.

Yeah, a couple of things there. I think it always goes back to the patient and the unmet medical needs. So if you think about this patient population, it's all about efficacy at the end of the day. And previously where you speak about heme-lira, that was more of a convenience play than anything else. While effective, it was more of a convenience play, the first subcutaneous product. So I'll break it into two pieces. Altubio is doing exceptionally well. We couldn't be more pleased with the launch progress because, again, the physician and the patient population really understood that for a single dose, you can actually have near normal factor levels for an entire week. And that's really changing the game in the offices. Now, where are we primarily taking business from? We always said we primarily take it from factors because we believe all patients that are on factors should be moved to Altubio. And the factor marketplace is about 60% of the marketplace still today, 60% to 65% of the marketplace. So that is primarily where we're taking business. Two-thirds of our switches are coming from competitors. One-third is coming from a lot to, again, a factor that should be switched. Now, as it specifically relates to Hemlibra, and then we'll talk about the competitor that's coming, I definitely think Hemlibra should be more nervous about the competitor than us, for sure. But we're taking about 10% of our business actually coming from Hemlibra. It wasn't what we anticipated necessarily, but, again, I think it goes back to the efficacy side of things. So, again, we couldn't be more pleased with the progress so far. A lot of our physicians, more than 80% of the physicians have prescribed, and we'll reiterate that they continue to increase their prescribing moving forward. So, again, we're off to, again, a really good start as we hit almost the first-year mark for Altivia. Thank you, Brian.

And, of course, you know, as we watch the market evolve, you're right. I think we took more patients from Hemlibra than expected, and probably because they're trying to chase efficacy down to the once a week, which meant once a week convenience was roughly the same. I think what Himalaya set the bar on was trying to find some new convenience standards. And I think for this monthly, or perhaps even eight weekly, with the juice around, I think that could be a new level too. So the market's clearly going convenience versus efficacy in the trades. So I think we're going to be well positioned. Next question.

Next question from Emmanuel Papadakis from Deutsche Bank.

Thank you for taking the questions. Maybe a question on cash flow, first of all, please. Francois, you mentioned some caution on the outlook for this year. I think you mentioned some one-time adjustments for prior year rebating. Perhaps you could give us a bit of colour, maybe in absolute sense. Cash flow last year was around 11 billion. Free cash flow was above eight. So what should we be thinking of for this year? And you did have some rather outsized restructuring costs in Q1 over 700 million. So where is that likely to land for the full year? What portion of that is cash? and a large capital, working capital outflow in Q1, which drove a negative cash from operations, which was also rather unusual. So comments around those would be very helpful. And then a quick one on T-Zield, flat again, two quarters in a row, still confident on blockbuster potential. If so, what gets us there? What are the timelines? Thank you.

So Francois, you do that, and then maybe I don't know if Olivia want to comment on T-Zield.

Let me start. Good afternoon, Emmanuel. On the cash flow, so it is essentially the fact that it deflates already in Q1 is essentially coming from... the lower gross to net in Lantus. As you know, we are booking lower, but we have to pay, from a cash flow point of view, the rebates on a higher base, at least in Q1. We will have a little bit of an impact as well in Q2 and Q3. This has impacted our cash flow significantly in Q1, and there will be a little bit of it on the next two quarters. Obviously, this will remain for the full year, so I just wanted to flag the fact that this is kind of a that will impact your cash flow for the full year. I don't want to quantify it because there are other moving parts, but this is a fairly significant one-off impact. On the restructuring cost, it's essentially linked to many of the projects that we have already announced. Part of it is actually obviously hitting France, as you know, because it's in the public domain as well. It's not necessarily a cash item that will be significant in 2024, as it will spread over the next two years partly, but some of it could potentially impact the end of 2024. Thank you.

Olivier, comments on TZILT? So we see a positive evolution and a slight acceleration, both in terms of screening and in terms of infusion rates, Q1 versus Q4. Where we have higher infusion in Q1, we have higher infusion in pediatric patients, which is for us a good signal, which means that we are progressing. Infusion have accelerated, driven by more field force execution. and better coordination along the patient journey. Payers' coverage is good. It's not a barrier to utilization. We said from the beginning that it would be a slow burn. We are shaping a market that didn't exist. There was no screening because there was no treatment. We know that it will take some time, but we think that it's worth the effort. It's about creating the awareness making sure that both awareness at the patient level, at the family level, but also with HEP is developed. We are very encouraged by the consensus guidelines that are being developed, the white paper from ADA that was recently developed, and there are a lot of activities, there's been a lot of activity in the Congress of ADTB with the GRF making and aligning a lot of medical society towards guidelines. So overall, it's going to be a slow burn, but we are confident that in the future, it will continue to progress. We think that it's worth continuing to invest. And this is reinforced by our exchange with KOL and clinicians that really gives us confidence that with TZILDA, we are the first and only disease-modifying therapy in type 1 diabetes.

Maybe I could add as well, Livia, that you said we knew full well when we made the transaction. There's a reason why some of these small companies sell a great medicine is because they just can't do this type of work over this many years. If I could add anything, the quality transitions are of less interest at the moment. The screening numbers are where we're heading and we will in contributing to the company, would do the hard yards, and not sure we meant to, but there was no competition for a decade. So we don't need to rush this. We can do this properly. In fact, we're the next competitor with the CD40 LIGA. So in time invested in building proper screening, infusion capacity where necessary, doing these things, we've all been on this journey before. I was on it with Hep C. I was on it with Remicade. You just do the work properly. and we'll get the benefits a few years from now because there's nothing to displace us. And that, of course, will set us up in the community for the CD40 light gown. So we're actually really pleased with how guidelines and other things are falling quickly into line. Next question.

Yes, next question from Simus Fernandez from Google 9. Simus?

Great, thanks so much for the question. So I just wanted to clarify the tolerability comments around rosabrutinib. Just to confirm, it says safety consistent with prior results on the slide. Just wanted to confirm that that is consistent with the lack of an LFT or liver signal, as previously stated. as well as maybe confirmation to some degree that the MS population, that the VTK signal in the MS population may actually be population specific. And just a quick second question. You know, Paul, just wanted to get a sense for how you're thinking about business development from here. I guess with the incremental investment in R&D and, you know, the robust kind of pipeline dynamics heading forward, wanted to get a better sense of how you're thinking about business development going forward in terms of, you know, the perhaps areas that you're most focused on building out. or if there is kind of a profitability or stage of development, later stage, that's more interesting versus early stage.

Thanks so much. Thank you, Seamus. Human tolerability, Rilza, and some also comments about MS and the population's creating different responses.

So, Seamus, thanks for the question, both thoughtful. The first one, brief and to the point, I can confirm that we're pleased with the liver tolerability profile of rilzabrutinib thus far and are confident taking it forward. As you said, point two on tolibrutinib, you very thoughtfully have called out the fact that multiple sclerosis appears to be a distinct indication with the BTKIs. There may be interaction between the BTKI and the underlying biology in MS, which predisposes people to a liver signal. I think that's, as you were referring to, a reasonable hypothesis with data supporting it and reflects clinical experience. I think both of those points are well made.

Thank you. On the BD, I guess, stroke M&A issue, You know, we guided to the sort of 2 to 5 billion range in Ultron. That's sort of standard, I think. We did commit after Q3 last year that we would hold R&D through 24 and 25, around about 7.7 billion. So, you know, we don't want to wriggle away from that. I don't think that's appropriate. Of course, we will get some failures in there. or some delayed starts or different things, which will mean that capacity will open up for us perhaps into 25 and 26. And then, of course, most of the big studies start to graduate as the pipeline comes along, and that gives us the sort of automatic bandwidth. I think to maintain that, you might see more of our effort and energy on the bolt-ons either in the early phases of where this bigger spend comes later and we can absorb that without missing a commitment, or indeed in the late stages where the R&D commitment ongoing is minimal and we can hold the line on what we've said and perhaps bring in a later stage asset. You know we have a good balance sheet. You know we have to leverage that. But I think the discipline around working within the envelope on our R&D budget is to be maintained. Should I throw the normal CEO disclaimer in? We remain opportunistic and everything else? Of course, but we've given guidance to you. We'd like to honor it for us and for you and make sure we get it done. And if we find some opportunities to reallocate, that's perhaps our biggest thing. We'll take it, but But demonstrating the discipline post Q3 last year is the number one priority because don't forget we have enough assets in-house to, we believe, to grow UPS, of course, and to do what we need to do and to go all the way through the LOE of do picks and whatever that comes. But the discipline is what will be judged on, I think, over the next couple of years at least. So that's as much as I can share with you. Next question.

Next question from Joe Weston from UBS.

No? Yes, can you hear me? Yes. Excellent. Two quick questions then, please. On Altuvio, I wonder, is there any evidence of moderate patients rather than severe patients beginning to try prophylaxis, given that this is now an ability to get to a normal level of factor clotting? On Bay Fortis, could you give us an idea of what the next countries would be? So you've obviously got potentially more demand than supply. What's the sort of order of countries that we should be thinking of as you roll out? Because you said you'd be rolling out some more this year. If I can just finally say, is there any read across from the failure in Frexalamab in Socrans to any of the other indications? Or should we see that as completely isolated?

Okay, good job. Good questions. Brian, Altuvio use moving into moderate?

Yeah, I think, I mean, the way we think about the marketplace is actually, again, all these patients are on therapies. So it's, you know, when we talk about the switches, again, these patients are identified really early in their life, and then they're on some type of therapy. So, you know, from a moderate standpoint, we don't think about it that way. Actually, we think about it as what type of therapy are you on and what types of efficacy levels are you looking for or convenience levels are you looking for. And that's why, again, we're really bullish because of what we've seen from a switch standpoint. The marketplace is really responding to the profile that we're bringing, which is, again, better efficacy near normal factor levels over a weekly period with a one dose type of therapy. So we're seeing switches of all patient types, no matter the types of therapy that they're on.

Thank you. I do think Altivia is going to surprise everybody, I have to say. All the feedback and being in the conferences, I think that near normal thing Joe mentioned is the goal. Thomas, I'm not sure whether you're prepared to share anything. a list of countries in what order, but maybe if you give some regional input.

Yes, and I can tell you a bit of flavor of how we are doing it and why we're not saying so much more. So, rightfully, as you said, Joe, of course, we are going to make sure that we have ample supply for the three geographies where we had significant uptake last year. You know very well about Spain, the U.S., and France. Moving forward, we've already, during Southern Hemisphere, ongoing season, open Chile and a couple of regions in Australia. Moving forward, for Northern Hemisphere 2024, I expect more European countries to pick up. What happens, and that's very important to remember, each time we introduce a new immunization, there is always a very specific national process for first setting up the right recommendations through the recommended body. I set up, and then we launch into the right National Immunization Schedule, which is why I cannot give you specific European countries right now, because I need to leave it to the recommending bodies to make sure that they have those votes, and we proceed for NH2024. In addition to this geography in Europe, you know very well that we just got the registration of B40s in Japan in Q1 2024, and you should expect a little bit of Japan and China set in the private setup, I will say, not national immunization program for 2024, in order to prepare for larger volumes in the coming year, but for the following seasons.

One of the things that Joe's comment on the asylum rub is well placed. Over to you.

Thanks, thanks. Well, thanks, John. Great question. Just to be super clear, we'd always positioned frexamab primarily as an MS and a T1D medication, and it's clearly demonstrated as CHOPS in MS in great detail and is progressing in T1D. It is incumbent on us as a patient-centric organization to for us to be thoughtful about the broadest possible patient benefit we can bring with our drugs. In my own clinical practice, I treated a bunch of patients with Sjogren's, and they are definitely on that medical need. We initiated some experimental medicine studies to see whether we could signal-seek in those indications. I don't see the Sjogren's readout as anything other than failure in a signal-seeking study, and we remain confident about proxalamab in the bigger, lesser indications.

Yeah, I think, right, the type 1 diabetes and MS, where I think you said it already, but just the risk of repeating it, where we have pipeline in the product, we will go and explore some adjacent areas where we think there's some pathway or some biological reason why there might be an impact. And you should expect more of that from us in like early box, left and right, pipeline in the product drugs, because We need to do that. I think we really need to do that. And, of course, everybody's tried showrooms because it's difficult to crack, and, you know, we can't pull any punches if we think we can do something. Okay, next question.

Next question from David Riesinger from Living. David?

Yes, thanks very much, and thanks for all the updates today. So I just have one question. And maybe you could comment in some detail, please. So the company has accelerating I&I Phase 2 readouts in 2025. Could you discuss the key cards that we'll be turning over for the candidates with the biggest commercial potential? Thanks very much.

Okay, David, thank you. So I think Hooman, we'll start with you on that. you know, we've already put them into two buckets, frankly. So, you know, I don't know how much more we need to add, but for the readouts that you're excited about, for example, human for INI for 2025 specifically is what you asked.

Yeah, specifically. It's like choosing between one's favourite children for our readouts in 2025. But I'll give it a go. So, Firstly, it's a big letter. You asked for the answers in some detail, and I will try and provide them with thoughtful detail. Sarphase 2 is reading out, as you've seen, there are amyloid telomere in a variety of disorders. particularly hydratinitis suppurativa and alopecia. Number one, as I said, with a non-depleting OX40 ligand inhibitor, we hit the type 2 inflammation, but also take on a bunch of other mechanisms. OX40 is often regarded as a checkpoint, an immune checkpoint, and I'm excited about its role in alopecia areata and the hydratinitis suppurativa, which have very diverse clinical indications. Obviously, we have an oral RITK1 inhibitor, with a role in ulcerative colitis. We think that's interesting. The biology is well-precedented. So, number one, I think the amyloid tiller map constellation of therapeutic opportunities is interesting. I think the IRAC degrader is super interesting. It's mechanistically unique. where we with our partner have played both an atopic dermatitis as an oral therapy, but also an hydratinib as a sub-receiver again. And then two others, just to call out, as you asked what our favorites were, the oral TNFR1 signaling inhibitor has the potential to be a truly disruptive therapy for patients with inflammatory disease, as it will capture potentially the value of classical TNF treatment but with a differentiated side effect profile, not affecting TNFR2. And the second one I wanted to call out is, obviously, linsecumate, a very special molecule in asthma. The reason it's special is because it seeks to augment durability, but also raise efficacy ceilings. And the way it does so is to take two modular targets, both of which are precedented mechanisms of asthma, put them together. So what we do is learn from the ecosystem, and with the excellence of our platforms, enhance what we know from the ecosystem. But before I jump off the pedestal, I also want to doff a cap to Tomar, because it would be remiss of me to talk about our pharma agents and not talk about the RSV products that are reading out in Phase 2 next year. We remain as excited about vaccines as we do as our pharma products.

So, you know, it's nice it took you a while to David's question. I'll answer that. There's a lot going on. Did you mention TNF of 40 ligand in HR?

I didn't mention that. Nor did I mention TL1A or some of the other remains.

TL1A will be up there too. So it's going to be busy. It's going to be busy, but this is what we've been trying to get the company to this point. We don't know if they'll all work, of course, but we do know that we would rather have the readouts. Okay, next question.

The next question from Gary Stevenson from Exxon.

Thanks for taking the questions. Hopefully you can hear me. Just firstly on the outlook, given the top-line momentum, could you frame maybe the level of flexibility you have in the R&D and launch plan and hence the likelihood that any outperformance could drop through to earnings? I mean, it wasn't that long ago you outlined the acceleration, so I'd assume that any near-term investment opportunities that you wanted to accelerate you perhaps have done already. And then secondly, just on the theme of the consumer separation, perhaps Francois, as it's your first earnings call as CFO, I could ask for your thoughts on what might be on your list in the scenario where Sanofi was to receive a significant cash inflow. So really just your thoughts on appetite for larger volume or larger value of M&A, larger buybacks or willingness to operate with net cash for a period of time. Thank you.

Francois, do you want to take a stab at those?

Yeah, I can.

On the R&D flexibility, this is good news if you can generate additional resources. I think that we will need to decide on due time on each and every single case and their merits. If we have good cases for good returns on investment on R&D, I think we will not hesitate to do it. That being said, we should not discount the fact that we let some of it flow to the bottom line. And I think that it's extremely important that we reward our shareholders. in an attractive way, which is the reason why I'm coming back to what I said earlier as well on our total confidence on the significant rebound in EPS, for example, in 2025. I think on capital allocation, I think that we have a very clear policy. So first of all, we want to invest in our business, both organically and inorganically as well. I think Paul touched on it earlier, and we need to be very disciplined on that, which means that we are rather thinking today of Bolton cases within the $2 to $5 billion, clearly with a view to get some return and generate value for shareholders as well. Paul said it. We don't want to discount either larger opportunities if they're different themselves. And these are attractive, obviously. In terms of capital allocation, we don't want to discount share by back. That's a possibility, especially in the context of the separation of CHC. So this is part of the option that we keep on reviewing. Let us work further into the year to decide exactly on which route we get. But we heard the message that there is an appetite as well from shareholders to get some share of the cash that we could generate from that transaction.

Thank you, François. We have time for another question.

Yes, the last one will be from Peter Verdul from Citi.

Thank you. Thank you, Peter Verdul from Citi. Two questions, please. I think everyone on the call realizes and your comments portray it that pipeline perception is the missing piece of the puzzle to get the shares flying again and above 100. So with that in mind, I've got two follow-up questions for Huma and please on Rilza and Toler Brutniv. I totally get you can't disclose too much ahead of data presentation, but Hooman, can I push you as best I can to give us a sense of how competitive you think that realtor data set in ITP is from an SQC safety perspective to incumbent molecules such as Promactor, especially given Promactor is facing generic risks. I'm going to try and push you as best I can without getting you to disclose the data. And then on Tolly, the head of the late summer phase three readouts, just how you're thinking about the relative opportunity across readouts for emitting and progressive, because On relapse remitting, the KOL feedback we're receiving and the data that's being presented at actrims and ectrims seems to be showing a waning effect for both Ego and Tolly over time as it relates to gadolinium lesion reduction. So the message we're getting is be wary of a positive result in relapse remitting. Progressive is clearly where the biggest unmet need is, but we don't yet have any randomized phase 2 data we can sort of bank on. So is it just the brain penetration angle and the NFL data that you've spoke about earlier, Hooman, that it's what gives you confidence in the progressive trials. Would you bring any other points to the table? Thank you.

Okay. Thank you so much for those questions. As always, deeply thoughtful. Let me just take real time very quickly. I think the existing standard of care is leave um they've been incredibly important medicines by the way i don't want any level people not to appreciate how important they've been for the treatment of icp um but they don't get to the heart of the disorder as i said mechanistically bed suppression of b cells and the reduction of fc gamma based macrophage uh platelet destruction has been really important and just building up the number of platelets doesn't ameliorate the severe fatigue, etc. So I really do think RILSA is a deeply important new add to that space. And as Brian beautifully said, beyond ITP, its future role potentially in rare blood is really very significant. And the tolerability profile is, as you say, I can't disclose, but to my mind, very pleasing. So the ITP answer, bullish on RILSA. On tolibrutinib, from time to time I find it frustrating that people try and change the goalposts. And let me be super clear, I think in progressive disease there is almost nothing out there of any significant value in secondary progressive MS. It's a horrible disorder with ventricular dilatation and substantially unmet medical need. Today many of those patients die. are either undertreated or labeled as a different condition in order to access therapy, right? So for progressive disease, I think the risk-benefit, should the tolerative readout play to our favor, is unequivocal. And I'm prepared to be confident that if there's efficacy, with the level of safety we've now seen with monitoring, that in progressive disease, there is significant value on the table. With respect to relapsing remitting, where my frustration comes in, to take, you know, at this stage in Gemini's development, to argue that even if the molecule works in phase three and passes the goalpost, that we now have another discussion about whether this is going to be sustained, I think is a difficult question to answer. My view is in a few months we will see the results of Gemini 1 and 2. I think that the regulatory part is really well established, both with respect to ARR, but also with respect to disability. This isn't something we've invented. And I think the onus will be on us and the regulator to get this through and benefit patients with relapsing disease if we get ARR and or disability. I think it's simple as that, really.

Yeah, thank you. Thank you and thanks. I mean, we, and with you, you know, I think rules have a really competitive profile irrespective of promactor and its challenges with diet and everything else. I think once we get beyond as well to asthma and to CSU, I think you're talking advanced orals in these spaces. And I think the question is the right question about, you know, earlier it was asked about tolerability. If you can thread that needle, which I believe we can, We'll put it in the two. On Tolly, I think it was summed up beautifully. You know, let's not forget that an advanced oral with potential disease modifying could be the profile. And, you know, there's a real space for it. So I think that if we can get it done... even worth speculating anymore. I think if we affect progression in any form, even if we have to have conversations with regulators about what is sort of understood and what is not, I think it's very hard to resist something that could do that. We'll find out. We'll see how good the data is. So, thanks everyone for your time today. Next and start in 2024. Sales advanced by 7%. Growth is driven by launches, including new indications for duplication. A transformation is gathering pace. And I felt that a bit today during the call, the questions weighted towards the future and what we're trying to do. If you have any follow-up questions, feel free to contact the IR team. They never rest. And have a great rest of your day. Thank you.