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Annual Results 2011
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2
Forward Looking Statements
This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts.
These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product
development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”
and similar expressions.
Although Sanofi’s
management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among
other
things, the uncertainties
inherent
in research
and development, future clinical
data and analysis, including
post marketing, decisions
by regulatory
authorities, such
as the FDA or the EMA, regarding
whether
and when
to approve
any
drug, device
or biological
application that
may
be
filed
for any
such
product
candidates as well
as their
decisions
regarding
labelling and other
matters
that
could
affect the availability
or commercial potential
of such
product
candidates, the absence of guarantee
that
the product
candidates if approved
will
be
commercially
successful, the future approval
and commercial success
of therapeutic
alternatives, the Group’s ability to benefit from external growth opportunities, trends in exchange rates and
prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, the average
number of shares outstanding as well
as those discussed or identified in the public filings with the SEC
and the AMF made by Sanofi, including those listed under “Risk Factors”
and “Cautionary Statement Regarding Forward-Looking Statements”
in Sanofi’s
annual report on Form 20-F for the year ended December 31, 2010.
Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.
3
Agenda
3
Key Highlights on Strategy Execution●
Christopher A. Viehbacher, Chief Executive Officer
Financial Performance
●
Jérôme
Contamine, Executive Vice President, Chief Financial Officer
Business Performance
●
Hanspeter
Spek, President, Global Operations
R&D Update
●
Dr. Elias Zerhouni, President, Global Research & Development
Conclusion
●
Christopher A. Viehbacher, Chief Executive Officer
Q&A Session
KEY HIGHLIGHTS ON STRATEGY EXECUTION
Christopher A. Viehbacher
Chief Executive Officer
4
Our Key Messages for Today
Strategy execution is on track
2011 results demonstrate importance of growth platforms and Genzyme
acquisition
2012 is a transition year
We are set to deliver sustainable growth over 2012-2015
1
2
3
4
5
Executing
Successful
Strategy
to Reposition Sanofi
Deliver sustainable growth
and generate improved
shareholder returnsAdapt structure for future
challenges and opportunities3
Pursue external growth opportunities2
Increase innovation in R&D1
66
R&D Pipeline Delivery
Significantly
Improved
in 2011
Kynamro™ (mipomersen)–
hoFH
and severe heFH
in Jul 2011 in EU
Aubagio™ (teriflunomide)–
RMS in Aug 2011 in the U.S. and Feb 2012 in EU
Lyxumia® (lixisenatide)–
Type 2 diabetes in Oct 2011 in EU
Zaltrap® (aflibercept)–
2L-mCRC in Dec 2011 in EU and Feb 2012 in the U.S.
hoFH: Homozygous Familial HypercholesterolemiaheFH: Heterozygous Familial HypercholesterolemiaVTE: Venous Thrombo
EmbolismRMS: Relapsing Forms of Multiple SclerosismCRC: Metastatic
Colorectal Cancer
Visamerin® / Mulsevo® (semuloparin)–
VTE prevention in chemo-treated patients in Sep 2011 in the U.S. and EU
7
Five new molecular
entities
submitted:
1
Kynamro™, Aubagio™, Visamerin®
/ Mulsevo®, Lyxumia®
and Zaltrap®
are registered trade names submitted to health authorities for investigational agents
Successful
Acquisition of Genzyme
in 2011
Strong management team in placeFocus on Rare Diseases and Multiple Sclerosis
Completing the integration
Ensuring manufacturing recovery
Creating synergiesAchieved synergies of $230m in 2011
Advancing R&D pipelineStrong Phase III results with LemtradaTM
Oral eliglustat
Phase III program fully recruitedCambridge positioned as primary U.S. research site
A SANOFI COMPANY
FDA and EMA approvals granted for Framingham plant to supply Fabrazyme®
Progress towards focusing Allston plant on Cerezyme®
Target inventory increase of Cerezyme®
and Fabrazyme®
1
2
3
4
8
2
€2bn Cost
Savings
Target Achieved
in 2011
Plan Plan PlanActual Actual Revised
€2bn
€1.3bn
€0.5bn
2009 2010 2011
(1)
At CER, before inflation and tax on a constant structure basis compared to 2008(2)
Not including Industrial Affairs net savings evaluated at €200m
OpEx Savings(1,2)
New plan to generate €2bn incremental cost savings by 2015
9
3
Sanofi Grew
Sales in 2011
due to Genzyme
Acquisition and Growth
Platforms
2011
€33,389m
2010
€32,367m
2009
€29,306m
2008
€27,568m
Sales
+5.3%
at CER
10(1)
In 2008 and 2009, Merial Joint Venture sales were not consolidated by Sanofi(2)
In 2010, excluding non-consolidated sales from Merial, Sanofi reported sales of €30,384m
(1) (1) (2)
2009 201120102008
% of
Total
42.7% 65.0%
Sales of Growth Platforms(1) & Genzyme
Sanofi Boosted Sales of its Growth Platforms and Significantly Reduced its Patent Cliff Exposure in 2011
(1) 2010 include sales of Merial. In 2008 and 2009, Merial Joint
Venture sales were not consolidated by Sanofi(2) Lovenox®
U.S., Plavix®
Western EU, Taxotere®
Western EU & U.S., Eloxatin®
U.S., Ambien CR®
U.S., Allegra®
U.S., Aprovel®
Western EU, Xyzal®
U.S., Xatral®
U.S., Nasacort®
U.S. -
Generic makers of oxaliplatin required to cease selling in the U.S. since June 30, 2010 but judgement is under appeal by Sun.
20112009 20102008
11
% of
Total
27.4% 9.4%
Sales of Key Genericized Products(2)
€21,703m
€11,783m
€3,152m
€7,565m
12
20112008
€3,071m
Diabetes Solutions
20112008
€6,540m
Emerging Markets(1)
20112008
€2,861m
HumanVaccines
20112008
€1,203m
Consumer Health Care
20112008
Animal Health(2)
20112008
Innovative Products(3)
€1,786m
Growth Platforms
Are on Track to Deliver Sustainable Growth Beyond the Patent Cliff
(1)
Including €347m from Genzyme in 2011(2)
Merial Joint Venture sales were not consolidated by Sanofi in 2008(3)
Multaq®
and Jevtana®
€10,133m
€4,684m €3,469m
€2,666m €2,030m
€449m
CAGR +15.7%
CAGR +15.1%
CAGR +6.6%
CAGR +30.4%
CAGR +4.4%
Geographic Sales Split Balanced in 2011
13
Note: Sales growth excluding A/H1N1 and Genzyme is : -5.7% for U.S., -10.5% for Western Europe, +10.4% for Emerging Markets, +6.3% for ROW(1)
World less North America (USA, Canada), Western Europe (France,
Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia and New Zealand(2) Japan, Canada, Australia and New Zealand
ROW
€4,169m+13.8% at CER
12.5%
United States
€9,957m+6.8% at CER
29.8%
Western Europe
€9,130m-4.0% at CER
27.3%
Emerging Markets
€10,133m+10.1% at CER
30.3%
(1)
(2)
€6.61
2011
€6.65
2010
€7.06
20092008
€5.59
Patent Cliff Impact on EPS Mitigated in 2011
Business EPS
14
-3.8% at CER
2013e2011
€2.65
2010
€2.50
2008
€2.20
2009
€2.40
15
Sanofi Increases Shareholder Returns
●
Proposed dividend(1) of €2.65 per share for 2011 results
●
Progressive increase of payout target to 50% for 2013 results(2)
●
Over €1bn of shares repurchased during 2011
●
Opportunistic share repurchase program
during 2012
Evolution of Dividend
Payout 40%
Payout 50%
(1)
To be submitted for approval by the Shareholders’
Annual General Meeting on May 4, 2012(2)
Dividend to be paid in 2014
+6%
Payout 35%
FINANCIAL PERFORMANCE
Jérôme Contamine
Executive Vice President, Chief Financial Officer
16
+€2,569m
Growth Platforms
+€1,943m
Others
-€128m
A/H1N1
-€452m
Key Genericized
Products
-€2,206m
FY 2010
€32,367m
FY 2011
€33,389m
FX Impact
-€704m
Genzyme
Genzyme and Growth Platforms Overcome Loss of Blockbusters in 2011
17
(1) Lovenox®
U.S., Plavix®
Western EU, Taxotere®
Western EU & U.S., Eloxatin®
U.S., Ambien CR®
U.S., Allegra®
U.S., Aprovel®
Western EU, Xyzal®
U.S., Xatral®
U.S., Nasacort®
U.S. -
Generic makers of oxaliplatin required to cease selling in the U.S. since June 30, 2010 but judgement is under appeal by Sun.(2) Emerging Markets, Diabetes Solutions, Vaccines, Consumer Health Care, Innovative Products & Animal Health(3) Consolidated since April 1st, 2011
FY 2011 Sales (€m)
(1)
(2)
(3)
The US$ Remained our Biggest Currency in 2011
18
2011 Currency Sales Exposure
Euro € 29.6%
U.S. $ 28.2%
Japanese ¥ 8.4%
Brazilian Real 4.4%
Chinese Yuan 3.1%
Australian $ 2.3%
Russian Ruble 2.2%
British £ 2.0%
Canadian $ 1.6%
€
/ U.S. $ sensitivity estimated at 0.3%
of 2012 EPS growth for a 1-cent movement
in the exchange rate
19
Sales and Business EPS Up +9.2% at CER in Q4 2011
€m Q4 2011 Q4 2010 % Change
(reported €)
% Change
(CER)
Net sales 8,508 7,823 +8.8% +9.2%
Other revenues 415 419 -1.0% -1.9%
Gross profit 6,202 5,770 +7.5% +7.3%
Business operating income 2,828 2,540 +11.3% +10.0%
Business net income 2,077 1,838 +13.0% +11.7%
Business EPS €1.56 €1.41 +10.6% +9.2%
CER: Constant Exchange Rates
20
FY 2011 P&L Reflects Genzyme Consolidation and Shift in Business Mix
€m FY 2011 FY 2010 % Change
(reported €)
% Change
(CER)
Net sales 33,389 32,367 +3.2% +5.3%
Other revenues 1,669 1,669 0.0% +4.0%
Cost of sales (10,426) (9,302) +12.1% +14.3%
Gross profit 24,632 24,734 -0.4% +1.9%
R&D (4,811) (4,556) +5.6% +7.4%
SG&A (8,536) (8,171) +4.5% +6.7%
Other current operating income & expenses 4 77 - -
Share of Profit/Loss of associates 1,102 1,036 - -
Minority interests (247) (257) - -
Business operating income 12,144 12,863 -5.6% -3.9%
Business operating margin 36.4% 39.7% - -
CER: Constant Exchange Rates
21
Cost of Sales of 31.2% in 2011 In-Line with Guidance
Cost of Sales (%)
31.6% 32.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
●
Higher Cost of Sales in 2011 vs. 2010 as anticipated due to:
●
Loss of sales of €2,206m from key genericized products with relatively low Cost of Sales
●
Lack of A/H1N1 sales
●
Productivity improvements
●
Decrease of CoGS ratio excluding key genericized products and A/H1N1(1)
21
31.2%28.8%
(1) Lovenox®
U.S., Plavix®
Western EU, Taxotere®
Western EU & U.S., Eloxatin®
U.S., Ambien CR®
U.S., Allegra®
U.S., Aprovel®
Western EU, Xyzal®
U.S., Xatral®
U.S., Nasacort®
U.S. -
Generic makers of oxaliplatin required to cease selling in the U.S. since June 30, 2010 but judgement is under appeal by Sun.
2010 2011
14.9% 15.2%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
14.4%14.1%
22
Tight Control over R&D Expenditures in 2011
●
2011 R&D expenses of €4,811m, up 7.4% at CER
●
Addition of €419m of R&D expenses from Genzyme
●
R&D/Sales ratio slightly up vs. 2010 to 14.4%
●
R&D expenses down 2.4% at CER excluding Genzyme reflecting transforming initiatives
22
R&D/Sales Ratio (%)
2010 2011
28.1%26.1%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011
25.6%25.2%
23
SG&A Expenses Excluding Genzyme
Declined in 2011
SG&A/Sales Ratio (%)●
2011 SG&A expenses of €8,536m, up +6.7% at CER
●
SG&A expenses down 2.6% when excluding Genzyme
●
SG&A/Sales ratio only slightly up
in 2011 vs. last year reflecting:
●
Lower ratio of Selling & Marketing Expenses to Sales ratio
●
Genzyme consolidation
●
Lower SG&A ratio in Q4 reflecting tight control of SG&A expense and start of Genzyme synergies
23
24
€m FY 2011 FY 2010 % Change
(reported €)
% Change
(CER)
Business operating income 12,144 12,863 -5.6% -3.9%
Net financial expenses (412) (362) - -
Income tax expense (2,937) (3,286) - -
Effective tax rate -27.0% -28.0% - -
Business net income 8,795 9,215 -4.6% -2.7%
Net margin 26.3% 28.5% - -
Business EPS €6.65 €7.06 -5.8% -3.8%
Average number of shares outstanding (in million) 1,321.7 1,305.3 - -
Patent Cliff Impact on BNI Largely Mitigated in 2011
CER: Constant Exchange RatesBNI: Business Net Income 24
From Business Net Income to Consolidated Net Income
€m 2011 2010 % Change
(reported €)
Business net income 8,795 9,215 -4.6%
Amortization of intangible assets (3,314) (3,529)
Impairment of intangible assets (142) (433)
Fair value remeasurement of contingent consideration liabilities 15
Expenses arising on the workdown of acquired inventories (476) (142)
Restructuring costs (1,314) (1,384)
Gains and losses on disposals, and litigation (327) (138)
Discontinuation of depreciation of PP&E (IFRS5) 77
Tax effect on the items listed above & other tax items 2,482 1,856
Share of items listed above attributable to non-controlling interests 6 3
Restructuring costs and expenses arising from the impact of acquisitions on associates and Merial (32) (58)
Net income attributable to equity holders of Sanofi 5,693 5,467 +4.1%
25
Restructuring Costs & Others
-977Dividend &
Share Repurchase
-2,446
Acquisitions & Licensing
-14,217
CapEx
-1,644
Net Cash from Operating Activities
+10,002
Net Debt Dec 31, 2011
Net Debt Dec 31, 2010
26
Strong Free Cash Flow Generated in 2011
+ €2,016m
(1)
Excluding Restructuring Costs(2)
Including -€754m Fx translation effect on Net Debt vs. end of Dec 2010
(1) (2)
●
Continued strong Free Cash Flow of €8,358m
●
Stable operating cash flow of €10,478m
●
CapEx limited to €1,644m despite inclusion of CapEx from Genzyme and Merial
●
Net debt below 1X EBITDA
●
Reasonable leverage
●
Low average cost of gross debt of 2.6% in 2011
In €m
-1,577
-10,859
FCF
8,358
27
CoGS: Increase productivity through Total Cost Ownership and LEAN approaches
R&D: Restructure footprint and variabilize costs(1)
Commercial Operations: Optimize field forces and marketing spend
Support Functions: Leverage shared services model
(1)
2011 R&D expenses on a proforma basis should reach around €5bn(2)
At CER, before inflation and tax on a constant structure basis
New Initiatives Combined with Genzyme Synergies to Generate Incremental Cost Savings of €2bn by 2015
Genzyme: Simplify organization and leverage Sanofi infrastructure
Cost savings
of€2bn(2)
BUSINESS PERFORMANCE
28
Hanspeter Spek
President, Global Operations
29
Growth Platforms(1)
+ €1,943mEmerging Markets: + €962m(3)
Diabetes Solutions: + €516m
CHC: + €505m
Vaccines w/o A/H1N1(4): + €242m
Innovative Products: +€208m
Animal Health: + €85m
+ €2,569m(5)
Key Genericized Products(2)
Taxotere® U.S. & Western EU: - €1,066m
Lovenox® U.S.: - €781m
Ambien® U.S.: - €357m
Plavix® Western EU: - €180m
Allegra® U.S.: - €144m
Xyzal® U.S.: - €114m
Others(2): - €240m
Total - €2,882m
Eloxatin® U.S.: + €676m(6)
Group Sales€33,389m+5.3% at CER
Growth Platforms & Genzyme Lead to Sales Growth in 2011 despite Generic Competition
(1)
Growth platforms: Emerging Markets, Diabetes Solutions, Vaccines
excluding A/H1N1, CHC, Innovative Products (Multaq®
and Jevtana®), Animal Health(2)
Other key genericized products include Aprovel®
in Western EU, Nasacort®
and Xatral®
in the U.S. (3)
Incremental quarterly sales contribution from Emerging Markets excluding other Growth Platforms and Genzyme was €148m(4)
A/H1N1 vaccine sales were €452m in 2010 (5)
Genzyme 2011 sales at 2010 exchange rates(6)
Eloxatin®
U.S. market exclusivity expected through August 9, 2012
2011 Sales Change (€m)
Total + €4,512m - €2,206mTotal
Growth Platforms Delivered Double-Digit Sales Growth in 2011
30
Emerging Markets
Consumer Health Care
Vaccines
Animal Health
Innovative Products(4)
Diabetes Solutions
€10,133m +10.4% +10.4%
€3,469m +7.2%+7.2%
€4,684m +12.0%+12.0%
€2,666m +22.8%+22.8%
€2,030m +4.3%+4.3%
excluding Genzyme & A/H1N1(2)
excluding A/H1N1(3)
€449m n/an/a
Growth is at CER (Constant Exchange Rates)(1)
2011 Growth Platforms and Genzyme sales increased by +21.7% at
CER including €452m of A/H1N1 vaccine sales in 2010 and €2,395m of Genzyme sales in 2011
(2)
2011 Emerging Markets sales increased by +10.1% at CER including
€361m of A/H1N1 vaccine sales in 2010 and €347m of Genzyme sales in 2011(3)
2011 Vaccines sales decreased by -5.5% at CER when including €452m of A/H1N1 vaccine sales in 2010 (4)
Multaq®
and Jevtana®
Growth Platforms €19,308m excluding Genzyme & A/H1N1(1)
+10.8% +10.8%
31
Aprovel® EU
Key Genericized Products(1)
Quarterly Sales (€m)
(1)
Key genericized products include Lovenox®
U.S., Plavix®
Western EU, Taxotere®
Western EU & U.S., Eloxatin®
U.S., Ambien CR®
U.S., Allegra®
U.S., Aprovel®
Western EU, Xyzal®
U.S., Xatral®
U.S., Nasacort®
U.S. -
Generic makers of oxaliplatin required to cease selling in the U.S. since June 30, 2010 but judgement is under appeal by Sun. (2) Eloxatin®
U.S. market exclusivity expected through August 9, 2012.
Patent Cliff Declined Further in Q4 2011 despite Recovery of U.S.
Eloxatin®
Sales
€744m€773m
€945m
€1,072m
Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
€690m
% of Total Sales 13.7% 12.1% 9.3% 8.1%
Eloxatin® U.S.: €260m(2)
Lovenox® U.S. Plavix® EU
€430m
Others
8.5%
32
Emerging Markets Grew at Double-Digit Organic Rate in 2011
(1)
World less North America (USA, Canada), Western Europe (France,
Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg,
Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia and New Zealand(2)
Growth is at CER. Merial sales consolidated from 2010 (€1,983m in 2010). A/H1N1 sales in Emerging Markets were €361m in 2010. Genzyme sales in Emerging Markets were €347m in 2011.
+16%
+9%
2011
€10.1bn
201020092008200720062005
€5.0bn
Emerging Markets Sales●
Record Emerging Markets(1)
sales of €10,133m in 2011●
+10.1% at CER ●
+10.4% excluding Genzyme and A/H1N1 sales(2)
●
30.3% of Group sales●
Strong sales in BRIC of €3,467m●
+14.9% at CER●
+19.8% excluding Genzyme and A/H1N1 sales(2)
33
(1)
World less North America (USA, Canada), Western Europe (France,
Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia and New Zealand(2) Genzyme sales in Emerging Markets were €115m in Q4 2011(3) Growth at CER excluding A/H1N1 vaccines and Genzyme
Acceleration in Emerging Markets in Q4 2011 Driven by Strong Performance in LatAm and Asia
●
Q4 2011 Emerging Markets(1)
sales of €2,649m
●
Growth of +13.8% at CER without Genzyme or +18.7% at CER with Genzyme(2)
Emerging Markets Q4 2011 Sales Split(3)
€476m
€634m€667m
€827m
LatinAmerica
EasternEurope &
Turkey
Asia Africa &Middle East
+21.0%
+4.9% +15.6%
+9.8%
33
Other Emerging Markets +10.6%
BRIC (Brazil, Russia, India, China)
+20.2%
Q4 2011 Growth Rates at CER without Genzyme
34
+17.8%
+14.6%+14.5%+13.2%
Q1 2011 Q2 2011 Q3 2011 Q4 2011
Diabetes Shows Impressive Double Digit Sales Growth in all Four Quarters of 2011
Quarterly Sales (€m)(1)
€1,054m
(1)
Growth at CER (Constant Exchange Rate)
●
Strong performance of Diabetes with 2011 sales of €4,684m, up +12.0% at CER
●
Lantus®
2011 sales of €3,916m, +15.0% at CER●
Lantus®
quarterly sales >€1bn for the first time
●
Growth of +16.7% in the U.S. related to increased market penetration of SoloSTAR®
(50%)●
Strong Emerging Markets sales up +30.7%
●
Nordic study confirms Sanofi’s confidence in the safety of Lantus®
35
Robust CHC Growth Boosted by Allegra®
Launch in 2011
(1)
Growth at constant perimeter and exchange rate for FY 2011: +14.1% (2)
Internal estimate based on Nicholas Hall dB6 OTC database(3)
A.C. Nielsen Food, Drug and Mass excluding Walmart (represents 64% of all outlets) 13-week period ending December 24, 2011
€1,203m€1,430m
€2,217m
€2,666m
FY 2008 FY 2009 FY 2010 FY 2011
Annual Sales (€m)●
Record 2011 CHC sales of €2,666m, +22.8%(1) at CER●
Sanofi now among Top 5 OTC companies globally(2)
●
Allegra®: most successful OTC launch in the U.S. in 2011 with sales of €211m●
#2 brand in the category(3)
●
#1 OTC brand for Sanofi globally
●
Investing in the dynamic CHC market in China (BMP Sunstone) and India (Universal Medicare)
+22.8% at CER
36
Becoming a Significant Regional Player in Generics
(1)
Gx organic growth is +14.6% in FY 2011
Annual Sales (€m)●
Solid 2011 sales of €1,746m, up +16.2%(1) at CER
●
Strong Q4: €488m, +21.0% at CER
●
AGx of Lovenox®
available in the U.S. market
●
Over €1bn of sales in Emerging Markets in 2011 (62.5% of Gx sales)
●
+14.0% in Emerging Markets
●
Roll-out of Medley in LatAm
2009 2010 2011
U.S.
Emerging Markets
Western Europe
Others€1,746m
€1,534m
€1,012m
2011 Sales Split by Region
37
Merial Showed Strong Resilience in 2011 despite Competitive Challenges
(1) Positive U.S. court ruling barring further sales of Cipla and Velcera’s generics and ordering seizure of U.S. inventory in possession of generic makers on August 21, 2011
●
2011 sales of €2,030m, up +4.3% at CER●
Companion Animals segment sales of €1,277m, +1.8% despite temporary U.S. generic competitor of Frontline®
Plus(1) and new U.S. competitor
●
Solid Production Animals segment sales of €753m, +8.9% at CER
●
Acceleration of Emerging Markets sales up +12.4% at CER to €507m
●
Rebound in Q4 with sales of €470m, up +10.0% at CER●
Recovery of Frontline®
Plus(1)
●
Increased uptake of Certifect®
in the U.S.
40% U.S.
27%
WesternEurope
EmergingMarkets
Other Countries
25%
8%
Vaccine Sales Driven by Growth in Emerging Markets and Sustained Performance in Mature Markets in 2011
38(1) FY 2011 sales down -5.5% including A/H1N1
●
FY 2011 sales: €3,469m, +7.2% excluding A/H1N1(1)
●
Record year for flu (€826m, +2.5%) supported by differentiation strategy
●
Emerging Markets up +10.7% excluding A/H1N1
●
Solid Q4 excluding influenza ●
Strong Pentaxim®
in Emerging Markets and Adacel®
globally●
Menactra®
(€93m, +43.2%) driven by booster recommendations in U.S. and global launches
●
Q4 flu sales reflect early shipments of Fluzone®
in the U.S. 2011
€3,469m
2010
€3,808m
Seasonal InfluenzaPandemic Other
Meningitis/PneumoTravel/EndemicAdult Boosters
Polio/Pertussis/Hib
FY 2011 Sales
+7.2% excluding
A/H1N1
-5.5% including
A/H1N1
39
Q2 2011 Q3 2011 Q4 2011
Genzyme Recovery On Track
Quarterly Sales(1) (€m)
&
●
FY 2011 Genzyme consolidated sales reached €2,395m, +7.7%(1,2)
●
Q4 2011 sales of €831m, +0.8%(2)
●
Rare Diseases sales of €346m•
Solid performance of Myozyme®/ Lumizyme®
of €108m, +15.9%
•
Cerezyme®
and Fabrazyme®
sales constrained by supply
●
Good performance of Renagel®/ Renvela®
and Synvisc®
franchise
●
EMA and FDA approvals granted for Framingham plant in Jan 2012●
Complete return to normal supply levels of Fabrazyme®
to begin in
Q2 2012
& Other s
(1) Genzyme sales are consolidated since April 1, 2011(2) Change on a constant structure basis and at constant exchange rates
€796m €768m€831m
Others
R&D UPDATE
40
Dr. Elias Zerhouni
President, Global Research & Development
Executing our R&D Strategy
GlobalR&D
Goals
An efficient global R&D organization Maximize synergies and convergence around Hub modelExploit economies of scale Improve R&D cost structure
Focus on high-value projects Execute on late-stage projectsMedical value and translational feasibility to guide early-stage
portfolio prioritization
Establish new models of external innovationEnhance the value of external opportunities and partnershipsCreate open and creative model of pharma-biotech partnership
e.g. Warp Drive Bio
41
Focusing on Delivering a Promising Development Portfolio
Achieve Regulatory Milestones
•
Lemtrada™•
Aubagio™•
Lyxumia® (1)
•
Zaltrap® (2)
•
Visamerin®
•
Kynamro™ (3)
Fastrack Next Wave of Late-Stage Projects
•
New glargine formulation•
Glargine-lixisenatide combo•
Dengue vaccine•
Eliglustat•
Anti-PCSK-9 mAb
EU/U.S.
EU
EU/U.S.
EU/U.S.
EU
•
Otamixaban•
Sarilumab•
JAK-2 inhibitor•
Iniparib•
Ombrabulin
Short-term opportunities
Mid-term opportunities
Submitted
42
Lemtrada™, Aubagio™, Lyxumia®, Zaltrap®,
Visamerin®
and Kynamro™ are registered trade names submitted to health authorities for investigational agents(1) In-licensed from Zealand Pharma A/S(2) Partnership with Regeneron (3) In-licensed from Isis Pharmaceuticals
Unmet need 3
Efficacy with manageable safety
Unmet need 2
Convenience &
efficacy
Early MS/CIS(1) RRMS(2)
and early active MS
RMS(3)
severe/ highly active
Emergence of a Franchise Addressing the Full Spectrum of Patient Needs in Multiple Sclerosis
Lemtrada™
43
Aubagio®
Unmet need 1
Convenience &
safety
Rebif®
Lemtrada™
Aubagio™
CIS –
Clinically Isolated Syndrome, TOPIC Phase III study presently ongoing RRMS –
Relapse Remitting Multiple SclerosisRMS –
Relapsing Multiple Sclerosis
Genzyme -
MS
43
A Unique Value Proposition: Superior Efficacy with Convenient Annual Dosing
CARE-MS I CARE-MS II
Patients 581 840
Study Duration 2 years 2 years
Patient Population
Treatment naïve
Relapsed on prior treatment
Treatment Arms
Alemtuzumab vs. IFNβ
1aAlemtuzumab
vs. IFNβ
1a
Relapse Rate Reduction at 2 Years(1)
55%(p<0.0001)
49%(p<0.0001)
Sustained Accumulation of Disability Reduction in
6 Months(1)30%
(ns)42%
(p=0.0084)
●
Superior efficacy demonstrated in Phase III vs. Rebif®
●
Manageable safety:
●
Well-characterized and consistent across studies
●
Effective risk management procedures in place
●
FDA Fast Track designation granted
(1)
Co-primary endpoints in CARE-MS I and CARE-MS II 44
Genzyme -
MS
45
Aubagi A Once-Daily Oral Therapy with Comparable Efficacy to Injectable Interferon
●
Efficacy demonstrated in TEMSO on both Relapse Rate and Disability Progression at 14mg
●
No superiority vs. Rebif®
in TENERE but lower rate of TEAE-
related discontinuation
●
Manageable safety
with up to 10 years of follow-up
(1)
Adjusted for Expanded Disability Status Scale score strata at baseline and takes duration of treatment into account.TEAE –
Treatment Emergent Adverse Events, ARR –
Annualized Relapse Rate, RRR –
Relative risk reduction, HRR –
Hazard ratio reduction
0 0,1 0,2 0,3 0,4 0,5 0,6
T. 14 mg
T. 7 mg
Placebo
TEMSO: Reduction in Adjusted(1) ARR
RRR: 31.2%p=0.0002
RRR: 31.5%p=0.0005
0 12 24 36 48 60 72 84 96 1080%
20%
10%
HRR: 23.7%p=ns
HRR: 29.8%p=0.0279
30%PlaceboT. 7 mgT. 14 mg
Week
TEMSO: Reduction in Disability Progression (%)
Genzyme -
MS
A GLP-1 Agonist with Unique Post-Prandial Effect and One Step Titration
MonoMono Japan
Drug naïve patients
Placebo-controlledin OAD failure
M (metformin)
F1 (metformin)
M Asia (metformin)
S (sulfonylurea)
P (pioglitazone)
X vs. exenatideActive-controlled
L
L AsiaPlacebo-controlled on
top of basal insulin
Placebo-controlled Secondary prevention
Cardiovascular Outcomes Study
Reported
Lixisenatide was in-licensed from Zealand Pharma A/S. Lyxumia®
is the intended trademark for lixisenatide. Lixisenatide is currently not approved or licensed anywhere in the world. 46
Duo 1 (Lantus®)
Consistent GLP-1 class effects of A1c reduction and weight loss
Pronounced effect on post-prandial glucose
Favorable safety profile with low risk of hypoglycemic events
OD injection, simple 1 step to maintenance dose, 1 pen per dose
Lyxumia® Profile
®Diabetes
Ongoing
●
3 positive GetGoal trials with Lyxumia®
on top of basal insulin
●
A1c target and PPG control achieved when used on top of Lantus®
in GetGoal-Duo 1(3)
●
Development of injection device for variable Lantus®
dose with fixed Lyxumia®
dose on track for Phase III initiation early 2013
T2D Patients Treated with Basal Insulin(1)
(worldwide)
On basal insulin On basal insulinwith controlled fasting
glucose controlbut A1c >7%
4 million
on other
basal insulins(2)
4 million
on Lantus®
4 million
T2D –
Type 2 Diabetes, A1C –
Glycated hemoglobin, PPG –
Post Prandial Glucose(1) Adapted from IMS data(2) Includes all types of basal insulins(3) Top line results press release (6 Dec 2011) –
Full results expected at a forthcoming scientific meeting
Optimal Complementary Pharmacological Profile with Basal Insulins
Diabetes®
47
New Glargine Formulation with Unique Pharmacokinetics
48
New Insulin Glargine Formulation Depot formation after subcutaneous injection
PK/PD: Pharmacokinetic/pharmacodynamicT2D: Type 2 Diabetes
Schematic illustration
●
New glargine formulation provides
●
Unique flat PK/PD profile
●
Lower injection volume
●
Phase III trials recently initiated in T2D high dose insulin users
●
Targeting ~1,600 patients
Diabetes
Lantus® New Glargine Formulation
Strenghtening our Portfolio of Oncology Drugs
49
●
A novel VEGF trap acting on multiple angiogenic targets
●
Previously treated metastatic colorectal cancer
●
VELOUR: Significant improvement in Overall Survival
●
Manageable safety profile consistent with previous studies
Zaltrap®
aflibercept
NSCLC –
Non Small Cell Lung Cancer
VTE –
Venous Thrombo Embolism (includes Deep Venous Thrombosis and Pulmonary Embolism)
Oncology
●
Only ultra-LMWH effective in reducing VTE risk reduction in chemo-treated cancer patients
●
Without impact on major bleeding incidence
●
Treatment effect consistent across solid tumor types, stages and geographical regions
Kynamro™: Targeting Rare Familial Hypercholesterolemias
50
(1) Patients for hoFH and Severe FH in US and EU marketshoFH –
Homozygous Familial HypercholesterolemiaSevere FH –
Severe Familial Hypercholesterolemia = treated LDL-C CHD –
Coronary Heart DiseaseheFH –
Heterozygous familial hypercholesterolemia
●
Four Phase III trials conducted in severe FH forms
●
Significant reduction in LDL-C when added to a regimen of maximally tolerated statin dose and other lipid lowering therapies
●
Liver fat stabilized or decreased in some patients with treatment beyond 12 months
●
Sustained reduction in apo B production decreased LDL and Lp(a) HeFH:
1 million patients
HoFH Severe FH
Understanding Rarity
~40,000 patients(1)
On statins: 60 million patients
Genzyme -
Rare Diseases
PCSK9 mAb: a First in Class Addressing Unmet Needs in Hypercholesterolemias
51
LDL-C Dose Response (Phase Ib) Atorvastatin Combo-Rx, heFH & Non-FH Combined
Mean Percent Change from Baseline in Calculated LDL-C (%)
= Dose administered
Placebo 50 mg 100 mg 150 mg
CHD –
Coronary Heart Disease, heFH –
Heterozygous familial hypercholesterolemia , ACC –
American College of Cardiology(1) Cohen JC. N Engl J Med 2006;354(12):1264-72
●
Landmark study demonstrated that when PCSK9 is disabled, cholesterol and risk of CHD are greatly lowered(1)
●
Preliminary Phase II data●
>65% LDL-C reduction in FH and primary hypercholesterolemia on top of baseline statin use
●
Generally safe and well tolerated
●
Phase III targeted to start Q2 2012
G. Swergold et al. Circulation 2011; 124: A16265
Metabolic Disorders
Otamixaban: Providing Superior Outcomes while Simplifying Treatment during Interventional Procedures
●
Despite current therapies, death, MI, and readmission rates remain high
●
Otamixaban is the first IV direct and selective factor Xa inhibitor with quick onset/offset
●
27 to 42% risk reduction in ACS complications including death and MI in Phase Il(1)
●
Phase III TAO study ongoing and expected to complete by end 2012
(1) The Lancet, Volume 374, Issue 9692, Pages 762 -
764, 5 September 2009 NSTE-ACS –
Non-ST-Elevation Acute Coronary Syndrome, MI –
Myocardial Infarction, UFH –
Unfractionated Heparin
TAO StudyModerate-to-high risk NSTE-ACS with
planned early invasive strategy (n=13,220)
Primary endpoint:Death/Myocardial Infarction @ day 7
Otamixaban Regimen 2(n=1,969)
Otamixaban Regimen 1(n=1,969)
UFH + Eptifibatide
(n=1,969)
R
Thrombosis
52
Sponsor-blinded interim analysis
Eliglustat: a Novel Oral Therapy in Gaucher Disease(1)
●
Potent, novel substrate inhibitor
●
Convenience of oral therapy ●
Eliminating challenges of infusing patients
●
Clinical profile expected to be similar to Cerezyme®
●
4-year Phase II data at WORLD congress in February 2012
●
Phase III trials fully recruited
53
(1) Investigational drug (2) Patient from Phase II clinical trialWORLD –
World Organization of Research on Lysosomal Diseases
Genzyme -
Rare Diseases
December 2006pre-treatment (18 years)
December 20093 years post treatment (21 years)(2)
54
Dengue Vaccine: Addressing a Growing Global Threat
Ambitious R&D Program
●
Global Phase III program (43,000 individuals)
●
1st
efficacy results expected by end of 2012
●
First submissions planned in 2013
Significant Disease Burden
●
Estimated 220m dengue infections worldwide per year
●
2m cases of Hemorrhagic Fever
●
>500,000 hospitalizations and >20,000 deaths / year
●
Dengue: a public health priority in Asia and Latin America
Vaccines
54
Rare Diseases & MS
DiabetesOncologyOther Pharma
Ophthalmology
Vaccines
Eighteen Potential New Launches over 2012-2015
58
Kynamro™ (mipomersen)
14
18
Lemtrada™ (alemtuzumab)
Aubagio™ (teriflunomide)
Lyxumia®
(lixisenatide)
Zaltrap®
(aflibercept)
Visamerin®
(semuloparin)Hexaxim®
ombrabulin
Dengue vaccine
eliglustat
SAR302503 (JAK-2 inhibitor)
otamixaban
DTP-HepB- Polio-Hib
FOV1101 (prednisporin)
SAR236553 anti-PCSK-9 mAb
iniparib
2012 2013 2014 2015
Cumulative Number of Projects Pharmaceuticals (excluding LCM) and Vaccines
Fluzone® QIV IM
Quadracel®
Note: Scope includes pharmaceuticals NMEs (excluding LCM –
Life cycle management) and vaccines. Only first launches in a given market are mentioned.55
hoFH
–
Homozygous Familial Hypercholesterolemiam-CRC –
Metastatic Colorectal CancerRMS –
Relapsing forms of Multiple Sclerosis
Multiple Important Catalysts in 2012
56
Zaltrap®, Lemtrada™, Aubagio™ and Kynamro™ are registered trade names submitted to health authorities for investigational agents
2012Expected Regulatory Submissions Q1 Q2 Q3 Q4●
Kynamro™ (mipomersen) in hoFH in the U.S. ●
Lemtrada™ (alemtuzumab) in RMS in the U.S. and EU ●
Lyxumia® (lixisenatide) in Type 2 diabetes in the U.S. Expected Headline Data Releases
●
Zaltrap® (aflibercept) -
Phase III results in 1st
line prostate cancer (VENICE) ●
Aubagio™ (teriflunomide) -
Phase III results in RMS (TOWER) ●
Lantus® -
Phase III results in reduction in CV morbidity & mortality (ORIGIN) ●
Otamixaban -
Phase III study completion in ACS Expected Phase III Study Initiations
●
New insulin glargine formulation -
Phase III in diabetes (EDITION)
●
Anti-PCSK-9 mAb -
Phase III trials in hypercholesterolemia
CONCLUSION
Christopher A. Viehbacher
Chief Executive Officer
57
2012 Is a Transition Year for Sanofi
58(1)
Avapro®
U.S. patent expiry on March 30, 2012, Plavix®
U.S. paediatric exclusivity expiry in May 17, 2012 and Eloxatin®
loss of exclusivity expected on August 9, 2012 58
Tailwinds
●
Performance of our growth platforms
●
Benefit of Genzyme consolidation for one additional quarter (Q1 2012)
●
Continued discipline on costs
●
Expected U.S. generic competition for Avapro®, Plavix®
and Eloxatin®(1)
●
Full-year impact of Taxotere®
generic
●
U.S. launch of 2nd
enoxaparin generic
●
Copaxone®
agreement terminating in early Q1 2012
Headwinds
EPS Guidance for FY 2012
2012 Will Be a Turning Point towards Sustainable Growth
59
(1)
Avapro®
U.S. patent expiry on March 30, 2012, Plavix®
U.S. paediatric exclusivity expiry in May 17, 2012 (2)
Growth is at CER (Constant Exchange Rates)(3)
FY 2011 Business EPS: €6.65 59
●
As announced last September, the loss of Plavix®
and Avapro®
exclusivity in the U.S. is anticipated to impact the 2012 business net income by around €1.4 billion at CER(1)
●
Taking into account this impact, the performance of growth platforms, contribution from Genzyme and cost control as well as other generic competition should lead to a 2012 business EPS
12% to 15% lower
than 2011 at CER, barring major unforeseen adverse events(2,3)
Continued Execution of Strategy Expected to Deliver Sustainable Growth 2012-2015
2012-2015 Sales CAGR
Diversified sources of growth
Scale in businesses with significant barriers to entry
Low small molecule patent exposure in mature markets(1)
Large Emerging Markets presence(2)
Potential new product launches(3)
Operating margin evolution
2012-2015 Business EPS CAGR
Increased dividend payout ratio(4)
(1)
2012 sales from chemical products exposed to patent expiry in the U.S., Japan and Western Europe over 2012/2015(2)
Based on 2015 internal estimates(3)
Over 2012-2015(4)
Dividend paid in 2014
~6%
50% of 2013 results
18
38-40%
Rebounding
> Sales CAGR
At least 5%
60
Q&A SESSION
61
APPENDICES
R&D Pipeline
62
63
Late Stage Pipeline –
Pharma & Vaccines
N New Molecular Entity
G GenzymeCentral Nervous System
Genetic diseases
OncologyMetabolic Disorders
Vaccines
Internal Medicine
RegistrationPhase III
Biosurgery
* ORIGIN: Evaluation of Lantus®
in reducing cardiovascular morbidity & mortality
iniparib (BSI-201)
squamous NSCLC
MACI®Cell-based treatment
Articular cartilage defects
Quadracel®
Diphtheria, tetanus, pertussis
& polio vaccine; 4-6 y of age
Hexaxim®
DTP-HepB-Polio-Hib vaccine
aflibercept VEGF-Trap 1st line AIPC
otamixaban Direct Xa inhibitor
ACS
Fluzone® & VaxiGrip® QIV IM Quadrivalent inactivated
influenza vaccines
Plavix®
clopidogrel bisulfate PAD, STEMI, Japan
ombrabulin (AV88E8062)
Vascular disrupting agent
Sarcoma
Lantus®
insulin glargine
ORIGIN*
Dengue Mild-to-severe
dengue fever vaccine
semuloparin (AVE5026)
Indirect Xa/IIa inhibitor
VTE prevention in cancer patients
Clolar® / Evoltra®
Purine nucleoside analogAdult acute myeloid leukemia (AML)
lixisenatide (AVE0010)
GLP-1 agonist Type 2 diabetes
DTP-HepB-Polio-Hib Pediatric hexavalent vaccine
teriflunomide Relapsing forms of multiple sclerosis
(RMS) –
monotherapy, U.S. / EU
SAR302503 (TG101348)
JAK-2 inhibitor
Myelofibrosis
New formulation Insulin glargine
Type 1+2 diabetes
Allegra®
fexofenadine
Dry syrup, Japan
mipomersenApolipoprotein B-100 antisense
hoFH and severe heFH, EU
teriflunomide Multiple sclerosis
(monotherapy, adjunct therapy & CIS)
mipomersenApolipoprotein B-100 antisense
hoFH (U.S.)
sarilumab (SAR153191)
Anti-IL-6R mAb
RA
lixisenatide (AVE0010)
GLP-1 agonist Type 2 diabetes, EU
alemtuzumab Anti-CD52 mAb
Multiple sclerosis
eliglustat tartrateGlucosylceramide synthetase inhibitor
Gaucher disease
Lantus®
insulin glargine
Pediatric, EU
aflibercept VEGF-Trap
2nd
line mCRC, U.S. / EU
N
G
G
N
N
N
N
N
G
N
G
Thrombosis
N
G
N
63
N
G
N
64
Early Stage Pipeline –
Pharma & Vaccines
N New Molecular Entity
G Genzyme
Central Nervous SystemOncologyMetabolic Disorders
VaccinesInternal Medicine
Phase II
Ophthalmology
iniparib (BSI-201)
Ovarian cancer, non-squamous NSCLC, neoadjuvant breast cancer
FOV1101 FDC prednisolone/ cyclosporine
Allergic conjunctivitis
SAR113945 IKK-β
inhibitor
Osteoarthritis
SAR3419 Maytansin-loaded anti-CD19 mAb
B-cell malignancies (DLBCL, ALL)
safotibant (FOV2304)
Bradykinin B1 antagonist
Diabetic macular edema
SAR231893 Anti-IL4 mAb
Asthma; Atopic dermatitis
SAR256212 (MM-121)
anti-ErbB3 mAb
Breast cancer, NSCLC
SAR164877 Anti-NGF mAb
Pain
(on clinical hold)
ferroquine Antimalarial
Malaria
SAR245408 (XL147)
Oral PI3K inhibitor
Endometrial cancer, Breast cancer
SAR110894 H3 antagonist
Alzheimer's disease
fresolimumabTGFβ
antagonistFibrosis
SAR245409 (XL765)
Oral dual inhibitor of PI3K & mTOR
Breast cancer, NHL
ACAM-Cdiff Clostridium difficile
Toxoid vaccine
SAR97276 Antimalarial
Malaria
ombrabulin (AVE8062)
Vascular disrupting agent
Ovarian 2nd
line, NSCLC 1st
line
Rabies VRVg Purified vero rabies vaccine
SAR279356 (F598)
Anti-PNAG mAb
Serious
infections
SAR302503 (TG101348)
JAK-2 inhibitor
Polycythemia vera
Meninge ACYW conj. 2nd
generation meningococcal
Conjugate infant vaccine
SAR236553 (REGN727)
Anti-PCSK-9 mAb
Hypercholesterolemia
N
N
N
N
N
N
N
N
N
N
G N
64
N
N
N
N
65
Early Stage Pipeline –
Pharma & Vaccines
Phase ISAR153192
Anti-DLL4 mAb
Solid tumors
Genz644282 Topoisomerase-1 inhibitor
Solid tumors
Gene therapy (AAV-AADC)
Parkinson's disease
Rotavirus Live Attenuated Tetravalent
Rotavirus oral vaccine
SAR256212 (MM-121) anti-ErbB3 mAb
Ovarian cancer
Mozobil® (plerixafor)
CXCR4 Antagonist
AML
Acid sphingomyelinase Niemann-Pick type B
Streptococcus pneumonia Meningitis & pneumonia vaccine
SAR650984 Anti-CD38 naked mAb
Hematological malignancies
GC1008 Anti-TGFβ
mAb
Solid tumors
SAR339658 VLA 2 antagonist
Inflammatory Bowel disease
Pseudomonas aeruginosa Antibody fragment product
Prevention of ventilator-associated pneumonia
SAR302503 (TG101348)
JAK-2 inhibitor
Incyte resistant MF
Oral clofaribine Purine nucleoside analog
Myelodysplastic syndrome
SAR292833 (GRC15300)
TRPV3 antagonist
Neuropathic pain, osteoarthritic pain
Tuberculosis Recombinant subunit vaccine
SAR566658 Maytansin-loaded anti-DS6
DS6 positive solid tumors
SAR407899 Rho kinase inhibitor
Diabetic nephropathy
SAR100842 LPA-1/LPA-3
Skin manifestation of scleroderma
RetinoStat®
Gene therapy Wet age-related macular degeneration (AMD)
SAR307746 (REGN910)
Anti-Ang2 mAb
Solid tumors
lixisenatide + Lantus®
GLP-1 agonist + insulin glargine
Single pen device / Type 2 diabetes
SAR156597 IL4/IL13 Bi-specific mAb
Idiopathic Pulmonary Fibrosis
StarGen®
Gene therapy
Stargardt disease
SAR125844 Met kinase inhibitor
Solid tumors
SAR164653 Cathepsin A inhibitor
CV-related complications & deaths in diabetic patients
SAR114137 Cathepsin S/K inhibitor
OA pain & Peripheral neuropathic pain
Gene therapy (sFLT-01)
Age related Macular Degeneration
(AMD)
Combinations SAR245408 / MSC1936369B
SAR245409 / MSC1936369B
SAR126119 TAFIa inhibitor
Acute ischemic stroke
SAR411298 FAAH inhibitor
Cancer pain
N
N
N
N
N
N
G
G
N
N
G
G
N New Molecular Entity
G Genzyme
Central Nervous System
Genetic diseasesOncologyMetabolic Disorders
VaccinesInternal Medicine
ThrombosisOphthalmology
N
N
N
N
N
N
N
N
N
G
G N
NG
65
N
N
66
Phase I Phase II Phase III Registration TOTAL
Oncology 7 4 3 1 15
Metabolic Disorders 2 1 0 2 5
Thrombosis 1 0 1 1 3
Central Nervous System 2 2 0 1 5
Internal Medicine 4 6 1 0 11
Ophthalmology 3 2 0 0 5
Genetic Diseases 2 0 1 0 3
Vaccines 4 3 5 1 13
TOTAL 25 18 11 6
R&D Pipeline Summary Table New Molecular Entities (NMEs) and Vaccines
43 17NMEs & Vaccines
47
60
66
67
Expected R&D Milestones -
Pharmaceuticals
67
Product Event Timing Status
New insulin glargine formulation Start of Phase III program in diabetes (EDITION) Q1 2012
Zaltrap® Regulatory resubmission in 2nd
line mCRC in U.S. Q1 2012
AubagioTM Regulatory submission in MS in EU Q1 2012
KynamroTM Regulatory submission for hoFH in U.S. Q1 2012
LemtradaTM Regulatory submission in MS in EU and U.S. Q2 2012
Zaltrap® Phase III results in 1st
line AIPC (VENICE) Q2 2012
anti-PCSK-9 mAb Initiation of Phase III program in hypercholesterolemia Q2 2012
ombrabulin Phase II results in 1st
line NSCLC, 2nd
line ovarian Q2/Q3 2012
68
Expected R&D Milestones –
Pharmaceuticals
68
Product Event Timing
AubagioTM Expected approval in MS in U.S. Q3 2012
Visamerin®
/Mulsevo® Expected approval in VTE prevention in cancer patients in U.S. and EU Q3 2012
KynamroTM Expected approval in hoFH and severe heFH in EU Q3 2012
Lantus® Phase III results in reduction in CV morbidity & mortality (ORIGIN) Q3 2012
ombrabulin Phase III results in sarcoma Q3 2012
Lyxumia® Expected approval in type 2 diabetes in EU Q4 2012
Lyxumia® Regulatory submission in type 2 diabetes in U.S. Q4 2012
Zaltrap® Expected approval in 2nd
line mCRC in EU Q4 2012
otamixaban Phase III results in ACS Q4 2012
iniparib Phase II results in 2nd
line ovarian platinum resistant cancer Q4 2012
69
Expected R&D Milestones -
Vaccines
69
Product Event Timing
HexaximTM Scientific opinion issued by EMA Q2 2012
Fluzone®
QIV IM File submission in U.S. Q3 2012
HexaximTM File submission in EU Q3 2012
Dengue vaccine First efficacy results Q4 2012
Fluzone®
QIV ID Start of Phase III Q4 2012
Vaxigrip®
QIV IM File submission Q1 2013
APPENDICES
FINANCE
70
Business Net Income Statement
* Net of tax** Determined on the basis of Business income before tax, associates, and non-controlling interests*** Based on an average number of shares outstanding of 1,330 million in the fourth quarter of 2011 and 1,30498 million in the fourth quarter of 2010(1) In 2010, the results of operations of the Merial
business previously presented as "held-for-exchange" were reclassified and included in income from continuing operations in accordance with IFRS5 § 36, following the announcement to maintain Merial
and Intervet/Schering-Plough as two separate organizations.
Fourth quarter 2011
Net sales 7,220 6,505 11.0% 818 890 (8.1%) 470 428 9.8% 8,508 7,823 8.8%Other
revenues 400 408 (2.0%) 7 7 8 4 100.0% 415 419 (1.0%)Cost
of sales (2,201) (1,942) 13.3% (352) (368) (4.3%) (168) (162) 3.7% (2,721) (2,472) 10.1%As % of net sales (30.5%) (29.9%) (43.1%) (41.3%) (35.7%) (37.9%) (32.0%) (31.6%)Gross profit 5,419 4,971 9.0% 473 529 (10.6%) 310 270 14.8% 6,202 5,770 7.5%
As % of net sales 75.1% 76.4% 57.8% 59.4% 66.0% 63.1% 72.9% 73.8%Research
and developmentexpenses (1,107) (987) 12.2% (146) (139) 5.0% (40) (42) (4.8%) (1,293) (1,168) 10.7%
As % of net sales (15.3%) (15.2%) (17.8%) (15.6%) (8.5%) (9.8%) (15.2%) (14.9%)Selling
and generalexpenses (1,935) (1,882) 2.8% (138) (175) (21.1%) (148) (145) 2.1% (2,221) (2,202) 0.9%
As % of net sales (26.8%) (28.9%) (16.9%) (19.7%) (31.4%) (33.9%) (26.1%) (28.1%)Other
current
operating income/expenses (54) (45) (1) 6 4 (6) (8) (13) (59) (58)Share
of profit/loss
of associates* 260 251 (4) 2 256 253Net income
attributable
to non-controlling
interests (55) (55) (2) (57) (55)Business operating income 2,528 2,253 12.2% 184 223 (17.5%) 124 77 61.0% (8) (13) 2,828 2,540 11.3%
As % of net sales 35.0% 34.6% 22.5% 25.1% 26.4% 18.0% 33.2% 32.5%Financial income
and expenses (113) (95)Income
tax
expense (638) (607)Tax rate** 25.4% 27.0%Business net income 2,077 1,838 13.0%
As % of net sales 24.4% 23.5%Business earnings per share*** (in euros) 1.56 1.41 10.6%
Other%
changeQ4 2011% change
% changeQ4 2011 Q4 2011 Q4 2010Q4 2010
Pharmaceuticals%
change
Vaccines Animal Health Group Total
€ million Q4 2011 Q4 2010 Q4 2010 Q4 2011 Q4 2010(1)
71
Business Net Income Statement
* Net of tax** Determined on the basis of Business income before tax, associates, and non-controlling interests*** Based on an average number of shares outstanding of 1,321.7 million in 2011 and 1,305.3 million in 2010(1) In 2010, the results of operations of the Merial business previously presented as "held-for-exchange" were reclassified and included in income from
continuing operations in accordance with IFRS5 § 36, following the announcement to maintain Merial and Intervet/Schering-Plough as two separate organizations.
Full-year 2011
Net sales 27,890 26,576 4.9% 3,469 3,808 (8.9%) 2,030 1,983 2.4% 33,389 32,367 3.2%Other revenues 1,622 1,623 (0.1%) 25 28 (10.7%) 22 18 22.2% 1,669 1,669Cost of sales (8,368) (7,316) 14.4% (1,404) (1,371) 2.4% (654) (615) 6.3% (10,426) (9,302) 12.1%
As % of net sales (30.0%) (27.5%) (40.5%) (36.0%) (32.2%) (31.0%) (31.2%) (28.7%)Gross profit 21,144 20,883 1.2% 2,090 2,465 (15.2%) 1,398 1,386 0.9% 24,632 24,734 0.4%
As % of net sales 75.8% 78.6% 60.2% 64.7% 68.9% 69.9% 73.8% 76.4%Research and development expenses (4,101) (3,884) 5.6% (564) (517) 9.1% (146) (155) (5.8%) (4,811) (4,556) 5.6%
As % of net sales (14.7%) (14.6%) (16.3%) (13.6%) (7.2%) (7.8%) (14.4%) (14.1%)
Selling and general expenses (7,376) (6,962) 5.9% (542) (603) (10.1%) (617) (604) 2.2% (1) (2) (8,536) (8,171) 4.5%
As % of net sales (26.4%) (26.2%) (15.6%) (15.8%) (30.4%) (30.5%) (25.6%) (25.2%)Other current operating income/expenses (13) 177 14 (7) (6) 24 (108) 4 77
Share of profit/loss of associates* 1,088 1,009 1 19 13 8 1,102 1,036Net income attributable to non-controlling interests (246) (258) 1 (1) (247) (257)
Business operating income 10,496 10,965 (4.3%) 985 1,379 (28.6%) 627 621 1.0% 36 (102) 12,144 12,863 (5.6%)
As % of net sales 37.6% 41.3% 28.4% 36.2% 30.9% 31.3% 36.4% 39.7%Financial income and expenses (412) (362)Income tax expense (2,937) (3,286)Tax rate** 27.0% 28.0%Business net income 8,795 9,215 (4.6%)
As % of net sales 26.3% 28.5%Business earnings per share*** (in euros) 6.65 7.06 (5.8%)
Group Total
€ million FY 2011 FY 2010 FY 2010 FY 2011 FY 2010 % changeFY 2011 FY 2011 FY 2010FY 2010
Pharmaceuticals%
change
Vaccines Animal Health Other%
change FY 2011% change
72
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi
(1)The results of operations of the Merial business previously presented as “held-for-exchange”
were reclassified and included in income from continuing operations in accordance with IFRS5 §36, following the announcement to maintain Merial and Intervet/Schering Plough as two separate organizations. (2) Of which amortization expense generated by the remeasurement
of intangible assets as part of business combinations: €769 million in the fourth quarter of 2011 and €795 million in the fourth quarter of 2010.(3) Of which €210 million of income related to the award received by Sanofi in
reparation of damages on the Plavix®
patent litigation.(4) Of which in 2011, related to Advance Price Agreement impact for €349 million and €228 million reflecting a decrease in deferred taxes liabilities linked to revaluation of intangible assets following legislation
changes.(5) Based on an average number of shares outstanding of 1,330 million in the fourth quarter of 2011 and 1,304.9 in the fourth quarter of 2010.* Property, Plant and Equipment.
73
€ million Q4 2011 Q4 2010(1) % change
Business net income 2,077 1,838 13.0%Amortization of intangible assets(2) (809) (848)
Impairment of intangible assets (66) (154)
Fair value remeasurement of contingent consideration liabilities (152)Expenses arising from the impact of acquisitions on inventories (72) (6)
Restructuring costs (777) (892)
Other gains and losses, and litigation(3) 190 (138)
Discontinuation of depreciation of PP&E* (IFRS5) 0 19
Tax effect of: 476 653
amortization of intangible assets 265 265impairment of intangible assets 15 50fair value remeasurement of contingent consideration liabilities 24expenses arising on the workdown of acquired inventories 23 1restructuring costs 225 299other gains and losses, and litigation (76) 46discontinuation of depreciation of PP&E* (IFRS5) 0 (8)
Other tax items(4) 577
Share of items listed above attributable to non-controlling interests 6 1
Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (11) (36)
Net income attributable to equity holders of Sanofi 1,439 437 229.3%Consolidated earnings per share(5) (in euros) 1.08 0.33 227.3%
74
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi
(1) The results of operations of the Merial business previously presented as “held-for-exchange”
were reclassified and included in income from continuing operations in accordance with IFRS5 §36, following the announcement to maintain Merial and Intervet/Schering Plough as two separate organizations.
(2) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €3,136 million in 2011 and €3,327 million in 2010
(3) Of which in 2011: related to the “Catch up”
in respect of 2009 and 2010 depreciation and amortization expense on PP&E* and intangible assets of Merial, previously classified as “Assets held for sale or exchange”
(€519 million) and €210 million of income related to the award received by Sanofi in reparation of damages on the Plavix®
patent litigation.(4) In 2011, related to Advance Price Agreement impact for €349 million and €228 million reflecting a decrease in deferred taxes liabilities linked to revaluation of intangible assets following legislation changes.(5) Based on an average number of shares outstanding of 1,321.7 million in 2011 and 1,305.3 in 2010.* Property, Plant and Equipment.
€ million FY 2011 FY 2010(1) % change
Business net income 8,795 9,215 (4.6%)Amortization of intangible assets(2) (3,314) (3,529)Impairment of intangible assets (142) (433)Fair value remeasurement of contingent consideration liabilities 15Expenses arising from the impact of acquisitions on inventories (476) (142)Restructuring costs (1,314) (1,384)
Other gains and losses, and litigation(3) (327) (138)Discontinuation of depreciation of PP&E* (IFRS5) 77
Tax effect of: 1,905 1,856amortization of intangible assets 1,178 1,183impairment of intangible assets 37 143fair value remeasurement of contingent consideration liabilities 34expenses arising on the workdown of acquired inventories 143 44
restructuring costs 399 466other gains and losses, and litigation 114 46discontinuation of depreciation of PP&E* (IFRS5) (26)
Other tax items(4) 577Share of items listed above attributable to non-controlling interests 6 3
Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (32) (58)
Net income attributable to equity holders of Sanofi 5,693 5,467 4.1%Consolidated earnings per share(5) (in euros) 4.31 4.19 2.9%
Consolidated Income Statements
(1)
The results of operations of the Merial business previously presented as “held‐for‐exchange”
were reclassified and included in income from continuing operations in accordance with IFRS5 §36, following the announcement to maintain Merial and Intervet‐Schering Plough as two separate organizations.
€ million
Net sales 8,508 7,823 33,389 32,367
Other revenues 415 419 1,669 1,669
Cost of sales (2,793) (2,469) (10,902) (9,398)
Gross profit 6,130 5,773 24,156 24,638
Research and development expenses (1,293) (1,167) (4,811) (4,547)
Selling and general expenses (2,221) (2,193) (8,536) (8,149)
Other operating income 38 30 319 369
Other operating expenses (97) (88) (315) (292)
Amortization of intangible assets (809) (848) (3,314) (3,529)
Impairment of intangible assets (66) (154) (142) (433)
Fair value remeasurement of contingent consideration liabilities (152) 15
Restructuring costs (777) (892) (1,314) (1,384)
Other gains and losses, and litigation 190 (138) (327) (138)
Operating income 943 323 5,731 6,535
Q4 2010(1)Q4 2011 FY 2010(1)FY 2011
(1) The results of operations of the Merial business previously presented as “held-for-exchange”
were reclassified and included in income from continuing operations in accordance with IFRS5 §36, following the announcement to maintain Merial and Intervet-Schering Plough as two separate organizations. 75
Consolidated Income Statements
(1) The results of operations of the Merial business previously presented as “held-for-exchange”
were reclassified and included in income from continuing operations in accordance with IFRS5 §36, following the announcement to maintain Merial and Intervet-Schering Plough as two separate organizations.
€ million
Operating income 943 323 5,731 6,535
Financial expenses (165) (138) (552) (468)
Financial income 52 43 140 106
Income before tax and associates and joint ventures 830 228 5,319 6,173
Income tax expense 415 46 (455) (1,430)
Share of profit / loss of associates and joint ventures 245 217 1,070 978
Net income 1,490 491 5,934 5,721
Net income attributable to non-controlling interests 51 54 241 254
Net income attributable to equity holders of Sanofi 1,439 437 5,693 5,467
Average number of shares outstanding ( million) 1,330 1,304.9 1,321.7 1,305.3
Consolidated earnings per share (in euros) 1.08 0.33 4.31 4.19
Q4 2010(1)Q4 2011 FY 2010(1)FY 2011
76
Change in Net Debt
(1) Excluding restructuring costs
(2) Net debt does not include contingent considerations for business combinations or non-controlling interests.
(3) In 2011: of which foreign exchange effect on net debt (€754 million)
€ millionFY
2011FY
2010
Business net income 8,795 9,215
Depreciation, amortization and impairment of property, plant and
equipment and intangible assets 1,156 1,080
Gains and losses on disposals of non-current assets, net of tax -52 -111
Other non cash items 579 550
Operating cash flow before changes in working capital(1) 10,478 10,734
Changes in working capital(1) -476 57
Acquisitions of property, plant and equipment and software -1,644 -1,349
Free cash flow(1) 8,358 9,442
Acquisitions of intangible assets excluding software -138 -313
Acquisitions of investments in consolidated undertakings including assumed debt(2) -14,079 -2,121
Restructuring costs paid -707 -892
Proceeds from disposals of property, plant and equipment, intangible assets and other non-current assets, net of tax 359 111
Issuance of Sanofi shares 70 18
Dividends paid to shareholders of Sanofi -1,372 -3,131
Acquisition of treasury shares -1,074 -321
Disposals of treasury shares 3 57
Other items(3) -702 -299
Change in net debt -9,282 2,551
77
Simplified Consolidated Balance Sheets
ASSETS€ million
12/31/2011 12/31/2010 LIABILITIES & EQUITY€ million
12/31/2011 12/31/2010
Property, plant and equipment 10,750 8,155 Equity attributable to equity holders of sanofi 56,219 53,097
Intangible assets (including goodwill) 61,718 44,411 Equity attributable to non-controlling interests 170 191
Non-current financial assets & investments in associates and deferred tax assets
6,839 5,619 Total equity 56,389 53,288
Non-current assets 79,307 58,185 Long-term debt 12,499 6,695
Inventories, accounts receivable and other current assets
16,667 13,578
Non-current liabilities related to business combinations and to non-controlling interests 1,336 388
Cash and cash equivalents 4,124 6,465 Provisions and other non-current liabilities 10,346 9,326 Current assets 20,791 20,043 Deferred tax liabilities 6,011 3,808
Non-current liabilities 30,192 20,217
Accounts payable & Other current liabilities 10,404 2,800
Current liabilities related to business combinations and to non-controlling interests 220 98
Short-term debt and current portion of long-term debt 2,940 1,565
Current liabilities 13,564 10,087
Assets held for sale or exchange 67 7,036 Liabilities related to assets held for sale or exchange 20 1,672
TOTAL ASSETS 100,165 85,264 TOTAL LIABILITIES & EQUITY 100,165 85,264
78