Q2 2013 RESULTS August 1, 2013
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 labeling 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, 2012. Other than as required by applicable law, Sanofi does not undertake any
obligation to update or revise any forward-looking information or statements.
3 3
Agenda
Business Performance
● Christopher A. Viehbacher, Chief Executive Officer
● Peter Guenter, Executive Vice President, Global Commercial Operations
● Pascale Witz, Executive Vice President, Global Divisions & Strategic Commercial Development
● Olivier Charmeil, Executive Vice President, Vaccines
Financial Performance
● Jérôme Contamine, Executive Vice President, Chief Financial Officer
Conclusion
● Christopher A. Viehbacher, Chief Executive Officer
Q&A
BUSINESS PERFORMANCE
4
Q2 2013 Was a Difficult Quarter
Tough comparison to last year due to the residual impact
of the patent cliff
Charge related to Brazil
Commercial underperformance in certain business areas
Continue to expect to return to growth in H2 2013(1)
Strong progress made in R&D
1
2
3
5
4
5
(1) At constant exchange rates
Q2 2013 FX Impact
- €223m
Key
Genericized Products
- €305m
Growth
Platforms
+ €354m
Brazil
generics
- €212m
Others
- €481m
Q2 2012
€8,870m
Q2 2013 Sales Were Adversely Affected by Patent Losses, Brazil and Currency
6
(1) “Others” includes - €97m from EU tail products (Other Rx Drugs), - €58m on three genericized brands in Japan (Allegra®, Myslee® and Amaryl®)
(2) Reported sales of Brazil generics w ere €75m in Q2 2012 and -€123m in Q2 2013 (of w hich -€122m w as an adjustment)
(3) Currency impact on sales in Q2 2013: Japanese Yen (-€145.6m); US Dollar (-€51.7m); Venezuelan Bolivar (-€35.6m); South African Rand (-€13.4m)
(4) On a reported basis, sales in Q2 2013 w ere down -9.8%
Q2 2013 Sales (€m)
(2)
€8,003m
excluding
Brazil generics
-6.3%
at CER(4)
(1)
(3)
Q2 2013 Was the Final Quarter with Significant Negative Sales Impact Expected from the Patent Cliff
2013 2012 2013 2012 2013 2012 2013 2012
7
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® family U.S.,
Allegra® U.S., Aprovel® Western EU, Xyzal® U.S., Xatral® U.S., Nasacort® U.S. and BMS Alliance (active ingredients of Plavix® and Avapro® sold to BMS)
- €553m at CER - €481m
at CER
ILLUSTRATIVE
ILLUSTRATIVE
€813m
€259m
€752m
€267m
€399m
€257m
Q1 Q2 Q3 Q4
8
"Other Revenues" "Income from Associates"
(1) Avapro® on March 30, 2012 and Plavix® on May 17, 2012
(2) At constant exchange rates. Impact on Business Net Income from the loss of U.S. exclusivity of Plavix® and Avapro® w as €562m in Q1 2013
and €233m in Q2 2013
Loss of Exclusivity of Plavix® & Avapro® in the U.S.(1)
Impact on
H1 2013 Business Net
Income:
€795m(2)
Q2 2013 Also Marked the End of Significant EPS Impact from the Loss of U.S. Exclusivity of Plavix® and Avapro®
2013 2012 2013 2012 2013 2012 2013 2012
€426m
€98m
€247m
€83m
€297m
€122m
Q1 Q2 Q1 Q2
€18m €3m
A Charge Relating to Brazil Was Taken in Q2 2013
9
● Trade channel inventory of generic products at June 30, 2013 was significantly and
inappropriately in excess of volumes needed to satisfy sell out demand
● Q2 2013 results reflect the following:
(1) When including the net sales adjustment of €122m booked in Q2 2013, Brazil generics had negative sales of - €123m
An adjustment reducing quarterly net sales by €122m(1) for product returns,
customer discounts and rebates
An additional provision of €79m mainly for inventory write-offs
Brazil
Vaccines
Growth Platforms Grew by +6.2% Reaching 71.9% of Sales
in Q2 2013(1)
10
(1) Excluding Brazil generics. When including Brazil generics , Grow th Platforms grew by +2.5% at CER and reached 71.4% of sales in Q2 2013
(2) Excluding Brazil generics . When including Brazil generics , Emerging Markets sales w ere down -2.3% at CER in Q2 2013 and up +1.9% in H1 2013
(3) Genzyme perimeter includes Rare Diseases and Multiple Sclerosis franchises
(4) Includes new product launches which do not belong to the other Grow th Platforms listed above: Multaq®, Jevtana®, Mozobil®, Zaltrap® and Auvi-Q™
+16.2%
+0.4%
+1.8%
-5.7%
+25.6%
Other Innovative Products(4) €171m +14.5%
+5.3%(2)
Consumer Healthcare
€760m
Diabetes Solutions €1,621m
€729m
Animal Health €529m
Emerging Markets €2,669m
Genzyme(3) €525m
Q2 2013 Growth at CER
H1 2013 Growth at CER
+17.8%
+7.2%
+2.5%
-4.4%
+25.5%
+14.1%
+6.6%(2)
(1) World excluding U.S., Canada, Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland,
Austria, Sw itzerland, Sweden, Ireland, Finland, Norw ay, Iceland, Denmark), Japan, Australia and New Zealand
(2) When including Brazil generics, Emerging Markets sales w ere down -2.3% at CER
(3) Reported Group sales In Latin America w ere €642m in Q2 2013. When including Brazil generics, Latin America sales w ere down -22.1% at CER
Emerging Markets Sales Highlight Various Dynamics
● Q2 2013 Emerging Markets sales of €2,669m(1)
● Up +5.3% at CER when excluding Brazil generics(2)
● Double-digit growth in Diabetes, Vaccines, Genzyme and Animal Health
● Weaker sales of Generics and lower sales of Oncology products
33.3%
30.8%
24.5%
11.4%
11
(1)
+9.6% +2.0% +1.3% +9.6% Growth
at CER
Q2 2013 Sales (€m)
excluding
Brazil generics
(3)
12
USA: €903m +20.9%
Emerging Markets: €230m +20.2%
Western EU: €203m +5.2%
RoW: €73m +10.5%
Growth
at CER
● Q2 2013 Diabetes sales of €1,621m, up +16.2% at CER
● Double-digit growth for ten consecutive quarters
● Strong performance of Lantus®, up +17.7% at CER
● SoloSTAR® accounted for 56.4% of U.S. sales (vs. 51.9% in Q2 2012)
● Recovery of Apidra® continues, up +25.0% at CER
Quarterly Sales (€m)
€969m
€1,228m
Q2 2013 Was Another Strong Quarter for Diabetes
€1,409m
(1) Source: Insight Health, Weekly Data in Units, MS w ithin GLP-1 market 13
● First sales recorded in Germany
and the UK
● >10% share in 18 weeks in Germany(1)
● EU launch rollout to continue throughout 2013
● Regulatory approval granted
in Japan in late June 2013
● Regulatory reviews continue worldwide
● FDA review ongoing including
interim ELIXA data
● ELIXA CV outcome trial expected to
complete enrolment by end 2013
Encouraging Lyxumia® Launch in Germany and the UK
0%
10%
20%
30%
40%
50%
60%
70%
Byetta Victoza Bydureon Lyxumia® ® ® ®
10.3%
GLP-1 Weekly Market Share (Volume %)
14
Consumer Healthcare Sales Driven by Top 4 Brands in Q2 2013
Q2 2013 Sales (€m) ● Q2 2013 sales of €729m, up +1.8%
at CER
● Solid growth of 4 largest brands:
Doliprane®, Allegra®, Essentiale® and Enterogermina®
● Favorable sequential trend in China following Q1 2013 changes implemented in distribution network
and reduced inventory levels
● Launch of Rolaids® in the U.S.
expected in Q3 2013
● Positive FDA AdCom Rx-to-OTC
switch of Nasacort® AQ in the U.S.
on July 31, 2013
Emerging Markets
€352m
USA €151m
Western EU €162m
RoW €64m
(1) H1 2013 sales w ere €1,457m, up +7.2% at CER
(2) PPH: Polio Pertussis Hib
Q2 2013 Vaccines Growth Mostly Affected by Phasing of Flu Vaccines and Menactra®
15 15
● Q2 2013 sales of €760m, up +0.4% at CER (1)
● PPH(2) sales of €293m, +12.5% at CER driven by Pentaxim® in Emerging Markets
● Progressive U.S. supply recovery of Pentacel® foreseen starting in Q3 2013
● Menactra® sales of €100m, -6.3% at CER reflecting U.S. public orders phasing
● A new record flu season in H1 2013 in the Southern Hemisphere (+3.0% at CER)
● Lower flu vaccine sales of €53m in Q2 2013 following solid Q1 2013 sales
● Early shipments of Fluzone® in the U.S. occurred in July 2013
Differentiated Vaccines Allow for the “Right Dose, Right Patient” Approach
16
Merial Performance Reflects Continuous Pressure on Frontline® in the U.S. and Europe in Q2 2013
Quarterly Sales (€m) ● Q2 2013 sales of €529m, down
-5.7% at CER
● Companion Animals sales of €323m,
down -14.0% at CER impacted by
lower demand for Frontline®
● Weak season for fleas and ticks given
unfavorable weather conditions
● Competition from Rx-only products in veterinary channels
● High promotional spend from fipronil branded generics
● Production Animals sales of €206m,
up +11.1% at CER
€529m
2011 2012 2013
€74m
€113m
€150m
€91m
€126m
€171m
17
Genzyme Rare Diseases Products Delivered Double-Digit Growth in Q2 2013
&
Q2 2013
Q2 2012
Q2 2013
Q2 2012
Q2 2013
Q2 2012
● Q2 2013 Rare Disease sales of
€492m, up +17.7% at CER
● Cerezyme® grew +18.0% at CER
driven by restored supply and new
patients
● Solid sales in Emerging Markets
● Myozyme® up +15.0% at CER
driven by new patient accruals in EU
● Fabrazyme® sales were up +28.4%
at CER driven by new patients
accruals and Replagal® switches(1)
● Strong performance in Western EU and the U.S.
Quarterly Sales (€m)
(1) Replagal® (agalsidase alfa) is a product of Shire
18 18
(1) NAS: New Active Substance
(2) IMS Weekly Total Prescriptions
(3) RRMS: Relapsing Remitting Multiple Sclerosis
Lemtrada™ is developed in collaboration w ith Bayer HealthCare
Genzyme Is Well Positioned to Enter the €10bn Global MS Market with a Franchise Approach
● U.S. sales of €33m in Q2 2013
● Positive CHMP opinion granted
in March 2013
● NAS(1) status granted in June 2013
● EU launch rollout to start in Q4 2013
● CHMP recommendation for approval obtained in June 2013
● Broad approved indication by CHMP: treatment of adult patients with RRMS(3) with active disease defined by clinical or imaging features
● EU launch rollout to start in Q4 2013 and FDA action expected in late 2013
U.S. Weekly TRx(2)
,
,
,
,
,
,
,
Multiple Regulatory Approvals and Positive Phase III Readouts Achieved in the Last 3 Months
5 2
Key Achievements in Last 3 Months
Regulatory
Approvals
Positive Phase III
Readouts
● Fedratinib (JAK2) - JAKARTA
Phase III in Myelofibrosis
● U300 - EDITION I & II Phase III in
Type 2 Diabetes(4)
● Aubagio® - NAS(1) status in EU
● Lemtrada™ - positive CHMP
opinion in EU(2)
● Fluzone® Quadrivalent IM - FDA
approval
● Lyxumia® - approval in Japan(3)
● Nasacort® Rx-to-OTC switch -
positive FDA AdCom
19
(1) NAS: New Active Substance
(2) Lemtrada™ is developed in collaboration w ith Bayer HealthCare
(3) Lyxumia® is in-licensed from Zealand Pharma
(4) U300 is an investigational new formulation of insulin glargine
Investigational New Insulin U300: Striving to Further Enhance the Value of Current Gold Standard Basal Insulin
20
Product Characteristics 1
U300
PK/PD Profile(1) 2 Clinical Benefits(2) 3
Flatter PK Profile
Serum Insulin Glargine Concentration
More Prolonged PD Profile Glucose Infusion Rate
EDITION I
EDITION II
• Equivalent glycemic control
• Fewer nocturnal hypoglycemic events
• Topline results confirm EDITION I
- 21%
U300 Lantus®
● Topline results of EDITION III & IV expected in H2 2013
● Expected regulatory submission in H1 2014 in U.S. and EU Next Steps
(1) Dahmen R et al, ADA 2013, abstract no. 113-OR. Euglycemic clamp study in T1D in steady state
(2) Riddle MC et al, ADA 2013, Late Breaking Poster 43-LB - Primary endpoint: Change in A1c from baseline to Month 6. First main secondary endpoint:
Number (%) percentage of patients reporting at least one severe or confirmed (plasma glucose ≤70 mg/dL) nocturnal [00:00 – 05:59 hrs] hypoglycemic
event from month 3 to 6 (RR: Relative risk)
Slower Insulin Glargine Release
After Subcutaneous Injection
U300
Lantus®
U300
Lantus®
Steady Flow of Clinical and Regulatory Milestones Expected before Year End
21
2013
Regulatory Milestones Q3 Q4
● Aubagio® final EC decision in Multiple Sclerosis in EU
● Lemtrada™ final EC decision in Multiple Sclerosis in EU
● Eliglustat regulatory submission in the U.S. and EU in Gaucher disease
● Fedratinib (JAK2) regulatory submission in the U.S. and EU in Myelofibrosis
● Lemtrada™ FDA decision in Multiple Sclerosis in the U.S.
Headline Phase III Data Releases Q3 Q4
● U300 in Diabetes (EDITION III & IV)
● Alirocumab (Anti-PCSK9) in Hypercholesterolemia (ODYSSEY Mono)
Start of Late Clinical Development Stage Q3 Q4
● Dupilumab (Anti-IL-4Rα) Phase IIb start in Asthma and in Atopic Dermatitis
● C. Difficile Toxoid Vaccine Phase III start
FINANCIAL PERFORMANCE
Jérôme Contamine
Executive Vice President, Chief Financial Officer
22
Q2 Q1 Q4 Q3 Q2 Q1
23
Q2 2013 Performance Impacted by Unfavorable FX, Notably the Continued Yen Depreciation
Currency impact on sales in Q2 2013: Japanese Yen (-€145.6m); US Dollar (-€51.7m); Venezuelan Bolivar (-€35.6m); South African Rand (-€13.4m)
Quarterly Currency Impact (in €m)
Q2 Q1 Q4 Q3 Q2 Q1
+2.4%
+5.8%
+4.0%
+8.0%
€486m
€187m
€235m
€120m
+6.4%
€561m
+8.2%
€277m
Sales Business Operating Income
+1.9%
€166m
+2.1%
€61m
-2.5%
-€212m
-4.5%
-€154m
-3.5%
-€305m
2012 2013
-€125m
-5.9%
2012 2013
(1) With the retroactive application of IAS19R
(2) Business operating income w as down -12.2% at CER in Q2 2013 excluding Brazil generics 24
Q2 2013 Was a Challenging Quarter
€m Q2 2013 Q2 2012 % Change (reported €)
% Change (CER)
Net sales 8,003 8,870 -9.8% -6.3%
Other revenues 83 247 -66.4% -66.0%
Cost of sales (2,672) (2,725) -1.9% +0.7%
Gross profit 5,414 6,392 -15.3% -11.7%
R&D (1,186) (1,235) -4.0% -2.4%
SG&A (2,309) (2,285) +1.1% +4.3%
Other current operating income & expenses 140 (141) - -
Share of Profit/Loss of associates 3 122 - -
Minority interests (45) (50) - -
Business operating income(2) 2,017 2,803 -28.0% -23.6%
Business operating margin 25.2% 31.6% - -
CER: Constant Exchange Rates
(1)
Q2 2013
- €0.17
Q2 2012
€1.46
Q1 2013
€1.22
Q1 2012
€1.83
Q2 2013 Business EPS Was Down, Primarily due to the Patent Cliff, FX and Brazil
Business EPS
25
-18.5% at CER(2)
(1) (1)
€1.11
(4,5)
(3) (3)
Brazil generics
(1) With the retroactive application of IAS19R
(2) On a reported basis, Q2 2013 EPS w as down -24.0%
(3) Average number of shares outstanding w as 1,325.7 million in Q2 2013 versus 1,317.4 million in Q2 2012
(4) This reflects the total negative impact of Brazil generics on Q2 2013 Business EPS, reflecting a negative sales variation
of €212m (including an adjustment reducing quarterly sales by €122m) as w ell as additional provisions of €79m (5) At CER, Brazil generics impacted business EPS by €0.19 in Q2 2013
Multiple Factors Adversely Impacted Q2 2013 CoS Ratio
● Stable Cost of Sales (CoS) in Q2
2013: €2,672m, up +0.7% at CER
● CoS ratio of 33.4% in Q2 2013
vs. Q2 2012 reflecting:
● Improvement in CoS for Lantus® and Genzyme
● Loss of sales from Key Genericized Products with relatively high margin
● Unfavourable currency impact
● Sales adjustment in Brazil
● Mix effects from higher vaccines
sales in EM and from VaxServe(2)
and lower Frontline® sales
26
Cost of Sales (%)
2012 2013
30.7%
(1) Including Brazil generics, cost of sales ratio w as 33.4% in Q2 2013
(2) VaxServe, a Sanofi Pasteur company, is a U.S. healthcare supplier serving primary care physician
offices, community immunization providers, immunizing pharmacies, travel clinics and corporations
excluding Brazil generics
(1)
32.1%
Investing in Late Stage Programs While Keeping
a Tight Control of R&D Expenses
27
● Q2 2013 R&D expenses of
€1,186m, down -2.4% at CER
reflecting:
● Ongoing multiple Phase IIb/III trials (e.g. alirocumab, U300, sarilumab,
dupilumab)
● Continued reduction of internal fixed
costs
● Quarterly R&D spend in line with
guidance
27
R&D Expenses (€m)
€1,186m €1,235m
2012 2013
As Expected, SG&A Increased in Q2 2013 Driven by Launch Costs and Investment in Growth Platforms
28
● Q2 2013 SG&A expenses of
€2,309m, up +4.3% at CER
reflecting:
● Cost savings reallocated to Sales &
Marketing investment in launch and pre-marketing activities
e.g. Aubagio®, Lemtrada™, Lyxumia®, Auvi-Q™(1), Zaltrap®
(2)
● Continued investment in Growth Platforms, in particular in Diabetes
● Flat G&A expenses
28
SG&A Expenses (€m)
€2,309m €2,285m
2012 2013
(1) Sanofi U.S. licensed the North American commercialization rights to Auvi-Q™ from Intelliject Inc.
(2) Collaboration w ith Regeneron
Net Debt
Jun 30, 2013
Other
-312
Acquisitions,
Licensing &
Disposals
-149
CapEx
- 586
Dividend
Payment
-3,638
Share
Repurchase
-890
Proceeds
from Issuance
of Shares
+741
Net Cash from
Operating
Activities
Net Debt
Dec 31, 2012
Cash Flow Reflects Dividend Payment of €3.6bn and
Share Repurchase of €890m in H1 2013
29
(1)
(2)
-7,719
-10,172
+2,381
(1)
H1 2013 (€m)
(1) Including derivatives related to the f inancial debt +€431m at Dec. 31, 2012 and +€307m at June 30, 2013
(2) Excluding Restructuring costs
(3) Other including Restructuring costs
(3)
Q3 2013 Will See a Significantly Reduced Impact from the Cliff
Q3 2013
Patent
Cliff
Impact
30
● Eloxatin® in the U.S.(1)
● Sales of €72m in Q3 2012
● Aprovel® and Co-Aprovel® in EU(2,3)
● Sales of €155m in Q3 2012
● One-time payment by BMS following alliance restructuring
● $80m in Q3 2012
(1) Loss of exclusivity for Eloxatin® in the U.S. w as August 9, 2012
(2) Aprovel® compound patent expired in August 15, 2012 in most EU countries
(3) Co-Aprovel® compound patent w ill expire in October 15, 2013 in EU.
In France, Co-Aprovel® has been facing generic competition since September 2012
Guidance for FY 2013
Outlook for 2013 Adjusted
31 (1) FY 2012 Business EPS of €6.14 w ith the retroactive application of IAS19R
31
● Given the impact of Brazil and the year-to-date performance, 2013
business EPS is expected to be 7% to 10% lower than 2012 at
CER(1), barring major unforeseen adverse events
CONCLUSION
Christopher A. Viehbacher
Chief Executive Officer
32
The Executive Leadership Team Has Been Strengthened
33
Roberto Pucci
Executive VP
Human Resources
Pascale Witz
Executive VP
Global Divisions &
Strategic Commercial
Development
Carsten Hellman
Executive VP
Merial
David-Alexandre Gros
Executive VP
Chief Strategy Officer
Elias Zerhouni
President
Global R&D
Jérôme Contamine
Executive VP
Chief Financial Officer
Olivier Charmeil
Executive VP
Sanofi Pasteur
Karen Linehan
Executive VP
Legal Affairs &
General Counsel
Philippe Luscan
Executive VP
Global Industrial Affairs
Peter Guenter
Executive VP
Global Commercial
Operations
Christopher A. Viehbacher
Chief Executive Officer
David Meeker
Executive VP
Genzyme
Composition of the Executive Committee as of September 1st, 2013
Sanofi’s Growth Profile Poised to Emerge despite Operational Challenges in Q2 2013
Q2 2013 was the final quarter with significant negative impact from
the patent cliff and was also impacted by Brazil and commercial
underperformance in certain business areas
H1 2013 sales growth of +7.7% from Growth Platforms(1) (71.4% of sales)
continues to demonstrate the value of Sanofi’s integrated business model
Sanofi expects to return to growth in H2 2013
Sanofi continues to make strong progress in delivering a growing portfolio
of high potential R&D assets
The executive leadership team has been strengthened and
new management has been appointed in areas of underperformance
1
2
3
4
34
5
(1) Excluding Brazil generics. When including Brazil generics, Grow th Platforms grew +5.4%
and represented 71.2% of sales in H1 2013
APPENDICES
R&D Pipeline
35
36
Late Stage Pipeline – Pharma & Vaccines
eliglustat tartrate
Glucosylceramide synthetase inhibitor
Gaucher disease
U300 Insulin glargine
Type 1+2 diabetes
Quadracel® Diphtheria, tetanus, pertussis
& polio vaccine; 4-6 y of age
Aubagio® (teriflunomide)
Relapsing forms of Multiple sclerosis
(RMS) – Monotherapy, EU
fedratinib JAK2 inhibitor
Myelofibrosis (1L)
Kynamro™ (mipomersen)
Apolipoprotein B-100 antisense
Severe HeFH, U.S.
Dengue Mild-to-severe
dengue fever vaccine
Lemtrada™ (alemtuzumab)
Anti-CD52 mAb
Multiple sclerosis, EU, U.S.
Jevtana® (cabazitaxel)
Metastatic prostate cancer (1L)
alirocumab Anti-PCSK-9 mAb
Hypercholesterolemia
DTP-HepB-Polio-Hib (PR5I)
Pediatric hexavalent vaccine
Lyxumia® (lixisenatide)
GLP-1 agonist
Type 2 diabetes, U.S.
SYNVISC-ONE®
Medical device
Pain in hip OA
sarilumab Anti-IL-6R mAb
Rheumatoid arthritis
Fluzone® QIV ID Quadrivalent inactivated
inf luenza vaccine intradermal
VaxiGrip® QIV IM
Quadrivalent inactivated
inf luenza vaccine
MACI®
Cell-based treatment
Femoral chondyle cartilage defects, U.S.
SAR399063 DHA-GLP + vit D
Pre-sarcopenia
Clostridium difficile Toxoid vaccine
Registration Phase III N
36
N
N
N New Molecular Entity
Immune Mediated Diseases
Rare Diseases
Oncology
Diabetes Solutions
Vaccines
Infectious Diseases
Cardiovascular Diseases
Age Related Degenerative
Diseases
Ophthalmology
Biosurgery
N
N
N
N
Early Stage Pipeline – Pharma & Vaccines
LixiLan lixisenatide+ insulin glargine
Fixed-Ratio / Type 2 diabetes
FOV1101 FDC prednisolone/cyclosporine
Allergic conjunctivitis
SAR279356 (F598)
Anti-PNAG mAb
Serious infections
SAR3419 Maytansin-loaded anti-CD19 mAb
B-cell malignancies refractory/relapsed (NHL, ALL)
sarilumab Anti-IL-6R mAb
Uveitis
ferroquine Antimalarial
Malaria
SAR256212 (MM121)
anti-ErbB3 mAb
Breast cancer (2L, 3L)
SAR292833 (GRC15300)
TRPV3 antagonist
Chronic disabling pain
SAR97276 Antimalarial
Malaria
SAR245409 (XL765)
Oral dual inhibitor of PI3K & mTOR
Non-Hodgkin lymphoma
SAR110894 H3 antagonist
Alzheimer's disease
fresolimumab TGFβ antagonist
Focal segmental glomerulosclerosis
fedratinib JAK-2 inhibitor
Polycythemia vera (2L) Ruxolitinib resistant/intolerant MF
SAR113945 IKK-β inhibitor
Osteoarthritis
dupilumab Anti-IL4Rα mAb
Asthma; Atopic dermatitis
Jevtana® (cabazitaxel)
Small cell lung cancer (2L)
Meninge ACYW conj. 2nd generation meningococcal
conjugate infant vaccine
SAR339658 VLA 2 antagonist
Inflammatory bow el disease
GENZ438027 (ALN-TTR02)
mRNA inhibitor
Familial amyloid polyneuropathy
Rabies VRVg Purif ied vero rabies vaccine
SAR156597 IL4/IL13 Bi-specif ic mAb
Idiopathic pulmonary f ibrosis
Rotavirus Live attenuated tetravalent
Rotavirus oral vaccine
SAR100842 LPA-1/LPA-3
Systemic sclerosis
Phase II
N
N
N
N
N
N N
N
N
N
37
N
N
N
37
N New Molecular Entity
Immune Mediated Diseases
Rare Diseases
Oncology
Diabetes Solutions
Vaccines
Infectious Diseases
Cardiovascular Diseases
Age Related Degenerative
Diseases
Ophthalmology
Biosurgery
N
N
N
Early Stage Pipeline – Pharma & Vaccines
SAR153192 Anti-DLL4 mAb
Solid tumors
SAR260301 PI3K β selective
PTEN – Deficient tumors
SAR252067 Anti-LIGHT mAb
Crohn’s disease
Streptococcus pneumonia Meningitis & pneumonia vaccine
SAR405838 (MI-773)
HDM2 / p53 antagonist
Solid tumors
SAR245408 (XL147)
Oral PI3K inhibitor
Solid tumors
SAR113244 Anti-CXCRS mAb
Systemic lupus erythematosus
Pseudomonas aeruginosa Antibody fragment product
Prev ention of v entilator-associated pneumonia
SAR650984 Anti-CD38 naked mAb
Hematological malignancies
GZ404477 (AAV-hAADC)
Gene therapy Parkinson's disease
SAR127963 P75 receptor antagonist
Trauma brain injury
Tuberculosis Recombinant subunit vaccine
SAR566658
Maytansin-loaded anti-CA6 mAb
Solid tumors
SAR391786 GDF8 mAb
Sarcopenia
SAR126119 TAFIa inhibitor
Acute ischemic stroke
RetinoStat®
Gene therapy Wet age-related macular degeneration (AMD)
SAR307746 Anti-ANG2 mAb
Solid tumors
SAR228810 Anti-protofibrillar AB mAb
Alzheimer’s disease
SAR407899 Rho kinase inhibitor
Pulmonary hypertension
StarGen® Gene therapy
Stargardt disease
SAR125844 C-MET kinase inhibitor
Solid tumors
SAR404460 DHA-GPL + Vit D
Sarcopenia
GZ402665 (rhASM)
Niemann-Pick type B
GZ402663 (sFLT-01)
Gene therapy
Age-related macular degeneration (AMD)
Combination SAR245409 / MSC1936369B
Solid tumors
Insulin Biosimilar Program Diabetes
GZ402671 GCS Inhibitor
Fabry Disease
UshStat® Gene therapy
Usher syndrome 1B
SAR438151 undisclosed target
Phase I
N
N
N
N
N
N
N N
N
N
N N
N
N
N
N
N
N
N
N
N
38 38
N New Molecular Entity
Immune Mediated Diseases
Rare Diseases
Oncology
Diabetes Solutions
Vaccines
Infectious Diseases
Cardiovascular Diseases
Age Related Degenerative
Diseases
Ophthalmology
Biosurgery
N
N
N
39
Phase I Phase II Phase III Registration TOTAL
Oncology 8 3 1 0 12
Diabetes Solutions 0 0 1 1 2
Cardiovascular Diseases 3 1 1 0 5
Immune Mediated
Diseases 2 4 1 1 8
Infectious Diseases 0 3 0 0 3
Ophthalmology 4 1 0 0 5
Rare Diseases 2 1 1 0 4
Age Related
Degenerative Diseases 4 3 1 0 8
Vaccines 3 3 5 1 12
TOTAL 27(2) 19 11 3
R&D Pipeline Summary Table(1)
46 14 NMEs & Vaccines
60
39
48(2)
(1) Excluding life cycle management programs
(2) Includes one Phase I project addressing an undisclosed target
40
Expected R&D Milestones
40
Product Event Timing
Dupilumab (anti IL-4Rα mAb) Start of Phase IIb studies in Asthma and Atopic Dermatitis Mid-year
C. difficile Toxoid Vaccine First Patients in Phase III Program Expected Q3 2013
Aubagio® (teriflunomide) Expected EC decision in RMS in EU Q3 2013
Lemtrada™ (alemtuzumab) Expected EC decision in RMS in EU Q3 2013
Alirocumab (anti PCSK9 mAb) First Phase III headline results in Hypercholesterolemia Q3 2013
Eliglustat Expected U.S. and EU regulatory submissions in Gaucher disease Q4 2013
Fedratinib (JAK2 inhibitor) Expected U.S. and EU regulatory submissions in Myelofibrosis Q4 2013
Lemtrada™ (alemtuzumab) Expected FDA decision in RMS in the U.S. Q4 2013
MACI® Expected U.S. regulatory submission in Cartilage Defects Q4 2013
Investigational new insulin U300 Expected EDITION III & IV Phase III results in Diabetes H2 2013
Lyxumia® (lixisenatide) Expected FDA decision in Type 2 Diabetes in the U.S. Q4 2013/Q1 2014
Investigational new insulin U300 Expected U.S. and EU regulatory submissions in Diabetes H1 2014
LixiLan (lixisenatide + insulin glargine) Expected start of Phase III program in Diabetes H1 2014
APPENDICES
FINANCE
41
42
Business Net Income Statement
Second quarter 2013 Group Total Pharmaceuticals Vaccines Animal Health Others
€ million Q2 2013 Q2 2012(1)
Change Q2 2013 Q2 2012(1)
Change Q2 2013 Q2 2012(1)
Change Q2 2013 Q2 2012(1)
Change Q2 2013 Q2 2012(1)
Net sales 8,003 8,870 (9.8%) 6,714 7,511 (10.6%) 760 783 (2.9%) 529 576 (8.2%)
Other revenues 83 247 (66.4%) 72 233 (69.1%) 5 5 6 9 (33.3%)
Cost of sales (2,672) (2,725) (1.9%) (2,142) (2,246) (4.6%) (350) (301) 16.3% (180) (178) 1.1%
As % of net sales (33.4%) (30.7%) (31.9%) (29.9%) (46.1%) (38.4%) (34.0%) (30.9%)
Gross profit 5,414 6,392 (15.3%) 4,644 5,498 (15.5%) 415 487 (14.8%) 355 407 (12.8%)
As % of net sales 67.6% 72.1% 69.2% 73.2% 54.6% 62.2% 67.1% 70.7%
Research and development expenses
(1,186) (1,235) (4.0%) (1,019) (1,054) (3.3%) (121) (142) (14.8%) (46) (39) 17.9%
As % of net sales (14.8%) (13.9%) (15.2%) (14.0%) (15.9%) (18.1%) (8.7%) (6.8%)
Selling and general expenses
(2,309) (2,285) 1.1% (1,968) (1,936) 1.7% (160) (157) 1.9% (181) (191) (5.2%) (1)
As % of net sales (28.9%) (25.8%) (29.3%) (25.8%) (21.1%) (20.1%) (34.2%) (33.1%)
Other current operating income/expenses
140 (141) 100 (153) 5 (2) (1) 36 14
Share of profit/loss of associates
(2) and joint
ventures 3 122 8 123 (3) (1) (2)
Net income attributable to non-controlling interests
(45) (50) (45) (49) (1)
Business operating income 2,017 2,803 (28.0%) 1,720 2,429 (29.2%) 136 185 (26.5%) 125 176 (29.0%) 36 13
As % of net sales 25.2% 31.6% 25.6% 32.3% 17.9% 23.6% 23.6% 30.6%
Financial income and expenses
(137) (156)
Income tax expense (405) (721)
Tax rate(3)
21.1% 28.0%
Business net income 1,475 1,926 (23.4%)
As % of net sales 18.4% 21.7%
Business earnings per share
(4) (in euros)
1.11 1.46 (24.0%)
(1) Including impact of transition to IAS19R (2) Net of tax (3) Determined on the basis of Business income before tax, associates, and non-controlling interests (4) Based on an average number of shares outstanding of 1,325.7 million in the second quarter of 2013 and 1,317.4 million in the second quarter of 2012
Business Net Income Statement
43
(1) Including impact of transition to IAS19R (2) Net of tax (3) Determined on the basis of Business income before tax, associates, and non-controlling interests (4) Based on an average number of shares outstanding of 1,323.9 million in the first semester of 2013 and 1,319.3 million in the first semester of 2012
First-half 2013 Group Total Pharmaceuticals Vaccines Animal Health Others
€ million H1 2013 H1 2012(1)
Change H1 2013 H1 2012(1)
Change H1 2013 H1 2012(1)
Change H1 2013 H1 2012(1)
Change H1 2013 H1 2012(1)
Net sales 16,062 17,381 (7.6%) 13,522 14,827 (8.8%) 1,457 1,400 4.1% 1,083 1,154 (6.2%)
Other revenues 181 673 (73.1%) 155 645 (76.0%) 12 10 20.0% 14 18 (22.2%)
Cost of sales (5,208) (5,333) (2.3%) (4,167) (4,424) (5.8%) (695) (563) 23.4% (346) (346)
As % of net sales (32.4%) (30.7%) (30.8%) (29.8%) (47.7%) (40.2%) (32.0%) (30.0%)
Gross profit 11,035 12,721 (13.3%) 9,510 11,048 (13.9%) 774 847 (8.6%) 751 826 (9.1%)
As % of net sales 68.7% 73.2% 70.3% 74.5% 53.1% 60.5% 69.3% 71.6%
Research and development expenses
(2,341) (2,407) (2.7%) (2,007) (2,044) (1.8%) (249) (283) (12.0%) (85) (80) 6.3%
As % of net sales (14.6%) (13.8%) (14.8%) (13.8%) (17.1%) (20.2%) (7.8%) (6.9%)
Selling and general expenses
(4,438) (4,401) 0.8% (3,796) (3,755) 1.1% (299) (287) 4.2% (343) (358) (4.2%) (1)
As % of net sales (27.6%) (25.3%) (28.1%) (25.3%) (20.5%) (20.5%) (31.7%) (31.1%)
Other current operating income/expenses
170 16 131 (1) 7 (2) (2) 1 34 18
Share of profit/loss of associates
(2) and joint
ventures 21 419 27 425 (4) (6) (2)
Net income attributable to non-controlling interests
(86) (104) (86) (104)
Business operating income 4,361 6,244 (30.2%) 3,779 5,569 (32.1%) 229 269 (14.9%) 319 389 (18.0%) 34 17
As % of net sales 27.2% 35.9% 27.9% 37.6% 15.7% 19.2% 29.5% 33.7%
Financial income and expenses
(277) (325)
Income tax expense (996) (1,569)
Tax rate(3)
24.0% 28.0%
Business net income 3,088 4,350 (29.0%)
As % of net sales 19.2% 25.0%
Business earnings per share
(4) (in euros)
2.33 3.30 (29.4%)
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi
44
Second-Quarter
€ million Q2 2013 Q2 2012(4)
Change
Business net income 1,475 1,926 (23.4%)
Amortization of intangible assets(1)
(768) (842)
Impairment of intangible assets (430) (39)
Fair value remeasurement of contingent consideration liabilities
(76) (73)
Expenses arising from the impact of acquisitions on inventories (3) (3)
Restructuring costs (105) (163)
Other gains and losses, and litigation
Tax effect of items listed above: 469 354
Amortization of intangible assets 231 283
Impairment of intangible assets 180 14
Fair value remeasurement of contingent consideration liabilities 16 1
Expenses arising from the impact of acquisitions on inventories 1 1
Restructuring costs 41 55
Other tax items(2)
(109)
Share of items listed above attributable to non-controlling interests 1
Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures
(10) (7)
Net income attributable to equity holders of Sanofi 444 1,153 (61.5%)
Consolidated earnings per share(3)
(in euros) 0.33 0.88
(1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €740 million in the
second quarter of 2013 and €814 million in the second quarter of 2012. (2) Tax (3%) on dividends paid to shareholders of Sanofi. (3) Based on an average number of shares outstanding of 1,325.7 million in the second quarter of 2013 and 1,317.4 in the second quarter of 2012. (4) Impact of transition to IAS19R.
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi
45
First-Half
€ million H1 2013 H1 2012(4)
Change
Business net income 3,088 4,350 (29.0%)
Amortization of intangible assets(1)
(1,543) (1,675)
Impairment of intangible assets (440) (40)
Fair value remeasurement of contingent consideration liabilities
(117) (106)
Expenses arising from the impact of acquisitions on inventories (6) (17)
Restructuring costs (159) (250)
Other gains and losses, and litigation
Tax effect of items listed above: 749 714
Amortization of intangible assets 490 615
Impairment of intangible assets 180 14
Fair value remeasurement of contingent consideration liabilities 20 3
Expenses arising from the impact of acquisitions on inventories 2 5
Restructuring costs 57 77
Other tax items(2)
(109)
Share of items listed above attributable to non-controlling interests
2 1
Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures
(17) (15)
Net income attributable to equity holders of Sanofi 1,448 2,962 (51.1%)
Consolidated earnings per share(3)
(in euros) 1.09 2.25
(1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €1,489 million in the first semester of 2013 and €1,602 million in the first semester of 2012.
(2) Tax (3%) on dividends paid to shareholders of Sanofi. (3) Based on an average number of shares outstanding of 1,323.9 million in the first semester of 2013 and 1,319.3 in the first semester of 2012. (4) Including impact of transition to IAS19R.
Consolidated Income Statement
46
€ million Q2 2013 Q2 2012
(1) H1 2013 H1 2012
(1)
Net sales 8,003 8,870 16,062 17,381
Other revenues 83 247 181 673
Cost of sales (2,675) (2,728) (5,214) (5,350)
Gross profit 5,411 6,389 11,029 12,704
Research and development expenses (1,186) (1,235) (2,341) (2,407)
Selling and general expenses (2,309) (2,285) (4,438) (4,401)
Other operating income 276 113 347 319
Other operating expenses (136) (254) (177) (303)
Amortization of intangible assets (768) (842) (1,543) (1,675)
Impairment of intangible assets (430) (39) (440) (40)
Fair value remeasurement of contingent consideration liabilities (76) (73) (117) (106)
Restructuring costs (105) (163) (159) (250)
Other gains and losses, and litigation
Operating income 677 1,611 2,161 3,841
Financial expense (154) (181) (311) (370)
Financial income 17 25 34 45
Income before tax and associates and joint ventures 540 1,455 1,884 3,516
Income tax expense(2)
(45) (367) (356) (855)
Share of profit/loss of associates and joint ventures (7) 115 4 404
Net income 488 1,203 1,532 3,065
Net income attributable to non-controlling interests 44 50 84 103
Net income attributable to equity holders of Sanofi 444 1,153 1,448 2,962
Average number of shares outstanding (million) 1,325.7 1,317.4 1,323.9 1,319.3
Consolidated earnings per share (in euros) 0.33 0.88 1.09 2.25
(1) Including impact of transition to IAS19R. (2) In 2013, including a tax on dividends paid to shareholders of Sanofi: €109 million.
Cash Flow Statement
47
€ million H1 2013 H1 2012(1)
Business net income 3,088 4,350
Depreciation, amortization and impairment of property, plant and equipment and software 594 627
Net gains and losses on disposals of non-current assets, net of tax (154) (40)
Other non cash items (277) 396
Operating cash flow before changes in working capital(2)
3,251 5,333
Changes in working capital(2)
(870) (684)
Acquisitions of property, plant and equipment and software (586) (711)
Free cash flow(2)
1,795 3,938
Acquisitions of intangibles, excluding software (142) (75)
Acquisitions of investments, including assumed debt(2)
(273) (179)
Restructuring costs paid (325) (504)
Proceeds from disposals of property, plant and equipment, intangibles, and other non-current assets, net of tax
266 71
Issuance of Sanofi shares 741 74
Dividends paid to shareholders of Sanofi (3,638) (3,487)
Acquisition of treasury shares
(890)
(454)
Disposals of treasury shares, net of tax 2
Other items(3)
11 128
Change in net debt (2,453) (488)
(1) Including impact of transition to IAS19R. (2)
Excluding restructuring costs.
(3) Of which foreign exchange effect on net debt €17 million in 2013 and -€68 million in 2012.
Balance Sheet
48
ASSETS
€ million June 30, 2013 Dec 31, 2012
(1)
LIABILITIES & EQUITY
€ million June 30, 2013 Dec 31, 2012
(1)
Property, plant and equipment 10,409 10,578 Equity attributable to equity-holders of Sanofi
56,066 57,332
Intangible assets (including goodwill) 56,410 58,265 Equity attributable to non-controlling interests
129 134
Non-current financial assets, investments in associates, and deferred tax assets
9,309 8,665 Total equity 56,195 57,466
Long-term debt 10,689 10,719
Non-current liabilities related to business combinations and to non-controlling interests
1,347 1,350
Non-current assets 76,128 77,508 Provisions and other non-current liabilities 9,565 11,043
Deferred tax liabilities 5,547 5,932
Inventories, accounts receivable and other current assets
16,626 16,419 Non-current liabilities 27,148 29,044
Cash and cash equivalents 4,181 6,381 Accounts payable and other current liabilities 9,549 9,948
Current liabilities related to business combinations and to non-controlling interests
109 100
Short-term debt and current portion of long-term debt
3,971 3,812
Current assets 20,807 22,800 Current liabilities 13,629 13,860
Assets held for sale or exchange 52 101 Liabilities related to assets held for sale or exchange
15 39
Total ASSETS 96,987 100,409 Total LIABILITIES & EQUITY 96,987 100,409
(1) Including impact of transition to IAS19R.
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