Peter Welford - Jefferies Luisa Hector - Berenberg Graham Parry - BofA Emily Field - Barclays Emmanuel Papadakis - Deutsche bank Seamus Fernandez - Guggenheim Jo Walton - UBS David Risinger - Leerink Gary Steventon - Exane Peter Verdult - Citi We're excited about the outlook for Dupixent's potential to become a breakthrough medicine for COPD, a leading cause of death worldwide. Dupixent is well-positioned to potentially address the high unmet need in COPD with a strong clinical profile across two large Phas ...

Summary of Sanofi's Participation at Barclays 26th Annual Global Healthcare Conference Company and Industry - **Company**: Sanofi (NASDAQ: SNY) - **Industry**: Pharmaceuticals, specifically focusing on Immunology and Inflammation Key Points and Arguments Amlitelimab Data Presentation - Sanofi presented data on **amlitelimab** at the American Academy of Dermatology (AAD) conference, highlighting results from the **Phase 2b study** [5][6] - In **Part 1** of the study, a response rate of nearly **50%** was observed at the highest dose for patients with severe atopic dermatitis at week 24, comparable to existing biologics [5] - **Part 2** of the study showed that **70% to 80%** of patients maintained a sustained response at week 52, even after drug withdrawal, indicating potential for long-term remission in atopic dermatitis [7][9] Mechanism of Action - Amlitelimab works by blocking **OX40-Ligand**, which is crucial for T effector and memory cell function, leading to a rebalanced immune response [8][9] Commercial Potential - Sanofi aims for **Q12 weekly dosing** for amlitelimab, which could differentiate it in the market and potentially reach a **EUR 5 billion** peak sales target [11][14] - The company has six different programs planned for this asset, including indications for asthma, systemic sclerosis, alopecia, hidradenitis suppurativa, and celiac disease [14] Dupixent Launch Preparations - The upcoming launch of **Dupixent** for COPD is anticipated with excitement, as it addresses a significant unmet need in a high-mortality disease [19][20] - Sanofi estimates that **350,000** patients in the U.S. will be eligible for Dupixent at launch, with a total of **500,000** including the EU [23][24] Comparative Efficacy - Dupixent has shown a **30% to 35%** reduction in exacerbations in COPD, significantly outperforming IL-5 drugs, which only show a **15% to 19%** reduction [26] - The drug also demonstrated improvements in lung function, with increases of **100ml to 150ml**, which IL-5 drugs have not achieved [26] Itepekimab and Future Studies - **Itepekimab**, an anti-IL-33 drug, is expected to target a different patient population, particularly former smokers with low eosinophil counts, showing a **greater than 40%** reduction in exacerbations [27][28] - Sanofi plans to complete recruitment for Phase 3 studies of amlitelimab by the end of the year, with results expected in **2025** [28] Nanobody Platform - Sanofi is developing a **Nanobody platform**, which includes multiple assets aimed at enhancing efficacy in treating various conditions, including asthma and hidradenitis suppurativa [36][37] Oral Anti-TNF Development - Sanofi is excited about an oral anti-TNF molecule, which is designed to be a **TNFR1 signaling inhibitor**, potentially offering improved safety and efficacy compared to existing biologics [39][42] - The unique mechanism of this oral drug may allow for better long-term disease control without the common side effects associated with traditional TNF inhibitors [42][43] Other Important Content - The discussion highlighted the importance of understanding patient demographics and the potential for different responses to treatments based on factors such as skin type and disease duration [18] - There is a focus on educating community pulmonologists about Dupixent's unique profile and the need for a shift in treatment paradigms for COPD [21] This summary encapsulates the key insights and developments shared during Sanofi's presentation at the Barclays Global Healthcare Conference, emphasizing the company's innovative approaches and future potential in the immunology space.

PART I [Key Information](index=11&type=section&id=Item%203.%20KEY%20INFORMATION) This section outlines Sanofi's key risks, including product liability, regulatory pricing, R&D challenges, and operational and financial market risks [Risk Factors](index=11&type=section&id=D.%20Risk%20Factors) Sanofi faces significant risks from product liability, regulatory compliance, market competition, R&D pipeline, and financial market fluctuations - Product liability is a **significant risk**, with ongoing claims for products such as TAXOTERE, ZANTAC, DEPAKINE, and GOLD BOND. The company acknowledges that defending these claims is **costly** and may **harm its reputation**, regardless of the outcome[31](index=31&type=chunk)[32](index=32&type=chunk) - The company faces **increasing pricing and reimbursement pressure** globally. In the US, the Inflation Reduction Act (IRA) is expected to **negatively impact revenue**, with DUPIXENT potentially subject to negotiation not before 2031. In China, national reimbursement drug list (NRDL) negotiations and volume-based procurement (VBP) tenders are **intensifying pricing pressure**[67](index=67&type=chunk)[70](index=70&type=chunk) - Sanofi's financial performance is **substantially dependent** on certain flagship products. DUPIXENT is the **largest product**, generating **24.9% of net sales in 2023**. Several other key products, including LANTUS, LOVENOX, and AUBAGIO, face **significant generic competition**, which led to a **€651 million loss in net sales in 2023** compared to 2022[93](index=93&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) - The company **relies on third-party collaborations** for key aspects of its business, such as the global strategic collaboration with Regeneron for the development and commercialization of DUPIXENT and KEVZARA[98](index=98&type=chunk)[99](index=99&type=chunk) - Sanofi is **exposed to customer credit risk**, particularly in the US where its three main customers represented **11%**, **9%**, and **7% of consolidated net sales in 2023**[104](index=104&type=chunk) - As part of its strategy, Sanofi **plans to separate its Consumer Healthcare (CHC) business**, likely via a publicly listed entity in France, with the earliest possible timing in **Q4 2024**. This is intended to increase focus on innovative medicines and vaccines[127](index=127&type=chunk)[164](index=164&type=chunk) - The company is **exposed to currency exchange rate fluctuations**, particularly between the euro and the US dollar, as **43.0% of its 2023 net sales** were generated in the United States[137](index=137&type=chunk) - As of December 31, 2023, L'Oréal is the **largest shareholder**, holding approximately **9.35% of the share capital** and **16.77% of the voting rights**[141](index=141&type=chunk) [Information on the Company](index=25&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details Sanofi's corporate history, business strategy, product portfolio, R&D pipeline, and operational infrastructure [History and Development of the Company](index=25&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Sanofi, a French société anonyme incorporated in 1994, has undergone significant transformation through strategic acquisitions and divestitures - Sanofi actively shaped its portfolio through strategic transactions, acquiring Kymab and Translate Bio in **2021**, Amunix in **2022**, and Provention Bio and QUNOL in **2023**, while spinning off EUROAPI in **2022**[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) [Business Overview](index=26&type=section&id=B.%20Business%20Overview) Sanofi's business is structured into Biopharma and Consumer Healthcare, driven by its 'Play to Win' strategy and planned CHC separation - Sanofi's "**Play to Win** strategy" is built on **four key priorities**: focusing on growth (led by DUPIXENT and Vaccines), leading with innovation, accelerating efficiency, and reinventing how the company works[159](index=159&type=chunk) - The company intends to **separate its Consumer Healthcare (CHC) business** to create two distinct entities, with the separation potentially occurring as early as **Q4 2024** through a capital markets transaction, creating a listed entity in France[164](index=164&type=chunk)[286](index=286&type=chunk) - DUPIXENT is a **key growth driver**, approved for multiple indications including atopic dermatitis, asthma, and eosinophilic esophagitis across various age groups in major markets like the US, EU, Japan, and China[170](index=170&type=chunk) - The R&D pipeline features **12 new molecular entities**, including three 'pipeline-in-a-product' assets: amlitelimab, frexalimab, and an oral TNFR1 signaling inhibitor, aimed at addressing unmet needs in immunology and inflammation[290](index=290&type=chunk)[295](index=295&type=chunk) - Sanofi is the **seventh largest pharmaceutical company globally** by sales. Its main markets are the United States (ranked 9th with **3.9% market share**), Europe (ranked 3rd in Germany, 4th in France), and other countries including China (ranked 9th) and Japan (ranked 16th)[358](index=358&type=chunk)[361](index=361&type=chunk) - The company faces **significant competition** from generics and biosimilars, parallel trading (especially in the EU), and illegal falsified drugs[362](index=362&type=chunk)[363](index=363&type=chunk)[364](index=364&type=chunk) - Sanofi operates **54 industrial production sites across 24 countries**, with a general policy of producing key active ingredients and main drug products in-house to reduce dependence on external suppliers[440](index=440&type=chunk)[494](index=494&type=chunk) - The company has a sustainability strategy, Planet Care, aiming to reduce carbon emissions (scopes 1 & 2) by **55% by 2030** (vs. 2019), achieve **carbon neutrality by 2030**, and reach **net-zero by 2045**[475](index=475&type=chunk)[476](index=476&type=chunk) [Organizational Structure](index=59&type=section&id=C.%20Organizational%20Structure) Sanofi is a holding company for a consolidated group of nearly **260** companies, organized into Biopharma and Consumer Healthcare, with centralized financing - Sanofi is a holding company for a group of **almost 260 companies**, with significant subsidiaries including Genzyme Corporation (US), Hoechst GmbH (Germany), and Sanofi Pasteur Inc. (US)[480](index=480&type=chunk)[481](index=481&type=chunk) - The group is organized around **two main activities**: Biopharma (comprising General Medicines, Specialty Care, and Vaccines) and Consumer Healthcare[483](index=483&type=chunk) - The Sanofi parent company **centralizes the group's financing**, operating a cash pooling arrangement and managing foreign exchange risk for its principal subsidiaries. As of year-end 2023, the parent company held **91% of external financing** and **75% of surplus cash**[485](index=485&type=chunk)[486](index=486&type=chunk) [Property, Plant and Equipment](index=60&type=section&id=D.%20Property,%20Plant%20and%20Equipment) Sanofi operates a global network of research, production, and logistics facilities, with **€10,160 million** in property, plant, and equipment and ongoing investments - As of December 31, 2023, the carrying amount of Sanofi's property, plant, and equipment was **€10,160 million**. The company invested **€1,693 million** in 2023, primarily to increase capacity and productivity[495](index=495&type=chunk) - The company operates **54 industrial production sites in 24 countries**, categorized into Specialty Care (8 sites), General Medicines (22 sites), Vaccines (10 sites), and CHC (13 sites)[494](index=494&type=chunk) - **Major investments** are underway in the Vaccines business to prepare for growth in influenza, Polio/Pertussis/Hib franchises, and the mRNA pipeline, with new facilities being built in France (Neuville-Sur-Saone, Val-de-Reuil), Singapore, Canada, the US, and Mexico[502](index=502&type=chunk) [Operating and Financial Review and Prospects](index=65&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes Sanofi's 2023 financial performance, detailing net sales, income, liquidity, and capital resources [Operating Results](index=65&type=section&id=A.%20Operating%20results) Sanofi's 2023 operating results show **€43,070 million** net sales (+**5.3%** CER) driven by DUPIXENT and Vaccines, with net income at **€5,400 million** Financial Metric | Financial Metric | 2023 | 2022 | Change (Reported) | Change (CER) | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | €43,070M | €42,997M | +0.2% | +5.3% | | **Net Income** | €5,400M | €8,371M | -35.5% | N/A | | **Business Net Income** | €10,155M | €10,341M | -1.8% | N/A | | **Basic EPS** | €4.31 | €6.69 | -35.6% | N/A | | **Business EPS** | €8.11 | €8.26 | -1.8% | N/A | - Key strategic events in 2023 included the acquisition of Provention Bio for TZIELD, a type 1 diabetes therapy, for approximately **$2.8 billion**, and the acquisition of QUNOL, a health & wellness brand, for **$1.4 billion** to strengthen the CHC business[516](index=516&type=chunk)[521](index=521&type=chunk) - Sanofi announced its intention to **separate its Consumer Healthcare (CHC) business**, with the earliest potential timing in **Q4 2024**, to increase focus on its Biopharma business[525](index=525&type=chunk) Product Sales | Product | 2023 Net Sales (€M) | Change at CER | | :--- | :--- | :--- | | **DUPIXENT** | 10,715 | +34.0% | | **AUBAGIO** | 955 | -52.6% | | **LANTUS** | 1,420 | -32.3% | | **BEYFORTUS (Launch)** | 547 | N/A | - Generic and biosimilar competition resulted in a **€651 million loss in net sales** in 2023 compared to 2022, primarily affecting LANTUS in the US and Europe, and AUBAGIO in the US[532](index=532&type=chunk)[534](index=534&type=chunk) - The Biopharma segment's net sales grew **5.1% at CER** to **€37,890 million**, while the Consumer Healthcare segment's sales grew **6.3% at CER** to **€5,180 million**[630](index=630&type=chunk)[633](index=633&type=chunk) [Liquidity and Capital Resources](index=85&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Sanofi maintains a strong liquidity position, primarily funded by operating cash flows, with **€7,793 million** net debt and **€8 billion** in undrawn credit facilities Financial Metrics | Metric | Dec 31, 2023 (€M) | Dec 31, 2022 (€M) | | :--- | :--- | :--- | | **Net Debt** | 7,793 | 6,437 | | **Total Equity** | 74,353 | 75,152 | | **Gearing Ratio** | 10.5% | 8.6% | | **Cash and Cash Equivalents** | 8,710 | 12,736 | Cash Flow Statement | Cash Flow Statement Item (€M) | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash from operating activities** | 10,258 | 10,526 | | **Net cash from investing activities** | (6,200) | (2,075) | | **Net cash from financing activities** | (8,052) | (5,821) | | **Free cash flow (non-IFRS)** | 8,478 | 8,483 | - The increase in net debt in 2023 was primarily driven by cash outflows for the acquisitions of Provention Bio and QRIB (**€3,915 million**) and dividend payments (**€4,454 million**), partially offset by free cash flow generation[709](index=709&type=chunk) - As of December 31, 2023, Sanofi had **€8 billion** of undrawn confirmed credit facilities, providing significant financial flexibility[720](index=720&type=chunk) [Directors, Senior Management and Employees](index=90&type=section&id=Item%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details Sanofi's governance structure, compensation policies, and employee information, including Board composition and global workforce data [Directors and Senior Management](index=90&type=section&id=A.%20Directors%20and%20Senior%20Management) Sanofi's governance separates Chairman and CEO roles, with a **16-member** Board (**79%** independent) and a **12-member** Executive Committee - Sanofi **separates the offices of Chairman** (Frédéric Oudéa) and Chief Executive Officer (Paul Hudson), a governance structure the Board believes is appropriate for the company[735](index=735&type=chunk) - As of December 31, 2023, the Board of Directors has **16 members**, with **11 deemed independent** (**79%** of non-employee directors), **43% women** (excluding employee representatives), and **50% non-French nationals**[748](index=748&type=chunk)[749](index=749&type=chunk)[779](index=779&type=chunk) - The Executive Committee, led by CEO Paul Hudson, consists of **12 members** as of February 22, 2024, with four new members joining in 2023 and early 2024[845](index=845&type=chunk)[846](index=846&type=chunk) [Compensation](index=122&type=section&id=B.%20Compensation) Sanofi's compensation policy for corporate officers is performance-based, with CEO Paul Hudson's 2023 compensation detailed, and includes a clawback policy - The CEO's compensation is benchmarked against a peer group of **12 global pharmaceutical companies**, including AstraZeneca, Pfizer, and Novartis. Paul Hudson's overall compensation is in the low range of the second quartile of this peer group[915](index=915&type=chunk) Officer Compensation | Officer | 2023 Awarded Compensation (€) | | :--- | :--- | | **Paul Hudson (CEO)** | 3,792,797 (Fixed + Variable) | | **Paul Hudson (CEO)** | 6,779,025 (Valuation of Performance Shares) | | **Frédéric Oudéa (Chairman)** | 528,505 (Pro-rated for service from May 25, 2023) | | **Serge Weinberg (Former Chairman)** | 324,964 (Pro-rated for service until May 25, 2023) | - For 2023, CEO Paul Hudson's annual variable compensation was set at **€2,379,300**, representing **169.9%** of his fixed compensation, based on the achievement of financial and individual objectives[1016](index=1016&type=chunk) - The CEO's equity-based compensation is **entirely in performance shares**, with vesting over three years contingent on internal criteria (Business EPS, FCF, R&D pipeline, CSR) and an external criterion (Total Shareholder Return relative to peers)[925](index=925&type=chunk)[972](index=972&type=chunk) - Sanofi adopted a **clawback policy** in October 2023, allowing the recovery of erroneously awarded variable compensation from executive officers in case of an accounting restatement[959](index=959&type=chunk) [Board Practices](index=146&type=section&id=C.%20Board%20Practices) Sanofi's Board practices, governed by French law and AFEP-MEDEF Code, include regular meetings, support from **five** specialist committees, and annual performance evaluations - The Board of Directors is assisted by **five specialist committees**: Audit, Appointments, Governance and CSR, Compensation, Strategy, and Scientific[1067](index=1067&type=chunk) - In 2023, the Board of Directors met **11 times**, achieving an overall **attendance rate of 97%**. Key activities included reviewing financial statements, overseeing the 'Play to Win' strategy, approving the proposed separation of the Consumer Healthcare business, and determining executive compensation[1061](index=1061&type=chunk)[1065](index=1065&type=chunk) - The Board conducts an **annual evaluation** of its operating procedures and a formal evaluation with an independent consultant at least every three years. It also holds at least **two executive sessions annually** without the CEO to evaluate performance and discuss succession[992](index=992&type=chunk)[1064](index=1064&type=chunk) [Employees](index=154&type=section&id=D.%20Employees) As of December 31, 2023, Sanofi employed **86,088** people globally, with the workforce primarily in Europe and Production as the largest function Employees by Region | Region | 2023 Employees | % of Total | | :--- | :--- | :--- | | Europe | 42,115 | 48.9% | | United States | 13,418 | 15.6% | | Rest of the World | 30,555 | 35.5% | | **Total** | **86,088** | **100.0%** | Employees by Function | Function | 2023 Employees | | :--- | :--- | | Sales Force | 16,835 | | Research and Development | 11,660 | | Production | 34,313 | | Marketing and Support Functions | 23,280 | | **Total** | **86,088** | - As of December 31, 2023, employees held **2.58% of Sanofi's share capital** through collective savings schemes or direct ownership[1107](index=1107&type=chunk) [Major Shareholders and Related Party Transactions](index=159&type=section&id=Item%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details Sanofi's ownership structure, identifying major shareholders like L'Oréal and BlackRock, and explains the double voting rights for registered shares Shareholder Information | Shareholder | % of Share Capital | % of Actual Voting Rights | | :--- | :--- | :--- | | L'Oréal | 9.35% | 16.81% | | BlackRock, Inc. | 6.85% | 6.15% | | Employees | 2.56% | 4.53% | | Public | 79.96% | 72.51% | | Treasury Shares | 1.28% | 0.00% | - Sanofi's Articles of Association grant **double voting rights** for shares held in registered form for a minimum of two years[1131](index=1131&type=chunk) [Financial Information](index=161&type=section&id=Item%208.%20FINANCIAL%20INFORMATION) This section covers Sanofi's dividend policy, proposing **€3.76** per share for 2023, and details significant legal proceedings and other financial disclosures - A dividend of **€3.76 per share** for the 2023 fiscal year will be proposed at the annual shareholders' meeting, representing a **46.3% payout** of business net income[1141](index=1141&type=chunk)[1142](index=1142&type=chunk) - Sanofi is involved in **numerous legal proceedings**, including product liability litigation for TAXOTERE (approx. **6,770 plaintiffs**), ZANTAC (approx. **26,984 plaintiffs**), and DEPAKINE (multiple civil and criminal cases in France)[1890](index=1890&type=chunk)[1898](index=1898&type=chunk)[1909](index=1909&type=chunk) - The company is engaged in **patent litigation**, including a case with Amgen regarding PRALUENT in Europe and a concluded case with Sandoz over JEVTANA in the US[1933](index=1933&type=chunk)[1934](index=1934&type=chunk) - In January 2024, Sanofi announced an agreement to acquire Inhibrx, Inc. for approximately **$1.7 billion** upfront to gain access to INBRX-101, a therapy for Alpha-1 Antitrypsin Deficiency (AATD)[1161](index=1161&type=chunk) [Additional Information](index=165&type=section&id=Item%2010.%20ADDITIONAL%20INFORMATION) This section details Sanofi's corporate structure, articles of association, and tax implications for shareholders, including withholding tax and financial transaction tax - Sanofi is a **société anonyme**, a form of limited liability company organized under the laws of France[1169](index=1169&type=chunk) - Under French law, dividends paid to non-residents are generally subject to withholding tax (**12.8%** for individuals, **25%** for legal persons). Under the US-France tax treaty, this rate can be reduced to **15%** for eligible US holders, who can claim a refund for any excess amount withheld[1216](index=1216&type=chunk)[1217](index=1217&type=chunk) - Purchases of Sanofi securities are subject to a **0.3% French tax on financial transactions (FTFF)** as the company's market capitalization exceeds the **€1 billion** threshold[1210](index=1210&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=174&type=section&id=Item%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Sanofi centrally manages market risks, including liquidity, foreign exchange, and interest rate, using derivatives to hedge exposures and maintain financial flexibility - Sanofi **centrally manages liquidity, foreign exchange, and interest rate risks**, using derivative instruments to hedge exposures. The company's policy **prohibits speculative use of derivatives**[1237](index=1237&type=chunk)[1238](index=1238&type=chunk) - The company has **significant operating foreign exchange risk**, as **43.0% of 2023 net sales** were in US dollars. It uses forward currency contracts and swaps to hedge this exposure[1244](index=1244&type=chunk) - To ensure liquidity, Sanofi maintains **€8 billion** of undrawn general corporate purpose credit facilities and diversifies short-term investments in money-market products. The average maturity of total debt was **4.45 years** as of December 31, 2023[1256](index=1256&type=chunk)[1257](index=1257&type=chunk)[1258](index=1258&type=chunk) PART II [Controls and Procedures](index=180&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of Sanofi's disclosure controls and internal control over financial reporting as of December 31, 2023 - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[1283](index=1283&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2023[1278](index=1278&type=chunk)[1280](index=1280&type=chunk) - The 2023 acquisition of Qunol was **excluded** from the scope of management's assessment of internal controls, as it represented **less than 1%** of total assets and net sales[1279](index=1279&type=chunk) [Other Information](index=181&type=section&id=Item%2016.%20Other%20Information) This section covers Sanofi's governance and compliance, including Audit Committee financial experts, NASDAQ listing differences, and cybersecurity risk management [Audit Committee Financial Expert](index=181&type=section&id=Item%2016A.%20AUDIT%20COMMITTEE%20FINANCIAL%20EXPERT) The Board of Directors has determined that all Audit Committee members are independent financial experts under the Sarbanes-Oxley Act - All four members of the Audit Committee have been determined by the Board of Directors to be **independent financial experts** under the Sarbanes-Oxley Act[1285](index=1285&type=chunk) [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=182&type=section&id=Item%2016E.%20PURCHASES%20OF%20EQUITY%20SECURITIES%20BY%20THE%20ISSUER%20AND%20AFFILIATED%20PURCHASERS) In **2023**, Sanofi repurchased **6,584,744** ordinary shares under publicly announced plans authorized by shareholder meetings Shares Purchased | Period | Total Shares Purchased | Average Price Paid per Share (€) | | :--- | :--- | :--- | | January 2023 | 4,000,204 | 90.60 | | December 2023 | 2,584,540 | 88.69 | | **Total** | **6,584,744** | N/A | [Corporate Governance](index=182&type=section&id=Item%2016G.%20CORPORATE%20GOVERNANCE) As a French company listed on Euronext Paris and NASDAQ, Sanofi follows home country governance practices, differing from certain NASDAQ rules - Sanofi follows its home country (French) corporate governance practices, which **differ from certain NASDAQ listing rules** for US domestic companies[1302](index=1302&type=chunk) - Key differences from NASDAQ rules include: board committees are **advisory only**, with final decisions made by the full Board; and shareholder approval for equity issuances is typically granted via a **general delegation of authority** to the Board rather than on a plan-by-plan basis[1306](index=1306&type=chunk)[1307](index=1307&type=chunk) [Cybersecurity](index=184&type=section&id=Item%2016K.%20CYBERSECURITY) Sanofi implements a comprehensive cybersecurity strategy, overseen by a CISO, focusing on threat prevention, detection, and response - Sanofi has a **cybersecurity strategy and processes** to manage threats, covering areas such as access control, patch management, network security, secure development, and third-party management[1314](index=1314&type=chunk) - A **cybersecurity operation center** is in place to detect and respond to threats, and regular incident response simulations are conducted[1317](index=1317&type=chunk) - Governance is led by a **Chief Information Security Officer (CISO)** who reports to the Chief Digital Officer (an Executive Committee member). The CISO provides regular updates to the group Risk Committee, Audit Committee, and Executive Committee[1321](index=1321&type=chunk)[1322](index=1322&type=chunk) PART III [Financial Statements](index=186&type=section&id=Item%2018.%20FINANCIAL%20STATEMENTS) This section presents Sanofi's complete audited consolidated financial statements for **2023**, **2022**, and **2021**, prepared under IFRS Consolidated Balance Sheet | Consolidated Balance Sheet (€M) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **126,464** | **126,722** | | Goodwill | 49,404 | 49,892 | | Other intangible assets | 24,319 | 21,640 | | Cash and cash equivalents | 8,710 | 12,736 | | **Total Equity and Liabilities** | **126,464** | **126,722** | | Total Equity | 74,353 | 75,152 | | Long-term debt | 14,347 | 14,857 | Consolidated Income Statement | Consolidated Income Statement (€M) | 2023 | 2022 | | :--- | :--- | :--- | | **Net sales** | **43,070** | **42,997** | | Gross profit | 32,208 | 31,694 | | R&D expenses | (6,728) | (6,706) | | Selling and general expenses | (10,692) | (10,492) | | **Operating income** | **7,875** | **10,656** | | **Net income attributable to equity holders** | **5,400** | **8,371** | Consolidated Statement of Cash Flows | Consolidated Statement of Cash Flows (€M) | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **10,258** | **10,526** | | Net cash used in investing activities | (6,200) | (2,075) | | Net cash used in financing activities | (8,052) | (5,821) | | **Net change in cash and cash equivalents** | **(4,026)** | **2,638** |

Sanofi (NASDAQ:SNY) Q4 2023 Earnings Call Transcript February 1, 2024 8:30 AM ET Company Participants Eva Schaefer-Jansen - Head of IR Paul Hudson - CEO Houman Ashrafian - Global Head of R&D Brian Ford - EVP, Head of Specialty Care Thomas Triomphe - EVP, Vaccines Olivier Charmeil - EVP, General Medicines Julie van Ongevalle - EVP, Consumer Healthcare Jean-Baptiste de Chatillon - CFO Conference Call Participants Luisa Hector - Berenberg Jo Walton - UBS Peter Welford - Jefferies Richard Vosser - JPMorgan Grah ...

Jean-Baptiste de Chatillon Julie, on switches. . Yes. I think that there's still a great path forward for perhaps Cialis, we're a bit more -- can be more transparent about because we can see it clearly after the latest conversations and the market opportunity for both is significant. So as and when we get the updates for share, but I think also they're very important value credit moments in the future of CHC. So I think perhaps that's why you asked it, but that's still very real. . Two, if I may, would revi ...

[Q3 2023 Performance Highlights](index=1&type=section&id=Q3%202023%20Performance%20Highlights) [Overall Performance](index=1&type=section&id=Overall%20Performance) In Q3 2023, Sanofi achieved robust performance driven by strong growth in Specialty Care and new products (Beyfortus®, ALTUVIIIO®), with sales increasing 3.2% at constant exchange rates (CER) despite a 2.1% decline in Business EPS, while reaffirming its full-year 2023 Business EPS guidance Key Financial Indicators for Q3 and 9M 2023 | Indicator | Q3 2023 | Reported Change | CER Change | 9M 2023 | Reported Change | CER Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **IFRS Reported Net Sales** | €11,964 million | -4.1% | +3.2% | €32,151 million | -0.4% | +3.9% | | **IFRS Reported Net Income** | €2,525 million | +21.6% | — | €5,955 million | +13.2% | — | | **IFRS Reported EPS** | €2.01 | +21.1% | — | €4.76 | +13.3% | — | | **Business Operating Income** | €4,028 million | -10.4% | -1.0% | €10,087 million | -2.2% | +4.1% | | **Business Net Income** | €3,196 million | -11.4% | -1.9% | €8,072 million | -1.6% | +4.8% | | **Business EPS** | €2.55 | -11.5% | -2.1% | €6.45 | -1.5% | +4.9% | | **Free Cash Flow** | €1,853 million | -31.2% | — | €4,982 million | -16.1% | — | - CEO Paul Hudson highlighted Dupixent®'s continued strong performance, the anticipated launch of Beyfortus®, and robust uptake of ALTUVIIIO® in the hemophilia market as key growth drivers this quarter, reflecting the company's strategy execution for sustainable growth through innovative medicines[4](index=4&type=chunk) - The company reaffirmed its full-year 2023 Business EPS guidance, expecting mid-single-digit growth at constant exchange rates, which includes an anticipated one-time COVID-19 vaccine revenue of approximately **€400 million** in Q4[3](index=3&type=chunk) [Business Unit Highlights](index=1&type=section&id=Business%20Unit%20Highlights) Specialty Care was the primary growth engine, increasing **13.5%** year-over-year, with Dupixent® sales surging **32.8%**, while Vaccines remained stable due to Beyfortus® offsetting flu vaccine declines, and General Medicines core assets along with Consumer Healthcare also saw moderate growth - **Specialty Care**: Grew **13.5%**, primarily driven by Dupixent® (**€2.847 billion**, **+32.8%**) and ALTUVIIIO®, offsetting generic competition for Aubagio® in the US - **Vaccines**: Sales remained stable (**-0.6%**), with the strong launch of Beyfortus® offsetting declining flu vaccine sales - **General Medicines**: Core assets grew **3.1%**, but were impacted by declines in non-core assets like Lantus® (**-32.9%**) - **Consumer Healthcare (CHC)**: Sales increased **4.6%**, mainly driven by Digestive Health and Allergy products[2](index=2&type=chunk) [Strategic Update: Next Chapter of Play to Win Strategy](index=2&type=section&id=Strategic%20Update%3A%20Next%20Chapter%20of%20Play%20to%20Win%20Strategy) [Strategic Initiatives](index=2&type=section&id=Strategic%20Initiatives) Sanofi announced the next phase of its "Play to Win" strategy, focusing on increased R&D investment for long-term growth, implementing strategic cost savings to reinvest in innovation, and a significant plan to spin off its Consumer Healthcare (CHC) business into a separate, France-headquartered listed company as early as Q4 2024 - **Increased Innovation Investment**: Boosting R&D pipeline investment to fully realize long-term growth potential - **Cost Optimization**: Launching a strategic cost-saving plan, with most savings reinvested into innovation and growth drivers - **Consumer Healthcare Spin-off**: Announcing plans to spin off the Consumer Healthcare business into an independent listed company as early as Q4 2024 - **Reaffirmed Capital Allocation & Guidance**: Reaffirming capital allocation policy and 2023 Business EPS growth target, while providing preliminary outlooks for 2024 and 2025[10](index=10&type=chunk) [Overall Financial Performance](index=2&type=section&id=Overall%20Financial%20Performance) [Sales Performance by Region](index=2&type=section&id=Sales%20Performance%20by%20Region) Total sales in Q3 2023 reached **€11.964 billion**, growing **3.2%** at CER but declining **4.1%** on a reported basis due to a **7.3** percentage point negative currency impact, with Rest of the World (**+5.9%**) and Europe (**+4.5%**) being key growth drivers, while the US market saw more moderate growth (**+1.0%**) Q3 and 9M 2023 Sales by Region | Region | Q3 2023 Sales (€ million) | CER Change | 9M 2023 Sales (€ million) | CER Change | | :--- | :--- | :--- | :--- | :--- | | **US** | 5,648 | +1.0% | 13,636 | +3.0% | | **Europe** | 2,707 | +4.5% | 7,741 | +5.6% | | **Rest of the World** | 3,609 | +5.9% | 10,774 | +4.1% | | *of which: China* | *728* | *-2.5%* | *2,268* | *-3.8%* | - **US**: Strong performance of Dupixent®, Nexviazyme®, and new launches Beyfortus® and ALTUVIIIO® partially offset generic competition for Aubagio®, and declining sales of Lantus® and flu vaccines - **Europe**: Growth driven by Dupixent®, Praluent®, and new launches Beyfortus® and Nexviadyme® - **Rest of the World**: Growth primarily driven by Dupixent®, General Medicines core assets, and Consumer Healthcare - **China**: Growth in Dupixent®, Praluent®, and Plavix® was offset by declining sales of Lantus®, Lovenox®, and Aprovel®[13](index=13&type=chunk) [Business Operating Income (BOI)](index=2&type=section&id=Business%20Operating%20Income%20%28BOI%29) Q3 Business Operating Income (BOI) was **€4.028 billion**, a reported decrease of **10.4%** and a **1.0%** decline at CER, with the BOI margin decreasing to **33.7%** (**34.5%** at CER), primarily impacted by exchange rates and operating costs - **Q3 2023 BOI**: Decreased **10.4%** year-over-year to **€4.028 billion**; declined **1.0%** at constant exchange rates[8](index=8&type=chunk) - **Q3 2023 BOI Margin**: Decreased **2.3** percentage points to **33.7%**; declined **1.5** percentage points to **34.5%** at constant exchange rates[8](index=8&type=chunk) [Business Segment Performance](index=4&type=section&id=Business%20Segment%20Performance) [Biopharma](index=4&type=section&id=Biopharma) Q3 Biopharma sales grew **3.1%** at CER to **€10.719 billion**, driven entirely by the strong performance of Specialty Care (**+13.5%**), particularly Dupixent®'s sustained high growth, while Vaccines sales remained stable (**-0.6%**) and General Medicines declined **6.6%** - Q3 Biopharma sales increased **3.1%** to **€10.719 billion**, primarily driven by Specialty Care (**+13.5%** growth), while Vaccines (**-0.6%**) and General Medicines (**-6.6%**) sales declined[14](index=14&type=chunk) - Q3 Biopharma Business Operating Income (BOI) decreased **11.2%** to **€3.748 billion** (**-2.0%** at CER), with a margin of **35.0%**[25](index=25&type=chunk) [Specialty Care](index=5&type=section&id=Specialty%20Care) Specialty Care sales surged **13.5%** (CER), primarily driven by Dupixent®'s exceptional performance, with sales growing **32.8%** year-over-year to **€2.847 billion**, and new hemophilia A therapy ALTUVIIIO® contributing **€46 million**, strongly offsetting Aubagio®'s **60.5%** sales decline due to US generic competition Key Specialty Care Product Sales Q3 2023 | Product | Sales (€ million) | CER Change | | :--- | :--- | :--- | | **Dupixent®** | 2,847 | +32.8% | | **Aubagio®** | 199 | -60.5% | | **Fabrazyme®** | 253 | +14.2% | | **Nexviazyme®** | 110 | +103.4% | | **Sarclisa®** | 97 | +34.2% | | **ALTUVIIIO®** | 46 | N/A | - Dupixent® maintained strong demand and growth across all approved indications and key markets (US, Europe, Rest of the World)[16](index=16&type=chunk) - Aubagio® sales significantly declined, primarily reflecting the impact of generic competition in the US market[16](index=16&type=chunk) [General Medicines](index=7&type=section&id=General%20Medicines) General Medicines sales declined **6.6%** (CER), with core assets growing **3.1%** driven by products like Praluent® (**+44.6%**) and Rezurock® (**+48.3%**), but non-core assets saw a **16.0%** sales decrease, mainly due to a **32.9%** drop in Lantus® sales and ongoing portfolio streamlining - The company completed its goal of reducing the non-core asset portfolio from approximately **300** to **100** products two years ahead of schedule, with plans to further reduce to approximately **85** by the end of 2025[18](index=18&type=chunk) Key General Medicines Product Sales Q3 2023 | Asset Category/Product | Sales (€ million) | CER Change | | :--- | :--- | :--- | | **Total Core Assets** | **1,512** | **+3.1%** | | Praluent® | 115 | +44.6% | | Rezurock® | 83 | +48.3% | | Lovenox® | 255 | -9.8% | | Toujeo® | 265 | -4.9% | | **Total Non-Core Assets** | **1,348** | **-16.0%** | | Lantus® | 343 | -32.9% | [Vaccines](index=9&type=section&id=Vaccines) Vaccines sales in Q3 were **€3.098 billion**, remaining largely stable (**-0.6%** CER), as the new RSV preventative Beyfortus® achieved **€137 million** in its first quarter with strong US and European demand, successfully offsetting a **6.2%** decline in flu vaccine sales due to lower vaccination rates and increased competition Vaccine Product Sales Q3 2023 | Product Category | Sales (€ million) | CER Change | | :--- | :--- | :--- | | **Flu Vaccines** | 1,766 | -6.2% | | **Polio/Pertussis/Hib Vaccines** | 577 | -3.4% | | **Beyfortus®** | 137 | N/A | | **Boosters** | 185 | +10.1% | - Beyfortus® demonstrated strong initial performance with robust demand in "all-infant protection programs" in the US, Spain, and France[22](index=22&type=chunk) - Flu vaccine sales declined primarily due to a slight decrease in vaccination rates, increased competition in the US market, and shipment delays in the Rest of the World[22](index=22&type=chunk) [Consumer Healthcare (CHC)](index=13&type=section&id=Consumer%20Healthcare%20%28CHC%29) Consumer Healthcare sales grew **4.6%** at CER in Q3 to **€1.245 billion**, primarily driven by growth in Digestive Health (**+8.0%**) and Allergy (**+14.1%**) categories, with Europe and Rest of the World as key growth markets, though Business Operating Income was negatively impacted by exchange rates and cost inflation Consumer Healthcare Product Category Sales Q3 2023 | Product Category | Sales (€ million) | CER Change | | :--- | :--- | :--- | | **Digestive Health** | 366 | +8.0% | | **Allergy** | 176 | +14.1% | | **Pain Care** | 272 | +5.1% | | **Cough & Cold** | 131 | +7.9% | - The company completed the acquisition of US health and wellness brand Qunol on September 29, with its sales to be integrated into the Physical & Mental Wellness category[36](index=36&type=chunk) - Q3 CHC Business Operating Income decreased **15.7%** (**+0.9%** at CER), with the margin falling from **25.9%** to **22.8%**, primarily due to exchange rates and cost of sales inflation[37](index=37&type=chunk) [R&D Update](index=9&type=section&id=R%26D%20Update) [Regulatory Update](index=9&type=section&id=Regulatory%20Update) This quarter saw several significant regulatory achievements, including US FDA approval and CDC recommendation for Beyfortus® for RSV prevention in infants, approval of ALTUVIIIO® in Japan and Nexviazyme® in China, and FDA's priority review acceptance for Dupixent® in pediatric eosinophilic esophagitis (EoE) - The US FDA approved Beyfortus® (nirsevimab) for the prevention of respiratory syncytial virus (RSV) lower respiratory tract disease in neonates and infants[27](index=27&type=chunk) - The FDA accepted for priority review the supplemental Biologics License Application (sBLA) for Dupixent® to treat eosinophilic esophagitis (EoE) in children aged 1 to 11 years, with a target action date of January 31, 2024[27](index=27&type=chunk) - ALTUVIIIO® received marketing authorization in Japan for hemophilia A, and Nexviazyme® was approved in China for Pompe disease[31](index=31&type=chunk) [Portfolio Update](index=11&type=section&id=Portfolio%20Update) The R&D pipeline showed positive progress, with improved safety and efficacy in the Phase 3 interim analysis of fitusiran for hemophilia, and rilzabrutinib meeting its primary endpoint in Phase 2 for chronic spontaneous urticaria (CSU), while eclitasertib and alomfilimab development was terminated based on strategic adjustments - **Phase 3 Progress**: Fitusiran (siRNA therapy) showed improved safety with reduced thrombotic events and sustained protection in a Phase 3 open-label extension study for hemophilia treatment[29](index=29&type=chunk) - **Phase 2 Progress**: Rilzabrutinib (oral BTK inhibitor) met its primary endpoint in a Phase 2 study for chronic spontaneous urticaria (CSU) but did not meet the primary endpoint in the atopic dermatitis study[32](index=32&type=chunk) - **Program Termination**: The company decided to discontinue the development of eclitasertib (RIPK1 inhibitor) in cutaneous lupus erythematosus (CLE) and halt enrollment for alomfilimab (anti-ICOS mAb) in solid tumor patients[32](index=32&type=chunk) [Corporate Social Responsibility (CSR) Update](index=14&type=section&id=Corporate%20Social%20Responsibility%20%28CSR%29%20Update) [CSR Key Initiatives](index=14&type=section&id=CSR%20Initiatives) Sanofi continues its CSR advancements, delivering initial "Impact" branded affordable medicines to low-income countries via its Global Health Unit (GHU), inaugurating a new photovoltaic park at its Aramon site in France towards 2030 carbon neutrality, and achieving a high **87** score in S&P Global's ESG rating for its environmental, social, and governance excellence - **Healthcare Access**: The Global Health Unit (GHU) made its first deliveries of non-profit "Impact" branded medicines, including insulin glargine and enoxaparin, to the Republic of Djibouti and global NGOs[40](index=40&type=chunk)[41](index=41&type=chunk) - **Environmental Protection**: As part of its 2030 carbon neutrality strategy, the company inaugurated a new photovoltaic park at its Aramon site in France, capable of meeting **11%** of the site's annual electricity needs[47](index=47&type=chunk)[48](index=48&type=chunk) - **ESG Rating**: For the second consecutive year, the company was recognized by S&P Global Ratings as one of the most committed companies to sustainable development, achieving a high score of **87/100**, among the highest across all industries globally[51](index=51&type=chunk) [Detailed Financial Results](index=17&type=section&id=Detailed%20Financial%20Results) [Business Net Income Statement Analysis](index=17&type=section&id=Business%20Net%20Income%20Statement%20Analysis) Q3 Business Net Income was **€3.196 billion**, a **11.4%** year-over-year decrease (**1.9%** at CER), with Business EPS at **€2.55**, down **11.5%** (**2.1%** at CER), as gross margin faced pressure from exchange rates and cost inflation, and SG&A and R&D expenses slightly increased as a percentage of sales, collectively contributing to the profit decline - Q3 gross margin decreased **0.6** percentage points to **74.0%**, with a slight increase of **0.1** percentage points at constant exchange rates, as Biopharma gross margin benefited from the Specialty Care product mix but was offset by Aubagio® generic competition and Lantus® price reductions in the US[56](index=56&type=chunk) - Q3 Selling and General Administrative (SG&A) expenses increased **4.6%** at constant exchange rates, reflecting increased commercial investments and launch costs in Specialty Care and Vaccines[57](index=57&type=chunk) - Q3 Business Net Income decreased **11.4%** to **€3.196 billion**, with the Business Net Income margin declining **2.2** percentage points to **26.7%**[61](index=61&type=chunk) [Capital Allocation and Net Debt](index=19&type=section&id=Capital%20Allocation%20and%20Net%20Debt) For the first nine months of 2023, the company's free cash flow was **€4.982 billion**, a **16.1%** year-over-year decrease, and net debt significantly increased from **€6.437 billion** at the end of 2022 to **€10.577 billion** as of September 30, 2023, primarily due to acquisitions of Provention Bio and Qunol, and dividend payments - For the first nine months of 2023, free cash flow before restructuring, acquisitions, and disposals was **€5.713 billion**, a **13.6%** year-over-year decrease[64](index=64&type=chunk) - Net debt increased from **€6.437 billion** as of December 31, 2022, to **€10.577 billion** as of September 30, 2023, primarily driven by the acquisition of Provention Bio (**-€2.58 billion**), Qunol (**-€1.335 billion**), and dividend payments (**-€4.454 billion**)[64](index=64&type=chunk) [Appendices](index=20&type=section&id=Appendices) [Appendix Contents](index=20&type=section&id=Appendix%20Contents) The appendices provide detailed financial data and supplementary information, including sales breakdowns by global business unit, product, and region, Business Net Income Statement, Consolidated Income Statement, reconciliation of IFRS Net Income to Business Net Income, net debt movements, currency sensitivity analysis, definitions of non-IFRS financial measures, and the CSR dashboard - The appendices contain the following key information: - **Appendix 1**: Sales by Business Unit, Product Line, Region, and Product - **Appendix 2**: Business Net Income Statement - **Appendix 3**: Consolidated Income Statement - **Appendix 4**: Reconciliation of IFRS Net Income to Business Net Income - **Appendix 5**: Net Debt Movements - **Appendix 6**: Currency Sensitivity - **Appendix 7**: Non-IFRS Financial Measures Definitions - **Appendix 8**: CSR Dashboard[68](index=68&type=chunk)

Jo Walton Apologies for that. I just have two questions, please. I noticed that Dietmar isn't on the Executive Committee just looking at the -- on your website. I wonder if you could tell us when you're going to be in a position to announce the head -- a new permanent head of R&D? And could I just ask related, another R&D-related question. It's a couple of years now since you bought Title IP for the targeted delivery CAR-T, certain cell types? I wonder -- this area still looks to be facing real challenges. ...

Exhibit 99.1 | | TABLE OF CONTENTS | | | --- | --- | --- | | 1. | CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS | 2 | | | CONSOLIDATED BALANCE SHEETS – ASSETS | 2 | | | CONSOLIDATED BALANCE SHEETS — SHAREHOLDERS' EQUITY AND LIABILITIES | 3 | | | CONSOLIDATED INCOME STATEMENTS | 4 | | | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | 5 | | | CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | 6 | | | CONSOLIDATED STATEMENTS OF CASH FLOWS | 8 | | | NOTES TO THE CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL ...

And just 2 quick ones. Firstly, just on the oral TNF again. Obviously, one of the indications where we are seeing OTNF still be used and actually not facing the same competition is HS, where I think you've also got some other programs looking at as well. I'm curious, I guess, why necessarily the focus on psoriasis, which is a pretty competitive market and I guess not some other potential statements as there are where perhaps less competition about the more amenable there for you to be an early entrant. Thom ...

Financial Performance - FDA approved ALTUVIIIO™, a new class of factor VIII therapy for hemophilia A, leading to a €2,154 million impairment reversal impacting 2022 IFRS net income[1][2] - Adjusted IFRS net income for 2022 is €8,371 million, a 34.5% increase from the previous figure of €6,720 million[2][4] - Earnings per share (IFRS EPS) for 2022 increased to €6.69, up 34.6% from €5.37[2][4] - IFRS net sales for Q4 2022 were €10,725 million, reflecting a 7.3% increase, and total 2022 net sales reached €42,997 million, a 13.9% increase[4] - Business operating income for 2022 was €13,040 million, a 21.7% increase year-over-year[4] - Free cash flow for 2022 amounted to €8,483 million, representing a 4.8% increase[4] - Business net income for 2022 remained unchanged at €10,341 million, with a 25.9% increase year-over-year[3][4] - The total equity for the company as of December 31, 2022, is €75,152 million, up from €73,512 million[2][4] Strategic Focus - The company continues to focus on innovative healthcare solutions and expanding its market presence globally[6] - Sanofi's commitment to sustainability and social responsibility remains central to its business strategy[6]