Sanofi(SNY)Q1 2025 法說會逐字稿

Hello, everyone. This is Thomas Guslatin from the Sanofi IR team. Welcome to the Q1 2025 Conference Call for investors and analysts. As usual, you can find the slides on sanofi.com. Please turn to Slide #3. Here, we have the usual forward-looking statements. We would like to remind you that information presented in this call contains forward-looking statements, which are subject to substantial risks and uncertainties that may cause actual results to differ materially. We encourage you to read the disclaimer in our slide presentation. In addition, we refer to our new Form 20-F on file with the U.S. SEC and our French registration document for description of these risk factors. As last quarter, financials reported are under the new reporting scope that excludes the pillar Consumer Health business. As usual, we will be making comments on our performance using constant exchange rates and other non-IFRS measures.

Numbers used are in millions of euros and for Q1 2025 unless stated otherwise. Now please turn to Slide #4. First, we have a presentation, then we'll take your questions. We have kept the presentation as shown in the past as other companies report today, and we aim at keeping the call to a maximum of 1 hour. For Q&A, we have Brian Olivier, Thomas to cover our global businesses as well as Roy, our General Counsel, and Brendan, Head of Manufacturing. For the Q&A, you have 2 options soon: raise your hand or submit your questions using the Q&A function. With this, I'll hand you over to Paul.

Well, thank you, Thomas and Sudan, and hello, everyone, on the call. We had a strong start to 2025 with a 7% sales growth in the first quarter. Our strategic focus on innovation continues to deliver, driven by pharma launches, Dupixent and Befortis in our vaccines portfolio. Let me highlight our performance of new launches on Slide 6. In Q1, our launch has generated EUR 1.1 billion in sales, contributing 11% of the total. This performance was driven by an element of Befortis phasing and expansion in Europe and Rest of the World. Altuve benefited from continued patient switches and has the potential to become our next blockbuster this year. Of note, on March 28, we obtained FDA approval for QFIPIA in hemophilia, one of three potential launches this year, with initial prescriptions already recorded in early Q2. Moving to Slide 7, Dupixent delivered strong growth of 20% in Q1, driven by broad-based demand and reached EUR 3.5 billion in sales.

In the U.S., sales were EUR 2.5 billion in the quarter, up 18%. Dupixent now also leads total prescription share across all approved indications. As usual, in the first quarter, U.S. sales reflected the impact from the annual reset of insurance deductibles, driving higher utilization of co-pay assistance. Outside the U.S., Dupixent sales exceeded EUR 1 billion for the first time, supported by contributions from Japan, China, and Germany. Looking at the remainder of the year, we will continue to drive Dupixent's growth across our markets and in all approved indications. As a reminder, bio penetration remains quite low. We are excited about the U.S. approval for CSU last week and the upcoming regulatory decision in the U.S. for bullosfamfogod. These additional indications continue to expand our leadership across type 2 inflammatory diseases. On Slide 8, let me briefly remind you of the high unmet need among people with uncontrolled COPD, many of whom resign themselves to their condition.

Dupixent is the first biologic medicine approved for this disease. We have already launched COPD in 8 countries, including the U.S., Germany, China, and Japan. Dupixent's value is being recognized by payers in key countries, ensuring access for all patients. To improve an option, we focus on two main objectives: first, we continue to educate pulmonologists about Dupixent's benefits, the role of type 2 inflammation, and the urgency to treat patients; second, we drive patient awareness. In April, we just launched our DTC campaign in the U.S.

Thank you, Paul, and hello, everyone. As highlighted by Paul earlier, net sales increased by 9.7% at constant exchange rates to EUR 9.9 billion. This growth was primarily driven by Dupixent, our new product launches, and favorable phasing in vaccines. Gross margin improved significantly to 78%, up 2.3 percentage points from the previous year, driven primarily by an improved product mix and efficiencies. Our Q1 effective tax rate was 22.3% linked to a one-off item this quarter. We maintain our full-year indication of a broadly stable effective tax rate versus 2024, which means around 20% for this current year. Business EPS was EUR 1.79, up 15.7%, reflecting our strong sales performance, improved gross margin, and operating leverage. This Q1 growth confirms our expected strong EPS rebound in 2025. Moving to Opella, we expect to close the transaction in the coming days. Sanofi will receive about EUR 10 billion while retaining a significant stake in Opella to support the company in its journey to independence and to participate in its future value creation.

The expected proceeds from this sale will be reallocated in accordance with our capital allocation policy. Our primary focus is to invest in our business to drive organic growth which includes investing in R&D, sales and marketing, industrial assets, AI, and talent. We also continue to explore external growth opportunities through bolt-on acquisitions. In March, for example, we agreed to acquire the 0201 from Dren Bio. This promising molecule strengthens our early pipeline in immunology. We maintain a progressive dividend policy, and 2025 will mark our 30th consecutive year of dividend increase. Regarding value-enhancing share repurchases, we are executing a EUR 5 billion share buyback program in 2025, with 76% already completed as of yesterday. We have repurchased 37.7 million shares at an average price of EUR 11.5, all for the purpose of cancellation. Looking ahead to the balance of 2025, I would like to remind you of some anticipated key business dynamics which may be helpful for modeling purposes.

For Q2, please note that Lantus U.S. sales started to increase materially in Q2 2024 due to the unavailability of a competitor's product representing a higher base of comparison for the next few quarters. Despite this higher baseline, we expect stable sales for launches in 2025 as we continue to capitalize on favorable market dynamics and competitive opportunities. In R&D, we remind you that we received in Q2 2024 a one-off payment from Sobi of about EUR 200 million for the development of Ativo at the time of approval in Europe. For the full year 2025, foreign exchange impact is moving against us and is now estimated to be around -1.5% on sales and around -2% on EPS. All other business dynamics remain unchanged compared to what we communicated at the beginning of the year.

Thank you, François. During the first quarter, we obtained 6 approvals, including Sarclisa, the first antithrombin lowering prophylaxis therapy for patients with hemophilia A or B regardless of inhibitors, and additional approvals for Dupixent in COPD in Japan and CSU in the U.S.; and Sarclisa across different lines in several countries. Moreover, as Paul has already alluded to, Dupixent was granted priority review in bullosfamfogod with a PDUFA date of June 20. This was followed by regulatory acceptance of tolebrutinib, which is now set for a PDUFA date of September 28 complemented by two recent New England Journal paper publications. As François said, last month, we announced the acquisition of DR 0201 from Dren Bio, a potential first-in-class CD20 directed bispecific antibody targeting and engaging myeloid cells with a potentially favorable and superior safety profile compared to T-cell engagers, which may carry cytokine release syndrome and other hematological risks.

The molecule has the potential to induce deep B-cell depletion of iofagocytosis, enabling sustained treatment-free remission in autoimmune diseases, such as lupus where significant unmet medical need remains. Next slide, please. Last week, we shared advances from our mid- and late-stage respiratory pipeline for amlitelimab, luncecumig and itepekimab across several indications. The clinical evidence supporting the OX40 ligand inhibition across three major diseases, namely asthma HS NAD is compelling. Preliminary efficacy results show that treatment with amlitelumab led to clinically meaningful and durable efficacy on exacerbations, lung function, and symptoms in patients with moderate discover asthma, including in those with heterogeneous inflammation. The primary endpoint of reduction in the exacerbations at the highest dose level in the ITT population did not reach statistical significance.

In certain groups, amlitelimab showed a robust reduction of more than 70% in the annualized rate of severe exacerbations. Amlatelimab was generally well tolerated with no new safety concerns. The KOL community feels very excited by this result. With the relevant statistical caveats that I've already mentioned, amlitelimab is to have a differentiated efficacy profile in selected patients, potentially representing a breakthrough for this underserved population.

I'll be very quick. So a couple of questions, please. Firstly, maybe one just on the amlitelimab-asthma data. Obviously, efficacy in these type 2 low patients. Just thinking more deeply, how do you think that efficacy compares to Dupixent and really how do you think that will lead to efficacy in AD relative to Dupixent from what you can see? And then a second question, just on this novel combination, which I think I heard was with incretins and anti-TNF. Just thinking through that combination, shouldn't we be thinking about that in HS?

So, I absolutely would not take a comparison between amlitelimab and Dupixent. Let me answer your question. We're very excited about the results we've seen with amlitelimab. We've been very clear and cautious that it missed its primary endpoint, but I have to say, from where I'm sitting, when you see the data, I feel that in multiple subgroups we have really compelling data, which has driven our commitments to go straight to Phase II in subgroups with substantial unmet medical need. You talked about the subgroup and indeed trust in this inflammation group. In those populations, amlitelimab has a distinct place for the treatment of patients, both because of the efficacy in these groups, but also its Q12 dosing. So I hope that answers your first question. Regarding the second question on balantinofib and combination therapies, we do plan to combine this in our treatment approach. Indeed, even in rheumatoid arthritis today, anti-TNF combined with methotrexate works well. Our strategy is indeed to go into combination therapies, including fixed-dose combinations.

My question still on amlitelimab and asthma, but maybe to go a little bit more broadly because you have other assets in development for asthma. So how do you see sort of more broadly a respiratory franchise developing within your pipeline? And then perhaps I could just check on Dupixent, again respiratory, so a little bit more color on that COPD launch reimbursement status and how we should think about that phasing through 2025?

Thank you so much for the question. I love that we keep getting asked about COPD. This is a critical disease state that's very heterogeneous like asthma. We expect to continue growing momentum, specifically with Dupixent. We launched it at the end of last year, and we anticipate progress throughout this year, particularly with 2025 being an inflection point. Early data suggest that we have a record-setting pace so far regarding Medicare and commercial coverage — approximately 90% Medicare coverage and about 88% commercial lives are covered. So that’s really record-setting for what we've had. Our fastest respiratory initiation launch so far is promising, but these initiations need to turn into new prescriptions. This should support our position in pulmonologist offices and enhance the growth of Dupixent in conjunction with asthma and other indications.

I was just wondering if you could help us understand or quantify the phasing impact. Was there any incentivizing for stocking ahead of a potential competitor launch? And in the slides, you also mentioned that you're focusing on increasing the next season immunization rate particularly in the U.S. What was the penetration of that last season? And how far do you see yourselves being able to take that up this year? And then a question on a mechanism of action, I was just wondering if you could give us a little more color on the synergistic component, given that we know TNFs alone look inferior to the IL-17s, and your own monotherapy didn't succeed. So I was just curious why you think that the combination there will look better than each on its own?

Thank you, Emily. Happy to provide a bit of color there. To get started, I want to reassure you that there was no incentive. There were no incentives during the season to stock up ahead of any competitor entry at the line. Regarding the vaccination coverage rate during the 2024-2025 season in the U.S., roughly it is around 55% to 60% across all products. A majority of this was before us, which is great. Therefore, there is more room to go because we expect this year to be close to traditional vaccination coverage rates for infants. Thus, we have a job to do in increasing the immunization rates in 2025 and 2026. We've seen that peer early successes lead to unique preventive measures where our focus will be on primary care and ensuring babies are protected throughout the entire year.

By the way, we are well aware of the exciting prospects for trispecifics. Our Nanobody platform allows us to generate trispecifics as needed. We have considered this opportunity but must exercise caution as it is challenging to gauge the geometric interactions between each component. While it is an area we have looked at, we do not expect significant incremental value from it. We recognize the competitive advantage that multiple simultaneous targeting can provide in diseases, particularly given the biologically underpenetrated marketplace in atopic dermatitis.

Just two quick ones for me today. First, just a little bit more on the OX40 TNF approach. Given the results you've seen in HS, does this give you any confidence that there are additional indications that this combination could be useful for? And does it change the relative positioning that you're thinking about with regards to the broader portfolio?

Yes, the safety profile and efficacy for various indications we've considered is something we're particularly excited about. There’s a substantial opportunity ahead of us, especially when accepting the need for combinatorial treatment approaches in high-need patient populations. The data shows promise, and we are keenly interested in exploring how these mechanisms work with our existing portfolio.

I just wanted to go back to the question on tariffs. Based on the administration comments, they have discussed 25% pharma tariffs — a lot of discussion around whether that goes on to transfer prices into the U.S. If that’s the case, what kind of impact could that have on Sanofi's tariffs on transfer prices into the U.S. and how easily could you mitigate that?

Once again, I mean, I don't want to start discussing various scenarios because it's very speculative by nature. That said, we are aware of some of the tariffs impacting trade between the U.S. and other countries. We have fully factored in the confirmed guidance for 2025. I wish I could offer you specifics for tariff scenarios but discussing what has not yet happened is very complicated.

Firstly, just going back to bravecimag. You gave us the p-value, I just wanted to ask about the posterior probability in that study. Also, thinking about the oral TNF and internal combination candidates, are there any others we should focus on combining the TNF?

I can't disclose the posterior probability. However, any advancements we make in research must be handled with care. In terms of combinations, while I can't disclose details of the pipeline, we're actively pursuing opportunities to pair the TNF with several candidates. This aims to leverage mutual strengths to maximize efficacy.