30.04.2015 07:30:00 CET

Sanofi delivers Q1 2015 Business EPS(1) growth of 2.6% at CER(2) and 12.8% on a reported basis

Paris, April 30, 2015

Sanofi delivers Q1 2015 Business EPS(1) growth of 2.6% at CER(2) and 12.8% on a reported basis

Sanofi growth driven by Genzyme and Merial

Solid financial performance

Significant achievements with new product launches

Further progress in R&D

2015 financial guidance

Sanofi Chief Executive Officer, Olivier Brandicourt commented:
"Sanofi had a good start to 2015. Our businesses provide a solid foundation for our new-product cycle. Sanofi's recent launches along with the ongoing regulatory reviews and planned submissions before year-end will drive future growth. At this important time for the company, my primary focus will be on maximizing the value of this innovative product portfolio and further establishing Sanofi as a leading biopharmaceutical company."

(1) See Appendix 8 for definitions of financial indicators; (2) constant exchange rates; (3) Growth in net sales is expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 8 for a definition); (4) See page 8; (5) 2014 business EPS was €5.20

Investor Relations: (+) 33 1 53 77 45 45 - E-mail: IR@sanofi.com
Media Relations: (+) 33 1 53 77 46 46 - E-mail: MR@sanofi.com
Web site: www.sanofi.com Mobile app: SANOFI IR available on the App Store and Google Play

2015 first-quarter figures

  Q1 2015 Change
(reported)
Change
(CER)
Net sales €8,810 m +12.3% +2.4%
Business net income(1) €1,726 m +11.6% +1.6%
Business EPS(1) €1.32 +12.8% +2.6%

In order to facilitate an understanding of operational performance, Sanofi comments on the business net income statement. Business net income(1) is a non-GAAP financial measure. The consolidated income statement for Q1 2015 is provided in Appendix 4 and a reconciliation of business net income to consolidated net income in Appendix 3. Consolidated net income for Q1 2015 was €1,023 million compared to €1,084 million for Q1 2014. Consolidated EPS for Q1 2015 was €0.78 versus €0.82 for Q1 2014.

2015 first-quarter sales

Unless otherwise indicated, all sales growth figures in this press release are stated at constant exchange rates(1).

In the first quarter of 2015, Sanofi generated sales of €8,810 million, an increase of 12.3% on a reported basis. Exchange rate movements had a positive effect of 9.9 percentage points reflecting mainly the weakness of the Euro against the dollar. Other currencies impacting sales in the first quarter primarily included the Chinese Yuan on the positive side and the Russian ruble on the negative side.

€ million Q1 2015
net sales
Change
(CER)
Pharmaceuticals   7,455   +2.2%
Diabetes   1,837   -3.2%
Consumer Healthcare (CHC)   979   +5.3%
Genzyme   821   +30.9%
Generics   478   +10.2%
Oncology   357   -7.3%
Established Rx Products   2,983   -1.5%
Vaccines   697   -4.6%
Animal Health   658   +13.5%
Total net sales   8,810   +2.4%

Pharmaceuticals

Sales for the Pharmaceuticals business increased 2.2% to €7,455 million in the first quarter, driven mainly by Genzyme, CHC and established Rx products in Emerging Markets, which were partially offset by lower sales of Diabetes.

(1) See Appendix 8 for definitions of financial indicators.

Diabetes

€ million Q1 2015
 net sales
Change
(CER)
Lantus 1,584 -5.0%
Amaryl 97 +1.2%
Apidra 91 +10.7%
Insuman 33 +3.1%
BGM (Blood Glucose Monitoring) 16 +0.0%
Lyxumia 8 +60.0%
Toujeo 7 -
Afrezza 1 -
Total Diabetes 1,837 -3.2%

In the first quarter, sales of the Diabetes division decreased 3.2% to €1,837 million. Sanofi recently managed to secure earlier and broader market access for Toujeo than expected due to a refined contracting strategy with payers in the U.S. As a result, Sanofi expects its global diabetes sales performance at constant exchange rates in the first quarter of 2015 to be indicative of the full year performance of this division.

Lantus sales were down 5.0% to €1,584 million over the period reflecting lower sales in the U.S., which were partially offset by strong growth in Emerging Markets. In the U.S., sales of Lantus were €1,007 million, a decrease of 13.1% due to the expected rebates required to maintain favorable formulary positions with key payers for contracts that started January 1, 2015. In Emerging Markets, Lantus sales were strong, up 18.0% to €276 million, reflecting solid growth in all regions. In Western Europe, Lantus first-quarter sales were up 6.3% to €223 million driven by growth in Germany, Portugal and Spain.

Toujeo, a next-generation basal insulin used to treat adults with type 1 and type 2 diabetes, was granted approval by the FDA in late February. Full launch activities in the U.S. market commenced at the end of March and included ToujeoCOACH, a customized patient support program that offers tailored information and services for patients with diabetes. Sales of the product were €7 million in the first quarter which primarily reflected wholesaler demand in advance of the launch.

First-quarter sales of Amaryl were €97 million, up 1.2% sustained by Emerging Markets (+12.9% to €78 million), especially in Latin America and China.

Sales of Apidra increased 10.7% to €91 million in the first quarter driven by Emerging Markets (+31.3% to €22 million). In the U.S. and in Western Europe, sales were up 3.6% (to €35 million) and 8.7% (to €25 million), respectively. 

First-quarter sales of Lyxumia were €8 million. Top-line results from the Phase IIIb ELIXA cardiovascular outcomes study of Lyxumia were announced in March and support the planned resubmission of the product in the U.S. in the third quarter of 2015.

Afrezza, a new rapid-acting inhaled insulin therapy (licensing agreement with MannKind), was launched in the U.S. in February 2015. Sales of the product were €1 million in the first quarter.

Consumer Healthcare

€ million Q1 2015
net sales
Change
(CER)
Allegra 142 +16.3%
Doliprane 85 -3.4%
Enterogermina 57 +36.8%
Essentiale 50 -7.6%
Nasacort 42 -16.7%
Maalox 28 +3.7%
Lactacyd 26 -4.0%
Dorflex 23 0.0%
No Spa 22 0.0%
Magne B6 20 +9.1%
Other 484 +6.9%
Total Consumer Healthcare 979 +5.3%

First-quarter sales of Consumer Healthcare products (CHC) were €979 million, an increase of 5.3% driven by Allegra and Enterogermina. Sales of CHC in Emerging Markets grew 6.3% to €455 million over the period led by Eastern Europe, particularly cough-and-cold products, and Latin America. In the U.S., first-quarter sales were up 5.5% to €259 million driven by Allegra which benefited from the launch of a new formulation. Sales of Nasacort were €42 million, a decrease of 16.7% impacted by an unfavorable comparison basis in the U.S. where the product was launched in the first quarter of 2014. Despite a price decrease of Doliprane in France in January 2015, CHC sales in Western Europe increased 0.5% to €202 million.

Genzyme

€ million Q1 2015
net sales
Change
(CER)
Cerezyme 189 +4.8%
Myozyme/ Lumizyme 156 +19.0%
Fabrazyme 141 +27.6%
Aldurazyme 48 +9.8%
Cerdelga 10 -
Total Rare Diseases 613 +15.9%
Aubagio 170 +88.5%
Lemtrada 38 -
Total Multiple Sclerosis 208 +118.1%
Total Genzyme 821 +30.9%

First-quarter sales of Genzyme increased 30.9% to €821 million reflecting the strong performance of Aubagio and double-digit growth of Rare Diseases products. Genzyme recorded double-digit sales growth in all territories including 37.7% to €357 million in the U.S., 24.2% to €244 million in Western Europe, 35.3% to €145 million in Emerging Markets and 20.7% to €75 million in the Rest of the World.

First-quarter sales of Rare Diseases reached €613 million, an increase of 15.9%.

Sales of the Gaucher franchise grew 10.1% to €199 million. Sales of Cerezyme were up 4.8% to €189 million in the first quarter, led by strong performance in Emerging Markets (up 16.4% to €66 million) especially in Latin America. Cerdelga, the only first-line oral therapy for Gaucher disease type 1 patients, was approved by the FDA in August 2014 and recorded sales of €10 million in the U.S.. The EMA approved Cerdelga for Gaucher disease type 1 patients in January 2015 and the product was launched in its first European market, Germany, in April. Cerdelga was also approved in Japan at the end of March.

First-quarter sales of Fabrazyme increased 27.6% to €141 million driven by strong growth in the U.S. (up 15.7% to €71 million), in Emerging Markets (up 157.1% to €19 million) and in Western Europe, (up 24.0% to €31million). In Emerging Markets, sales of the product benefited from a favorable phasing effect and the addition of new patients in Brazil.

Sales of Myozyme/Lumizyme grew 19.0% to €156 million in the first quarter, largely driven by an increase in worldwide diagnosis rates and patient identification leading to new patient accruals. In the U.S. (up 29.0% to €48 million) growth was partially due to the conversion of clinical study patients in 2014. Growth in Emerging Markets (up 36.8% to €28 million) also benefited from government ordering patterns in Brazil.

First-quarter sales of Multiple Sclerosis were €208 million (up 118.1%). Aubagio continued its success with sales more than doubling to €170 million versus €78 million in the same period of 2014. In the U.S., sales of Aubagio were €123 million versus €59 million in the first quarter of 2014. In Western Europe, sales were €36 million (versus €17 million in the same period of 2014) reflecting the continued roll out and successful launch in France.

First quarter sales of Lemtrada were €38 million including €18 million in Western Europe and €16 million in the U.S. where the product was introduced late last year.

Generics

Sales of Generics increased 10.2% to €478 million in the first quarter driven by the performance in Emerging Markets (up 12.7% to €277 million) led by cough-and-cold products in Eastern Europe and the performance in Latin America. In the U.S., sales of generics were up 17.9% to €41 million due to the growth of the authorized generics of Lovenox and Taxotere. In Western Europe, generics were down 2.9% to €138 million. In Rest of the World, sales more than doubled to €22 million, driven by Allegra generics sales in Japan.

Oncology

€ million Q1 2015
net sales
Change
(CER)
Jevtana 77 +7.6%
Thymoglobulin 55 -7.7%
Eloxatin 54 +4.3%
Taxotere 53 -31.9%
Mozobil 34 +20.0%
Zaltrap 20 +18.8%
Total Oncology 357 -7.3%

First-quarter sales of Oncology were €357 million, a decrease of 7.3%, mainly reflecting lower sales of Taxotere.

Sales of Jevtana grew 7.6% to €77 million in the first quarter, led by the U.S. (up 15.0% to €27 million) and Japan where the product was launched in September 2014.

First-quarter sales of Thymoglobulin were €55 million, down 7.7%.

First-quarter sales of Taxotere decreased 31.9% (€53 million), mainly due to generic competition. Over the same period, sales of Eloxatinincreased 4.3% (€54 million) driven by growth in China.

First-quarter sales of Mozobil were €34 million, up 20.0% driven by growth in the U.S. (up 15.4% to €18 million) and Emerging Markets (up 66.7% to €5 million).

In the first quarter, sales of Zaltrap grew 18.8% to €20 million, led by sales in Western Europe (€13 million versus €7 million in the first quarter of 2014) which offset lower sales in the U.S.

Established Rx Products

€ million Q1 2015
net sales
Change
(CER)
Plavix 483 -9.4%
Lovenox 438 +1.2%
Renvela/Renagel 226 +13.4%
Aprovel/Avapro 201 +0.0%
Synvisc/Synvisc-One 85 +2.9%
Multaq 83 -4.1%
Allegra 80 -5.0%
Myslee/Ambien/Stilnox 75 -11.5%
Other 1,312 -0.8%
Total Established Rx Products 2,983 -1.5%

Total sales of Established Rx Products were €2,983 million down 1.5%.

Sales of Plavix were down 9.4% to €483 million in the first quarter reflecting lower sales in Western Europe (down 30.6% to €44 million) due to generic competition and in Japan (down 12.6% to €198 million) impacted by an unfavorable comparison to the previous year resulting from buying patterns in anticipation of an increase in the consumption tax during the second quarter of 2014. In mid-2015, generic versions of Plavix are anticipated to enter the market in Japan. In Emerging Markets, sales of Plavix were €226 million, up 0.5% mainly due to lower sales in the Middle East. In China, sales of the product increased 4.4% to €142 million.

First-quarter sales of Lovenox were €438 million up 1.2%. In Emerging Markets, sales of the product grew 11.2% (€157 million) led by growth in the Middle-East and Latin America, which was partially offset by lower sales in the U.S. (down 31.3% to €26 million) due to generic competition and stable sales in Western Europe (€231 million).

Sales of Renvela/Renagel increased 13.4% to €226 million in the first quarter, driven by the U.S. (up 19.3% to €165 million). In the U.S., sales benefited from reduced competition from Impax which was granted a license to sell a limited number of bottles of an authorized generic version of Renvela tablets in the U.S. beginning in April 2014.

In the first quarter, sales of Aprovel/Avapro were stable at €201 million. The product recorded strong performance in Emerging Markets (up 18.7% to €125 million) driven by Latin America and China which was offset by lower sales in Western Europe (down 33.3% to €37 million) due to generic competition.

Vaccines

 € million Q1 2015
net sales
Change
(CER)
Polio/Pertussis/Hib Vaccines
(incl. Pentacel, Pentaxim, Hexaximand Imovax)
282 +15.6%
Influenza Vaccines
(incl. Vaxigrip and Fluzone)
22 -84.4%
Meningitis/Pneumonia Vaccines
(incl. Menactra)
97 +44.6%
Adult Booster Vaccines (incl. Adacel ) 95 -1.2%
Travel and Other Endemic Vaccines 82 -1.3%
Other Vaccines 119 +41.4%
Total Vaccines
(consolidated sales)
697 -4.6%

In the first quarter, consolidated sales of Sanofi Pasteur were €697 million, a decrease of 4.6% reflecting expected lower influenza vaccines sales due to the delay of the Southern Hemisphere influenza campaign which impacted the performance in Emerging Markets (down 19.4% to €228 million). Excluding influenza sales, the rest of the portfolio grew 17.2% in the first quarter. In the U.S., first-quarter sales increased 15.4% to €395 million driven by the continued recovery of Pentacel, the performance of Menactra and VaxServe (a Sanofi Pasteur company, U.S. specialty supplier of vaccines).

As the Southern Hemisphere influenza campaign was delayed by two required strain changes this year, first-quarter sales of Influenza vaccines were €22 million versus €135 million in the first quarter of 2014.

Sales of Polio/Pertussis/Hib vaccines were up 15.6% to €282 million in the first quarter. In the U.S., Polio/Pertussis/Hib vaccines sales increased 26.3% to €118 million, reflecting the continued recovery of Pentacel. In Emerging Markets sales of Polio/Pertussis/Hib vaccines grew 32.2% to €132 million led by strong performance of Pentaxim especially in China. In the Rest of the world, first-quarter sales of Polio/Pertussis/Hib vaccines decreased 43.6% to €25 million reflecting lower sales of the Polio vaccine, Imovax, and Hib vaccines in Japan.
In December 2014, Shantha was awarded an order for 37 million doses of Shan5TM, its pediatric pentavalent vaccine, to supply global health organizations in 2015 and 2016. The first 5.3 million doses of Shan5, produced by Shantha, were delivered in March and sales in the first quarter were €7 million.

First-quarter sales of Menactra grew 50.0% to €87 million reflecting 62.2% growth in the U.S. due to favorable CDC order phasing.

Sales of Adult Booster vaccines were down 1.2% to €95 million in the first quarter.

First-quarter sales of Travel and Other Endemic vaccines declined 1.3% to €82 million.

Sales of Sanofi Pasteur MSD (not consolidated), the joint venture with Merck & Co. in Europe, were €139 million, (down 11.8% on a reported basis) in the first quarter due to lower sales of Gardasil.

Animal Health

€ million Q1 2015
net sales
Change
(CER)
Companion Animal 443 +13.1%
Production Animal 215 +14.5%
Total Animal Health 658 +13.5%
of which fipronil products 193 +1.2%
of which Vaccines 186 +11.7%
of which avermectin products 157 +17.5%

Sales of Animal Health grew 13.5% to €658 million in the first-quarter confirming the recovery that started in 2014 and supported by both Companion and Production Animal segments. In the U.S. and in Emerging Markets, Animal Health sales grew 15.2% (to €307 million) and 8.9% (to €131 million), respectively.

First-quarter sales of the Companion Animals segment were up 13.1% to €443 million, reflecting the success of NexGard(TM) as well as performance of Heartgard. NexGard, Merial's next generation flea and tick product for dogs, was launched in the U.S. in the first quarter of 2014 and in Europe, Australia and Japan during 2014 and Brazil in the first quarter of 2015. Sales of NexGard more than doubled in the first quarter of 2015 compared to the same period of 2014. The Frontline family of products continued its stable performance over the period with sales up 1.2%

Sales of the Production Animals segment increased 14.5% to €215 million in the first-quarter. The Avian market, impacted last year by Avian influenza mostly in Asia, recovered in the first quarter while Merial increased its competitive response particularly in Emerging Markets. The Ruminant business was driven by the success of LongRange(TM) in the U.S. becoming a leading brand in parasite control. Sales of Veterinary Public Health products were driven by an outbreak of Foot-and-Mouth disease in Korea where Merial is a key partner supporting the management of disease.

Net sales by geographic region

€ million Q1 2015
 net sales
Change
(CER)
United States 2,976 +1.0%
Emerging Markets(a) 2,859 +7.3%
of which Asia 849 +8.6%
of which Latin America 846 +7.1%
of which Eastern Europe, Russia and Turkey 586 +8.6%
of which Africa and Middle East 530 +2.7%
Western Europe(b) 2,031 +0.6%
Rest of the world(c) 944 -3.5%
of which Japan 569 -8.2%
TOTAL 8,810 +2.4%

(a) World less the U.S., Canada, Western Europe, Japan, South Korea, Australia and New Zealand;
(b) France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark;
(c) Japan, South Korea, Canada, Australia and New Zealand;

In the U.S., sales were €2,976 million, up 1.0% in the first quarter. The strong performance of Genzyme (up 37.7%), Vaccines (up 15.4%), and Animal Health (up 15.2%) were partially offset by lower sales of Lantus (down 13.1%).

First-quarter sales in Emerging Markets increased 7.3% to €2,859 million. Pharmaceuticals sales in Emerging Markets increased 10.4% driven by Diabetes (up 18.5%), Genzyme (up 35.3%) and Generics (up 12.7%). Vaccines sales were down 19.4% (€228 million) reflecting the delay of the Southern Hemisphere influenza campaign. Animal Health recorded good growth (up 8.9% to €131 million) driven by Avian products. Sales in China grew 7.7% to €484 million driven by vaccines, Lantus, Plavix, Aprovel and Depakine. First-quarter sales in Eastern Europe, Russia and Turkey were up 8.6% to €586 million led by good performance in Turkey, Hungary, Poland and Ukraine. Sales in Russia were €132 million, up 0.5%. In Africa and Middle-East, sales were €530 million, up 2.7%. In Latin America, sales reached €846 million, up 7.1% reflecting significantly higher sales in Venezuela that were partially offset by lower sales of vaccines (down 66.9%) in this region. Despite the strong performance of Genzyme (up 64.3%) and generics (up 9.6%), sales in Brazil decreased 20.9% to €283 million, impacted by lower sales of vaccines (down 85.3%). In Venezuela, significantly increased demand was observed in the first quarter of 2015, due to buying patterns associated with local market conditions. As a consequence, first-quarter sales in Venezuela were €200 million versus €66 million in the same period of 2014. Sanofi does not expect this increased demand to be replicated throughout 2015. This positive impact from Venezuela on Emerging Market sales was partially offset by low influenza vaccines sales (€20 million in the first quarter of 2015 versus €105 million in the same period of 2014) due to the delay of the influenza campaign.

First-quarter sales in Western Europe were €2,031 million (up 0.6%). The performance of Genzyme (up 24.2%) and Animal Health (+8.5%) was partially offset by the impact of generic competition to Aprovel and Plavix.

In Japan, sales were €569 million, a decrease of 8.2% in the first-quarter, reflecting the impact of generic competition to Taxotere, Myslee and Amaryl, lower sales of vaccines and Plavix.

R&D update

Consult Appendix 6 for full overview of Sanofi's R&D pipeline

Regulatory update

Regulatory updates since the publication of the 2014 results on February 5, 2015 include the following:

At the end of April 2015, the R&D pipeline contained 37 projects (excluding Life Cycle Management) and vaccine candidates in clinical development of which 12 are in Phase III or have been submitted to the regulatory authorities for approval.

Portfolio update

Phase III:

Phase II:

Phase I:

             

             

Collaboration

First-quarter financial results

Business Net Income(1)

In the first quarter of 2015, Sanofi generated net sales of €8,810 million, an increase of 12.3% on a reported basis (up 2.4% at constant exchange rates).

Other revenues decreased 3.6% to €80 million in the first quarter. At constant exchange rates, other revenues were down 14.5% reflecting lower royalties received on Enbrel sales in Europe.

First-quarter gross profit increased 12.8% (up 1.8% at constant exchange rates) to €6,104 million. The Gross margin ratio improved by 0.3 percentage points to 69.3% versus the first quarter of 2014, reflecting an improvement in industrial performance and a positive effect from foreign exchange rates which more than offset the impact from U.S. diabetes and ramp up of biologics.

Research and development expenses were €1,199 million, up 5.3% in the first quarter. At constant exchange rates, R&D expenses decreased by 1.8% reflecting timing of clinical programs in 2015.

First-quarter selling and general expenses (SG&A) increased 17.3% to €2,438 million. At constant exchange rates, SG&A grew 6.6% reflecting investments in new launches at Genzyme and U.S. diabetes as well as in Emerging Markets. The ratio of SG&A to net sales was 1.2 percentage points higher to 27.7% compared with the first quarter of 2014.

Other current operating income net of expenses was -€67 million in the first quarter versus -€25 million in the first quarter of 2014. This line in 2015 included a foreign exchange loss of €66 million booked in connection with our Venezuelan operations.

The share of profits from associates was €31 million in the first quarter (versus €13 million in the first quarter of 2014) and included Sanofi's share in Regeneron profit recorded under the equity method since the beginning of April 2014 as well as Sanofi's share of profit in Sanofi Pasteur MSD (the Vaccines joint venture with Merck & Co. in Europe).

(1) See Appendix 8 for definitions of financial indicators, and Appendix 3 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi

Non-controlling interests were -€33 million in the first quarter (versus -€35 million in the first quarter of 2014)

Business operating income increased 11.8% to €2,398 million in the first quarter. At constant exchange rates, business operating income grew 2.1%. The ratio of business operating income to net sales was 0.2 percentage points lower to 27.2% versus the same period of last year, driven by higher SG&A expenses connected to investment behind launches.

Net financial expenses were €97 million in the first quarter compared to €76 million in the first quarter of 2014. This line included capital gains linked to the sales of some financial investments of €16 million in the first quarter of 2015 and €41 million in the first quarter of 2014, respectively.

The first quarter effective tax rate was 25%, which was stable versus the first quarter of 2014.

First-quarter business net income(1) grew 11.6% to €1,726 million. At constant exchange rates, business net income increased 1.6%. The ratio of business net income to net sales was 19.6% in the first quarter versus 19.7% in the first quarter of 2014.

In the first quarter of 2015, business earnings per share(1) (EPS) was €1.32, up 12.8% on a reported basis and up 2.6% at constant exchange rates. The average number of shares outstanding was 1,308.4 million in the first quarter versus 1,319.9 million in the same period in 2014.

From business net income to consolidated net income (see Appendix 3)

In the first quarter of 2015, the main reconciling items between business net income and consolidated net income attributable to equity holders of Sanofi were:

             

(1) See Appendix 8 for definitions of financial indicators, and Appendix 3 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi

Capital Allocation

In the first quarter of 2015, net cash generated by operating activities was €1,247 million after capital expenditures of €355 million (versus €279 million in the first quarter of 2014) driven by investment into new biologics capacities and after an increase in working capital by €379 million resulting in particular from inventory seasonality and the build-up of inventory of products. This net Cash Flow has contributed to finance a share repurchase (€794 million) partially offset by proceeds from the issuance of new shares (€247 million), acquisitions and partnerships net of disposals (€327 million) and restructuring costs (€148 million). Net debt increased from €7,171 million at December 31, 2014 to €7,571 million at March 31, 2015 (amount net of €7,740 million cash and cash equivalents) and included the translation impact of the debt held in U.S. dollars which represented €593 million.

Forward-Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi's management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, the Group's ability to benefit from external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December 31, 2014. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.

Appendices

List of appendices

Appendix 1:  2015 first-quarter consolidated net sales by geographic region and product

 
Appendix 2: 2015 first-quarter business net income statement

 
Appendix 3: Reconciliation of business net income to net income attributable to equity holders of Sanofi

 
Appendix 4: 2015 first-quarter consolidated income statement

 
Appendix 5: 2015 currency sensitivity

 
Appendix 6: R&D pipeline

 
Appendix 7: Expected R&D milestones in 2015

 
Appendix 8: Definitions

Appendix 1: 2015 First-quarter consolidated net sales by geographic region and product

Q1 2015 net sales
(€ million)
Total %
CER
%
reported
  Western Europe %
CER
  United States %
CER
  Emer-ging Markets %
CER
  Rest of the World %
CER
Lantus 1,584 -5.0% 9.4%   223 6.3%   1,007 -13.1%   276 18.0%   78 1.4%
Apidra 91 10.7% 21.3%   25 8.7%   35 3.6%   22 31.3%   9 0.0%
Amaryl 97 1.2% 12.8%   4 -33.3%   1   -   78 12.9%   14 -33.3%
Insuman 33 3.1% 3.1%   18 -14.3%   0   -   14 25.0%   1 -100.0%
Lyxumia 8 60.0% 60.0%   5 66.7%   0   -   2   -   1 -50.0%
Afrezza 1   -   -   0   -   1   -   0   -   0   -
Toujeo 7   -   -   0   -   7   -   0   -   0   -
Diabetes 1,837 -3.2% 10.5%   290 4.7%   1,051 -12.0%   393 18.5%   103 -6.0%
Taxotere 53 -31.9% -23.2%   2 -50.0%   2 -33.3%   31 -27.8%   18 -34.6%
Jevtana 77 7.6% 16.7%   38 -2.6%   27 15.0%   8 0.0%   4 300.0%
Eloxatine 54 4.3% 17.4%   1 0.0%   1 0.0%   32 8.0%   20 0.0%
Thymoglobulin 55 -7.7% 5.8%   9 0.0%   32 13.0%   9 -41.2%   5 0.0%
Mozobil 34 20.0% 36.0%   10 12.5%   18 15.4%   5 66.7%   1 0.0%
Zaltrap 20 18.8% 25.0%   13 85.7%   6 -37.5%   1 0.0%   0   -
Other Oncology 64 -20.0% -8.6%   14 -12.5%   38 -31.1%   8 -14.3%   4 150.0%
Oncology 357 -7.3% 3.8%   87 2.4%   124 -8.8%   94 -14.6%   52 -5.7%
Aubagio 170 88.5% 117.9%   36 105.9%   123 69.5%   6 400.0%   5 600.0%
Lemtrada 38 580.0% 660.0%   18 260.0%   16   -   2   -   2   -
Cerezyme 189 4.8% 12.5%   61 3.4%   50 -8.9%   66 16.4%   12 11.1%
Cerdelga 10   -   -   0   -   10   -   0   -   0   -
Myozyme 156 19.0% 28.9%   69 7.9%   48 29.0%   28 36.8%   11 25.0%
Fabrazyme 141 27.6% 43.9%   31 24.0%   71 15.7%   19 157.1%   20 13.3%
Aldurazyme 48 9.8% 17.1%   17 6.3%   9 14.3%   16 15.4%   6 0.0%
Other Rare Diseases products 69 10.9% 25.5%   12 22.2%   30 21.1%   8 28.6%   19 -10.0%
Genzyme 821 30.9% 45.1%   244 24.2%   357 37.7%   145 35.3%   75 20.7%
Plavix 483 -9.4% -0.8%   44 -30.6%   0   -   226 0.5%   213 -12.2%
Lovenox 438 1.2% 5.3%   231 0.0%   26 -31.3%   157 11.2%   24 0.0%
Aprovel 201 0.0% 12.3%   37 -33.3%   3 -25.0%   125 18.7%   36 6.7%
Renagel/ Renvela 226 13.4% 31.4%   33 3.1%   165 19.3%   22 0.0%   6 0.0%
Allegra 80 -5.0% 0.0%   3 0.0%   0   -   0   -   77 -5.2%
Stilnox 75 -11.5% -3.8%   10 -9.1%   18 -6.3%   16 7.1%   31 -21.6%
Depakine 104 7.6% 13.0%   35 3.0%   0   -   65 10.9%   4 0.0%
Synvisc / Synvisc One 85 2.9% 21.4%   7 16.7%   65 1.9%   10 12.5%   3 -33.3%
Tritace 75 5.9% 10.3%   30 -6.3%   0   -   44 21.2%   1 -33.3%
Multaq 83 -4.1% 13.7%   10 0.0%   70 -5.0%   3 0.0%   0 0.0%
Lasix 42 11.1% 16.7%   18 -10.0%   1 0.0%   14 8.3%   9 166.7%
Targocid 40 2.7% 8.1%   20 0.0%   0    -   19 13.3%   1 -50.0%
Orudis 50 31.4% 42.9%   4 -20.0%   0   -   45 41.4%   1 0.0%
Cordarone 34 3.1% 6.3%   6 0.0%   0   -   20 11.1%   8 -12.5%
Xatral 25 -4.2% 4.2%   9 -10.0%   0   -   15 0.0%   1 0.0%
Actonel 7 -66.7% -66.7%   1 -75.0%   0   -   4 -50.0%   2 -85.7%
Auvi-Q / Allerject 17 40.0% 70.0%   1 0.0%   13 37.5%   0   -   3 100.0%
Other established Rx products 918 -3.0% 1.0%   394 -3.9%   81 -33.7%   351 8.7%   92 -5.4%
Total Established Rx Products 2,983 -1.5% 5.8%   893 -6.3%   442 -5.7%   1,136 9.0%   512 -9.0%
Consumer Healthcare 979 5.3% 10.6%   202 0.5%   259 5.5%   455 6.3%   63 15.4%
Generics 478 10.2% 13.5%   138 -2.9%   41 17.9%   277 12.7%   22 110.0%
Pharmaceuticals 7,455 2.2% 11.3%   1,854 -0.1%   2,274 -2.8%   2,500 10.4%   827 -3.1%
Polio / Pertussis / HIB 282 15.6% 33.6%   7 16.7%   118 26.3%   132 32.2%   25 -43.6%
Influenza vaccines 22 -84.4% -83.7%   0   -   -2 -104.8%   20 -81.9%   4 -66.7%
Meningitis / Pneumonia 97 44.6% 73.2%   1   -   74 57.9%   20 26.7%   2 -66.7%
Adult Booster Vaccines 95 -1.2% 17.3%   5 -37.5%   73 -6.3%   12 57.1%   5 100.0%
Travel and other endemic vaccines 82 -1.3% 9.3%   8 60.0%   19 0.0%   40 -7.5%   15 -6.7%
Other Vaccines 119 41.4% 70.0%   0 -100.0%   113 41.5%   4 200.0%   2 100.0%
Vaccines 697 -4.6% 11.0%   21 0.0%   395 15.4%   228 -19.4%   53 -31.4%
Fipronil products 193 1.2% 12.9%   69 9.7%   88 -5.3%   24 4.5%   12 -8.3%
Vaccines 186 11.7% 20.8%   42 0.0%   43 2.9%   79 10.3%   22 100.0%
Avermectin products 157 17.5% 37.7%   17 6.3%   108 31.3%   11 -9.1%   21 -5.0%
Other Animal Health 122 38.5% 56.4%   28 22.7%   68 36.6%   17 27.3%   9 175.0%
Animal Health 658 13.5% 27.3%   156 8.5%   307 15.2%   131 8.9%   64 32.6%
Total Group 8,810 2.4% 12.3%   2,031 0.6%   2,976 1.0%   2,859 7.3%   944 -3.5%

Appendix 2: Business net income statement

First quarter 2015 Group Total Pharmaceuticals Vaccines Animal Health Others
€ million Q1 2015 Q1 2014 Change Q1 2015 Q1 2014 Change Q1 2015 Q1 2014 Change Q1 2015 Q1 2014 Change Q1 2015 Q1 2014
Net sales 8,810 7,842 12.3% 7,455 6,697 11.3% 697 628 11.0% 658 517 27.3% - -
Other revenues 80 83 (3.6%) 62 68 (8.8%) 6 7 (14.3%) 12 8 50.0% - -
Cost of sales (2,786) (2,516) 10.7% (2,190) (1,988) 10.2% (376) (350) 7.4% (220) (178) 23.6% - -
As % of net sales (31.6%) (32.1%)   (29.4%) (29.7%)   (53.9%) (55.7%)   (33.4%) (34.4%)      
Gross profit 6,104 5,409 12.8% 5,327 4,777 11.5% 327 285 14.7% 450 347 29.7% - -
As % of net sales 69.3% 69.0%   71.5% 71.3%   46.9% 45.4%   68.4% 67.1%      
Research& Development expenses (1,199) (1,139) 5.3% (1,039) (995) 4.4% (120) (107) 12.1% (40) (37) 8.1% - -
As % of net sales (13.6%) (14.5%)   (13.9%) (14.9%)   (17.2%) (17.0%)   (6.1%) (7.2%)      
Selling and general expenses (2,438) (2,078) 17.3% (2,094) (1,791) 16.9% (156) (129) 20.9% (188) (158) 19.0% - -
As % of net sales (27.7%) (26.5%)   (28.1%) (26.7%)   (22.4%) (20.6%)   (28.6%) (30.5%)      
Other current operating income/ expenses (67) (25)   (28) (23)   1 (2)   - 6   (40) (6)
Share of profit/loss of associates(1) and joint ventures 31 13   32 8   (1) 5   - -   - -
Net income attributable to non-controlling interests (33) (35)   (33) (35)   - -   - -   - -
Business operating income 2,398 2,145 11.8% 2,165 1,941 11.5% 51 52 (1.9%) 222 158 40.5% (40) (6)
As % of net sales 27.2% 27.4%   29.0% 29.0%   7.3% 8.3%   33.7% 30.6%      
Financial income and expenses (97) (76)                        
Income tax expense (575) (522)                        
Tax rate(2) 25.0% 25.0%                        
Business net income 1,726 1,547 11.6%                      
As % of net sales 19.6% 19.7%                        
Business earnings per share(3)
(in euros)
1.32 1.17 12.8%                      

(1) Net of tax.
(2) Determined on the basis of Business income before tax, associates and non-controlling interests.
(3) Based on an average number of shares outstanding of 1,308.4 million in the first quarter of 2015 and 1,319.9 million in the first quarter of 2014.

Appendix 3: Reconciliation of Business net income to Net income attributable to equity holders of Sanofi

€ million Q1 2015 Q1
2014
Change
Business net income 1,726 1,547 11.6%
Amortization of intangible assets(1) (618) (677)  
Impairment of intangible assets (27) (3)  
Fair value remeasurement of contingent
consideration liabilities
1 (8)  
Restructuring costs (353) (51)  
Other gains and losses, and litigation - 35(2)  
Tax effect of items listed above: 355 248  
 Amortization of intangible assets 217 244  
 Impairment of intangible assets 10 1  
 Fair value remeasurement of contingent consideration liabilities 7 1  
 Restructuring costs 121 15  
 Other gains and losses, and litigation - (13)  
 

Share of items listed above attributable to non-controlling interests
1 1  
 

Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures
(62) (8)  
Net income attributable to equity holders of Sanofi 1,023 1,084 (5.6%)
Consolidated earnings per share(3) (in euros) 0.78 0.82  

(1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €590 million in the first quarter of 2015 and €657 million in the first quarter of 2014.

(2) In 2014, day one profit on Alnylam shares presented in financial result.
             

(3) Based on an average number of shares outstanding of 1,308.4 million in the first quarter of 2015 and 1,319.9 in the first quarter of 2014.

See page 11 for comments on the reconciliation of business net income to consolidated net income.

Appendix 4: Consolidated income statement

€ million Q1 2015 Q1 2014
Net sales 8,810 7,842
Other revenues 80 83
Cost of sales (2,786) (2,516)
Gross profit 6,104 5,409
Research and development expenses (1,199) (1,139)
Selling and general expenses (2,438) (2,078)
Other operating income (30) 10
Other operating expenses (37) (35)
Amortization of intangible assets (618) (677)
Impairment of intangible assets (27) (3)
Fair value remeasurement of contingent consideration liabilities 1 (8)
Restructuring costs (353) (51)
Operating income 1,403 1,428
Financial expenses (133) (147)
Financial income 36 106
Income before tax and associates and joint ventures 1,306 1,387
Income tax expense (220) (274)
Share of profit/loss of associates and joint ventures (31) 5
Net income 1,055 1,118
Net income attributable to non-controlling interests 32 34
Net income attributable to equity holders of Sanofi 1,023 1,084
Average number of shares outstanding (million) 1,308.4 1,319.9
Earnings per share (in euros) 0.78 0.82

Appendix 5: 2015 currency sensitivity

2015 Business EPS currency sensitivity

Currency Variation Business EPS Sensitivity
U.S. Dollar -0.05 USD/EUR +EUR 0.10
Japanese Yen +5 JPY/EUR -EUR 0.03
Russian Ruble +10 RUB/EUR -EUR 0.06

Currency exposure on Q1 2015

Currency Q1 2015
US $ 34.7%
Euro € 23.4%
Japanese Yen 6.1%
Brazilian Real 3.1%
Chinese Yuan 5.4%
Russian Ruble 1.5%
British Poundฃ 2.1%
Mexican Peso 1.4%
Canadian $ 1.5%
Australian $ 1.4%
Others 19.4%

Currency average rates

  Q1 2014 Q1 2015 Change Average March 2015
€/$ 1.37 1.13 -17.7% 1.08
€/Yen 140.76 134.19 -4.7% 130.41
€/Yuan 8.36 7.03 -15.9% 6.76
€/Ruble 48.08 71.09 +47.9% 65.14

Appendix 6: R&D Pipeline

Registration

N
Praluent (alirocumab)
Anti-PCSK9 mAb
Hypercholesterolemia, U.S., EU

 

Dengue
Mild-to-severe
dengue fever vaccine

  PR5I
DTP-HepB-Polio-Hib
Pediatric hexavalent vaccine, U.S., EU

Phase III

LixiLan
lixisenatide + insulin glargine
Fixed-Ratio / Type 2 diabetes
N
patisiran (ALN-TTR02)
siRNA inhibitor targeting TTR
Familial amyloid polyneuropathy


Clostridium difficile
Toxoid vaccine


N
Lyxumia (lixisenatide)
GLP-1 agonist
Type 2 diabetes, U.S.
N
revusiran (ALN-TTRsc)
siRNA inhibitor targeting TTR
Familial amyloid cardiomyopathy
Rotavirus
Live attenuated tetravalent
Rotavirus oral vaccine
N
SAR342434
insulin lispro
Type 1+2 diabetes

Kynamro (mipomersen)
Apolipoprotein B-100 antisense
Severe HeFH, U.S.
VaxiGrip QIV IM
Quadrivalent inactivated
influenza vaccine
N
sarilumab
Anti-IL6R mAb
Rheumatoid arthritis

Jevtana (cabazitaxel)
Metastatic prostate cancer (1L)

 
N
dupilumab
Anti-IL4R alpha mAb
Atopic dermatitis, Asthma

SYNVISC-ONE
Medical device
Pain in hip OA

Phase II

 

dupilumab
Anti-IL4Ralpha mAb
Nasal polyposis;
Eosinophilic oesophagitis
N
SAR391786
Anti-GDF8 mAb
Sarcopenia

Rabies VRVg
Purified vero rabies vaccine

N
vatelizumab
Anti-VLA 2 mAb
Multiple sclerosis

N
SAR650984
Anti-CD38 naked mAb
Multiple myeloma

Meninge ACYW conj.
2nd generation meningococcal
conjugate infant vaccine 
N
SAR156597
 IL4/IL13 Bi-specific mAb
Idiopathic pulmonary fibrosis

N
GZ402671
Oral GCS Inhibitor
Fabry Disease

Tuberculosis
Recombinant subunit vaccine
sarilumab
Anti-IL6R mAb
Uveitis
N
Combination
ferroquine / OZ439

 Antimalarial
Malaria
 

N
fresolimumab
TGF฿ antagonist
Focal segmental glomerulosclerosis

   

Phase I

N
GZ402668
GLD52 (anti-CD52 mAb)
Relapsing multiple sclerosis

N
SAR125844
C-MET kinase inhibitor
Solid tumors

N
GZ402665 (rhASM)
olipudase alfa
Niemann-Pick type B

 
N
SAR113244
Anti-CXCR5 mAb
Systemic lupus erythematosus

N
SAR566658
Maytansin-loaded anti-CA6 mAb
Solid tumors

N
GZ402666
neo GAA
Pompe Disease

 
N
SAR228810
Anti-protofibrillar AB mAb
Alzheimer's disease
N
SAR408701
Anti-CEACAM5 ADC
Solid tumors

 
N
StarGen
Gene therapy
Stargardt disease

 
 
N
SAR425899
GLP-1 / GCGR agonist
Diabetes
N
SAR245408 (XL147)
Oral PI3K inhibitor
Solid tumors

 
N
UshStat
Gene therapy
Usher syndrome 1B

 
N
SAR439152
Myosin inhibitor
Hypertrophic cardiomyopathy

  Streptococcus pneumonia
Meningitis & pneumonia vaccine

 
 
    Herpes Simplex Virus Type 2
HSV-2 vaccine

 
 
   

N : New molecular entity

Appendix 7: Expected R&D milestones

Product Event Timing
Toujeo EU regulatory decision in Diabetes Q2 2015
Dupilumab Start of Phase III trial in Asthma Q2 2015
Sarilumab Expected Phase III top line results in Rheumatoid Arthritis Q2 2015
Dengue vaccine Regulatory submission in endemic countries H1 2015
Praluent (alirocumab) Expected U.S. regulatory decision in Hypercholesterolemia Q3 2015
PR5I vaccine (DTP-HepB-Polio-Hib) Expected U.S. regulatory decision Q3 2015
LixiLan Expected Phase III top line results in Diabetes Q3 2015
Lyxumia (lixisenatide) Expected U.S. regulatory submission in Diabetes Q3 2015
Dupilumab Expected start of Phase III trial in Nasal Polyposis Q3 2015
Vaxigrip QIV IM (3+ years) Expected EU regulatory submission Q4 2015
Dengue vaccine Expected regulatory decision in endemic countries Q4 2015
LixiLan Expected U.S. regulatory submission in Diabetes Q4 2015
Sarilumab Expected U.S. regulatory submission in Rheumatoid Arthritis Q4 2015
LixiLan Expected EU regulatory submission in Diabetes Q1 2016
Praluent (alirocumab) Expected EU regulatory decision in Hypercholesterolemia Q1 2016

Appendix 8: Definitions of non-GAAP financial indicators

Net sales at constant exchange rates (CER)

When we refer to changes in our net sales "at constant exchange rates" (CER), this means that we exclude the effect of changes in exchange rates.
We eliminate the effect of exchange rates by recalculating net sales for the relevant period at the exchange rates used for the previous period.

Reconciliation of reported net sales to net sales at constant exchange rates for the first quarter of 2015

€ million Q1 2015
Net sales 8,810
Effect of exchange rates -782
Net sales at constant exchange rates 8,028

Net sales on a constant structure basis

We eliminate the effect of changes in structure by restating prior-period net sales as follows:

Business net income

Sanofi publishes a key non-GAAP indicator. This indicator "Business net income", replaced "adjusted net income excluding selected items".

Business net income is defined as net income attributable to equity holders of Sanofi excluding:

(1) Reported in the line items Restructuring costs and Gains and losses on disposals, and litigation, which are defined in Note B.20. to our consolidated financial statements.

Q1 2015 Results