08.02.2017 07:30:00 CET

Sanofi Delivers 2016 Sales and Business EPS(1) Growth at CER(2)

Paris, February 8, 2017

Sanofi Delivers 2016 Sales and Business EPS(1) Growth at CER(2)

  Q4 2016 Change Change (CER) 2016 Change Change (CER)
IFRS net sales reported €8,867m +3.3% +3.4% €33,821m -0.7% +1.2%
IFRS net income reported €790m +136.5%   €4,709m +9.8%  
IFRS EPS reported €0.62 +138.5%   €3.66 +11.6%  
Business net income(1) €1,606m -6.0% -2.9% €7,308m -0.9% +2.5%
Business EPS(1) €1.25 -4.6% -1.5% €5.68 +0.7% +4.1%

Following the announcement of exclusive negotiations with Boehringer Ingelheim and as per the IFRS 5 presentation requirement for discontinued operations, net income for Sanofi's Animal Health business (Merial) was reported on a separate line ("Net income from the held for exchange Animal Health Business") in the Consolidated Income Statement for 2016 and the prior year. In the first three quarters of 2016, Sanofi comments included Merial for every income statement line using the term "Aggregate". Sanofi neither presents "Aggregate" figures nor reports Animal Health business as an operating segment in Q4 2016 and in 2016 as a result of the closing early in 2017 of the swap of the Animal Health/CHC business with Boehringer Ingelheim. 2016 net sales including Animal Health(3) were €36,529 million of which €9,466 million in the fourth quarter of 2016.

All Global Business Units delivered positive sales performance in the fourth quarter of 2016

  • Net sales were €8,867 million, up 3.3% on a reported basis (up 3.4% at CER).
  • Sanofi Genzyme (Specialty Care) GBU increased 12.6% driven by multiple sclerosis products.
  • Sanofi Pasteur GBU grew 3.7% due to strong pediatric combination franchise sales.
  • Diabetes and Cardiovascular GBU sales were up 3.8%. Global diabetes franchise sales increased 1.9%.

2016 sales supported by Specialty Care and Vaccines


  • Net sales in 2016 were €33,821 million, down 0.7% on a reported basis and up 1.2% at CER.
  • Sanofi Genzyme GBU sales reached €5,019 million, up 17.3% while Sanofi Pasteur sales grew 8.8% to €4,577 million.
  • Emerging Markets(4) sales increased 2.4% to €9,593 million (up 7.0% excluding Venezuela).

Solid financial results in 2016 despite launch investments, supported by cost savings


  • 2016 Business EPS(1) of €5.68 (+4.1% at CER) and IFRS EPS of €3.66 (+11.6% on a reported basis).
  • Q4 2016 Business EPS was €1.25, down -1.5% at CER impacted by an unfavorable tax rate comparison.
  • Q4 2016  Business operating income grew 3.7% at CER
  • Board proposes dividend of €2.96, the 23rd consecutive annual increase.

Sanofi progresses on its strategic priorities


  • Closing of the Boehringer Ingelheim (BI) business swap elevates Sanofi into a global leadership position in CHC.
  • Sanofi Pasteur and MSD end joint vaccines business to pursue their European vaccine strategies independently.
  • Soliqua(TM) 100/33 launched in the U.S. and Suliqua(TM) approved in EU for type-2 diabetic patients.
  • Kevzara(TM) (sarilumab) in rheumatoid arthritis approved in Canada and U.S. resubmission planned in Q1 2017.
  • 5 NMEs started registrational studies in 2016: isatuximab, PD-1, sotagliflozin, olipudase alfa and NeoGAA.

2017 financial guidance
  • Sanofi expects 2017 Business EPS(1) to be stable to -3%(5) at constant exchange rates, barring unforeseen major adverse events, consistent with its previously announced Strategic Roadmap guidance for the 2016-17 period. Applying the average December 2016 exchange rates, the currency impact on 2017 Business EPS is estimated to be +3% to +4%.

Sanofi Chief Executive Officer, Olivier Brandicourt, commented:
"2016 was a busy year for Sanofi as we progressed on our 2020 strategic roadmap. We successfully closed the Boehringer Ingelheim asset swap, lifting us into a leadership position in Consumer Healthcare. Our streamlined organization started to deliver and supported a stronger financial performance than initially anticipated. At the same time, we completed the filing of our breakthrough innovation Dupixent for the first indication, atopic dermatitis, in the U.S and Europe. Separately, we recently advanced five new molecules into registrational studies."

(1) In order to facilitate an understanding of operational performance, Sanofi comments on the business net income statement. Business net income is a non-GAAP financial measure (see Appendix 11 for definitions). The consolidated income statement for Q4 2016 and 2016 is provided in Appendix 4 and a reconciliation of business net income to IFRS net income reported is set forth in Appendix 3; (2) changes in net sales are expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 11); (3) Merial information is provided in appendix 5; (4) See page 8; (5) 2016 Business EPS was €5.68.

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2016 fourth-quarter and full-year Sanofi sales

Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER(6).

In the fourth quarter of 2016, Company sales were €8,867 million, up 3.3% on a reported basis. Exchange rate movements had a negative effect of 0.1 percentage points. At CER, Company sales increased 3.4%.

In 2016, Company sales were €33,821 million, down 0.7% on a reported basis. Exchange rate movements had an unfavorable effect of 1.9 percentage points reflecting mainly the adverse evolution of the Argentine Peso, Chinese Yuan, Mexican Peso and British Pound, which more than offset the positive effects from the Japanese Yen. At CER, Company sales increased 1.2%.

2016 performance included a negative currency impact related to the change of exchange rate applied for the translation of Venezuela operations, resulting from the evolution of the exchange system in February 2016 as well as from the persistent inability to exchange Venezuelan bolivars for U.S. dollars at the privileged official rate. In addition, in the first half of 2015, Sanofi benefited from a significant increase in product demand in Venezuela, due to buying patterns associated with local market conditions. As a consequence, sales in Venezuela were €18 million in 2016 compared to €455 million in 2015. Excluding Venezuela, Company sales increased 3.7% and 2.6% in the fourth quarter and in 2016, respectively.

Global Business Units

The table below presents sales by Global Business Units (GBU) and reflects the organization of Sanofi which became effective as of January 1, 2016. This structure drives deeper specialization, simplifies reporting and provides clear focus on growth drivers. Please note that in Emerging Markets, Specialty Care and Diabetes and Cardiovascular sales are included in the General Medicines and Emerging Markets GBU.

Net Sales by GBU
(€ million)
Q4 2016 Change
(CER)
2016 Change
(CER)
Sanofi Genzyme (Specialty Care)(a)   1,335   +12.6% 5,019 +17.3%
Diabetes and Cardiovascular(a)   1,710   +3.8% 6,397 -2.0%
General Medicines & Emerging Markets(b)   3,636   +0.4% 14,498 -3.3%(c)
Consumer Healthcare   834   +2.7% 3,330 -1.6%(d)
Total Pharmaceuticals   7,515   +3.4% 29,244 +0.2%
Sanofi Pasteur (Vaccines)   1,352   +3.7% 4,577 +8.8%(e)
Total Company sales   8,867   +3.4% 33,821 +1.2%(f)

(a) Does not include Emerging Markets sales- see definition page 8; (b) Includes Emerging Markets sales for Diabetes & Cardiovascular and Specialty Care; (c) Excluding Venezuela: -1.2%; (d) Excluding Venezuela: +1.4%; (e) Excluding Venezuela: +9.0%; (f) Excluding Venezuela: +2.6%

Global Franchises

The tables below present fourth quarter and full year 2016 sales by global franchise, including Emerging Markets, to facilitate comparisons. Appendix 1 provides a reconciliation of sales by GBU and franchise.

Net sales by Franchise
(€ million)
Q4 2016 Change
(CER)
Developed
Markets
Change
(CER)
Emerging
Markets
Change
(CER)
Specialty Care 1,569 +12.9% 1,335 +12.6% 234 +14.3%
Diabetes and Cardiovascular 2,076 +3.9% 1,710 +3.8% 366 +4.1%
Established Products 2,568 -1.3% 1,622 -2.6% 946 +0.9%
Consumer Healthcare (CHC) 834 +2.7% 508 +7.0% 326 -3.2%
Generics 468 +0.2% 259 -3.3% 209 +5.1%
Vaccines 1,352 +3.7% 831 +1.4% 521 +7.3%
Total net sales 8,867 +3.4% 6,265 +3.4% 2,602 +3.5%

 (6) See Appendix 11 for definitions of financial indicators.

Net sales by Franchise
(€ million)
2016 Change
(CER)
Developed
Markets
Change
(CER)
Emerging
Markets
Change
(CER)
Specialty Care 5,950 +17.2%(a) 5,019 +17.3% 931 +16.7%(b)
Diabetes and Cardiovascular 7,799 -0.4%(c) 6,397 -2.0% 1,402 +7.2%(d)
Established Products 10,311 -6.8%(e) 6,552 -9.5% 3,759 -2.0%(f)
Consumer Healthcare (CHC) 3,330 -1.6%(g) 2,092 +2.9% 1,238 -7.9%(h)
Generics 1,854 +0.7%(i) 1,069 -0.2% 785 +1.8%(j)
Vaccines 4,577 +8.8%(k) 3,099 +7.0% 1,478 +12.4%(l)
Total net sales 33,821 +1.2%(m) 24,228 +0.8% 9,593 +2.4%(n)

(a) Excluding Venezuela : +17.6%; (b) Excluding Venezuela : +18.8%; (c) Excluding Venezuela : +0.2%; (d) Excluding Venezuela :+10.8%; (e) Excluding Venezuela : -4.9%; (f) Excluding Venezuela: +3.8%; (g) Excluding Venezuela: +1.4%; (h) Excluding Venezuela: -0.9%; (i) Excluding Venezuela: +2.5%; (j) Excluding Venezuela: +6.1%;
(k) Excluding Venezuela: +9.0%; (l) Excluding Venezuela: +13.2%; (m) Excluding Venezuela: +2.6%; (n) Excluding Venezuela: +7.0%.

Pharmaceuticals

Fourth-quarter Pharmaceuticals sales increased 3.4% to €7,515 million driven by Multiple Sclerosis, Rare Disease and Cardiovascular franchises. In 2016, Pharmaceuticals sales were up 0.2% to €29,244 million. Excluding Venezuela, 2016 sales Pharmaceuticals increased 1.6%.

Rare Disease franchise

Net sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
Myozyme/ Lumizyme 192 +15.6% 725 +13.5%
Cerezyme 184 +7.8% 748 +5.3%
Fabrazyme 182 +13.9% 674 +14.7%
Aldurazyme 50 +8.2% 201 +7.7%
Cerdelga 29 +27.3% 106 +59.1%
Total Rare Diseases 716 +9.7% 2,777 +11.7%

In the fourth quarter, Rare Disease sales increased 9.7% to €716 million driven by the accrual of patients worldwide and strong performance of the franchise in Emerging Markets. In 2016, Rare Disease sales were up 11.7% to €2,777 million.

In the fourth quarter, Gaucher (Cerezyme and Cerdelga) sales increased 9.9% to €213 million, driven by Cerezyme growth in Emerging Markets (up 34.7% to €57 million) and the increasing contribution of Cerdelga (€29 million, up 27.3%). In 2016, Gaucher sales increased 9.6% to €854 million.

Sales of Fabrazyme were up 13.9% to €182 million in the fourth quarter, due to a continued accrual of new patients. In 2016, sales of Fabrazyme were up 14.7% to €674 million.

Fourth-quarter Myozyme/Lumizyme sales increased 15.6% to €192 million, mainly due to new patient accruals and increased worldwide diagnosis. In 2016, sales of Myozyme/Lumizyme increased 13.5% to €725 million.

Multiple Sclerosis franchise

Net sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
Aubagio 367 +34.2% 1,295 +49.7%
Lemtrada 117 +46.9% 425 +79.0%
Total Multiple Sclerosis 484 +37.1% 1,720 +56.1%

Fourth-quarter Multiple Sclerosis (MS) sales increased 37.1% to €484 million, reflecting strong Aubagio and Lemtrada performance in the U.S. and Europe as well as the increasing sales contribution from Emerging Markets and the Rest of the World. In 2016, MS sales were up 56.1% to €1,720 million.

In the fourth quarter, Aubagiosales increased 34.2% to €367 million driven by the U.S. (up 34.5% to €265 million) and Europe (up 31.7% to €79 million). Aubagio is currently the fastest growing oral disease modifying therapy in the Multiple Sclerosis market with prescription share of 8.8% in the U.S. (IMS NPA TRX -Q4 2016). In 2016, Aubagiosales were up 49.7% to €1,295 million.

Fourth-quarter Lemtrada sales increased 46.9% to €117 million, including €67 million in the U.S. (up 50.0%) and €39 million in Europe (up 41.4%). In 2016, Lemtrada sales were up 79.0% to €425 million.

Oncology franchise

Net sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
Jevtana 92 +8.3% 358 +11.5%
Thymoglobulin 77 +10.1% 281 +10.9%
Taxotere 42 -12.2% 179 -17.1%
Eloxatin 41 -27.6% 170 -21.6%
Mozobil 41 +5.3% 152 +7.0%
Zaltrap 15 -16.7% 65 -14.3%
Total Oncology 369 -3.9% 1,453 -2.2%

Fourth-quarter Oncology sales decreased 3.9% to €369 million. Growth of Jevtana, Thymoglobulin and Mozobil was offset by lower Taxotere and Eloxatin sales. In 2016, Oncology sales were €1,453 million, down 2.2%.

Jevtanasales were up 8.3% to €92 million in the fourth quarter led by Europe (up 12.5% to €35 million) and Japan. Full-year Jevtanasales were up 11.5% to €358 million.

In the fourth quarter, Thymoglobulin sales were up 10.1% to €77 million supported by the performance in the U.S.
(up 16.2% to €43 million). In 2016, Thymoglobulin sales were up 10.9% to €281 million.

Fourth-quarter Eloxatinsales were down 27.6% to €41 million reflecting generic competition in Canada. Over the same period, Taxotere sales decreased 12.2% (to €42 million) due to continuous generic competition in Japan. In 2016, Taxotere and Eloxatin sales were down 17.1% (€179 million) and 21.6% (€170 million), respectively.

Diabetes franchise

Net sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
Lantus 1,463 -5.1% 5,714 -9.4%
Toujeo 238 138.8% 649 ns
Total glargine 1,701 +3.5% 6,363 -1.8%
Apidra 95 -9.6% 367 -1.1%
Amaryl 89 -1.1% 362 -3.8%
Insuman 31 -13.2% 129 -3.5%
BGM (Blood Glucose Monitoring) 16 - 66 +4.8%
Lyxumia 7 -36.4% 33 -13.2%
Total Diabetes 1,945 +1.9% 7,341 -1.8%(a)

(a) Excluding Venezuela: -1.2%;

In the fourth quarter, Diabetes sales increased 1.9% to €1,945 million, including lower Lantus sales in the U.S. Fourth-quarter U.S. Diabetes sales were up 5.5% to €1,131 million. Sales in Emerging Markets increased 4.1% to €365 million. Sales in Europe were €318 million, a decrease of 5.6%. In 2016, Diabetes sales were €7,341 million, down 1.8%.

Fourth-quarter sales of Sanofi glargine (Lantus and Toujeo) increased 3.5% to €1,701 million. In the U.S., Sanofi glargine sales of €1,100 million were up 7.0%. In Europe, Sanofi glargine sales decreased 5.4% to €240 million due to biosimilar competition in several European markets. In 2016, Sanofi glargine sales were €6,363 million, down 1.8%.

Over the quarter, Lantus sales were €1,463 million down 5.1%. In the U.S., Lantus sales decreased 1.8% to €931 million mainly reflecting lower average net price and patients switching to Toujeo. In Europe, fourth-quarter Lantus sales were €199 million (down 17.4%) due to biosimilar competition and patients switching to Toujeo. In Emerging Markets, sales were stable at €243 million impacted by lower sales in Russia. In 2016, Lantus sales were €5,714 million, down 9.4%.

Fourth-quarter Toujeo sales were €238 million of which €169 million were recorded in the U.S. and €41million in Europe. The global roll-out of this product continues and Toujeo is available in 45 countries. In Japan, the two-week prescription limit was lifted in September 2016, resulting in a significant increase in market share (10.8% in December 2016- based on IMS basal insulin share market in value). Full-year Toujeo sales were €649 million (versus €164 million in 2015).

Amaryl sales were €89 million, down 1.1% in the fourth quarter, of which €73 million were generated in Emerging Markets (up 4.1%). In 2016, Amaryl sales were €362 million, down 3.8%.

Fourth-quarter Apidra sales decreased 9.6% to €95 million, reflecting lower sales in the U.S. (down 31.0% to €29 million) and Europe (down 6.1% to €32 million), which offset the performance in Emerging Markets (up 33.3% to €22 million). In 2016, Apidra sales decreased 1.1% to €367 million.

Since January 2017, Soliqua(TM) 100/33 (insulin glargine 100 Units/mL & lixisenatide 33 mcg/mL injection; lixisenatide was in-licensed from Zealand Pharma) has been available in the U.S. Soliqua 100/33 is indicated for the treatment of adults with type 2 diabetes inadequately controlled on basal insulin (less than 60 Units daily) or lixisenatide. Sanofi is offering Soliqua(TM) 100/33 at a $0 co-pay (see press release from January 4, 2017) for eligible U.S. patients with commercial insurance and is working to secure market access from payers. Sanofi is also offering a tailored support program, Soliqua(TM) 100/33 COACH, at no cost to patients who have been prescribed the product.

Cardiovascular franchise

Praluent (alirocumab, collaboration with Regeneron) was launched in the U.S., in a number of European markets and Japan in 2015 and 2016. Fourth-quarter Praluent sales were €37 million of which €30 million were in the U.S. and €6 million in Europe. Full-year Praluent sales were €105 million reflecting significant payer utilization management restrictions in the U.S. and limited market access in Europe.

In January 2017, the U.S. District Court for the District of Delaware issued an injunction that requires Sanofi and Regeneron to stop marketing, selling and manufacturing Praluent in the U.S. starting from February 21, 2017. Until that date, Praluent remains available in the U.S. Sanofi and Regeneron filed a motion with the United States Court of Appeals for the Federal Circuit to stay (suspend) the injunction pending the appeal of the judgment upholding the validity of Amgen's patents for antibodies targeting PCSK9 as well as the injunction ruling.

Fourth-quarter and 2016 Multaq sales were €94 million (up 10.6%) and €353 million (up 3.8%), respectively.

Established Rx Products

Net sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
Lovenox 414 +0.7% 1,636 -1.7%(a)
Plavix 363 -20.0% 1,544 -18.8%(b)
Renvela/Renagel 235 -2.5% 922 -1.1%
Aprovel/Avapro 163 -1.8% 681 -7.0%(c)
Synvisc/Synvisc-One 111 -4.3% 408 -0.2%(d)
Myslee/Ambien/Stilnox 79 -11.8% 304 -2.9%(e)
Allegra 41 -18.2% 186 -11.9%
Other 1,162 +7.9% 4,630 -5.6%(f)
Total Established Rx Products 2,568 -1.3% 10,311 -6.8%(g)

(a) Excluding Venezuela: -1.1%; (b) Excluding Venezuela: -17.1%; (c) Excluding Venezuela: -0.7%; (d) Excluding Venezuela: +0.5%; (e) Excluding Venezuela: -2.3%;
(f)
Excluding Venezuela: -3.2%; (g) Excluding Venezuela: -4.9%;

In the fourth quarter, Established Rx Products sales decreased 1.3% to €2,568 million, reflecting generic competition to Plavix in Japan, and the low basis for comparison from the recall of Auvi-Q in the fourth quarter of 2015. In Emerging Markets, Established Rx Products sales increased 0.9% to €946 million driven by the performance of Lovenox. In the U.S., Established Rx Products sales increased 22.4% (to €371 million) mainly due to the low basis for comparison from the recall Auvi-Q in the prior period. In Europe, Established Rx Products sales decreased 3.3% to €911 million. Full-year Established Rx Products sales decreased 6.8% to €10,311 million and 4.9% excluding Venezuela.

Lovenoxsales increased 0.7% to €414 million in the fourth quarter, driven by strong performance in Emerging Markets (up 12.2% to €124 million), which offset the impact of generic competition in the U.S. (down 27.8% to €13 million) and lower sales in Europe (down 1.5% to €255 million). In September, two enoxaparin biosimilars were approved in the European Union. In 2016, Lovenoxsales were €1,636 million, down 1.7%.

In the fourth quarter, Plavixsales were down 20.0% to €363 million due to generic competition in Japan that started in June 2015 (sales in Japan were down 49.3% to €82 million). In 2016, Plavix sales decreased 18.8% to €1,544 million.

Fourth-quarter Renvela/Renagelsales decreased 2.5% to €235 million.  In the U.S. where Sanofi expects generic competition in the first half of 2017, fourth-quarter sales were down 0.5% to €194 million. In Europe, Renvela/Renagelsales were down 24.0% to €19 million due to generic competition. Full-year Renvela/Renagel sales were down 1.1% to €922 million.

Aprovel/Avapro sales were down 1.8% (to €163 million) and down 7.0% (to €681 million) in the fourth quarter and the full year, respectively.

In the fourth quarter of 2015, Sanofi recalled Auvi-Q/Allerject in the U.S. and Canada. The negative impact of this recall on sales was -€122 million, which corresponded mainly to the reversal of sales of the product since the beginning of 2015. Sanofi no longer commercializes this product and no sales were recorded in 2016. 

Consumer Healthcare

Net sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
Allegra 86 +12.0% 417 -0.2%
Doliprane 86 +3.6% 309 +2.6%
Essentiale 45 -18.2% 145 -20.9%
Enterogermina 36 +2.9% 159 +2.5%
Maalox 22 - 85 -8.2%
Dorflex 20 - 75 -2.5%
No Spa 20 -9.1% 82 -
Lactacyd 19 -5.0% 80 -25.4%
Magne B6 18 -5.0% 73 -6.1%
Nasacort 17 -19.0% 108 -10.7%
Other CHC Products 465 +6.2% 1,797 +1.7%
Total Consumer Healthcare 834 +2.7% 3,330 -1.6%(a)

(a) Excluding Venezuela: +1.4%;

In the fourth quarter, Consumer Healthcare (CHC) sales increased 2.7% to €834 million driven by the performance in Europe, reflecting an early cough and cold season, partially offset by lower sales in Russia. Excluding the divestiture of several small products, sales of CHC were up 3.2% in the fourth quarter.

Fourth-quarter CHC sales in the U.S. increased 4.6% to €209 million despite increased competitive environment in the allergy category. In Emerging Markets, sales decreased 3.2% to €326 million reflecting lower sales in Russia due to the challenging local economic situation. In the quarter, sales in Europe were up 9.5% to €229 million due an early start of cough and cold season, mainly in France, despite the divesture of small products. Adjusting for these divestitures, CHC sales in Europe were up 11.1% in the fourth quarter. Full-year CHC sales reached €3,330 million, down 1.6% (up 2.7% excluding Venezuela and the divestiture of several small products).

Sanofi and Boehringer Ingelheim recently announced that the exchange of Sanofi's animal health business (Merial) and Boehringer Ingelheim's consumer healthcare (CHC) business was successfully closed in most markets on January 1st 2017. The closing of the disposal of Merial in Mexico and the swap of Merial and CHC in India have been delayed pending receipt of certain regulatory approvals. The transactions in both countries are expected to close early 2017.

Generics

In the fourth quarter, Generics sales increased 0.2% to €468 million driven by Emerging Markets (up 5.1% to €209 million) and Japan, which more than offset for the U.S. (down 6.8% to €43 million) and Europe (down 6.6% to €192 million). In 2016, Generics sales were up 0.7% to €1,854 million (up 2.5% excluding Venezuela).

As announced in our 2020 strategic roadmap, Sanofi has carefully reviewed all options for our Generics business in Europe and recently made the definitive decision to initiate a carve-out process expected to be completed by the end of 2018. Importantly, Sanofi confirms its commitment to Generics in other parts of the world with a greater focus on the Emerging Markets.

Vaccines

Net sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
Polio/Pertussis/Hib vaccines
(incl. Pentacel, Pentaximand Imovax)
544 +16.5% 1,495 +12.7%
Influenza vaccines
(incl. Vaxigrip and Fluzone)
416 -5.3% 1,521 +16.6%
Adult Booster vaccines (incl. Adacel ) 129 -15.3% 417 -15.5%
Meningitis/Pneumonia vaccines
(incl. Menactra)
118 +3.6% 633 +4.1%
Travel and other endemic vaccines 107 +4.0% 368 -0.8%
Dengvaxia 5 - 55 -
Other vaccines 33 +21.4% 88 -17.0%
Total Vaccines (consolidated sales) 1,352 +3.7% 4,577 +8.8%*(a)

*Comparability based on the new presentation of VaxServe sales (see below)
 (a) Excluding Venezuela: +9.0%;

Fourth quarter consolidated Vaccines sales were up 3.7% to €1,352 million mainly driven by the Polio/Pertussis/Hib (PPH) franchise both in the U.S. (total US sales up 7.8% to €704 million) and in Emerging Markets (total Emerging Markets sales up 7.3% to €521 million) despite early flu shipments in the U.S. in the third quarter. In Europe, vaccines sales were down 46.3% to €44 million mainly reflecting both (i) supply issues with Repevax and (ii) sales from Sanofi to Sanofi Pasteur MSD deferred to 2017 in connection with the buy-back of inventory as part of the termination of Sanofi Pasteur MSD joint-venture. In 2016, sales of Sanofi Pasteur increased 8.8% to €4,577 million mainly driven by the PPH franchise, the benefits from our flu differentiation strategy and, to a lesser extent, the dengue launch.

In the fourth quarter, Polio/Pertussis/Hib vaccines sales increased 16.5% to €544 million reflecting supply improvements of Pentacel in the U.S. (€119 million versus €53 million in the fourth quarter of 2015). Customer allocations for Pentacel were removed in December 2016 and both private and public channels have now full access to Pentacel to meet their needs. In Emerging Markets, PPH sales increased 5.1% to €304 million driven by the growth of Hexaxim, partially offset by the impact of local market disruption in China. Full-year PPH sales were up 12.7% to €1,495 million.

Fourth-quarter Influenza vaccines sales were down 5.3% to €416 million due to early shipments in the U.S. in the third quarter. Sales of Influenza vaccines were down 14.0% to €280 million in the U.S. in the fourth quarter. In 2016, Influenza vaccines sales increased 16.6% to €1,521 million, reflecting Sanofi Pasteur's strategy to offer a portfolio of differentiated influenza vaccines. 2016 was a new record year for the Influenza franchise of Sanofi Pasteur.

Adult Booster vaccines sales decreased 15.3% to €129 million in the fourth quarter, as a result of lower sales in Europe due to a Repevax supply disruption. In the U.S. adult Booster vaccines sales were down 2.0% to €100 million. Full-year sales of Adult Booster vaccines decreased 15.5% to €417 million mainly driven by supply issues with Repevax and increased competitive pressure towards Adacel in the US.

Dengvaxia, the world's first dengue vaccine, is now approved in 14 countries (Bolivia, Brazil, Cambodia, Costa Rica, El Salvador, Guatemala, Indonesia, Mexico, Paraguay, Peru, Thailand, Singapore Venezuela and the Philippines). As expected, sales of Dengvaxia were limited (€5 million) in the fourth quarter as no new immunization programs were implemented. These sales were generated in the private market and by the public vaccination program launched in Paranแ State in Brazil in the third quarter. In 2016, Dengvaxia sales were €55 million.

Fourth-quarter Menactra sales were up 1.0% to €107 million, €93 million of which was generated in the U.S (up 7.1%) reflecting the market leadership of Menactra. In 2016, sales of Menactra increased 4.8% to €586 million.

Fourth-quarter and full-year 2016 Travel and other endemic vaccines sales were €107 million (up 4.0%) and €368 million (down 0.8%), respectively.

In the fourth quarter, Sanofi Pasteur MSD, the joint venture with Merck & Co. in Europe, sales (not consolidated) increased 25.5% (on a reported basis) to €301 million. Excluding the 2016 year-end inventories repurchase to both parent companies, sales were flat, the growth of Hexyon (pediatric hexavalent vaccine) and travel vaccines sales being largely offset by lower Influenza and boosters vaccines sales. In 2016, sales of Sanofi Pasteur MSD were up 14.1% (on a reported basis) to €940 million (including the disposal of 2016 year-end inventories to both parent companies).

As previously announced, on January 2, 2017, Sanofi Pasteur and MSD separated their vaccine joint venture in Europe in order to pursue their own vaccine strategies and integrate their respective European vaccines businesses into their own operations.

Company sales by geographic region

Sanofi sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
United States 3,321 +11.3% 12,391 +5.1%
Emerging Markets(a) 2,602 +3.5% 9,593 +2.4%
  of which Latin America 710 +4.2% 2,503 -7.1%
  of which Asia 782 -2.8% 3,109 +4.5%
  of which Africa, Middle East and South Asia(b) 752 +11.4% 2,764 +9.9%
  of which Eurasia(c) 329 +8.4% 1,090 +5.2%
Europe(d) 2,134 -1.7% 8,679 +0.6%
Rest of the World(e) 810 -11.0% 3,158 -13.4%
  of which Japan 428 -22.2% 1,688 -24.8%
Total Sanofi sales 8,867 +3.4% 33,821 +1.2%

(a) World excluding U.S., Canada, Western & Eastern Europe (except Eurasia), Japan, South Korea, Australia, New Zealand and Puerto Rico
(b) India, Pakistan, Bangladesh, Sri Lanka
(c) Russia, Ukraine, Georgia, Belarus, Armenia and Turkey
(d) Western Europe + Eastern Europe except Eurasia
(e) Japan, South Korea, Canada, Australia, New Zealand, Puerto Rico

Fourth-quarter sales in the U.S. increased 11.3% to €3,321 million driven mainly by double digit growth of the multiple sclerosis franchise (up 37.4%) and Established products (up 22.4%), reflecting the low basis for comparison from the impact (-€122 million) of the recall of Auvi-Q in the fourth quarter of 2015. Growth in the fourth quarter also benefited from the performance of the Rare disease (up 7.7%), Oncology (up 5.0%), CHC (up 4.6%) and Vaccines (up 7.8%) franchises. The U.S. sales performance included growth of diabetes franchise (up 5.5%), aided by a low basis for comparison in the fourth quarter 2015. In 2016, sales in the U.S. increased 5.1% to €12,391 million.

Sales in Emerging Markets increased 3.5% to €2,602 million in the fourth quarter driven by Rare Disease (up 23.5%), Diabetes (up 4.1%), Generics (up 5.1%) and Vaccines (up 7.3%). In the Asia region, fourth-quarter sales decreased 2.8% to €782 million reflecting lower sales in China (down 10.5% to €496 million), primarily impacted by local vaccines market disruption and inventory fluctuation. In Latin America, fourth-quarter sales increased 4.2% to €710 million driven by sales in Argentina and Brazil. Fourth-quarter sales in Brazil increased 5.6% to €244 million supported by performance of Vaccines and Established products. Fourth-quarter sales in the Eurasia region increased 8.4% to €329 million supported by strong growth in Turkey and Ukraine. Over the quarter, sales in Russia returned to growth (up 3.0% to €178 million). In Africa, the Middle-East and South Asia, sales were up 11.4% to €752 million sustained by double digit growth in Middle-East, Africa and India. In 2016, sales in Emerging Markets increased 2.4% to €9,593 million. Excluding Venezuela, 2016 sales in Emerging Markets grew 7.0%. 2016 sales in China, Brazil and Russia were €2,039 million (up 0.5%), €983 million (up 1.7%), €499 million (down 7.1%), respectively.

Fourth-quarter sales in Europe were down 1.7% to €2,134 million. The performance of multiple sclerosis (up 34.8%), Rare disease (up 4.5%) and CHC (up 9.5%) were offset by lower sales in Diabetes (down 5.6%), Established Rx Products (down 3.3%) and Vaccines (down 46.3%). In 2016, sales in Europe increased 0.6% to €8,679 million.

Sales in Japan decreased 22.2% to €428 million in the fourth quarter, impacted by generic Plavixcompetition (down 49.3% to €82 million). In Japan, 2016 sales decreased 24.8% to €1,688 million.

R&D update

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

Regulatory update

Regulatory updates since the publication of the third quarter results on October 28, 2016 include the following: 

At the beginning of February 2017, the R&D pipeline contained 44 pharmaceutical new molecular entities (excluding Life Cycle Management) and vaccine candidates in clinical development of which 13 are in Phase 3 or have been submitted to the regulatory authorities for approval.

Portfolio update

Phase 3:

Phase 2: 

Phase 1: 

Collaboration

On December 28th, 2016, Hanmi and Sanofi entered into an amendment to their initial license agreement executed for the development of a portfolio of long-acting diabetes treatments. Sanofi returned to Hanmi the rights related to the weekly long-acting insulin to primarily focus on development of the weekly GLP-1 (efpeglenatide). Hanmi will take the development lead on the weekly insulin and will assume responsibility for the development of the long-acting weekly efpeglenatide/insulin drug combination for a certain period of time, after which Sanofi will re-assume responsibility for development.

2016 fourth-quarter and full-year financial results(7)

Business Net Income(7)

In the fourth quarter of 2016, Sanofi generated sales of €8,867 million, an increase of 3.3% (up 3.4% at CER). 2016 sales were €33,821 million, down 0.7% (up 1.2% at CER).

Fourth-quarter other revenues increased 31.9% to €310 million and include VaxServe sales of non-Sanofi products (up 62.5% to €221 million) following the change in presentation as of January 1, 2016(7). 2016 other revenues increased 10.7% to €887 million of which €581 million were generated by VaxServe (up 20.5%).

Fourth-quarter Gross Profit increased 4.5% to €6,221 million (up 4.5% at CER). The gross margin ratio improved by 0.8 percentage points to 70.2% versus the fourth quarter of 2015, reflecting mainly the positive impact of Aubagioand rare disease franchise, the low basis for comparison in the fourth quarter of 2015 from the recall of Auvi-Q and Medicaid delayed bills related to Lantus as well as industrial productivity improvements. In 2016, the gross margin ratio improved by 0.7 percentage points to 71.0% versus 2015, driven by the strong performance of Sanofi Genzyme. In 2016, the gross margin ratio of Pharmaceuticals was 72.4%, an improvement of 0.9 percentage points and the gross margin ratio of Vaccines was stable at 62.0%. Sanofi expects its gross margin ratio to be approximatively 70% at CER in 2017.

Research and Development expenses were up 5.4% to €1,437 million, (up 4.7% at CER) in the fourth quarter. This increase reflected the start of several Phase 3 programs especially isatuximab, as well as ongoing Toujeostudies. In 2016, the ratio of R&D to sales was 0.4 percentage points higher at 15.3% compared to the same period of 2015.

Selling general and administrative expenses (SG&A) increased 4.9% to €2,603 million in the fourth quarter. At CER,   SG&A was up 4.8% mainly reflecting pre-launch costs for Kevzara(TM) and Dupixent(TM), as well as one-time costs linked to the pre-integration of Boehringer Ingelheim CHC business. The ratio of SG&A to sales increased 0.5 percentage points to 29.4% compared with the fourth quarter of 2015. In 2016, the ratio of SG&A to sales was 0.5 percentage points higher at 28.0% compared with 2015 mainly due to launch costs of new products.

Fourth-quarter other current operating income net of expenses was -€78 million versus €24 million for the same period of 2015. In the fourth quarter of 2016, this line included a foreign exchange loss linked to our operation in Egypt. In 2016, other current operating income net of expenses was -€127 million versus -€208 million in 2015.

The share of profits from associates was €53 million in the fourth quarter versus €31 million for the same period of 2015. The share of profits from associates included Sanofi's share in Regeneron profit as well as Sanofi's share of profit in Sanofi Pasteur MSD (the Vaccines joint venture with Merck & Co. in Europe). In 2016, the share of profits from associates was €177 million versus €169 million in 2015.

In the fourth quarter, non-controlling interests were -€32 million versus -€39 million in the fourth quarter of 2015. In 2016, non-controlling interests were -€113 million versus -€126 million in 2015.

Fourth-quarter business operating income was stable at €2,124 million. At CER, business operating income increased 3.7%. The ratio of business operating income to net sales decreased 0.7 percentage point to 24.0% versus the same period of 2015. In 2016, business operating income decreased 0.3% to €9,285 million (or up 3.1% at CER). In 2016, the ratio of business operating income to net sales increased 0.2 percentage point to 27.5%. In 2016, the business operating income ratio of Pharmaceuticals was 26.8%, 0.1 percentage points lower and the business operating income ratio of vaccines improved 1.2 percentage points to 34.4%.

Net financial expenses were €125 million in the fourth quarter versus €73 million in the fourth quarter of 2015 which included disposals and reassessments of financial assets. Full-year net financial expenses were €399 million versus €381 million in 2015.

Fourth-quarter effective tax rate (without Animal Health) was 24.0% compared with 17.4% in 2015. The 2015 tax reflected the effects of the modification in France of the taxation of dividend. In 2016, the effective tax rate was 23.3% versus 21.7% in 2015.

Fourth-quarter and full-year 2016 business net income of Merial was €81 million (versus €17 million in the same period of 2015) and €476 million (versus €368 million in 2015), respectively.

(7) See Appendix 4 for 2016 fourth-quarter and 2016 Consolidated income statement; see Appendix 11 for definitions of financial indicators, and Appendix 3 for reconciliation of business net income to IFRS net income reported

Fourth-quarter business net income(7) decreased 6.0% to €1,606 million (down 2.9% at CER). In 2016, business net income decreased 0.9% to €7,308 million, (up 2.5% at CER).

In the fourth quarter of 2016, business earnings per share(7) (EPS) decreased 4.6% to €1.25 on a reported basis and 1.5% at CER. The average number of shares outstanding was 1,282.9 million in the fourth quarter of 2016 versus 1,304.9 million in the fourth quarter of 2015. In 2016, business earnings per share(7) was €5.68, up 0.7% on a reported basis and up 4.1% at CER. The average number of shares outstanding was 1,286.6 million in 2016 versus 1,306.2 million in 2015.

Cost savings

In 2016, Sanofi delivered approximately €650 million of cost savings which was largely reinvested to support growth initiatives. Sanofi expects that cost savings will reach €1.3 billion in 2017 and the company confirms that it remains on track to deliver at least €1.5 billion of cost savings by 2018.

2017 guidance

Sanofi expects 2017 Business EPS to be stable to -3% at CER, barring unforeseen major adverse events, consistent with its previously announced Strategic Roadmap guidance for the 2016-17 period. Applying the average December 2016 exchange rates, the currency impact on 2017 Business EPS is estimated to be +3% to +4%.

Dividend

The Board of Directors convened on February 7, 2017, and proposed a dividend of €2.96 per share.

From business net income to IFRS net income reported (see Appendix 3)

In 2016, the main reconciling items between business net income and IFRS net income reported were:

(7) See Appendix 4 for 2016 fourth-quarter and 2016 Consolidated income statement; see Appendix 11 for definitions of financial indicators, and Appendix 3 for reconciliation of business net income to IFRS net income reported

Capital Allocation

In 2016, net cash generated by operating activities decreased 4.1% to €7,798 million after capital expenditures of €1,486 million and an increase in working capital of €610 million. This net cash flow partially funded acquisitions and partnerships net of disposals (€936 million), restructuring costs and similar items (€729 million), the dividend paid by Sanofi (€3,759 million) and higher share repurchases (€2,908 million) in anticipation of the cash to be received as part of the asset swap with Boehringer Ingelheim. As a consequence, net debt increased from €7,254 million at December 31, 2015 to €8,206 million (excluding Merial) at December 31, 2016 (amount net of €10,273 million cash and cash equivalents).

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, Sanofi's ability to benefit from external growth opportunities and/or obtain regulatory clearances, risks associated with intellectual property and any related pending or future litigation and the  ultimate outcome of such litigation,  trends in exchange rates and prevailing interest rates, volatile economic conditions, the impact of cost containment initiatives 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, 2015. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.

Appendices
Financial statements are not audited. The audit procedures by the Statutory Auditors are underway.

List of appendices

Appendix 1:  2016 fourth-quarter net sales by GBU, franchise, geographic region and product

 
Appendix 2: 2016 Fourth-quarter and 2016 Business net income statement

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

 
Appendix 4: 2016 fourth quarter and 2016 consolidated income statement

 
Appendix 5

 

Appendix 6

 

Appendix 7:

 

Appendix 8:

 

Appendix 9:

 

Appendix 10:
Animal Health : 2016 fourth quarter and 2016 sales and business operating income

 

Change in net debt

 

Simplified consolidated balance sheet

 

Currency sensitivity

 

R&D pipeline

 

Expected R&D milestones
 

Appendix 11:
 

Definitions of non-GAAP financial indicators

Appendix 1: 2016 fourth-quarter net sales by GBU, franchise, geographic region and product

                               
Q4 2016
(€ million)
Total
GBUs
%
CER
%
reported
Europe %
CER
United
States
%
CER
Rest
of
the
World
%
CER
  Emer-
ging
Mar-
kets
%
CER
Total
Fran-
chises
%
CER
%
reported
Aubagio 357 34.1% 35.2% 79 31.7% 265 34.5% 13 40.0%   10 37.5% 367 34.2% 34.9%
Lemtrada 112 44.9% 43.6% 39 41.4% 67 50.0% 6 20.0%   5 100.0% 117 46.9% 44.4%
Total MS 469 36.5% 37.1% 118 34.8% 332 37.4% 19 33.3%   15 54.5% 484 37.1% 37.1%
Cerezyme 127 -2.3% -3.1% 70 -1.4% 46 -2.1% 11 -8.3%   57 34.7% 184 7.8% 2.2%
Cerdelga 29 27.3% 31.8% 5 66.7% 23 21.1% 1 -   0 - 29 27.3% 31.8%
Myozyme 162 11.8% 12.5% 80 7.8% 66 18.2% 16 8.3%   30 39.1% 192 15.6% 15.0%
Fabrazyme 165 13.5% 17.0% 40 13.9% 95 13.4% 30 13.0%   17 17.6% 182 13.9% 15.2%
Aldurazyme 35 5.7% 0.0% 18 0.0% 11 0.0% 6 40.0%   15 14.3% 50 8.2% 2.0%
Total
Rare
Disease
589 6.8% 7.9% 228 4.5% 270 7.7% 91 10.7%   127 23.5% 716 9.7% 8.5%
Taxotere 10 -23.1% -23.1% 1 -50.0% 1 -116.7% 8 -52.9%   32 -8.3% 42 -12.2% -14.3%
Jevtana 87 10.4% 13.0% 35 12.5% 39 5.7% 13 20.0%   5 -14.3% 92 8.3% 9.5%
Eloxatine 9 -67.9% -67.9% 1 0.0% 0 -100.0% 8 -61.9%   32 10.0% 41 -27.6% -29.3%
Thymo-
globulin
59 9.4% 11.3% 9 0.0% 43 16.2% 7 -16.7%   18 12.5% 77 10.1% 11.6%
Mozobil 40 8.6% 14.3% 10 -9.1% 27 23.8% 3 -33.3%   1 -33.3% 41 5.3% 7.9%
Zaltrap 14 -17.6% -17.6% 11 -15.4% 3 -40.0% 0 -100.0%   1 0.0% 15 -16.7% -16.7%
Total
Oncology
277 -4.9% -2.1% 78 0.0% 150 5.0% 49 -34.4%   92 -1.0% 369 -3.9% -3.1%
Sanofi
Genzyme
(Specialty
Care)
1,335 12.6% 14.0% 424 10.4% 752 18.4% 159 -5.3%   234 14.3% 1,569 12.9% 12.6%
Lantus 1,220 -6.2% -5.0% 199 -17.4% 931 -1.8% 90 -18.3%   243 0.0% 1,463 -5.1% -4.8%
Toujeo 223 136.6% 139.8% 41 263.6% 169 111.4% 13 333.3%   15 180.0% 238 138.8% 142.9%
Apidra 73 -18.6% -15.1% 32 -6.1% 29 -31.0% 12 -9.1%   22 33.3% 95 -9.6% -8.7%
Amaryl 16 -20.0% -20.0% 6 -16.7% 1 - 9 -28.6%   73 4.1% 89 -1.1% -5.3%
Insuman 20 -8.7% -13.0% 19 -9.1% 1 - 0 -100.0%   11 -20.0% 31 -13.2% -18.4%
Toujeo 223 136.6% 139.8% 41 263.6% 169 111.4% 13 333.3%   15 180.0% 238 138.8% 142.9%
Total
Diabetes
1,580 1.4% 2.8% 318 -5.6% 1,131 5.5% 131 -12.7%   365 4.1% 1,945 1.9% 2.2%
Multaq 93 10.8% 12.0% 10 -8.3% 81 15.7% 2 -100.0%   1 0.0% 94 10.6% 10.6%
Praluent 37 640.0% 640.0% 6 500.0% 30 500.0% 1 -200.0%   0 - 37 640.0% 640.0%
Total
Cardio-
vascular
130 46.6% 47.7% 16 30.8% 111 48.0% 3 -   1 0.0% 131 45.6% 45.6%
Diabetes &
Cardio-
vascular
1,710 3.8% 5.2% 334 -4.2% 1,242 8.3% 134 -12.0%   366 4.1% 2,076 3.9% 4.2%
Plavix 363 -20.0% -20.2% 37 -13.6% 0 - 97 -45.6%   229 -5.1% 363 -20.0% -20.2%
Lovenox 414 0.7% -1.2% 255 -1.5% 13 -27.8% 22 -8.3%   124 12.2% 414 0.7% -1.2%
Renagel /
Renvela
235 -2.5% -1.7% 19 -24.0% 194 -0.5% 8 -11.1%   14 16.7% 235 -2.5% -1.7%
Aprovel 163 -1.8% -4.1% 29 -18.9% 4 33.3% 32 -3.2%   98 4.0% 163 -1.8% -4.1%
Allegra 41 -18.2% -6.8% 2 -50.0% 0 - 39 -16.7%   0 - 41 -18.2% -6.8%
Myslee /
Ambien /
Stilnox
79 -11.8% -7.1% 11 -8.3% 24 0.0% 30 -27.0%   14 8.3% 79 -11.8% -7.1%
Synvisc /
Synvisc One
111 -4.3% -4.3% 9 12.5% 84 -9.8% 3 -20.0%   15 36.4% 111 -4.3% -4.3%
Depakine 108 7.8% 4.9% 40 0.0% 0 - 5 50.0%   63 11.9% 108 7.8% 4.9%
Tritace 59 -6.3% -7.8% 37 -9.8% 0 - 1 -   21 -4.3% 59 -6.3% -7.8%
Lasix 34 0.0% -2.9% 18 -5.3% 0 -100.0% 2 0.0%   14 14.3% 34 0.0% -2.9%
Targocid 35 0.0% -2.8% 16 -15.0% 0 - 2 100.0%   17 13.3% 35 0.0% -2.8%
Orudis 26 -16.1% -16.1% 4 0.0% 0 - 2 100.0%   20 -24.0% 26 -16.1% -16.1%
Cordarone 29 -6.5% -6.5% 7 -25.0% 0 - 8 0.0%   14 0.0% 29 -6.5% -6.5%
Xatral 24 4.3% 4.3% 9 0.0% 0 - 2 0.0%   13 7.7% 24 4.3% 4.3%
Other
Rx Drugs
847 11.5% 11.0% 418 0.7% 52 -256.3% 87 14.3%   290 -2.7% 847 11.5% 11.0%
Total
Established
Rx
Products
2,568 -1.3% -1.8% 911 -3.3% 371 22.4% 340 -19.9%   946 0.9% 2,568 -1.3% -1.8%
Generics 468 0.2% 0.2% 192 -6.6% 43 -6.8% 24 57.1%   209 5.1% 468 0.2% 0.2%
Total
Emerging
Markets
Specialty
Care
234 14.3% 4.9% 0 - 0 - 0 -   234 14.3% 0    
Total
Emerging
Markets
Diabetes &
Cardio-
vascular
366 4.1% -0.5% 0 - 0 - 0 -   366 4.1% 0.0%    
General
Medicines &
Emerging
Markets
3,636 0.4% -1.0% 1,103 -3.9% 414 18.7% 364 -17.5%   1,755 3.8%      
Consumer
Healthcare
834 2.7% 3.1% 229 9.5% 209 4.6% 70 6.5%   326 -3.2% 834 2.7% 3.1%
                               
Total
Pharma-
ceuticals
7,515 3.4% 3.3% 2,090 0.0% 2,617 12.3% 727 -12.0%   2,081 2.6% 7,515 3.4% 3.3%
                               
Polio /
Pertussis /
Hib
544 16.5% 16.7% 24 -30.3% 166 89.5% 50 -9.8%   304 5.1% 544 16.5% 16.7%
Adult
Booster
Vaccines
129 -15.3% -14.0% 7 -75.0% 100 -2.0% 4 0.0%   18 0.0% 129 -15.3% -14.0%
Meningitis/
Pneumonia
118 3.6% 5.4% 1 0.0% 93 7.1% 4 33.3%   20 -13.0% 118 3.6% 5.4%
Influenza
Vaccines
416 -5.3% -7.6% 6 -60.0% 280 -14.0% 7 50.0%   123 25.7% 416 -5.3% -7.6%
Travel and
other endemic
Vaccines
107 4.0% 7.0% 5 -33.3% 35 40.0% 15 27.3%   52 -12.1% 107 4.0% 7.0%
Dengue 5 - - 0 - 0 - 0 -   5 - 5 - -
Vaccines 1,352 3.7% 3.5% 44 -46.3% 704 7.8% 83 -1.3%   521 7.3% 1,352 3.7% 3.5%
Total Group 8,867 3.4% 3.3% 2,134 -1.7% 3,321 11.3% 810 -11.0%   2,602 3.5% 8,867 3.4% 3.3%
                               

Appendix 1: 2016 net sales by GBU, franchise, geographic region and product

                               
2016
(€ million)
Total
GBUs
%
CER
%
reported
Europe %
CER
United
States
%
CER
Rest
of
the
World
%
CER
  Emer-
ging
Mar-
kets
%
CER
Total
Fran-
chises
%
CER
%
reported
Aubagio 1,261 49.0% 48.9% 308 56.9% 908 46.6% 45 46.9%   34 75.0% 1,295 49.7% 48.7%
Lemtrada 407 77.7% 74.7% 151 73.6% 233 82.0% 23 64.3%   18 110.0% 425 79.0% 74.9%
Total MS 1,668 55.2% 54.4% 459 62.2% 1,141 52.7% 68 52.2%   52 85.3% 1,720 56.1% 54.4%
Cerezyme 509 -3.9% -4.3% 280 0.0% 181 -10.0% 48 -2.1%   239 27.1% 748 5.3% -1.2%
Cerdelga 106 59.1% 60.6% 17 183.3% 85 41.7% 4 -   0 - 106 59.1% 60.6%
Myozyme 623 12.4% 12.1% 327 8.5% 240 16.6% 56 20.5%   102 20.2% 725 13.5% 11.5%
Fabrazyme 606 13.4% 14.6% 156 13.6% 345 12.8% 105 15.5%   68 25.4% 674 14.7% 13.9%
Aldurazyme 141 4.4% 2.9% 75 2.7% 42 5.0% 24 9.1%   60 15.5% 201 7.7% 3.1%
Total
Rare
Disease
2,270 9.1% 9.4% 922 8.6% 1,014 9.4% 334 9.8%   507 22.9% 2,777 11.7% 8.9%
Taxotere 49 -41.3% -38.8% 4 -42.9% 4 -500.0% 41 -47.3%   130 -3.5% 179 -17.1% -19.4%
Jevtana 335 12.9% 13.9% 139 0.0% 152 18.9% 44 53.8%   23 -3.7% 358 11.5% 11.5%
Eloxatine 36 -61.9% -62.9% 4 0.0% 0 -100.0% 32 -60.7%   134 8.5% 170 -21.6% -25.1%
Thymo-
globulin
222 7.8% 8.3% 38 -2.5% 160 10.3% 24 10.0%   59 23.5% 281 10.9% 9.8%
Mozobil 145 10.7% 10.7% 42 4.9% 95 14.5% 8 0.0%   7 -33.3% 152 7.0% 6.3%
Zaltrap 61 -16.2% -17.6% 47 -7.8% 14 -33.3% 0 -50.0%   4 33.3% 65 -14.3% -15.6%
Total
Oncology
1,081 -3.9% -3.5% 326 -2.4% 582 6.4% 173 -30.3%   372 2.9% 1,453 -2.2% -3.4%
Sanofi
Genzyme
(Specialty
Care)
5,019 17.3% 17.4% 1,707 16.4% 2,737 23.2% 575 -3.4%   931 16.7% 5,950 17.2% 15.1%
Lantus 4,761 -12.1% -12.1% 878 -10.3% 3,528 -12.5% 355 -12.9%   953 6.0% 5,714 -9.4% -10.6%
Toujeo 630 295.6% 296.2% 120 566.7% 475 246.0% 35 775.0%   19 260.0% 649 294.5% 295.7%
Apidra 286 -8.4% -7.1% 127 2.4% 115 -20.7% 44 2.6%   81 32.4% 367 -1.1% -2.4%
Amaryl 70 -19.3% -15.7% 27 3.8% 3 50.0% 40 -32.7%   292 0.3% 362 -3.8% -7.9%
Insuman 85 -11.3% -12.4% 82 -11.7% 3 50.0% 0 -100.0%   44 13.6% 129 -3.5% -8.5%
Total
Diabetes
5,946 -3.8% -3.7% 1,319 -0.4% 4,127 -4.6% 500 -6.5%   1,395 7.0% 7,341 -1.8% -3.2%
Multaq 347 3.6% 3.6% 44 2.3% 299 4.2% 4 -25.0%   6 16.7% 353 3.8% 3.5%
Praluent 104 1055.6% 1055.6% 18 1700.0% 85 855.6% 1 -100.0%   1 - 105 1066.7% 1066.7%
Total
Cardio-
vascular
451 31.1% 31.1% 62 40.0% 384 30.1% 5 0.0%   7 33.3% 458 31.1% 30.9%
Diabetes &
Cardio-
vascular
6,397 -2.0% -1.8% 1,381 0.9% 4,511 -2.3% 505 -6.5%   1,402 7.2% 7,799 -0.4% -1.7%
Plavix 1,544 -18.8% -20.0% 162 -11.4% 1 0.0% 411 -50.0%   970 3.4% 1,544 -18.8% -20.0%
Lovenox 1,636 -1.7% -4.8% 1,027 -1.1% 54 -29.9% 93 -2.1%   462 1.6% 1,636 -1.7% -4.8%
Renagel /
Renvela
922 -1.1% -1.4% 82 -31.4% 764 5.5% 33 6.5%   43 -23.3% 922 -1.1% -1.4%
Aprovel 681 -7.0% -10.6% 127 -13.5% 15 0.0% 127 -7.9%   412 -4.8% 681 -7.0% -10.6%
Allegra 186 -11.9% -4.1% 9 -18.2% 0 - 177 -11.5%   0 - 186 -11.9% -4.1%
Myslee /
Ambien /
Stilnox
304 -2.9% -0.7% 44 -6.4% 84 13.5% 120 -16.0%   56 9.3% 304 -2.9% -0.7%
Synvisc /
Synvisc One
408 -0.2% -1.2% 33 3.1% 313 -2.8% 14 -12.5%   48 20.9% 408 -0.2% -1.2%
Depakine 416 3.3% -1.4% 161 -1.2% 0 - 15 7.1%   240 6.3% 416 3.3% -1.4%
Tritace 245 -7.7% -10.6% 154 -4.9% 0 - 4 -20.0%   87 -11.3% 245 -7.7% -10.6%
Lasix 148 -6.2% -8.6% 75 -2.6% 0 -100.0% 19 -34.6%   54 7.1% 148 -6.2% -8.6%
Targocid 149 -3.8% -6.9% 74 -8.4% 0 - 7 -25.0%   68 4.3% 149 -3.8% -6.9%
Orudis 103 -30.1% -34.0% 17 -5.3% 0 - 7 50.0%   79 -36.1% 103 -30.1% -34.0%
Cordarone 122 -4.6% -6.2% 28 -6.7% 0 - 31 -9.4%   63 -1.5% 122 -4.6% -6.2%
Xatral 100 8.4% 5.3% 38 0.0% 0 - 4 -20.0%   58 17.3% 100 8.4% 5.3%
Other
Rx Drugs
3,347 -5.9% -7.9% 1,611 -4.1% 259 -16.6% 358 -5.7%   1,119 -5.8% 3,347 -5.9% -7.9%
Total
Established
Rx
Products
10,311 -6.8% -8.7% 3,642 -4.8% 1,490 -2.4% 1,420 -25.7%   3,759 -2.0% 10,311 -6.8% -8.7%
Generics 1,854 0.7% -3.3% 802 -0.7% 175 1.8% 92 1.2%   785 1.8% 1,854 0.7% -3.3%
Total
Emerging
Markets
Specialty
Care
931 16.7% 4.3%               931 16.7%      
Total
Emerging
Markets
Diabetes &
Cardio-
vascular
1,402 7.2% -0.8%               1,402 7.2%      
General
Medicines &
Emerging
Markets
14,498 -3.3% -6.6% 4,444 -4.1% 1,665 -1.9% 1,512 -24.5%   6,877 2.5%      
Consumer
Healthcare
3,330 -1.6% -4.6% 879 0.0% 938 3.8% 275 9.9%   1,238 -7.9% 3,330 -1.6% -4.6%
                               
Total
Pharma-
ceuticals
29,244 0.2% -1.9% 8,411 0.8% 9,851 4.3% 2,867 -15.2%   8,115 0.8% 29,244 0.2% -1.9%
                               
Polio /
Pertussis /
Hib
1,495 12.7% 10.9% 105 16.7% 405 2.5% 153 9.3%   832 18.2% 1,495 12.7% 10.9%
Adult
Booster
Vaccines
417 -15.5% -15.9% 44 -29.0% 302 -16.4% 23 20.0%   48 -7.4% 417 -15.5% -15.9%
Meningitis/
Pneumonia
633 4.1% 3.1% 5 66.7% 518 4.6% 16 88.9%   94 -7.5% 633 4.1% 3.1%
Influenza
Vaccines
1,521 16.6% 15.1% 83 -13.5% 1,117 24.4% 39 8.3%   282 3.7% 1,521 16.6% 15.1%
Travel And
other endemic
Vaccines
368 -0.8% -1.9% 26 -13.3% 126 13.5% 50 -5.7%   166 -6.1% 368 -0.8% -1.9%
Dengue 55 - - 0 - 0 - 0 -   55 - 55 - -
Vaccines 4,577 8.8% 7.4% 268 -5.3% 2,540 8.3% 291 8.9%   1,478 12.4% 4,577 8.8% 7.4%
Total Group 33,821 1.2% -0.7% 8,679 0.6% 12,391 5.1% 3,158 -13.4%   9,593 2.4% 33,821 1.2% -0.7%
                               

Appendix 2: 2016 Fourth-quarter and 2016 Business net income statement

Fourth Quarter
2016
Pharmaceuticals Vaccines Others Group
€ million Q4
2016
Q4
2015
Change Q4
2016
Q4
2015
Change Q4
2016
Q4
2015
Q4
2016
Q4
2015
Change
Net sales 7,515 7,277 3.3% 1,352 1,306 3.5%     8,867 8,583 3.3%
Other revenues (1) 83 91 (8.8%) 227 144 57.6%     310 235 31.9%
Cost of sales (2,210) (2,195) 0.7% (746) (670) 11.3%     (2,956) (2,865) 3.2%
As % of net sales (29.4%) (30.2%)   (55.2%) (51.3%)       (33.3%) (33.4%)  
Gross profit 5,388 5,173 4.2% 833 780 6.8%     6,221 5,953 4.5%
As % of net
sales
71.7% 71.1%   61.6% 59.7%       70.2% 69.4%  
Research and development expenses (1,292) (1,214) 6.4% (145) (150) (3.3%)     (1,437) (1,364) 5.4%
As % of net sales (17.2%) (16.7%)   (10.7%) (11.5%)       (16.2%) (15.9%)  
Selling and general expenses (2,401) (2,276) 5.5% (202) (206) (1.9%)     (2,603) (2,482) 4.9%
As % of net sales (31.9%) (31.3%)   (14.9%) (15.8%)       (29.4%) (28.9%)  
Other current
operating income
/expenses
(28) 46   (14) 25   (36) (47) (78) 24  
Share of profit/loss of associates* and joint-ventures 41 28   12 3       53 31  
Net income attributable to non-controlling interests (31) (39)   (1) -       (32) (39)  
Business
operating
income
1,677 1,718 (2.4%) 483 452 6.9% (36) (47) 2,124 2,123 0.0%
As % of net sales 22.3% 23.6%   35.7% 34.6%       24.0% 24.7%  
                  Financial income
and expenses
(125) (73)      
                  Income tax
expense
(474) (358)    
                  Tax rate** 24.0% 17.4%    
                  Business net income
excl. Animal Health
business
1,525 1,692 (9.9%)
                  As % of net sales 17.2% 19.7%    
                  Business Net
Income of Animal
Health business
81 17 376.5%
                         
                  Business Net
Income
1,606 1,709 (6.0%)
                         
                  Business Earnings
/ share excluding
Animal Health
business*** (in euros)
1.19 1.30 (8.5%)
                  Business earnings
/ share***
(in euros)
1.25 1.31 (4.6%)

* Net of tax.
** Determined on the basis of Business income before tax, associates and non-controlling interests (excluding Animal Health business).
*** Based on an average number of shares outstanding of 1,282.9 million in the fourth quarter of 2016 and 1,304.9 million in the fourth quarter of 2015.
(1) As per a change in accounting presentation, VaxServe sales of non-Group products are reported in Other revenues from 2016 onwards. Prior period Net sales and Other revenues have been represented accordingly. 

2016 Pharmaceuticals Vaccines Others Group
€ million  2016 2015 Change  2016 2015 Change 2016 2015 2016 2015 Change
Net sales 29,244 29,799 (1.9%) 4,577 4,261 7.4%     33,821 34,060 (0.7%)
Other revenues (1) 274 288 (4.9%) 613 513 19.5%     887 801 10.7%
Cost of sales (8,349) (8,788) (5.0%) (2,353) (2,131) 10.4%     (10,702) (10,919) (2.0%)
As % of net sales (28.5%) (29.5%)   (51.4%) (50.0%)       (31.6%) (32.1%)  
Gross profit 21,169 21,299 (0.6%) 2,837 2,643 7.3%     24,006 23,942 0.3%
As % of net sale 72.4% 71.5%   62.0% 62.0%       71.0% 70.3%  
Research and development expenses (4,618) (4,530) 1.9% (554) (552) 0.4%     (5,172) (5,082) 1.8%
As % of net sales (15.8%) (15.2%)   (12.1%) (13.0%)       (15.3%) (14.9%)  
Selling and general expenses (8,743) (8,656) 1.0% (743) (726) 2.3%     (9,486) (9,382) 1.1%
As % of net sales (29.9%) (29.0%)   (16.2%) (17.0%)       (28.0%) (27.5%)  
Other current operating income/expenses (1) (121)   (14) 27   (112) (114) (127) (208)  
Share of profit/loss of associates* and joint-ventures 129 146   48 23       177 169  
Net income attributable to non-controlling interests (112) (125)   (1) (1)       (113) (126)  
Business operating
income
7,824 8,013 (2.4%) 1,573 1,414 11.2% (112) (114) 9,285 9,313 (0.3%)
As % of net sales 26.8% 26.9%   34.4% 33.2%       27.5% 27.3%  
                  Financial income
and expenses
(399) (381)  
                  Income tax expense (2,054) (1,929)  
                  Tax rate** 23.3% 21.7%  
                  Business net income
excl. Animal Health
business
6,832 7,003 (2.4%)
                  As % of net sales 20.2% 20.6%  
                         
                  Business net income
of Animal Health
business
476 368 29.3%
                         
                  Business Net
Income
7,308 7,371 (0.9%)
                         
                  Business earnings /
share excluding
Animal Health
business***
(in euros)
5.31 5.36 (0.9%)
                  Business earnings /
share*** (in euros)
5.68 5.64 0.7%

*     Net of tax.
**    Determined on the basis of Business income before tax, associates and non-controlling interests (excluding Animal Health business).
***  Based on an average number of shares outstanding of 1,286.6 million in 2016 and 1,306.2 million in 2015.
(1) As per a change in accounting presentation, VaxServe sales of non-Group products are reported in Other revenues from 2016 onwards. Prior period Net sales and Other revenues have been represented accordingly.

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

€ million Q4 2016 (1) Q4 2015 (1) Change
Business net income 1,606 1,709 (6.0%)
Amortization of intangible assets (2) (412) (695)  
Impairment of intangible assets (119) (533)  
Fair value remeasurement of contingent
consideration liabilities
(41) (108)  
Restructuring costs and similar items (189) (359)  
Impairment loss on Alnylam investment (296) -  
Other gains and losses, and litigation (3) 211 -  
Tax effect of items listed above (4): 95 601  
  Amortization of intangible assets 197 256  
  Impairment of intangible assets 24 175  
  Fair value remeasurement of contingent consideration  liabilities 1 46  
  Restructuring costs and similar items (139) 124  
  Other tax effects 12 -  
Other tax items - -  
Share of items listed above attributable to non-controlling interests 11 20  
Restructuring costs of associates and joint-ventures, and expenses arising from the impact of acquisitions on associates and joint-ventures (9) (59)  
Animal Health items (5) (63) (242)  
Other Sanofi Pasteur MSD items (6) (4) -  
Net income attributable to equity holders of Sanofi 790 334 136.5%
IFRS earnings per share(7) (in euros) 0.62 0.26  

(1) Animal Health business reported separately in accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations).
(2) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €374 million in the fourth quarter of 2016 and €423 million in the fourth quarter of 2015.
(3) Gain on Sanofi Pasteur MSD investment in associates and joint-ventures upon termination of the joint-venture.
(4) This lines includes the impact on deferred tax assets and liabilities coming from the reconciliation items (in particular amortization and impairment of intangible assets and restructuring costs) following the change in tax rates, mainly in France (28% standard rate effective as of January 1, 2020).
(5) Includes the following items: impact of the elimination of depreciation and impairment of Property, Plant & Equipment included in Business Net Income from the IFRS 5 application date, impact of the amortization and impairment of intangible assets until IFRS 5 application date, costs incurred as a result of the divestment, as well as tax effect of these items.
(6) Includes the following items: impact of the discontinuation of the equity accounting of the Sanofi Pasteur MSD business net income since the announcement by Sanofi and Merck of their intent to end their joint vaccine operations in Europe.
(7) Based on an average number of shares outstanding of 1,282.9 million in the fourth quarter of 2016 and 1,304.9 million in the fourth quarter of 2015.

€ million 2016 (1) 2015 (1) Change
Business net income 7,308 7,371 (0.9%)
Amortization of intangible assets (2) (1,692) (2,137)  
Impairment of intangible assets (192) (767)  
Fair value remeasurement of contingent consideration liabilities (135) 53  
Restructuring costs and similar items (879) (795)  
Impairment loss on Alnylam investment (457) -  
Other gains and losses, and litigation (3) 211 -  
Tax effect of items listed above(4): 841 1,331  
  Amortization of intangible assets 647 757  
  Impairment of intangible assets 47 262  
  Fair value remeasurement of contingent consideration liabilities 24 39  
  Restructuring costs and similar items 95 273  
  Other tax effect 28 -  
Other tax items (113) (111)  
Share of items listed above attributable to non-controlling interests 22 25  
Restructuring costs of associates and joint-ventures, and expenses arising from the impact of acquisitions on associates and joint-ventures 9 (191)  
Animal Health items (5) (162) (492)  
Other Sanofi Pasteur MSD items (6) (52) -  
Net income attributable to equity holders of Sanofi 4,709 4,287 9.8%
IFRS earnings per share (7) (in euros) 3.66 3.28  

 (1) Animal Health business reported separately in accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations).
(2) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €1,550 million in 2016 and €1,770 million 2015.
(3) Gain on Sanofi Pasteur MSD investment in associates and joint-ventures upon termination of the joint-venture.
(4) This lines includes the impact on deferred tax assets and liabilities coming from the reconciliation items (in particular amortization and impairment of intangible assets and restructuring costs) following the change in tax rates, mainly in France (28% standard rate effective as of January 1, 2020) and in Japan.
(5) Includes the following items: impact of the elimination of depreciation and impairment of Property, Plant & Equipment included in Business Net Income from IFRS 5 application date, impact of the amortization and impairment of intangible assets until IFRS 5 application date, costs incurred as a result of the divestment, as well as tax effect of these items.
(6) Includes the following items: impact of the discontinuation of the equity accounting of the Sanofi Pasteur MSD business net income since the announcement by Sanofi and Merck of their intent to end their joint vaccine operations in Europe.
(7) Based on an average number of shares outstanding of 1,286.6 million in 2016 and 1,306.2 million in 2015.

Appendix 4: Consolidated income statements

€ million Q4 2016 (1) Q4 2015 (1)(2) 2016 (1) 2015 (1)(2)
Net sales 8,867 8,583  33,821 34,060
Other revenues 310 235 887 801
Cost of sales (2,956) (2,865) (10,702) (10,919)
Gross profit 6,221 5,953 24,006 23,942
Research and development expenses (1,437) (1,364) (5,172) (5,082)
Selling and general expenses (2,603) (2,482) (9,486) (9,382)
Other operating income 56 145 355 254
Other operating expenses (134) (121) (482) (462)
Amortization of intangible assets (412) (695) (1,692) (2,137)
Impairment of intangible assets (119) (533) (192) (767)
Fair value remeasurement of contingent consideration liabilities (41) (108) (135) 53
Restructuring costs and similar items (189) (359) (879) (795)
  Other gains and losses and litigation 211 - 211 -
Operating income 1,553 436 6,534 5,624
Financial expenses (422) (172) (924) (559)
Financial income 1 99 68 178
Income before tax and associates and joint ventures 1,132 363 5,678 5,243
Income tax expense (369) 243 (1,326) (709)
Share of profit/loss of associates and joint ventures 30 (28) 134 (22)
Net income excluding the held for exchange Animal Health business 793 578 4,486 4,512
Net income from the held for exchange Animal Health business 18 (225) 314 (124)
Net income 811 353 4,800 4,388
Net income attributable to non-controlling interests 21 19 91 101
Net income attributable to equity holders of Sanofi 790 334 4,709 4,287
Average number of shares outstanding (million) 1,282.9 1,304.9 1,286.6 1,306.2
Earnings per share (in euros) excluding the held for exchange Animal Health business 0.60 0.43 3.42 3.38
IFRS earnings per share (in euros) 0.62 0.26 3.66 3.28

(1) Animal Health business reported on a single line in the consolidated income statements in accordance with IFRS 5 (Non-current held for sale and discontinued operations).

(2) As per a change in accounting presentation, VaxServe sales of non-Group products are reported in Other revenues from 2016 onwards. Prior period Net sales and Other revenues have been represented accordingly.

Appendix 5: Animal Health: 2016 fourth quarter and 2016 sales and business operating income

Net sales (€ million) Q4 2016 Change
(CER)
2016 Change
(CER)
Companion Animal 359 +11.8% 1,781 +10.4%
Production Animal 240 - 927 +7.9%
Total Animal Health 599 +6.8% 2,708 +9.5%
  of which vaccines 226 +6.6% 845 +8.0%
  of which fipronil products 84 -16.7% 546 -11.2%
  of which avermectin products 97 +1.1% 520 +5.2%

Animal Health Fourth Quarter 2016 2016
€ million Q4 2016 Q4 2015 Change 2016 2015 Change
Net sales 599 559 7.2% 2,708 2,515 7.7%
Other revenues 12 9 33.3% 39 41 (4.9%)
Cost of sales (230) (217) 6.0% (937) (885) 5.9%
As % of net sales (38.4%) (38.8%)   (34.6%) (35.2%)  
Gross profit 381 351 8.5% 1,810 1,671 8.3%
As % of net sales 63.6% 62.8%   66.8% 66.4%  
Research and development expenses (56) (51) 9.8% (191) (177) 7.9%
As % of net sales (9.3%) (9.1%)   (7.1%) (7.0%)  
Selling and general expenses (225) (218) 3.2% (899) (865) 3.9%
As % of net sales (37.6%) (39.0%)   (33.2%) (34.4%)  
Other current operating income/expenses 2 (4)   (14) 5  
Share of profit/loss of associates* and joint-ventures - -   1 1  
Business operating income 102 78 30.8% 707 635 11.3%
As % of net sales 17.0% 14.0%   26.1% 25.2%  

*     Net of tax.

Appendix 6: Change in net debt

€ million 2016 2015
Business net income 7,308 7,371
Depreciation amortization and impairment of property, plant and equipment and software 1,355 1,333
Net gains and losses on disposals of non-current assets, net of tax (33) (137)
Other non-cash items 44 (19)
Operating cash flow before changes in working capital (1) 8,674 8,548
Changes in working capital (1) 610 1,048
Acquisitions of property, plant and equipment and software (1,486) (1,464)
Free cash flow (1) 7,798 8,132
Acquisitions of intangibles, excluding software (716) (1,559)
Acquisitions of investments, including assumed debt (534) (365)
Restructuring costs and similar items paid (729) (682)
Proceeds from disposals of property, plant and equipment, intangibles, and other non-current assets, net of tax 314 208
Issuance of Sanofi shares 306 573
Dividends paid to shareholders of Sanofi (3,759) (3,694)
Acquisition of treasury shares (2,908) (1,784)
Disposals of treasury shares, net of tax - 1
Transactions with non-controlling interests including dividends (31) (25)
Foreign exchange impact (192) (768)
Other items (501) (120)
Change in net debt (952) (83)

(1) Excluding restructuring costs and similar items

Appendix 7: Simplified consolidated balance sheet

ASSETS
€ million
12/31/16 12/31/15 LIABILITIES
€ million
12/31/16 12/31/15
      Equity attributable to equity-holders of Sanofi 57,554 58,049
      Equity attributable to non-controlling interests 170 161
      Total equity 57,724 58,210
      Long-term debt 16,815 13,118
Property, plant and equipment 10,019 9,943 Non-current liabilities related to business combinations and to non-controlling interests 1,378 1,121
Intangible assets (including goodwill) 51,166 51,583 Provisions and other non-current liabilities 8,834 9,169
Non-current financial assets, investments in associates, and deferred tax assets

 
10,379 10,115 Deferred tax liabilities 2,292 2,895
Non-current assets 71,564 71,641 Non-current liabilities 29,319 26,303
      Accounts payable and other current liabilities 14,472 13,259
Inventories, accounts receivable and other current assets 16,414 15,780 Current liabilities related to business combinations and  to non-controlling interests 198 130
Cash and cash equivalents 10,273 9,148 Short-term debt and current portion of long-term debt 1,764 3,436
Current assets 26,687 24,928 Current liabilities 16,434 16,825
Assets held for sale or exchange 6,421 5,752 Liabilities related to assets held for sale or exchange 1,195 983
Total ASSETS 104,672 102,321 Total LIABILITIES & EQUITY 104,672 102,321

Appendix 8: currency sensitivity

2017 Business EPS currency sensitivity

Currency Variation Business EPS Sensitivity
U.S. Dollar -0.05 USD/EUR +EUR 0.13
Japanese Yen +5 JPY/EUR -EUR 0.02
Chinese Yuan +0.2 CNY/EUR -EUR 0.02
Brazilian Real +0.4 BRL/EUR -EUR 0.02
Russian Ruble +10 RUB/EUR -EUR 0.03

Currency exposure on Q4 2016 and 2016 sales (without Merial)

Currency Q4 2016 2016
US $ 38.2% 37.5%
Euro € 21.9% 22.9%
Chinese Yuan 5.3% 5.8%
Japanese Yen 4.5% 4.7%
Brazilian Real 2.5% 2.8%
Mexican Peso 2.4% 1.6%
Russian Ruble 1.9% 1.4%
British Pound 1.7% 1.8%
Australian $ 1.4% 1.5%
Canadian $ 1.4% 1.4%
Others 18.8% 18.6%

Currency average rates

  Q4 2015 Q4 2016 Change
€/$ 1.09 1.08 -1.5%
€/Yen 132.93 117.92 -11.3%
€/Yuan 7.00 7.38 +5.5%
€/Real 4.21 3.55 -15.7%
€/Ruble 72.37 67.99 -6.0%

Appendix 9: R&D Pipeline

: New Molecular Entity

Registration

N
sarilumab
Anti-IL6R mAb
Rheumatoid arthritis, U.S, EU
 

Dengvaxiaฎ(1)
Mild-to-severe
dengue fever vaccine

N
Dupixent
Anti-IL4Ralpha mAb
Atopic dermatitis, U.S., EU

PR5i
DTP-HepB-Polio-Hib
Pediatric hexavalent vaccine, U.S.
N
SAR342434
insulin lispro
Type 1+2 diabetes
VaxiGrip QIV IM(2)
Quadrivalent inactivated
influenza vaccine (3 years+)

Phase 3

 

dupilumab
Anti-IL4Ralpha mAb
Asthma, Nasal polyposis

Clostridium difficile
Toxoid vaccine
N
isatuximab
Anti-CD38 naked mAb
Relapsed Refractory Multiple myeloma

VaxiGrip QIV IM
Quadrivalent inactivated
influenza vaccine (6-35 months)

N
patisiran (ALN-TTR02)
siRNA inhibitor targeting TTR
Familial amyloidotic polyneuropathy

Pediatric pentavalent vaccine
DTP-Polio-Hib
Japan
N
GZ402666
neo GAA
Pompe Disease

Men Quad TT
2nd generation meningococcal
ACYW conjugate vaccine 
N
sotagliflozin
Oral SGLT-1&2 inhibitor
Type 1 & Type 2 diabetes

 

(1) Approved in 14 countries
(2) Approved in 27 countries

Phase 2

 

dupilumab
Anti-IL4Ralpha mAb
Eosinophilic oesophagitis

N
GZ402671
Oral GCS inhibitor
Fabry Disease, Gaucher Type 3,
Gaucher related Parkinson's Disease
Rabies VRVg
Purified vero rabies vaccine

N
SAR156597
 IL4/IL13 Bi-specific mAb
Idiopathic pulmonary fibrosis / Systemic Scleroderma

N
efpeglenatide
Long-acting GLP-1 receptor agonist
Type 2 diabetes

Tuberculosis
Recombinant subunit vaccine

N
GZ389988
 TRKA antagonist
Osteoarthritis

N
SAR425899
GLP-1R/GCGR dual agonist
Type 2 diabetes


Fluzone
QIV HD
Quadrivalent inactivated
influenza vaccine - High dose
sarilumab
Anti-IL6R mAb
Uveitis
N
SAR100842
LPA1 receptor antagonist
Systemic sclerosis


Adacel+
Tdap booster
N
SAR422459
ABCA4 gene therapy
Stargardt disease

N
SAR439152
Myosin inhibitor
Hypertrophic cardiomyopathy


Shan 6
DTP-HepB-Polio-Hib
Pediatric hexavalent vaccine
N
SAR439684
PD-1 inhibitor
Advanced CSCC (Skin cancer)

N
Combination
ferroquine / OZ439
Antimalarial


HIV

Viral vector prime & rgp120 boost vaccine
N
olipudase alfa
rhASM Deficiency
Acid Sphingomyelinase Deficiency(1)

   

Phase 1

N
SAR440340
Anti-IL33 mAb
Asthma & COPD

N
SAR428926
Maytansin-loaded anti-Lamp1 mAb
Cancer

 
 

Herpes Simplex Virus Type 2
HSV-2 vaccine


N
SAR439794
TLR4 agonist
Peanut allergy

N
fitusiran (ALN-AT3)
siRNA targeting Anti-Thrombin
Hemophilia

 

Zika
Inactivated Zika vaccine


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

N
SAR438335
GLP-1R/GIPR dual agonist
Type 2 diabetes
 

Respiratory syncytial virus
Infants


N
UshStat
Myosin 7A gene therapy
Usher syndrome 1B

N
SAR341402
Rapid acting insulin
Diabetes

 
N
SAR228810
Anti-protofibrillar AB mAb
Alzheimer's disease

N
SAR247799
S1P1 agonist
Cardiovascular Indication

N
SAR566658
Maytansin-loaded anti-CA6 mAb
Solid tumors

N
SAR407899
rho kinase
Microvascular angina

N
SAR408701
Maytansin-loaded anti-CEACAM5 mAb
Solid tumors

 

(1) Previously referred as Niemann Pick type B

Appendix 10: Expected R&D milestones

Products Expected milestones Timing
Dengvaxia Regulatory decision in endemic countries Throughout 2017
Kevzaraฎ (1) U.S. regulatory resubmission in Rheumatoid Arthritis Q1 2017
Dupixentฎ (1) Japan regulatory submission in Atopic Dermatitis Q1 2017
Dupixentฎ (1) U.S. regulatory decision in Atopic Dermatitis Q1 2017
dupilumab Start of Phase 3 trial in Asthma in 6-11 year-olds Q2 2017
fitusiran Start of Phase 3 trial in Hemophilia Q2 2017
Kevzaraฎ (1) U.S. regulatory decision in Rheumatoid Arthritis Q2 2017
Dupixentฎ (1) Start of Phase 3 trial in Atopic Dermatitis in 12-17 year-olds Q2 2017
Dupixentฎ (1) Start of Phase 3 trial in Atopic Dermatitis in 6-11 year-olds Q3 2017
patisiran Phase 3 results in Familial amyloidotic polyneuropathy Q3 2017
Fluzone QIV HD Start of Phase 3 trial Q3 2017
VaxiGrip QIV IM (6-35 months) EU regulatory submission Q3 2017
dupilumab Phase 3 results in Asthma in Adult patients Q4 2017
dupilumab U.S. regulatory submission in Asthma in Adult patients Q4 2017
efpeglenatide Start of Phase 3 trial in type-2 Diabetes 2017
isatuximab Start of additional Phase 3 trials in Multiple Myeloma 2017

 (1) Name received conditional approval

Appendix 11: Definitions of non-GAAP financial indicators

Company
"Company" corresponds to Sanofi and its subsidiaries

Company 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 net sales to Company sales at constant exchange rates for the fourth quarter and 2016

€ million Q4 2016 2016
Net sales 8,867 33,821
Effect of exchange rates +10 +661
Company sales at constant exchange rates 8,877 34,482

Business net income

Sanofi publishes a key non-GAAP indicator.
Business net income is defined as net income attributable to equity holders of Sanofi excluding:

(1) Reported in the line items Restructuring costs and similar items and Gains and losses on disposals, and litigation, which are defined in Note B.20. to our consolidated financial statements.
(2) Impact of discontinuation of depreciation and impairment of Property, Plant and Equipment starting at IFRS 5 application (non-current assets held for sales and discontinued operations), amortization and impairment of intangible assets until IFRS 5 application and costs incurred as a result of the divestment as well as tax effect of these items.
(3) Elimination of the Company's share of the business net income of Sanofi Pasteur MSD from the date when Sanofi and Merck announced their intention to end their joint venture, plus an income tax charge arising from the taxable temporary differences relating to the investment in the joint venture

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