31.07.2018 07:54:49 CET

Sanofi: Q2 2018 Performance Positions Sanofi for New Growth Phase

Paris, July 31, 2018

Q2 2018 Performance Positions Sanofi for New Growth Phase

  Q2 2018 Change Change
at CER
H1 2018 Change Change
at CER
IFRS net sales reported €8,176m -5.7% +0.1% €16,074m -7.2% -0.1%
IFRS net income reported €762m -26.2% - €1,778m -73.6%(2) -
IFRS EPS reported €0.61 -25.6% - €1.42 -73,4%(2) -
Business net income(1) €1,558m -7.9% +0.4% €3,156m -9.4% +0.4%
Business EPS(1) €1.25 -6.7% +1.5% €2.53 -8.3% +1.4%

Second-quarter 2018 sales stable(3) with strong contributions from Specialty Care and Emerging Markets

  • Net sales were €8,176 million, down 5.7% on a reported basis, up 0.1%(3) at CER and down 2.5% at CER/CS (4).
  • Sanofi Genzyme sales up 14.1% at CER/CS (4) (33.1% at CER) driven by Dupixent and consolidation of Bioverativ.
  • Vaccines sales down 15.7% reflecting high basis for comparison and expected Pentaxim supply constraint in China.
  • CHC sales increased 4.1% supported by growth in Europe and Emerging Markets(5).
  • DCV(6) GBU sales down 15.6%; global Diabetes franchise sales declined 11.9%, confirming expected trend for year.
  • Emerging Markets sales(5) increased 5.2% with double-digit growth in China.
2018 business EPS guidance range slightly narrowed

  • Second-quarter 2018 business EPS(1) up 1.5% at CER to €1.25.
  • Second-quarter 2018 IFRS EPS was €0.61 (-25.6%).
  • Business EPS(1) in 2018 now expected to grow 3% to 5% at CER(7) barring unforeseen major adverse events.
  • Currency impact on 2018 business EPS is estimated to be around -6% applying the average July exchange rates.
Key achievements in sustaining innovation in R&D
  • Sanofi completed the acquisition of Ablynx in May, internalizing the innovative Nanobody platform.
  • Positive CHMP recommendation for CabliviTM for aTTP(8).
  • Phase 1/2a data on BIVV001, an extended factor VIII therapy, demonstrated half-life of 37 hours.
  • A phase 2/3 study is being initiated on venglustat, an oral glucosylceramide synthase (GCS) inhibitor, in ADPKD(9).
  • Positive phase 3 trial evaluating Dupixent to treat moderate-to-severe atopic dermatitis in adolescents.
  • Priority review granted in the U.S. to cemiplimab for the treatment of CSCC(10).
  • ZynquistaTM (sotagliflozin) accepted for review by the FDA in type 1 diabetes.
  • Praluent ODYSSEY OUTCOMES results submitted to the FDA and EMA in Q2.

Sanofi Chief Executive Officer, Olivier Brandicourt, commented:
"In the second quarter, we achieved significant milestones in building our new Rare Blood Disorder franchise and the successful continued execution of the global roll-out of Dupixent. As the impact from the U.S. losses of exclusivity peaked in the second quarter, the growth of our diversified businesses largely compensated for these headwinds. We look forward to entering a new growth phase led by our increasing focus on Specialty Care and our leadership positions in Emerging Markets and Vaccines."

(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 8 for definitions). The consolidated income statement for Q2 2018 is provided in Appendix 3 and a reconciliation of reported IFRS net income to business net income is set forth in Appendix 4; (2) Excluding Animal Health gain on disposal, first-half IFRS net income was down 22.6% and first-half IFRS EPS was down 22.4%;(3) Changes in net sales are expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 10); (4) Constant Structure: Adjusted for Bioverativ acquisition; (5) See definition page 8; (6) DCV: Diabetes and Cardiovascular; (7) 2017 business EPS was €5.52; (8) Acquired thrombotic thrombocytopenic purpura; (9) Autosomal Dominant Polycystic Kidney Disease; (10) Cutaneous Squamous Cell Carcinoma

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
Website: www.sanofi.com  Mobile app: SANOFI IR available on the App Store and Google Play

2018 Second-quarter and first-half Sanofi sales

Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER(11).

In the second quarter of 2018, Company sales were €8,176 million, down 5.7% on a reported basis. Exchange rate movements had a negative effect of 5.8 percentage points mainly driven by the movement of the U.S. Dollar accompanied by the Brazilian Real, Argentine Peso, Turkish Lira, Japanese Yen and Russian Ruble. At CER, Company sales increased 0.1%.

First-half Company sales reached €16,074 million, down 7.2% on a reported basis. Exchange rate movements had an unfavorable effect of 7.1 percentage points. At CER, Company sales were down 0.1%.

Global Business Units

The table below presents sales by Global Business Unit (GBU). Please note that Emerging Markets sales for Specialty Care and Diabetes and Cardiovascular are included in the General Medicines and Emerging Markets GBU.

Net Sales by GBU
(€ million)
Q2 2018 Change
at CER
H1 2018 Change
at CER
Sanofi Genzyme (Specialty Care)(a)   1,808   +33.1% 3,268 +24.8%
Diabetes and Cardiovascular(a)   1,107   -15.6% 2,195 -15.6%
General Medicines & Emerging Markets(b)   3,335   -3.7% 6,736 -2.6%
Total Pharmaceuticals   6,250   +1.9% 12,199 +0.5%
Consumer Healthcare (CHC)   1,115   +4.1% 2,353 +3.0%
Sanofi Pasteur (Vaccines)   811   -15.7% 1,522 -9.3%
Total net sales   8,176   +0.1% 16,074 -0.1%

(a) Does not include Emerging Markets sales- see definition page 8; (b) Includes Emerging Markets sales for Diabetes & Cardiovascular and Specialty Care


Global Franchises

The tables below present second-quarter and first-half 2018 sales by global franchise, including Emerging Markets sales, to facilitate comparisons. Appendix 1 provides a reconciliation of sales by GBU and franchise.

Net sales by Franchise
(€ million)
Q2 2018 Change
at CER
Developed
Markets
Change
at CER
Emerging
Markets
Change
at CER
Specialty Care 2,071 +29.5% 1,808 +33.1% 263 +10.3%
Diabetes and Cardiovascular 1,511 -9.4% 1,107 -15.6% 404 +12.2%
Established Rx Products 2,266 -7.9% 1,301 -17.3% 965 +7.8%
Consumer Healthcare (CHC) 1,115 +4.1% 723 +0.8% 392 +10.1%
Generics 402 -1.6% 230 -6.8% 172 +5.3%
Vaccines 811 -15.7% 482 -15.9% 329 -15.5%
Total net sales 8,176 +0.1% 5,651 -2.1% 2,525 +5.2%

Net sales by Franchise
(€ million)
H1 2018 Change
at CER
Developed
Markets
Change
at CER
Emerging
Markets
Change
at CER
Specialty Care 3,781 +23.1% 3,268 +24.8% 513 +13.4%
Diabetes and Cardiovascular 2,995 -9.0% 2,195 -15.6% 800 +15.0%
Established Rx Products 4,586 -7.1% 2,628 -16.7% 1,958 +8.7%
Consumer Healthcare (CHC) 2,353 +3.0% 1,552 -1.6% 801 +12.3%
Generics 837 -0.3% 486 -3.7% 351 +4.1%
Vaccines 1,522 -9.3% 953 -4.2% 569 -16.7%
Total net sales 16,074 -0.1% 11,082 -3.1% 4,992 +6.8%

(11) See Appendix 10 for definitions of financial indicators.

Pharmaceuticals

Second-quarter Pharmaceutical sales were up 1.9% to €6,250 million driven by the Rare Blood Disorder and Immunology franchises which were partially offset by Diabetes and Established Rx Products. First-half sales for Pharmaceuticals increased 0.5% to €12,199 million.

Rare Disease franchise

Net sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
Myozyme/ Lumizyme 209 +7.8% 405 +9.4%
Fabrazyme 188 +6.3% 358 +6.5%
Cerezyme 181 +2.6% 356 +6.2%
Aldurazyme 52 -1.8% 103 +1.8%
Cerdelga 38 +32.3% 74 +29.0%
Others Rare Disease 75 +5.3% 142 -5.5%
Total Rare Disease 743 +6.1% 1,438 +6.5%

In the second quarter, Rare Disease sales increased 6.1% to €743 million, driven by Europe (up 6.2% to €256 million), Emerging Markets (up 7.1% to €139 million) and Rest of the World (up 12.0% to €85 million). In the U.S., second-quarter Rare Disease sales grew 3.7% to €263 million. First-half Rare Disease sales increased 6.5% to €1,438 million.

Second-quarter Gaucher (Cerezyme and Cerdelga) sales were up 6.7% to €219 million, supported by the increasing penetration of Cerdelga in Europe and the U.S. and the sustained growth of Cerezyme in Emerging Markets. Second-quarter Cerdelga sales increased 32.3% to €38 million, with sales doubling in Europe (€12 million). First-half Gaucher sales were €430 million, up 9.5%.

Second-quarter Myozyme/Lumizyme sales grew 7.8% to €209 million, supported by positive trends in na๏ve patient accruals. Second-quarter Myozyme/Lumizyme sales increased 9.2% to €95 million in Europe and 8.8% to €69 million in the U.S., respectively. First-half Myozyme/Lumizyme sales increased 9.4% to €405 million.

Second-quarter Fabrazyme sales grew 6.3% to €188 million. Second-quarter sales in the U.S. and Europe increased 5.2% (to €93 million) and 9.8% (to €45 million), respectively. First-half Fabrazyme sales were up 6.5% to €358 million.

Multiple Sclerosis franchise

Net sales (€ million) Q2 2018 Change
 at CER
H1 2018 Change
 at CER
Aubagio 404 +1.2% 775 +6.0%
Lemtrada 102 -12.9% 207 -10.8%
Total Multiple Sclerosis 506 -2.0% 982 +2.0%

Second-quarter Multiple Sclerosis (MS) sales decreased 2.0% to €506 million, reflecting lower Lemtradasales and a high basis of comparison for Aubagio in Europe. First-half MS sales increased 2.0% to €982 million.

Second-quarter Aubagiosales increased 1.2% to €404 million, supported by the U.S. performance (up 9.1% to €287 million) which was offset by lower sales in Europe (down 21.1% to €89 million) reflecting the high basis of comparison from clinical trial supply orders of approximately €30 million in the second quarter of 2017. First-half Aubagio sales increased 6.0% to €775 million.

In the second quarter, Lemtrada sales decreased 12.9% to €102 million due to lower U.S. sales (down 20.6% to €46 million) reflecting increased competition as well as its unique dosing and durable effect. In Europe, Lemtrada sales were down 2.1% to €45 million. First-half Lemtrada sales decreased 10.8% to €207 million.

Immunology franchise

Net sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
Dupixent 176 - 283 -
Kevzara 20 - 30 -
Total Immunology 196 - 313 -

Dupixent (collaboration with Regeneron) for the treatment of moderate-to-severe atopic dermatitis in adults generated sales of €176 million in the second quarter compared to €26 million in the second quarter of 2017. In the U.S., Dupixent was launched in April 2017 and reached sales of €151 million in the second quarter. Demand for the product remains strong with more than 50,000 patients having been prescribed to date and total prescriptions (source: IQVIA weekly TRx data) increasing 27% sequentially in the second quarter. Trade inventory at the end of the second quarter is estimated to have been in the middle of the normal range of three to five weeks. Outside the U.S., Dupixent was launched in Germany in December 2017 and the Netherlands, Canada, Denmark, Sweden and Japan during the first half of 2018. Second-quarter sales in Europe were €16 million. First-half Dupixent sales were €283 million compared to €26 million in the first half of 2017.

Kevzara (collaboration with Regeneron) for rheumatoid arthritis was launched in the U.S. in June 2017, in Germany, the UK, the Netherlands during the second half of last year and in Japan, Belgium, Sweden and Finland in the first half of 2018. Second-quarter Kevzara sales were €20 million, of which €15 million were generated in the U.S. reflecting improved U.S. commercial coverage. First-half Kevzara sales were €30 million.

Rare Blood Disorder franchise

Net sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
Eloctate 176 - 219 -
Alprolix 81 - 102 -
Total Rare Blood Disorder 257 - 321 -

Bioverativ was consolidated in Sanofi's Financial Statements from March 9, 2018. Second-quarter sales of the Rare Blood Disorder franchise were €257 million, up 15.5% on a pro forma basis(12) including non U.S. sales of €38 million with Japan as the primary contributor. Eloctate and Alprolix were launched in Colombia in the first quarter of 2018. In the first half of 2018, consolidated sales of the Rare Blood Disorder franchise were €321 million, up 18.3% on a pro forma basis(12).

Eloctate, a recombinant antihemophilic Factor VIII, Fc Fusion Protein, indicated for the treatment of hemophilia A, generated sales of €176 million in the second quarter, up 20.0% on a pro forma basis(12). First-half consolidated Eloctate sales were €219 million, up 23.3% on a pro forma basis(12).

Alprolix, a recombinant coagulation Factor IX, Fc Fusion Protein, indicated for the treatment of hemophilia B, generated sales of €81 million in the second quarter, up 6.6% on a pro forma basis(12) despite a delay in government contracting in Canada. First-half consolidated Alprolix sales were €102 million, up 8.9% on a pro forma basis(12).

Oncology franchise

Net sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
Jevtana 103 +10.0% 202 +10.2%
Thymoglobulin 74 +3.9% 144 +6.1%
Eloxatin 46 +4.4% 90 +5.6%
Mozobil 44 +15.0% 82 +10.0%
Taxotere 41 0.0% 84 -1.1%
Zaltrap 24 +38.9% 46 +41.2%
Others 37 -31.7% 79 -44.5%
Total Oncology 369 +2.4% 727 -1.8%

(12) Growth comparing full second-quarter 2018 sales versus full second-quarter 2017 sales, and full first-half 2018 sales versus full first-half 2017 sales at CER. Unaudited data.

Second-quarter Oncology sales increased 2.4% to €369 million. Consistent with the Company's portfolio prioritization efforts, Sanofi sold Leukine on January 31, 2018. Excluding Leukine, oncology second-quarter sales were up 5.1%. First-half Oncology sales were down 1.8% to €727 million and up 4.3% excluding Leukine.

Jevtanasales were up 10.0% to €103 million in the second quarter supported by the performance in the U.S. (up 14.6% to €43 million). First-half Jevtana sales increased 10.2% to €202 million. In the second quarter, Thymoglobulin and Eloxatin sales increased 3.9% (to €74 million) and 4.4% (to €46 million), respectively, with growth driven by China. First-half sales of Thymoglobulin and Eloxatin increased 6.1% (to €144 million) and 5.6% (to €90 million), respectively.

Diabetes franchise

Net sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
Lantus 891 -20.6% 1,802 -19.1%
Toujeo 217 +7.9% 414 +10.7%
Total glargine 1,108 -16.2% 2,216 -14.9%
Apidra 92 +5.4% 183 +3.1%
Amaryl 87 +9.5% 170 +5.8%
Insuman 23 -17.2% 47 -12.5%
Lyxumia 6 -14.3% 11 -14.3%
Soliqua 17 +260.0% 26 +222.2%
Total Diabetes 1,366 -11.9% 2,722 -10.9%

In the second quarter, global Diabetes sales decreased 11.9% to €1,366 million, due to lower glargine (Lantus and Toujeo) sales in the U.S. Second-quarter U.S. Diabetes sales were down 30.1% to €525 million, reflecting the previously announced changes in coverage of the Part D business and a continued decline in average U.S. glargine net prices. Second-quarter sales in Emerging Markets increased 11.8% to €401 million. Second-quarter sales in Europe increased 0.3% to €325 million, supported by Toujeo growth. First-half global Diabetes sales decreased 10.9% to €2,722 million.

Second-quarter glargine (Lantus and Toujeo) sales decreased 16.2% to €1,108 million. U.S. glargine sales were down 32.2% to €489 million, reflecting the aforementioned changes in coverage in Part D and a continued decline in average U.S. glargine net prices. In Europe, glargine sales increased 0.8% to €249 million due to strong Toujeo performance, despite biosimilar glargine competition in several European markets. First-half glargine sales decreased 14.9% to €2,216 million.

In the second quarter, Lantus sales were €891 million, down 20.6%. In the U.S., Lantus sales decreased 33.9% to €403 million mainly reflecting lower average net price and changes in coverage in Part D. In Europe, second-quarter Lantus sales were €174 million, down 9.8% due to biosimilar glargine competition and patients switching to Toujeo. In Emerging Markets, second-quarter Lantus sales were up 1.1% to €244 million. First-half Lantus sales decreased 19.1% to €1,802 million.

Second-quarter Toujeo sales were €217 million, up 7.9%. In the U.S., second-quarter Toujeo sales were €86 million, down 23.0%. In Europe and Emerging Markets, second-quarter Toujeo sales were €75 million (up 38.9%) and €37 million (versus €24 million), respectively. First-half Toujeo sales increased 10.7% to €414 million.

Soliqua 100/33 (insulin glargine 100 Units/mL & lixisenatide 33 mcg/mL injection) was launched in the U.S. in January 2017 and Suliqua(TM) was also launched in several European countries in 2017. Second-quarter and first-half Soliqua 100/33 / Suliqua(TM) sales were €17 million and €26 million, respectively.

Amaryl sales were €87 million, up 9.5% in the second quarter, of which €74 million were generated in Emerging Markets (up 11.4%). First-half Amaryl sales were up 5.8% at €170 million,

Second-quarter Apidra sales increased 5.4% to €92 million. Lower sales in the U.S. (down 22.2% to €19 million) were offset by strong growth in Emerging Markets (up 29.2% to €27 million). First-half Apidra sales increased 3.1% to €183 million.

Cardiovascular franchise

Second-quarter Praluent (collaboration with Regeneron) sales increased 54.8% to €62 million, of which €35 million was generated in the U.S. and €22 million in Europe. First-half Praluent sales increased 55.3% to €111 million. The Company is in active discussions with a number of U.S. payers to simplify utilization management (UM) criteria and improve access for patients in return for greater rebates, consistent with the new commercial policy for Praluent announced in March. As a result of recent payer agreements, around 30% of Commercial lives now benefit from improved UM criteria. Negotiations with U.S. payers are ongoing with additional contract decisions expected to be finalized in the next few months.

Second-quarter and first-half Multaq sales were up 7.2% (to €83 million) and down 1.7% (to €162 million), respectively.

Established Rx Products

Net sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
Lovenox 377 -2.2% 768 -1.5%
Plavix 374 +0.3% 761 +4.6%
Aprovel/Avapro 171 -6.3% 343 -4.7%
Renvela/Renagel 100 -57.3% 201 -55.7%
Synvisc/Synvisc-One 92 -13.8% 160 -14.6%
Myslee/Ambien/Stilnox 55 -7.8% 116 -8.0%
Allegra 28 -11.8% 80 -14.7%
Other 1,069 -1.5% 2,157 -2.0%
Total Established Rx Products 2,266 -7.9% 4,586 -7.1%

In the second quarter, Established Rx Products sales decreased 7.9% to €2,266 million. This reflected generic competition to Renvela/Renagel (sevelamer) in the U.S., which more than offset growth in Emerging Markets (up 7.8% to €965 million). First-half Established Rx Products sales decreased 7.1% to €4,586 million.

Second-quarter Lovenoxsales decreased 2.2% to €377 million, reflecting increased competition in Europe (down 5.8% to €227 million), which offset the growth in Emerging Markets (up 10.6% to €121 million). Biosimilars are available in the UK, Germany and Italy. First-half Lovenox sales were down 1.5% to €768 million.

In the second quarter, Plavixsales were up 0.3% to €374 million reflecting generic competition in Japan (sales down 28.1% to €42 million) offset by strong growth in Emerging Markets (up 7.1% to €278 million) driven by China. First-half Plavix sales increased 4.6% to €761 million.

Second-quarter Aprovel/Avapro sales decreased 6.3% to €171 million, reflecting the strong performance in China offset by the impact of generic competition in Japan. First-half Aprovel/Avapro sales decreased 4.7% to €343 million.

Second-quarter Renvela/Renagel(sevelamer) sales decreased 57.3% to €100 million, due to generic competition in the U.S. (down 68.9% to €60 million). First-half Renvela/Renagel sales decreased 55.7% to €201 million.

Generics

In the second quarter, Generics sales decreased 1.6% to €402 million. Sales in Emerging Markets sales were up 5.3% (to €172 million) and sales in Europe were down 3.2% (to €183 million). In June, Sanofi and Advent International finished negotiations for the acquisition by Advent of Zentiva, Sanofi's European generics business and the companies signed a Share Purchase Agreement worth €1.9 billion (enterprise value). The transfer of the Zentiva business to Advent is anticipated during the course of the fourth quarter 2018. The transaction remains subject to approval of the regulatory authorities.

Consumer Healthcare

CHC sales by geography and category are provided in Appendix 1.

Net sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
Allergy Cough & Cold 239 +2.0% 580 -4.2%
  of which Allegra 99 +1.9% 229 +2.0%
  of which Mucosolvan 22 +53.3% 49 +13.0%
  of which Xyzal 7 - 21 -52.9%
Pain 304 +10.4% 628 +9.6%
  of which Doliprane 77 +6.8% 161 +4.5%
  of which Buscopan 50 +39.0% 104 +42.2%
Digestive 248 +8.6% 496 +11.7%
  of which Dulcolax 56 +3.6% 109 +12.6%
  of which Enterogermina 45 +16.7% 94 +14.6%
  of which Essentiale 46 +8.9% 89 +11.8%
  of which Zantac 31 +10.0% 62 +21.1%
Nutritionals 166 +0.6% 330 +2.0%
Other 158 -6.0% 319 -5.6%
  of which Gold Bond 48 +6.0% 97 +9.0%
Total Consumer Healthcare 1,115 +4.1% 2,353 +3.0%

In the second quarter, Consumer Healthcare (CHC) sales increased 4.1% to €1,115 million, led by good growth in Emerging Markets and Europe which more than offset a decline in U.S. sales due the late onset of the allergy season and private label competition. First-half CHC sales increased 3.0% to €2,353 million.

In Europe, second-quarter CHC sales were up 6.6% to €324 million driven by Pain (up 8.9%) and Allergy Cough & Cold (up 11.9%) categories. First-half CHC sales in Europe were stable at €706 million.

In the U.S., second-quarter CHC sales decreased 5.8% to €254 million due to the late onset of the allergy season which impacted sales of Allegra, Nasacortand Xyzal. Nasacort was additionally impacted by private label competition. In the U.S., first-half CHC sales decreased 5.3% to €541 million.

In Emerging Markets, second-quarter CHC sales increased 10.1% to €392 million driven by double-digit growth of Allergy, Cough and Cold (up 13.9%), Pain (up 19.1%) and Digestive (up 17.6%) categories primarily in Latin America. In the first half, Emerging Markets CHC sales increased 12.3% to €801 million.

Vaccines

Net sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
Polio/Pertussis/Hib vaccines
(incl. Hexaxim / Hexyon, Pentacel, Pentaximand Imovax)
354 -20.3% 734 -12.8%
Travel and other endemic vaccines 126 +15.9% 228 +9.6%
Meningitis/Pneumo vaccines
(incl. Menactra)
116 -36.4% 205 -22.1%
Influenza vaccines
(incl. Vaxigrip, Fluzone HD & Fluzone)
98 +7.1% 127 +0.7%
Adult Booster vaccines (incl. Adacel ) 94 -14.8% 186 +2.1%
Other vaccines (including Dengvaxia) 23 -7.7% 42 -23.3%
Total Vaccines 811 -15.7% 1,522 -9.3%

Second-quarter Vaccines performance was impacted as expected by the supply constraint of Pentaxim in China, a high basis of comparison for Menactra and phasing for the Polio/Pertussis/Hib franchise. Second-quarter Vaccines sales decreased by 15.7% to €811 million reflecting a decline of 15.5% to €329 million in Emerging Markets and a decrease of 25.4% to €265 million in the U.S. As anticipated, first-half Vaccines sales were lower than in the first half of 2017, down 9.3% to €1,522 million. In the second half of 2018, sales of the Vaccines GBU are expected to grow in mid-single digit, supported by the growth of the Polio/Pertussis/Hib franchise, including the progressive recovery in Pentaxim supply in China as of the third quarter.

In the second quarter, Polio/Pertussis/Hib (PPH) vaccines sales decreased 20.3% to €354 million, reflecting the supply constraint for Pentaxim in China and impacted by the timing of tender business for Pentaxim and Hexaxim in Emerging Markets. In the U.S., PPH vaccines sales decreased 25.0% to €65 million, reflecting inventory fluctuation for Pentacel and Daptacel. First-half Polio/Pertussis/Hib vaccines sales decreased 12.8% to €734 million.

Second-quarter Travel and other endemic vaccines sales were €126 million up 15.9% supported by increased demand for Yellow fever and Typhim. First-half Travel and other endemic vaccines sales were up 9.6% to €228 million.

Second-quarter Menactra sales decreased 31.5% to €116 million due a high basis for comparison. In the second quarter of the previous year, Menactra sales benefited from CDC order phasing in the U.S. and a meningitis outbreak in Australia which together accounted for €58 million. First-half Menactra sales decreased 16.6% to €205 million.

Second-quarter Influenza vaccines sales were up 7.1% to €98 million driven by the Southern Hemisphere flu campaign. First-half Influenza vaccines sales increased 0.7% to €127 million.

Second-quarter Adult Booster vaccines sales decreased 14.8% to €94 million due to lower sales in the U.S. (down 21.1% to €56 million) reflecting timing of orders which are expected to be weighted in the second half of 2018. First-half Adult Booster vaccines sales increased 2.1% to €186 million.

Company sales by geographic region

Sanofi sales (€ million) Q2 2018 Change
at CER
H1 2018 Change
at CER
United States 2,479 -4.4% 4,677 -6.3%
Emerging Markets(a) 2,525 +5.2% 4,992 +6.8%
  of which Asia 993 +9.0% 1,993 +9.2%
  of which Latin America 648 +4.5% 1,298 +8.9%
  of which Africa, Middle East 539 -7.4% 1,030 -4.3%
  of which Eurasia(b) 307 +17.3% 597 +14.3%
Europe(c) 2,342 +0.1% 4,758 +0.3%
Rest of the World(d) 830 -0.7% 1,647 -2.1%
  of which Japan 430 -3.0% 875 -5.4%
Total Sanofi sales 8,176 +0.1% 16,074 -0.1%

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

Second-quarter sales in the U.S. decreased 4.4% to €2,479 million, reflecting the good performances of Dupixent and Aubagioand consolidation of Eloctate and Alprolix sales offset by lower sales in Diabetes (down 30.1%) and Vaccines (down 25.4%) as well as generic competition for sevelamer. In the U.S., first-half sales decreased 6.3% to €4,677 million.

Second-quarter sales in Emerging Markets grew 5.2% to €2,525 million, mainly driven by Established Rx Products (up 7.8%), Diabetes (up 11.8%) and CHC (up 10.1%). In Asia, second-quarter sales were up 9.0% to €993 million, reflecting strong performance in China (up 11.0% to €613 million) despite Pentaxim local supply constraint. In Latin America, second-quarter sales increased 4.5% to €648 million. Second-quarter sales in Brazil were up 1.1% to €240 million impacted by lower sales in Rare Disease and Diabetes. In Africa and the Middle East region, second-quarter sales were €539 million down 7.4% (down 5.0% excluding Maphar in Morocco in which Sanofi sold a controlling stake at the end of Q2 2017 and therefore is no longer consolidating sales) reflecting lower Vaccines sales in South Africa and Middle East. Second-quarter sales in the Eurasia region increased 17.3% to €307 million, supported by strong growth in Turkey and Russia. Second-quarter sales in Russia were €168 million up 17.2% driven by Pharma and Vaccines. In Emerging Markets, first-half sales increased 6.8% to €4,992 million.

Second-quarter sales in Europe were €2,342 million, up 0.1% mainly driven by Rare Disease (up 6.2%), CHC (up 6.6%) and the roll-out of Dupixent and Praluent which offset lower sales in Established Rx Products (down 3.6%) and Multiple Sclerosis (down 15.5%). In Europe, first-half sales increased 0.3% to €4,758 million.

Sales in Japan decreased 3.0% to €430 million in the second quarter, due to lower sales of Plavixand Aprovelgeneric competition. In Japan, first-half sales decreased 5.4% to €875 million.

R&D update

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

Regulatory update

Regulatory updates since April 27, 2018 include the following:

At the end of April 2018, the R&D pipeline contained 87 projects including 40 new molecular entities in clinical development. 36 projects are in phase 3 or have been submitted to the regulatory authorities for approval.

Portfolio update

Phase 3:

Phase 2:

2018 Second-quarter and first-half financial results(13)

Business Net Income(13)

In the second quarter of 2018, Sanofi generated net sales of €8,176 million, a decrease of 5.7% (up 0.1% at CER). First-half sales were €16,074 million, down 7.2% on a reported basis (down 0.1% at CER).

Second-quarter other revenues increased 13.0% (up 21.1% at CER) to €305 million, reflecting the VaxServe sales contribution of non-Sanofi products (€228 million, up 26.7% at CER) and the collaboration revenues from Swedish Orphan Biovitrum AB. First-half other revenues increased 2.7% (up 13.1% at CER) to €533 million of which €397 million were generated by VaxServe (up 20.1% at CER).

Second-quarter Gross Profit decreased 5.1% to €5,830 million (up 0.9% at CER). The gross margin ratio was 71.3% (71.3% at CER) versus 70.8% in the second quarter of 2017. The positive impact of business mix toward Specialty Care as well as the contribution from Bioverativ more than offset the negative impacts from U.S. Diabetes net price evolution and sevelamer generic competition. In the second quarter of 2018, the gross margin ratio of segments were 74.9% for Pharmaceuticals (up 0.1 percentage points), 67.4% for CHC (up 1.4 percentage points) and 55.1% for Vaccines (down 2.8 percentage points). First-half Gross Profit decreased 7.3% to €11,441 million (stable at CER). In the first half of 2018, the gross margin ratio decreased 0.1 percentage point to 71.2% (71.4% at CER) versus the first half of 2017. Sanofi expects its gross margin ratio to be between 70% and 71% at CER in 2018.

Research and Development (R&D) expenses increased 8.6% to €1,475 million in the second quarter of 2018. At CER, R&D expenses increased 13.1%, mainly reflecting the acquisitions of Bioverativ and Ablynx together with the investments in the immuno-oncology and diabetes programs. In 2018, second-quarter R&D expenses also included clinical materials for comparator studies purchased from a third party (which were recorded in R&D expenses); as part of the agreement, the expense (€58 million) was offset by income related to data shared with this same third party on a previously divested product candidate, which was recorded under the "other current operating income net of expenses" line. Excluding the impact of this transaction, second-quarter R&D expenses grew 8.6% at CER. First-half R&D expenses increased 3.3% to €2,755 million (up 8.9% at CER).

Second-quarter selling general and administrative expenses (SG&A) decreased 2.8% to €2,499 million. At CER, SG&A expenses were up 2.7% reflecting consolidation of Bioverativ and Ablynx and investments in immunology, which were partially offset by lower Diabetes expenses in the U.S. In the second quarter, the ratio of SG&A to sales increased 0.9 percentage points to 30.6% compared to the second quarter of 2017. First-half SG&A expenses decreased 4.8% to €4,809 million (up 1.8% at CER). In the first half of 2018, the ratio of SG&A to sales was 0.7 percentage points higher at 29.9% compared to the same period of 2017.

Second-quarter other current operating income net of expenses was €189 million versus €68 million in the second quarter of 2017 and included the share of profit to Regeneron of the monoclonal antibodies Alliance. In the second quarter of 2018, this line also included the Ablynx acquisition-related fees which were more than offset by €123 million of capital gains on disposals of some small products in Latin American and Europe, in line with our portfolio simplification efforts. This line also benefited from the aforementioned data share agreement. First-half other current operating income net of expenses was €158 million versus €102 million in the first half of 2017.

The share of profits from associates was €75 million in the second quarter versus €46 million for the same period of 2017 partly driven by the increased contribution of the share of profits in Regeneron. In the first half, the share of profits from associates was €149 million versus €70 million for the same period of 2017.

In the second quarter, non-controlling interests were -€28 million versus -€30 million in the second quarter of 2017. First-half non-controlling interests were -€58 million versus -€65 million for the same period of 2017.

Second-quarter business operating income decreased 8.9% to €2,092 million. At CER, business operating income decreased 1.0%. The ratio of business operating income to net sales decreased 0.9 percentage points to 25.6% versus the second quarter of 2017. Over the period, the business operating income ratio of segments were 37.5% for Pharmaceuticals (down 0.5 percentage points), 35.6% for CHC (up 8.7 percentage points) and 16.0% for Vaccines (down 9.7 percentage points). First-half business operating income was €4,126 million, down 12.8% (or down 3.8% at CER). In the first half of 2018 the ratio of business operating income to net sales decreased 1.6 percentage point to 25.7%.

Net financial expenses were -€107 million in the second quarter versus -€60 million in the same period of 2017. In the second quarter of 2018, net financial expenses included the cost associated with the Bioverativ and Ablynx acquisitions. First-half net financial expenses were -€105 million versus -€123 million in the first half of 2017.

(13) See Appendix 3 for 2018 second-quarter consolidated income statement; see Appendix 10 for definitions of financial indicators, and Appendix 4 for reconciliation of IFRS net income reported to business net income.
The second-quarter effective tax rate was 22.0% compared to 24.5% in the second quarter of 2017, mainly reflecting the net positive impact of the U.S. tax reform and lower tax rates in different countries. First-half effective tax rate was 22.0% compared to 24.5% in the same period of 2017.

Second-quarter business net income(13) decreased 7.9% to €1,558 million and increased 0.4% at CER. The ratio of business net income to net sales decreased 0.4 percentage points to 19.1% versus the second quarter of 2017. First-half 2018 business net income(13) decreased 9.4% to €3,156 million and increased 0.4% at CER. The ratio of business net income to net sales decreased 0.5 percentage points to 19.6% versus the first half of 2017.

In the second quarter of 2018, business earnings per share(13) (EPS) decreased 6.7% to €1.25 on a reported basis and increased 1.5% at CER. The average number of shares outstanding was 1,247.4 million versus 1,258.2 million in the second quarter of 2017.

In the first half of 2018, business earnings per share(13) was €2.53, down 8.3% on a reported basis and up 1.4% at CER. The average number of shares outstanding was 1,247.8 million in the first half of 2018 versus 1,260.3 million in the first half of 2017.

Reconciliation of IFRS net income reported to business net income (see Appendix 4)

In the first half of 2018, the IFRS net income was €1,778 million. The main items excluded from the business net income were:

(13) See Appendix 3 for 2018 second-quarter consolidated income statement; see Appendix 10 for definitions of financial indicators, and Appendix 4 for reconciliation of IFRS net income reported to business net income.

Capital Allocation

In the first half of 2018, net cash generated by operating activities was €1,854 million after capital expenditures of €689 million and an increase in working capital of €1,139 million. This net cash flow funded restructuring costs and similar items (€414 million) and share repurchases (€730 million). Over the period, the dividend paid by Sanofi was €3,773 million and acquisitions and partnerships net of disposals were €12,460 million (including €12,685 million related to Bioverativ and Ablynx). As a consequence, net debt increased from €5,229 million at December 31, 2017, to €21,278 million at June 30, 2018 (amount net of € 7,493 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, to complete related transactions, 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, 2017. 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:  2018 second-quarter and first-half net sales by GBU, franchise, geographic region and product

 
Appendix 2: 2018 second-quarter and first-half Business net income statement

 
Appendix 3: 2018 second-quarter and first-half Consolidated income statement

 
Appendix 4: Reconciliation of IFRS net income reported to business net income

 
Appendix 5:

 

Appendix 6:

 

Appendix 7:

 

Appendix 8:

 

Appendix 9:
Change in net debt

 

Simplified consolidated balance sheet

 

Currency sensitivity

 

R&D pipeline

 

Expected R&D milestones
 

Appendix 10:
 

Definitions of non-GAAP financial indicators


Appendix 1: 2018 second-quarter net sales by GBU, franchise, geographic region and product

Q2 2018
(€ 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 391 0.2% -5.6% 89 -21.1% 287 9.1% 15 -6.7% 13 36.4% 404 1.2% -4.9%
Lemtrada 95 -16.1% -19.5% 45 -2.1% 46 -20.6% 4 -62.5% 7 50.0% 102 -12.9% -17.7%
Total Multiple Sclerosis 486 -3.4% -8.6% 134 -15.5% 333 3.7% 19 -26.1% 20 41.2% 506 -2.0% -7.8%
Cerezyme 120 -3.9% -7.0% 68 -2.8% 42 -2.2% 10 -16.7% 61 15.4% 181 2.6% -6.7%
Cerdelga 37 29.0% 19.4% 12 100.0% 23 13.0% 2 0.0% 1 - 38 32.3% 22.6%
Myozyme 179 9.4% 4.7% 95 9.2% 69 8.8% 15 12.5% 30 0.0% 209 7.8% 2.5%
Fabrazyme 168 7.2% 1.2% 45 9.8% 93 5.2% 30 10.3% 20 0.0% 188 6.3% -1.1%
Aldurazyme 37 2.7% 0.0% 19 0.0% 11 9.1% 7 0.0% 15 -10.0% 52 -1.8% -8.8%
Total Rare Disease 604 5.9% 1.0% 256 6.2% 263 3.7% 85 12.0% 139 7.1% 743 6.1% -1.2%
Taxotere 9 -10.0% -10.0% 1 0.0% 1 - 7 -11.1% 32 3.0% 41 0.0% -4.7%
Jevtana 97 10.8% 4.3% 38 0.0% 43 14.6% 16 28.6% 6 0.0% 103 10.0% 3.0%
Eloxatine 9 0.0% 0.0% 0 - 0 - 9 0.0% 37 5.6% 46 4.4% 2.2%
Thymo-
globulin
56 0.0% -5.1% 10 0.0% 41 0.0% 5 0.0% 18 17.6% 74 3.9% -2.6%
Mozobil 41 12.8% 5.1% 12 9.1% 24 8.3% 5 50.0% 3 100.0% 44 15.0% 10.0%
Zaltrap 21 40.0% 40.0% 13 0.0% 2 50.0% 6 - 3 33.3% 24 38.9% 33.3%
Total Oncology 266 0.0% -5.3% 87 1.2% 126 -6.1% 53 17.0% 103 8.9% 369 2.4% -3.4%
Dupixent 175 619.2% 573.1% 16 - 151 526.9% 8 - 1 - 176 623.1% 576.9%
Kevzara 20 2,100.0% 1,900.0% 3 - 15 1,600.0% 2 - 0 - 20 2,100.0% 1,900.0%
Total Immunology 195 674.1% 622.2% 19 - 166 566.7% 10 - 1 - 196 677.8% 625.9%
Alprolix 81 - - 0 - 67 - 14 - 0 - 81 - -
Eloctate 176 - - 0 - 152 - 24 - 0 - 176 - -
Total Rare blood disorders 257 - - 0 - 219 - 38 - 0 - 257 - -
Sanofi Genzyme (Specialty Care) 1,808 33.1% 25.7% 496 2.0% 1,107 50.9% 205 39.9% 263 10.3% 2,071 29.5% 21.1%
Lantus 647 -26.7% -30.7% 174 -9.8% 403 -33.9% 70 -7.6% 244 1.1% 891 -20.6% -25.5%
Toujeo 180 -0.5% -5.3% 75 38.9% 86 -23.0% 19 42.9% 37 75.0% 217 7.9% 1.4%
Apidra 65 -2.9% -5.8% 35 9.4% 19 -22.2% 11 10.0% 27 29.2% 92 5.4% -1.1%
Amaryl 13 0.0% -7.1% 4 -33.3% 1 - 8 12.5% 74 11.4% 87 9.5% 3.6%
Insuman 18 -14.3% -14.3% 18 -10.0% 1 - -1 -100.0% 5 -25.0% 23 -17.2% -20.7%
Soliqua / Suliqua 16 240.0% 220.0% 2 - 14 220.0% 0 - 1 - 17 260.0% 240.0%
Total Diabetes 965 -19.2% -23.4% 325 0.3% 525 -30.1% 115 1.7% 401 11.8% 1,366 -11.9% -17.2%
Multaq 82 7.4% 1.2% 10 -9.1% 69 5.6% 3 -300.0% 1 0.0% 83 7.2% 0.0%
Praluent 60 51.2% 46.3% 22 100.0% 35 27.6% 3 200.0% 2 200.0% 62 54.8% 47.6%
Total Cardio-
vascular
142 22.1% 16.4% 32 45.5% 104 12.0% 6 - 3 66.7% 145 23.2% 16.0%
Diabetes & Cardio-
vascular
1,107 -15.6% -19.8% 357 3.2% 629 -25.5% 121 5.8% 404 12.2% 1,511 -9.4% -14.9%
Plavix 374 0.3% -2.6% 38 -2.6% 0 - 58 -21.5% 278 7.1% 374 0.3% -2.6%
Lovenox 377 -2.2% -6.5% 227 -5.8% 8 -42.9% 21 -8.7% 121 10.6% 377 -2.2% -6.5%
Renagel / Renvela 100 -57.3% -59.7% 16 -15.8% 60 -68.9% 6 -30.0% 18 80.0% 100 -57.3% -59.7%
Aprovel 171 -6.3% -10.0% 27 -6.9% 3 -33.3% 21 -48.9% 120 12.6% 171 -6.3% -10.0%
Allegra 28 -11.8% -17.6% 3 -25.0% 0 - 25 -10.0% 0 - 28 -11.8% -17.6%
Myslee / Ambien / Stilnox 55 -7.8% -14.1% 9 -10.0% 12 -7.7% 20 -17.9% 14 15.4% 55 -7.8% -14.1%
Synvisc / Synvisc One 92 -13.8% -20.7% 7 -22.2% 66 -22.0% 3 0.0% 16 50.0% 92 -13.8% -20.7%
Depakine 116 9.0% 4.5% 42 4.9% 0 - 4 0.0% 70 12.1% 116 9.0% 4.5%
Tritace 58 -1.6% -6.5% 37 -5.1% 0 - 1 100.0% 20 0.0% 58 -1.6% -6.5%
Other Rx Drugs 895 -2.7% -7.0% 442 -1.8% 50 -7.3% 95 -16.5% 308 1.5% 895 -2.7% -7.0%
Total Esta-
blished Rx
Pro-
ducts
2,266 -7.9% -12.0% 848 -3.6% 199 -45.7% 254 -20.8% 965 7.8% 2,266 -7.9% -12.0%
Generics 402 -1.6% -8.6% 183 -3.2% 25 -15.6% 22 -19.4% 172 5.3% 402 -1.6% -8.6%
Total Emerging Markets Specialty Care 263 10.3% -3.3% 0 - 0 - 20 41.2% 263 10.3% 513 0 0
Total Emerging Markets Diabetes & Cardio-
vascular
404 12.2% 2.5% 0   0   0   404 12.2% 0.0%    
General Medicines & Emerging Markets 3,335 -3.7% -9.4% 1,031 -3.5% 224 -43.4% 276 -20.7% 1,804 8.9% 2,668 -7.0% -11.5%
                             
Total Pharma-
ceuticals
6,250 1.9% -3.8% 1,884 -0.9% 1,960 -0.4% 602 -1.4% 1,804 8.9% 6,250 1.9% -3.8%
                             
Allergy, Cough and Cold 239 2.0% -5.2% 67 11.9% 68 -17.0% 24 7.7% 80 13.9% 239 2.0% -5.2%
Pain 304 10.4% 1.7% 122 8.9% 41 -2.2% 30 3.2% 111 19.1% 304 10.4% 1.7%
Digestive 248 8.6% 1.6% 79 3.9% 47 2.0% 14 -6.3% 108 17.6% 248 8.6% 1.6%
Nutritional 166 0.6% -6.7% 29 0.0% 9 -18.2% 65 4.5% 63 0.0% 166 0.6% -6.7%
Consumer Healthcare 1,115 4.1% -3.5% 324 6.6% 254 -5.8% 145 2.0% 392 10.1% 1,115 4.1% -3.5%
                             
Polio / Pertussis / Hib 354 -20.3% -24.5% 68 -16.9% 65 -25.0% 40 10.3% 181 -24.3% 354 -20.3% -24.5%
Adult Booster Vaccines 94 -14.8% -18.3% 29 0.0% 56 -21.1% 6 0.0% 3 -20.0% 94 -14.8% -18.3%
Meningitis / Pneumonia 116 -36.4% -40.5% 0 - 90 -35.1% 3 -85.0% 23 -7.4% 116 -36.4% -40.5%
Influenza Vaccines 98 7.1% 0.0% 0 - 0 - 19 133.3% 79 -5.6% 98 7.1% 0.0%
Travel And Other Endemic Vaccines 126 15.9% 11.5% 32 52.4% 40 0.0% 13 -7.1% 41 22.2% 126 15.9% 11.5%
Dengue 0 -100.0% -100.0% 0 - 0 - 0 - 0 -100.0% 0 -100.0% -100.0%
Vaccines 811 -15.7% -20.2% 134 0.0% 265 -25.4% 83 0.0% 329 -15.5% 811 -15.7% -20.2%
Total Company 8,176 0.1% -5.7% 2,342 0.1% 2,479 -4.4% 830 -0.7% 2,525 5.2% 8,176 0.1% -5.7%
                             

2018 first-half net sales by GBU, franchise, geographic region and product

H1 2018
(€ 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 750 4.9% -3.5% 184 -9.8% 541 11.0% 25 -7.1% 25 52.6% 775 6.0% -2.6%
Lemtrada 195 -13.0% -18.1% 92 1.1% 93 -19.2% 10 -43.8% 12 36.4% 207 -10.8% -16.9%
Total Multiple Sclerosis 945 0.7% -6.9% 276 -6.4% 634 5.2% 35 -20.5% 37 46.7% 982 2.0% -6.0%
Cerezyme 236 -2.4% -7.1% 134 -2.9% 83 1.1% 19 -13.0% 120 25.0% 356 6.2% -3.8%
Cerdelga 73 27.4% 17.7% 22 100.0% 47 10.4% 4 33.3% 1 - 74 29.0% 19.4%
Myozyme 349 10.2% 4.5% 188 11.8% 133 9.6% 28 3.3% 56 5.0% 405 9.4% 2.8%
Fabrazyme 320 6.8% -1.2% 87 7.4% 179 5.8% 54 9.3% 38 4.7% 358 6.5% -2.5%
Aldurazyme 71 2.8% -1.4% 38 0.0% 21 9.1% 12 0.0% 32 0.0% 103 1.8% -6.4%
Total Rare Disease 1,170 4.9% -1.4% 502 6.8% 509 3.5% 159 4.2% 268 13.3% 1,438 6.5% -1.9%
Taxotere 17 -15.0% -15.0% 2 0.0% 1 0.0% 14 -17.6% 67 2.9% 84 -1.1% -6.7%
Jevtana 191 12.1% 4.9% 78 4.0% 84 16.0% 29 23.1% 11 -13.3% 202 10.2% 2.5%
Eloxatine 16 0.0% -5.9% 1 -50.0% 0 - 15 6.7% 74 6.8% 90 5.6% 0.0%
Thymo-
globulin
107 0.9% -7.8% 19 -5.0% 78 2.4% 10 0.0% 37 25.0% 144 6.1% -2.7%
Mozobil 77 7.8% 0.0% 24 9.1% 45 2.0% 8 50.0% 5 66.7% 82 10.0% 2.5%
Total Oncology 520 -5.3% -11.6% 176 1.1% 248 -15.2% 96 20.0% 207 8.3% 727 -1.8% -8.4%
Dupixent 282 1,088.5% 984.6% 26 - 246 950.0% 10 - 1 - 283 1,092.3% 988.5%
Kevzara 30 3,200.0% 2,900.0% 5 - 23 2,500.0% 2 - 0 - 30 3,200.0% 2,900.0%
Total Immunology 312 1,166.7% 1,055.6% 31 - 269 1,007.4% 12 - 1 - 313 1,170.4% 1,059.3%
Alprolix 102 - - 0 - 83 - 19 - 0 - 102 - -
Eloctate 219 - - 0 - 187 - 32 - 0 - 219 - -
Total Rare blood disorders 321 - - 0 - 270 - 51 - 0 - 321 - -
Sanofi Genzyme (Specialty Care) 3,268 24.8% 16.0% 985 4.9% 1,930 36.3% 353 27.7% 513 13.4% 3,781 23.1% 13.5%
Lantus 1,310 -25.6% -31.3% 355 -9.4% 816 -32.4% 139 -7.9% 492 4.8% 1,802 -19.1% -25.7%
Toujeo 349 1.6% -4.6% 142 42.0% 171 -19.0% 36 31.0% 65 100.0% 414 10.7% 2.7%
Apidra 129 -5.6% -9.8% 70 4.5% 40 -19.6% 19 0.0% 54 29.2% 183 3.1% -4.2%
Amaryl 24 -16.1% -22.6% 8 -27.3% 1 0.0% 15 -10.5% 146 10.6% 170 5.8% -1.7%
Soliqua / Suliqua 25 211.1% 177.8% 2 - 23 188.9% 0 - 1 - 26 222.2% 188.9%
Total Diabetes 1,929 -18.6% -24.4% 648 -0.3% 1,059 -28.3% 222 -1.6% 793 14.7% 2,722 -10.9% -17.8%
Multaq 159 -1.7% -10.2% 21 -4.5% 135 -1.9% 3 100.0% 3 0.0% 162 -1.7% -10.5%
Praluent 107 52.7% 44.6% 41 115.8% 61 26.4% 5 150.0% 4 150.0% 111 55.3% 46.1%
Total Cardio-
vascular
266 14.3% 6.0% 62 51.2% 196 5.3% 8 133.3% 7 50.0% 273 15.2% 6.2%
Diabetes & Cardio-
vascular
2,195 -15.6% -21.6% 710 2.7% 1,255 -24.6% 230 0.0% 800 15.0% 2,995 -9.0% -16.1%
Plavix 761 4.6% -0.4% 76 -2.6% 0 - 110 -25.3% 575 14.6% 761 4.6% -0.4%
Lovenox 768 -1.5% -6.0% 471 -5.4% 20 -24.1% 41 -4.3% 236 9.9% 768 -1.5% -6.0%
Renagel / Renvela 201 -55.7% -59.3% 32 -13.5% 121 -67.5% 15 -10.5% 33 59.1% 201 -55.7% -59.3%
Aprovel 343 -4.7% -10.2% 55 -8.3% 5 -16.7% 41 -50.5% 242 15.1% 343 -4.7% -10.2%
Allegra 80 -14.7% -21.6% 5 -16.7% 0 - 75 -14.6% 0 - 80 -14.7% -21.6%
Myslee / Ambien / Stilnox 116 -8.0% -15.3% 20 0.0% 22 -14.3% 42 -17.5% 32 9.4% 116 -8.0% -15.3%
Synvisc / Synvisc One 160 -14.6% -22.3% 13 -23.5% 111 -22.2% 7 -12.5% 29 43.5% 160 -14.6% -22.3%
Depakine 230 7.6% 2.7% 84 2.4% 0 - 7 -12.5% 139 12.0% 230 7.6% 2.7%
Tritace 115 -2.4% -7.3% 73 -6.4% 0 - 2 50.0% 40 2.3% 115 -2.4% -7.3%
Other Rx Drugs 1,812 -3.1% -8.5% 890 -2.6% 100 -2.7% 190 -12.2% 632 -0.8% 1,812 -3.1% -8.5%
Total Established Rx Products 4,586 -7.1% -12.3% 1,719 -3.9% 379 -44.1% 530 -20.0% 1,958 8.7% 4,586 -7.1% -12.3%
Generics 837 -0.3% -7.6% 367 -4.7% 48 -21.7% 71 21.9% 351 4.1% 837 -0.3% -7.6%
Total Emerging Markets Specialty Care 513 13.4% -0.4% 0 - 0 - 37 46.7% 513 13.4% 513    
Total Emerging Markets Diabetes & Cardio-
vascular
800 15.0% 4.0%             800 15.0%      
General Medicines & Emerging Markets 6,736 -2.6% -9.2% 2,086 -4.1% 427 -42.2% 601 -16.6% 3,622 10.2% 5,423 -6.1% -11.6%
                             
Total Pharma-
ceuticals
12,199 0.5% -6.4% 3,781 -0.6% 3,612 -5.4% 1,184 -3.5% 3,622 10.2% 12,199 0.5% -6.4%
                             
Allergy, Cough and Cold 580 -4.2% -12.0% 167 1.2% 173 -19.4% 78 4.9% 162 7.6% 580 -4.2% -12.0%
Pain 628 9.6% 0.6% 254 1.2% 78 -2.2% 57 5.2% 239 24.9% 628 9.6% 0.6%
Digestive 496 11.7% 3.8% 163 1.2% 95 12.8% 27 7.1% 211 20.5% 496 11.7% 3.8%
Nutritional 330 2.0% -6.3% 62 1.6% 18 -9.1% 123 2.3% 127 3.6% 330 2.0% -6.3%
Consumer Healthcare 2,353 3.0% -5.3% 706 0.0% 541 -5.3% 305 2.5% 801 12.3% 2,353 3.0% -5.3%
                             
Polio / Pertussis / Hib 734 -12.8% -18.5% 139 0.7% 176 -10.0% 81 4.8% 338 -21.4% 734 -12.8% -18.5%
Adult Booster Vaccines 186 2.1% -4.1% 66 43.5% 97 -11.6% 13 7.7% 10 -21.4% 186 2.1% -4.1%
Meningitis / Pneumonia 205 -22.1% -29.3% 0 -100.0% 157 -21.0% 7 -63.6% 41 -6.3% 205 -22.1% -29.3%
Influenza Vaccines 127 0.7% -6.6% 1 - 4 66.7% 24 36.8% 98 -7.9% 127 0.7% -6.6%
Travel And Other Endemic Vaccines 228 9.6% 4.1% 59 37.2% 62 -5.6% 28 7.1% 79 9.1% 228 9.6% 4.1%
Vaccines 1,522 -9.3% -15.4% 271 16.2% 524 -12.6% 158 0.6% 569 -16.7% 1,522 -9.3% -15.4%
Total Company 16,074 -0.1% -7.2% 4,758 0.3% 4,677 -6.3% 1,647 -2.1% 4,992 6.8% 16,074 -0.1% -7.2%
                             


Appendix 2: Business net income statement

Second quarter 2018 Pharmaceuticals Consumer Healthcare Vaccines Others(2) Total Group
€ million Q2 2018 Q2 2017 (1) Change Q2 2018 Q2 2017 (1) Change Q2 2018 Q2 2017 (1) Change Q2 2018 Q2 2017 (1) Change Q2 2018 Q2
2017 (1)
Change
Net sales 6, 250 6, 499 (3. 8%) 1, 115 1, 156 (3. 5%) 811 1, 016 (20. 2%) - - - 8, 176 8, 671 (5. 7%)
Other revenues 76 72 5. 6% - - - 229 197 16. 2% - 1 (100. 0%) 305 270 13. 0%
Cost of sales (1, 643) (1, 709) (3. 9%) (364) (393) (7. 4%) (593) (625) (5. 1%) (51) (71) (28. 2%) (2, 651) (2, 798) (5. 3%)
As % of net sales (26. 3%) (26. 3%)   (32. 6%) (34. 0%)   (73. 1%) (61. 5%)         (32, 4%) (32. 3%)  
Gross profit 4, 683 4, 862 (3. 7%) 751 763 (1. 6%) 447 588 (24. 0%) (51) (70) (27. 1%) 5, 830 6, 143 (5. 1%)
As % of net sales 74. 9% 74. 8%   67. 4% 66. 0%   55. 1% 57. 9%         71. 3% 70. 8%  
Research& Development expenses (1, 135) (999) 13. 6% (30) (30) - (142) (137) 3. 6% (168) (192) (12. 5%) (1, 475) (1, 358) 8. 6%
As % of net sales (18. 2%) (15. 4%)   (2. 7%) (2. 6%)   (17. 5%) (13. 5%)         (18. 0%) (15. 7%)  
Selling and general expenses (1, 394) (1, 422) (2. 0%) (399) (444) (10. 1%) (173) (193) (10. 4%) (533) (513) 3. 9% (2, 499) (2, 572) (2. 8%)
As % of net sales (22. 3%) (21. 9%)   (35. 8%) (38. 4%)   (21. 3%) (19. 0%)         (30. 6%) (29. 7%)  
Other current operating income/ expenses 139 8   77 25   (2) 4   (25) 31   189 68  
Share of profit/loss of associates* and joint-ventures 75 47   - -   - (1)   - -   75 46  
Net income attributable to non-controlling interests (26) (27)   (2) (3)   - -   - -   (28) (30)  
Business operating income 2, 342 2, 469 (5. 1%) 397 311 27. 7% 130 261 (50. 2%) (777) (744) 4. 4% 2, 092 2, 297 (8. 9%)
As % of net sales 37. 5% 38. 0%   35. 6% 26. 9%   16. 0% 25. 7%         25. 6% 26. 5%  
              Financial income and expenses (107) (60)  
              Income tax expenses (427) (545)  
              Tax rate** 22. 0% 24. 5%  
              Business net income 1, 558 1, 692 (7. 9%)
              As % of net sales 19. 1% 19. 5%  
              Business earnings / share (in euros) *** 1. 25 1. 34 (6. 7%)

*      Net of tax.
**     Determined on the basis of Business income before tax, associates and non-controlling interests.
***    Based on an average number of shares outstanding of 1,247.4 million in the second quarter of 2018 and 1,258.2 million in the second quarter of 2017.
(1)    Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018
(2)    Other includes the cost of global support functions (Medical Affairs, External Affairs, Finance, Human Resources, Information Solution & Technologies, Sanofi    Business Services, etc.).

First Half 2018 Pharmaceuticals Consumer Healthcare Vaccines Others (2) Total Group
€ million H1 2018 H1 2017 (1) Cha-
nge
H1 2018 H1 2017(1) Cha-
nge
H1 2018 H1 2017 (1) Cha-
nge
H1 2018 H1 2017 (1) Cha-
nge
H1
2018
H1
2017 (1)
Cha-
nge
Net sales 12, 199 13, 038 (6. 4%) 2, 353 2, 486 (5. 3%) 1, 522 1, 800 (15. 4%) - - - 16, 074 17, 324 (7. 2%)
Other revenues 134 148 (9. 5%) - - - 399 370 7. 8% - 1 (100. 0%) 533 519 2. 7%
Cost of sales (3, 230) (3, 419) (5. 5%) (763) (818) (6. 7%) (1, 068) (1, 123) (4. 9%) (105) (135) (22. 2%) (5, 166) (5, 495) (6. 0%)
As % of net sales (26. 5%) (26. 2%)   (32. 4%) (32. 9%)   (70. 2%) (62. 4%)         (32. 1%) (31. 7%)  
Gross profit 9, 103 9, 767 (6. 8%) 1, 590 1, 668 (4. 7%) 853 1, 047 (18. 5%) (105) (134) (21. 6%) 11, 441 12, 348 (7. 3%)
As % of net sales 74. 6% 74. 9%   67. 6% 67. 1%   56. 0% 58. 2%         71. 2% 71. 3%  
Research& Development expenses (2, 113) (1, 999) 5. 7% (58) (52) 11. 5% (268) (260) 3. 1% (316) (356) (11. 2%) (2, 755) (2, 667) 3. 3%
As % of net sales (17, 3%) (15. 3%)   (2. 5%) (2. 1%)   (17. 6%) (14. 4%)         (17. 1%) (15. 4%)  
Selling and general expenses (2, 648) (2, 807) (5. 7%) (788) (880) (10. 5%) (326) (363) (10. 2%) (1, 047) (1, 004) 4. 3% (4, 809) (5, 054) (4. 8%)
As % of net sales (21. 7%) (21. 5%)   (33. 5%) (35. 4%)   (21. 4%) (20. 2%)         (29. 9%) (29. 2%)  
Other current operating income/ expenses 132 41   82 57   - 1   (56) 3   158 102  
Share of profit/loss of associates* and joint-ventures 150 71   - -   (1) (1)   - -   149 70  
Net income attributable to non-controlling interests (52) (54)   (6) (11)   - -   - -   (58) (65)  
Business operating income 4, 572 5, 019 (8. 9%) 820 782 4. 9% 258 424 (39. 2%) (1, 524) (1, 491) 2. 2% 4, 126 4, 734 (12. 8%)
As % of net sales 37. 5% 38. 5%   34. 8% 31. 5%   17. 0% 23. 6%         25. 7% 27. 3%  
              Financial income and expenses (105) (123)  
              Income tax expenses (865) (1, 129)  
              Tax rate** 22. 0% 24. 5%  
              Business net income 3, 156 3, 482 (9. 4%)
              As % of net sales 19. 6% 20. 1%  
              Business earnings / share (in euros) *** 2. 53 2. 76 (8. 3%)

*      Net of tax.
**     Determined on the basis of Business income before tax, associates and non-controlling interests.
***    Based on an average number of shares outstanding of 1,247.8 million in the first half of 2018 and 1,260.3 million in the first half of 2017.
(1)    Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018
(2)    Other includes the cost of global support functions (Medical Affairs, External Affairs, Finance, Human Resources, Information Solution & Technologies, Sanofi Business Services, etc.).

Appendix 3: Consolidated income statements

€ million Q2 2018 Q2 2017(1) H1 2018 H1 2017(1)
Net sales 8,176 8,671 16,074 17,324
Other revenues 305 270 533 519
Cost of sales (2,720) (2,886) (5,265) (5,671)
Gross profit 5,761 6,055 11,342 12,172
Research and development expenses (1,475) (1,358) (2,755) (2,667)
Selling and general expenses (2,507) (2,572) (4,819) (5,054)
Other operating income 298 113 323 173
Other operating expenses (109) (45) (165) (71)
Amortization of intangible assets (541) (487) (999) (990)
Impairment of intangible assets (98) (12) (101) (12)
Fair value remeasurement of contingent consideration liabilities 66 (64) 10 (100)
Restructuring costs and similar items (416) (245) (607) (364)
  Other gains and losses and litigation (18) (7) (67) (7)
Operating income 961 1,378 2,162 3,080
Financial expenses (107) (107) (202) (218)
Financial income - 47 97 95
Income before tax and associates and joint ventures 854 1,318 2,057 2,957
Income tax expense (110) (276) (297) (612)
Share of profit/loss of associates and joint ventures 45 27 75 27
Net income excluding the held for exchange Animal Health business 789 1,069 1,835 2,372
Net income from the held for exchange Animal Health business 1 (6) - 4,421
Net income 790 1,063 1,835 6,793
Net income attributable to non-controlling interests 28 30 57 64
Net income attributable to equity holders of Sanofi 762 1,033 1,778 6,729
Average number of shares outstanding (million) 1,247.4 1,258.2 1,247.8 1,260.3
Earnings per share (in euros) excluding the held for exchange Animal Health business 0.61 0.83 1.42 1.83
IFRS earnings per share (in euros) 0.61 0.82 1.42 5.34
  1. Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018
  2. In 2017 net gain resulting from the divestment of the Animal Health business presented separately in accordance with IFRS5, Non current assets held-for-sale and discontinued operations.

Appendix 4: Reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi

€ million Q2 2018 Q2 2017(1) Change
Net income attributable to equity holders of Sanofi 762 1,033 (26.2%)
Amortization of intangible assets(2) 541 487  
Impairment of intangible assets 98 12  
Fair value remeasurement of contingent
consideration
(66) 64  
Expenses arising from the impact of acquisitions on inventories 69 88  
Other expenses related to business combinations 8 -  
Restructuring costs and similar items 416 245  
Other gains and losses, and litigation(3) 18 7  
Tax effect of items listed above:  (290) (380)  
  Amortization & impairment of intangible assets (153) (167)  
  Fair value remeasurement of contingent consideration 17 (25)  
  Expenses arising from the impact of acquisitions on inventories (17) (28)  
  Other expenses related to business combinations 1 -  
  Restructuring costs and similar items (131) (83)  
  Other tax effects (7) (77)  
Other tax items(4) (27) 111  
Share of items listed above attributable to non-controlling interests - -  
Restructuring costs of associates and joint-ventures, and expenses arising from the impact of acquisitions on associates and joint-ventures 30 19  
Animal Health items(5) (1) 6  
Business net income 1,558 1,692 (7.9%)
IFRS earnings per share(6) (in euros) 0.61 0.82  

(1)    Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018.
(2)    Of which related to amortization expense generated by the remeasurtement of intangible asstes as part of business combinations: €509 million in the second quarter of 2018 and €453 million in the second quarter of 2017
(3)    In 2018, separation costs for the European Generics business divestiture.
(4)    In 2018, adjustments made to our preliminary analysis of the direct and indirect impacts of US tax reform. In 2017, relates to French 3% tax on dividends.
(5)    In 2017, net gain resulting from divestment of the Animal Health business presented separately in accordance with IFRS 5, Non current assets held-for-sale and discontinued operations.
(6)    Based on an average number of shares outstanding of 1,247.4 million in the second quarter of 2018 and 1,258.2 million in the second quarter of 2017.


€ million
H1 2018 H1 2017(1) Change
Net income attributable to equity holders of Sanofi 1,778 6,729 (73.6%)
Amortization of intangible assets(2) 999 990  
Impairment of intangible assets 101 12  
Fair value remeasurement of contingent
Consideration
(10) 100  
Expenses arising from the impact of acquisitions on inventories 99 176  
Other expenses related to business combinations 10 -  
Restructuring costs and similar items 607 364  
Other gains and losses, and litigation(3) 67 7  
Tax effect of items listed above: (475) (628)  
  Amortization & impairment of intangible assets (275) (349)  
  Fair value remeasurement of contingent consideration 11 (31)  
  Expenses arising from the impact of acquisitions on inventories (23) (56)  
  Other expenses related to business combinations on inventories - -  
  Restructuring costs and similar items (183) (126)  
  Other tax effects (5) (66)  
Other tax items(4) (93) 111  
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 74 43  
Animal Health items(5) - (4,421)  
Business net income 3,156 3,482 (9.4%)
IFRS earnings per share(6) (in euros) 1.42 5.34  

(1)    Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018
(2)    Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combination: €934 million in the first-half of 2018 and €919 million in the first-half of 2017
(3)    In 2018, separation costs for the European Generics business divestiture.
(4)    In 2018, adjustments made to our preliminary analysis of the direct and indirect impacts of US tax reform. In 2017, relates to French 3% tax on dividends.
(5)    In 2017, net gain resulting from the divestment of the Animal Health business presented separately in accordance with IFRS 5, Non current assets hel-for-sale and discontinued operations.
(6)    Based on an average number of shares outstanding of 1,247.8 million in the first-half of 2018 and 1,260.3 million in the first-half of 2017.

Appendix 5: Change in net debt

€ million H1 2018 H1 2017(1)
Business net income 3,156 3,482
Depreciation amortization and impairment of property, plant and equipment and software 591 604
Gains and losses on disposals of non-current assets, net of tax (216) (79)
Other non-cash items 151 167
Operating cash flow before changes in working capital (2) 3,682 4,174
Changes in working capital (2) (1,139) (1,187)
Acquisitions of property, plant and equipment and software (689) (688)
Free cash flow (2) 1,854 2,299
Acquisitions of intangibles, excluding software (77) (285)
Acquisitions of investments, in consolidated undertakings including assumed debt (12,872) (274)
Restructuring costs and similar items paid (414) (438)
Proceeds from disposals of property, plant and equipment, intangibles, and other non-current assets, net of tax 489 313
Issuance of Sanofi shares 19 99
Dividends paid to shareholders of Sanofi (3,773) (3,710)
Acquisition of treasury shares (730) (1,698)
Transactions with non-controlling interests including dividends (18) (48)
Foreign exchange impact (210) 290
Net cash-flow from the swap between BI - CHC and Sanofi Aninal Health business 5 4,349
Other items (322)  

(154)

 
Change in net debt (16,049) 743

(1)    Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018
(2)    Excluding restructuring costs and similar items

Appendix 6: Simplified consolidated balance sheet

ASSETS
€ million
Jun 30, 2018 Dec 31, 2017(1) LIABILITIES & EQUITY
€ million
Jun 30, 2018 Dec 31, 2017(1)
      Equity attributable to equity-holders of Sanofi 56,197 58,070
      Equity attributable to non-controlling interests 164 169
      Total equity 56,361 58,239
      Long-term debt 22,788 14,326
Property, plant and equipment 9,470 9,579 Non-current liabilities related to business combinations and to non-controlling interests 1,018 1,026
Intangible assets (including goodwill) 67,264 53,344 Provisions and other non-current liabilities 8,949 9,154
Non-current financial assets, investments in associates, and deferred tax assets

 
 

10,575

 
10,502 Deferred tax liabilities 3,784 1,605
Non-current assets 87,309 73,425 Non-current liabilities 36,539 26,111
      Accounts payable and other current liabilities 13,004 13,845
Inventories, accounts receivable and other current assets 16,443 16,039 Current liabilities related to business combinations and  to non-controlling interests 450 343
Cash and cash equivalents 7,493 10,315 Short-term debt and current portion of long-term debt 6,153 1,275
Current assets 23,936 26,354 Current liabilities 19,607 15,463
Assets held for sale or exchange 1,533 34 Liabilities related to assets held for sale or exchange 271 -
Total ASSETS 112,778 99,813 Total LIABILITIES & EQUITY 112,778 99,813
  1. Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018

Appendix 7 : currency sensitivity

2018 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 0.01
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 Q2 2018 sales

Currency Q2 2018
US $ 31.1%
Euro € 25.2%
Chinese Yuan 7.3%
Japanese Yen 5.1%
Brazilian Real 2.7%
British Pound 2.1%
Russian Ruble 2.0%
Australian $ 1.7%
Canadian $ 1.6%
Mexican Peso 1.4%
Others 19.8%

Currency average rates

  Q2 2017 Q2 2018 Change
€/$ 1.10 1.19 +8.4%
€/Yen 122.15 130.15 +6.6%
€/Yuan 7.54 7.60 +0.9%
€/Real 3.54 4.30 +21.5%
€/Ruble 62.87 74.02 +17.7%


Appendix 8: R&D Pipeline

: Opt-in rights products for which rights have not been exercised yet
: Registrational Study (other than Phase 3)

  Immuno-inflammation   Rare Blood Disorders   Cardiovascular & metabolism
  Oncology   MS & Neuro   Vaccines
  Rare Diseases   Diabetes    

New Molecular Entities(*)

Phase 1
(Total : 16)
Phase 2
(Total : 13)
Phase 3
(Total : 8)
Registration
(Total : 3)
SAR439794
TLR4 agonist
Peanut Allergy
SAR228810
Anti-protofibrillar AB mAb
Alzheimer's Disease
SAR440340(**)
Anti-IL33 mAb
Asthma
ST400(8)
ZFN Gene Editing Technology
Beta thalassemia
isatuximab
Anti-CD38 mAb
3L Relapsing Refractory MM (ICARIA)
cemiplimab(**)
PD-1 inhibitor mAb
Advanced CSCC (U.S./EU)
SAR408701
Maytansin-loaded anti-CEACAM5 mAb Solid Tumors
UshStat
Myosin 7A gene therapy
Usher Syndrome 1B
SAR156597
 IL4/IL13 bispecific mAb
Systemic Scleroderma
SAR422459
ABCA4 gene therapy
Stargardt Disease
avalglucosidase alfa
Neo GAA
Pompe Disease
ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Type 1 Diabetes (U.S./EU)
SAR439459
anti-TGFb  mAb
Advanced Solid Tumors
SAR442168(4)
BTK inhibitor
Multiple Sclerosis
GZ389988
TRKA antagonist
Osteoarthritis
SAR425899
GLP-1/GCG dual agonist
Obesity/Overweight in T2D
Venglustat
Oral GCS inhibitor
ADPKD(10)
CabliviTM
Bivalent anti-vWF Nanobody
acquired Thrombotic Thrombocytopenic Purpura (EU)

O

REGN3767(1)
Anti-LAG-3 mAb
Advanced Cancers
SAR438335
GLP-1/GIP dual agonist
Type 2 Diabetes
Combination
ferroquine / OZ439(**)
 Antimalarial
SAR407899
rho kinase
Microvascular Angina
fitusiran
siRNA targeting Anti-Thrombin
Hemophilia A and B
 
 

O

REGN4659(1)
Anti-CTLA-4 mAb
Cancer
SAR440181(5)(**)
 
Myosin activation
Dilated Cardiomyopathy
ALX0171
Anti RSV Nanobody
Respiratory Syncitial Virus
HIV
Viral vector prime & rgp120 boost vaccine
sutimlimab(11)
Anti Complement C1s mAb
Cold Agglutinin Disease
 
 

O

REGN4018(1)
Anti-MUC16-CD3
bispecific mAb
Ovarian Cancer
SAR247799
S1P1 agonist
Cardiovascular indication

R

olipudase alfa
rhASM
Acid Sphingomyelinase Deficiency(6)
SP0232(9) mAb(**)
Respiratory syncytial virus
Monoclonal Antibody
SAR341402
Rapid acting insulin
Type 1/2 Diabetes
 
   
SAR439859
SERD
Metastatic Breast Cancer
Herpes Simplex Virus Type 2
HSV-2 vaccine

O

SAR339375(7)
miRNA-21
Alport Syndrome
  efpeglenatide(**)
Long-acting GLP-1 agonist
Type 2 Diabetes
 
 
BIVV001(2)
rFVIIIFc - vWF - XTEN(3)
Hemophilia A
Respiratory syncytial virus
Infants
Vaccines
    mavacamten(12)(**)
Myosin inhibitor - Obstructive Hypertrophic Cardiomyopathy
 


(1)  Regeneron product for which Sanofi has opt-in rights
(2)  Sanofi Product for which Sobi has opt-in rights
(3)  Recombinant Coagulation Factor VIII Fc - von Willebrand Factor - XTEN Fusion protein
(4)  Also known as PRN2246
(5)  Also known as MYK491
(6)  Also known as Niemann Pick type B
(7)  Regulus product for which Sanofi has opt-in rights
 (8)  Developed in collaboration with Sangamo
(9)  Also known as MEDI8897
(10)  Autosomal Dominant Polycystic Kidney Disease
(11)  Also known as BIVV009
(12)  Also known as SAR439152 and MYK461
(*)  Data related to all studies published on clinicaltrials.gov
(**)  Partnered and/or in collaboration - Sanofi may have limited or shared rights on some of these products

Additional Indications(*)

Phase 1
(Total : 6)
Phase 2
(Total : 16)
Phase 3
(Total : 20)
Registration
(Total : 5)
SAR439459 + cemiplimab(**)
Anti-TGFb mAb + PD-1 inhibitor mAb
Advanced Solid Tumors
dupilumab(**)
Anti-IL4Ralpha mAb
Eosinophilic Esophagitis
venglustat
Oral GCS inhibitor
Gaucher Type 3
dupilumab(**)
Anti-IL4Ralpha mAb
Asthma 6 - 11 years old
cemiplimab(**)
PD-1 inhibitor mAb + platinum based chemotherapy
1L NSCLC
dupilumab(**)
Anti-IL4Ralpha mAb
Asthma 12y+  (U.S./EU)

O

cemiplimab(**) + REGN3767(1)
PD-1 inhibitor mAb + Anti-LAG-3 mAb
Advanced Cancers
dupilumab(**)
Anti-IL4Ralpha mAb
 Grass Immunotherapy
venglustat
Oral GCS inhibitor
Fabry Disease
dupilumab(**)
Anti-IL4Ralpha mAb
Nasal Polyposis
Aubagio
teriflunomide
Relapsing Multiple Sclerosis - Pediatric
Praluent(**)
alirocumab
CV events reduction (U.S.(4)/EU)
 

O

cemiplimab(**) + REGN4659(1)
PD-1 inhibitor mAb + Anti-CTLA-4 mAb
NSCLC

R

sarilumab(**)
Anti-IL6R mAb
Polyarticular Juvenile Idiopathic
Arthritis
venglustat
Oral GCS inhibitor
Gaucher related Parkinson's Disease
Dupixentฎ(**)
dupilumab
Atopic Dermatitis 12 - 17 years old
Lemtrada
alemtuzumab
Relapsing Remitting Multiple Sclerosis - Pediatric
VaxiGrip QIV IM
Quadrivalent inactivated
Influenza vaccine 6 - 35 months
   

O

cemiplimab(**) + REGN4018(1)
PD-1 inhibitor mAb + Anti-MUC16-CD3
bispecific mAb - Ovarian Cancer
sarilumab(**)
Anti-IL6R mAb
Systemic Juvenile Arthritis
mavacamten(3)(**)
Myosin inhibitor
Non -Obstructive Hypertrophic Cardiomyopathy
Dupixentฎ(**)
dupilumab
Atopic Dermatitis 6 - 11 years old
ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Worsening Heart Failure in Diabetes
PR5i
DTP-HepB-Polio-Hib
 Pediatric hexavalent vaccines (U.S.)
 
SAR439859
SERD + Palbociclib
Metastatic Breast Cancer

R

SAR440340(**)
Anti-IL33 mAb
COPD
Rabies VRVg
Purified vero rabies vaccine
Dupixent(**)
dupilumab
Atopic Dermatitis 6 months - 5 years old
ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Type 2 Diabetes
Fluzone 0,5 mL QIV
Quadrivalent inactivated
Influenza vaccine 6 months+
 
sutimlimab(2)
Anti Complement C1s mAb
Immune Thrombocytopenia
cemiplimab(**)
PD-1 inhibitor mAb
Advanced Basal Cell Carcinoma
Adacel+
Tdap booster
cemiplimab(**)
PD-1 inhibitor mAb
1L NSCLC
Cerdelga
eliglustat
Gaucher Type 1, switch from ERT - Pediatric
 
  isatuximab + cemiplimab(**)
Anti-CD38 mAb + PD-1 inhibitor mAb
Relapsing Refractory MM
Shan 6
DTP-HepB-Polio-Hib
Pediatric  hexavalent vaccine
cemiplimab(**)
PD-1 inhibitor mAb
2L Cervical Cancer
Praluentฎ(**)
alirocumab
LDL-C reduction - Pediatric
 
  isatuximab + cemiplimab(**)
Anti-CD38 mAb + PD-1 inhibitor mAb
Advanced Malignancies
  cemiplimab(**)
PD-1 inhibitor mAb + ipilimumab
1L NSCLC
Fluzone QIV HD
Quadrivalent inactivated
Influenza vaccine - High dose
 
  cemiplimab(**)
PD-1 inhibitor mAb
2L NSCLC
  isatuximab
Anti-CD38 mAb
1L Newly Diagnosed MM (IMROZ)
Men Quad TT
Advanced generation meningococcal
ACYW conjugate vaccine
 
      isatuximab
Anti-CD38 mAb
1-3L Relapsing Refractory MM (IKEMA)
Pediatric pentavalent vaccine
DTP-Polio-Hib
Japan
 

(1)  Regeneron product for which Sanofi has opt-in rights
(2)  Also known as BIVV009
(3)  Also known as SAR439152 and MYK461
(4)  U.S. filing pending acceptance by FDA 
(*)  Data related to all studies published on clinicaltrials.gov
(**)  Partnered and/or in collaboration - Sanofi may have limited or shared rights on some of these products

Expected Submission Timeline(1)

  New Molecular Entities Additional Indications
2018
isatuximab

anti-CD38 mAb
3L RRMM (ICARIA)

  Dupixentฎ(**)
dupilumab
 AD 12 - 17 years old
 
         
2019 SAR341402
Rapid acting insulin
Type 1/2 Diabetes - EU(2)
  Dupixent(**)
dupilumab
AD 6 - 11 years old
dupilumab(**)
Anti-IL4Ra mAb
Nasal Polyposis Adult
   
cemiplimab(**)
PD-1 inhibitor mAb
Advanced BCC

ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Type 2 Diabetes - EU(3)
    Fluzone QIV HD
Quadrivalent inactivated
Influenza vaccine - High dose
Men Quad TT
Adv. generation meningococcal
U.S.: 2y+ & EU: Toddlers+
      PentacelvIPV
DTaP-IPV/Hib
 
         
2020
olipudase alfa

rhASM
ASD(4)

fitusiran
siRNA inhibitor
Hemophilia A/B
sarilumab(**)
Anti-IL6R mAb
Polyarticular Juvenile Idiopathic Arthritis - U.S./EU
Isatuximab
Anti-CD38 mAb
1-3L RRMM (IKEMA)

avalglucosidase alfa
NeoGAA
Pompe Disease

 

 
cemiplimab(**)
PD-1 inhibitor mAb
2L Cervical Cancer
cemiplimab(**)
PD-1 inhibitor mAb
1L NSCLC
sutimlimab(5)
Anti Complement C1s mAb
Cold Agglutinin Disease

 
  Aubagio
teriflunomide
Relapsing MS - Pediatric
Shan 6
DTP-HepB-Polio-Hib
Pediatric hexavalent vaccine
         

 

  New Molecular Entities Additional Indications
2021

 
efpeglenatide(**)
Long acting GLP1-R agonist
Type 2 Diabetes
  Isatuximab
Anti-CD38 mAb
1L Newly Diagnosed MM (IMROZ)
ZynquistaTM(**)
Oral SGLT 1/2 inhibitor
Worsening Heart Failure in Diabetes
venglustat
Oral GCS inhibitor
ADPKD(6)
  cemiplimab(**)
PD-1 inhibitor mAb + platinum based chemotherapy
1L NSCLC
Pediatric pentavalent vaccine
DTP-Polio-Hib (Japan)
        Adacel+
Tdap booster
         
2022
and beyond

GZ389988
TRKA antagonist
Osteoarthritis

SAR156597
 IL4/IL13 bispecific mAb
Systemic Scleroderma
Dupixent(**)
dupilumab
AD 6 months - 5 years old
sarilumab(**)
Anti-IL6R mAb
Systemic Juvenile Arthritis
SAR440340(**)
Anti-IL33 mAb
Asthma
ALX0171
Anti RSV Nanobody
Respiratory Syncitial Virus
dupilumab(**)
Anti-IL4Ra mAb
Eosinophilic Esophagitis
dupilumab(**)
Anti-IL4Ralpha mAb
Asthma 6 - 11 years old
Combination
ferroquine / OZ439
(**)
 Antimalarial
SAR228810
Anti-protofibrillar AB mAb
Alzheimer's Disease
SAR440340(**)
Anti-IL33 mAb
COPD
venglustat
Oral GCS inhibitor
Gaucher Type 3
SAR422459
ABCA4 gene therapy
Stargardt Disease
SAR407899
rho kinase
Microvascular Angina 
venglustat
Oral GCS inhibitor
Fabry Disease
Cerdelga
eliglustat
Gaucher Type 1, switch from ERT
Pediatric - EU
SAR425899
GLP-1/GCG dual agonist
Obesity/Overweight in T2D
SP0232 mAbs(7)(**)
Respiratory syncytial virus
Praluentฎ(**)
alirocumab
LDL-C reduction - Pediatric
Rabies VRVg
Purified vero rabies vaccine
  HIV
Viral vector prime & rgp120 boost vaccine
  venglustat
Oral GCS inhibitor
GrPD(8)
 

(1)    Excluding Phase 1 - Data related to all studies published on clinicaltrials.gov
(2)    Submission strategy for the U.S. under evaluation
(3)    Submission for the U.S. expected in 2020
(4)    Acid Sphingomyelinase Deficiency
(5)    Also known as BIVV009; Currently operating as separate entities. Reported dates are based on prior Bioverativ disclosure of study completion date
(6)    Autosomal Dominant Polycystic Kidney Disease
(7)    Also known as MEDI8897
(8)    Gaucher Related Parkinson's Disease
(**)   Partnered and/or in collaboration - Sanofi may have limited or shared rights on some of these products

Pipeline Movements Since Q1 2018

  Additions Removals
Registration CabliviTM
Nanobody Bivalent anti-vWF
Purpura thrombotique thrombocytop้nique acquis (EU)
     

 
  Praluentฎ(**)
alirocumab - R้duction des attaques cardiovasculaires (U.S.(1)/EU)
     
         
Phase 3 mavacamten(2)(**)
Myosin inhibitor - Obstructive Hypertrophic Cardiomyopathy
ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Worsening Heart Failure in Diabetes
   

 
Praluentฎ(**)
alirocumab
LDL-C reduction-  Pediatric
cemiplimab(**)
PD-1 inhibitor mAb + ipilimumab
1L NSCLC
   
  Cerdelga
eliglustat
Gaucher disease Type 1, switch from ERT Pediatric
cemiplimab(**)
PD-1 inhibitor mAb + platinum based chemotherapy
1L NSCLC
   
  venglustat
Oral GCS inhibitor
ADPKD(3)
     
         
Phase 2 dupilumab(**)
Anti-IL4Ralpha mAb
 Grass Immunotherapy
ST400(4)
ZFN Gene Editing Technology
Beta thalassemia
SAR566658
Maytansin-loaded anti-CA6 mAb
Triple Negative Breast Cancer
 
  SAR440340(**)
Anti-IL33 mAb
COPD
mavacamten(2)(**)
Myosin inhibitor
Non -Obstructive Hypertrophic Cardiomyopathy
Tuberculosis
Recombinant subunit vaccine

 
  ALX0171
Anti RSV Nanobody
Respiratory Syncitial Virus
cemiplimab(**)
PD-1 inhibitor mAb
2L NSCLC
   
         
Phase 1

O

REGN4018(5)
Anti-MUC16-CD3 bispecific mAb
Cancer

O

cemiplimab(**) + REGN4659(5)
PD-1 inhibitor mAb + Anti-CTLA-4 mAb
NSCLC
   
   
 

O

REGN4018(5)
Anti-MUC16-CD3 bispecific mAb
Ovarian Cancer

O

cemiplimab(**) + REGN4018(5)
PD-1 inhibitor mAb + Anti-CTLA-4 mAb
Ovarian Cancer
   
   

(**)    Partnered and/or in collaboration - Sanofi may have limited or shared rights on some of these products                                             (5)     Regeneron product for which Sanofi has opt-in rights
(1)     U.S. filing pending acceptance by FDA

(2)     Also known as SAR439152 and MYK46

(3)     Autosomal Dominant Polycystic Kidney Disease

(4)     Developed in collaboration with Sangamo


Appendix 9: Expected R&D milestones

Products Expected milestones Timing
Praluent U.S. sBLA filing to include ODYSSEY OUTCOMES results(1)   Q3 2018
isatuximab Start of Phase 3 in 1st line Multiple Myeloma in SCT eligible patients (GMMG) Q3 2018
CabliviTM (caplacizumab) U.S. FDA filing in acquired Thrombotic Thrombocytopenic Purpura Q3 2018
venglustat Start of Pivotal study in Autosomal Dominant Polycystic Kidney Disease Q3 2018
MenQuadTT Phase 3 results for prevention of Meningococcal Meningitis Q3 2018
Dupixent U.S. FDA filing in Atopic Dermatitis in Adolescent patients Q3 2018
Fluzone QIV HD Phase 3 results for prevention of Influenza Q4 2018
cemiplimab U.S. regulatory decision in locally advanced CSCC Q4 2018
dupilumab U.S. regulatory decision in Asthma in Adult/Adolescent patients Q4 2018
dupilumab Start of Phase 2b/3 trial in Chronic Obstructive Pulmonary Disease Q4 2018
isatuximab Phase 3 results in Multiple Myeloma in combination with PomDex (ICARIA) Q4 2018
dupilumab Phase 3 read-out in Nasal Polyps Q4 2018
efpeglenatide Start of Phase 3 in Type 2 Diabetes as add-on to metformin vs dulaglutide Q4 2018
efpeglenatide Start of Phase 3 in Type 2 Diabetes as add-on to basal insulins Q4 2018
dupilumab Start of Phase 3 trial in Eosinophilic Esophagitis Q4 2018
alemtuzumab Start of Phase 3 in Primary Progressive Multiple Sclerosis H2 2018
ZynquistaTM (sotagliflozin) EU CHMP decision expected in Type 1 Diabetes Q1 2019
cemiplimab EU CHMP decision expected in Advanced Cutaneous Squamous Cell Carcinoma Q1 2019

(1) Praluent ODYSSEY OUTCOMES results submitted to the FDA in Q2 2018; submission is pending acceptance by FDA

Appendix 10: 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 second quarter and first half 2018

€ million Q2 2018 H1 2018
Net sales 8,176 16,074
Effect of exchange rates (508) (1,227)
Company sales at constant exchange rates 8,684 17,301

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:

ท         amortization of intangible assets,
ท         impairment of intangible assets,
ท         fair value remeasurement of contingent consideration related to business combinations or to disposals,
ท         other impacts associated with acquisitions (including impacts of acquisitions on associates and joint ventures),
ท         restructuring costs and similar items(1),
ท         other gains and losses (including gains and losses on disposals of non-current assets(1)),
ท         costs or provisions associated with litigation(1),
ท         tax effects related to the items listed above as well as effects of major tax disputes,
ท         net income attributable to non-controlling interests related to the items listed above,

(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.

Press release (PDF)