2014 - Exane BNP Paribas Healthcare Conference

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2014 - Exane BNP Paribas Healthcare Conference

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2014 - Exane BNP Paribas Healthcare Conference

  1. 1. Exane BNP Paribas Healthcare Conference Fabrice Baschiera, General Manager, Sanofi Greater China Paris – March 25th, 2014
  2. 2. 2 Forward Looking Statements This presentation 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 labeling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, the Group's ability to benefit from external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December 31, 2013. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.
  3. 3. Agenda 3 Emerging Markets – Strong Contribution from China A Leading Presence in the Chinese Healthcare Market Strategic Pillars for continued Growth in China Providing Solutions to the Diabetes Pandemic in China Conclusion Sanofi 2013 Review
  4. 4. 2013 Year in Review From Sep to Dec 2013, the underlying growth profile of the new Sanofi emerged Throughout 2013, we left the patent cliff further behind us and took decisive action to resolve temporary operational challenges Growth platforms now account for 73% of sales(1) compared to 43% in 2008 Sanofi has currently 9 high-potential late-stage projects(2) 45% of sales(3) come from biologics and 80% of development pipeline projects(4) are biologics 1 2 3 4 4 (1) Growth Platforms include Emerging Markets, Diabetes Solutions, Vaccines, Consumer Healthcare, Animal Health, Genzyme & Other Innovative Products. In Q4 2013, sales from Growth Platforms accounted for 72.9% of Group sales (2) U300, 6-in-1 vaccine PR5I (U.S.), alirocumab, Dengue vaccine, lixisenatide (U.S.), sarilumab, LixiLan, dupilumab, C. Diff vaccine (3) Sales from biologics include insulins (Lantus®, Apidra®, Insuman®), Genzyme rare disease products, Lovenox®, vaccines from Sanofi Pasteur, vaccines from Merial, selected oncology products (Thymoglobulin®, Mozobil®, Zaltrap®), Lemtrada™ and half of SPMSD sales (non-consolidated) (4) 39 NMEs and vaccines out of a total of 49 5
  5. 5. Genzyme(3) Vaccines Growth Platforms Grew by +10.0% in Q4 2013 Reaching 72.9% of Sales(1) 5 (1) FY 2013 sales of Growth Platforms reached €23,905m, up +6.6% at CER and accounted for 72.5% of sales (2) Sales in Emerging Markets excluding other Growth Platforms were €1,525m for Q4 2013 and €5,785m for FY 2013 (3) Genzyme perimeter includes Rare Diseases and Multiple Sclerosis franchises (4) Products launched since 2009 which are not included in the Growth Platforms listed above: Multaq®, Jevtana®, Auvi-Q™, Mozobil® and Zaltrap® Other Innovative Products(4) €186m €959m Diabetes Solutions €1,735m €722m Animal Health €595m Emerging Markets(2) €2,917m €705m €3,716m €6,568m €3,004m €2,142m €10,957m Q4 2013 Sales & Growth at CER FY 2013 Sales & Growth at CER €444m Consumer Healthcare €1,985m +19.0% +0.1% +6.1% +31.4% -6.3% +15.7% +10.4% +18.7% -0.1% +5.2% +25.9% -5.3% +18.8% +4.4% +7.1% ex Brazil generics
  6. 6. 9 Late-Stage Projects Potentially Filed over Next 4 Years 9 Potential Filings in 2014-2018 ● U300 in Diabetes ● 6-in-1 vaccine PR5I (U.S.) ● Alirocumab in Hypercholesterolemia ● Dengue vaccine ● Lixisenatide in Diabetes (U.S.) 6 ● Sarilumab in Rheumatoid Arthritis ● LixiLan in Diabetes ● Dupilumab in Atopic Dermatitis and Asthma ● C. Diff vaccine
  7. 7. Agenda 7 Emerging Markets – Strong Contribution from China A Leading Presence in the Chinese Healthcare Market Strategic Pillars for continued Growth in China Providing Solutions to the Diabetes Pandemic in China Conclusion Sanofi 2013 Review
  8. 8. Q4 2013 Geographic Sales Mix (1) World excluding U.S., Canada, Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia, and New Zealand Double Digit Sales Growth in Emerging Markets in Q4 2013 34.5% 31.4% 23.0% 11.1% 8 (1) +12.3% +5.2% +15.4% +10.1% Growth at CER +1.2% -5.6% +11.3% +10.4%
  9. 9. Sanofi China – A Strong and Growing Contributor to Our Leadership Position in Emerging Markets 9 (1) IMS CHPA MAT December 2013 (2) Mainland China; CAGR 2008-2013 Sanofi Sales in China(2) €347m 20122011201020092008 +33% 2013 Ranked #4 in China(1) Sanofi China represented 13% of Emerging Markets and 4.5% of Group sales in 2013 €1,471m PFIZER ASTRAZENECA SHANDONG QILU FTY BAYER JS. YANGZIJIANG FTY ROCHE KE LUN NOVARTIS JS.L.Y.G. HENGRUI 1 2 3 4 5 6 7 8 9 10
  10. 10. 10 Progressively Developing Our Growth Platforms in China Breakdown of Sanofi Sales in China(1) by Business(2) Total Sales €1,471m 72% 2007 2013 Total Sales €273m (1) Mainland China (2) Illustrative 10 Pharmaceuticals Genzyme Consumer Healthcare Diabetes Vaccines Animal Health/Merial
  11. 11. Agenda 11 Emerging Markets – Strong Contribution from China A Leading Presence in the Chinese Healthcare Market Strategic Pillars for continued Growth in China Providing Solutions to the Diabetes Pandemic in China Conclusion Sanofi 2013 Review
  12. 12. 12 (1) Health care expenditure reflects the total expenditure on medical and health care services, which includes government expenditure, social expenditure and individual out-of-pocket expenditure. (2) China National Bureau of Statistics, Ministry of Finance; projections: BCG, McKinsey, internal analysis (3) WHO : ‘Total expenditure on health as % of Gross National Product’ (GDP); 2011: U.S. = 17.9%; France = 11.6%; Brazil = 8.9% (4) IMS Market Prognosis, September 2013, at ex-manufacturer price levels, not including rebates and discounts; IMS CHPA 2013 M12 Fundamental Drivers for Continued Strong Growth in the Chinese Healthcare Market Healthcare Expenditure(1) Expected to Grow Strongly, but to Remain Low as % of GDP(2) HC expenditure as % of GDP(3) 2015e201220092005 RMB bn 4,100 2020e 8.9% 11.6% 17.9% 5.4% ● Ageing Population ● Strong patient flow growth ● Growing Middle Class ● Higher disposable income ● Rapid Urbanization ● Change in life-style ● Higher incidence of chronic diseases ● Rise in disease burden ● Favorable healthcare reform policies ● Expanded insurance coverage and improved infrastructure China has become the 2nd largest Pharmaceutical Market,+13.8% in 2013(4)
  13. 13. A Dynamic Environment with Sustained Pricing Pressure Multiple Rounds of Price Cuts by NDRC(3) May 2007 260 drugs (excl. TCM(4))  19% 162 anti-infective and cardiovascular drugs  21% Nov 2010 Mar 2011  19%176 drugs 128 drugs including hormone treatments, endocrine system and neurological disorder drugs  14%Sep 2011 Target Average % of price cut (1) RDL – Reimbursement Drug List (2) EDL – Essential Drug List (3) China National Bureau of Statistics, Ministry of Finance, NDRC – National Development and Reform Commission, internal analysis (4) TCM - Traditional Chinese Medicines (5) ‘Good Manufacturing Practices’; Notice on Implementation the 2010 Revised GMP, CFDA, 25 February 2011 May 2012 13 Time 53 digestive system and gastrointestinal drugs  17% Oct 2012 95 hematology, oncology and immunology drugs  17% Jan 2013 400 respiratory, antipyretic, analgesics and other specialty drugs  15% ● Regular RDL(1) price cuts ● Erosion of price premium for non- patented originator drugs ● Broader EDL(2) system and usage ● High EDL usage in lower tier CHC (Consumer Healthcare Centers) ● New Provincial tender models ● Increased frequency and emphasis on price ● Emergence of strong local players ● Enhanced quality of non-EDL un-/differentiated generics ● All Chinese manufacturers to comply with recent ‘GMP 2010’ guidelines(5)
  14. 14. 11 Sanofi China - Well Poised to Seize the Opportunities in the Chinese Healthcare Market 14 Shanghai Tianjin Shenyang Wuhan Chengdu Urumqi Ji’nan Beijing Hangzhou Guangzhou Nanjing Nanchang Tangshan Shenzhen Regional offices Production Sites R&D centerRegional R&D ● >8,500 Employees ● >5,000 Sales force ● 11 Regional Offices ● Regional R&D Platform ● 7 Manufacturing Sites ● Local Production for Pharmaceuticals, Vaccines, CHC and Animal Health ● Highest Standards for Quality, Sustainability and Supply Chain A Fully Integrated Presence
  15. 15. A Large Portfolio of Flagship Brands and Powerful Commercial Operations 15 Oncology BU Cardiovascular BU 1. Cancer 2. Heart disease 3. Cerebro-vascular diseases 4. Respiratory System 5. Injury/Poisoning 6. Metabolic/ Endocrine diseases 7. Digestive system 8. CNS 9. Genitourinary system 10.Infectious diseases Top 10 Causes of Death in China(1) (1) China’s Health Statistics Yearbook 2012, Ministry of Health (Urban population) Consumer Healthcare BU Diabetes Solutions BU Primary Care BU A dedicated regional BU which covers the county market in China Addressing the Medical Needs in China with 5 Business Units
  16. 16. Driving Leadership and Innovation at Sanofi China R&D 16 Four Dimensions of Innovation at Sanofi China R&D to Address Unmet Medical Needs ● Over 30 local R&D Collaborations and Partnerships ● Focus on Liver Disease, Asian Cancers and Diabetes ● More than 15 ongoing clinical development programs to bring global innovation & minimize drug-lag ● Eloxatin® in HCC ● Lyxumia® (1) under regulatory review ● China R&D Translational Medicine Platform for Regional and Global R&D ● Genotyping Study for prevention and treatment of Diabetes in Chinese patients Research Clinical Development External Innovation Medicine Leadership ● Enrich pipeline with in-licensing opportunities (2) ● R&D investment to leverage and capture TCM opportunity (1) Lyxumia® is the proprietary name approved by the EMA for lixisenatide. The proprietary name for lixisenatide in the U.S. is under consideration (2) Takeda and Sanofi signed a co-promotion agreement to expand reach of diabetes treatment Nesina® (alogliptin) in China
  17. 17. Agenda 17 Emerging Markets – Strong Contribution from China A Leading Presence in the Chinese Healthcare Market Strategic Pillars for continued Growth in China Providing Solutions to the Diabetes Pandemic in China Conclusion Sanofi 2013 Review
  18. 18. Total Pharma Market by Institution(1) (in € bn) (1) BCG, internal analysis (1 EUR = 8.6212 CNY); China’s Health Statistics Yearbook 2012; National Health and Family Planning Commission (2) THC = Township Healthcare Center (3) CHC = Community Healthcare Center (4) National Health and Family Planning Commission of PRC (NHFPC), 2014 Capturing the Growth in China’s County Hospital Market by Reaching out to the Next Billion Customers 18 2011 2015e 2020e +13% 18% 20% 23% County hospitals City hospitals CHC(3) THC(2) Retail 48% 50% 50% 20% 19% 17% 80 141 237 ● The County market is the focus of public healthcare investments(4) ● ‘County hospitals’ expected to be the fastest growing market segment(1) ● 16% growth (2011-2020 CAGR) ● ‘City hospitals’ forecasted to represent half of the total market ● Declining share of basic healthcare system (CHC, THC) and retail market projected
  19. 19. Chongzhou County Hospital(2) ● County – Chongzhou ● Population – ~670,000 ● County hospital – Built in 2008 ● Number of beds – 694 ● Outpatient visits in 2013 – 581,782 Modern Healthcare Infrastructure is Driving the Growth in China’s Huge County Market 19 (1) Defined as county-level cities or counties; 32 provinces, autonomous regions and municipalities, excluding Hong Kong, Macao, and Taiwan (2) Sichuan Chongzhou Hospital website: http://www.cz-hospital.cn/ China’s ~2,000 Counties(1) Population ~900 million Opportunity ● Huge base ● Lower affordability ● Geographically broad Coverage Very limited presence of Multinational Companies Example: Sichuan Province, Chongzhou County Sichuan Province
  20. 20. ● Reaching out to >1,000 counties in multiple provinces ● Almost 1,000 dedicated sales representatives, covering several thousand hospitals ● Portfolio approach to secure sales force efficiency and profitability ● Strict selection criteria for targeted county hospitals ● Significant growth contribution and further expansion underway Our Rapid Expansion into the County Hospital Market follows a Highly Selective Approach 2013 2014 Sanofi Primary Care Business Unit 20
  21. 21. Top 10 OTC Markets in 2013(1) 21 ● Highly attractive CHC market with solid growth in recent years ● Sanofi is present in the 2 largest and fastest growing CHC categories in China(2) ● Cough&Cold and Vitamins ● Improved performance of our CHC business in China throughout 2013 ● Reorganization of our distribution network ● Reduced inventory levels ● New management appointed (1) Nicholas Hall & Company (2014); Growth 2013 vs 2012 (2) Nicholas Hall & Company DB6 (2013) 1. USA 28.8bn 2. 20.3bn 3. Japan 7.9bn 4. Russia 6.0bn 5. Germany 5.7bn 6. France 4.8bn 7. Brazil 3.6bn 8. Italy 3.6bn 9. UK 3.0bn 10.Canada 2.6bn 3.5% 6.8% -0.3% 14.0% 3.7% -3.7% 16.9% 3.8% 1.2% 2.5% Rank by Country Sales in USD Growth Strong Ambition to Realize Our Growth Potential in the World’s 2nd largest Consumer Healthcare Market
  22. 22. Our Strategy for Sustainable Growth in the Chinese Consumer Healthcare Market Reinforce the Business Expand the Portfolio Value Enhancing External Opportunities Two Umbrella Brands in key CHC Categories (Cough/Cold & Vitamins) OTC Switch of Essentiale® and VMS Specialty Segments Market screening and target assets identification 1 2 3 22 ● Targeting domestic players ● Presence in Sanofi CHC core categories required ● Strong brand equity ● Liver Care Category with Essentiale® ● Specialty VMS Category with “Silver” variant for Seniors
  23. 23. Agenda 23 Emerging Markets – Strong Contribution from China A Leading Presence in the Chinese Healthcare Market Strategic Pillars for continued Growth in China Providing Solutions to the Diabetes Pandemic in China Conclusion Sanofi 2013 Review
  24. 24. The Diabetes Pandemic in China Creates Significant Challenges for the Hospital Care System 113.9(3) China Has the World’s Largest Population Living with Diabetes(1) (population in million) 24 (1) International Diabetes Federation (IDF) Diabetes Atlas, Sixth Edition 2013; Top 10 countries/territories of people with diabetes (20-79 years) (2) The Lancet, Vol 378, August 6, 2011 (3) Ning Guang, JAMA September 4, 2013, Vol 310, No. 9 ● Control of chronic diseases, such as diabetes, is a major challenge in China(2) ● Low rate of diagnosis in diabetes(3) ● Low number of patients treated ● Only 25.8% or ~29.4m treated(3) ● Hurdles to providing chronic care at the hospital level ● Crowded out-patient environment ● Short physician consultation ● No continuous follow-up treatment with the same physician 65.1 24.4 11.9 10.9 8.7 8.5 7.6 7.5 7.2
  25. 25. Insulins: CAGR 2009-2013, +21.5% MAT Dec 2013, +18.6% Sales Value of Diabetes Therapy Segments (in € m)(2) 2013 49% 2012 50% 50% 2011 52% 48% 2010 54% 46% 2009 55% 45% 2008 56% 44% 2007 59% 41% 50% Insulin has Overtaken OADs(1) to Become the Largest Diabetes Therapeutic Segment in China 25 Oral Anti-Diabetics (OADs): CAGR 2009-2013, +14.9% MAT Dec 2013, +15.3% Total Market CAGR 2009-2013, +18.2% MAT Dec 2013, +17.1% (3) China’s diabetes drug market expected to reach >€4bn in 2018(4) (1) OAD – Oral Anti-Diabetic (2) IMS CHPA MAT 2007 – 2013; 1 EUR = 8.6212 CNY (www.ecb.europa.eu, March 19, 2014) (3) GLP-1 market share 0.68% in 2013 (4) IMS and internal analysis 1,534 1,310 1,146 966 785 607 435
  26. 26. Analog: CAGR 2009-2013, +37.4% MAT Dec 2013, +27.8% Human: CAGR 2009-2013, +7.6% MAT Dec 2013, +6.2% Sales Value of Insulin Class (in € m)(1) 43% 57% 2011 50% 50% 2010 55% 45% 2009 2012 2013 62% 38% 62% 38% 2008 72% 28% 2007 81% 19% Analogs Account for >60% of Total Insulin Sales in China 26 (1) IMS CHPA MAT 2007 – 2013; 1 EUR = 8.6212 CNY (www.ecb.europa.eu, March 19, 2014) 547 445 355 652 774 269 178
  27. 27. ● Lantus® drives the paradigm shift in the Chinese insulin market ● Shift from Premix to Basal ● Basal regimen included in Chinese diabetes treatment guidelines ● Leading insulin in several big cities(2) ● Low average daily dosing per patient ● ‘Biosimilar’ to Lantus® competing in the market since 2005 27 Paradigm Shift Drives Strong Sales of Lantus® in China (1) IMS MAT 12/2009 – 12/2013; 1 EUR = 8.6212 CNY (www.ecb.europa.eu, March 19, 2014) (2) IMS CHPA MAT 12/13; Cities where Lantus is the #1 insulin include Guangzhou, Hangzhou, Suxi, Nanjing, Chengdu, Xi’an, Shenzhen, Shijiazhuang, Changsha, Guiyang, Wenzhou 2012201120102009 Lantus Sales in China(1) (in € m) 29% 2013 45 64 84 106 125
  28. 28. Expanding our Lantus® Options in China ● SoloSTAR® disposable pen ● Convenience option ● Lantus® available in China only in SoloStar® until 2013 ● Lantus® SoloSTAR® pen assembly at Sanofi’s facility in Beijing ● Inaugurated in May 2012 ● ClikSTAR® re-usable pen for Lantus® cartridges ● Durable solution ● Differentiated price ● Registration approval in Q4 2012 ● Launched in March 2013 Easy-to-use, Accurate and Affordable 28 AllStar™, the next step to further improve access to innovative, affordable devices
  29. 29. Amaryl® is Driving the Growth of the entire Sulfonylurea Class in China despite Generic Competition Share in Glimepiride (value)(2) Share in Glimepiride (volume)(2) (1) OAD – Oral Anti-Diabetic; In December 2013, Amaryl® reached 7.0% of the market share of the total OAD market, growing at 23.3% (2) IMS CHPA MAT December 2013 Generics Amaryl® Generics Amaryl® Generic Glimepiride Glurenorm Diamicron Glipizide XL Market Share of sulfonylureas (value)(2) 29
  30. 30. ● Patient-centric, integrated diabetes management programs ● CIDE – ‘China Initiative for Diabetes Excellence’ ● A major public-private partnership ● Enhancing patients’ self-management capabilities through ‘PEP’ ● Basal Insulin Patient Education Program ● Multiple programs addressing the educational needs of doctors, nurses and other healthcare professionals ● Providing hospitals with technology & tools to improve treatment success Providing Support for the Management of Diabetes in China at the Point of Care Broad range of innovative therapeutic solutions 30 Private-public partnerships for best practice diabetes care
  31. 31. Agenda 31 Emerging Markets – Strong Contribution from China A Leading Presence in the Chinese Healthcare Market Strategic Pillars for continued Growth in China Providing Solutions to the Diabetes Pandemic in China Conclusion Sanofi 2013 Review
  32. 32. A Compelling Strategy for Sustainable Growth in China 32 1 2 3 4 Long term commitment to China with a fully-integrated presence Medicine leadership through a broad portfolio of products and innovation Expansion into Counties aligned with the focus of public healthcare investments Reinforcing our platform in the growing Chinese CHC Market Leadership in diabetes by maximizing the value of the entire portfolio Investment into medical education and public-private partnerships 5 6

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