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2012 - IR - LatAm

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IR Thematic Seminar in LatAm 2012

IR Thematic Seminar in LatAm 2012


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  • 1. IR Thematic Seminar in LatAm São Paulo - November 29th - 30th, 2012
  • 2. Forward Looking StatementsThis 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 includeprojections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions andexpectations with respect to future financial results, events, operations, services, product development and potential, andstatements regarding future performance. Forward-looking statements are generally identified by the words "expects","anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofis management believesthat 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 andgenerally beyond the control of Sanofi, that could cause actual results and developments to differ materially from thoseexpressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertaintiesinclude 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 toapprove any drug, device or biological application that may be filed for any such product candidates as well as theirdecisions regarding labeling and other matters that could affect the availability or commercial potential of such productcandidates, the absence of guarantee that the product candidates if approved will be commercially successful, the futureapproval and commercial success of therapeutic alternatives, the Groups ability to benefit from external growthopportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies andsubsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in thepublic filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "CautionaryStatement Regarding Forward-Looking Statements" in Sanofis annual report on Form 20-F for the year ended December31, 2011. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise anyforward-looking information or statements. 2
  • 3. AgendaNovember 29, 2012 LatAm Highlights ● Hanspeter Spek, President, Global Operations Brazil Overview ● Heraldo Marchezini, SVP, Latin America and General Manager, Brazil Genzyme ● Rogerio Vivaldi, MD, SVP, Head of Rare Diseases - Genzyme Consumer Healthcare ● Heraldo Marchezini, SVP, Latin America and General Manager, Brazil Q&A Break 3
  • 4. AgendaNovember 29, 2012 Diabetes ● Fernando Sampaio, General Manager, Sanofi Pharma, Brazil Generics ● Heraldo Marchezini, SVP, Latin America and General Manager, Brazil Animal Health ● José Barella, SVP, Animal Health - Merial Vaccines ● Patrice Lebrun, VP, Latin America - Sanofi Pasteur Q&A 4
  • 5. AgendaNovember 30, 2012 (1) The Interfarma Perspective on Brazil ● Antônio Britto, Executive President of Interfarma LatAm Industrial Affairs ● François Blanot, VP Industrial Affairs, Latam Q&A Suzano Plant Visit The Brazilian Pharmaceutical Market ● Herbert Gonçalves, Partner at Primeira Consulta Q&A (1) Interfarma: Brazil Research-based Pharmaceutical Manufacturers Association 5
  • 6. LatAm HighlightsHanspeter SpekPresident, Global Operations 6
  • 7. A Strong and Experienced Group of Managers Presentingat the IR Thematic Seminar on LatAm Heraldo Marchezini SVP, Latin America and Fernando Sampaio General Manager, Brazil General Manager, Sanofi Pharma, Brazil François Blanot VP Industrial Affairs Latin America José Barella SVP, Animal Health Merial Rogerio Vivaldi, MD SVP, Head of Rare Diseases Genzyme Patrice Lebrun VP, Latin America Sanofi Pasteur 7
  • 8. Agenda Latin America - A Fast Growing Region Sanofi - The Market Leader in LatAm 8
  • 9. Latin America Is a Region of Diversity Mexico CAMAC(2) (1) GDP: $ 1,163bn GDP: $305bn Market Characteristics Population: 115m Population: 70m ● A large population Colombia Venezuela GDP: $365bn ● ~600m people or 8% of the world‘s Population: 47m GDP $338bn Population: 30m population ● Diverse political systems and Ecuador Brazil GDP: $71bn GDP $ 2,425bn unequal distribution of wealth Population: 15m Population: 197m ● LatAm per capita income only 30% of the U.S. Peru Paraguay GDP: $200bn GDP: $26bn ● Regional development gaps Population: 30m Population: 7m ● >30 distinct Emerging Markets Bolivia Uruguay ● Disparities in affordability GDP: $27bn Population: 11m GDP: $50bn Population: 3m ● Public funding vs out-of-pocket expenditures for Healthcare Chile Argentina GDP: $268bn GDP $475bn Population: 17m Population: 41m (1) IMF World Economic Outlook Database, October 2012 (2) CAMAC: Central America & Caribbean Countries 9
  • 10. The Economic Outlook for LatAm Remains Positive ● Economic indicators show resilience LatAm GDP Growth(1) ● Fairly stable GDP growth projected GDP in % ● Recent slowdown in larger economies Inflation rate in % (Argentina, Brazil) balanced by faster growth in smaller economies (Colombia, Peru, etc...) ● Appreciation of most currencies (except Brazilian Real in 2012) ● Unemployment rate at historic low level: 6.8% for LatAm in 2011(2) ● Mix of external economic factors ● Weaker prospects in advanced economies (Eurozone, U.S.) ● Commodities and food prices boom ● Capital inflow surge Actuals Projections (1) IMF World Economic Outlook 2012 (2) International Labour Organization 2012 10
  • 11. The Unequal Evolution of Healthcare ExpendituresReflects a Diverse Socio-Economic Environment ● LatAm healthcare expenditures Evolution of Health Expenditures(1) growing faster than GDP (% of GDP per country) ● 8% of GDP in 2010(1) ● Continued strong growth expected Brazil in healthcare expenditures as a Argentina percent of GDP in key markets Ecuador ● Brazil, Mexico, Colombia Mexico ● Disparities in the development of healthcare infrastructure across Colombia LatAm countries ● Tailored approach to local markets required Venezuela (1) World Bank 11
  • 12. LatAm Markets Are Largely Out-Of-Pocket but PublicFunding Is a Growing Percent of Healthcare Expenditures Split of Pharmaceutical ● Large portion of out-of-pocket (1) Expenditures (%) healthcare expenditures typical of Emerging Markets ● High percent of out-of-pocket spend on Pharmaceuticals (>80% in Brazil) ● Significant public sector funding through healthcare programs in key countries ● Government purchases by "Sistema único de saúde" (SUS) in Brazil ● "Seguro popular" in Mexico ● Private health insurance gaining traction among the middle-class (1) IMS World Review Q1 2012 and Sanofi internal analysis 12
  • 13. A Growing and Aging Population with IncreasedPurchasing Power of a Larger Middle Class (1) (2)Total Population & People ≥60 in LatAm Middle Class Population in LatAm (in millions) (in millions) (1) Latin America and Caribbean Demographic Center (CELADE) – Population Division of ECLAC and United Nations, 2011 (2) Wolfensohn Center for Development at Brookings Institution, 2010 13
  • 14. Healthcare Expenditures in LatAm Are Projectedto Continue to Expand ● LatAm healthcare expenditure per % Population ≥ 60 years old relative to capita still low at U.S. $671 vs. Healthcare expenditures per capita(1) global average of ~U.S. $1,000(1) 8000 Healthcare expenditures per capita (U.S.$) ● Growth of average healthcare 7000 expenditure per capita in LatAm 6000 >10% in 2010 5000 ● Market attractiveness to support growth in the medium term 4000 ● Economic expansion of the region 3000 ● Aging population 2000 ● Chronic diseases on the rise ● Growing upper and middle-class 1000 0 5% 10% 15% 20% 25% 30% % Population over 60 years (1) World Bank 14
  • 15. LatAm Pharmaceutical Markets Are Expected to ReachOver $100bn by 2016 Rank in 2000(1) Rank in 2016e(2) LatAm Pharmaceutical Market1 U.S. 1 U.S. (3) as % of Emerging Markets2 Japan 2 China3 Germany 3 Japan4 France 4 Brazil5 UK 5 Germany6 Italy 6 France7 China 7 Russia8 Brazil 8 Italy9 Canada 9 India10 Spain 10 Canada11 Mexico 11 UK12 Argentina 12 Spain13 South Korea 13 South Korea14 India 14 Australia15 Australia 15 Mexico16 Turkey 16 Argentina17 Netherlands 17 Turkey18 Poland 18 Venezuela (1) IMS World Review 2000 (US$) (2) IMS Market Prognosis 2011-2016 (US$) (3) World excluding USA, Canada, Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, 15 Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia /New Zealand
  • 16. Top 3 Countries Make Up ~70% of Pharmaceuticalsin LatAm 2011 2016e $15.0bn $10.9bn $5.4bn $4.1bn $29.0bn $47.4bn $8.5bn $5.7bn $6.6bn $11.7bn $12.2bn $13.6bn Market size $68bn Expected market size $102bn (1) IMS Market Prognosis 2011-2016 (US$) 16
  • 17. Agenda Latin America - A Fast Growing Region Sanofi - The Market Leader in LatAm 17
  • 18. LatAm Is a Significant Contributorto Sanofi’s Leadership in Emerging Markets (1) LatAm Sales Emerging Markets Sales >€3,300m €3,111m €2,963m 2012e: ~€11bn 9M 2012 €1,913m Other LatAm Emerging ~30% Markets 70% 2009 2010 2011 2012e (1) World excluding USA, 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 /New Zealand 18
  • 19. Sanofi Is the Market Leader in LatAm ● Sanofi: an undisputed market 2008(1) MAT Q2 2012(1) leader in LatAm for several years 1. 7.3% 1. 7.5% ● Overall market share of 7.5% in Pharmaceuticals(2) 2. PFIZER 6.9% 2. NOVARTIS 5.6% ● Strong presence in most LatAm 3. NOVARTIS 6.6% 3. PFIZER 5.2% countries 4. MERCK 5.3% 4. EMS 4.2% ● Leader in Brazil, the largest market 5. BAYER 4.3% 5. GSK 4.0% ● Significant changes in the LatAm market 6. GSK 4.1% 6. MERCK 3.9% ● Most multinational companies 7. ROCHE 3.9% 7. BAYER 3.7% losing market share 8. ABBOTT 3.1% 8. ROCHE 3.3% ● Increasingly fierce domestic competition 9. J&J 3.0% 9. ABBOTT 3.2% 10. ASTRAZENECA 2.8% 10. HYPERMARCAS 3.0% (1) IMS MIDAS MAT Q2 2012 19
  • 20. Sanofi Is a Well Diversified Player in LatAmwith Multiple Sources of Sustainable Growth LatAm Sales Split by Business (2012e) Vaccines 12% Animal Health 8% Other Pharmaceuticals 41% 5% New Genzyme 12% Generics 8% 14% Diabetes CHC 20
  • 21. Brazil and Mexico Represent >2/3 of Sales and Headcountfor Sanofi in LatAm Geographic Sales Split Headcount Split > €3,300m > 10,000 people 33% Other LatAm 29% 20% 21% Mexico 46% Brazil 51% 2012e 2012e 21
  • 22. Sanofi’s Leadership in LatAm Is Illustrated byits Broad Industrial Footprint and Significant Headcount ● A network of 10 plants dedicated to the LatAm market LatAm Headcount per Function ● ~3,900 people in Manufacturing 2012e ● Branded pharmaceuticals, Generics, R&D CHC, Vaccines, Animal Health 6% ● 95% of Pharma volumes sold in 18% Manufacturing LatAm produced locally Sales Force ● A strong sales force Others ● ~3,900 commercial people 39% ● A solid operating margin 38% ● In line with business operating margin for the whole Emerging Markets perimeter(1) (1) Sanofi’s Business Operating Margin excluding central administrative and R&D costs was around 40% in 2011 in Emerging Markets 22
  • 23. LatAm Represents a Strategic Opportunityfor Sustainable Growth Historical ● Leverage unique accumulated local experience presence and diversified product portfolio Market reach ● Expand product portfolio to address growing middle-class Manufacturing ● Leverage network of industrial sites to serve increasing volume capacity and ability to produce at local costs Quality of ● Attract, train and retain local management talent management Local ● Use local R&D capabilities to participate in global clinical trials innovation and to respond to LCM needs in LatAm Bolt-on ● Continue to enlarge our portfolio by successfully acquisitions identifying and integrating M&A targets 23
  • 24. Brazil OverviewHeraldo MarcheziniSenior Vice President, Latin Americaand General Manager, Brazil 24
  • 25. Agenda Brazil - A Country on the Rise The Pharmaceutical Market in BrazilSanofi’s Leadership in Brazil 25
  • 26. Brazil - A Country on the Rise ● Significant growth potential Brazil Nominal GDP(3,4) (BRL in trillion) ● 6th largest economy worldwide(1) 4.5 ● 5th largest population (~200m)(2) ● Public debt under control ● Public debt / GDP ratio: 35% in September 2012(3) ● Policy tightening to contain inflation 2.7 ● Stable inflation targeted below 6%(3) ● Economic growth expected to rebound in 2013(4) ● 2011 GDP: +2.7% ● 2012e GDP: +1.5% ● 2013e GDP: +4.0% 2007 2008 2009 2010 2011 2012e (1) IMF 2012, World Bank (2) IBGE – Instituto Brasileiro de Geografia e Estatistica (2010 Population census) (3) Brazilian Central Bank 26 (4) IMF, World Economic Outlook database, October 2012
  • 27. Brazil Benefited Significantly from a Period of Stabilityand Rising Living Standards from 2000 to 2011 Population Shares of Income Categories ● Increase in employment levels and in Brazil ($ per day)(3) salaries boosted consumption ● Emergence of a large middle class ● Consumer credit expansion created opportunities for the middle class ● Large foreign investment inflows ● Cumulative value of €288bn(1) from 2000-2011 ● Lowest unemployment rate in Brazil’s history reached in 2011 ● 4.7% vs. 11.7% in 2003(2) (1) Brazilian Central Bank (2) IBGE (Average unemployment rate of major metropolitan regions) (3) Socio-Economic Database for Latin America and the Caribbean (CEDLAS and The World Bank) 27
  • 28. Agenda Brazil - A Country on the Rise The Pharmaceutical Market in BrazilSanofi’s Leadership in Brazil 28
  • 29. Brazil Is Expected to Become >$47bn PharmaceuticalMarket by 2016 ● Brazil expected to become the 4th Pharmaceutical Market by Segments(1) largest Pharma market by 2016 $47.4bn ● Private demand accounts for the vast majority of the market >+10% CAGR ● Retail sector represented >70% of total market in 2011(1) ● Public market growth accelerated by “Plano Brasil Maior” $29.0bn ● Generics segment expected to outpace market growth ● Expansion of public sector coverage ● “Farmacia popular” program to expand access to medicines for chronic diseases (1) IMS Market Prognosis 2012 and internal estimates 29
  • 30. Changing Dynamics in a Competitive Marketplace Regulatory Environment Competitive Environment ● Evolving regulatory framework ● Government policies implemented ● Unified Healthcare System (SUS)(1) to boost national industry established in 1988 ● Growing share of domestic players ● Pipeline Patent Law of 1996 46% in 2012, up from 37% in 2007(5) ● ANS(2) created in 1998 ● “Profarma” - Government incentives for local manufacturers ● Generics Law introduced in 1999 ● Public-Private Partnerships (‘PPP’) ● Guidelines for Biosimilars in 2011 for improved technology transfers ● Stricter regulatory procedures ● Fast growing number of generics implemented by ANVISA(3) ● Use driven by government policies ● Bioequivalence tests for all branded Generics/Similares required by ● More Multinationals with “local” base 2014 ● Consolidation in the distribution ● Tight price control through CMED(4) channels ● Annual price adjustments based ● Drugstore chains with regional on multiple criteria expansion strategies (1) SUS- Sistema Único de Saúde (2) ANS - Agência Nacional de Saúde Suplementar (3) ANVISA - Agência Nacional de Vigilância Sanitária (4) CMED - Câmara de Regulação do Mercado de Medicamentos 30 (5) IMS Health 2012
  • 31. Drugstore Chains are Increasingly Important Playersin the Retail Market ● Drugstore chains capture share Sales Split by of Point of Sales Type(1) in a growing retail market 4-6% ● Investments in regional expansion ● Modern retail concepts with 35-39% state-of-the-art infrastructure ● Launch of private labels ● In-store shopping experience increasingly important to consumers ● Large product assortments appealing to the new Middle-class 57-61% ● Combination of Health, Well-being and Beauty product offerings ● Strong presence in retail channels key to market share expansion (1) IMS Latin America 2012 (IMS Distribution Study, Company Annual Reports, Midea, IMS analysis) 31
  • 32. Agenda Brazil - A Country on the Rise The Pharmaceutical Market in BrazilSanofi’s Leadership in Brazil 32
  • 33. Sanofi’s Largest Operation in Emerging Markets ● Commercial presence since 1955 Sales in Brazil(1) (in €m) ● Headquartered in São Paulo ● Also LatAm regional HQ th ● Sanofi’s 5 largest country by sales Brasilia (1) ● Sales of €1,522m in 2011 (+17%) ● 4.6% of Group sales in 2011 Sao Paulo ● >5,200 employees ● Manufacturing capabilities at 4 sites €1,458m €1,522m ● Market leadership gained through A/H1N1 €1,254m acquisition of Medley in 2009 €767m ● Five of Brazil’s top 20 pharma products are from Sanofi(2) (1) 2011 sales growth at CER excluding A/H1N1 sales of €204m in 2010 (2) IMS MIDAS August 2012 33
  • 34. Our Continued Success is Based on 3 Pillars Sustainable growth driven by strengths in the local market 1 2 3 A Diversified Portfolio A Preferred Partner A Committed Enhanced by the Status at Pharmacies Organization Acquisition of Medley 34
  • 35. Sanofi: Well Diversified with Leading Presencein Key Pharma Market Segments in Brazil Share of Market Segments in Brazil(1,2,3)Total Pharmaceutical Market (in %) Generics (in %) CHC (in %) Retail Retail HypermarcasRetail + Non Retail 9.8% 12.0% EMS 8.9% Others 11.9% 28.7% Others Novartis Others EMS 7.8% EMS 7.3% Eurofarma 24.1% 7.4% #1 in Pharmaceuticals #1 in Generics #2 in CHC ● Strong local brands including OTX and Mature or Off-Patent Rx Drugs ● >50 brands actively promoted ● Unique combination of medical detailing expertise and media/POS know-how ● More than 150 products and >500 presentations manufactured ● Broad offerings adapted to local needs ● 92% of sales are from non-patented drugs ● New line extensions fueling growth (1) IMS MAT September 2012 (2) In value (3) Only Pharma (Sanofi and Genzyme) - Excluding Vaccines and Merial 35
  • 36. Strong Outlook for Future Growth of Pharmaceuticalsin Brazil A tailored approach in each market segment Drive performance Consolidate leadership Expand presence in Ethical Rx in Generics in CHC● Strengthen diabetes ● Benefit from increasing ● Leverage broad CHC leadership in private and demand for affordable portfolio through extended public markets, based on drugs by the emerging distribution channels success of Lantus® middle class ● Execute new launches● Successfully launch new ● Seize opportunities with in a brand-driven consumer products launches of high-demand market off-patent products● Continue innovation ● Penetrate into high growth through life cycle ● Secure industrial capacity CHC segments management to accommodate growth 36
  • 37. GenzymeRogerio Vivaldi, MDSenior Vice President, Head of Rare Diseases 37
  • 38. Agenda Genzyme’s History in LatAm Genzyme - A Leader in Treating Rare Diseases in LatAmBuilding a Presence in Multiple Sclerosis in LatAm 38
  • 39. Genzyme - A Commitment to Changing the Livesof Patients with Rare Diseases - A Transformative Therapy Brazil Mexico 39
  • 40. Applying Genzyme’s Deep Commitmentto Rare Diseases in LatAm Global Rare Diseases Sales(1) Expanding Rare Disease Treatment €470m ● Latin America followed Europe and became a major geographic region of expansion for Genzyme ● Brazil office established in 1997 ● Sales in LatAm of €160m in last four quarters ● Growth of +20% reported in Q3 2012 versus Q2 2012 2011 2012 (1) Key Rare Diseases brands include Cerezyme®, Myozyme®, Fabrazyme®, Thyrogen®, and Aldurazyme® 40
  • 41. Genzyme Benefits from a Strong History in LatAm ● Headquarters in Rio de Janeiro, Brazil (1997) Mexico city ● Presence expanded over time across LatAm: San Jose Caracas ● Buenos Aires, Argentina (1997) Panama city Bogotá ● São Paulo, Brazil (2000) ● Bogotá, Colombia (2002) Lima ● Mexico City (2003) ● Santiago, Chile (2004) Rio de Janeiro ● San Jose, Costa Rica (2005) São Paulo ● Caracas, Venezuela (2007) Santiago Montevideo Buenos Aires ● Panama City, Panama (2010) ● Montevideo, Uruguay (2010) ● Lima, Peru (2011) 41
  • 42. Genzyme Pioneered and Overcame Challenges in LatAm Challenges Genzyme Expertise Socialized Medicine Navigating bureaucratic systems Centralized Tender Bids Past success with tender offers Complex Reimbursement Process Experienced professionals No Orphan Drug Legislation Participating in Brazil’s Fast Track process Patient Advocacy Groups Vital role understood Limited Patient Data Comprehensive patient registries 42
  • 43. Today, Genzyme Is Well-Established in LatAm1 Leader in LatAm treating patients with Enzyme Replacement Therapy (ERT) ● Focused efforts on diagnostic capacity ● Early investment in the region ● >1,700 patients treated with Genzyme’s products(1)2 First fully established biotech company in LatAm ● >300 employees and support staff in 15 countries ● Benefit of aligning with Sanofi’s large infrastructure3 Strong partnerships with key stakeholders ● Governments, Patient Groups, Academia and Research (1) Including Gaucher patients enrolled in clinical trials for the investigational agent eliglustat tartrate 43
  • 44. Agenda Genzyme’s History in LatAm Genzyme - A Leader in Treating Rare Diseases in LatAmBuilding a Presence in Multiple Sclerosis in LatAm 44
  • 45. Genzyme’s Rare Disease Business in LatAmHas a Promising Growth Outlook ● LatAm sales represented 10% of LatAm Rare Diseases Sales(1) Genzyme total sales in 9M 2012 €48m ● Genzyme comprised 5% of Sanofi LatAm business in 9M 2012 ● Solid recovery in Brazil attributable to improved supply situation ● Brazil accounted for 46% of Genzyme sales in LatAm in Q3 2012 ● Significant room for expansion exists in other LatAm countries 2011 2012 (1) Key Rare Diseases brands include Cerezyme®, Myozyme®, Fabrazyme®, Thyrogen® and Aldurazyme® 45
  • 46. Genzyme’s Growth Expected to Come from NewlyIdentified Patients and Full Supply Situation (1) Patients on Treatment in LatAm ~1,700 Eliglustat tartrate 2011 2012 (1) Including Gaucher patients enrolled in clinical trials for the investigational agent eliglustat tartrate 46
  • 47. Brazil Has the Second Largest Gaucher Patient Populationin the World(1) ● First Gaucher patient treated with Brazil: Gaucher-Treated Patient Share(1) Cerezyme® in 1992 ● Cerezyme® is an established ~1% 3% 10% market leader ● Treating >500 Gaucher patients out of an estimated total population of 10% 660 patients treated in Brazil(1) ● ~86% patient share(2) 76% ● Proven commitment to Gaucher community with ongoing development of eliglustat 86% of all Gaucher-treated patients(2) (1) Estimates based on public information and internal data (2) Including Gaucher patients enrolled in clinical trials for the investigational agent eliglustat tartrate 47
  • 48. Eliglustat Expected to Expand Genzyme’s GaucherFranchise ● >100 patients enrolled in LatAm in Eliglustat Clincal Program eliglustat Phase 3 trials Patients Enrolled(1) ● Largest clinical trial in the Rare Disease field ever conducted ~400 ● Sites in Argentina, Brazil and Mexico ● Estimated product launch 2014 ~400 ~160 ~170 ~40 (1) (1) Includes Phase II participants 48
  • 49. Agenda Genzyme’s History in LatAm Genzyme - A Leader in Treating Rare Diseases in LatAmBuilding a Presence in Multiple Sclerosis in LatAm 49
  • 50. The Multiple Sclerosis Market in LatAm Is Poisedfor Significant Change ● Market estimated to be ~€375m ® in 2011(1) ● ~23,000 patients on DMTs(2) ● 80% of treated patients in Brazil, Under regulatory review in Brazil, Mexico and Mexico and Argentina Argentina ● Regulatory approvals expected in 2013 ● Standard injectable therapies available ● Beta-interferons, glatiramer acetate (3) and natalizumab ● Reimbursement programs exist ● Public and private payors Regulatory submissions in Brazil, Mexico and Argentina expected in Q1 2013 ● Pricing for branded DMTs in range ●Regulatory approvals expected in 2014 of EU and U.S. (1) Based on IMS data and Genzyme estimates (2) Disease Modifying Therapy (3) Lemtrada™ is the proprietary name submitted to health authorities for the company’s investigational multiple sclerosis agent 50 alemtuzumab being co-developed with Bayer Health Care
  • 51. Genzyme Contributing to Sanofi’s Growth in LatAm 1 Well Established Rare Disease presence in LatAm ● Largest pool of patients treated(1) ● Successful government tenders ● Experienced with payors 2 Existing scope for expansion ● Identify new patients ● Increase publications, education and training on rare diseases ● Create next generation products 3 Future roll-out of Multiple Sclerosis franchise in LatAm ● High unmet need ● Sizeable market ● Leverage success of rare disease experience in the region (1) Based on public information and internal data 51
  • 52. Paulinho, Brazil 52
  • 53. Consumer HealthcareHeraldo MarcheziniSenior Vice President, Latin Americaand General Manager, Brazil 53
  • 54. Agenda Consumer Healthcare Market in LatAm Sanofi’s Successful Brand Strategies in LatAm 54
  • 55. LatAm is One of the Fastest GrowingRegional Consumer Healthcare Markets Worldwide(1) Total CHC Market in LatAm in 2012 ~€8.7bn, +14%(1) in €bn +15% +41% -0.2% 9% +8% +20% (1) Nicholas Hall OTC Year Book, DB6 2012 (2) IMS MIDAS MAT August 2012 (3) IMS OTC Market MAT August 2012 55
  • 56. The CHC Market Remains Very Fragmented in LatAm ● Strong presence of multinational Top 10 CHC Companies in LatAm companies by Market Share(1) ● Six MNCs within Top 10 ● Sanofi: #1 player in CHC in LatAm ● Domestic players in leading Hypermarcas positions at a national level ● Hypermarcas #1 in Brazil(1) Others Bayer ● Genomma Lab #1 in Mexico(1) ● Grupo Pharma #1 in Venezuela(1) GSK ● Growing competition from private label brands EMS J&J Boehringer Nestle Genomma Pfizer (1) IMS MIDAS MAT August 2012 56
  • 57. The CHC Market in LatAm Has Grown Double-Digitsfor Many Years ● Experiencing solid double-digit growth for more than 10 years (€m) 45.0 ● 2012 CHC growth slightly slower +17% than for total market ● Recent re-acceleration, driven by +17% Brazil and Venezuela 28.7 +14% ● CHC growth reflects country specific +10% out-of-pocket spend levels ● Brazil (+15%), Venezuela (+41%), Argentina (+20%) ● Mexico, Uruguay, Ecuador (<10%) +14% +20% +17% ● Opportunities in new segments +11% driven by lifestyle changes ● New focus on nutrition, “well-being” (1) IMS Retail MAT June 2012 - Growth is at constant x-rate 57
  • 58. Agenda Consumer Healthcare Market in LatAm Sanofi’s Successful Brand Strategies in LatAm 58
  • 59. Sanofi is #1 in CHC in LatAm ● CHC is a key contributor to Sanofi’s CHC Quarterly Sales (€m) growth in LatAm €130m ● Sales of €470m in last 4 quarters ● Brazil is the 4th largest contributor to Sanofi CHC sales ● Focus on leadership in key categories ● Pain, Gastrointestinals, VMS(2)/Nutraceuticals, Intimate Hygiene ● Strength built on heritage products and brand recognition ● Dorflex® in Pain ● Lactacyd® in Feminine Hygiene ● Launch of new products in growth categories 2009 2010 2011 2012 ● DePura® and Gelicart® /Trivance® in VMS/Nutraceuticals (1) IMS OTC Market MAT August 2012 (2) Vitamins, Minerals & Supplements 59
  • 60. Strategic Investment Focused on Regional Brands andLocal Heroes Pain Gastro- Cough & VMS/Nutra- Feminine Others intestinal Cold ceuticals, Hygiene ‘Well-Being’RegionalBrands Skin care SINUBERASE Eyes careLocal Calmidol OthersHeroes PAX Local Enterolyte BioGrip Brands Adermicina 60
  • 61. - The Champion in Brazil Keeps Growing● Top selling brand(1) in the pharma market in Brazil since 2006 ● #1 out of >11,500 registered brands● Key contributor to Sanofi’s revenue base in Brazil ● >€100m sales expected in 2012● Competitive presence at the Point sales (in €m) of Sale key for continued growth● Potential to leverage brand by using U.S. Chattem portfolio (1) IMS MIDAS, August 2012 61
  • 62. &A Successful CHC Growth Story in LatAm ● “Intimate Hygiene” : a new category and with low household penetration One Brand Equity ● Sustainable growth ● High consumer loyalty to established products with high brand recognition ● Low price sensitivity ● Brand not subject to patent cliff or impact from generics ● Long duration asset ● #1 category brand in ten LatAm countries(1) ● Growth of >40% expected in 2012 ● Geographic expansion ● DTC and brand LCM LatAm Brazil (1) IMS MIDAS, August 2012 (2) Direct-to-consumer 62
  • 63. - Innovation and Growth in the Categoryvia Geographical Expansion in LatAmin €m Q4 2012 Launch in Brazil Launch in Argentina Life-cycle Launch in Launch in management, Venezuela, Peru, Ecuador, Introduction of Colombia, Uruguay, capsules Launch Paraguay Central America in Mexico ● Strong relationship and brand equity with physicians and patients ● Physician and DTC educational program ● Expansion through regionalization strategy ● Currently launched in >10 countries ● Balanced high double-digit growth across all countries ● Growth of >50% in Latin America expected in 2012 63
  • 64. DePura® - A New CHC Brand Launched by Sanofiin the Brazilian Vitamins Market ● Regulatory status of a food supplement and promoted as an ethical medicine ● Developed locally by Sanofi Brazil ● Manufactured in Suzano facility ● Launched in Brazil in 2011 and reached market leadership in July 2012(1) ● DePura® kids launched in March ● Launch in LatAm planned for 2013 ● ~100m consumers aged 50+ are targets for vitamin D supplementation (1) IMS PMB July 2012 64
  • 65. Strategic Focus Has Driven Performance of Sanofi’s CHCGrowth Platform in LatAm Strategic Priorities Revenue Base in Latin America in the CHC market Expected to Double Over 3 Years in LatAm >2x Boost sales of €418m existing brands Drive regional expansion €242m Launch innovations and new variants 2009 2010 2011 2012e 65
  • 66. Sanofi is #1 in Consumer Healthcare in LatAm(1) ●1 Broad portfolio of well-established brands with name recognition at the country level (“local heroes”) ●2 Execution of regionalization strategies replicates business model in multiple markets (“regional brands”) ● Strong Brand Equity ● Professional Endorsement by Physicians ● Execution at the Point of Sale ●3 Steady flow of new products in high growth CHC categories (1) IMS MIDAS, August 2012 66
  • 67. DiabetesFernando SampaioGeneral Manager, Sanofi Pharma, Brazil 67
  • 68. AgendaThe Diabetes Market in Latin America and BrazilSanofi - A Leader in DiabetesBroadening Access with A Patient Centric Approach 68
  • 69. Diabetes is a Large Growth Opportunity in LatAm Adults with diabetes in Latin America(1) 36m Patients undiagnosed in Latin America(2) ~45% Percent of patients not achieving glycemic control target values in Latin America(3) >70% Expected CAGR growth of diabetes market between 2011 and 2015(4) 25% Expected size of Latin America diabetes market in 2015(4) €2.55bn (1) IDF. Diabetes Atlas 5th Edition, 2011 (2) Pramparo P et al. Prevention and Control (2006) 2, 149–157 (3) Lopez Stewart G et al. Pan Am J Public Health 22(1), 2007 69 (4) Internal Data (IMS projection)
  • 70. Diabetes Prevalence is Rapidly Growing in LatAm● Expected growth of diabetes Diabetes Prevalence(1) prevalence in LatAm is significantly higher than the U.S. or Europe +22%● Patients are predominately treated +58% 64m with first generation therapies +36% 56m● Lifestyle of middle class changing 51m 53m (i.e. increasingly sedentary, diets including fast food) leading to higher diabetes prevalence 38m 36m● Health Authorities focus on chronic diseases, prevention programs and treatment (1) IDF. Diabetes Atlas 5th Edition, 2011 70
  • 71. 20 Million Diabetic Patients Expected in Brazil by 2030● Aging population with increased Brazil: Number of Diabetic Patients(1) incidence of lifestyle related diseases 19.6m● Market is largely out-of-pocket and for high-end treatments● Increased purchasing power of 12.5m growing middle and low income classes● Treatment of chronic diseases is a priority of the Health Authorities ● Glibenclamide and NPH are provided free of charge through “Farmácia Popular” 2011 2030e (1) IDF Diabetes Atlas 5th Edition , 2011 – Country Estimates Table 71
  • 72. Other LatAm Markets Also Hold Sizable Potential Mexico Colombia ● 10.3m type 2 diabetes patients(1), one of ● Healthcare reform covers ~90% of the the highest prevalence rates in LatAm population ● Low rate of insulinization (<10%), low ● Analogue insulins now reimbursed on average daily dose and 95% of patients basic formulary, increasing insulin usage not at treatment goal(2) ● Sanofi is increasing investment by ~50% ● Innovative approach: Sanofi integrated with a focus on patient education solutions program proposed to the gov’t Venezuela Argentina ● Government increasing coverage ● Government programs offering last reaching ~50% of the diabetic population generation diabetes therapies & devices ● Diagnosis and treatment is increasing ● All patients are reimbursed for insulin due to social programs treatment from HMOs based on protocols and local legislation for diabetes ● Sanofi is increasing educational programs for GPs and at hospitals (1) IDF Diabetes Atlas 5th edition, 2011 (2) ENSANUT 2006. salud pública de méxico. 2010 (52) suppl 1:S19-S26 72
  • 73. Basal Insulins Are the Largest and Fastest GrowingInsulin Segment in LatAm Insulin Market Share by Type (Value) Latin America(1) Brazil(2) Market Share (%) Market Share (%) Growth vs. prior year (%) Growth vs. prior year (%) 14% 15% +16% +23% 5% -4% 14% +23% 72% 80% +27% +16% Basal €459m market size(1) €222m market size(2) Premix Short-acting (1) MAT IMS MIDAS June 2012; Retail + Non-Retail (2) MAT IMS August 2012; Retail + Non-Retail 73
  • 74. AgendaThe Diabetes Market in Latin America and BrazilSanofi - A Leader in DiabetesBroadening Access with A Patient Centric Approach 74
  • 75. Sanofi: A Track Record of Strong Growth in Diabetesin LatAm Diabetes LatAm Sales (€m) ● LatAm Diabetes sales in 2012 228 (+35%) 186 (+26%) expected to approach €300m and grow more than 20% at CER ● Fastest growing markets(1) ● Mexico (+33% at CER) ● Colombia (+67% at CER) ● Venezuela (+73% at CER) ● LatAm Lantus® sales in 2011 were €176m, up 35% at CER ● Lantus® is #1 product for Sanofi in LatAm 2010 2011 2012 (1) Based on 9M 2012 results 75
  • 76. Lantus® is the Cornerstone of our Diabetes Franchise andour LatAm Presence is Well-Diversified Sales Split by Product(1) Sales Split by Country(1) % of Sales % of Sales Venezuela Others(2) Brazil 13% Argentina 23% 11% 29% 10% Colombia 77% 11% 26% Lantus® Others Mexico (1) Based on 9M 2012 reported sales (2) Amaryl®, Apidra®, Insuman® 76
  • 77. Sanofi: The Leader in Diabetes in LatAm (1)● Sanofi has a leading share of the LatAm Diabetes Sales: Market Share diabetes market in LatAm● Broad leadership across LatAm markets(1): 21.1%● #1 in Mexico (27% share)● #1 in Venezuela (22% share) 15.3%● #2 in Brazil (20% share)● Provide integrated patient solutions treating multiple patient 9.1% comorbidities 8.6% 8.5% Merck KGaA● Sanofi diabetes has solid company image: Sanofi Merck Novo Lilly● #1 ranking among endocrinologists and diabetologists in Brazil(2) (1) Year-to-date IMS MIDAS Data, Quarterly (as of June); Retail + Non Retail (2) Source: Diabetes Image and Company Performance (180 physicians) 77
  • 78. Sanofi Has the Highest Insulin Market Share in LatAmand Brazil Insulin Market Share by Company (Value) Latin America(1) Brazil(2) Market Share (%) Market Share (%) Growth vs. prior year (%) Growth vs. prior year (%) 19% 19% +28% +44% 40% 42% 2% nm +25% +34% 35% +14% 39% -3% Sanofi 3% +30% Novo Lilly Others (1) MAT IMS MIDAS June 2012; Retail + Non-Retail (2) MAT IMS August 2012; Retail + Non-Retail 78
  • 79. Sanofi: A Strong Heritage of Diabetes Solutions in Brazil 1972 1996 2000 2004 2010Daonil ®glibenclamida ● Launched ● Launched ● Completed ● Launched 46 ● Launched ● Unique patient Daonil®, the Amaryl®, leader Insuman® and in licensing Lantus®, a novel support leading in the OAD pushed the agreementsccc basal insulin & programs: 24/7 sulphonylurea market from market towards became the call center, until 1999 1999 to 2002 devices leading insulin educators, etc. 79
  • 80. AgendaThe Diabetes Market in Latin America and BrazilSanofi - A Leader in DiabetesBroadening Access with A Patient Centric Approach 80
  • 81. Patients’ Purchasing Power Limits Private Market Growth Income per Household Brazil (households in millions) ● Outpatient drugs are out-of- Monthly pocket expenses in Brazil 2004 2009 Change Income ● Patients generally allocate 3% to High 3.3 4.2 10% of their income to +1.0 > €2.2 k pharmaceutical spend(1) Middle ● <10% of the population can afford 22.3 29.3 +7.0 the average cost of Lantus® €0.4 - 2.2 k therapy(1) Mid-Low 13.8 14.0 ● Economic growth is increasing the +0.2 €0.2 - 0.4 k affordability of medications but access challenges remain Low < €0.2k 11.1 9.3 -1.8 Source: IBGE (PNAD 2009/2004), Analysis Primeira Consulta Euro = 2,3 Reais; 2004 income adjusted by inflation to 2009 figures (1) Internal research 81
  • 82. Lantus® is Not Sufficiently Accessible in Brazil Brazil: Lantus® Share By Income Class(1,2)● Insulin analogues are priced at a 19% premium● Lantus® market share is concentrated in income class “A”● Main objective is to expand access Target Groups to the middle class ● Target groups “B”, “C” and “D” 4% represent nearly half of insulin 3% patient population 1% 1% E < 1,0K D 1,0 - 2,0K C 2,0 - 3,0K B 3,0 - 4,5K A > 4,5K (1) Source: Vidalink analysis / Primeira Consulta; patient share by volume (2) A = >4,500 BRL per month; B = 3,000 to 4,500 BRL per month; C = 2,000 to 3,000 BRL per month; D = 1,000 to 2,000 BRL per month; 82 E = < 1,000 BRL per month
  • 83. “Alcance” Project Expands Lantus® Access in Braziland Supports Volume Expansion● Selectively targets patients that cannot afford Lantus® therapy● Individual screening process adjusts benefit to each patient’s need and income● Reduces the overall treatment cost for diabetes patients● Leverages multiple partners and Sanofi’s broad portfolio● Offers patients a comprehensive solution treating diabetes and other co-morbidities 83
  • 84. Sales in Brazil Accelerated following Implementationof Alcance Lantus® Sales Growth: Private Sector (€m) 33% Alcance 27% Implemented 24% 22% 13% 0 2007 2008 2009 2010 2011 A key growth driver for Lantus® in Brazil 84
  • 85. Delivering More Value to Patients in Brazil Insupen needle aims to improve patient satisfaction; Sanofi has a broad distribution 2012 On the market system and strong customer service ® Brazil has key competitive advantages to leverage the opportunity, including Alcance 2013 Anticipated launch and superior share of voice with physicians Sanofi will bring the most integrated and complete offering for diabetes treatment in 2013 Anticipated launch Brazil including disease management Diabetic foot ulcer is a common complication of diabetes; Hidrastar is a 2013 Anticipated launch moisturizing cream for daily use A new “pen” device developed exclusively 2014 for the emerging markets Anticipated launch 85
  • 86. An Integrated Solution Provider for Diabetic Patients Core Brands Devices/Services ● Lantus® ● BGM(1) ● Amaryl® ● SoloSTAR Patient Value ● Apidra® ● Moisturizer(1) Value Market ● Lyxumia®(2) ● Call Center ● Educators ● Other Services Tailored Offering Volume ● Alcance Market Patient ● All-Star pen(1) Access ● Insuman®(1) ● Generics (1) Product is not yet commercially available in Brazil (2) In-licensed from Zealand Pharma A/S. Lyxumia® is the proprietary name submitted to health authorities for investigational GLP-1 RA lixisenatide. Lixisenatide is not currently approved or licensed anywhere in the world. 86
  • 87. Key Pillars to Fuel our Diabetes Growth in LatAm 87
  • 88. GenericsHeraldo MarcheziniSenior Vice President, Latin Americaand General Manager, Brazil 88
  • 89. Agenda Generics - A Fast Growing Market Segment Medley - A Major Player in the Generics MarketMedley’s Strategy for Continued Strong Profitable Growth 89
  • 90. Generics Are a Fast Growing Segment in the LatAmPharmaceutical Market (1) ● Drivers of generics market growth: LatAm Pharmaceutical Sales (in €bn) ● Lack / loss of exclusivity of patented originator drugs ● Government expenditures providing access to medicine and coverage to a broader population ● Aging population and increased prevalence of chronic diseases ● “Branded Generics” represent majority of generic market in value ● Further acceleration of generics market expected ● Strong national manufacturers (1) IMS Midas MAT Q2 2012 (Retail only, Pharmacy Purchase Price (PPP) not included) 90
  • 91. Continued Leadership in the Generics Market is Key toour Growth Strategy in LatAm Sales in €bn in 2012(1) Expected growth 2012-17(2) (CAGR) Total Market Generics +13% +16% +5% +8% +25% +31% +19% +20% +8% +11% +3% +4% (3) LatAm generics market expected to reach ~€35bn in 2017 (1) IMS MIDAS MAT Q2.2012 (Retail only, PPP not included) (2) IMS Prognosis and internal estimates (3) International Nonproprietary Names 91
  • 92. The Brazilian Generics Market OffersTwo Distinct Business Models 1 2 Pure Generics “Similares” Rx Originator INN Branded Generics • Mandatory % below • High Reference Price • Equivalent to Generics Price • Low discounts branded reference price • Low discounts • High discounts • Sales Channels • Field force Investment, • Field force • Investment at POS(1) • Branding, Sampling Promotion • Concept selling • Added Value • Pharmacy presence (1) Point of Sale 92
  • 93. Agenda Generics - A Fast Growing Market Segment Medley - A Major Player in the Generics MarketMedley’s Strategy for Continued Strong Profitable Growth 93
  • 94. - A Powerhouse for Affordable Medicines (1) ● Total sales of €370m in 2011 ● ~1,800 employees ● Headquartered at Campinas site in São Paulo, Brazil ● Strong operations and market reach ● ~550 sales representatives ● Worldclass industrial facilites ● ~1,000 employees in Industrial Affairs ● Customer service to 25,000 pharmacies and 80,000 physicians ● Generics INN, Branded Generics (1) Generics sales in LatAm were in total €441m in 2011 (of which Medley was €370m) 94
  • 95. A Highly Competitive Portfolio Alignedwith Market Demand in Brazil Medley‘s portfolio includes 65 out of 77 Medley leads the market owning 7 out of high-volume generics molecules(1) the top 10 generics molecules in value(2) Total Generics Total Generics Rank Molecule Total Market Market market market Market Leader Share 77 molecules BRL 77 account for (in m) 65 molecules ~80% of molecules 1 Losartan 71.7 19.6% Generic market volume 2 Sildenafil 36.6 26.3% 108 ~80% 3 Pantoprazole 33.0 51.3% molecules volume 4 Omeprazole 29.6 40.9% 5 Enalapril 29.2 28.0% 313 6 Simvastatin 27.3 35.2% molecules 7 Amoxicillin 21.2 27.5% 8 Clopidogrel 21.1 30.7% ~20% 9 Metamizole Sod. 19.4 46.9% volume 10 Atenolol 18.1 35.7% (1) IMS MAT September 2012 (2) IMS September 2012 in local currency – generic market 95
  • 96. High Exposure to the São Paulo State Market ProvidesOpportunity for Geographic Diversification Market Share per Region(1) Volume Split by Region in Brazil(1) (in volume) 24% 25% 20% São Paulo State 22% São Paulo State, 41% (1) IMS YTD August 2012 (units) 96
  • 97. A Compelling Presence at the Point-of-Sale● Exploit selling space to raise awareness for preferred brand● Wealthier middle class asking for increased number of product presentations● Favorable purchasing conditions at modern pharmacy chains● Secure profitability through returns from trade marketing investments 97
  • 98. Agenda Generics - A Fast Growing Market Segment Medley - A Major Player in the Generics MarketMedley’s Strategy for Continued Strong Profitable Growth 98
  • 99. - Consolidate Leadership Position in the Generics Market in LatAm 3 Strategic Levers for Future Growth in Brazil and LatAm Maintain leadership Broaden position in Extend geographic1 in volume market 2 Branded Generics 3 reach • Address growing demand • Expand in Branded • Enlarge business model from population segments Generics across LatAm markets • Middle class, Aging population • M&A(1)  Focus on high  Leverage existing  Generate synergies consumption strong image from Sanofi’s leading molecules position in LatAm (1) Genfar - The closing of the transaction is subject to certain conditions precedent and is expected to occur in Q1 2013 99
  • 100. Esomeprazol - A Major Launch Success in 2012 Share of esomeprazol market in Brazil(1) ● Esomeprazol: a high volume moleculein k units ● Launch of generic version of Nexium® by Medley in July 2012 ● Medley rapidly expanding its unit share 12% 24% ● Medley achieved 29% market share of generic esomeprazol in September(1) 29% ● Medley’s esomeprazol is the #1 generic version in Brazil(1) (1) IMS PMB September 2012 100
  • 101. Portfolio Expansion into Key Countries Across LatAm 25 countries with Medley’s products in Latin America 78 therapeutic classes 150 products in its portfolio, in over 500 presentations 645 dossiers prepared since LatAm platform was established in 2010 262 dossiers approved 101 101
  • 102. - A Brand With a Growing Reach MEXICO Branded GX Q3 2011 INN ACHIEVEMENTS HONDURAS INN (where Medley is present): Q4 2011GUATEMALA INN Q4 2010 PANAMA EL SALVADOR Q4 2011 INN million patients buy ~24 INN Q3 2011 VENEZUELA Q3 2011 Branded GX Medley products COLOMBIA Branded GX monthly(1) Q1 2012 Branded GX BRAZIL INN (1) Based on units sold per month in Latin America YTD October 2012; internal analysis 102
  • 103. Genfar Acquisition in Colombia to Accelerate GrowthPath towards Leadership in Affordable Medicines ● Sanofi to acquire Genfar S.A.(1) in Generics Segment in Colombia by (2) Colombia Market Share (value) ● #1 position by sales(2) Sanofi and Genfar to reach ● One of the fastest growing companies ~30% share of Gx market ● Genfar has a commercial presence 22.6% 22.5% in more than 10 countries in the Andean countries & Central America ● >1,200 employees in the region ● Sales of $133m in 2011 11.3% 10.9% ● 30% of sales outside of Colombia LAFRANCOL MCKESSON 6.7% ● Industrial facilities located in Cali LA SANTE ● Large portfolio of affordable medicines (1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013 (2) IMS MAT June 2012 (Generics and Branded Generics) 103
  • 104. Genfar – A Complementary Footprint in the Andean andCentral American Region ● A commercial presence covering a region of 200m people ● Andean and Central America generics market of $5.2bn growing at +12%(1) ● Solid awareness of Genfar brands in large markets ● Colombia, Peru, Venezuela ● Leadership positions in Generics in most markets after acquisition ● A strategic fit with Sanofis portfolio ● Improves leverage with existing relationships in the distribution channels (1) IMS MAT June 2012 104
  • 105. Sustaining Leadership in the Generics Market in LatAm ● Generics are expected to remain the fastest growing segment in Pharmaceuticals in LatAm ● Medley is the leader in affordable medicines ● Broad product portfolio ● High brand recognition ● Local manufacturing capabilities ● Medley is poised for future growth ● Maintain leadership in the volume market ● Enlarge position in Branded Generics ● Extend geographical reach in the region ● Genfar acquisition to further boost leadership position in affordable medicines across the Andean region 105
  • 106. Animal HealthJosé BarellaSenior Vice President, Animal Health 106
  • 107. Agenda Merial - A Leading Presence in Latin America Production Animal Health - Growth Drivers Companion Animal Health - Growth Drivers Strategic priorities in Latin America 107
  • 108. Merial: An Animal Health Leader with a Broad, DiversifiedGeographic Footprint ● Merial global sales were €2bn in 2011 Merial 2011 Sales Split by Region ● Globally ranked #1 in the Pets market(1) Other and #3 in Production Animals(2) Countries ● 25% of sales in Emerging Markets, approaching Western Europe in size 8% (vs. 20% in 2008) Emerging ● Growth driven by Asia and LatAm Markets 23% U.S. ● Room for further expansion 25% 40% 42% ● Expected to grow twice as fast as developed markets from 2012-2015(1, 2) ● LatAm accounts for ~50% of Merial Emerging Markets sales 27% 27% Western Europe (1) Source: Vetnosis Companion Animal 2012 Study (2) Source: Excludes Medical Feed Additives; Vetnosis 2012 Avian Study, Vetnosis 2012 Pig Study, Vetnosis 2012 Cattle Study, Vetnosis 2012 Sheep study 108
  • 109. Merial: A Leading Presence in LatAm Merial: LatAm Quarterly Sales (€m)(1) ● LatAm sales in 2012 expected to 228 (+8%) 246 (+11%) approach €270m, up double-digits at CER ● Paulinia, Brazil manufacturing site is one of the largest AH facilities in the southern hemisphere ● Leading positions in key LatAm markets: ● #1 ranking in Argentina(2) ● #3 ranking in Brazil(3) ● #4 ranking in Mexico(4) ● Brazil, Mexico and Argentina accounted for ~75% of YTD 2012 LatAm sales 2010 2011 2012 (1) Growth at constant exchange rates (2) Source: CARPROVE (3) Source: IMS-SINDAN 109 (4) Source: KLEFFMANN Goup
  • 110. Merial: Double-Digit Growth in Both Production andCompanion Animal Health Businesses Merial Sales in Latin America (€m) Production Animal Health Sales Companion Animal Health Sales CAGR +10% 185 CAGR +14% 61 2008 2009 2010 2011 2012e 2008 2009 2010 2011 2012e 110
  • 111. Merial LatAm Well Positioned with a Wide Range ofLeading Premium Brands #1 Pets brand in LatAm(1) Parasiticide controlling fleas and ticks for pets Recombinant DNA vaccine – advanced protection #1 internal / external parasiticide control in LatAm for cattle and swine(1) Pour-on broad spectrum parasiticide for cattle Leading innovative recombinant vaccine for poultry Leading Foot and Mouth disease supplier in LatAm (1) Compiling data from IMS-SINDAN, CARPROVE and KLEFFMANN 111
  • 112. Agenda Merial - A Leading Presence in Latin America Production Animal Health - Growth Drivers Companion Animal Health - Growth Drivers Strategic priorities in Latin America 112
  • 113. Latin America Is a Top Producer of Meat Globally LatAm: Feeding the World 26% of world 21% of world 6% of world 16% of world bovine poultry pork meat production production production production #1 #2 #5 #2 in the world in the world in the world in the world Source: Vetnosis STORM 2012 113
  • 114. Brazil Ranks #3 in Meat Production Globally(1) Beef Meat(1) Chicken Meat(1) Pork Meat(1) (mn tons) (mn tons) (mn tons) 14.2 3.8 9.9 9.0 11.7 3.2 2011 2020e 2011 2020e 2011 2020e Brazil accounts for 14% Brazil accounts for 11% of Brazil accounts for 3% of of world bovine meat world poultry production(1) world pork production(1) production(1) ●Ranks #3 globally ●Ranks #4 globally ●Ranks #2 globally (1) Vetnosis 114
  • 115. Increase in Production and Yield Improvement DriveGrowth of the Production Animal Health Market LatAm: Meat Production(1) LatAm: Production Animal Health(1) (ktons) (m€) CAGR +2% CAGR +7% 39,623 1,211 2010 2015e 2020e 2010 2015e 2020e (1) Vetnosis STORM 2012 115
  • 116. Increased Spending Per Head Is The Major Driver ofGrowth in Production Animal Health in LatAm Spending Per HeadLarge Animals (Swine & Ruminant)(1) Avian(1) (€ per Medicalized Treatable Unit) (€ per 100 x Medicalized Treatable Unit) 3.92 6.25 2.35 3.63 2011 2020e 2011 2020e (1) Vetnosis STORM 2012 116
  • 117. Agenda Merial - A Leading Presence in Latin America Production Animal Health - Growth Drivers Companion Animal Health - Growth Drivers Strategic priorities in Latin America 117
  • 118. The Pet Moves “From the Backyard to the Bed” withGrowing GDP per Capita Food Consumption/Pet 2009 (kg) 100 Emerging Markets Mature Markets GERMANY 80 FRANCE UK 60 USA 40 BRAZIL ARGENTINA JAPAN COLOMBIA 20 MEXICO 0 0 10,000 20,000 30,000 40,000 50,000 GDP/Capita 2009 (US$) Source: Euromonitor 2009 118
  • 119. Substantial Opportunity for Growth as LatAm MarketsSpend More on Pets Animal Health Expenditures per Pet ($) Latin America Developed Markets 34.8 29.6 25.6 20.0 6.4 5.2 2.1 2.2 Source: Euromonitor 2009, Vetnosis STORM 2010 119
  • 120. A Fast Growing Companion Animal Health Market LatAm: ● LatAm Companion Animal Health Companion Animal Health Market(1) market is expected to more than (€m) double over a 10 year period(1) ● Improvement in the general welfare in LatAm CAGR +8% ● Increased spending per pet: “Pet as a family member” ● Brazil represents ~30% of the LatAm companion Animal Health 429 market(1) 2010 2015e 2020e (1) Vetnosis STORM 2012 120
  • 121. Agenda Merial - A Leading Presence in Latin America Production Animal Health - Growth Drivers Companion Animal Health - Growth Drivers Strategic priorities in Latin America 121
  • 122. Sustaining Growth, Entering New Markets andLeveraging our Leading Portfolio LatAm Production AH LatAm Companion AH ● Sustain Avian leadership ● Steady growth of purchasing power ● Leverage leading vaccines in LatAm to benefit Frontline business ● Introduce new parasiticides and ● Provide services in a partnership vaccines approach with producers ● Increase strength of local portfolio ● Expand ruminants business and defend against generics ● Develop new local brands ● Leverage government partnerships ● Enter fast growing categories to improve rabies business ● Expand into new geographies ● Introduce new therapeutics ● Develop swine via customized vaccine platform from recent Newport acquisition 122
  • 123. New Initiatives to Capture Growth in Latin America Creation of a local R&D Establish LatAm Center to meet local needs headquarters in Campinas, Brazil Fully capture potential of Genfar acquisition(1) and Brazil’s Northern & Colombia as a new Midwestern regions subsidiary (1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013 123
  • 124. Latin America Animal Health – Well Positionedfor Continued Strong Growth● Double-digit LatAm growth for Merial expected over the next few years ● Increasing world protein consumption to fuel Production AH growth ● Increasing welfare of population to drive Companion AH growth● Geographical expansion through increased investments ● Increase presence in less penetrated regions of major countries ● Create new affiliates in smaller LatAm countries ● Newly established local R&D center will develop local brands● Leveraging premium brands● Opportunistic business development transactions 124
  • 125. VaccinesPatrice LebrunVice President, Latin AmericaSanofi Pasteur 125
  • 126. Agenda Vaccines - A Sizeable and Attractive Market Sanofi Pasteur - A Well Entrenched PlayerDengue - A Significant Opportunity 126
  • 127. The Vaccines Market in LatAm is Sizeable LatAm Market(1) (1 Market Characteristics(1) 2011 Market Size: €280m ● ~€1.4bn sales in 2011 (2) ● +19% CAGR over 2008-2011 Total Population: 596m (2) Birth Cohort: 10.7m ● Brazil and Mexico: ~60% of market ● Public market: 75% of sales ● Governments increasingly attracted by innovative products 2011 Market ● Private market for “non-covered” 2011 Market Size: €590m vaccines Size: €520m ● Growing trend towards local production Projected LatAm market growth over 2012-17(1): +13% CAGR (1) Sanofi Pasteur internal estimates for market size and growth (2) PAHO Health Situation in the Americas – Basic Indicators 2012 127
  • 128. Mexico and Brazil Constitute the Bulk of Market Immunization Schedule(2) ● Mexico and Brazil Brazil Mexico ● 55% of LatAm population BCG 0 0 ● 4.8m birth cohort Hep B 0 0, 2, 6m ● Vaccines sales >€800m(1) OPV 6, 15m 3 campaigns per year for 2m – 5y ● Public immunization programs drive IPV 2, 4m market growth DTP 15m, 4y 4y DTP-Hib-HepB 2, 4, 6m ● Public and industrial partnerships key DTaP-Hib-IPV 2, 4, 6, 18m for market access Pneumo_conj 2, 4, 6, 12m 2, 4, 12m ● Opportunities with private market Rotavirus 2, 4m 2, 4m ● Room for adoption of new and MR > 13y innovative vaccines and services MMR 12m, 4y 12m, 6y MenC_conj 3, 5, 15m ● Markets becoming increasingly Pneumo 23 > 60y, @risk > 65y competitive Td >20y, preg TdaP > 12y, preg Yellow Fever 9m, ev 10y 6-24m, > 60y, preg, 6-59m, > 60y, Influenza HCW, @risk @risk 11-60y HPV > 9y (1) Sanofi Pasteur internal estimate (2) As of October 2012 128
  • 129. Agenda Vaccines - A Sizeable and Attractive Market Sanofi Pasteur - A Well Entrenched PlayerDengue - A Significant Opportunity 129
  • 130. Sanofi Pasteur is a Leading Player in LatAm 2011 Sales Split by Country ● €374m sales in LatAm in 2011 2008-2011 CAGR(2) ● +14% CAGR over 2008-2011 ● 2nd player with 29% market share(1) CAGR CAGR Others Brazil ● 34% of vaccine sales in Emerging +9% +26% Markets ● Brazil and Mexico: 2/3 of sales CAGR +11% ● Undisputed position in flu Mexico immunization ● Strong positions in pediatric and 2011 Sales Split by Product endemic vaccines % of Sales Others ● Industrial presence and strong local 9% partnerships Travel & Flu Endemic 18% 53% 20% PPH (1) Sanofi Pasteur internal estimate (2) Including pandemic A(H1N1) Flu vaccines sales PPH – Pertussis, Polio, Hib 130
  • 131. Local Industrial Capabilities Providea Strategic Advantage to Sanofi Pasteur Ocoyoacac, Mexico ● Flu vaccines ● Up to 25m dose capacity ● €100m investment ● 1st lots being shipped for the 2012-13 season ● Partnership with Mexican federal vaccine manufacturer Birmex Pilar, Argentina ● Hepatitis B antigen for pediatric hexavalent vaccines Hexaxim™ in LatAm and other international markets ● 50m dose capacity ● €60m investment Birmex – Biologics and Reagents Laboratories of Mexico 131
  • 132. Brazil Illustrates Strong Track Record of Partnershipswith Sanofi Pasteur Partnership with Butantan ● Sanofi Pasteur, an historical Step-wise technology transfer process initiated in 1999-2000 partner to Brazil public health ● Meningitis outbreak (1974) Quality control tests ● Yellow fever outbreak (2008) ● Pandemic A/H1N1 flu (2009-2010) ● Case-study with Butantan Institute Filled vaccine ● Goal: building capacity for flu vaccine production and maintaining reliable and consistent supply Formulated bulk ● Partnership with Fiocruz for IPV introduction in NIP in 2012 Blending, ● Opportunity to build long-term filling & packaging technical and scientific cooperation Support Production technology & 1st shipment expected in 2013 Assistance Butantan Institute – Biomedical research center affiliated with the São Paulo State Secretary of Health Fiocruz – Oswaldo Cruz Foundation’s vaccines unit is Immunobiological Institute of Technology (Bio-Manguinhos) IPV – Inactivated Polio Vaccine NIP – National Immunization Program 132
  • 133. Sanofi Pasteur Remains the Undisputed Leaderin the Rapidly Growing LatAm Flu Market ● Seasonal flu sales in 2011: €197m Seasonal Flu Vaccines Sales (in €m) ● >70% market share (public+private)(1) ● Market driven by public policies: €197m ● Public market: 70% of sales(1) ● Most countries recommend: children up to 24-36 months and elderly > 60 yrs - Extension expected ● Mexico influenced by U.S. policy €107m ● Private market offers opportunities ● IDflu, Private companies, Pharmacies ● Evaluating further opportunities for local partnerships in 2013 2008 2009 2010 2011 (1) Sanofi Pasteur internal estimates 133
  • 134. Lead Market Entry of Inactivated Polio Vaccine andAcellular Pertussis Combo Portfolio in LatAm ● Major role in the switch from OPV Immunization Rate(1) (in %) to IPV post-polio eradication 100% ● IPV included in the Brazilian national immunization program as of 2012 ● Pentaxim®: 5-in-1 pediatric combo ● Already launched in Mexico and some other countries ● Evaluating local agreements for wcP OPV broader market access ● Future launch: Hexaxim™, first fully- liquid hexavalent pediatric combo ● Includes Hepatitis B antigen produced in Argentina (Pilar) acP IPV 0% Pertussis Polio Pentaxim® – Diphtheria, Tetanus, Pertussis, inactivated Polio, and Haemophilus Hexaxim™ – 5 above antigens plus Hepatitis B OPV – Oral Polio Vaccine IPV – Inactivated Polio Vaccine wcP – whole cell Pertussis acP – acellular Pertussis 134 (1) Sanofi Pasteur estimates applicable for birth cohorts in LatAm – Primary series in 3 doses for each antigen.
  • 135. Private Vaccine Market in LatAmProvides New Growth Opportunities ● Solid Private Market evolution Middle Class Consumer Spending(1) (in trillion U.S. $) ● CAGR 2008-2011: +11% $3.1 tr ● Growth fueled by rising middle class ● Looking for higher standards of health $1.5 tr ● Uncovered teens / adults population reached via new channels ● Emergence of new stakeholders 2009 2030 ● Leveraging vaccines as differentiation (e.g. SESI in Brazil, Pharmacies - Walmart in Mexico & Central America, Locatel in Venezuela, Obras Sociales in Argentina) Evolution of Offering in Brazil Services Offer ● Moving from product sales to National SESI vaccination campaign and services Flu  Campaign Offer Regional SESI Flu Vaccine individual companies 1997 2007 2012 Volumes in SESI 0 0.5md >1 md SESI – Serviço Social da Indústria (Social Services of the Federation of Industries) (1) OCDE Americas Market Intelligence 2012 135
  • 136. Brazil and Mexico Expected to Remain LargestOpportunities for Sanofi Pasteur in LatAm Brazil Mexico ● Continuous process of technology ● Unique Flu industrial plant in LatAm transfer for Flu while private Flu ● Strong performance of Pentaxim® market progressively evolves ● Avaxim® : new CONAVA Hepatitis A ● Adacel® Quadra launched in 2011 recommendation in 2010 for at-risk ● IPV introduction in public market children - Future extension expected in 2012 ● Adacel® launched in 2012 ● Market entry of Hexaxim™ expected and ● Multiple new launches expected: Menactra® expected in 2014 2014 in ● 2013: Tetraxim® and Menactra® ● 2014: Hexaxim™ Key countries for potential Dengue vaccine introduction CONAVA – National Vaccination Council 136
  • 137. Agenda Vaccines - A Sizeable and Attractive Market Sanofi Pasteur - A Well-Entrenched PlayerDengue - A Significant Opportunity 137
  • 138. Dramatic Increase in Number of Dengue Caseswith Broad Geographical Expansion (1)Dengue Incidence, 1980-2010 < 50 > 100 - 200 Unavailable data (per 100,000 by country) 50 - 100 > 200 Without indigenous cases 1980 - 1989 1990 - 1999 2000-2009 2010 (1) Source: www.paho.org 138
  • 139. Dengue Hyperendemic State in LatAmCreates Public Health Concerns ● Estimated 400m people living in Increasing Morbidity and Mortality(1) at-risk or endemic areas Period 80’s 2008-11 ● Incidence typically higher in Dengue cases 1.0m 4.8m adolescents and young adults DHF 13.4K 128.7K ● Trend towards infection in younger DHF as a % of total cases 1.3% 2.7% ages Fatalities 242 2,861 ● Dengue seasonality depends on rainy season in each country Cost of Dengue Illness(2) ● 4 serotypes circulating with Aggregate annual costs in the Americas epidemiology changes over time Estimated at $2.1 billion for the period 2000-2007 ● Public health priority for health Peak at $3.1 billion in 2007 authorities and PAHO 40% in Brazil alone PAHO – Pan American Health Organization DHF – Dengue Hemorrhagic Fever (1) San Martin JL et al. Am. J. Trop. Med. Hyg., 82(1), 2010, pp.128-135 for the 80’s, and www.paho.gov for 2008-2011 (2) Shepard DS et al. Am. J. Trop. Med. Hyg., 84(2), 2011, 200-207 139
  • 140. Dengue Vaccine: Seeks to Address a Major Threatin LatAm ● Phase III trial ongoing in LatAm(1) Clinical Program in LatAm (25,000 subjects) ● 21,000 subjects – 23 centers ● Efficacy results expected in 2014 MEXICO Ph I, II, III (efficacy, co-administration) ● Main channel expected to be the PUERTO RICO public segment Ph II, III (efficacy) ● Significant opportunities in private markets for “non-covered” age groups HONDURAS Ph II, III (efficacy) ● Regular contact with regulatory agencies PANAMA (co-administration) ● ANVISA (Brazil), COFEPRIS (Mexico) and INVIMA (Colombia) COLOMBIA ● Strong partnerships engaged with Ph II, III (efficacy) BRAZIL health authorities and international PERU Ph II, IIII (efficacy) organizations (e.g. PAHO) Ph II (co-administration) (1) ClinicalTrials.gov Identifier: NCT01374516 ANVISA – National Health Surveillance Agency COFEPRIS – Federal Commission for the Protection against Sanitary Risk INVIMA – National Institute for Drug and Food Surveillance MoH – Ministry of Health 140
  • 141. Multiple Opportunities Exist in LatAm for Future Growth ● Solidify existing businesses ● Introduce new products and indications ● Leverage industrial assets and strong public health relationships ● Partner locally to expand market access ● Secure profitable segments/offer expansion in private market ● Continue market preparation for Dengue Launching Dengue vaccine will be key to exceeding market growth in next 5 years 141
  • 142. Industrial AffairsFrançois BlanotVice President Industrial Affairs,Latin America 142
  • 143. Agenda LatAm Manufacturing Capabilities: a Strategic Advantage Suzano: A Key Site in LatAm 143
  • 144. Industrial Affairs Are Committed to Support Sanofi’sStrategy in LatAm 1 Grow LatAm presence, a key contributor to Emerging Markets Sanofi Three Point 2 Focus on growth platforms Strategy 3 Achieve profitable organic growth coupled with bolt-on acquisitions 1 Pro-actively manage industrial network Industrial Affairs 2 Constantly adapt to business competitive needs Execution 3 Support active acquisition policy and Life Cycle Management 144
  • 145. Sanofi Benefits from a Strong Industrial Network in LatAmwith 10 Plants Dedicated to the Regional Market Broad industrial footprint Ocoyoacac ● Longstanding industrial presence in LatAm ● Pharma products: 637m(1) units manufactured, 3,350 employees(2) Guarenas ● Successful Generics integration: Medley, Kendrick Cali ● Merial & Sanofi Pasteur: 20m(3) units and 35m(3) doses respectively, 480 employees in total Brasilia Industrial Network Paulinia Our strengths Campinas Merial plant Suzano ● State of the art in-house manufacturing Sanofi-Pasteur plant Sao Paulo Pilar ● Wide product portfolio and strong Generics expertise Sanofi Pharma plant Mirador ● Product development capabilities with regional to Regional Headquarters global potential ● Long-term performance track record of Industrial Industrial hub Operations 95% of Pharma volumes sold in LatAm are produced locally (1) 2011 figures, excluding external manufacturing (2) Figures as of September 2012 (3) 2011 figures and estimated 2012 production for Ocoyoacac Vaccines 145
  • 146. Our Pharma Industrial Network Is Tailored to RegionalBusiness Needs Production Markets supplied by the Country Site Headcount Rank (1) split plants Suzano 980 Brazil (95%) 1 Campinas 920 Other LatAm countries (5%) Ocoyoacac 550 Mexico (90%) 2 Textitlan 225 Other LatAm countries (10%) Argentina (96%) 2/3 Sanofi, 1/3 toll-in Mirador 190 3 Other LatAm countries (4%) Venezuela (99%) Guarenas 110 4 Other LatAm countries (1%) Colombia (73%) Cali 230 5 Other LatAm countries (27%) (1) LatAm Pharmaceutical Markets ranking 2011, in Units, source IMS MIDAS 146
  • 147. Industrial Capacities Strengthened by Recent Bolt-onAcquisitions and Pro-active Plant Management Year 2008 2009 2010 2011 2012 2013e 12 +1 Genfar(3) +2 Paulinia Mirador Textitlan BrasiliaIndustrial +3 Ocoyoacac V(2) Sumaré Paulinianetwork in Textitlan -2 Campinas Campinas Mirador LatAm Ocoyoacac P 5 Sumaré Ocoyoacac P(1) Ocoyoacac V Suzano Suzano Cali Cali Existing Acquired Built Guarenas network companies capacities Guarenas Pilar Pilar (4) Share ofproductionoutsourced Increased capacity allowed to reduce outsourcing and to manage rapid volume growth (1) Ocoyoacac Pharma (2) Ocoyoacac Vaccines (3) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013 147 (4) 2012e
  • 148. Double-Digit Growth in Pharma Production SupportsDynamic Local Sales Growth Pharma Sales Growth in LatAm (€m) Volume Growth produced in LatAm (Mu) CAGR CAGR 18 % 25 % 2,490 2,134 1,516 1,633 Acquisition and successful integration of targets 2009: Medley, Kendrick 2010: Mirador site 2012: Genfar(1)Key Answersto Production Consistent investments to increase capacity and launch newGrowth needs products €110m(2) of cumulative Capex 2008-2011 Increased industrial productivity through LEAN manufacturing implementation (1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013 (2) At CER, 2011 exchange rate 148
  • 149. Animal Health and Vaccines Industrial Networks Align withMerial and Sanofi Pasteur Strategies ANIMAL HEALTH VACCINES LatAm industrial strategy LatAm industrial strategy● One site providing a competitive export platform ● Two sites dedicated to regional market and ● To supply regional market with vaccines emerging countries ● To fuel global needs in pharma products ● Take advantage of regional footprint ● To source innovative soft chewable galenic forms ● Foster market access● Seize external growth opportunities ● Invest in new facilities ● Leverage the Group’s industrial presence Industrial network in LatAm Industrial network in LatAm Volume Production Markets Capacity Production Markets Site HC(1) In m units split supplied Site HC(1) (m doses) split supplied LatAm markets for vaccines Ocoyoacac 100 25 Influenza MexicoPaulinia 300 20 Worldwide for International Pilar 80 50 Hepatitis pharma markets (1) Headcount 149
  • 150. Local Industrial Presence in Main LatAm MarketsRemains Key to our Commercial Success Foster market access conditions • National regulations and institutional buyers support local production • Lower tariffs and import restrictions inside free trade areas Well adapted Mitigate currency risks to local market Manage portfolio diversity and customer alignment features Adapt quickly to market changes and demands Expand regional portfolio and implement local LCM • CHC and nutraceuticals 150
  • 151. Pharma Industrial Affairs Manages a Diverse Portfolio inLatAm with Competitive CoGS Sanofi pharma Industrial Affairs LatAm positioning Rx Type of OTC Gx drugs Public tenders Barriers to entry Technology Portfolio Complexity Costs Main Competitors Big Pharma Local to Regional players Commodities companies 500 500 Production 125 costs of 100 products 70 65 0 15 LatAm volume distribution 151
  • 152. Industrial Affairs are Driven by Continuous Search forImproved Performance Initiatives enforced Key results achievedLEAN implementation ● Overall Equipment Efficiency (OEE) on track to●LEAN culture propagated in plants increase 9 pts 2010-2012 ● LEAN leaders ● Optimizing investments through●LEAN tools implemented with high commitment from productivity improvementsoperators ● Managing high capacity loads ● SMED(1), Visual Management●Rethinking of production lines through Value StreamMapping ● Plant Cycle Time and Work In Progress reduced ● Permanent efforts of standardisation betweenFormat and packaging harmonization operations and Industrial Affairs ● From local suppliers to local markets to minimizeBetter stock management cashflowStandardization of policies ● Global Industrial KPI Scorecard enforced (1) SMED: Single Minute Exchange of Die 152
  • 153. Generics Are Expected to Remain a Key Growth Driverin LatAm ● Move to Generics executed through Campinas acquisitions ● Acquisition of Medley and Kendrick ● Strong brand image of Medley among patients ● New industrial capabilities ● Synergies delivered, e.g. with manufacturing repatriation of Kendrick products from Textitlan Brasilia ● Further expansion ongoing with Genfar(1) acquisition ● New Brasilia plant construction to focus on fast-growing hormonal segment ● Low competition ● Double-digit growth (1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013 153
  • 154. Genfar(1) Acquisition Strengthens Sanofi Leadership inAffordable Pharmaceuticals ● Creation of a new industrial hub in Genfar Colombia ● Sanofi: one existing highly competitive manufacturing site in Cali ● Diversified production fueling both local and export markets (Central America and Venezuela) ● Genfar(1): a large and extensible asset ● 2 sites: Bogota and Villa Rica ● 80,000 m2 with current capacity of 150 Mu Affordable ● Extension capabilities above 100 Mu pharmaceuticals Animal Health (1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013 154
  • 155. Innovative Life Cycle Management Team SupportsSanofi’s Growth Platforms LCM in Latin America Recent Launches ● LCM department created in 2009 in LatAm to: ● Foster innovation in pharma Launched March 12 products ● Optimise time-to-market ● Mutualize expertise ● 150 people in 4 plants with different focus Launched June 12 ● CHC: Suzano, Ocoyoacac ● Generics: Campinas, Cali Launched June 12 LCM department as a catalyst for new product development 155
  • 156. LatAm Manufacturing Capabilities Provide Sanofi with aStrategic Advantage 1 State of the art facilities aligned with Sanofi manufacturing standards 2 Local manufacturing to foster market access Industrial Network Supports 3 Double-digit production growth to meet strong demand Growth Platforms 4 Continuous productivity efforts to provide affordable medicines 5 Innovative LCM to boost sales growth and build profitable franchises 156
  • 157. Agenda LatAm Manufacturing Capabilities: a Strategic Advantage Suzano: A Key Site in LatAm 157
  • 158. Suzano Ranks Among the Largest Plants of the Group Suzano strengths● Productivity in line with Sanofi’s best sites● Outstanding customer-service track record● Product development capabilities with regional potential● Strong focus on sustainable performance● Wide range of galenic forms A diversified portfolio manufactured at competitive costs 4 types of Galenic forms(1) 4 market segments(2) Emphasis on local market(1) (1) 2011 figures (2) 2011 figures, excluding toll-in 158
  • 159. Suzano Produces LatAm Star Products in All MarketSegments Ethical drugs Customer Health Care and OTC Tablets Spray Tablets Drops Affordable medicines Drops Creams Capsules Liquid Soap 159
  • 160. Suzano is Designed According to Sanofi ManufacturingStandards Quality brings a competitive advantage to Industrial Operations • Dedicated to patient safety and customer satisfaction Quality is a Quality is a strong driver of performancecore value • Only one batch rejected out of more than 5,000 tested(1) • Right First Time at 99%(1) HSE is a daily concern for each employee • Zero LTI(3) in Suzano for the past two years HSE(2) is a mindset Energy efficiency leads to financial savings • New boilers, LED technology… Suzano combines competitiveness with the highest standards of Quality and HSE (1) 2012 YTD figures at September end (2) Health Safety & Environment (3) LTI: Lost Time Injury 160
  • 161. Suzano Effectively Contributes to Sanofi Growth PlatformsDevelopment center: strong focus on Example of LCM impulsed by Suzano: Dermacyd (CHC) Growth Platforms (1) Improvement of industrial processes, Formulations, Packaging Ethical drugs, Generics, Access to Medicine 100(2) New New New formula format formula Dermacyd Dermacyd New scent Dermacyd Pocket Teen Dermacyd Infantil Fueling LatAm star CHC products Breeze New formula Dermacyd 24H Launch Lactacyd Central America 30 2008 2009 2010 2011 2012 (1) Hours spent on projects by Suzano development center in 2011 (2) June 2012: base value of 100 -volume- 161
  • 162. Suzano Combines Operational, Financial andEnvironmental Performance LEAN initiative example HSE initiatives examplesSMED(1) on Puran packaging line ● On-demand steam boilers● Two workshops organised with operators ● New air compressors ● Team training on LEAN tools ● HVAC(3) rest-mode ● Movie analysis ● Chillers efficiency increase ● Creation of a check-list ● Visual Management to monitor performance ● Suzano HSE(4) commitment is recognised by international standards● Quick and sustainable results ● ISO 14001 ● OEE(2) : +33% ● OHSAS 18001 ● Change-over time: -47% 100(5) Expected Cost Production Improvements Cost -29% per Unit (2010-2013e) 70 2010 2011 2012e 2013e (1) SMED: Single Minute Exchange of Die (4) Health Safety & Environment (2) OEE: Overall Equipment Efficiency (5) 2010: base value of 100, in local currency 162 (3) HVAC: Heating Ventilation & Air Conditioning

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