Q1 2009 Earning Report of Sanofi Aventis
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Q1 2009 Earning Report of Sanofi Aventis

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Q1 2009 Earning Report of Sanofi Aventis Q1 2009 Earning Report of Sanofi Aventis Presentation Transcript

  • Q1 2009 Results April 29, 2009 1
  • 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 financial and product development projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future events, operations, products and services, 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-aventis’ 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-aventis, 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 EMEA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of such products candidates, the absence of guarantee that the products candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives as well as those discussed or identified in the public filings with the SEC and the AMF made by sanofi-aventis, including those listed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in sanofi-aventis’ annual report on Form 20-F for the year ended December 31, 2008. Other than as required by applicable law, sanofi-aventis does not undertake any obligation to update or revise any forward-looking information or statements. 2
  • Agenda Q1 2009 Achievements Chris Viehbacher, Chief Executive Officer R&D Portfolio Update Marc Cluzel, Senior VP, Research & Development Q1 2009 Market Performance Hanspeter Spek, Executive VP, Pharmaceutical Operations Q1 2009 Financial Performance Jérôme Contamine, Executive VP, Chief Financial Officer Q&A Session 3
  • Q1 2009 Achievements Chris Viehbacher Chief Executive Officer 4
  • Delivering a Good Start into the Year Q1 2009 Strong underlying sales performance(1) of flagship products and vaccines +3.0% for Pharmaceuticals +9.1% for Vaccines Continued cost management Good growth of adjusted EPS(2) +9.8% at constant exchange rates (CER) +16.8% on a reported basis Transforming initiatives well underway Acquisitions in line with strategy Positive FDA Ad Com for Multaq® (dronedarone) (1) Growth is on a constant structure and exchange rates basis 5 (2) Excluding selected items
  • A Diversified Healthcare Company with Several Growth Platforms* Worldwide presence(1) €1,699m, +8.6% Vaccines(2) OTC / OTX(4) Sales: €627m, +9.1% Sales: €762m, +1.3% Sales: €378m, +9.9% Sales: €254m, -8.7% (non-consolidated) Sales: €747m, +27.1% Animal Generics Health(3) Sales: €534m, +8.3% Sales: €93m, +18.3% Sales: $684m, +2.0% (non-consolidated) Worldwide presence(1) €507m, +6.1% (1) Worldwide presence for Plavix®/Iscover® and Aprovel®/Avapro® /Karvea® includes sales consolidated by sanofi-aventis and BMS (2) Sanofi Pasteur MSD is a 50/50 joint venture with Merck (3) Merial is a 50/50 joint venture with Merck 6 (4) Including the acquisition of Symbion * Sales figures correspond to Q1 2009 sales and growth is at constant exchange rate
  • Guidance for FY 2009 Reiterated Adjusted EPS excluding In 2009, sanofi-aventis expects selected items (€) growth of adjusted EPS excluding selected items(1) 6.10 of at least 7% 6.00 5.90 At least at constant exchange rates(2), 5.80 +7% 5.70 barring major adverse events 5.60 5.50 5.40 5.30 5.49 5.20 5.10 5.00 2008 2009 (1) FY 2008 adjusted EPS excluding selected items: €5.49 7 (2) Based on actual 2008 average exchange rates for all currencies
  • Rolling-out our Three-Pronged Strategy Adapt Increase Pursue our company innovation external growth to future in R&D opportunities challenges Transforming Program to ensure sustainable, profitable growth and improved risk profile 8
  • Important Milestones Reached in R&D R&D PORTFOLIO REVIEW BiPar acquisition Thorough and Fulfilling a clear illustrating strong rigorous process unmet patient commitment to need in AF Moving high priority oncology projects forward Creating value for payors Novel tumor- Discontinuing selective approach 4 Phase II and Positive FDA Ad 4 Phase III projects Com on March 18 BSI-201, potential first-in-class Freeing up Potential EMEA compound in resources for decision and U.S. Phase II for TNBC(1) external R&D launch in Q3 2009 New data at ASCO 9 (1) Triple Negative Breast Cancer
  • Three Bolt-on Acquisitions to Strengthen our Growth Platforms 2008 Sales: ~€153m 2008 Sales: ~€26m 2008 Sales: ~€736m #1 generic company A leading generic Leader in branded in Brazil company in Mexico generics in CEE, Turkey and Russia Portfolio of 127 Portfolio of > 50 generic products active ingredients Portfolio of more than 400 products Leadership reinforced in emerging markets Additional stream of sales growth complementing our branded business Improving access to medicines for a wider population Our priority is to expand search for licensing or acquisition deals maintaining a disciplined approach 10
  • Key Achievements to date & Next Milestones Good Q1 Results - On track to deliver FY 2009 guidance Appointment of new Chief Financial Officer New organization set by Chief Strategic Officer New external R&D deals (eg. BiPar) Disciplined investments in Generics regional growth platforms Completion of R&D pipeline review FDA decision for Multaq® (dronedarone) expected in Q2 2009 Emerging Markets Thematic Investor Seminar in Paris on July 2 Q2 Results and Roadmap for Transforming Program in July 29 11
  • R&D Portfolio Update Marc Cluzel Senior VP, Research & Development 12
  • R&D Transformation Process is Ongoing Portfolio 1 Prioritization Conduct a detailed objective review of our R&D pipeline Decision 2 Redefine investment decision making process Making 3 Reallocate resources to external R&D partnerships Partnerships 4 Strategy Focus R&D strategy on key technologies and disease areas 5 Organization Implement new R&D organization to encourage innovation 13
  • Rigorous and Thorough Portfolio Review Complete portfolio review covering Research & Development Multidimensional views aimed at understanding the unique value proposition for each compound Portfolio evaluated across 4 key dimensions: Extent of Overall value Technical & Degree of patient need / Return on commercial innovation addressed investment risk Engaged cross-functional internal expertise while leveraging neutral external party to run the process Going forward, a complete R&D pipeline review will be conducted regularly by newly-created “Portfolio Management Group” 14
  • Outcome of Portfolio Review on Clinical Projects 4 Phase II and 4 Phase III projects 4 Phase II 4 Phase III discontinued since Feb 11, 2009 6 Phase I projects also discontinued TroVax®(2) AVE0657 in the recent portfolio review (sleep apnea) (cancer) Rationale for termination included: SSR180575 Saredutant (diabetic polyneuropathies) (depression) Lack of efficacy (1) AVE1642 AVE5530 (breast cancer) (hypercholesterolemia) Safety findings Melanoma Unifive™ vaccine Limited value proposition (DTP-HepB-Hib) 4 compounds with an upcoming Project Name Next Milestone Go/No-Go milestone 4-6 months AVE1625 (schizophrenia) Reassessment of compounds to be xaliproden 4-6 months performed once milestones reached (peripheral sensory neuropathies) idrabiotaparinux 6 months (DVT/PE and AF) West Nile vaccine 6-9 months (1) AVE 1642: project returned to ImmunoGen, Inc. 15 (2) TroVax®: project returned to Oxford BioMedica Plc
  • Main Achievements in R&D Pipeline since Feb 11 BSI-201, PARP inhibitor, in Phase II in triple negative breast cancer* 3 New Projects SAR110894, H3 antagonist, entering Phase I in Alzheimer's in Clinical Development SAR164877, anti-NGF mAb, entering Phase I in pain management 2 New Plavix® combo with ASA re-submitted in EU Regulatory Flu new formulation (Fluzone® High Dose IM) in the U.S. Submissions Apidra® SoloSTAR® in the U.S. Lovenox® for VTE prevention in abdominal surgery in Japan 5 New Apidra® and Apidra® SoloSTAR® in Japan Regulatory Approvals Intanza® / IDflu® in EU Emerflu® in Australia *BSI-201: project from BiPar Sciences, Inc. 16
  • R&D Pipeline Summary Table on April 29 New Molecular Entities and Vaccines Development portfolio balanced across phases and therapeutic areas* n tio III II tr a L I TA e e e is as as as g TO Re Ph Ph Ph 2 0 1 0 3 Metabolic Disorders 1 1 1 1 4 Cardiovascular 5 4 1 1 11 Central Nervous System 33 1 1 6 0 8 Oncology 0 1 2 0 3 Thrombosis 2 2 0 0 4 Internal Medicine 4 6 7 1 18 Vaccines 51 15 15 18 3 TOTAL New Molecular Entities & Vaccines 30 21 *See appendices for list of R&D pipeline projects 17
  • R&D Pipeline Characteristics 49% of the development portfolio (from Phase I to registration) in biologics and 27% from external partnerships Other Partnerships / Biologics collaborations 14% 27% 51% 73% 35% Vaccines Chemical Internal Entities 18
  • Evolution on R&D Spend in 2009 Split of R&D Spend in 2008 Full impact of large Phase III studies initiated in 2008 and before expected in 2009 R&D Vaccines Post-Mkg Studies Regulatory Increased spend in R&D for Pharmacovigilance Vaccines Industrial New R&D deals (eg. BiPar) R&D Termination of clinical projects Pharmaceuticals announced today €3,246m Expecting a low single digit decline of the R&D spend at constant exchange rates in 2009 Total R&D Spend in 2008 €4,575m 19
  • Aflibercept - A Unique Anti-Angiogenic Agent Aflibercept (VEGF Trap): a fusion Four Phase III studies ongoing protein blocking VEGF, a well- validated anti-angiogenic approach Targeted Data Study Indication / Design # of expected patients Broad oncology development program in combination with common 2nd line metastatic chemotherapy regimens colorectal cancer 1200 2010 VELOUR + FOLFIRI (folinic acid / Four Phase III studies ongoing 5-FU / irinotecan) All studies ~ 50% enrolled 1st line metastatic Initial data expected in 2010 pancreatic cancer 630 2010 VANILLA +gemcitabine Two phase II studies ongoing 2nd line metastatic non- Data expected mid-2009 in small cell lung cancer 900 2010 VITAL symptomatic malignant ascites +Taxotere® Combination trial with FOLFOX in 1st line metastatic 1st line metastatic colorectal cancer hormone resistant recently initiated 1225 2011 VENICE prostate cancer +Taxotere® / prednisone 20 FOLFOX: (folinic acid / 5-FU / oxaliplatin)
  • BSI-201 - Potential to Become a Platform Therapy in Oncology DNA-repair inhibition: a new Innovative mode of action “validated” oncology target BSI-201: potential first-in-class and PARP best-in-class PARP(1) inhibitor upregulation Triple Negative Breast Cancer(2) identified as the lead indication + BSI-201 ~ 20% of all breast cancers Poor prognosis and no specific treatment guidelines DNA Randomized phase IIb study ongoing repair Interim results(3) showed no significant toxicities attributable to BSI-201 Enhance tumor response to Results expected at ASCO 2009 chemotherapy Potential future expansion into non- TNBC breast cancer, ovarian cancer, and other solid tumors (1) PARP: Poly ADP-Ribose Polymerase (2) Lack ER/PR/HER2 receptors 21 (3) Reported at the San Antonio Breast Cancer Symposium (Dec 2008)
  • Developing a Safe and Effective Tetravalent Dengue Vaccine as Rapidly as Possible A major public health concern Global Prevalence of Dengue Estimated 230m people infected annually 2m, mostly children, develop dengue hemorrhagic fever Our priority is to develop a safe and effective tetravalent dengue vaccine Phase II studies initiated in 2009 in Thailand, the Philippines, Singapore, Vietnam, Mexico and Peru including adults, adolescents and children Other studies in Asia and Latin America Areas infested with Aedes aegypti being planned Areas with Aedes aegypti and dengue epidemic activity Working closely with governments, public health officials and NGO’s to support the creation of appropriate immunization policies and funding sources Expected to be first to market Filing planned in 2014 22
  • Anticipated Newsflow in 2009 Milestones Timing U.S. expected decision on Apidra SoloSTAR® Approved FDA AdCom for Multaq® (dronedarone) 10 votes in favor vs 3 against Plavix® ACTIVE-A data presentation Primary endpoint met EU regulatory re-submission of Plavix® FDC with ASA Filed Expected regulatory decision on Lovenox® - VTE abdominal surgery (Japan) Approved U.S. regulatory submission of Flu new formulation Filed Expected regulatory decision on Apidra® (Japan) Approved Expected U.S. regulatory decision on Multaq® (dronedarone) Q2 2009 U.S. regulatory submission of Menactra® Infant/Toddler 9-12 months Mid 2009 Expected CHMP opinion on Multaq® (dronedarone) Q3 2009 Plavix® U.S. / EU regulatory submission for Atrial Fibrillation Q3 2009 Regulatory submissions of Japanese Encephalitis Vaccine in Asia Q3 2009 Plavix® CURRENT/OASIS-7 data presentation H2 2009 U.S. / EU regulatory submissions of cabazitaxel in prostate cancer* Q4 2009 EU regulatory submission of Pediacel® Q4 2009 U.S. / EU expected regulatory decisions on Ciltyri® Q4 2009 23 * Filing date with interim “overwhelmingly positive data”
  • Next Steps in R&D Focusing R&D resources on projects with best chance of success and acceptable returns Accelerating R&D partnerships & alliances to expand access to new technologies and enrich our portfolio with innovative compounds in all stages of development More details on R&D transformational initiatives related to Strategy and Organization expected for Q2 2009 results 24
  • Q1 2009 Market Performance Hanspeter Spek Executive VP, Pharmaceutical Operations 25
  • Solid Q1 2009 Sales Performance as Planned % Change (1) Q1 2009 €m Pharmaceuticals 6,480 +3.0% Vaccines 627 +9.1% Total Sales 7,107 +3.5% Europe 2,948 +0.4% US 2,295 +5.1% Rest of the World 1,864 +7.3% 26 (1) Growth is on a constant structure and exchange rates basis
  • Leadership Reinforced in Emerging Markets Q1 2009 Sales Split by Regions Robust Q1 2009 sales in emerging markets(1): €1,616m, +8.0%(2) Asia Strong BRIC-M sales: €562m, +13.5%(2) Latin Others Pacific America 6,4% 7,1% Japan Wholesalers tightly managing 5,5% 7,2% inventories in some LATAM countries Eastern 5,1% BRIC-M markets forecasted to deliver Europe close to double digit growth in 2009(3) Leadership position of sanofi-aventis reinforced by recent acquisitions Increased market share(4) of 6% in emerging countries 36,4% 32,3% Western Well-positioned to increase pharma USA Europe sales by around 50% by 2012 (1) World less North America (USA, Canada), Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan and Australia/New Zealand (2) Growth is at constant exchange rates (3) Internal analysis based on IMS market prognosis 27 (4) IMS, based on pro forma 2008
  • Becoming an Important Player in Generics Pro forma 2008 Sales in Generics (1) Successful acquisitions of Zentiva, Medley and Kendrick (€m) Regional platforms with competitive development and production capabilities 0.2 Large portfolio of affordable and quality medicines Commercial presence boosted in the 0.6 generics market 1.2 1 Pro forma 2008 sales in generics increase to just over € 1,2 bn(1) #8 generic player globally(2) with a 0.4 0,4 targeted regional approach #1 in Central & Eastern Europe (3) Old New #1 in Latin America Perimeter Perimeter (1) Internal sources & company reports on a pro forma 2008 basis (2) IMS MIDAS FY 2008 IMS Health except GERS (France), Cegedim (Romania), Business Credits (Ukraine) (3) Excluding OTC sales 28
  • - Sustained Underlying Growth Lovenox® U.S. Sales ($m) Q1 2009 sales: €762m, +1.3%(1) US: high basis for comparison in Q1 2008 650 due to UFH supply crisis UFH supply crisis Mid-single digit growth in EU despite impact residual impacts of UFH crisis on product availability EMEA guidelines on LMWH biosimilars 550 now published At least one large comparative clinical trial per indication needed to establish equivalence in terms of efficacy and 450 safety Impact from new oral anticoagulants still insignificant Market share of dabigatran and rivaroxaban remaining below 1% 350 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 in Germany, UK and France(2) 2007 2007 2007 2007 2008 2008 2008 2008 2009 (1) Growth is at constant exchange rates 29 (2) IMS February 2009, in treatment days, market : ATC B1B1, B1B2, B1E0, B1X0 + fondaparinux + bivaluridin
  • - Continued Linear Growth Worldwide Lantus® Volume Share in Japan(2) (%) Strong Q1 2009 sales: €747m, +27.1%(1) > 30% quarterly sales growth in the U.S. 80% Lantus® Successful ramp-up in Japan driven by SoloSTAR® device SoloSTAR® 70% launch 60% 50% Growth potential for Apidra® SoloSTAR® Lantus® from penetration of “Basal+” regimen 40% (Lantus® + Apidra®) in eligible sub- NPH populations 30% Apidra® SoloSTAR® approved in the U.S. detemir and Japan 20% 10% 0% Se - 08 M - 08 Ju 8 De -08 No -08 Au 8 Ju 08 Fe - 09 Fe - 08 O 08 Ja 08 09 Ja 07 M 08 Ap 0 8 l-0 0 n- p- c- c- - b- b- - r g n n ct v ay ar De (1) Growth is at constant exchange rates 30 (2) IMS, market share in insulin, International Units
  • - Well-Established Leadership Plavix® Worldwide Sales(3) Q1 2009 worldwide presence(1) : €1,699m, +8.6%(2) (€bn) Stable EU sales despite competition from clopidogrel besylate in GER 6 Sustained U.S. performance with quarterly sales growth of +13.6%(2) 5 Strong performance in Japan: €70m (+90.2%) 4 Positive ACTIVE-A data at ACC 2009 Supporting the addition of Plavix® to aspirin 3 in AF patients unsuitable for OAC(4) 2 Significantly reduces stroke (-28%) with an acceptable increase in major bleeding 1 Contraindications to take OAC in up to 43% of AF patients(5) 0 Expected U.S. and EU filings for AF 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 19 20 20 20 20 20 20 20 20 20 19 20 20 20 20 indication in Q3 2009 (1) Worldwide presence for Plavix®/Iscover® and Aprovel®/Avapro® /Karvea® includes sales consolidated by sanofi-aventis and BMS (2) Growth is at constant exchange rates (3) IMS MIDAS, except GERS for France (4) ACTIVE-A study, patients with atrial fibrillation who were at increased risk for stroke and could not take an oral anticoagulant (OAC) medication, taking Plavix® (clopidogrel bisulfate) in addition to aspirin significantly reduced major vascular events by 11% over aspirin alone, at a median of 3.6 years of follow-up (6.8% vs. 7.6%per year, p=0.01). 31 (5) Sudlow M et al. Lancet. 1998;352:1167-1171
  • Early Stage Breast Cancer Driving Growth Global Sales of Taxotere® (€m)(1) Q1 2009 sales: €534m, +8.3%(1) Growing penetration in Node(+) Early Stage Breast Cancer Lower wholesaler inventory levels in the 106 +18.9% U.S. in Q1 2009 90 GEICAM 9805 positive results driving 231 use in Node(-) ESBC +8.1% 223 Guidelines recently updated in FR, GER, SP, IT, UK and US Node(-) represents 65% of ESBC 197 patients, 22% chemo-treated(2) 171 +2.9% Approval of 1-vial Taxotere® Q1 2008 Q1 2009 new presentation expected in 2009 US Europe ROW One vial, one single step for preparation Easier and time-saving preparation (1) Growth is at constant exchange rates 32 (2) Source: Affiliates Forecasting model, October 2008; Top 7 countries, Breast cancer epidemiology data, 2006
  • - Preparing for U.S. Launch ® Positive vote from FDA Advisory Multaq® Association with Product Committee on March 18, 2009 Attributes(2) recommending approval 100 Ongoing regulatory review in the EU 77% 75 Expected CHMP opinion in Q3 2009 ATHENA recently published in the NEJM 50 U.S. launch preparation building upon a strong commercial platform in cardiology 25 Low satisfaction level with existing AADs(1) 0 Multaq® Multaq® well-positioned to meet current market needs Reduces risk of cardiovascular hospitalization Requires minimal monitoring U.S. sanofi-aventis sales force ranked in the top 3 among cardiologists (3) Low risk of pro-arrhythmia Ease of use Low risk of organ toxicity Maintains sinus rhythm (1) Source: U.S. Multaq® Physician Segmentation Research, 2009 (Fielded Nov/Dec 2008). (2) Idem supra, % physicians indicating product X is most associated (vs. other AADs) with each feature 33 (3) SDI’s Sales Force Structures & Strategies 2008-2009 Ranking
  • Vaccines - Solid Q1 2009 Performance Q1 2009 sales: €627m, +9.1%(1) Q1 2009 Vaccines Sales Split (%) Main contributors 6% Pediatric vaccines: €236m, +33.9% driven by 12% Pentacel® launch, + €73m 38% Seasonal influenza: €62m, +43.8%, impacted 15% by the favorable timing of shipments in Southern Hemisphere 10% 19% : €96m, -13.2% ® Next wave of growth: Infant/Toddler Polio/Pertussis/Hib Influenza U.S. filing planned mid-2009 Meningitis/Pneumo Boosters Expected to be first to market Travel & Endemic Others Emerging markets continued growth Latin America: €81m, +51.1% Asia-Pacific: €63m, +16.8% (1) Growth is at constant exchange rates 34 (2) 50-50 JV with Merck & Co (JV Perimeter is 19 European countries)
  • Q1 2009 - A Solid Start into the Year Overall sales performance and growth perfectly in line with plan despite current economic downturn Significant strengthening of growth platforms in major products, regions, generics and emerging markets FDA decision on Multaq® (dronedarone) expected in Q2 2009 35
  • Q1 2009 Financial Performance Jérôme Contamine Executive VP, Chief Financial Officer 36
  • Q1 2009 Sales Growth Reported net sales of €7,107m In €m (+2.5% in reported sales 234 or -0.2% at CER) 247 183 Change in Group structure Primarily reflecting the discontinuation of commercialization of 7,107 Copaxone® in North America 6,937 6937 6924 6924 since April 2008 Positive FX movements Solid underlying sales growth of +3.5%(1) Q1 2008 Organic Change in FX Impact Q1 2009 Growth Structure (1) Growth is on a constant structure and exchange rates basis 37
  • Sales by Key Currencies Q1 2009 (%) Q1 2008 (%) EUR EUR Others Others 36% 37% Q1 2009 Q1 2008 Sales Sales €7,107m €6,937m JPY JPY 7% 5% USD USD 31% 32% 38
  • Foreign Exchange Effect on Q1 2009 Sales In €m +183 GB Pound Australian Dollar Russian Ruble USD USD Other currencies 240 JPY JPY 121 7107 6924 Q1 2009 Q1 2009 Sales CER Sales 39
  • Cost Management Continued in Q1 2009(1,2) Q1 2008 % Change % Change €m Q1 2009 (reported €) (CER) Net sales 7,107 6,937 +2.5% -0.2% Other revenues 344 284 +21.1% +9.9% Cost of sales (1,767) (1,889) -6.5% -5.9% Gross profit 5,684 5,332 +6.6% +2.4% R&D (1,152) (1,089) +5.8% +2.8% SG&A (1,732) (1,783) -2.9% -5.6% 148 104 - - Other current operating income & expenses Amortization of intangibles (50) (42) - - Adj. operating income current 2,898 2,522 +14.9% +8.6% (1) Excluding selected items 40 (2) See reconciliation of Adjusted Consolidated Income Statement excluding selected items to Consolidated Income Statement on slide 55
  • Strong EPS Growth in Q1 2009(1,2) Q1 2008 % Change % Change €m Q1 2009 (reported €) (CER) Adj. operating income current 2,898 2,522 +14.9% +8.6% Net financial expenses (44) (17) - - Income tax expense (828) (741) - - - - Effective tax rate 29.0% 29.6% Share of profit/loss of associates 273 234 +16.7% +9.0% Minority interests (121) (115) +5.2% +5.2% Adjusted net income 2,178 1,883 +15.7% +8.7% Adjusted EPS € 1.67 € 1.43 +16.8% +9.8% (1) Excluding selected items 41 (2) See reconciliation of Adjusted Consolidated Income Statement excluding selected items to Consolidated Income Statement on slide 55
  • Significant Operating Leverage in Q1 2009(1) COS/Sales Ratio (%) Operating Margin (%) 30.0 43.0 29.0 42.0 28.0 41.0 40.8 27.0 40.0 27.2 26.0 39.0 25.0 38.0 24.8 24.0 37.0 23.0 36.0 36.4 22.0 35.0 21.0 34.0 20.0 33.0 Q1 08 Q1 09 Q1 08 Q1 09 SG&A/Sales Ratio (%) Net Income/Sales Ratio (%) 30.0 33.0 29.0 32.0 28.0 31.0 27.0 30.0 30.6 26.0 29.0 25.0 28.0 25.7 24.0 27.0 24.4 27.1 23.0 26.0 22.0 25.0 21.0 24.0 20.0 23.0 Q1 08 Q1 09 Q1 08 Q1 09 42 (1) Ajusted P&L excluding selected items
  • Foreign Exchange Effect Methodology and Sensitivity Constant Exchange Rates methodology: To calculate growth at Constant Exchange Rates (CER), we exclude the impact of exchange rates by recalculating actual figures for the current period on the basis of exchange rates of the same period a year ago Average ForEx sensitivity on yearly basis for Adjusted EPS(1) : EUR / USD: 1 cent movement in the rate 0.5% of EPS growth 43 (1) Excluding selected items
  • Strong Financial Flexibility Net Debt (€bn) Strong cash flow generation of €2.3bn before financial €bn acquisitions in Q1 2009 16 14.2 Reduction of net debt from 14 €1.8bn to €1.2bn by end of 12 Q1 2009 despite Zentiva 9.9 10 acquisition 8 Solid credit ratings 5.8 6 4.2 Moody’s: 4 1.8 A1 / Stable outlook 1.2 2 Standard & Poor’s 0 AA- / Stable outlook 04 05 07 09 6 8 00 00 0 0 0 0 2 2 /2 /2 /2 /2 1/ 1/ 1 1 1 1 /3 /3 /3 /3 /3 /3 12 12 12 03 12 12 44
  • Q1 2009 - A Good Quarter Solid underlying sales performance in-line with expectations Continued cost management Strong EPS(1) growth and cash flow generation Low net debt level 2009 EPS(1) guidance reiterated 45 (1) Adjusted EPS before excluding selected items
  • Q&A Session Chris Viehbacher, Chief Executive Officer Marc Cluzel, Senior VP, Research and Development Hanspeter Spek, Executive VP, Pharmaceutical Operations Jérôme Contamine, Executive VP, Chief Financial Officer 46
  • Appendices R&D 47
  • Late Stage Pipeline – Pharma & Vaccines Registration Phase III Lantus® Taxotere® HIV Lantus® insulin glargine docetaxel (Thailand) insulin glargine Reduction in CV Pediatric Prevention of infection; Proof of Retinopathy labeling change, U.S. morbidity & mortality concept N aflibercept (VEGF-Trap) N N AVE0010 Adacel® Multaq® (AVE0005) Single: SMA; Combo:1st GLP1 agonist DTP 4-6 years dronedarone line mProstate; 2nd line NSCLC, 2nd T2 diabetes Antiarrhythmic agent line mCRC, 1st line mPancreatic K Atrial fibrillation N N Aprovel® alvocidib IMOJEV™ Ciltyri® irbesartan (HMR1275) Cyclin-dependent kinase Japanese Encephalitis eplivanserin Atrial fibrillation inhibitor Prevention of infection 5-HT2A antagonist - Insomnia CLL N N XRP0038 cabazitaxel Flu Micro-injection Fasturtec®/Elitek® NV1FGF (XRP6258) Taxoid, tubulin inhibitor New Delivery U.S. rasburicase Japan - Malig./chemo-associated Critical Limb Ischemia (CLI) Prostate K hyperuricemia; Hyperuricemia adult, U.S. N N teriflunomide AVE8062 Hexaxim™ Plavix® (HMR1726) immunomodulator Vascular disrupting agent DTP-HepB-Polio-Hib clopidogrel bisulfate Multiple Sclerosis (monotherapy) Sarcoma Combo ASA, EU N Pharmaceuticals Lovenox® larotaxel Pediacel® EU Sculptra® Pharmaceuticals enoxaparin (XRP9881) Taxoid, Tubulin inhibitor DTP-Polio-Hib DL6049 Pen Pancreatic K, Bladder K Nasolabial fold wrinkles, U.S. N New Molecular Entity N Plavix® xaliproden Menactra® Allegra® clopidogrel bisulfate Infant / Toddler 9-12 months fexofenadine (SR57746) Neurotrophic AF; Pedi. extension; ACS high ODT, Japan Peripheral sensory neuropathies loading dose; Stent, & PAD, Japan N idrabiotaparinux Xatral® Flu Therapeutic area Therapeutic area alfuzosin New formulation U.S. (SSR126517) Biotinylated long-acting BPH, Japan; Pediatric pentasaccharide; Indirect Xa inhibitor Metabolic Disorders Long-term treatment DVT/PE; AF N Cardiovascular AVE5026 Actonel® Indirect Xa/IIa inhibitor risedronate Central Nervous System VTE prevent. in ortho, abdo. surgery, Pediatric, EU Oncology cancer patients Thrombosis Internal Medicine Vaccines Source: sanofi-aventis project direction April 29, 2009 48
  • Early Stage Pipeline – Pharma & Vaccines Phase I Phase II AVE0897 SAR3419 celivarone ferroquine N N N N Balanced PPAR α/γ agonist Maytansin-loaded anti-CD19 mAb (SSR149744) Antiarrhythmic agent (SSR97193) Antimalarial T2 diabetes non-Hodgkin’s lymphoma Ventricular Arrhythmia Malaria N N N N SAR351034 AVE0675 ataciguat SAR97276 PPAR δ agonist TLR9 agonist (HMR1766) Guanylate cyclase Antimalarial T2 diabetes; Dyslipidemia Asthma activator Malaria Neuropathic pain N N N SAR407899 SAR153191 nerispirdine Dengue Rho-kinase inhibitor Anti-IL-6R mAb (HP184) K+/Na+ channel blocker Mild-to-severe Dengue Fever Erectile dysfunction; neuropathic Rheumatoid Arthritis Multiple Sclerosis pain N N SSR125543 Flu Pandemia AVE1625 DTP-HepB-Polio-Hib CRF1 antagonist Low Dose CB1 antagonist Depression; PTSD Schizophrenia N N SAR501788 Tuberculosis SSR411298 ACAM-Cdiff PBR ligand Prevention of disease FAAH inhibitor Prevention of C. difficile associated Sensory & motor neuron Depression diarrhea Pharmaceuticals Pharmaceuticals degeneration N AVE0118 Meninge ACYW conj. teriflunomide Rabies N New Molecular Entity 2nd generation K+ channel blocker mAb Post Exposure prophylaxis (HMR1726) Immunomodulator Obstructive sleep apnea (nasal Meningitis in infants Multiple sclerosis (adjunct. therapy) route) N SAR110894 Pneumo aflibercept Flu Cell Culture H3 antagonist Meningitis & pneumonia (AVE005) VEGF-Trap New production method 1st line Colorectal K combi Alzheimer's in infants (Monovalent) N N SAR164877 BSI-201 West Nile Metabolic Disorders Anti-NGF mAb PARP inhibitor Prevention of disease Cardiovascular Pain Triple Negative Breast Cancer Central Nervous System N otamixaban Oncology (XRP0673) Direct Xa inhibitor Thrombosis ACS Internal Medicine Vaccines Source: sanofi-aventis project direction April 29, 2009 49
  • Appendices Finance 50
  • Q1 2009: Adjusted Consolidated Income Statement excluding selected items* (I) as % of as % of € million Q1 2009 Q1 2008 % change net sales net sales Net Sales 7,107 100.0% 6,937 100.0% +2.5% Other revenues 344 4.8% 284 4.1% +21.1% Cost of sales (1,767) (24.8%) (1,889) (27.2%) -6.5% Gross Profit 5,684 80.0% 5,332 76.9% +6.6% Research & development expenses (1,152) (16.2%) (1,089) (15.7%) +5.8% Selling & general expenses (1,732) (24.4%) (1,783) (25.7%) -2.9% Other current operating income & 148 - 104 - - expenses Amortization of intangibles (50) - (42) - - Operating Income – Current (1) 2,898 40.8% 2,522 36.4% +14.9% Restructuring costs - - - - - Impairment of PP&E and intangibles - - - - - Gains and losses on disposals, litigation - - - - - Operating Income 2,898 40.8% 2,522 36.4% +14.9% * Non GAAP 51 (1) Before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation
  • Q1 2009: Adjusted Consolidated Income Statement excluding selected items* (II) As % of As % of € million Q1 2009 Q1 2008 % change net sales net sales Operating Income 2,898 40.8% 2,522 36.4% +14.9% Net financial expenses (44) - (17) - - Income Before Tax and 2,854 40.2% 2,505 36.1% +13.9% Associates Income tax expense (828) - (741) - - Share of profit/loss of associates 273 - 234 - - Net Income Before Minority 2,299 32.3% 1,998 28.8% +15.1% Interests Minority interests (121) - (115) - - Net Income After Minority 2,178 30.6% 1,883 27.1% +15.7% Interests Average number of shares 1,305.5 1,320.8 outstanding (million) Earnings per share (in euros) 1.67 1.43 +16.8% * Non GAAP 52
  • Q1 2009 Reconciliation of Adjusted Consolidated Income Statement Excluding Selected Items to Consolidated Income Statement Q1 2009 Adjusted excl. € million selected items Selected Items Adjusted Adjustments Consolidated Net Sales 7,107 7,107 7,107 - - Other revenues 344 - 344 - 344 Cost of sales (1,767) - (1,767) - (1,767) Gross Profit 5,684 5,684 5,684 - - Research & development expenses (1,152) - (1,152) - (1,152) Selling & general expenses (1,732) - (1,732) - (1,732) Other current operating income & expenses 148 - 148 - 148 Amortization of intangibles (50) - (50) (844) (894) Operating Income – Current (1) 2,898 - 2,898 (844) 2,054 Restructuring costs - (8) (8) - (8) Impairment - (20) (20) - (20) Gains and losses on disposals, and litigation - - - - - Operating Income 2,898 (28) 2,870 (844) 2,026 Net financial expenses (44) - (44) - (44) Income Before Tax and Associates 2,854 (28) 2,826 (844) 1,982 Income tax expense (828) 10 (818) 284 (534) Share of profit/loss of associates 273 - 273 (22) 251 Net Income Before Minority Interests 2,299 (18) 2,281 (582) 1,699 Minority interests (121) - (121) - (121) Net Income After Minority Interests 2,178 (18) 2,160 (582) 1,578 Average number of shares outstanding (million) 1,305.5 1,305.5 1,305.5 Earnings Per Share (in euros) 1.67 (0.02) 1.65 (0.44) 1.21 53 (1) Before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation
  • Q1 2008 Reconciliation of Adjusted Consolidated Income Statement Excluding Selected Items to Consolidated Income Statement Q1 2008 Adjusted excl. € million selected items Selected Items Adjusted Adjustments Consolidated Net Sales 6,937 6,937 6,937 - - Other revenues 284 - 284 - 284 Cost of sales (1,889) - (1,889) - (1,889) Gross Profit 5,332 5,332 5,332 - - Research & development expenses (1,089) - (1,089) - (1,089) Selling & general expenses (1,783) - (1,783) - (1,783) Other current operating income & expenses 104 - 104 - 104 Amortization of intangibles (42) - (42) (819) (861) Operating Income – Current (1) 2,522 - 2,522 (819) 1,703 Restructuring costs - (28) (28) - (28) Impairment - - - - - Gains and losses on disposals, and litigation - - - - - Operating Income 2,522 (28) 2,494 (819) 1,675 Net financial expenses (17) - (17) - (17) Income Before Tax and Associates 2,505 (28) 2,477 (819) 1,658 Income tax expense (741) 8 (733) 301 (432) Share of profit/loss of associates 234 - 234 (20) 214 Net Income Before Minority Interests 1,998 (20) 1,978 (538) 1,440 Minority interests (115) - (115) - (115) Net Income After Minority Interests 1,883 (20) 1,863 (538) 1,325 Average number of shares outstanding (million) 1,320.8 1,320.8 1,320.8 Earnings Per Share (in euros) 1.43 (0.02) 1.41 (0.41) 1.00 54 (1) Before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation
  • Q1 2009: Vaccines Adjusted Consolidated Income Statement* (I) As % of As % of Q1 2009 Q1 2008 € million % change net sales net sales NET SALES 627 100.0% 548 100.0% +14.4% Other revenues 8 1.3% 8 1.5% - Cost of sales (236) (37.7%) (214) (39.1%) +10.3% GROSS PROFIT 399 63.6% 342 62.4% +16.7% R&D expenses (109) (17.4%) (91) (16.6%) +19.8% SG&A (130) (20.7%) (118) (21.5%) +10.2% Other current operating income & - - 1 0.2% - expenses Amortization of intangibles - - - - - OPERATING INCOME CURRENT(1) 160 25.5% 134 24.5% +19.4% Restructuring costs - - - - - Impairment of PP&E and intangibles - - - - - Gain/loss on disposals, litigation - - - - - OPERATING INCOME 160 25.5% 134 24.5% +19.4% * Non GAAP 55 (1) Before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation
  • Q1 2009: Vaccines Adjusted Consolidated Income Statement* (II) As % of As % of Q1 2009 Q1 2008 € million % change net sales net sales OPERATING INCOME 160 25.5% 134 24.5% +19.4% Net financial expenses (3) (0.5%) - - - INCOME BEFORE TAX 157 25.0% 134 24.5% +17.2% Income tax expense (52) (8.3%) (41) (7.5%) +26.8% Share of profits 5 0.8% 3 0.5% +66.7% Minority interests - - - - - NET INCOME 110 17.5% 96 17.5% +14.6% * Non GAAP 56
  • Definition of Net Sales at Constant Exchange Rate and Structure Basis Net Sales at Constant Exchange Rate: When we refer to the change in our sales at Constant Exchange Rate, we mean that we exclude the impact of exchange rate movements We exclude the impact of exchange rates by recalculating sales for the current period on the basis of exchange rates used in the prior period Net Sales at Constant Structure Basis: When we refer to the change in our sales at Constant Structure Basis, we mean that we exclude the impact of changes in Group structure (acquisitions and divestments of interests in entities and rights to products, and changes in consolidation method for consolidated entities). We exclude the impact of acquisitions by including sales from the acquired entity or product rights for a portion of the prior period equal to the portion of the current period during which we owned them, based on sales information we receive from the party from whom we make the acquisition. Similarly, we exclude sales in the relevant portion of the prior period when we have sold an entity or rights to a product. 57
  • Definition of Adjusted Net Income Net income + Add back: Material impacts of the application of purchase accounting to acquisitions made by sanofi-aventis (primarily the acquisition of Aventis): Charges related to remeasurement of inventories, net of tax Amortization/impairment charges arising from remeasurement of intangible assets, net of tax Any impairment of goodwill + Add back: Integration and restructuring costs specific to acquisitions, net of tax = Adjusted Net Income 58
  • Definition of “Selected Items” We define “selected items” as accounting items reflecting significant events occurring during the period that would alter a user’s understanding of our operational performance if they were not disclosed separately. Consequently, selected items are limited in number, unusual in nature, and involve significant amounts. Selected items are primarily recorded in the following line items: Restructuring costs Restructuring costs include early retirement benefits, compensation for early termination of contracts, and rationalization costs relating to restructured sites. Asset impairment losses directly attributable to restructuring are also recorded on this line. Restructuring costs included on this line relate only to unusual and major restructuring plans. Impairment of property, plant and equipment and intangibles This line includes major impairment losses (other than those directly attributable to restructuring) on property, plant and equipment and intangibles, including goodwill. It also includes any reversals of such losses. Gains and losses on disposals, and litigation This line comprises gains and losses on major disposals of property, plant and equipment and intangible assets, and costs and provisions related to major litigation. Income tax expense, as regards the effect of material tax disputes and any tax effects of other income or expenses that are treated as selected items. 59