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Q2 2015 RESULTS by Sanofi

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Q2 2015 RESULTS by Sanofi

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Q2 2015 RESULTS by Sanofi

  1. 1. Q2 2015 RESULTS July 30, 2015
  2. 2. 2 Forward Looking Statements This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi's management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, the Group's ability to benefit from external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December 31, 2014. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.
  3. 3. KEY HIGHLIGHTS 3 Olivier Brandicourt Chief Executive Officer
  4. 4. Q2 2015 - A Solid Quarterly Performance 4 Delivering mid-single digit sales growth Posting solid financial results Bringing innovative medicines to market GBUs: Global Business Units (1) On a reported basis, Q2 2015 sales were up +16.1% (2) On a reported basis, Q2 2015 Business EPS was up +20.5% (3) FDA submissions of lixisenatide, LixiLan and sarilumab (4) Effective January 1, 2016 Building a sustainable path forward 11 22 33 44 ● Higher OpEx driven by investment in new launches ● Business EPS up +5.1% at CER(2) ● Sales up +4.9% at CER(1) ● Sales growth across all geographies and businesses except Diabetes ● Praluent®: FDA approval and positive CHMP opinion ● Three regulatory filings expected in H2 2015(3) ● New alliance with Regeneron in Immuno-Oncology ● Reorganization around five GBUs recently announced(4)
  5. 5. FX Impact +€0.18 Incremental EPS at CER +€0.06 Q2 2014 Q2 2015 Net Sales Business EPS Solid Sales and Business EPS Delivered in Q2 2015 5 (1) On a reported basis, Q2 2015 sales were up +16.1% and Business EPS was up +20.5% +5.1% at CER(1) FX Impact Q2 2015 +€910m Incremental Sales at CER +€393m Q2 2014 +4.9% at CER(1) €8,075m €9,378m €1.17 €1.41
  6. 6. Q2 2015 Sales by Business Areas (1) Q2 2015 sales were up +4.9% at CER and +16.1% on a reported basis Growth at CER Genzyme Generics Consumer Healthcare Diabetes Oncology €907m €520m €890m €1,988m €390m +26.6% +9.2% +1.3% -3.8% +3.6% Sales Growth Delivered Across All Businesses in Q2 2015 Except for Diabetes(1) % of Sales 9.7% 9.5% 21.2% 5.5% 4.2% Animal Health Vaccines €691m €887m +14.2% +8.6%9.5% 7.4% Pharmaceuticals €7,800m +3.7%83.1% 6 Established Products €3,105m +3.1%33.0%
  7. 7. Sales Growth at CER Q1 2015 Q2 2015 U.S. -12.0% -14.0% Western EU +4.7% +6.5% Emerging Markets +18.5% +17.0% RoW -6.0% +4.8% Worldwide -3.2% -3.8% Q2 2015 Diabetes Sales Consistent with Previous Quarter 21.2%78.8% 57% 43% U.S. ex U.S. Diabetes Sales €1,988m -3.8% at CER Total Group Sales excluding Diabetes €7,390m +7.3% at CER Q2 2015 Diabetes Sales by Geographies (in €m) €854m +11.2% at CER €1,134m -14.0% at CER Expected launch of insulin glargine biosimilar in Europe(1) and Japan in H2 2015 7 (1) Already launched in two Eastern European markets
  8. 8. 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 Week1 Week2 Week3 Week4 Week5 Week6 Week7 Week8 Week9 Week10 Week11 Week12 Week13 Week14 Week15 Week16 0 10 20 30 40 50 60 70 80 Week1 Week2 Week3 Week4 Week5 Week6 Week7 Week8 Week9 Week10 Week11 Week12 Week13 Week14 Week15 Week16 Basal Market NRx Shares week of April 3 - week of July 17, 2015 Total glargine 67.1% Levemir® 25.6% Share (%) (2) (1) Encouraging U.S. Launch Metrics and Global Launch Ongoing (1) Basal market includes Toujeo®, Lantus®, Levemir® (a Novo Nordisk brand) and NPH - Source: IMS Weekly Data (2) Total glargine includes Toujeo® and Lantus® (3) Source: IMS Weekly Data 8 Toujeo® Market Access as of August 1, 2015 % Lives Covered 28% 45% 0% 20% 40% 60% 80% 100% Commercial Medicare Tier 2 Tier 2 Tier 3 91% 73% Toujeo® TRx & NRx Volume week of April 3 - week of July 17, 2015 NRx 4,507 Cumulative NRx 40,891 Rx (absolute) Cumulative TRx 51,829 TRx 6,539 (3) EU launch ongoing and approval in Japan, Canada, Australia recently granted
  9. 9. Rare Disease Franchise Sustained Growth Momentum and Strengthened Leadership(1) in Q2 2015 9 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Others Fabrazyme Myozyme Cerdelga Cerezyme Genzyme Rare Disease Sales (€m) €647m +9.1% at CER €540m €146m €199m €121m €165m (1) Cerezyme® + Cerdelga® value share is 74% and Fabrazyme® value share is 58% based on Q2 2015 reported sales by Sanofi and Shire (2) Cerdelga® sales were €16m in Q2 2015 (2) & Others
  10. 10. Multiple Sclerosis Franchise Sales Now Annualizing(1) Over €1bn 10 Genzyme Multiple Sclerosis Sales (€m) Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Lemtrada Aubagio €260m +118.4% at CER €103m €56m €204m ® New Global Campaign (1) Multiplying Q2 2015 sales of €260m by four provides a hypothetical annual run rate of over €1bn sales * AUBAGIO® (teriflunomide) is effective across key measures of disease activity: sustained disability progression (14 mg only), annualized relapse rate, and MRI activity. Common side effects with AUBAGIO led to treatment discontinuation rates ≤3.3% in clinical trials.
  11. 11. A Breakthrough Innovation to Help Reduce the Burden of Dengue(2) Vaccines Showed Broad Sales Momentum in Q2 2015 11 Sanofi Pasteur Sales (€m) Q2 2015 €887m Q2 2014 €718m Other Adult Boosters Travel/Endemic Polio/Pertussis/Hib Influenza Vaccines Meningitis/Pneumo (1) +8.6% at CER (1) Includes VaxServe, a U.S. healthcare supplier serving primary care physician offices, community immunization providers, immunizing pharmacies, travel clinics and corporations (2) WHO, 2012, Global Strategy for Dengue Prevention and Control ● Regulatory submissions in key endemic countries in Asia and Latin America completed in June 2015 ● First license anticipated before year-end 2015 Targeting over 65m doses of flu vaccines to be distributed in the U.S. in 2015
  12. 12. Merial Sales Growth (at CER) Animal Health Continued its Strong Recovery in Q2 2015 12 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 -5.7% -6.3%-6.4% -1.6% +12.7% +6.2% +11.5% +13.5% +14.2% Five consecutive quarters of strong sales growth NexGard® U.S. Campaign (1) Merial sales growth excluding NexGard® was +7.8% at CER in Q2 2015 (1)
  13. 13. (1) World excluding U.S., Canada, Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, the Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, South Korea, Australia, and New Zealand (2) RoW: Japan, South Korea, Canada, Australia, and New Zealand Sales Growth Delivered Across All Geographies in Q2 2015 33.9% 34.7% 21.3% 10.1% 13 (1) €602m €616m €934m €982m Africa & Middle East Eastern Europe, Russia & Turkey Asia Latin America +3.0% +9.3% +7.1%Growth at CER +9.0% Emerging Markets Sales by Region Emerging Markets €3,182m +7.5% at CER U.S. €3,250m +2.1% at CER Western EU €1,998m +3.4% at CER RoW €948m +8.2% at CER (2) Q2 2015 Sales by Geographies (in €m)
  14. 14. 14 New Strategic Alliance with Regeneron to Develop Cancer Treatments in Emerging Field of Immuno-Oncology ● Establish Sanofi’s presence in immuno-oncology, a rapidly growing and promising approach to treat cancer  Significant unmet needs remain despite advances shown with checkpoint inhibitors ● Expand our oncology pipeline, developing best-in-class new antibodies and novel combination products(1)  Alliance includes PD-1(2) in Phase I and a portfolio of antibodies, including LAG3, GITR and PD-L1 currently in Preclinical development(3) ● Accelerate development of multiple drug candidates in a fast-evolving IO field with a scale and focus beyond our existing discovery agreement 1 2 Committing to Immuno Oncology 3 PD-1: Programmed death protein 1 LAG-3: Lymphocyte activation gene 3 PD-L1: Programmed death ligand 1 GITR: Glucocorticoid-Induced Tumor-necrosis-factor-Receptor-related protein IO: Immuno-Oncology (1) Including bi-specifics antibodies (2) REGN2810 (3) Subject to opting in
  15. 15. 15 Ready to Launch Praluent® (alirocumab) in the U.S. and EU Positive CHMP opinion on July 23, 2015(1)  Indicated in adults with primary hypercholesterolemia (HeFH and non-familial) or mixed dyslipidaemia, as an adjunct to diet in patients unable to reach their LDL-C goals with a maximally-tolerated statin and patients who are statin intolerant, or for whom a statin is contraindicated FDA approval granted on July 24, 2015  Indicated as adjunct to diet and maximally tolerated statin therapy for the treatment of adults with heterozygous familial hypercholesterolemia or clinical atherosclerotic cardiovascular disease, who require additional lowering of LDL cholesterol (LDL-C) (1) EC regulatory decision expected in late September 2015 75 mg dose 150 mg dose
  16. 16. (1) ELIXA evaluated CV outcomes in Type 2 Diabetes patients after Acute Coronary Syndrome during treatment with lixisenatide (2) LixiLan is a once-daily fixed-ratio combination of insulin glargine and lixisenatide (3) LixiLan-O evalutates the combination of insulin glargine and lixisenatide in patients insufficiently controlled on OADs. LixiLan-L focuses on patients not at goal on basal insulin. The ongoing LixiLan-L study will be completed in Q3 2015. Following an analysis of results from both Phase III studies, LixiLan-O and LixiLan-L, Sanofi will determine the next steps in the regulatory process. Currently, regulatory submissions are planned for Q4 2015 in the U.S. and Q1 2016 in the EU. (4) SARIL-RA-TARGET, SARIL-RA-EASY and SARIL-RA-ASCERTAIN Additional Clinical Milestones and Regulatory Filings Expected in H2 2015 Key Milestones in H2 2015 16 Type 2 Diabetes Positive ELIXA study results supported U.S. regulatory submission in late July 2015(1) Type 2 Diabetes Positive LixiLan-O top-line results demonstrated superiority over insulin glargine or lixisenatide on HbA1c reduction(3) LixiLan-L results expected in Q3 2015(3) (2) Rheumatoid Arthritis 3 Phase III trials recently met their primary endpoints(4) Regulatory submission expected in late 2015 in the U.S. and Q4 2016 in EU sarilumablixisenatide
  17. 17.  Diabetes  Cardiovascular Diabetes & Cardio- vascular P. Witz  Rare diseases  Multiple Sclerosis  Oncology  Immunology Sanofi Genzyme (Specialty Care) D. Meeker  CHC  Established products  Generics General Medicines & Emerging Markets P. Guenter Sanofi Pasteur (Vaccines) O. Charmeil Merial (Animal Health) C. Hellmann  Human vaccines  Animal Health products  Emerging markets(1) & A New Organizational Model with Five Global Business Units Is a Necessary Step to Drive Focus and Simplification 17 (1) All pharmaceutical businesses in Emerging markets to report to General Medicine & Emerging Markets GBU (2) Functions include Research & Development, Industrial Affairs, Finance, Human Resources, Business Development & Strategy, External Affairs, Information Systems, Medical, Legal, Compliance, Procurement (not an exhaustive list of functions) (3) The process of legal and social consultation will be followed as required  Similar to R&D and Industrial Affairs, all functions will be globalized(2) New organization implemented beginning in January 2016(3)
  18. 18. Sanofi to Host an IR Seminar in Q4 2015 18 ● Outlining a roadmap towards 2020 ● Sharing the outcome of the ongoing business review ● Presenting further progress of our R&D pipeline ● Offering opportunities to interact with management Friday November 6th, 2015 from 8:30 to 16:00 in Sanofi HQ - Paris 18 Meet Management
  19. 19. FINANCIAL RESULTS Jérôme Contamine Executive Vice President, Chief Financial Officer 19
  20. 20. Net Sales(1) Business EPS 20 Sustained U.S. Dollar Strength Led to Strong FX Tailwind on Top and Bottom Line Again in Q2 2015 (1) Main currency impact on sales in Q2 2015: U.S. Dollar (+€645m); Chinese Yuan (+€99m); Brazilian Real (-€33m); Russian Ruble (-€31m) Quarterly Currency Impact -6.2% -€497m -5.5% -€443m -1.0% -€81m +9.9% +€782m Q1 2015 Q1 2014 Q2 2014 Q3 2014 Q4 2014 +2.7% +€229m Q1 2015 Q1 2014 Q2 2014 Q3 2014 Q4 2014 -9.1% -€0.11 -8.9% -€0.10 -€0.03 -2.2% +1.5% +€0.02 +10.2% +€0.12 Q2 2015 Q2 2015 +11.2% +€910m +15.4% +€0.18
  21. 21. CER: Constant Exchange Rates 21 Business Operating Income Up +4.7% at CER Despite OpEx Increase of +3.7% at CER in Q2 2015 €m Q2 2015 Q2 2014 % Change (reported €) % Change (CER) Net sales 9,378 8,075 +16.1% +4.9% Other revenues 83 71 +16.9% +0.0% Cost of sales (2,938) (2,608) +12.7% +4.8% Gross profit 6,523 5,538 +17.8% +4.8% R&D (1,290) (1,188) +8.6% -0.3% SG&A (2,648) (2,255) +17.4% +5.9% Other current operating income & expenses (20) 54 - - Share of Profit/Loss of associates 30 26 - - Minority interests (29) (30) - - Business operating income 2,566 2,145 +19.6% +4.7% Business operating margin 27.4% 26.6% - -
  22. 22. 22 €m Q2 2015 Q2 2014 % Change (reported €) % Change (CER) Business operating income 2,566 2,145 +19.6% +4.7% Net financial expenses (112) (94) - - Income tax expense (614) (514) - - Effective tax rate -25.0% -25.0% - - Business net income 1,840 1,537 +19.7% +4.2% Net margin 19.6% 19.0% - - Business EPS €1.41 €1.17 +20.5% +5.1% Average number of shares outstanding (m) 1,305.9 1,314.5 - - Mid-Single Digit Business EPS Growth at CER in Q2 2015 22 CER: Constant Exchange Rates (1) Number of shares outstanding on June 30, 2015: 1,306.2m (1)
  23. 23. Gross Margin Consistent with FY 2015 Expectations ● Cost of Sales (CoS) of €2,938m in Q2 2015, up +4.8% at CER ● Gross margin of 69.6% in Q2 2015 reflecting 1.0 pt increase over Q2 2014: ● Driven by favorable FX impact ● Positive impact from Genzyme and Renagel® offsetting negative impact of Vaccines mix and Lantus® U.S. 23 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 69.6% Gross Margin (%) 68.6%
  24. 24. OpEx Grew +14.4% in Reported and +3.7% at CER in Q2 2015 2424 Q1 Q2 Q3 Q4 Q1 Q2 €3,938m €3,443m Operating Expenses (€m) €1,290m €1,188m €2,648m €2,255m R&D SG&A 2014 2015 Targeting mid-single digit OpEx growth at CER in 2015 ● Q2 2015 OpEx of €3,938m, up +3.7% at CER ● R&D expenses of €1,290m (13.8% of sales), up +8.6% or stable at CER ● SG&A expenses of €2,648m (28.2% of sales), up +17.4% or +5.9% at CER
  25. 25. Regeneron Agreement Terms Provide Critical Investment Mass for IO Target Discovery and Antibody Development 25 Key Terms for PD-1 inhibitor (REGN2810)Key IO Collaboration Terms ● $265m upfront payment for access to Regeneron’s research capabilities and technologies in IO ● Sanofi and Regeneron will invest over $1bn in R&D (split 75/25) ● Sanofi will re-allocate $75m to IO from existing collaboration(1) ● Sanofi opt-in rights at Proof of Concept ● After opt-in, partners share R&D costs and alternate development lead and U.S. commercialization(2) ● Worldwide profits shared 50/50 ● $375m upfront payment ● Sanofi and Regeneron will invest $650m in R&D (split 50/50) ● Worldwide profits shared 50/50 ● Regeneron leads development and consolidates U.S. sales ● Sanofi consolidates non-U.S. sales ● $375m milestone if sales of a PD-1 and any other collaboration antibody sold for use in combination with a PD-1 exceed $2bn over 12 months Exclusive IO antibody collaboration with Regeneron will last up to 8 years(3) IO: Immuno-Oncology (1) Sanofi to re-allocate $75m (over 3 years) to IO from its $160m annual contribution to existing collaboration (2) For antibodies that Regeneron leads development, development costs will be shared equally. For antibodies that Sanofi leads development, Sanofi will prefund and Regeneron will reimburse 50% of the costs through the IO collaboration development balance, in an annual amount equal to 10% of the Regeneron share of profits (3) Five years with an ability to extend the collaboration for selected ongoing programs for an additional three years
  26. 26. Free Cash Flow Increased 29.0% in H1 2015 26 Net Debt (in €m) €363m Share Repurchase €1,243m€462m Proceeds from Issuance of Shares CapEx €667m Net Cash from Operating Activities Net Debt Dec 31, 2014 Net Debt Jun 30, 2015 €801m Dividend €3,694m Acquisitions, Licensing, Net of Disposals Other(1) (2) €7,171m €9,726m€3,751m (3) (1) FCF €3,084m FCF: Free Cash Flow (1) Including derivatives related to the financial debt +€302m at December 31st 2014 and +€305m at June 30th 2015 (2) Excluding Restructuring costs (3) Other including Restructuring costs and Fx impact
  27. 27. Exclusivity Losses and Higher OpEx Expected in H2 2015 ● Slower sales growth of Venezuela and Merial ● Expected launch of insulin glargine biosimilar in Europe(1) and Japan ● Generic competition to Plavix® in Japan and Renagel® in Europe and possibly the U.S. ● Accelerating OpEx growth given: ● New R&D funding of Immuno-Oncology alliance, Toujeo® Phase IV program, dupilumab Phase III in Asthma ● Investment in Praluent® launch and Toujeo® DTC campaign 2727 H2 2015 (1) Already launched in two Eastern European markets
  28. 28. Business EPS Growth Approximately +10%(3) Stable to slightly growing at CER(1,2) 28 (1) Barring major unforeseen adverse events (2) FY 2014 Business EPS of €5.20 (3) Difference between variation on a reported basis and variation at CER, when applying June 2015 average exchange rates to the remaining two quarters of the year Outlook for 2015 - Investing in Future Growth Drivers FY 2015 FX impact on Business EPS
  29. 29. APPENDICES R&D Pipeline 29
  30. 30. 30 Late Stage Pipeline – Pharma & Vaccines LixiLan lixisenatide + insulin glargine Fixed-Ratio / Type 2 diabetes patisiran (ALN-TTR02) siRNA inhibitor targeting TTR Familial amyloid polyneuropathy Clostridium difficile Toxoid vaccine Praluent® (alirocumab) Anti-PCSK9 mAb Hypercholesterolemia, EU SAR342434 insulin lispro Type 1+2 diabetes revusiran (ALN-TTRsc) siRNA inhibitor targeting TTR Familial amyloid cardiomyopathy Rotavirus Live attenuated tetravalent Rotavirus oral vaccine lixisenatide GLP-1 agonist Type 2 diabetes, U.S. sarilumab Anti-IL6R mAb Rheumatoid arthritis Kynamro® (mipomersen) Apolipoprotein B-100 antisense Severe HeFH, U.S. VaxiGrip® QIV IM Quadrivalent inactivated influenza vaccine Dengue Mild-to-severe dengue fever vaccine dupilumab Anti-IL4Rα mAb Atopic dermatitis, Asthma Jevtana® (cabazitaxel) Metastatic prostate cancer (1L) PR5i DTP-HepB-Polio-Hib Pediatric hexavalent vaccine, U.S., EU SYNVISC-ONE® Medical device Pain in hip OA 30 N N N N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular / Renal Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery Phase III Registration N N NN
  31. 31. Early Stage Pipeline – Pharma & Vaccines dupilumab Anti-IL4Rα mAb Nasal polyposis; Eosinophilic oesophagitis isatuximab Anti-CD38 naked mAb Multiple myeloma Rabies VRVg Purified vero rabies vaccine vatelizumab Anti-VLA 2 mAb Multiple sclerosis SAR125844 C-MET kinase inhibitor NSCLC Meningitis ACYW conj. 2nd generation meningococcal conjugate infant vaccine SAR156597 IL4/IL13 Bi-specific mAb Idiopathic pulmonary fibrosis GZ402671 Oral GCS Inhibitor Fabry Disease Tuberculosis Recombinant subunit vaccine sarilumab Anti-IL6R mAb Uveitis olipudase alfa rhASM Niemann-Pick type B Combination ferroquine / OZ439 Antimalarial Phase II N N 31 N 31 N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular / Renal Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery N N N N
  32. 32. Early Stage Pipeline – Pharma & Vaccines GZ402668 GLD52 (anti-CD52 mAb) Relapsing multiple sclerosis SAR566658 Maytansin-loaded anti-CA6 mAb Solid tumors GZ402666 neo GAA Pompe Disease Streptococcus pneumonia Meningitis & pneumonia vaccine SAR113244 Anti-CXCR5 mAb Systemic lupus erythematosus SAR408701 Anti-CEACAM5 ADC Solid tumors GZ389988 TRKA antagonist Osteoarthritis Herpes Simplex Virus Type 2 HSV-2 vaccine SAR228810 Anti-protofibrillar AB mAb Alzheimer’s disease REGN2810 PD-1 inhibitor Cancer StarGen® Gene therapy Stargardt disease SAR425899 GLP-1 / GCGR agonist Diabetes SAR125844 C-MET kinase inhibitor Solid tumors UshStat® Gene therapy Usher syndrome 1B SAR439152 Myosin inhibitor Hypertrophic cardiomyopathy Phase I N N N NN NN N 32 N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular / Renal Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery N N N N
  33. 33. 33 Phase I Phase II Phase III Registration TOTAL Oncology 3 2 0 0 5 Diabetes Solutions 1 0 1 1 3 Cardiovascular / Renal Diseases 1 0 0 1 2 Immune Mediated Diseases 2 2 2 0 6 Infectious Diseases 0 1 0 0 1 Ophthalmology 2 0 0 0 2 Rare Diseases 2 2 2 0 6 Age Related Degenerative Diseases 1 0 0 0 1 Vaccines 2 3 3 2 10 TOTAL 14 10 8 4 R&D Pipeline Summary Table(1) 24 12 NMEs & Vaccines 36 33 26 (1) Excluding life cycle management programs
  34. 34. 34 Expected R&D Milestones 34 Product Event Timing Praluent® (alirocumab) Expected EC regulatory decision in Hypercholesterolemia Q3 2015 LixiLan Expected Phase III top line results in Diabetes Q3 2015 Vaxigrip® QIV IM (3+ years) Expected EU regulatory submission Q4 2015 Dengue vaccine Expected regulatory decision in endemic countries Q4 2015 LixiLan Expected U.S. regulatory submission in Diabetes Q4 2015 sarilumab Expected U.S. regulatory submission in Rheumatoid Arthritis Q4 2015 PR5i vaccine (DTP-HepB-Polio-Hib) Expected U.S. regulatory decision Q4 2015 LixiLan Expected EU regulatory submission in Diabetes Q1 2016 PR5i vaccine (DTP-HepB-Polio-Hib) Expected EU regulatory decision Q1 2016 Meningitis ACYW conj. vaccine Expected start of Phase III trial Q1 2016 dupilumab Expected Phase III top line results in Atopic Dermatitis Q1 2016 Rotavirus vaccine Expected regulatory submission in India Q2 2016 insulin lispro Expected Phase III top line results in Diabetes Q2 2016
  35. 35. APPENDICES FINANCE 35
  36. 36. Business EPS Currency Sensitivity Currency Exposure on Q2 2015 Sales Currency Average Rates 2015 Currency Sensitivity 36 Q2 2014 Q2 2015 % change EUR/USD 1.37 1.10 -19.7% EUR/JPY 140.03 134.14 -4.2% EUR/CNY 8.54 6.85 -19.8% EUR/RUB 47,96 58,12 +21.2% Currency Variation Business EPS Sensitivity U.S. Dollar -0.05 USD/EUR +EUR 0.10 Japanese Yen +5 JPY/EUR -EUR 0.03 Russian Ruble +10 RUB/EUR -EUR 0.06 € 23.0% US $ 35.6% Japanese Yen 5.5% Bristish £ 2.0% Australian $ 1.5% Canadian $ 1.5% Brazilian Real 3.2% Chinese Yuan 5.4% Russian Ruble 1.6% Others 19.3 % Mexican Peso 1.4%
  37. 37. 37 Business Net Income Statement (1) Net of tax (2) Determined on the basis of Business income before tax, associates and non-controlling interests (3) Based on an average number of shares outstanding of 1,305.9 million in the second quarter of 2015 and 1,314.5 million in the second quarter of 2014 Second quarter 2015 Net sales 9,378 8,075 16.1% 7,800 6,820 14.4% 887 718 23.5% 691 537 28.7% - - Other revenues 83 71 16.9% 67 58 15.5% 8 7 14.3% 8 6 33.3% - - Cost of sales (2,938) (2,608) 12.7% (2,252) (2,058) 9.4% (450) (350) 28.6% (236) (200) 18.0% - - As % of net sales (31.3%) (32.3%) (28.9%) (30.2%) (50.7%) (48.8%) (34.2%) (37.2%) Gross profit 6,523 5,538 17.8% 5,615 4,820 16.5% 445 375 18.7% 463 343 35.0% - - As % of net sales 69.6% 68.6% 72.0% 70.7% 50.2% 52.2% 67.0% 63.9% Research & development expenses (1,290) (1,188) 8.6% (1,104) (1,030) 7.2% (142) (123) 15.4% (44) (35) 25.7% - - As % of net sales (13.8%) (14.7%) (14.2%) (15.1%) (16.0%) (17.1%) (6.4%) (6.5%) Selling and general expenses (2,648) (2,255) 17.4% (2,216) (1,930) 14.8% (188) (142) 32.4% (244) (183) 33.3% - - As % of net sales (28.2%) (27.9%) (28.4%) (28.3%) (21.2%) (19.8%) (35.3%) (34.1%) Other current operating income/expenses (20) 54 (11) 42 1 3 5 11 (15) (2) Share of profit/loss of associates(1) 30 26 29 25 1 1 - - - - Net income attributable to non-controlling interests (29) (30) (29) (30) - - - - - - Business operating income 2,566 2,145 19.6% 2,284 1,897 20.4% 117 114 2.6% 180 136 32.4% (15) (2) As % of net sales 27.4% 26.6% 29.3% 27.8% 13.2% 15.9% 26.0% 25.3% Financial income and expenses (112) (94) Income tax expense (614) (514) Tax rate (2) 25.0% 25.0% Business net income 1,840 1,537 19.7% As % of net sales 19.6% 19.0% Business earnings per share(3) (in euros) 1.41 1.17 20.5% OtherGroup Total Pharmaceuticals Vaccines Animal health change Q2 2015 Q2 2014change Q2 2015 Q2 2014 change Q2 2015 Q2 2014Q2 2014€ million Q2 2015 Q2 2014 change Q2 2015
  38. 38. 38 Business Net Income Statement (1) Net of tax (2) Determined on the basis of Business income before tax, associates and non-controlling interests (3) Based on an average number of shares outstanding of 1,307.2 million in the first semester of 2015 and 1,317.2 million in the first semester of 2014 First Half 2015 Net sales 18,188 15,917 14.3% 15,255 13,517 12.9% 1,584 1,346 17.7% 1,349 1,054 28.0% Other revenues 163 154 5.8% 129 126 2.4% 14 14 - 20 14 42.9% - - Cost of sales (5,724) (5,124) 11.7% (4,442) (4,046) 9.8% (826) (700) 18.0% (456) (378) 20.6% - - As % of net sales (31.5%) (32.2%) (29.1%) (29.9%) (52.1%) (52.0%) (33.8%) (35.8%) Gross profit 12,627 10,947 15.3% 10,942 9,597 14.0% 772 660 17.0% 913 690 32.3% - - As % of net sales 69.4% 68.8% 71.7% 71.0% 48.7% 49.0% 67.7% 65.5% Research and development expenses (2,489) (2,327) 7.0% (2,143) (2,025) 5.8% (262) (230) 13.9% (84) (72) 16.7% - - As % of net sales (13.7%) (14.6%) (14.0%) (15.0%) (16.5%) (17.1%) (6.2%) (6.8%) Selling and general expenses (5,086) (4,333) 17.4% (4,310) (3,721) 15.8% (344) (271) 26.9% (432) (341) 26.7% - - As % of net sales (28.0%) (27.2%) (28.3%) (27.5%) (21.7%) (20.1%) (32.0%) (32.4%) Other current operating income/expenses (87) 29 (39) 19 2 1 5 17 (55) (8) Share of profit/loss of associates(1) 61 39 61 33 - 6 - - - - Net income attributable to non-controlling interests (62) (65) (62) (65) - - - - - - Business operating income 4,964 4,290 15.7% 4,449 3,838 15.9% 168 166 1.2% 402 294 36.7% (55) (8) As % of net sales 27.3% 27.0% 29.2% 28.4% 10.6% 12.3% 29.8% 27.9% Financial income and expenses (209) (170) Income tax expense (1,189) (1,036) Tax rate (2) 25.0% 25.0% Business net income 3,566 3,084 15.6% As % of net sales 19.6% 19.4% Business earnings per share(3) (in euros) 2.73 2.34 16.7% € million H1 2015 H1 2014 change H1 2015 Group Total Pharmaceuticals Vaccines Animal health H1 2014 H1 2015 H1 2014 Other H1 2014 change H1 2015 H1 2014H1 2015change change
  39. 39. Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi 39 (1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €582 million in the second quarter of 2015 and €601 million in the second quarter of 2014 (2) Based on an average number of shares outstanding of 1,305.9 million in the second quarter of 2015 and 1,314.5 million in the second quarter of 2014 € million Q2 2015 Q2 2014 Change Business net income 1,840 1,537 19.7% Amortization of intangible assets(1) (611) (624) Impairment of intangible assets (1) (71) Fair value remeasurement of contingent consideration liabilities 70 (124) Restructuring costs (28) (84) Other gains and losses, and litigation - - Tax effect of: 206 274 amortization of intangible assets 214 207 impairment of intangible assets - 25 fair value remeasurement of contingent consideration liabilities (22) 13 other gains and losses, and litigation - - restructuring costs 14 29 Other tax items (111) (110) Share of items listed above attributable to non-controlling interests 2 3 Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (65) (24) Net income attributable to equity holders of Sanofi 1,302 777 67.6% Consolidated earnings per share(2) (in euros) 1.00 0.59
  40. 40. Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi 40 (1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €1,172 million in the first semester of 2015 and €1,258 million in the first semester of 2014 (2) Day one profit on Alnylam shares presented in financial result (3) Tax on dividends paid to shareholders of Sanofi (4) Based on an average number of shares outstanding of 1,307.2 million in the first semester of 2015 and 1,317.2 million in the first semester of 2014 € million H1 2015 H1 2014 Change Business net income 3,566 3,084 15.6% Amortization of intangible assets(1) (1,229) (1,301) Impairment of intangible assets (28) (74) Fair value remeasurement of contingent consideration liabilities 71 (132) Restructuring costs (381) (135) Other gains and losses, and litigation(2) - 35 Tax effect of: 561 522 amortization of intangible assets 431 451 impairment of intangible assets 10 26 fair value remeasurement of contingent consideration liabilities (15) 14 other gains and losses, and litigation - (13) restructuring costs 135 44 Other tax items(3) (111) (110) Share of items listed above attributable to non-controlling interests 3 4 Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (127) (32) Net income attributable to equity holders of Sanofi 2,325 1,861 24.9% Consolidated earnings per share(4) (in euros) 1.78 1.41
  41. 41. 41 Consolidated Income Statements (1) In 2015, including a tax on dividends paid to shareholders of Sanofi: (111)M€ compared to (110)M€ in 2014 € million Net sales 9,378 8,075 18,188 15,917 Other revenues 83 71 163 154 Cost of sales (2,938) (2,608) (5,724) (5,124) Gross profit 6,523 5,538 12,627 10,947 Research and development expenses (1,290) (1,188) (2,489) (2,327) Selling and general expenses (2,648) (2,255) (5,086) (4,333) Other operating income 47 106 83 116 Other operating expenses (67) (52) (170) (87) Amortization of intangible assets (611) (624) (1,229) (1,301) Impairment of intangible assets (1) (71) (28) (74) Fair value remeasurement of contingent consideration liabilities 70 (124) 71 (132) Restructuring costs (28) (84) (381) (135) Operating income 1,995 1,246 3,398 2,674 Financial expenses (134) (145) (267) (292) Financial income 22 51 58 157 Income before tax and associates and joint ventures 1,883 1,152 3,189 2,539 Income tax expense(1) (519) (350) (739) (624) Share of profit / loss of associates and joint ventures (35) 2 (66) 7 Net income 1,329 804 2,384 1,922 Net income attributable to non-controlling interests 27 27 59 61 Net income attributable to equity holders of Sanofi 1,302 777 2,325 1,861 Average number of shares outstanding (million) 1,305.9 1,314.5 1,307.2 1,317.2 Consolidated earnings per share (in euros) 1.00 0.59 1.78 1.41 Q2 2014Q2 2015 H1 2015 H1 2014
  42. 42. 42 Cash Flow Statements (1) Excluding restructuring costs € million H1 2015 H1 2014 Business net income 3,566 3,084 Depreciation, amortization and impairment of property, plant and equipment and software 628 582 Gains and losses on disposals of non-current assets, net of tax (44) (97) Other non cash items (218) (98) Operating cash flow before changes in working capital(1) 3,932 3,471 Changes in working capital(1) (181) (552) Acquisitions of property, plant and equipment and software (667) (529) Free cash flow (1) 3,084 2,390 Acquisitions of intangible assets excluding software (280) (108) Acquisitions of investments in consolidated undertakings including assumed debt (169) (1,679) Restructuring costs (345) (382) Proceeds from disposals of property, plant and equipment, intangible assets and other non-current assets net of tax 86 179 Issuance of Sanofi shares 462 240 Dividends paid to shareholders of Sanofi (3,694) (3,676) Acquisition of treasury shares (1,243) (1,010) Disposals of treasury shares 1 - Transactions with non-controlling interests including dividends (16) (6) Foreign exchange impact (391) (37) Other items (50) (62) Change in net debt (2,555) (4,151)
  43. 43. 43 Balance Sheets ASSETS € million June 30, 2015 Dec 31, 2014 LIABILITIES & EQUITY € million June 30, 2015 Dec 31, 2014 Property, plant and equipment 10,540 10,396 Equity attributable to equity holders of Sanofi 56,618 56,120 Intangible assets (including goodwill) 55,062 53,740 Equity attributable to non-controlling interests 156 148 Non-current financial assets & investments in associates and deferred tax assets 10,296 9,819 Total equity 56,774 56,268 Non-current assets 75,898 73,955 Long-term debt 10,770 13,276 Non-current liabilities related to business combinations and to non-controlling interests 1,132 1,133 Provisions and other non-current liabilities 9,206 9,578 Deferred tax liabilities 3,742 4,105 Non-current liabilities 24,850 28,092 Inventories, accounts receivable and other current assets 17,308 16,086 Accounts payable & Other current liabilities 12,192 11,363 Cash and cash equivalents 4,701 7,341 Current liabilities related to business combinations and to non-controlling interests 141 131 Current assets 22,009 23,427 Short-term debt and current portion of long-term debt 3,962 1,538 Current liabilities 16,295 13,032 Assets held for sale or exchange 16 10 Liabilities related to assets held for sale or exchange 4 - TOTAL ASSETS 97,923 97,392 TOTAL LIABILITIES & EQUITY 97,923 97,392

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