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Sanofi delivers 2018 business EPS growth of 5.1% at CER

Paris, February 7, 2019

Sanofi delivers 2018 business EPS growth of 5.1% at CER

  Q4 2018 Change Change
at CER
 2018 Change Change
at CER
IFRS net sales reported €8,997m +3.5% +3.9% €34,463m -1.7% +2.5%
IFRS net income reported €254m +101.6% - €4,306m -48.8%(2) -
IFRS EPS reported €0.20 +100.0% - €3.45 -48.5%(2) -
Business net income(1) €1,364m +2.9% +4.3% €6,819m -1.8% +4.2%
Business EPS(1) €1.10 +3.8% +4.7% €5.47 -0.9% +5.1%


Fourth-quarter sales(3) growth driven by Specialty Care and Vaccines

Net sales were €8,997 million, an increase of 3.5% on a reported basis, 3.9%(3) at CER and 2.6% at CER/CS (4). Sanofi Genzyme sales were up 37.4% (16.1% at CER/CS(4)), led by Immunology and Rare Blood Disorder franchises. Vaccines sales increased 9.7%, driven by successful influenza differentiation strategy and Menactra®. CHC sales increased 1.9%, supported by Emerging Markets. DCV(5) GBU sales were down 11.3%; Global Diabetes franchise sales declined 10.5% in line with 2015-2018 guidance. Emerging Markets sales(6) were up 6.0%, reflecting strong performance in Asia. Full-Year 2018 sales growth from new products and Emerging markets more than offset impact of U.S. LoEs

Net sales in 2018 were €34,463 million, down 1.7% on a reported basis and grew 2.5% at CER (up 0.6% at CER/CS(4)). Sanofi Genzyme grew 30.8% (+14.2% at CER/CS(4)) to €7,226 million. Vaccines sales increased 2.4% to €5,118 million while CHC sales were up 3.0% to €4,660 million. DCV(5) GBU sales declined 13.8% to €4,511 million. Emerging Markets sales were up 7.5%, supported by strong performance in China (up 12.7%). Sanofi delivers 2018 business EPS at the high end of its guidance range

Q4 2018 business EPS(1) up 4.7% at CER to €1.10. Full-Year 2018 business EPS of €5.47 up 5.1% at CER and IFRS EPS of €3.45 (down 48.5%(2)). Board proposes dividend of €3.07, the 25th consecutive increase in dividend. Key achievements in sustaining innovation in R&D

Isatuximab met primary endpoint of ICARIA phase 3 study in Relapsed/Refractory Multiple Myeloma. BIVV001 demonstrated sustained high factor levels at once-weekly dosing with data presented at ASH. FDA Priority Review granted for Dupixent® in adolescents with moderate-to-severe atopic dermatitis. R&D strategy evolves towards prioritization of Specialty Care and Vaccines, leveraging technology platforms and data science. 2019 financial outlook Sanofi expects 2019 business EPS(1) to grow between 3% and 5%(7) at CER, barring unforeseen major adverse events. Applying average January 2019 exchange rates, the positive currency impact on 2019 business EPS is estimated to be between 1% to 2%.


Sanofi Chief Executive Officer, Olivier Brandicourt, commented:
"In the fourth quarter, we continued the momentum of the previous quarter and we delivered 5% full-year business EPS growth, at the high end of our guidance. In 2018, we executed on important launches including Dupixent®, Libtayo® and Cablivi®, as the headwinds from our U.S. LoEs began to moderate. Additionally, the acquisitions of Bioverativ and Ablynx provided the foundation to build a leading Rare Blood Disorder franchise and to enhance our biologic discovery capabilities. As we enter 2019, our focus remains on delivering our business priorities and transforming Sanofi to address the evolving business dynamics facing our industry."

(1) In order to facilitate an understanding of operational performance, Sanofi comments on the business net income statement. Business net income is a non-GAAP financial measure (see Appendix 10 for definitions). The consolidated income statement for Q4 2018 is provided in Appendix 3 and a reconciliation of reported IFRS net income to business net income is set forth in Appendix 4; (2) Excluding Animal Health gain on disposal, full-year IFRS net income was up 14.5% and full-year IFRS EPS was up 15.3%; (3) Changes in net sales are expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 10); (4) Constant Structure: Adjusted for Bioverativ acquisition and divestment of European Generics business; (5) DCV: Diabetes and Cardiovascular; (6) See definition page 8; (7) 2018 business EPS was €5.47.

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2018 fourth-quarter and full-year Sanofi sales

Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER(8).

In the fourth quarter of 2018, Company sales were €8,997 million, up 3.5% on a reported basis. Exchange rate movements had a negative effect of 0.4 percentage points mainly driven by the movement of the Turkish Lira, Brazilian Real and Argentine Peso. At CER, Company sales increased 3.9%.

Full-year Company sales reached €34,463 million, down 1.7% on a reported basis. Exchange rate movements had an unfavorable effect of 4.2 percentage points. At CER, Company sales were up 2.5%.

Global Business Units

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

Net Sales by GBU
(€ million)
Q4 2018 Change
at CER
2018 Change
at CER
Sanofi Genzyme (Specialty Care)(a)   2,054   +37.4%(c) 7,226 +30.8%(d)
Diabetes and Cardiovascular(a)   1,170   -11.3% 4,511 -13.8%
General Medicines & Emerging Markets(b)   3,052   -6.6%(e) 12,948 -2.8%(f)
Total Pharmaceuticals   6,276   +3.0% 24,685 +2.4%
Consumer Healthcare (CHC)   1,194   +1.9% 4,660 +3.0%
Sanofi Pasteur (Vaccines)   1,527   +9.7% 5,118 +2.4%
Total net sales   8,997   +3.9% 34,463 +2.5%

(a) Does not include Emerging Markets sales - see definition page 8; (b) Includes Emerging Markets sales for Diabetes & Cardiovascular and Specialty Care; (c)+16.1% at CS; (d)+14.2% at CS; (e) -1.8% at CS; (f)-1.6% at CS

Global Franchises

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

Net sales by Franchise
(€ million)
Q4 2018 Change
at CER
Developed
Markets
Change
at CER
Emerging
Markets
Change
at CER
Specialty Care 2,328 +35.2% 2,054 +37.4% 274 +22.4%
Diabetes and Cardiovascular 1,552 -7.1% 1,170 -11.3% 382 +7.9%
Established Rx Products 2,126 -6.8% 1,242 -13.0% 884 +2.9%
Consumer Healthcare (CHC) 1,194 +1.9% 789 -0.4% 405 +6.4%
Generics 270 -33.8%* 97 -61.4%** 173 +3.8%
Vaccines 1,527 +9.7% 1,054 +13.3% 473 +2.5%
Total net sales 8,997 +3.9% 6,406 +3.0% 2,591 +6.0%

* +6.7% at CS
**+12.9% at CS

Net sales by Franchise
(€ million)
 2018 Change
at CER
Developed
Markets
Change
at CER
Emerging
Markets
Change
at CER
Specialty Care 8,269 +29.0% 7,226 +30.8% 1,043 +18.7%
Diabetes and Cardiovascular 6,083 -7.9% 4,511 -13.8% 1,572 +13.1%
Established Rx Products 8,843 -6.1% 5,090 -14.1% 3,753 +6.6%
Consumer Healthcare (CHC) 4,660 +3.0% 3,072 -0.1% 1,588 +8.9%
Generics 1,490 -9.8%* 805 -19.4%** 685 +3.0%
Vaccines 5,118 +2.4% 3,647 +4.5% 1,471 -2.3%
Total net sales 34,463 +2.5% 24,351 +0.5% 10,112 +7.5%

* -0.6% at CS
**-3.8% at CS
 (8) See Appendix 10 for definitions of financial indicators.

Pharmaceuticals

Fourth-quarter Pharmaceutical sales were up 3.0% to €6,276 million mainly driven by the Immunology and Rare Blood Disorder franchises which were partially offset by Diabetes, Established Rx Products and the disposal of the European generics business. Full-year sales for Pharmaceuticals increased 2.4% to €24,685 million.

Rare Disease franchise

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Myozyme® / Lumizyme® 226 +10.7% 840 +10.8%
Fabrazyme® 206 +14.4% 755 +9.8%
Cerezyme® 190 +9.3% 711 +6.4%
Aldurazyme® 54 +16.7% 206 +6.7%
Cerdelga® 44 +33.3% 159 +31.0%
Others Rare Disease 74 -6.5% 287 -5.4%
Total Rare Disease 794 +10.9% 2,958 +8.3%

In the fourth quarter, Rare Disease delivered a solid performance with sales up 10.9% to €794 million, driven by Gaucher, Pompe and Fabry therapies. In the U.S. and Europe, fourth-quarter Rare Disease sales grew 8.5% (to €292 million) and 3.1% (to €262 million), respectively, while Emerging Markets sales were up 32.6% to €150 million. Full-year Rare Disease sales increased 8.3% to €2,958 million.

Fourth-quarter Gaucher (Cerezyme® and Cerdelga®) sales were up 13.0% to €234 million, supported by the increasing penetration of Cerdelga® in Europe and the sustained growth of Cerezyme® in Emerging Markets. Fourth-quarter Cerdelga® sales increased 33.3% to €44 million. Full-year Gaucher sales were €870 million, up 10.0%.

Fourth-quarter Pompe (Myozyme®/Lumizyme®) sales grew 10.7% to €226 million, supported by positive trends in naïve patient accruals. Fourth-quarter Myozyme®/Lumizyme® sales increased 18.8% to €79 million in the U.S. and 1.1% to €96 million in Europe, respectively. Full-year Myozyme®/Lumizyme® sales increased 10.8% to €840 million.

Fourth-quarter Fabry (Fabrazyme®) sales grew 14.4% to €206 million. Fourth-quarter sales in the U.S. and Europe increased 9.9% (to €104 million) and 4.8% (to €45 million), respectively. Full-year Fabrazyme® sales were up 9.8% to €755 million.

Multiple Sclerosis franchise

Net sales (€ million) Q4 2018 Change
 at CER
 2018 Change
 at CER
Aubagio® 446 +12.6% 1,647 +9.3%
Lemtrada® 96 -14.3% 402 -11.6%
Total Multiple Sclerosis 542 +6.6% 2,049 +4.4%

Fourth-quarter Multiple Sclerosis (MS) sales were up 6.6% to €542 million, as double-digit Aubagio® sales growth was partially offset by the decline in Lemtrada® sales. Full-year MS sales increased 4.4% to €2,049 million.

Fourth-quarter Aubagio® sales increased 12.6% to €446 million, driven by the U.S. (up 13.5% to €311 million) and Europe (up 12.5% to €108 million). Full-year Aubagio® sales increased 9.3% to €1,647 million.

In the fourth quarter, Lemtrada® sales decreased 14.3% to €96 million due to lower U.S. sales (down 19.6% to €45 million) and European sales (down 11.9% to €37 million), reflecting increased competition. Full-year Lemtrada® sales decreased 11.6% to €402 million.

Immunology franchise

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Dupixent® 280 +130.5% 788 +268.0%
Kevzara® 31 +275.0% 83 +663.6%
Total Immunology 311 +139.7% 871 +287.0%

Dupixent® (collaboration with Regeneron) for the treatment of moderate-to-severe atopic dermatitis in adults and moderate-to-severe adolescent and adult asthma generated sales of €280 million in the fourth quarter compared to €118 million in the fourth quarter of 2017. In the U.S., Dupixent® sales reached €225 million in the fourth quarter (up 87.9%). Demand for the product remains strong and total prescriptions (source: IQVIA weekly TRx data) increased 25% sequentially in the fourth quarter, bolstered by the branded DTC campaign and the recent U.S. launch in asthma. Fourth-quarter sales in Europe were €29 million. Full-year Dupixent® sales were €788 million compared to €219 million in the same period of 2017. By the end of 2018, Dupixent® had been launched in 17 countries.

Kevzara® (collaboration with Regeneron) for rheumatoid arthritis generated sales of €31 million in the fourth quarter, of which €23 million was in the U.S. reflecting improved commercial coverage. Kevzara® was launched in 14 countries in Europe in 2018 (included France in the fourth quarter). Full-year Kevzara® sales were €83 million.

Rare Blood Disorder franchise

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Eloctate® 196 - 608 -
Alprolix® 95 - 285 -
Cablivi® 3 - 4 -
Total Rare Blood Disorder 294 - 897 -

Bioverativ was consolidated in Sanofi's Financial Statements from March 9, 2018. Fourth-quarter sales of the Rare Blood Disorder franchise were €294 million (up 5.7% on a pro forma basis(9)), including non-U.S. sales of €58 million with Japan as the primary contributor. Full-year consolidated sales of the Rare Blood Disorder franchise were €897 million, up 12.5% on a pro forma basis(9).

Eloctate®, a recombinant antihemophilic Factor VIII, indicated for the treatment of hemophilia A, generated sales of
€196 million in the fourth quarter, up 4.3% on a pro forma basis(10). The performance in the U.S., Japan and Australia was partially offset by a decline in sales in Canada following the previously announced tender loss. The competitive dynamics in the U.S. resulted in a deceleration in growth compared with the previous quarter. Full-year consolidated Eloctate® sales were €608 million, up 15.0% on a pro forma basis(10).

Alprolix®, a recombinant coagulation Factor IX, indicated for the treatment of hemophilia B, generated sales of €95 million in the fourth quarter, up 5.3% on a pro forma basis(10). Full-year consolidated Alprolix® sales were €285 million, up 6.6% on a pro forma basis(10).

Cablivi® (caplacizumab) for the treatment of adults with acquired thrombotic thrombocytopenic purpura (aTTP), received EU approval in September and was launched in its first market, Germany, in October. Sales in the fourth quarter were €3 million.

Oncology franchise

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Jevtana® 114 +14.1% 422 +13.0%
Thymoglobulin® 78 +9.9% 297 +7.2%
Mozobil® 47 +15.0% 171 +8.6%
Eloxatin® 43 0.0% 182 +5.0%
Taxotere® 38 -2.5% 166 -0.6%
Zaltrap® 23 +14.3% 91 +27.0%
Others 44 0.0% 165 -32.1%
Total Oncology 387 +8.1% 1,494 +2.1%

 (9) Growth comparing fourth-quarter 2018 sales versus fourth-quarter 2017 sales, and full 2018 sales versus full 2017 sales at CER. Excluding the Sobi contract manufacturing sales and including Cablivi® sales in 2018. Unaudited data. (10) Growth comparing fourth-quarter 2018 sales versus fourth-quarter 2017 sales, and full 2018 sales versus full 2017 sales at CER. Excluding the Sobi contract manufacturing sales. Unaudited data.

Fourth-quarter Oncology sales increased 8.1% to €387 million. Consistent with the Company's portfolio prioritization efforts, Sanofi sold Leukine® on January 31, 2018. Excluding Leukine®, Oncology fourth-quarter sales were up 10.2%. Full-year Oncology sales were up 2.1% to €1,494 million and up 6.3% excluding Leukine®.

Jevtana® sales were up 14.1% to €114 million in the fourth quarter supported by the performance in the U.S. (up 20.0% to €50 million). Full-year Jevtana® sales increased 13.0% to €422 million. In the fourth quarter and full year, Thymoglobulin® sales increased 9.9% (to €78 million) and 7.2% (to €297 million), respectively.

In September, Libtayo® (cemiplimab-rwlc, collaboration with Regeneron) was approved in the U.S. for the treatment of patients with metastatic cutaneous squamous cell carcinoma (CSCC) or locally advanced CSCC who are not candidates for curative surgery or curative radiation. Libtayo® is the only treatment for advanced CSCC approved by the FDA. U.S. Libtayo® sales were $15 million and were consolidated by Regeneron.

Diabetes franchise

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Lantus® 866 -19.7% 3,565 -19.0%
Toujeo® 211 -2.3% 840 +7.2%
Total glargine 1,077 -16.8% 4,405 -15.1%
Apidra® 89 -6.2% 357 +0.3%
Amaryl® 77 -1.3% 335 +4.8%
Insuman® 23 -14.8% 91 -12.0%
Admelog® 57 - 93 -
Soliqua® 27 +188.9% 73 +188.5%
Total Diabetes 1,375 -10.5% 5,472 -10.4%

In the fourth quarter, global Diabetes sales decreased 10.5% to €1,375 million, due to lower glargine (Lantus® and Toujeo®) sales in the U.S. Fourth-quarter U.S. Diabetes sales were down 26.3% to €555 million, reflecting the previously announced changes in coverage of the Part D business and a continued decline in average U.S. glargine net prices. Fourth-quarter sales in Emerging Markets increased 7.7% to €376 million. Fourth-quarter sales in Europe decreased 0.6% to €320 million, supported by Toujeo® growth. Full-year global Diabetes sales decreased 10.4% to €5,472 million. This in turn resulted in a CAGR sales decline for the global Diabetes franchise over 2015-2018 of 7.4% at CER, in line with the guidance.

Fourth-quarter glargine (Lantus® and Toujeo®) sales decreased 16.8% to €1,077 million. U.S. glargine sales were down 35.7% to €460 million, reflecting the aforementioned changes in coverage in Part D and a continued decline in average U.S. glargine net prices. In Europe, glargine sales were stable ato €245 million reflecting strong Toujeo® performance. Full-year glargine sales decreased 15.1% to €4,405 million. In 2019, Sanofi expects a further net pricing decline for its glargine products in the U.S. as a result of higher rebates needed to maintain broad payer coverage and the increased Part D coverage gap impact.

In the fourth quarter, Lantus® sales were €866 million, down 19.7%. In the U.S., Lantus® sales decreased 37.0% to €379 million, mainly reflecting lower average net price and changes in coverage in Part D. In Europe, fourth-quarter Lantus® sales were €168 million, down 8.2% due to biosimilar glargine competition and patients switching to Toujeo®. In Emerging Markets, fourth-quarter Lantus® sales were up 7.7% to €242 million. Full-year Lantus® sales decreased 19.0% to €3,565 million.

Fourth-quarter Toujeo® sales were €211 million, down 2.3%. In the U.S., fourth-quarter Toujeo® sales were €81 million, down 29.1%. In Europe and Emerging Markets, fourth-quarter Toujeo® sales were €77 million (up 23.8%) and €31 million (up 32.0%), respectively. Full-year Toujeo® sales increased 7.2% to €840 million.

Fourth-quarter Apidra® sales decreased 6.2% to €89 million. Lower sales in the U.S. (down 36.0% to €17 million) offset growth in Emerging Markets (up 10.7% to €29 million). Full-year Apidra® sales increased 0.3% to €357 million.

Amaryl® sales were €77 million, down 1.3% in the fourth quarter, of which €66 million were generated in Emerging Markets (up 1.5%). Full-year Amaryl® sales were up 4.8% at €335 million.

Admelog® (insulin lispro injection) 100 Units/mL, which was launched in the U.S. in April, generated sales of €57 million in the fourth quarter mainly due to access in Managed Medicaid. Full-year Admelog® sales were €93 million.

Fourth-quarter and full-year Soliqua® 100/33 (insulin glargine 100 Units/mL & lixisenatide 33 mcg/mL injection) and Suliqua(TM) sales were €27 million and €73 million, respectively.

Cardiovascular franchise

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Praluent® 82 +50.9% 261 +56.1%
Multaq® 95 +20.8% 350 +7.1%
Total cardiovascular franchise 177 +33.1% 611 +23.5%

Fourth-quarter Praluent® (collaboration with Regeneron) sales increased 50.9% to €82 million. U.S. sales of €52 million (up 45.7%) benefited from ESI coverage exclusivity which began in the third quarter. In Europe, sales were €23 million (up 53.3%). Full-year Praluent® sales increased 56.1% to €261 million. In 2019, Sanofi expects higher U.S. rebates to impact Praluent® sales.

Fourth-quarter and full-year Multaq® sales were up 20.8% (to €95 million) and 7.1% (to €350 million), respectively.

Established Rx Products

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Lovenox® 346 -9.0% 1,465 -3.0%
Plavix® 328 -4.9% 1,440 +1.2%
Aprovel®/Avapro® 151 -2.5% 652 -1.7%
Renvela®/Renagel® 96 -39.4% 411 -46.7%
Synvisc® /Synvisc-One® 81 -7.0% 313 -15.0%
Myslee®/Ambien®/Stilnox® 59 -1.7% 231 -6.9%
Allegra® 26 -21.9% 124 -17.7%
Other 1,039 -2.5% 4,207 -1.8%
Total Established Rx Products 2,126 -6.8% 8,843 -6.1%

In the fourth quarter, Established Rx Products sales decreased 6.8% to €2,126 million, reflecting lower U.S. sales of Renvela®/Renagel® (sevelamer) due to generic competition, together with lower sales of Lovenox® in Europe and Plavix® in Japan. Full-year Established Rx Products sales decreased 6.1% to €8,843 million.

Fourth quarter Lovenox® sales decreased 9.0% to €346 million, reflecting biosimilar competition in the UK, Poland, Germany, Italy and France. Sales in Europe were down 13.9% to €199 million impacted mainly by price erosion in France and Germany triggered by biosimilar launches. In Emerging Markets, Lovenox® sales grew 3.3% to €117 million. Full-year Lovenox® sales were down 3.0% to €1,465 million

In the fourth quarter, Plavix® sales were down 4.9% to €328 million. The decline was mainly driven by generic penetration in Japan (sales down 31.5% to €38 million) and procurement timing in the Middle East. Plavix® sales continued to grow in China. Sales of the product decreased in the rest of Emerging Markets and increased 2.9% in Europe. Full-year Plavix® sales were up 1.2% to €1,440 million.

Fourth-quarter Aprovel®/Avapro® sales decreased 2.5% to €151 million due to loss of exclusivity in Japan in December 2017. In Emerging Markets, performance continued to be strong with sales up 8.6% to €112 million. Full-year Aprovel®/Avapro® sales decreased 1.7% to €652 million.

Fourth-quarter Renvela®/Renagel® (sevelamer) sales decreased 39.4% to €96 million due to generic competition in the U.S. (down 53.0% to €57 million). Full-year Renvela®/Renagel® sales decreased 46.7% to €411 million.

Generics

In the fourth quarter, Generics sales decreased 33.8% to €270 million, reflecting the divestment of the European generics business Zentiva at the end of the third quarter. This divestiture was consistent with Sanofi's strategy to simplify and reshape the company. At CS, fourth quarter Generic sales increased 6.7%. Emerging Markets Generics sales increased 3.8% to €173 million. Full-year Generics sales decreased 9.8% to €1,490 million and decreased 0.6% at CS.

Consumer Healthcare

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

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Allergy Cough & Cold 268 -6.3% 1,124 -1.7%
  of which Allegra® 80 -3.6% 396 +1.2%
  of which Mucosolvan® 30 -14.3% 110 +1.8%
  of which Xyzal® 10 +42.9% 41 -32.3%
Pain 336 +4.6% 1,254 +6.7%
  of which Doliprane® 98 +3.2% 333 +4.0%
  of which Buscopan® 49 0.0% 194 +16.0%
Digestive 256 +4.4% 986 +8.7%
  of which Dulcolax® 55 0.0% 216 +7.1%
  of which Enterogermina® 47 +14.3% 183 +16.1%
  of which Essentiale® 48 +4.1% 177 +8.7%
  of which Zantac® 34 +13.8% 127 +13.7%
Nutritionals 174 +9.1% 675 +4.7%
Other 160 0.0% 621 -5.2%
  of which Gold Bond® 67 +16.1% 211 +9.5%
Total Consumer Healthcare 1,194 +1.9% 4,660 +3.0%

In the fourth quarter, Consumer Healthcare (CHC) sales increased 1.9% to €1,194 million, driven by Emerging Markets and the U.S. Full-year CHC sales increased 3.0% to €4,660 million.

In Europe, fourth-quarter CHC sales were down 3.6% to €368 million. Lower sales in the Allergy Cough & Cold category (down 13.3%) resulted from a weak season coupled with a strong base for comparison in the fourth quarter of 2017, which featured an unusual spike in demand. Full-year CHC sales in Europe decreased 0.2% to €1,403 million.

In the U.S., fourth-quarter CHC sales increased 6.0% to €274 million, supported by the Digestive category (up 10.9%) and Gold Bond performance. Full-year U.S. CHC sales decreased 1.1% to €1,066 million.

In Emerging Markets, fourth-quarter CHC sales increased 6.4% to €405 million, mainly driven by a solid demand in Brazil (mainly Pain category). Full-year Emerging Markets CHC sales increased 8.9% to €1,588 million.

Vaccines

Net sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
Influenza vaccines
(incl. Vaxigrip®, Fluzone HD®, Fluzone®, Flublok®)
596 +17.1% 1,708 +7.2%
Polio/Pertussis/Hib vaccines
(incl. Hexaxim® / Hexyon®, Pentacel®, Pentaxim® and Imovax®)
504 +3.0% 1,749 -0.7%
Meningitis/Pneumo vaccines
(incl. Menactra®)
131 +59.3% 609 +0.6%
Adult Booster vaccines (incl. Adacel ®) 135 -2.9% 470 +1.3%
Travel and other endemic vaccines 130 -18.8% 488 +1.8%
Other vaccines 31 +158.3% 94 +3.2%
Total Vaccines 1,527 +9.7% 5,118 +2.4%

Fourth-quarter Vaccines sales were up 9.7% driven by the performance in the U.S. (up 10.4%) and Europe (up 21.9%). In Emerging Markets, fourth-quarter Vaccines sales increased 2.5%. Fourth-quarter performance was consistent with Sanofi's expectation that sales of the Vaccines GBU would grow mid to high-single digits in the second half of 2018. Full-year Vaccines sales increased 2.4% to €5,118 million.

Fourth-quarter Influenza vaccines sales were up 17.1% to €596 million, reflecting slightly greater weighting of shipments in the fourth quarter versus the prior year as well as Sanofi Pasteur's influenza differentiation strategy which included the successful launch of Flubok® in the U.S. and the strong performance of Vaxigrip® QIV in Europe. Full-year Influenza vaccines sales increased 7.2% to €1,708 million.

In the fourth quarter, Polio/Pertussis/Hib (PPH) vaccines sales were up 3.0% to €504 million, driven by higher Hexaxim sales in Emerging Markets. In China, Pentaxim® supply returned to normal. In the U.S., PPH vaccines sales decreased 9.2% to €102 million reflecting lower sales of Polio and Hib vaccines. Full-year Polio/Pertussis/Hib vaccines sales were down 0.7% to €1,749 million.

Fourth-quarter Menactra® sales increased 63.3% to €130 million, driven by sales in the U.S. and Middle-East. In the U.S., fourth-quarter Menactra® sales were €80 million (up 45.3%) reflecting timing differences in CDC and wholesaler buying patterns. Full-year Menactra® sales were up 4.5% to €608 million.

Fourth-quarter and full-year Adult Booster vaccines sales decreased 2.9% (to €135 million) and increased 1.3% (to €470 million), respectively.

Fourth-quarter Travel and other endemic vaccines sales were €130 million, down 18.8% reflecting lower Rabies and Typhoid vaccines sales. Full-year Travel and other endemic vaccines sales were up 1.8% to €488 million.

Company sales by geographic region   

Sanofi sales (€ million) Q4 2018 Change
at CER
 2018 Change
at CER
United States 3,195 +8.7% 11,540 +0.7%
Emerging Markets(a) 2,591 +6.0% 10,112 +7.5%
  of which Asia 941 +8.4% 3,962 +9.3%
  of which Latin America 710 +2.6% 2,612 +8.1%
  of which Africa, Middle East 601 +5.2% 2,232 +1.1%
  of which Eurasia(b) 288 +3.3% 1,152 +10.1%
Europe(c) 2,342 -4.8% 9,434 -0.6%
Rest of the World(d) 869 +6.7% 3,377 +2.7%
  of which Japan 423 -1.4% 1,710 -2.0%
Total Sanofi sales 8,997 +3.9% 34,463 +2.5%
  1. World excluding U.S., Canada, Western & Eastern Europe (except Eurasia), Japan, South Korea, Australia, New Zealand and Puerto Rico
  2. Russia, Ukraine, Georgia, Belarus, Armenia and Turkey
  3. Western Europe + Eastern Europe except Eurasia
  4. Japan, South Korea, Canada, Australia, New Zealand, Puerto Rico

Fourth-quarter sales in the U.S. were up 8.7% to €3,195 million. This mainly reflected the strong performances of Dupixent® and Aubagio®, together with the consolidation of Eloctate® and Alprolix® sales, which were partly offset by lower sales of the Diabetes franchise (down 26.3%) and of sevelamer. In the U.S., full-year sales increased 0.7% to €11,540 million.

Fourth-quarter sales in Emerging Markets increased 6.0% to €2,591 million, mainly driven by Rare Diseases (up 32.6%), Diabetes (up 7.7%) and CHC (up 6.4%). In Asia, sales were up 8.4% to €941 million in the fourth quarter, sustained by the performance in China (up 8.3% to €566 million). In Latin America, fourth-quarter sales increased 2.6% to €710 million. Fourth-quarter sales in Brazil were up 10.0% to €254 million. In Africa and the Middle East region, fourth-quarter sales were €601 million, up 5.2%. Fourth-quarter sales in the Eurasia region increased 3.3% to €288 million, driven by the growth in Turkey which was partially offset by lower sales in Russia (€153 million, down 4.0%). Full-year sales in Emerging Markets increased 7.5% to €10,112 million. In 2018, sales in China, Brazil and Russia were €2,464 million (up 12.7%), €1,023 million (up 7.0%) and €605 million (up 4.6%), respectively.

Fourth-quarter sales in Europe were €2,342 million, down 4.8% due to the divestment of the European Generics business. At CS, fourth-quarter sales were up 2.0% driven by Vaccines (up 21.9%) and the roll-out of Dupixent® which offset lower sales in Established Rx Products (down 6.8%). In Europe, full-year sales decreased 0.6% to €9,434 million and increased 1.1% at CS.

Sales in Japan decreased 1.4% to €423 million in the fourth quarter. The consolidation of Rare Blood Disorder sales was more than offset by the impact of Plavix®  and Aprovel® generic competition and lower Vaccines sales. In Japan, full-year sales decreased 2.0% to €1,710 million.

R&D update

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

R&D strategy

Sanofi is today providing an update on the evolution of its R&D strategy. Consistent with its ambition to be an industry innovation leader, Sanofi has increased its R&D focus on Specialty Care therapy areas (Oncology, Immunology, Rare Disease and Rare Blood Disorder) while maintaining its commitment to Vaccines. Since 2017, the number of R&D programs in these areas has increased significantly, and they now represent over 90% of Sanofi's clinical portfolio. This change reflects advances in the Company's R&D capabilities and understanding of human biology.

In support of this strategy, Sanofi recently carried out a rigorous pipeline prioritization review to accelerate investment behind its most promising programs and to discontinue those with a less attractive expected return profile. As a result, the Company is accelerating the development of 17 programs, including 8 in Oncology. Thirteen development projects and 25 research projects are being discontinued to enhance the company's focus on delivering first and best in class medicines. Overall, Sanofi could potentially submit 9 new medicines and 25 additional indications to regulatory authorities over 2019 to 2022.

Through the development of its own expertise and the establishment of partnerships with industry pioneers, Sanofi has access to a broad range of therapeutic modalities that enable a more customized, science-driven approach to targeting disease. This includes development of next-generation biologics, such as multi-specific antibodies and Nanobodies, which provide new opportunities relative to traditional monoclonal antibodies in areas such as oncology and immunology, as well as gene therapies. The Company is also employing data science and machine learning across the R&D organization to generate higher quality data, accelerate development and regulatory submissions, and reduce costs.  Sanofi expects to maintain an annual R&D budget of approximately €6 billion through 2021.

Regulatory update

Regulatory updates since October 31, 2018 include the following:

  • In February, the European Medicine Agency's Committee for Medicinal Products for Human Use (CHMP) has recommended approval of Praluent® (collaboration with Regeneron) in European Union to reduce cardiovascular risk in people with established atherosclerotic cardiovascular disease.
  • In December, the FDA approved the hexavalent vaccine, Vaxelis(TM), for use in children from 6 weeks through 4 years of age. Vaxelis(TM) was developed as part of a joint partnership between Sanofi and Merck in the U.S. and Canada. Commercial supply will not be available in the U.S. prior to 2020.
  • In December, Dupixent® ( collaboration with Regeneron) was submitted to the FDA for the treatment of adults with inadequately-controlled chronic rhinosinusitis with nasal polyps (CRSwNP).
  • In December, the European Commission granted marketing authorization for Dengvaxia® to prevent dengue disease in individuals 9-45 years of age with a documented prior dengue infection and who are living in endemic areas.
  • In November, the CHMP recommended approval in European Union of fexinidazole the first all-oral treatment for sleeping sickness.
  • In November, the FDA accepted for Priority Review the supplemental Biologics License Application (sBLA) for Dupixent® in adolescent patients 12 to 17 years of age with moderate-to-severe atopic dermatitis, whose disease is inadequately controlled with topical therapies or for whom topical treatment is medically inadvisable. The target action data for the FDA decision is March 11, 2019.

At the beginning of February 2019, the R&D pipeline contained 81 projects including 33 new molecular entities in clinical development. 35 projects are in phase 3 or have been submitted to the regulatory authorities for approval.

Portfolio update

Phase 3:

  • In February, Sanofi announced that Isatuximab phase 3 trial (ICARIA study) met primary endpoint of prolonging progression free survival in patients with relapsed/refractory multiple myeloma
  • In January, the New England Journal of Medicine (NEJM) published positive results of the Phase 3 trial of Cablivi® (caplacizumab) in adults with acquired thrombotic thrombocytopenic purpura (aTTP).
  • In November, new analyses on mortality from the ODYSSEY OUTCOMES trial evaluating Praluent® were presented at the American Heart Association (AHA) Scientific Sessions. In November, the New England Journal of Medicine (NEJM) also published detailed results of this trial.
  • Shan 6, a pediatric hexavalent vaccine, entered phase 3.

Phase 2:

  • A phase 2 study evaluating the combination of isatuximab (anti-CD38 mAb) and cemiplimab (collaboration with Regeneron) in lymphoma was intitiated.
  • A phase 2 study evaluating the combination of isatuximab and atezolizumab (PD-L1 inhibitor mAb) in solid tumors was initiated.
  • A phase 2 study evaluating SAR440340 (an anti-IL33 mAb, collaboration with Regeneron) in atopic dermatitis was initiated.
  • Positive primary analysis of the Phase 2b trial demonstrated the safety and efficacy of SP0232/MEDI8897 (anti RSV mAb - Respiratory Syncytial Virus, collaboration with Medimmune).
  • Several projects in phase 2 were stopped:
    • GZ389988, a TRKA antagonist, in osteo arthritis;
    • ALX0171, an anti RSV nanobody (from Ablynx) for Respiratory Syncitial Virus;
    • SAR425899, a GLP-1 / GCGR agonist, in obesity in type 2 diabetes patients;
    • SAR407899, a rho kinase inhibitor, for microvascular angina;

Phase 1:

  • SAR408701, an anti-CEACAM5, achieved positive proof of concept in a subgroup of lung cancer patients. A broad development program is expected to start by the end of 2019.
  • BIVV001, a recombinant Factor VIII for Hemophilia A, achieved positive proof of concept with demonstration of sustained high factor levels at once-weekly dosing.
  • SAR441000, a cytokine mRNA (collaboration withBioNTech AG) entered phase 1 in the treatment of melanoma.
  • SAR443060/DNL747 (collaboration with Denali), an oral brain-penetrant small molecule (RIPK1 inhibitor), entered phase 1 clinical study in Amyotrophic Lateral Sclerosis (ALS) and Alzheimer's disease.
  • BIVV003, a Zinc Finger Nuclease (ZFN) gene editing technology issued from Bioverativ entered phase 1 in the treatment of sickle cell disease.
  • SAR441344, an anti-CD40L mAb (license from ImmuNext), entered phase 1 in the treatment of multiple sclerosis.
  • A next generation Pneumococcal Conjugate Vaccine (PCV) entered phase 1.
  • Several projects in phase 1 were stopped:
    • SAR439794, a TLR4 agonist immunomodulatory evaluated in peanut allergy;
    • SAR247799, a  S1P1 agonist evaluated in cardiovascular area;
    • SAR438335, a GLP-1/GIP agonist in Type 2 diabetes;
    • SAR228810, an anti protofibrillar AB mAb for Alzheimer disease;
  • UshStat®, a myosin 7A gene therapy for Usher Syndrome 1B, will be discontinued contigent upon identification of out-licensing partner.

Collaborations

In January 2019, Sanofi and Regeneron announced a restructuring of their global Immuno-Oncology Discovery and Development Agreement for new IO cancer treatments. The 2015 agreement was scheduled to end in approximately mid-2020. This revision provides for ongoing collaborative development of two clinical-stage bispecific antibody programs (BCMAxCD3 and MUC16xCD3 bispecific). It also provides Sanofi with increased flexibility to advance its early-stage IO pipeline independently while Regeneron retains all rights to its other IO discovery and development programs.

In January 2019, BioNTech announced that it has extended its research collaboration with Sanofi initiated in late 2015 in the field of mRNA cancer immunotherapy.

In January 2019, MyoKardia, Inc. announced that it regained worldwide rights to all programs covered under its license and collaboration agreement with Sanofi. The collaboration has not been extended beyond the initial research term, which ended on December 31, 2018. As a result, MyoKardia now has regained global rights to all programs in its portfolio, including mavacamten (a Myosin inhibitor evaluated in obstructive and non-obstructive hypertrophic cardiomyopathy) and MYK-491 (a Myosin activator evaluated in dilated cardiomyopathy) and the license and collaboration will conclude in its entirety effective April 1, 2019.

In December sanofi and Medicines for Malaria Ventures (MMV) agreed to transfer the operational responsibility for the development of Ferroquine/OZ439, to MMV in such a way that MMV would assume leadership while sanofi remains the sponsor of the studies, fulfilling drug supply, regulatory and legal obligations. Ferroquine/OZ439 is a first in class combination for malaria previously developed in collaboration with MMV.

In November, Sanofi announced that it plans to collaborate with Denali Therapeutics Inc. on the development of multiple molecules with the potential to treat a range of neurological and systemic inflammatory diseases.

2018 Fourth-quarter and full-year financial results(11)

Business Net Income(11)

In the fourth quarter of 2018, Sanofi generated net sales of €8,997 million, an increase of 3.5% (up 3.9% at CER). Full-year sales were €34,463 million, down 1.7% on a reported basis (up 2.5% at CER).

Fourth-quarter other revenues increased 13.4% (up 10.3% at CER) to €329 million, reflecting the VaxServe sales contribution of non-Sanofi products (€262 million, up 13.9% at CER) and the royalties received from Swedish Orphan Biovitrum AB. Full-year other revenues increased 5.7% (up 9.3% at CER) to €1,214 million of which €959 million were generated by VaxServe (up 15.6% at CER).

Fourth-quarter Gross Profit increased 5.2% to €6,188 million (up 5.2% at CER). The gross margin ratio was 68.8% (68.6% at CER) versus 67.7% in the fourth quarter of 2017. The positive mix impact of Specialty Care as well as the contribution from Bioverativ and Vaccines (impacted by Dengvaxia® in the fourth quarter of 2017) more than offset the negative impacts from U.S. Diabetes net price evolution and sevelamer generic competition. In the fourth quarter of 2018, the gross margin ratio of segments was 72.1% for Pharmaceuticals (down 0.2 percentage points), 66.0% for CHC (up 1.6 percentage points) and 60.4% for Vaccines (up 4.9 percentage points). Full-year Gross Profit decreased 1.7% to €24,356 million (up 2.5% at CER). In 2018, the gross margin ratio increased 0.1 percentage point to 70.7% (70.6% at CER) versus 2017. In 2019, Sanofi expects its gross margin ratio to be around 70% at CER.

Research and Development (R&D) expenses increased 14.6% to €1,678 million in the fourth quarter of 2018. At CER, R&D expenses increased 13.5%, mainly reflecting the acquisitions of Bioverativ and Ablynx together with the investments in the immuno-oncology and diabetes programs. Excluding the impact of acquisitions, R&D expenses would have risen by 6.7% in the fourth quarter of 2018. Full-year R&D expenses increased 7.7% to €5,894 million (up 10.3% at CER).

Fourth-quarter selling general and administrative expenses (SG&A) increased 0.8% to €2,721 million. At CER, SG&A expenses were up 1.1% mainly reflecting consolidation of Bioverativ and Ablynx. Additional marketing investments in new launches were offset by lower Diabetes expenses in the U.S. In the fourth quarter, the ratio of SG&A to sales decreased 0.9 percentage points to 30.2% compared to the fourth quarter of 2017. Full-year SG&A expenses decreased 2.4% to €9,831 million (up 1.6% at CER). In 2018, the ratio of SG&A to sales was 28.5%, 0.2 percentage points lower than in 2017.

Fourth-quarter other current operating income net of expenses was -€148 million versus -€114 million in the fourth quarter of 2017 and included the share of profit/loss to Regeneron of the monoclonal antibodies Alliance net of associated marketing expenses incurred by Regeneron. In the fourth quarter of 2018, this line also included charges related to a legal contingency provision, as well as a capital gain on an associate company and other accruals, which in aggregate represented a net charge of €72 million. In the fourth quarter of 2017, this line included an impairment of tangible assets of €87 million related to Dengvaxia®. In 2018, other current operating income net of expenses was -€64 million versus €4 million in 2017.

The share of profits from associates was €121 million in the fourth quarter versus €109 million for the same period of 2017, reflecting the increased contribution of the share of profits in Regeneron. In 2018, the share of profits from associates was €423 million versus €214 million in 2017.

In the fourth quarter, non-controlling interests were -€22 million versus -€30 million in the fourth quarter of 2017. Full-year non-controlling interests were -€106 million versus -€125 million in 2017.

Fourth-quarter business operating income increased 3.3% to €1,740 million. At CER, business operating income increased 4.5%. The ratio of business operating income to net sales decreased 0.1 percentage points to 19.3% versus the fourth quarter of 2017. Over the period, the business operating income ratio of segments was 27.1% for Pharmaceuticals (down 3.9 percentage points), 29.0% for CHC (up 2.2 percentage points) and 36.1% for Vaccines (up 14.2 percentage points). Full-year business operating income was €8,884 million, down 4.7% (or up 0.9% at CER). In 2018, the ratio of business operating income to net sales decreased by 0.8 percentage points to 25.8%.

Net financial expenses were -€60 million in the fourth quarter versus -€73 million in the same period of 2017. In the fourth quarter of 2018, net financial expenses included the cost associated with the Bioverativ and Ablynx acquisitions coupled with an increase of €22 million in the market value of a financial investment. Full-year net financial expenses were -€271 million versus -€273 million in 2017.

The fourth-quarter effective tax rate was 20.0% compared to 18.7% in the fourth quarter of 2017. In 2018, the effective tax rate was 21.6% compared to 23.5% in 2017. Sanofi expects its effective tax rate to be around 22% in 2019.
(11) See Appendix 3 for 2018 fourth-quarter consolidated income statement; see Appendix 10 for definitions of financial indicators, and Appendix 4 for reconciliation of IFRS net income reported to business net income.

Fourth-quarter business net income(11) increased 2.9% to €1,364 million and 4.3% at CER. The ratio of business net income to net sales was stable at 15.2% versus the fourth quarter of 2017. In 2018, business net income(11) decreased 1.8% to €6,819 million and increased 4.2% at CER. The ratio of business net income to net sales was stable at 19.8%.

In the fourth quarter of 2018, business earnings per share(11) (EPS) increased by 3.8% to €1.10 on a reported basis and by 4.7% at CER. The average number of shares outstanding was 1,245.6 million in the fourth quarter of 2018 versus 1,252.9 million in the fourth quarter of 2017.

In 2018, business earnings per share(11) was €5.47, down 0.9% on a reported basis and up 5.1% at CER. The average number of shares outstanding was 1,247.1 million in 2018 versus 1,256.9 million in 2017.

2019 Guidance

Sanofi expects 2019 Business EPS to grow between 3% and 5% at CER, barring unforeseen major adverse events. Applying average January 2019 exchange rates, the positive currency impact on 2019 Business EPS is estimated to be between 1% to 2%.

Dividend

The Board of Directors convened on February 6, 2019, and proposed a dividend of €3.07 per share.

Financial statements are not audited. The audit procedures by the Statutory Auditors are underway.

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

In 2018, the IFRS net income was €4,306 million. The main items excluded from the business net income were:

  • An amortization charge of €2,170 million related to fair value remeasurement on intangible assets of acquired companies (primarily Aventis: €256 million, Genzyme: €760 million, Boehringer Ingelheim CHC business:
    €242 million, Bioverativ: €430 million) and to acquired intangible assets (licenses/products: €213 million). In the fourth quarter, an amortization charge of €634 million related to fair value remeasurement on intangible assets of acquired companies (primarily Aventis: €56 million, Genzyme: €186 million, Boehringer Ingelheim CHC business: €61 million, Bioverativ: €136 million) and to acquired intangible assets (licenses/products: €114 million) was recorded. These items have no cash impact on the Company.
  • An impairment of intangible assets of €718 million (of which €426 million in the fourth quarter) mainly related to Lemtrada®, intangible assets from the Ablynx acquisition in May 2018 (including the anticipated termination collaboration with Merck & Co), and other Intellectual Property R&D assets of which the rights related to programs in Myokardia portfolio. This item has no cash impact on the Company.
     
  • A charge of €114 million arising from the workdown of inventories of acquired companies (related to Bioverativ) remeasured at fair value due to the application of purchase accounting to acquisitions. This item has no cash impact on the Group.
     
  • An income of €117 million mainly reflecting a decrease of Bayer contingent considerations linked to Lemtrada® (income of €109 million) and a charge related to CVR fair value adjustment.

             

  • Restructuring costs and similar items of €1,480 million (of which €765 million in the fourth quarter) which include the termination fee (€283 million) paid to Regeneron related to the research program under the original IO agreement, streamlining initiatives in Europe and Japan, the cost of transfer to Evotec of the early stage infectious diseases R&D portfolio and Research unit for an amount of €252 million and accelerated depreciation of industrial assets in the U.S.

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

             

  • A €1,125 million tax effect arising from the items listed above, mainly comprising €692 million of deferred taxes generated by amortization and impairments of intangible assets, and €435 million associated with restructuring costs and similar items. The fourth-quarter tax effect was €503 million, including €241 million of deferred taxes on amortization and impairments charged against intangible assets and €220 million associated with restructuring costs and similar items (see Appendix 4).
  • A €188 million tax effect (of which €56 million in the fourth quarter) arising from the U.S. tax reform.
  • An income of €76 million net of tax (of which €180 million in the fourth quarter) related to restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures.

Capital Allocation

In 2018, net cash generated by operating activities was €5,061 million after capital expenditures of €1,674 million and an increase in working capital of €1,099 million. In 2018, restructuring costs and similar items were €894 million while expenditure on share repurchases was €1,104 million. Over the period, the dividend paid by Sanofi amounted to €3,773 million and acquisitions and partnerships net of disposals were €11,243 million (including €12,728 million related to the Bioverativ and Ablynx acquisitions and €1,598 million related to the European generics business divestment). As a consequence, net debt increased from €5,161 million at December 31, 2017, to €17,628 million at December 31, 2018 (amount net of €6,925  million in cash and cash equivalents).

Forward-Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi's management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, Sanofi's ability to benefit from external growth opportunities, to complete related transactions, and/or obtain regulatory clearances, risks associated with intellectual property and any related pending or future litigation and the  ultimate outcome of such litigation,  trends in exchange rates and prevailing interest rates, volatile economic conditions, the impact of cost containment initiatives and subsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December 31, 2017. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.

Appendices

List of appendices

Appendix 1:  2018 fourth-quarter and 2018 net sales by GBU, franchise, geographic region and product
Appendix 2: 2018 fourth-quarter and 2018 business net income statement
Appendix 3: 2018 fourth-quarter and 2018 consolidated income statement
Appendix 4: Reconciliation of IFRS net income reported to business net income
Appendix 5

Appendix 6

Appendix 7:

Appendix 8:

Appendix 9:
Change in net debt

Simplified consolidated balance sheet

Currency sensitivity

R&D pipeline

Expected R&D milestones
Appendix 10: Definitions of non-GAAP financial indicators

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

                         
Q4 2018
(€ million)
Total
GBUs
% CER % reported Europe % CER United States % CER Rest of the World % CER Emerging Markets % CER Total
Franchises
% CER % reported
Aubagio 436 12 .4% 15 .0% 108 12 .5% 311 13 .5% 17 -5 .9% 10 20 .0% 446 12 .6% 14 .7%
Lemtrada 87 -17 .1% -17 .1% 37 -11 .9% 45 -19 .6% 5 -28 .6% 9 28 .6% 96 -14 .3% -14 .3%
Total MS 523 6 .0% 8 .1% 145 5 .1% 356 7 .8% 22 -12 .5% 19 23 .5% 542 6 .6% 8 .2%
Cerezyme 127 -1 .6% -0 .8% 72 -2 .7% 47 4 .7% 8 -18 .2% 63 34 .5% 190 9 .3% 3 .8%
Cerdelga 43 31 .3% 34 .4% 16 87 .5% 26 0 .0% 1 - 1 100 .0% 44 33 .3% 33 .3%
Myozyme 190 8 .0% 9 .2% 96 1 .1% 79 18 .8% 15 6 .7% 36 25 .8% 226 10 .7% 10 .2%
Fabrazyme 180 9 .3% 11 .1% 45 4 .8% 104 9 .9% 31 13 .8% 26 61 .1% 206 14 .4% 14 .4%
Aldurazyme 39 8 .3% 8 .3% 20 5 .3% 12 20 .0% 7 0 .0% 15 41 .7% 54 16 .7% 12 .5%
Total Rare Disease 644 6 .2% 7 .9% 262 3 .1% 292 8 .5% 90 8 .4% 150 32 .6% 794 10 .9% 9 .4%
Taxotere 6 -25 .0% -25 .0% 1 - -1 - 6 -25 .0% 32 3 .1% 38 -2 .5% -5 .0%
Jevtana 109 16 .1% 17 .2% 41 10 .5% 50 20 .0% 18 20 .0% 5 -16 .7% 114 14 .1% 15 .2%
Eloxatine 8 -12 .5% 0 .0% 0 -100 .0% 0 - 8 0 .0% 35 2 .8% 43 0 .0% -2 .3%
Thymoglobulin 59 7 .4% 9 .3% 9 0 .0% 43 5 .0% 7 40 .0% 19 17 .6% 78 9 .9% 9 .9%
Mozobil 44 16 .2% 18 .9% 12 18 .2% 26 18 .2% 6 0 .0% 3 0 .0% 47 15 .0% 17 .5%
Total Oncology 286 9 .3% 10 .4% 89 10 .8% 141 8 .7% 56 8 .0% 101 5 .0% 387 8 .1% 7 .8%
Dupixent 278 128 .8% 135 .6% 29 2800 .0% 225 87 .9% 24 2200 .0% 2 - 280 130 .5% 137 .3%
Kevzara 31 275 .0% 287 .5% 6 500 .0% 23 214 .3% 2 - 0 - 31 275 .0% 287 .5%
Total Immunology 309 138 .1% 145 .2% 35 - 248 95 .1% 26 - 2 - 311 139 .7% 146 .8%
Alprolix 95 - - 0 - 76 - 19 - 0 - 95 - -
Eloctate 194 - - 0 - 160 - 34 - 2 - 196 - -
Total Hemophilia Rare blood disorders 292 - - 3 - 236 - 53 - 2 - 294 - -
Sanofi Genzyme (Specialty Care) 2,054 37 .4% 40 .1% 534 12 .6% 1,273 48 .8% 247 52 .5% 274 22 .4% 2,328 35 .2% 36 .0%
Lantus 624 -27 .3% -25 .9% 168 -8 .2% 379 -37 .0% 77 1 .3% 242 7 .7% 866 -19 .7% -19 .5%
Toujeo 180 -6 .8% -5 .8% 77 23 .8% 81 -29 .1% 22 22 .2% 31 32 .0% 211 -2 .3% -2 .3%
Apidra 60 -13 .0% -13 .0% 34 0 .0% 17 -36 .0% 9 0 .0% 29 10 .7% 89 -6 .2% -8 .2%
Amaryl 11 -14 .3% -21 .4% 4 -20 .0% 1 0 .0% 6 -12 .5% 66 1 .5% 77 -1 .3% -3 .8%
Admelog 57 5400 .0% 5600 .0% 2 100 .0% 54 - 1 - 0 - 57 5400 .0% 5600 .0%
Total Diabetes 999 -16 .2% -14 .6% 320 -0 .6% 555 -26 .3% 124 4 .3% 376 7 .7% 1,375 -10 .5% -10 .3%
Multaq 93 22 .7% 24 .0% 10 0 .0% 82 23 .1% 1 - 2 -50 .0% 95 20 .8% 23 .4%
Praluent 78 48 .1% 50 .0% 23 53 .3% 52 45 .7% 3 50 .0% 4 200 .0% 82 50 .9% 54 .7%
Total Cardiovascular 171 33 .1% 34 .6% 33 32 .0% 134 31 .0% 4 150 .0% 6 33 .3% 177 33 .1% 36 .2%
Diabetes & Cardiovascular 1,170 -11 .3% -9 .8% 353 1 .7% 689 -19 .4% 128 6 .7% 382 7 .9% 1,552 -7 .1% -6 .7%
Plavix 328 -4 .9% -5 .7% 37 2 .9% 0 -100 .0% 53 -23 .5% 238 -0 .4% 328 -4 .9% -5 .7%
Lovenox 346 -9 .0% -10 .8% 199 -13 .9% 9 -28 .6% 21 -13 .0% 117 3 .3% 346 -9 .0% -10 .8%
Renagel / Renvela 96 -39 .4% -38 .1% 14 -18 .8% 57 -53 .0% 8 28 .6% 17 13 .3% 96 -39 .4% -38 .1%
Aprovel 151 -2 .5% -4 .4% 27 -3 .7% 3 50 .0% 9 -54 .2% 112 8 .6% 151 -2 .5% -4 .4%
Allegra 26 -21 .9% -18 .8% 1 -50 .0% 0 - 25 -20 .0% 0 - 26 -21 .9% -18 .8%
Myslee / Ambien / Stilnox 59 -1 .7% 0 .0% 11 10 .0% 12 -26 .7% 21 -13 .0% 15 45 .5% 59 -1 .7% 0 .0%
Synvisc / Synvisc One 81 -7 .0% -5 .8% 7 0 .0% 55 -13 .1% 3 0 .0% 16 14 .3% 81 -7 .0% -5 .8%
Depakine 109 -0 .9% -2 .7% 39 -2 .4% 0 - 5 -25 .0% 65 1 .5% 109 -0 .9% -2 .7%
Tritace 54 -8 .2% -11 .5% 35 -7 .7% 0 - 1 -50 .0% 18 -5 .0% 54 -8 .2% -11 .5%
Other Rx Drugs 876 -2 .3% -4 .1% 447 -4 .3% 49 -4 .2% 94 -4 .2% 286 1 .7% 876 -2 .3% -4 .1%
Total Established Rx Products 2,126 -6 .8% -8 .0% 817 -6 .8% 185 -31 .0% 240 -16 .0% 884 2 .9% 2,126 -6 .8% -8 .0%
Generics 270 -33 .8% -37 .5% 32 -82 .9% 45 5 .0% 20 0 .0% 173 3 .8% 270 -33 .8% -37 .5%
Total Emerging Markets Specialty Care 274 22 .4% 11 .4% 0 - 0 - 19 23 .5% 274 22 .4% 274 0 0
Total Emerging Markets Diabetes & Cardiovascular 382 7 .9% 4 .4% 0   0   0   382 7 .9% 0 .0%    
General Medicines & Emerging Markets 3,052 -6 .6% -9 .1% 849 -20 .2% 230 -26 .2% 260 -14 .9% 1,713 6 .9% 2,396 -11 .1% -12 .7%
                 
Total Pharmaceuticals 6,276 3 .0% 2 .6% 1,736 -7 .8% 2,192 8 .5% 635 7 .9% 1,713 6 .9% 6,276 3 .0% 2 .6%
                 
Allergy, Cough and Cold 268 -6 .3% -6 .6% 91 -13 .3% 62 -4 .8% 29 11 .1% 86 -4 .3% 268 -6 .3% -6 .6%
Pain 336 4 .6% 2 .1% 147 3 .5% 45 10 .0% 33 3 .3% 111 4 .3% 336 4 .6% 2 .1%
Digestive 256 4 .4% 2 .4% 82 0 .0% 53 10 .9% 12 -18 .8% 109 8 .5% 256 4 .4% 2 .4%
Nutritional 174 9 .1% 6 .1% 33 3 .1% 10 0 .0% 62 3 .2% 69 19 .7% 174 9 .1% 6 .1%
Consumer Healthcare 1,194 1 .9% 0 .5% 368 -3 .6% 274 6 .0% 147 -2 .7% 405 6 .4% 1,194 1 .9% 0 .5%
                 
Polio / Pertussis / Hib 504 3 .0% 2 .2% 83 -2 .4% 102 -9 .2% 32 -24 .4% 287 14 .3% 504 3 .0% 2 .2%
Adult Booster Vaccines 135 -2 .9% -1 .5% 33 -8 .3% 76 -6 .3% 8 0 .0% 18 26 .7% 135 -2 .9% -1 .5%
Meningitis/Pneumonia 131 59 .3% 61 .7% 0 - 80 45 .3% 5 0 .0% 46 104 .3% 131 59 .3% 61 .7%
Influenza Vaccines 596 17 .1% 18 .7% 93 95 .8% 411 24 .1% 26 212 .5% 66 -44 .7% 596 17 .1% 18 .7%
Travel And Other Endemics Vaccines 130 -18 .8% -18 .8% 27 7 .7% 33 -32 .7% 15 7 .7% 55 -23 .6% 130 -18 .8% -18 .8%
Vaccines 1,527 9 .7% 10 .3% 238 21 .9% 729 10 .4% 87 15 .8% 473 2 .5% 1,527 9 .7% 10 .3%
Total Company 8,997 3 .9% 3 .5% 2,342 -4 .8% 3,195 8 .7% 869 6 .7% 2,591 6 .0% 8,997 3 .9% 3 .5%
                             

2018 net sales by GBU, franchise, geographic region and product

                         
2018
(€ million)
Total
GBUs
% CER % reported Europe % CER United States % CER Rest of the World % CER Emerging Markets % CER Total
Franchises
% CER % reported
Aubagio 1,599 8 .0% 4 .5% 385 -0 .3% 1,157 11 .4% 57 0 .0% 48 59 .5% 1,647 9 .3% 5 .1%
Lemtrada 375 -14 .0% -16 .7% 167 -3 .4% 189 -19 .1% 19 -33 .3% 27 33 .3% 402 -11 .6% -15 .2%
Total MS 1,974 3 .0% -0 .3% 552 -1 .2% 1,346 5 .8% 76 -11 .2% 75 49 .2% 2,049 4 .4% 0 .4%
Cerezyme 481 -1 .8% -4 .0% 270 -3 .6% 174 2 .8% 37 -9 .3% 230 24 .3% 711 6 .4% -2 .7%
Cerdelga 156 28 .8% 24 .8% 51 96 .2% 98 7 .4% 7 100 .0% 3 300 .0% 159 31 .0% 26 .2%
Myozyme 716 8 .8% 6 .4% 374 6 .5% 284 13 .0% 58 3 .4% 124 22 .4% 840 10 .8% 6 .5%
Fabrazyme 673 7 .9% 4 .5% 175 7 .4% 383 8 .1% 115 8 .0% 82 25 .6% 755 9 .8% 4 .6%
Aldurazyme 144 4 .2% 1 .4% 76 1 .3% 44 9 .5% 24 4 .0% 62 12 .1% 206 6 .7% -1 .0%
Total Rare Disease 2,416 5 .3% 2 .6% 1,008 5 .3% 1,072 5 .8% 336 3 .6% 542 21 .5% 2,958 8 .3% 2 .4%
Taxotere 32 -13 .5% -13 .5% 3 0 .0% 1 - 28 -17 .6% 134 2 .9% 166 -0 .6% -4 .0%
Jevtana 399 13 .9% 10 .8% 158 7 .4% 179 17 .6% 62 20 .8% 23 0 .0% 422 13 .0% 9 .3%
Eloxatine 32 -3 .0% -3 .0% 2 -50 .0% 0 -100 .0% 30 7 .1% 150 6 .8% 182 5 .0% 1 .7%
Thymoglobulin 222 2 .7% -0 .9% 37 -5 .1% 162 4 .9% 23 0 .0% 75 22 .7% 297 7 .2% 2 .4%
Mozobil 161 7 .8% 4 .5% 47 9 .1% 96 5 .2% 18 21 .4% 10 22 .2% 171 8 .6% 4 .9%
Total Oncology 1,075 -0 .4% -3 .2% 351 4 .1% 523 -6 .8% 201 12 .2% 419 8 .8% 1,494 2 .1% -1 .5%
Dupixent 783 265 .8% 257 .5% 75 3650 .0% 660 213 .9% 48 4700 .0% 5 - 788 268 .0% 259 .8%
Kevzara 83 663 .6% 654 .5% 14 1300 .0% 64 550 .0% 5 - 0 - 83 663 .6% 654 .5%
Total Immunology 866 284 .8% 276 .5% 89 - 724 228 .8% 53 - 5 - 871 287 .0% 278 .7%
Alprolix 285 - - 0 - 222 - 63 - 0 - 285 - -
Eloctate 606 - - 0 - 500 - 106 - 2 - 608 - -
Total Hemophilia Rare blood disorders 895 - - 4 - 722 - 169 - 2 - 897 - -
Sanofi Genzyme (Specialty Care) 7,226 30 .8% 27 .4% 2,004 7 .9% 4,387 42 .3% 835 40 .9% 1,043 18 .7% 8,269 29 .0% 23 .8%
Lantus 2,588 -25 .8% -28 .4% 684 -9 .7% 1,614 -33 .3% 290 -3 .8% 977 5 .3% 3,565 -19 .0% -22 .9%
Toujeo 710 -0 .9% -3 .7% 290 34 .6% 344 -20 .7% 76 18 .5% 130 83 .5% 840 7 .2% 2 .9%
Apidra 248 -9 .0% -11 .1% 136 0 .0% 74 -23 .5% 38 -2 .4% 109 26 .5% 357 0 .3% -5 .3%
Amaryl 47 -16 .9% -20 .3% 17 -19 .0% 2 0 .0% 28 -16 .7% 288 9 .4% 335 4 .8% -0 .3%
Admelog 93 9100 .0% 9200 .0% 7 600 .0% 86 - 0 - 0 - 93 9100 .0% 9200 .0%
Total Diabetes 3,918 -17 .5% -20 .0% 1,272 -0 .9% 2,185 -26 .9% 461 -0 .8% 1,554 12 .7% 5,472 -10 .4% -14 .5%
Multaq 343 7 .2% 3 .3% 43 2 .4% 296 8 .0% 4 0 .0% 7 0 .0% 350 7 .1% 3 .2%
Praluent 250 53 .3% 49 .7% 86 87 .0% 154 37 .1% 10 120 .0% 11 175 .0% 261 56 .1% 52 .6%
Total Cardiovascular 593 22 .6% 18 .8% 129 46 .6% 450 16 .4% 14 66 .7% 18 63 .6% 611 23 .5% 19 .8%
Diabetes & Cardiovascular 4,511 -13 .8% -16 .4% 1,401 2 .2% 2,635 -22 .0% 475 0 .4% 1,572 13 .1% 6,083 -7 .9% -11 .9%
Plavix 1,440 1 .2% -2 .0% 147 -2 .0% 0 -100 .0% 218 -23 .5% 1,075 8 .8% 1,440 1 .2% -2 .0%
Lovenox 1,465 -3 .0% -6 .9% 870 -8 .3% 38 -29 .3% 81 -6 .6% 476 11 .4% 1,465 -3 .0% -6 .9%
Renagel / Renvela 411 -46 .7% -48 .7% 60 -15 .5% 253 -59 .1% 31 -8 .6% 67 42 .0% 411 -46 .7% -48 .7%
Aprovel 652 -1 .7% -5 .5% 108 -6 .1% 10 0 .0% 69 -45 .5% 465 12 .7% 652 -1 .7% -5 .5%
Allegra 124 -17 .7% -21 .5% 8 -11 .1% 0 - 116 -18 .1% 0 - 124 -17 .7% -21 .5%
Myslee / Ambien / Stilnox 231 -6 .9% -10 .8% 39 -2 .5% 45 -14 .5% 86 -16 .0% 61 13 .8% 231 -6 .9% -10 .8%
Synvisc / Synvisc One 313 -15 .0% -19 .1% 25 -16 .7% 217 -22 .3% 13 0 .0% 58 23 .5% 313 -15 .0% -19 .1%
Depakine 452 4 .7% 1 .1% 163 -1 .2% 0 - 14 -6 .7% 275 9 .0% 452 4 .7% 1 .1%
Tritace 221 -3 .8% -7 .9% 142 -5 .9% 0 - 5 0 .0% 74 0 .0% 221 -3 .8% -7 .9%
Other Rx Drugs 3,534 -2 .5% -6 .8% 1,768 -2 .0% 188 -6 .3% 376 -7 .1% 1,202 -1 .1% 3,534 -2 .5% -6 .8%
Total Established Rx Products 8,843 -6 .1% -9 .9% 3,330 -4 .4% 751 -38 .2% 1,009 -16 .9% 3,753 6 .6% 8,843 -6 .1% -9 .9%
Generics 1,490 -9 .8% -15 .8% 568 -24 .4% 124 -15 .3% 113 9 .1% 685 3 .0% 1,490 -9 .8% -15 .8%
Total Emerging Markets Specialty Care 1,043 18 .7% 3 .9% 0 - 0 - 75 49 .2% 1,043 18 .7%      
Total Emerging Markets Diabetes & Cardiovascular 1,572 13 .1% 4 .2%             1,572 13 .1%      
General Medicines & Emerging Markets 12,948 -2 .8% -8 .2% 3,898 -7 .9% 875 -35 .8% 1,122 -14 .8% 7,053 9 .3% 10,333 -6 .7% -10 .8%
                 
Total Pharmaceuticals 24,685 2 .4% -1 .9% 7,303 -2 .1% 7,897 0 .9% 2,432 1 .9% 7,053 9 .3% 24,685 2 .4% -1 .9%
                 
Allergy, Cough and Cold 1,124 -1 .7% -6 .7% 347 -0 .9% 303 -12 .3% 135 2 .9% 339 6 .9% 1,124 -1 .7% -6 .7%
Pain 1,254 6 .7% -0 .6% 521 1 .8% 165 3 .6% 119 3 .4% 449 14 .0% 1,254 6 .7% -0 .6%
Digestive 986 8 .7% 3 .4% 314 2 .6% 195 8 .5% 54 1 .8% 423 14 .4% 986 8 .7% 3 .4%
Nutritional 675 4 .7% -1 .5% 125 5 .9% 37 -5 .0% 256 5 .9% 257 4 .4% 675 4 .7% -1 .5%
Consumer Healthcare 4,660 3 .0% -2 .9% 1,403 -0 .2% 1,066 -1 .1% 603 2 .1% 1,588 8 .9% 4,660 3 .0% -2 .9%
                 
Polio / Pertussis / Hib 1,749 -0 .7% -4 .3% 296 -1 .0% 397 -4 .8% 156 5 .9% 900 0 .3% 1,749 -0 .7% -4 .3%
Adult Booster Vaccines 470 1 .3% -0 .8% 129 9 .2% 273 -4 .1% 26 0 .0% 42 18 .9% 470 1 .3% -0 .8%
Meningitis/Pneumonia 609 0 .6% -2 .2% 0 -100 .0% 466 -1 .6% 16 -50 .0% 127 29 .1% 609 0 .6% -2 .2%
Influenza Vaccines 1,708 7 .2% 7 .5% 177 57 .5% 1,233 7 .5% 81 62 .7% 217 -22 .9% 1,708 7 .2% 7 .5%
Travel And Other Endemics Vaccines 488 1 .8% -1 .0% 117 31 .1% 134 -10 .3% 56 7 .4% 181 -3 .6% 488 1 .8% -1 .0%
Vaccines 5,118 2 .4% 0 .3% 728 16 .0% 2,577 1 .1% 342 9 .5% 1,471 -2 .3% 5,118 2 .4% 0 .3%
Total Company 34,463 2 .5% -1 .7% 9,434 -0 .6% 11,540 0 .7% 3,377 2 .7% 10,112 7 .5% 34,463 2 .5% -1 .7%
                             


Appendix 2: Business net income statement

Fourth Quarter 2018 Pharmaceuticals Consumer Healthcare Vaccines Others(2) Total Group
€ million Q4 2018 Q4 2017(1) Cha-
nge
Q4 2018 Q4 2017(1) Cha-
nge
Q4 2018 Q4 2017(1) Cha-
nge
Q4 2018 Q4 2017(1) Cha-
nge
Q4 2018 Q4 2017(1) Cha-
nge
Net sales 6 ,276 6 ,119 2 .6% 1 ,194 1 ,188 0 .5% 1 ,527 1 ,385 10 .3% - -   8 ,997 8 ,692 3 .5%
Other revenues 67 66 1 .5% - -   262 224 17 .0% - -   329 290 13 .4%
Cost of Sales (1 ,820) (1 ,760) 3 .4% (406) (423) (4 .0)% (866) (841) 3 .0% (46) (75) (38 .7)% (3 ,138) (3 ,099) 1 .3%
As % of net sales (29 .0)% (28 .8)%   (34 .0)% (35 .6)%   (56 .7)% (60 .7)%         (34 .9)% (35 .7)%  
Gross Profit 4 ,523 4 ,425 2 .2% 788 765 3 .0% 923 768 20 .2% (46) (75) (38 .7%) 6 ,188 5 ,883 5 .2%
As % of net sales 72 .1% 72 .3%   66 .0% 64 .4%   60 .4% 55 .5%         68 .8% 67 .7%  
Research and development expenses (1 ,311) (1 ,067) 22 .9% (48) (41) 17 .1% (162) (166) (2 .4)% (157) (190) (17 .4)% (1 ,678) (1 ,464) 14 .6%
 As % of net sales (20 .9)% (17 .4)%   (4 .0)% (3 .5)%   (10 .6)% (12 .0)%         (18 .7)% (16 .8)%  
Selling and general expenses (1 ,485) (1 ,523) (2 .5)% (409) (406) 0 .7% (210) (197) 6 .6% (617) (573) 7 .7% (2 ,721) (2 ,699) 0 .8%
 As % of net sales (23 .7)% (24 .9)%   (34 .3)% (34 .2)%   (13 .8)% (14 .2)%         (30 .2)% (31 .1)%  
Other current operating income/ expenses (123) (19)   16 2   (1) (100)   (40) 3   (148) (114)  
Share of profit/loss of associates* and joint-ventures 120 109   - 1   1 (1)   - -   121 109  
Net income attributable to non controlling interests (21) (26)   (1) (3)   - (1)   - -   (22) (30)  
Business operating income 1 ,703 1 ,899 (10 .3)% 346 318 8 .8% 551 303 81 .8% (860) (835) 3 .0% 1 ,740 1 ,685 3 .3%
As % of net sales 27 .1% 31 .0%   29 .0% 26 .8%   36 .1% 21 .9%         19 .3% 19 .4%  
                               
              Financial income and expenses (60) (73)  
              Income tax expenses   (316) (287)  
              Tax rate**   20 .0% 18 .7%  
              Business net income   1 ,364 1 ,325 2 .9%
              As % of net sales   15 .2% 15 .2%  
                       
              Business earnings / share (in euros)*** 1 .10 1 .06 3 .8%

* Net of tax.
** Determined on the basis of Business income before tax, associates, and non-controlling interests.
*** Based on an average number of shares outstanding of 1,245.6 million in the fourth quarter of 2018 and 1,252.9 million in the fourth quarter of 2017.
(1) Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018.
(2) Other includes the cost of Global Support Functions (Medical Affairs, External Affairs, Finance, Human Resources, Information Solution & Technologies, Sanofi Business Services, etc.).

Full year 2018 Pharmaceuticals Consumer Healthcare Vaccines Others (2) Total Group
€ million 2018 2017(1) Cha-
nge
2018 2017(1) Cha-
nge
2018 2017(1) Cha-
nge
2018 2017(1) Cha-
nge
2018 2017(1) Cha-
nge
Net sales 24 ,685 25 ,173 (1 .9)% 4 ,660 4 ,798 (2 .9)% 5 ,118 5 ,101 0 .3% - -   34 ,463 35 ,072 (1 .7)%
Other revenues 252 287 (12 .2)% - -   962 862 11 .6% - -   1 ,214 1 ,149 5 .7%
Cost of Sales (6 ,738) (6 ,766) (0 .4)% (1 ,539) (1 ,612) (4 .5)% (2 ,854) (2 ,798) 2 .0% (190) (271) (29 .9)% (11 ,321) (11 ,447) (1 .1)%
As % of net sales (27 .3)% (26 .9)%   (33 .0)% (33 .6)%   (55 .8)% (54 .9)%         (32 .8)% (32 .6)%  
Gross Profit 18 ,199 18 ,694 (2 .6)% 3 ,121 3 ,186 (2 .0)% 3 ,226 3 ,165 1 .9% (190) (271) (29 .9%) 24 ,356 24 ,774 (1 .7)%
As % of net sales 73 .7% 74 .3%   67 .0% 66 .4%   63 .0% 62 .0%         70 .7% 70 .6%  
Research and development expenses (4 ,572) (4 ,056) 12 .7% (143) (123) 16 .3% (555) (557) (0 .4)% (624) (736) (15 .2)% (5 ,894) (5 ,472) 7 .7%
As % of net sales (18 .5)% (16 .1)%   (3 .1)% (2 .6)%   (10 .8)% (10 .9)%         (17 .1)% (15 .6)%  
Selling and general expenses (5 ,431) (5 ,649) (3 .9)% (1 ,534) (1 ,645) (6 .7)% (710) (728) (2 .5)% (2 ,156) (2 ,050) 5 .2% (9 ,831) (10 ,072) (2 .4)%
As % of net sales (22 .0)% (22 .4)%   (32 .9)% (34 .3)%   (13 .9)% (14 .3)%         (28 .5)% (28 .7)%  
Other current operating income/ expenses (37) 34   101 94   (4) (107)   (124) (17)   (64) 4  
Share of profit/loss of associates* and joint-ventures 425 212   1 1   (3) 1   - -   423 214  
Net income attributable to non controlling interests (96) (110)   (10) (15)   - -   - -   (106) (125)  
Business operating income 8 ,488 9 ,125 (7 .0)% 1 ,536 1 ,498 2 .5% 1 ,954 1 ,774 10 .1% (3 ,094) (3 ,074) 0 .7% 8 ,884 9 ,323 (4 .7)%
As % of net sales 34 .4% 36 .2%   33 .0% 31 .2%   38 .2% 34 .8%         25 .8% 26 .6%  
                               
              Financial income and expenses (271) (273)  
              Income tax expenses       (1 ,794) (2 ,107)  
              Tax rate**   21 .6% 23 .5%  
              Business net income   6 ,819 6 ,943 (1 .8)%
              As % of net sales   19 .8% 19 .8%  
                               
              Business earnings / share (in euros)*** 5 .47 5 .52 (0 .9)%

* Net of tax.
** Determined on the basis of Business income before tax, associates, and non-controlling interests.
*** Based on an average number of shares outstanding of 1,247.1 million in 2018 and 1,256.9 million in 2017.
(1) Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018.
(2) Other includes the cost of Global Support Functions (Medical Affairs, External Affairs, Finance, Human Resources, Information Solution & Technologies, Sanofi Business Services, etc.).

Appendix 3: Consolidated income statements

€ million Q4 2018 Q4 2017(1) 2018 2017(1)
Net sales 8,997 8,692 34,463 35,072
Other revenues 329 290 1,214 1,149
Cost of sales (3,138) (3,089) (11,435) (11,613)
Gross profit 6,188 5,893 24,242 24,608
Research and development expenses (1,678) (1,464) (5,894) (5,472)
Selling and general expenses (2,730) (2,699) (9,859) (10,072)
Other operating income 83 10 484 237
Other operating expenses (231) (124) (548) (233)
Amortization of intangible assets (634) (442) (2,170) (1,866)
Impairment of intangible assets (426) (262) (718) (293)
Fair value remeasurement of contingent consideration - 15 117 (159)
Restructuring costs and similar items (765) (118) (1,480) (731)
Other gains and losses, and litigation (7) (61) 502 (215)
Operating income (200) 748 4,676 5,804
Financial expenses (103) (99) (435) (420)
Financial income 43 26 164 147
Income before tax and associates and joint ventures (260) 675 4,405 5,531
Income tax expense 243 (699) (481) (1,722)
Share of profit/(loss) of associates and joint ventures 301 21 499 85
Net income excluding the exchanged/held-for-exchange Animal Health business 284 (3) 4,423 3,894
Net income/(loss) of the exchanged/held-for-exchange Animal Health business(2) (9) 159 (13) 4,643
Net income 275 156 4,410 8,537
Net income attributable to non-controlling interests 21 30 104 121
Net income attributable to equity holders of Sanofi 254 126 4,306 8,416
Average number of shares outstanding (million) 1,245.6 1,252.9 1,247.1 1,256.9
Earnings per share excluding the exchanged/held-for-exchange Animal Health business (in euros) 0.21 (0.03) 3.46 3.00
IFRS Earnings per share (in euros) 0.20 0.10 3.45 6.70

(1) Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018.
(2) In 2017, net gain resulting from the divestment of the Animal Health business presented separately in accordance with IFRS 5, Non current assets held-for-sale and discontinued operations.

Appendix 4: Reconciliation of Net income attributable to equity holders of Sanofi to Business net income

€ million Q4 2018   Q4 2017(1)   Change
Net income attributable to equity holders of Sanofi 254   126   101.6%
Amortization of intangible assets(2) 634   442    
Impairment of intangible assets 426   262    
Fair value remeasurement of contingent consideration -   (15)    
Expenses arising from the impact of acquisitions on inventories -   (10)    
Other expenses related to business combinations 9   -    
Restructuring costs and similar items 765   118    
Other gains and losses, and litigation 7   61    
Tax effect of the items listed above(3): (503)   (219)    
Amortization and impairment of intangible assets (241)   (242)    
Fair value remeasurement of contingent consideration 3   37    
Expenses arising from the impact of acquisitions on inventories -   4    
Other expenses related to business combinations (2)   -    
Restructuring costs and similar items (220)   82    
Other tax effects (43)   (100)    
Other tax items(4) (56)   631    
Share of items listed above attributable to non-controlling interests (1)   -    
Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (180)   88    
Animal Health items (5) 9   (159)    
Business net income 1,364   1,325   2.9%
IFRS earnings per share (6) (in euros) 0.20   0.10    

(1)   Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018.
(2)  Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations:  €520 million in the fourth quarter of 2018 and €407 million in the fourth quarter of 2017.
(3)  In 2017, this line includes the impact of changes in corporate income tax rates, mainly in France (25% standard rate effective as of January 1, 2022).
(4)  In 2018, adjustments made to our preliminary analysis of the direct and indirect impacts of US tax reform. In 2017, includes an amount of €562m related to litigation gain on French 3% tax on dividends and temporary exceptional surcharge and an amount of (€1,193) million related to US tax reform.
(5)  In 2017, net gain resulting from the divestment of the Animal Health business presented separately in accordance with IFRS 5, Non-current assets held-for-sale and discontinued operations (including the closing in Mexico in Q4 2017).
(6)  Based on an average number of shares outstanding of 1,245.6 million in the fourth quarter of 2018 and 1,252.9 million in the fourth quarter of 2017.

€ million 2018   2017(1)   Change
Net income attributable to equity holders of Sanofi 4,306   8,416   (48.8)%
Amortization of intangible assets(2) 2,170   1,866    
Impairment of intangible assets 718   293    
Fair value remeasurement of contingent consideration (117)   159    
Expenses arising from the impact of acquisitions on inventories 114   166    
Other expenses related to business combinations 28   -    
Restructuring costs and similar items 1,480   731    
Other gains and losses, and litigation (3) (502)   215    
Tax effect of the items listed above(4): (1,125)   (1,127)    
Amortization and impairment of intangible assets (692)   (719)    
Fair value remeasurement of contingent consideration 38   4    
Expenses arising from the impact of acquisitions on inventories (27)   (52)    
Other expenses related to business combinations (6)   -    
Restructuring costs and similar items (435)   (134)    
Other tax effects (3)   (226)    
Other tax items(5) (188)   742    
Share of items listed above attributable to non-controlling interests (2)   (4)    
Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (76)   129    
Animal Health items (6) 13   (4,643)    
Business net income 6,819   6,943   (1.8)%
IFRS earnings per share (7) (in euros) 3.45   6.70    

(1)   Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018.
(2)  Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations:  €1,957 million in 2018 and €1,726 million in 2017.
(3)  In 2018, of which gain resulting from the European Generics business divestiture amounting to €510 million. In 2017, mainly adjustment to vendor's guarantee provision in connection with past divestment.
(4)  In 2017, this line includes the impact of changes in corporate income tax rates, mainly in France (25% standard rate effective as of January 1, 2022).
(5)  In 2018, adjustments made to our preliminary analysis of the direct and indirect impacts of US tax reform. In 2017, includes French 3% tax on dividends and temporary exceptional surcharge for an amount of €451 million and US tax reform amounting to €(1,193) million.
(6)  In 2017, net gain resulting from the divestment of the Animal Health business presented separately in accordance with IFRS 5, Non-current assets held-for-sale and discontinued operations.
(7)  Based on an average number of shares outstanding of 1,247.1 million in 2018 and 1,256.9 million in 2017.

Appendix 5: Change in net debt

€ million 2018 2017(1)
     
Business net income 6,819 6,943
Depreciation, amortization and impairment of property, plant and equipment and software 1,208 1,349
Gains and losses on disposals of non-current assets, net of tax (284) (127)
Other non cash items 91 728
Operating cash flow before changes in working capital (2) 7,834 8,893
Changes in working capital (2) (1,099) (589)
Acquisitions of property, plant and equipment and software (1,674) (1,500)
Free cash flow (2) 5,061 6,804
Acquisitions of intangible assets excluding software (312) (398)
Acquisitions of investments in consolidated undertakings including assumed debt (13,051) (1,063)
Restructuring costs and similar items paid (894) (754)
Proceeds from disposals of property, plant and equipment, intangible assets and other non-current assets net of tax 2,120 408
Issuance of Sanofi shares 177 319
Dividends paid to shareholders of Sanofi (3,773) (3,710)
Acquisition of treasury shares (1,104) (2,158)
Transactions with non-controlling interests including dividends (91) (52)
Foreign exchange impact (288) 434
Net cash-flow from the swap between BI - CHC and Sanofi Animal Health business (6) 3,535
Other items (306) (292)
Change in net debt (12,467) 3,073


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

Appendix 6: Simplified consolidated balance sheet

ASSETS
€ million
Dec 31,
2018
Dec 31,
2017(1)
  LIABILITIES & EQUITY
€ million
Dec 31,
2018
Dec 31,
2017(1)
        Equity attributable to equity holders of Sanofi 58,876 58,070
        Equity attributable to non-controlling interests 159 169
        Total equity 59,035 58,239
        Long-term debt 22,007 14,326
Property, plant and equipment 9,651 9,579   Non-current liabilities related to business combinations and to non-controlling interests 963 1,026
Intangible assets (including goodwill) 66,124 53,344   Provisions and other non-current liabilities 8,613 9,154
Non-current financial assets & investments in associates and deferred tax assets 10,986 10,502   Deferred tax liabilities 3,414 1,605
Non-current assets 86,761 73,425   Non-current liabilities 34,997 26,111
        Accounts payable & Other current liabilities 14,402 13,845
Inventories, accounts receivable and other current assets 17,654 16,039   Current liabilities related to business combinations and to non-controlling interests 341 343
Cash and cash equivalents 6,925 10,315   Short-term debt and current portion of long-term debt 2,633 1,275
Current assets 24,579 26,354   Current liabilities 17,376 15,463
Assets held for sale or exchange 68 34   Liabilities related to assets  held for sale or exchange - -
 Total ASSETS 111,408 99,813    Total LIABILITIES & EQUITY 111,408 99,813

(1) Includes the effects of first-time application of IFRS 15 on revenue recognition, effective January 1, 2018.

Appendix 7 : currency sensitivity

2019 Business EPS currency sensitivity

Currency Variation Business EPS Sensitivity
U.S. Dollar +0.05 USD/EUR -EUR 0.10
Japanese Yen +5 JPY/EUR -EUR 0.02
Chinese Yuan +0.2 CNY/EUR -EUR 0.02
Brazilian Real +0.4 BRL/EUR -EUR 0.01
Russian Ruble +10 RUB/EUR -EUR 0.03

Currency exposure on Q4 2018 sales

Currency Q4 2018
US $ 36.6%
Euro € 23.8%
Chinese Yuan 6.2%
Japanese Yen 4.7%
Brazilian Real 2.7%
British Pound 1.8%
Mexican Peso 1.8%
Canadian $ 1.8%
Russian Ruble 1.7%
Australian $ 1.4%
Others 17.5%

Currency average rates

  Q4 2017 Q4 2018 Change
€/$ 1.18 1.14 -3.1%
€/Yen 133.0 128.82 -3.1%
€/Yuan 7.79 7.90 +1.4%
€/Real 3.83 4.35 +13.6%
€/Ruble 68.80 75.91 +10.3%



Appendix 8: R&D Pipeline

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

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

New Molecular Entities(*)

Phase 1
(Total : 17)
Phase 2
(Total : 7)
Phase 3
(Total : 7)
Registration
(Total : 2)
SAR441344
Anti-CD40L mAb
Multiple Sclerosis
BIVV001(4)
rFVIIIFc - vWF - XTEN(5)
Hemophilia A
SAR440340(**)
Anti-IL33 mAb
Atopic Dermatitis
HIV
Viral vector prime & rgp120 boost vaccine
isatuximab
Anti-CD38 mAb
3L Relapsing Refractory MM (ICARIA)
cemiplimab(**)
PD-1 inhibitor mAb
Advanced CSCC (EU)
SAR408701
Maytansin-loaded anti-CEACAM5 mAb Solid Tumors
ST400(6)
ZFN Gene Editing Technology
Beta thalassemia
SAR156597
 IL4/IL13 bispecific mAb
Systemic Scleroderma
SP0232(**)(13)
Respiratory syncytial virus
Monoclonal Antibody
avalglucosidase alfa
Neo GAA
Pompe Disease
ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Type 1 Diabetes (U.S./EU)
SAR439459
anti-TGFb  mAb
Advanced Solid Tumors
BIVV003(6)
ZFN Gene Editing Technology
Sickle Cell Disease
R olipudase alfa
rhASM
Acid Sphingomyelinase Deficiency(10)
  venglustat
Oral GCS inhibitor
ADPKD(14)
 
 
O REGN5458(1)
Anti-BCMA-CD3 bispecific mAb
RRMM
SAR442168(7)(**)
BTK inhibitor
Multiple Sclerosis
SAR339375(11)
miRNA-21
Alport Syndrome
  fitusiran
RNAi therapeutic targeting anti-thrombin
Hemophilia A and B
 
 
O REGN4018(1)
Anti-MUC16-CD3 bispecific mAb
Ovarian Cancer
SAR443060(8)
 RIPK1 inh(9)
Amyotrophic Lateral Sclerosis
SAR422459(**)(12)
ABCA4 gene therapy
Stargardt Disease
  sutimlimab(15)
Anti Complement C1s mAb
Cold Agglutinin Disease
 
 
SAR439859
SERD
Metastatic Breast Cancer
Next Gen PCV
Pneumococcal Conjugate
Vaccines
    SAR341402
Rapid acting insulin
Type 1/2 Diabetes
 
SAR442720(2)
SHP2 inhibitor
Solid Tumors
Herpes Simplex Virus Type 2
HSV-2 vaccine
    efpeglenatide(**)
Long-acting GLP-1 agonist
Type 2 Diabetes
 
SAR440234
T cell engaging multi spe mAb
Leukemia
Respiratory syncytial virus
Infants
Vaccines
       
SAR441000(3)
Cytokine mRNA
Melanoma
         
           



Regeneron product for which Sanofi has opt-in rights Developed in collaboration with REVOLUTION Medicines; also known as RMC-4630 Developed in collaboration with BioNtech Sanofi Product for which Sobi has opt-in rights Recombinant Coagulation Factor VIII Fc - von Willebrand Factor - XTEN Fusion protein Developed in collaboration with Sangamo Also known as PRN2246 Also known as DNL747 Receptor-interacting serine/threonine-protein kinase 1 Also known as Niemann Pick type B Regulus product for which Sanofi has decided to opt-in Identification of out-licensing partner ongoing Also known as MEDI8897 Autosomal Dominant Polycystic Kidney Disease Also Known as BIVV009   (*)   Phase of projects determined by clinicaltrials.gov disclosure timing
  (**)   Partnered and/or in collaboration - Sanofi may have limited or shared rights on some of these products

Additional Indications(*)

Phase 1
(Total : 5)
Phase 2
(Total : 17)
Phase 3
(Total : 23)
Registration
(Total : 3)
SAR439459 + cemiplimab(**)
Anti-TGFb mAb + PD-1 inhibitor mAb
Advanced Solid Tumors
dupilumab(**)
Anti-IL4Ralpha mAb
 Grass Immunotherapy
isatuximab + atezolizumab(**)
Anti-CD38 mAb + PD-L1 inhibitor mAb
Advanced Malignancies
dupilumab(**)
Anti-IL4Ralpha mAb
Asthma 6 - 11 years old
isatuximab
Anti-CD38 mAb
Newly Diagnosed MM Te(6) (GMMG)
dupilumab(**)
Anti-IL4Ralpha mAb
Asthma 12y+ (EU)
O cemiplimab(**) + REGN4018(1)
PD-1 inhibitor mAb + Anti-MUC16-CD3 bispecific mAb - Ovarian Cancer
R sarilumab(**)
Anti-IL6R mAb
Polyarticular Juvenile Idiopathic Arthritis
isatuximab + atezolizumab(**)
Anti-CD38 mAb + PD-L1 inhibitor mAb
Solid Tumors
dupilumab(**)
Anti-IL4Ralpha mAb
Nasal Polyposis
isatuximab
Anti-CD38 mAb
1-3L Relapsing Refractory MM (IKEMA)
Dupixent®(**)
dupilumab
Atopic Dermatitis 12 - 17 years old (U.S./EU)
   
SAR439859
SERD + Palbociclib
Metastatic Breast Cancer
sarilumab(**)
Anti-IL6R mAb
Systemic Juvenile Arthritis
venglustat
Oral GCS inhibitor
Fabry Disease
dupilumab(**)
Anti-IL4Ralpha mAb
Eosinophilic Esophagitis
Aubagio®
teriflunomide
Relapsing Multiple Sclerosis - Pediatric
Praluent®(**)
alirocumab
CV events reduction (U.S./EU)
sutimlimab(2)
Anti Complement C1s mAb
Idiopathic Thrombocytopenic Purpura
SAR440340(**)
Anti-IL33 mAb
COPD
venglustat
Oral GCS inhibitor
Gaucher Type 3
Dupixent®(**)
dupilumab
Atopic Dermatitis 6 - 11 years old
Lemtrada®
alemtuzumab
Relapsing Remitting Multiple Sclerosis - Pediatric
 
SAR443060(3)
 RIPK1 inh(4)
Alzheimer's Disease
dupilumab(**) + AR101
Anti-IL4Ralpha mAb
Peanut Allergy - Pediatric
venglustat
Oral GCS inhibitor
Gaucher related Parkinson's Disease
Dupixent®(**)
dupilumab
Atopic Dermatitis 6 months - 5 years old
ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Worsening Heart Failure in Diabetes
 
  SAR440340(**)
Anti-IL33 mAb
Asthma
Rabies VRVg
Purified vero rabies vaccine
 sarilumab(**)
Anti-IL6R mAb
Giant Cell Arteritis
ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Type 2 Diabetes
 
  R cemiplimab(**)
PD-1 inhibitor mAb
Advanced Basal Cell Carcinoma
SP0173 Tdap booster US
Tdap booster
sarilumab(**)
Anti-IL6R mAb
Polymyalgia Rheumatica
Cerdelga®
eliglustat
Gaucher Type 1, switch from ERT - Pediatric
 
 
  isatuximab + cemiplimab(**)
Anti-CD38 mAb + PD-1 inhibitor mAb
Relapsing Refractory MM
  cemiplimab(**)
PD-1 inhibitor mAb
1L NSCLC
Praluent®(**)
alirocumab
LDL-C reduction - Pediatric
 
  isatuximab + cemiplimab(**)
Anti-CD38 mAb + PD-1 inhibitor mAb
Advanced Malignancies
  cemiplimab(**)+ chemotherapy
PD-1 inhibitor mAb
1L NSCLC
Fluzone® QIV HD
Quadrivalent inactivated
Influenza vaccine - High dose
 
  isatuximab + cemiplimab(**)
Anti-CD38 mAb + PD-1 inhibitor mAb
Lymphoma
  cemiplimab(**)
PD-1 inhibitor mAb
2L Cervical Cancer
Men Quad TT
Advanced generation meningococcal
ACYW conjugate vaccine
 
      isatuximab
Anti-CD38 mAb
1L Newly Diagnosed MM Ti(5) (IMROZ)
Pediatric pentavalent vaccine
DTP-Polio-Hib
Japan
 
        Shan 6
DTP-HepB-Polio-Hib
Pediatric  hexavalent vaccine
 


Regeneron product for which Sanofi has opt-in rights Also known as BIVV009 Also known as DNL747 Receptor-interacting serine/threonine-protein kinase 1 Transplant ineligible Transplant eligible (*)  Phase of projects determined by clinicaltrials.gov disclosure timing
(**)  Partnered and/or in collaboration - Sanofi may have limited or shared rights on some of these products 


Expected Submission Timeline(1)

  New Molecular Entities Additional Indications
         
2019(2) isatuximab
anti-CD38 mAb
3L RRMM (ICARIA)
   dupilumab(**)
Anti-IL4Ra mAb
Nasal Polyposis Adult
Pentacel® vIPV
DTaP-IPV/Hib
SAR341402
Rapid acting insulin
Type 1/2 Diabetes - EU(3)
  Fluzone® QIV HD
Quadrivalent inactivated
Influenza vaccine - High dose
Men Quad TT
Adv. generation meningococcal
U.S.: 2y+ & EU: Toddlers+
       
         
2020(2)  

olipudase alfa
rhASM
ASD(4)

 
fitusiran
RNAi therapeutic targeting anti-thrombin
Hemophilia A/B
sarilumab(**)
Anti-IL6R mAb
Polyarticular Juvenile Idiopathic Arthritis
isatuximab
Anti-CD38 mAb
1-3L RRMM (IKEMA)
 

avalglucosidase alfa
NeoGAA
Pompe Disease

 
sutimlimab(5)
Anti Complement C1s mAb
Cold Agglutinin Disease
Dupixent®(**)
dupilumab
AD 6 - 11 years old
ZynquistaTM(**)
Oral SGLT-1&2 inhibitor
Type 2 Diabetes
 

 
  cemiplimab(**)
PD-1 inhibitor mAb
Advanced BCC
Aubagio®
teriflunomide
Relapsing MS - Pediatric
        Shan 6
DTP-HepB-Polio-Hib
Pediatric hexavalent vaccine
         
2021(2)

 
efpeglenatide(**)
Long acting GLP1-R agonist
Type 2 Diabetes
  isatuximab
Anti-CD38 mAb
1L Newly Diagnosed MM Ti (IMROZ)
ZynquistaTM(**)
Oral SGLT 1/2 inhibitor
Worsening Heart Failure in Diabetes
  venglustat
Oral GCS inhibitor
ADPKD(6)
  cemiplimab(**)
PD-1 inhibitor mAb
2L Cervical Cancer
 
      cemiplimab(**)
PD-1 inhibitor mAb
1L NSCLC
 


  New Molecular Entities Additional Indications
2022(2)

 
 SP0232 mAbs(7)(**)
Respiratory Syncytial Virus
  Dupixent®(**)
dupilumab
AD 6 months - 5 years old
sarilumab(**)
Anti-IL6R mAb
Systemic Juvenile Arthritis
    dupilumab(**)
Anti-IL4Ra mAb
Eosinophilic Esophagitis
sarilumab(**)
Anti-IL6R mAb
Polymyalgia Rheumatica
    dupilumab(**)
Anti-IL4Ralpha mAb
Asthma 6 - 11 years old
Cerdelga®
eliglustat
Gaucher Type 1, switch from ERT
Pediatric
    sarilumab(**)
Anti-IL6R mAb
Giant Cell Arteritis
venglustat
Oral GCS inhibitor
Gaucher Type 3
    SP0173 Tdap booster US
Tdap booster
Praluent®(**)
alirocumab
LDL-C reduction - Pediatric
         
2023
and beyond(2)
 

SAR440340(**)
Anti-IL33 mAb
Atopic Dermatitis

 
SAR156597
 IL4/IL13 bispecific mAb
Systemic Scleroderma
SAR440340(**)
Anti-IL33 mAb
COPD
dupilumab(**) + AR101
Anti-IL4Ralpha mAb
Peanut Allergy - Pediatric
SAR422459(**)
ABCA4 gene therapy
Stargardt Disease
HIV
Viral vector prime & rgp120 boost vaccine
SAR440340(**)
Anti-IL33 mAb
Asthma
venglustat
Oral GCS inhibitor
Fabry Disease
    isatuximab
Anti-CD38 mAb
Newly Diagnosed MM Te (GMMG)
Rabies VRVg
Purified vero rabies vaccine
    venglustat
Oral GCS inhibitor
GrPD(8)
Pediatric pentavalent vaccine
DTP-Polio-Hib (Japan)
  1. Excluding Phase 1
  2. Projects within a specified year are not arranged by submission timing 
  3. Submission strategy for the U.S. under evaluation
  4. Acid Sphingomyelinase Deficiency
  5. Also known as BIVV009
  6. Autosomal Dominant Polycystic Kidney Disease
  7. Also known as MEDI8897
  8. Gaucher Related Parkinson's Disease

(**)      Partnered and/or in collaboration - Sanofi may have limited or shared rights on some of  these products

Pipeline Movements Since Q3 2018

  Additions Removals
Registration        

 
         
         
Phase 3 Shan 6
DTP-HepB-Polio-Hib
Pediatric  hexavalent vaccine
  mavacamten(**)
Myosin inhibitor
Obstructive Hypertrophic Cardiomyopathy
cemiplimab(**)+ ipilimumab
PD-1 inh. mAb + CTLA4 mAb
1L NSCLC >= 50% PDL1+
         
         
Phase 2 SAR440340(**)
Anti-IL33 mAb
Atopic Dermatitis
isatuximab + atezolizumab(**)
Anti-CD38 mAb + PD-L1 inhibitor mAb
Solid Tumors
GZ389988
TRKA antagonist
Osteoarthritis
SAR425899
GLP-1/GCG dual agonist
Obesity/Overweight in T2D
  isatuximab + cemiplimab(**)
Anti-CD38 mAb + PD-1 inhibitor mAb
Lymphoma
  Combination
ferroquine / OZ439(**)
 Antimalarial
SAR407899
rho kinase
Microvascular Angina
      ALX0171
Anti RSV Nanobody
Respiratory Syncitial Virus
mavacamten(**)
Myosin inhibitor
Non -Obstructive Hypertrophic Cardiomyopathy
         
Phase 1 SAR441344
Anti-CD40L mAb
Multiple Sclerosis
SAR443060
 RIPK1 inh
Amyotrophic Lateral Sclerosis
SAR439794(**)
TLR4 agonist
Peanut Allergy
O REGN3767
Anti-LAG-3 mAb
Advanced Cancers
 
  O REGN5458
Anti-BCMA-CD3 bispecific mAb
RRMM
SAR443060
 RIPK1 inh
Alzheimer's Disease
SAR440181(**)
 Myosin activation
Dilated Cardiomyopathy
O REGN4659
Anti-CTLA-4 mAb
Cancer
   
  SAR441000
Cytokine mRNA
Melanoma
BIVV003
ZFN Gene Editing Technology
Sickle Cell Disease
SAR247799
S1P1 agonist
Cardiovascular indication
SAR228810(**)
Anti-protofibrillar AB mAb
Alzheimer's Disease
    Next Gen PCV
Pneumococcal Conjugate
Vaccines
SAR438335
GLP-1/GIP dual agonist
Type 2 Diabetes
UshStat®(**)(1)
Myosin 7A gene therapy
Usher Syndrome 1B
      O cemiplimab(**) + REGN3767
PD-1 inhibitor mAb + Anti-LAG-3 mAb
Advanced Cancers
O cemiplimab(**) + REGN4659
PD-1 inhibitor mAb + Anti-CTLA-4 mAb
NSCLC
   

(**)    Partnered and/or in collaboration - Sanofi may have limited or shared rights on some of these products

Appendix 9: Expected R&D milestones

Products Expected milestones Timing
Dupixent® U.S. regulatory decision in Atopic Dermatitis in Adolescent patients Q1 2019
ZynquistaTM (sotagliflozin) U.S. regulatory decision expected in Type 1 Diabetes Q1 2019
dupilumab U.S. sBLA filing in Nasal Polyposis Q1 2019
Dupixent® EU regulatory decision in Asthma in Adult/Adolescent patients Q2 2019
ZynquistaTM (sotagliflozin) EU regulatory decision expected in Type 1 Diabetes Q2 2019
Praluent® EU regulatory decision in CV events reduction ODYSSEY OUTCOMES Q2 2019
Praluent® U.S. regulatory decision in CV events reduction ODYSSEY OUTCOMES Q2 2019
cemiplimab EU regulatory decision expected in Advanced Cutaneous Squamous Cell Carcinoma Q2 2019
dupilumab Start of Phase 2b/3 trial in Chronic Obstructive Pulmonary Disease H1 2019
Dupixent® EU regulatory decision in Atopic Dermatitis in Adolescent patients Q3 2019
sutimlimab Expected pivotal trial read-outs in Cold Agglutinin Disease Q4 2019
ZynquistaTM (sotagliflozin) Expected pivotal trial read-out in Type 2 Diabetes Q4 2019
Dupixent® Expected pivotal trial read-out in Atopic Dermatitis in 6-11 years Q4 2019
Olipudase Expected pivotal trial read-out in Niemann Pick Type B Q4 2019
Isatuximab Expected pivotal trial read-out in 1-3L RRMM (IKEMA) Q1 2020

Appendix 10: Definitions of non-GAAP financial indicators

Company

"Company" corresponds to Sanofi and its subsidiaries

Company sales at constant exchange rates (CER)

When we refer to changes in our net sales "at constant exchange rates" (CER), this means that we exclude the effect of changes in exchange rates.

We eliminate the effect of exchange rates by recalculating net sales for the relevant period at the exchange rates used for the previous period.

Reconciliation of net sales to Company sales at constant exchange rates for the fourth quarter and full-year 2018

€ million Q4 2018  2018
Net sales 8,997 34,463
Effect of exchange rates (33) (1,492)
Company sales at constant exchange rates 9,030 35,955

Business net income

Sanofi publishes a key non-GAAP indicator.
Business net income is defined as net income attributable to equity holders of Sanofi excluding:

  • amortization of intangible assets,
  • impairment of intangible assets,
  • fair value remeasurement of contingent consideration related to business combinations or to disposals,
  • other impacts associated with acquisitions (including impacts of acquisitions on associates and joint ventures),
  • restructuring costs and similar items(1),
  • other gains and losses (including gains and losses on disposals of non-current assets(1)),
  • costs or provisions associated with litigation(1),
  • tax effects related to the items listed above as well as effects of major tax disputes,
  • net income attributable to non-controlling interests related to the items listed above.
  1. Reported in the line items Restructuring costs and similar items and Gains and losses on disposals, and litigation, which are defined in Notes B.19 and B.20. to our consolidated financial statements.

Attachment

Thursday, February 7, 2019 - 01:32