SNY - Sanofi
Q2
Q2 2025
2025-07-31
+
Thomas Kudsk Larsen: Hello, everyone. This is Thomas Kudsk Larsen from the Sanofi IR team. Welcome to the Q2 2025 conference call for investors and analysts. As usual, you can find the slides on sanofi.com. Please turn to Slide #3. Here, we have the usual forward-looking statements. We would like to remind you that information presented in this call contains forward-looking statements, which are subject to substantial risks and uncertainties that may cause actual results to differ materially. We encourage you to read the disclaimer in our slide presentation. In addition, we refer you to our Form 20-F on file with the U.S. SEC and our French universal registration document for a description of these risk factors. As usual, we'll be making comments on our performance using constant exchange rates and other non-IFRS measures. Numbers used are in millions of euros and for Q2 2025, unless stated otherwise. Please turn to Slide #4. First, we have a presentation. Then we'll take your questions. We have kept the presentation as short as in the past, as other companies report today, and we aim at keeping the call to maximum 1 hour, all included. For Q&A, we have Brian, Olivier, Thomas to cover our global businesses as well as Roy, our General Counsel, and Brendan, Head of Manufacturing and Supply. For the Q&A, you have 2 options in Zoom: Raise Your Hand or submit your question using the Q&A function. With this, I'll hand you over to Paul.
Paul Hudson: Well, thank you, and hello, everyone on the call. We've delivered another strong quarter with double-digit sales growth. Our strategic focus on innovation continues to drive our top line performance with significant contributions from our new launches, vaccines and Dupixent. The performance of our growth drivers made us more confident in our full year business outlook. With that, we've refined our 2025 sales guidance to high single-digit percentage sales growth at constant exchange rates. Let me highlight the performance of our new launches on Slide 6. In Q2, our launch has generated close to EUR 1 billion in sales, continuing the momentum we saw in Q1. ALTUVIIIO extended its strong performance, increasing market share through patient switches. The presence of Beyfortus in Southern Hemisphere countries was further expanded in Q2. Keep in mind, these are smaller markets compared to our key launch countries in the Northern Hemisphere. Qfitlia, following the FDA approval at the end of Q1, has recorded initial sales. Uptake has been as expected, and we're pleased to be able to offer an additional treatment option to health care professionals and patients living with hemophilia A or B. Together, these 9 launches now represent 10% of our total sales, demonstrating our successful execution in bringing innovative medicines and vaccines to patients. Dupixent sales reached EUR 3.8 billion, up 21% in Q2, driven by the continued strong demand and improved indications across geographies. Momentum has been driven by the market growth across all indications where biopenetration remains low as well as by recent launches, including COPD. In the U.S., sales reached EUR 2.8 billion, up 22.7% as Dupixent continues to lead in both new-to-brand prescriptions and total prescriptions across all established indications. The CSU launch is off to a promising start, supported by positive feedback from physicians and patients and broader payer coverage in the first 2 months. Outside the U.S., sales again exceeded the EUR 1 billion mark, driven by volume growth in key markets. 8 years after its initial launch in atopic dermatitis, Dupixent continues to demonstrate strong and sustained growth, with bullous pemphigoid being its eighth indication approved in the U.S. Our ongoing efforts in deepening biologic penetration and expanding indications support our ambition of reaching sales of approximately EUR 22 billion in 2030, in line with previous communications at Q4. Our vaccine business delivered solid growth in Q2, with sales increasing by 10.3%, driven by the Beyfortus expansion that I just mentioned and benefiting from the effect of a late 2024-2025 flu season in the Northern Hemisphere. As a reminder, the larger portion of our vaccine business is in the second half of the year due to the seasonality of flu and RSV in key markets in the Northern Hemisphere. François will provide our indication for 2025 Beyfortus and flu vaccine sales in just a minute. Our vaccine franchise was further strengthened this quarter by several important R&D and regulatory milestones. A key example is the extended duration of protection for up to 6 months in the EU label of Beyfortus. And we continue to invest in the future of vaccines, most recently entering an agreement to acquire Vicebio. Vicebio would represent a strong strategic fit with our ambition to develop vaccines that can protect against multiple respiratory pathogens. It would also add an innovative technology for combination vaccines, specifically designed for vulnerable groups like the older adults and those at increased risk of severe RSV and hMPV infections. Moving to Slide 9. The completion of the Blueprint Medicines acquisition just 2 weeks ago marked a major milestone in our strategic capital redeployment. Blueprint significantly strengthens our position in rare immunology diseases particularly with Ayvakit in systemic mastocytosis, along with a promising pipeline. We are very encouraged by the strong performance of Ayvakit, reaching USD 175 million in sales in Q2. While this performance is not included in the Sanofi Q2 financials, it underscores both the high unmet need and Ayvakit's potential as the first approved medicine in advanced and indolent systemic mastocytosis. The addition of Blueprint brings an established presence amongst allergists, dermatologists and immunologists, enhancing our ability to advance our own pipeline in immunology. With the acquisition now completed, I would like to formally welcome the talented teams of Blueprint to Sanofi. Together, we look forward to the potential of Ayvakit as one of Sanofi's next blockbusters. Here, I'd like to highlight our progress in sustainability leadership. We are proud that TIME has, again, ranked Sanofi as the world's 10th most sustainable company across all industries and #1 in pharma and biotech. A good example is the eco-design approach we're taking to reduce the environmental footprint of our medicines and vaccines. By 2025, all new medicines and vaccines will incorporate eco-design principles, extending to our 20 top sellers by 2030. We're already seeing impressive results with Dupixent, Toujeo and Hexaxim through optimized manufacturing, packaging and production. Thank you. I'll now hand over to François, our CFO, for more details on the financials.
François-Xavier Roger: Thank you, Paul, and hello to everyone. As highlighted earlier, net sales increased by 10.1% at constant exchange rate in Q2. This growth was primarily driven by Immunology, by our pharma launches and by Beyfortus. Gross margin improved by 1.5 percentage points, largely led by an improved product mix and efficiencies. R&D expenses increased by 17.7% due to the lower base of comparison last year with the onetime reimbursement from Sobi. Underlying R&D expenses, excluding this reimbursement, increased by around 7%. We expect a moderate increase of R&D expenses in H2. Business EPS was EUR 1.59, up 8.3%, reflecting our strong sales performance and improved gross margin. Let me make a few comments beyond Q2 and discuss H1. SG&A is increasing in H1 at around half of the rate of our sales growth, and 70% of the increase in SG&A goes to sales and marketing investments to support growth that we have and future launches that are coming. Business EPS in the first 6 months of the year is up 12%, which is fully supporting our expected strong EPS rebound for the full year 2025. Moving to the next slide. In Q2, we continued to execute our capital allocation priorities after having received in April around EUR 11 billion from the sale of a controlling stake in Opella. We have been actively redeploying this capital. Indeed, we have announced the acquisition of Dren Bio's DR-0201, Vigil Neuroscience, Blueprint and, last week, Vicebio. These acquisitions are perfectly aligned with our strategy and meet our 3 main expectations: first, strategic fit within our core therapeutic areas; second, scientific relevance offering differentiated medicines and vaccines; and third, financial attractiveness. 3 of our 4 announced acquisitions reflect our interest in early-stage assets. While Blueprint is at the higher end of our targeted price range, we are confident in its strategic value, playing both in rare diseases and immunology areas, and we are confident as well in its future financial returns. As previously indicated, early-stage opportunities remain our primary interest. However, we always retain the flexibility to slightly expand beyond our preestablished interest when compelling opportunities arise with attractive business cases. Looking ahead, we retained further capacity for business development on M&A while remaining committed to our AA credit rating. In parallel, we are executing our EUR 5 billion share buyback program in 2025, with over 80% already completed as of today. We remain firmly committed to completing the full program by the end of this year. Moving to the next slide, I would like to highlight 2 key components of our ongoing financial performance, namely the Regeneron development balance and the Amvuttra royalties. First, it is important to note that the profit sharing payments to Regeneron are increasing in direct correlation with Dupixent profit growth. These payments are partially offset by the development balance compensation we received from Regeneron. As a reminder, Sanofi has historically funded a larger share of Dupixent development costs compared to our partner. Under the agreement, Regeneron reimburses up to 50% of this cumulative cost by deducting them from our profit sharing payments. Based on current projections, we anticipate this development balance to be fully reimbursed by the end of 2026. This reimbursement arrangement is expected to result in a negative year-on-year BOI impact for Sanofi of approximately EUR 300 million in 2026, followed by a more substantial negative BOI impact of approximately EUR 800 million in 2027. From 2027 onwards, R&D costs incurred will be shared within the same year. Second, new royalty streams are emerging as an increasingly important margin driver. For example, Amvuttra was recently approved for a new indication in both the U.S. and EU, with royalty rights up to 30% of sales. As illustrated on the right-hand side of the slide, the expected royalty revenue of this medicine, based on external consensus, will have a significant contribution to our financial outlook, probably until the end of the decade. Let me now give you a little bit more color on some key considerations for the balance of the year. Beyfortus had a strong momentum in 2024, with high vaccine coverage rates in many markets. We anticipate modest growth for 2025, with Q4 sales likely to be roughly similar to Q3. For flu, while we anticipate gaining market share, total sales are expected to decrease by a mid-teens percentage versus last year due to competitive forces, in particular, in the U.S. and in Germany. We anticipate a sales split of about 75% in Q3 and 25% in Q4. For the full year 2025, operating expenses may increase slightly due to the previously announced acquisitions. ForEx impact is now estimated to be around minus 4% on sales and around minus 6% on EPS. Other items are similar to what we shared with you last quarter. For the full year 2025, we are now expecting sales growth at a high single-digit percentage, at the upper range of our previous guidance. This refinement of our sales guidance is not linked to Blueprint, which is consolidated by the way, from mid-July 2025, but it is linked to the underlying performance of our business. We confirm our EPS guidance of a low double-digit percentage growth at constant exchange rates. This is also an implied upgrade of our EPS guidance as we now absorb a few hundreds of millions of additional cost from the newly acquired businesses largely in R&D. Finally, we are navigating through a dynamic world with a lot of uncertainties from potential U.S. tariffs on EU exports. However, all the -- as all the details are still limited and not fully settled yet, we will update you along the way. I now hand over to Houman, who will provide an update on the progress of our innovative pipeline.
Houman Ashrafian: Thank you, François. Since our last update, we received U.S. approval for Dupixent in bullous pemphigoid and MenQuadfi 6 weeks and, last week, the EU approval for Sarclisa in newly diagnosed transplant-eligible patients. Furthermore, Dupixent was submitted for review in Japan for BP and Cerezyme in the U.S. for Gaucher disease type 3, with an FDA decision expected in January next year. Despite itepekimab's mixed Phase III results, our pipeline continues to advance, with new rabies vaccine showing consistent Phase III efficacy. We secured 7 new regulatory designations, including orphan and fast track, and had 7 medicines featured in prestigious journals, which emphasizes our determination to accelerate our commitment in improving R&D. Last quarter, as François said, we acquired DR-201 (sic) [ DR-0201 ] from Dren Bio, now entering Phase I in immunology. We since made 2 acquisitions: Blueprint with Ayvakit and 2 new potential options in mid-stage clinical development, the potential next- generation molecule elenestinib to mastocytosis and BLU-808 in inflammatory indications. And lastly, Vigil with VG-3927, which has the potential to magnify and restore the neuroprotective function of microglia in Alzheimer's disease. We remain committed to expanding our pipeline with more opportunities, both internally and externally. We're excited about new monoclonal antibody from multiple myeloma, which was recently designated an orphan drug, showcasing our ongoing innovation from our own research in France. Externally, we continue to augment partnerships and collaborations, working hand in hand with the leaders in the field to bring cutting-edge treatment to patients. Next slide. We're committed to addressing the large unmet medical need for different COPD patients with Dupixent, with itepekimab and, lastly, with lunsekimig. At ATS, we presented pooled data from BOREAS and NOTUS Phase III studies, showing significant reductions in exacerbations, FEV1 improvement and quality of life, confirming our legacy in COPD with Dupixent. For itepekimab targeting former smokers, we're progressing with the data analysis for AERIFY-1 and AERIFY-2 Phase III studies, including insights from other molecules targeting the same pathway. And once more advanced, we will discuss with regulatory authorities and provide an update on next steps. The data will be presented at a forthcoming medical meeting. Lastly, we announced our intention to evaluate lunsekimig, our IL13-TSLP pentavalent antibody in a Phase II/III COPD study this year. Based on its benefits seen in existing clinical study and 2 known and proven mechanisms of action, we have faith in its dual- targeting nanobody technology with strong efficacy and proof of concept due to its deeper access into lower respiratory tract airways. Phase Ib data showed a 40.9% ppb reduction in FeNO levels in asthma with patients at day 29. The medicine remains our main interest in respiratory conditions, thanks to its effect on biomarkers and symptoms. Next slide. Rilzabrutinib has emerged as a safe and highly effective platform for rare diseases. The regulatory decision is expected soon for ITP with a target action date for the FDA decision on August 29, 2025. It's received its first global approval recently in the UAE. Moreover, we are pleased by the recent designations received, a fast track for IgG4 disease and orphan drug for wAIHA and sickle cell disease, all in the U.S., and orphan designation for IgG4 in the EU. To complement our presence in rare diseases, at ASCO, we presented the subcutaneous Sarclisa data from 3 studies, evaluating the convertibility of Sarclisa administered either by both on-body injector or manual infusions compared to IV results for the study across different lines and regimens, which demonstrated noninferiority, with most of the patients preferring the on-body injector. Regulatory submissions are underway, with acceptances expected soon. Finally, efdoralprin alfa, our recombinant human AAT-1 fusion protein in a Phase II superiority study for alpha-1 antitrypsin deficiency, aiming for normal function -- normal functional AAT levels with greater convenience, data is expected H2 2025. Sanofi is deeply committed to rare diseases. We've established a global franchise with a strong presence in enzyme replacement therapies and hematology, as demonstrated by ALTUVIIIO and, lastly, fitusiran. Based on the solid foundation, we're expanding our expertise in our pipeline to address the unmet medical need in patients with rare diseases worldwide. Our global reach, combined with our specialized knowledge, positions us uniquely to make a significant impact in the lives of those affected by rare disease. Riliprubart, our C1s complement inhibitor for CIDP, which shows promising progress in an area with remaining unmet medical need despite the availability of existing therapies. At PNS conferences that took place during the second quarter in Edinburgh, Scotland, we presented new long-term extension data from our Phase II study. Part A demonstrated that most patients improved or remained stable on riliprubart at 24 weeks. Results from the Part B confirmed finding across all CIDP patient subgroups, including those who are on standard of care, refractory or naive where patients remain relapse-free and sustain their response at week 76. Patients showed 35% reduction in NfL levels and a strong and sustained reduction in complement activity compared to base. Riliprubart offers potential as safe, effective subcutaneous option for CIDP and now also for antibody-mediated rejection, with orphan drug designations in Japan for CIDP in the U.S. for AMR. Our Phase III programs include 2 studies. MOBILIZE, it's for patients who have experienced failure or inadequate response to standard-of-care therapies, which are mostly IVIg or steroids depending on the country. And VITALIZE is the first head-to-head study in patients who are on IVIg and remain partial responders. Currently, both studies expect data from H2 2026. I would like to conclude with my usual flow slide for the next 18 months, which includes a new view of 2026, split into 2 halves. Key upcoming studies include the Phase II efdoralprin alfa in AATD and DOTAMTATE with Orano Med and 2 significant Phase III readouts with tolebrutinib in PPMS and the first data for amlitelimab in AD this year. Next year, we expect the remaining Phase III data for amlitelimab in AD, potentially followed by submission. The Q4 dosing in the Phase III study seeking to replicate positive data from the STREAM-AD Phase II study with an additional Q12 arm to assess the potential of longer dosing. The Q12 dosing is also used in the extension study. Our objective is to explore a more convenient treatment approach in AD with as few as 4 injections a year, potentially in the maintenance setting. As a reminder, recent results in asthma provided support for longer dosing interval potentially possible with OX40 ligand modulation on top of the AD Phase II data that suggested sustained efficacy after ending treatment. While not all of our efforts will succeed as it's the nature of drug development, we're confident our skilled teams and advanced digital technologies will drive progress in our core therapeutic areas. I thank our R&D team and colleagues for their achievements and continue chasing the miracle of science to improve the lives of patients. With this, I will hand back to Paul.
Paul Hudson: We'll now open the call to questions. As a reminder, we would ask you to limit your questions to 1 or 2. [Operator Instructions] And we'll take the first question. Please go ahead.
Unidentified Company Representative: Yes. First question is from Luisa Hector from Berenberg. Luisa?
Luisa Caroline Hector: So I wanted to touch on the R&D transformation because we see enormous amounts of progress at Sanofi across the whole organization, but the share price is still lagging. And I think it's awaiting pipeline progress. So on the R&D transformation, I wanted to check your levels of confidence given some of your recent successes but also some more mixed data sets, which are still in-house. And if we go back to your December '23 R&D Day where you laid out some objectives, you were targeting a 50% increase in Phase III trials for this year, 2025. You highlighted the new launch cohort with risk-adjusted sales over EUR 10 billion in 2030 and your 12 blockbuster assets, of which 3 of those could be over EUR 5 billion. So I wonder if you could just comment on those specifically. Are you on track for the Phase III trials? Are you more confident in your EUR 10 billion by 2030? And if so, has the mix changed now that you have more data in-house?
Paul Hudson: Thank you, Luisa, very comprehensive. Houman, do you want to get started?
Houman Ashrafian: Yes. Luisa, thank you for the question. And I'll try to remain succinct. Sanofi has become an R&D-driven company. We are committed to innovation in the service of patients. And I'm excited by the transformation that takes place. But we have to acknowledge that an R&D transformation is something that doesn't happen overnight. Many in the industry would believe it takes 5 to 7 years. And I'd like to believe that we're a significant way through that. The proof will be in the pudding, and we remain humble in the face of disease. My -- to answer your question specifically and very directly, of the 3 big ones that you described that we talked about on the 7th of December 2023, amlitelimab was 1 of the 3 as well as frexa and balinatunfib. We remain committed to all the molecules in our portfolio. Amlitelimab will read out in the relatively near future with its first Phase III. We look forward to pressure testing our predictions. I'll stop there and hand over to Paul.
Paul Hudson: Yes. I mean, Luisa, and I think it's fair to say, we had plenty of time to reflect on the ups and downs of this year. And while not everything has gone our way, the data sets have allowed us to do some good thinking around how to go forward or not as the case may be. I think Houman used the word humble, and I would add to that because I think this transformation has been moving at such a pace that we have spent the recent months, literally going back and kicking the tires to make sure that we have dotted every i and crossed every t on the studies to make sure that we will continue to push science, of course, as expected of us. What we would like to avoid is stubbing our own toe. So we have some work to do. I think we remain, on balance, optimistic about the nature of the big 12 and what that could mean for us. Of course, not everything will work. I'm very pleased with how the transformation has progressed. But I think you're right, by the way, that is, for some, the jury remains out that the progress is one thing, but it's revealing itself in successful Phase IIIs. And I think I said this, I think maybe it was you that asked me a question for reflection on a previous call. I'd like to think these things could have been done faster, but I've learned a few things about being patient. So we have to do good work, be diligent, be accurate and factual. And then we just have to turn the cards over, and we recognize that we're better just to keep our powder dry, get the results, share them, and confidence will be built from there.
Unidentified Company Representative: The next question is from Richard Vosser from JPMorgan. Richard?
Richard Vosser: First question, just on development of spend, a little bit higher in the first half on both SG&A and OpEx, obviously, ahead of new launches on SG&A. Just how should we think about the development of that, probably also thinking about '26 as well? You potentially have some interesting launches maybe at the least -- latter end of that year and in '27. So should we think SG&A goes up from here, R&D as well? Have we reached a level? Or with the trials that you're starting, should we expect that and Blueprint to go up as well? And how should we think about the margin in '26? Is that sort of at a similar level of '25? And then just a quick bit on Dupixent, a little bit weak in China, maybe, and we've seen that with some products in -- who have NDRL (sic) [ NRDL ] listing in China and some pressure in that market. Just thoughts about China, Dupixent and the rest of the portfolio and how we should think about the growth there going forward?
Paul Hudson: Thanks, Richard. I think -- and it's a couple of questions we've had throughout the day or morning. SG&A, R&D spend, of course, a little bit higher in the quarter. François, where do you think -- how can you guide?
François-Xavier Roger: No, Richard, it's a good question. François speaking. On R&D, obviously, I mean, we reported an increase of 17% in the quarter. But if you put aside the exceptional item, that exceptional revenue that we had from Sobi last year, it's 7% underlying. As I said earlier, we expect to be probably around flat, maybe slightly up in R&D in the latter part of the year. So we will be, for the full year, where we said we would be, which is slightly up for the full year. There might be a little bit of additional cost as well coming from Blueprint, but I mean, again, the guidance that we gave initially at the beginning of the year, we will be there. So there is a little bit of a phasing issue between H1 and H2. I have no concern whatsoever. On SG&A, you can see some increase as well. Just to give you a perspective, I mentioned it earlier, we have a rate of increase of SG&A, which is half of our increase in sales, which means that we are benefiting from growth leverage. Do expect that to continue in the future. And if you look at it, 70%, 7-0, 70% of the increase that we experienced in the first half went to an investment in sales and marketing to get growth, which we have, and to prepare for future launches. So I think it's very healthy because we are in an investment position. Do expect that to continue as well. To give you a little bit more color, I don't want to go into guidance for '26 because it's too early and it's not the right time to do that. But just to give you a direction of travel, we do expect in the next couple of years to enjoy an attractive growth profile until 2031 at least. We will have a tight control on cost, which means basically G&A, more or less, flat. Sales and marketing up, but probably -- certainly at a lower level than sales. R&D will be certainly slightly up, although there, I want to be very careful. It will depend on readouts, and it may be impacted a little bit as well by some acquisitions in BD and M&A. So we don't have necessarily the full visibility of what -- where we can go year-by-year at this point in time. But anyway, given that we will get some growth leverage, do expect our BOI to increase year after year in absolute value in the next coming years, once again, largely as a consequence of an attractive growth profile in sales with a benefit -- with tight control on cost and growth leverage. We'll get that in '25, and we'll get it in the coming years as well. That will give us space to absorb some specific items, such as the one I mentioned earlier, in the next couple of years, like the Regeneron end of R&D reimbursement. That one, we will be able to absorb in BOI. So do expect to see our BOI increasing year after year. And I'm very confident about it.
Paul Hudson: Thank you, François. I think -- and well said, attractive growth profile, tight management on OpEx, R&D broadly flat depending on successes or the opposite in R&D, up for this year and a little bit beyond. We'll see. And we overlaid that with the -- being one of the companies with the lowest genericization profiles over the next 5, 6, 7, 8 years. So it's important that we advance the medicines that drive the growth and then fund the launches. But I think we've come a long way as a team reshaping the business, but we have to be extremely prudent with how we deploy those investments because we want increasingly profitable growth. It's just obvious. Brian, Dupixent in China.
Brian Foard: Well, thank you, Richard, so much for the question. And I'll come to China in just a second. As you probably know Dupixent is a pretty diversified product now around the world, a bunch of different indications. So we're in 8 as Paul alluded to already in the United States. And so while China is a very important marketplace, it is one of many where we're actually seeing continued underlying volume growth. And so I'd first start there. Actually, in China, we've seen more than 30% volume growth in China. So really positive in China right now. Of course, as you mentioned, we will have pricing pressures from time to time in market as is normally the case and as we planned for. And we will grow through the NRDL actually eventually. But as we get more access to more indications in China, this is going to be a really important marketplace for us moving forward, but one of many.
Unidentified Company Representative: Next question is from Matthew Weston from UBS.
Matthew Weston: Two questions for me, please. One is on amlitelimab, and Houman, if I'm a leading AD prescriber, I'd love to know what you think I want to see from amlitelimab. Do I want more efficacy from -- than dupi? Do I want more efficacy than dupi and subgroups? Or is it really about looking for the same efficacy as dupi but with that better duration of treatment? And then just one finance question. The additional comment on tariffs. I think the comment was that there was a lot that was unknown. Have you assumed [ something ] in guidance for 2025? Or have you assumed the basic level that's being discussed in the current EU-U.S. trade deal or just you've moved so much inventory, it doesn't matter this year?
Paul Hudson: Let's start there, François.
François-Xavier Roger: Yes, Matthew, anyway, it's difficult to comment on what we don't know. But we have run different scenarios, obviously. And we have -- based on what is widely reported in the media, we have looked at the impact that it could have on 2025, given that we're already fairly well advanced in the year. And we confirm -- we did not factor it in our guidance, but it will have a limited impact on 2025 because we already have inventory in place in the U.S. So I don't think that it will -- in fact, with what we know today and what we read in the media, we don't think that it will impact our guidance in any way for 2025.
Paul Hudson: Thank you. Houman, what are you expecting to see?
Houman Ashrafian: So taking -- thanks for the question. Taking a step back, I think it's important to think about the atopic dermatitis landscape. And it remains a matter of some concern to me that only 15% or 16% of patients with atopic dermatitis, which -- who are biologically -- biologic eligible are currently receiving therapies, both from our own molecules and those of other pharmaceutical companies. We welcome new molecules in the space. And I think a leading KOL in the atopic dermatitis space and beyond will welcome more options for their patients. Speaking specifically about amlitelimab, the value that we see in this space is that there are a variety of patients that are highly heterogenous and need a variety of solutions, including the fact that agents -- patients who are refractory to current agents demonstrate an upregulation of OX40 ligand in skin biopsies. What does that lead us to believe? All in all, the distillate of that is that I think that a new agent that comes in, consistent with our STREAM-AD work that we've previously published, that provides both a longer interval of treatment, coupled with magnitude of treatment consistent with the standard of care would be significantly and hugely favored in the marketplace. One other final comment, newer agents that have significantly lower efficacy than the standard of care have already garnered substantial interest. So a molecule that is comparable to the standard of care will be, with a longer interval, very substantially of value.
Paul Hudson: Yes. I think -- thanks, Houman. I think if you look at STREAM-AD design, we had another arm to explore longer intervals. I think we'd love to see what that could look like. We'll see. The data will tell us.
Unidentified Company Representative: Next question from Florent Cespedes from Bernstein. Florent? Okay. Let's take the next question in between. Next question from in Shirley Shin -- Chen, sorry, from Barclays.
Xue Chen: Can you hear me?
Paul Hudson: Yes.
Xue Chen: So I have a question on flu. You guided mid-teen decline primarily due to price pressure. Could you please provide more color on how Sanofi plans to mitigate this aggressive pricing dynamic across multiple markets? And how are you thinking about the longer-term pricing dynamics in flu? And also, on top of that, how do you find so far RFK Jr.'s leadership impact on the flu business in the U.S.? And maybe on top of that, just you guided high single digit for the top line, given the slow headwinds that you have already flat. I think it actually shows a resilient business on the top line at least. So can you please walk us through your confidence to reach that top end? And like what -- which franchise will be doing the heavy lifting in the second quarter? Any color would be appreciated.
Paul Hudson: Thomas?
Thomas Triomphe: Thanks for your question, Shirley. On the second part of your first question, so I don't have any specific comment on the new administration view on flu. But I can give you a bit more color on how we are seeing the full flu year in 2025. As we've mentioned and you were making allusion to it, we foresee in 2025 a decrease of our sales in the mid-teens percentage range, with a Q3 to Q4 split of 75%, 25% split. You completely understood that it's linked to competitive pricing pressure with -- let me give you some color around it. First of all, there is a one-off impact in Germany. So it's a one-off effect of 2025 only and will not replicate it moving forward, which is the fact that within the flu recommendation for elder in Germany, there is the addition of an adjuvanted competitor, which automatically reset the price at approximately half what the price was in the previous year. So there's a one-off there in 2025. The second part of that overall decrease for the year is linked to competitive pricing pressure, mostly in the U.S. and a little bit in the international zones. I think there are a couple of points that are important here to highlight. First of all, we are a significant leader in the flu market. And let's be very clear, we expect our market share in flu to have -- to be a solid market share performance in 2025 despite this declining market in value. Again, maintaining our flu leadership position, which obviously comes from the fact that we have a very strong differentiated portfolio with Fluzone High-Dose (Influenza) and Flublok. As for the long term, well, I think that's quite in line with what we had in view, and that's why we've made the deal with Novavax and Nuvaxovid because the way we foresee the market to evolve is, first of all, to keep evolving towards more differentiated flu vaccines like the ones we have, but provide strong efficacy and good safety profile. Then on top of that, moving forward to flu-COVID-19 combination, where again, you will have -- you will be able to meet the quality in terms of efficacy of the differentiated flu vaccines, but of course, also the tolerability profile. And I think that with our flu-COVID-19 portfolio in development, we have a good chance to get there.
Paul Hudson: Thank you. François?
François-Xavier Roger: Yes. And Shirley, on the question about landing in terms of sales growth for the full year, indeed, we confirm our confidence for the high single-digit level for the full year. First and foremost, we did 9.9% in H1. It does help for the full year. Second, we will continue to have a strong growth with Dupixent. Don't forget that we were at 21% of value growth in Q2. It's amazing. By the way, it's even in the mid-20s by volume 8 years after the launch, really impressive. It's not only Dupixent. We are not Dupixent dependent. Launches, they contributed 10% of sales, but they also contributed, in Q2, almost 1/4 of our growth and is gaining traction quarter after quarter. And we have a resilient Gen Med business. Our established product are very resilient as well. So we do confirm our high single-digit guidance for the full year. Let's be careful with Q3. We have flagged it already since the beginning of the year. We had very high comps last year in Q3. So do expect to see a little bit of a slowdown in Q3 in terms of growth versus what we have experienced in H1, but once again, full confidence with high single digit. By the way, I take the opportunity to say it. It's high single digit with and without Blueprint. So it's not coming from Blueprint. High single digit, it's coming from the base business.
Unidentified Company Representative: Let's try again with Florent Cespedes from Bernstein. Florent?
Florent Cespedes: Two, please. First, on Dupixent, could you maybe give a little bit more color on the ramp-up in COPD as now we have the product available in certain countries and 6 more to come? Could you share with us if -- where you see the best adoption in this disease? That's my first question. Second question for Paul on M&A. With the recent Blueprint acquisition and really late-stage products, is it fair to assume that in the future, you will look for earlier-phase assets and a transaction that's more on what you used to call bolt-on, around EUR 2 billion to EUR 5 billion? Any color on that would be great.
Paul Hudson: Thank you. Brian?
Brian Foard: Yes. So thank you so much for your question. And first and foremost, the double-digit growth that we've seen, just as François just said, really comes from across indications, across geographies. Our base business -- actually, our base indications of atopic dermatitis, asthma, nasal polyps, some of the first indications, we continue to see strong growth there. But it is really exciting to see also growth coming from new indications, such as COPD, CSU and, even recently, BP. Now specifically as it relates to COPD, about 9 months into the launch, we continue to see excitement from customers. And again, as a reminder, these are customers, these are really largely pulmonologists that have had a great deal of experience with Dupixent in asthma previously. So the best way to look at this is if you really look at the pulmonologists community and you look at how their prescriptions have changed, our volume has really grown strongly in the pulm's offices, thanks to the launch of COPD in combination, of course, with asthma. And of course, that is, again, really positive and will continue to develop over time. So really, really positive start to the launch of COPD, and we're seeing this pretty consistently across the markets, as you mentioned, 13 and 6 more to go before the end of the year for launching in COPD.
Paul Hudson: Thank you, Brian. On the second part, we've guided for quite a while on the EUR 2 billion to EUR 5 billion range. We had said for maybe the last year or 2, we'd step outside for the right opportunity, but prefer single digit. The Blueprint opportunity was right in the sweet spot for us on this immunology-rare axis. And we felt like we were quite uniquely positioned to be able to build on the great work the Blueprint team had done and to really move quickly based on our experience, one of the world's leading rare disease companies. And I think -- don't forget that it's literally just in the launch phase. And of course, with elenestinib behind that and perhaps even more of a -- out of the -- more of a complicated but intriguing step is 808. Further back, it could be a game changer. Of course, these things could disappear quietly into the night. But we feel like it really matched what we were trying to do. As for deals going forward, we sort of reiterate -- I know you might say, well, you just did Blueprint, but we get back into the EUR 2 billion to EUR 5 billion range, not because of the financial piece, but because we continue to look early, early, early, and they tend to be in that range. And we want to maintain our AA rating or at least we have flexibility there to do that. François said it that our growth profile for the next 5-plus years is in the top group of the industry. So it's really -- the emphasis remains early, early, early, but in the areas that we are strong in, where the marginal cost to deploy new asset would be modest. We just want to keep adding to that because as we get into the early '30s, depending, that's when we need to be in launch swing for some of these assets, so it's better to go early. So I think we're trying to be disciplined. We spend a lot of time on this. And we're very particular about what we think meets our bar. And I think we're happy with how we sit.
Unidentified Company Representative: Next question from Sachin Jain from BofA. Sachin?
Sachin Jain: A couple of product ones and then one clarification for me. So on amlitelimab, the answer to prior question, you flagged the importance of less frequent dosing. We haven't seen, I don't think, in the Q12-week asthma data. So just any color you can give on the strength of that data and read to AD. I just wanted to be clear that you put the Q12-week data in the AD press release as, I think, it's a secondary endpoint. That's the first question. Second question on tolebrutinib in SPMS. As you approach approval, just what should our expectation for the REMS be? And how that might impact launch? And then just a quick clarification on a prior question on the BOI for '26, '27. So in no doubt, should we see BOI margin growth as well as absolute growth? I heard the answer as a comment on absolute BOI, and I think the question was on the margin.
Paul Hudson: Okay. Thank you. Let's give this to Houman, amli.
Houman Ashrafian: Sachin, thank you for the question. Firstly, on amli, when I was referring to longer interval earlier, just for clarification for everyone on the call, I was talking about Q4W, which is a differentiated interval currently for patients with atopic dermatitis, point one. Point two -- and of course, an ongoing theme through our AD trial, starting with STREAM-AD, which was a Q4W dosing and then into COAST 1 and COAST 2, et cetera. So point one is that when I was asked about what a KOL would expect, I meant the Q4W dosing for an abundance of clarification. The second comment was your comment to Q12W, and there are 3 data points that I would direct you to. Number one is the cessation study of STREAM-AD, the off-drug study component, as it was described. As you know, over 60% of patients had a maintenance of their response at 24 weeks, which is what the inspiration was to have both the induction and maintenance Q12W dosing. And as you'll know from the corpus of studies, 9 studies in the OCEANA's program, we will see the red thread of QW go through at least 4 of those studies, which include COAST 1, COAST 2, SHORE and AQUA, running into ESTUARY. And the final part of that amli question was, thank you for noting on the asthma study that the Q12W dosing in asthma was promising, and that adds to our understanding that OX40 ligand modulation of T cells in disease does have the potential to have a longer interval traction. On SPMS and tolebrutinib, the only comment I'll make -- and thank you for noting the importance of the REMS. The only comment I'd make is it's a subject of active regulatory discussion, and our practice is not to disclose any specific comments around it, especially this delicate stage of discussions with the regulator. So we found the collaborative interaction with the regulator extremely gratifying, and that's important.
Paul Hudson: Thank you. François?
François-Xavier Roger: Yes, Sachin, on the increase of BOI, you're absolutely right that what I said, we will see our BOI increasing in absolute value in '26, '27 and in the following years as well. And you're right. I said in absolute value. That, I'm very confident. That being said, I don't want to commit at this stage as a percentage of sales. Don't forget this is what I mentioned in my presentation earlier. We had to absorb EUR 1.1 billion of BOI that will not disappear, but that will go to a certain extent because of the end of the Regeneron reimbursement of R&D. So that's quite a significant amount. Even if we grow at a high rate, and we will continue growing, I don't want to commit at this stage. We are working on it in order to try to make it valid as well as a percentage of sales, but I don't want to commit at this stage.
Unidentified Company Representative: Next question from Seamus Fernandez from Guggenheim. Seamus?
Seamus Christopher Fernandez: So just wanted to check in on patent estates and the patent portfolio in terms of how you're thinking about the opportunity there. And then maybe just as an extension to that, life cycle management opportunities that you see on a go-forward basis with your partner, Regeneron. And then just a quick second question. Houman, it seems like you're commenting on the orthogonal combination potential that might exist with OX40. Are you really referring more to the potential to combine amlitelimab with other assets? Or are you talking about the prospect of whether it be nanobody or other OX40 ligand combinations, in particular, in HS, at least, we know OX40 and the TNF will be presented, I believe, at EADV. Just trying to get a sense of your thoughts around how broadly the OX40 mechanism could be applied in various disease states.
Paul Hudson: Roy? Thank you. Roy?
Roy Papatheodorou: I guess the question was about Dupixent. But in general, also for Dupixent, I remind you that the compound patent expires in the U.S. in March '31. In Europe, it expires in March '33, with all the exclusivities, extensions attached to them. As Brian said, we've got 8 indications. We've been spending a huge amount of money on development. You can rest assured that we have ensured that we protected all the innovations that the company prepared around Dupixent. And we have a number of patents going well beyond the composition of matter patent into the '40s, and it's too early to speculate. As and when, we'll keep you updated on the relevant developments.
Paul Hudson: Thank you. Houman, fast, if you can, LCM with our partner, Regeneron?
Houman Ashrafian: The LCM in discussion with Regeneron, active, ongoing discussions within the alliance. We work closely with them. We are excited by the ongoing relationship, which is active across the existing molecules like dupi and itepekimab, but also potential new opportunities that we're seeking to get.
Paul Hudson: Thank you. On amli, combos?
Houman Ashrafian: Firstly, let me just say on our dashboard at the moment, amli mono is very much in the headlights, windscreen and every other part of the front of the car. Our focus is 100% on executing on delivering those studies over the next year or so, at large, OCEANA program. And in terms of -- so that is absolutely our focus. In terms of combination therapies, OX40 ligand is an important biological node. Licensing, B-cell biology and far beyond, the opportunity to do combination therapies, as we've already demonstrated with a positive result in brivekimig in HS, as you say, which is about to be presented, is going to open a whole new vista.
Unidentified Company Representative: Next question from Simon Baker from Redburn. Simon?
Simon P. Baker: Two quick ones, if I may, please. Firstly, could you just give us an update on the current trends and your outlook of the Beyfortus in the U.S.? And then moving to Blueprint and BLU-808. The literature has been peppered with reports on KIT inhibition in inflammatory disease for, I think, under 20 years. So I just wonder if you could give us your thoughts, Houman, on the -- on why you see KIT inhibition in that setting as an interesting area? And specifically, what appeals to you about the Blueprint asset?
Paul Hudson: Thomas, Beyfortus?
Thomas Triomphe: So Beyfortus, we -- as discussed before, we see some growth for Beyfortus overall in 2025. This will come from market expansion as Beyfortus is going to more and more geographies. You know very well that there is further competition entering into the field. I just want to take the opportunity that while the new product is also a monoclonal antibody, both monoclonal antibodies are very different, extremely very different half-life. Beyfortus has a half-life of 71 days. The other product has a half-life of 42 days. And very, very different real-world experience, with Beyfortus being studied in 0.25 million of babies with outstanding results. Due to that, we expect that overall U.S. this year will keep increasing this year and next year. It takes 3 to 5 years for a pediatric intervention for vaccination coverage rates to reach their peak. So overall, RSV prevention will increase, and Beyfortus will remain the dominant player, thanks to its data set.
Paul Hudson: Thank you. Briefly, Houman, on 808?
Houman Ashrafian: Yes, Simon, I guess you can never take the chemist out of you when you speak. We're -- firstly, let's start by saying we are honored and privileged to have the Blueprint team join us. They really are the experts in ecobiology, and our industry is characterized by experts being able to achieve outstanding results. Speaking very briefly about mast cell biology, as you know, based on your background specifically, targeting wild-type c-KIT has been a sort of holy grail of the industry for decades. You know very well from the time of William Osler -- Sir William Osler, mast cell and their role in inflammation diseases -- classical diseases, such as asthma, COPD but far beyond have been important. If we can target wild-type c-KIT with an adequate therapeutic index, then it will open up a whole number of inflammatory diseases.
Paul Hudson: Yes. I think -- well, I think, ultimately, it's a nice shot to have in the pipeline. It's been around a long time. If we get it right, it could be great. And if it doesn't, then it's early enough for us to make the tough call, but we're optimistic. Let's see.
Unidentified Company Representative: Next question from Sarita Kapila from Morgan Stanley. Sarita?
Sarita Kapila: Sorry to come back to margins, but maybe should we think about '26 margins being flat as a floor? And you provided more color on refunding income and Amvuttra royalties, but should we expect divestment income, I believe it's EUR 500 million this year, to continue into '26 and 2027? And then just a quick one on Blueprint and Ayvakit competition from Cogent's bezuclastinib. Maybe you could have some words on the molecule given the liver tox. I'm sure you diligenced the landscape, but do you believe Blueprint adequately factored competition in the EUR 2 billion peak sales guide?
Paul Hudson: Thank you. François?
François-Xavier Roger: So on the '26, I don't want to guide for '26. It's too early to do that. And so we'll do that in due time. But once again, I confirm the fact that we are working towards an increase in BOI next year that will start with the benefit of growth leverage and the strong growth on the top line again. I do confirm what you said, which is we do expect to get probably EUR 0.5 billion. Why not potentially more, by the way, from disposal -- in terms of capital gains from the disposal of assets? We regularly had about EUR 0.5 billion, might be a little bit more in the future, but at least that amount.
Paul Hudson: Okay. I want to -- actually, Brian, competitiveness of Ayvakit?
Brian Foard: Yes, I think it's a fantastic question. And I'll start kind of the same way we talk about a lot of the disease states across immunology, which is, first and foremost, this is a very underpenetrated marketplace. They've just launched into the space. And if you look at the growth for Ayvakit, it is because they are finding new patients, getting new patients on therapy, keeping new patients on therapy. So as we've said before, new competition into any space like that is actually good for the space from a noise level standpoint, finding these patients. It's a really symptomatic disease state that presents itself in a lot of really important specialists that we call on, on a regular basis today, and we'll continue to call on in the future. That said, I think that they have done a very nice job of factoring future competition into the mix, not only for market growth but also for leadership share. So we feel very confident with Ayvakit and its profile, especially in recent light of the readout that we just saw from bezu.
Unidentified Company Representative: Next question from Peter Verdult from BNP.
Peter Verdult: Pete Verdult, BNP. Just a couple for Paul. Number one, interested in gauging your level of enthusiasm around IL-17 becoming part of your pipeline or portfolio in line with the growing opportunity in HS and competitive data this week showing very promising efficacy in atopic dermatitis. And then secondly, Paul, sorry about the obligatory question on U.S. pricing reform and the potential for Europe to step up and share the load. Just interested in what your latest thoughts are. And just a very quick third, if I could squeeze one in for Houman. Just when should we expect to hear about next steps and plans on your go-forward strategy on itepekimab or whether it will get terminated? Is that something that we should expect to hear about this year? Or are you still doing the work?
Paul Hudson: Okay, Peter, thanks very much. I'm not sure what the question was on IL-17. Was it -- I can't read that. So you have to tell me what was the question. It was in AD?
François-Xavier Roger: Yes.
Paul Hudson: Okay. I'm not -- sorry. Let's go to another question -- another part of the question. Houman, maybe itepekimab. Then I'll answer pricing. And then we'll come back to that question.
Houman Ashrafian: Okay. So itepekimab, we were obviously hoping for better results than our mixed result. We're working closely across the alliance with Regeneron, working through the basis for the difference there, AERIFY-1 and 2. And once we figure that out, we have to recognize that AERIFY-2 failed. We will go back to the regulator for next steps.
Paul Hudson: Okay. So then Peter, maybe it was just us here, but you really broke up on the first part. I think the question was about IL-17 for sure. The UCB, I think, had some early data. I think that's what we've cobbled together here. Look, we believe the assets we have in AD will be the difference. There's no surprises there. We'll get COAST 1, see how that looks, decide how competitive it is. I think in immunology, there's always an opportunity to show an impact, whether you can really make a difference. We will see. I'm very familiar with IL-17s, but I think our emphasis has been on breakthrough technologies and opportunities and intervals to try and really improve the patient outcome. U.S. pricing, I think you said at the second part of it and the relationship between Europe and the U.S. But just very quickly, we don't know the final voting from the White House on how we'll look between the 232 investigation, MFN and tariffs. And tariffs once they are established -- and we know them, important step. Then we'll know what the relationship is like with the other 2 components and know whether it's a 15% tariff with a caveat or 15% plus or 15% less. We don't know. And nobody knows. But we prepared for delivering the guidance this year. That's a minimum. So don't feel we're casual about it because we're absolutely not. I've been on record as many CEOs now about innovation access in Europe. And there's part of me as a parent and as a member of society would still concern that more than 50% of medicines approved in Europe are not available for patients in Europe. I think the value of a medicine should be paid for. And I think there's a lot of people who could contribute to economies in GDP if medicines were made available to them. I'm as interested in budgets for health care, giving access to innovation for more patients as I am in the pricing conversation. We will see where it nets out, when we have the facts, we will share them. But we're a health care company. We'd like to see more patients get access -- excuse me, more patients get access to more innovation.
Unidentified Company Representative: Next question from David Risinger from Leerink. David?
David Reed Risinger: Yes. So I just have one question, please. Could you discuss your expectations for tolebrutinib in PPMS, Houman? And if you could just comment on efficacy expectations and also what you're anticipating from the liver toxicity data in that trial.
Paul Hudson: Thank you, Houman?
Houman Ashrafian: Yes. So thanks for the question. Succinctly, there's a significant biological overlap between SPMS and PPMS. There was a Nature paper around genetics of progressive disease a couple of years ago from Australia. Our view is there is at least some biological reason to believe that smoldering inflammation and brain compartment inflammation are important in both diseases, and there may be some read-through. We look forward to seeing those results later in the year. And with respect to toxicity profile with the liver, we expect it to be commensurate with what we see in SPMS.
Paul Hudson: Okay. I think maybe we have time for one more.
Unidentified Company Representative: One more question and final from Ben Jackson from Jefferies. Ben?
Benjamin Jackson: Great. Just one final one for me then on amlitelimab. If we think about the efficacy that we've been talking about in several questions here, what is it specifically that you think physicians and patients are looking for in terms of which endpoint? We've obviously had a lot of noise recently about perhaps how an itch benefit is helping to drive penetration to the market. And clearly, within your Phase III designs, you have built in some itch endpoints into that. So I guess which of the endpoints we should be paying most attention to? And then secondly, is there any reason to believe that the OX40 mechanism could perhaps have a beneficial effect on itch?
Paul Hudson: Houman?
Houman Ashrafian: Yes. So again, briefly, I think that -- your second question first, the OX40 ligand biology that Kymera had already worked out, specifically the ligand is likely through its effect on T cells and neuroinflammatory access have an effect certainly on the atopic dermatitis and possibly itch. There's a literature on that. Happy to discuss off-line. And with respect to the endpoints, I think the key here, both regulatory and from a community perspective is IGA 0/1 and EASI-75, obviously, the things that are the entry ticket in a disorder which has significant low biopen rate. I think that those would be the entry ticket for what we do.
Paul Hudson: Okay. Ben, thanks. The last question. We delivered strong performance in Q2 with 10.1% sales growth, refined our 2025 sales guidance. At the same time, we confirm our guidance, strong business EPS rebound. Our pipeline continued to make progress despite the mixed results for itepekimab in COPD, and we eagerly anticipate several important Phase III data readouts in the second half of the year, including amlitelimab, tolebrutinib. Augmenting our own pipeline, we closed the acquisition of Blueprint in rare diseases. We'll remain focused on strategically redeploying capital towards pipeline and growth as we continue to advance our strategy. With this, I wish everyone a good summer. We'll close the call.