Sanofi: Sales Growth of 6.9% Thanks to Genzyme Acquisition and Performance of Growth Platforms
Positive impact from Genzyme on business EPS(1)
PARIS, July 28, 2011 /PRNewswire/ --
(Logo: http://photos.prnewswire.com/prnh/20110616/NY20158LOGO )
Q2 2011
Change on a
Reported
basis
Change at
Constant
exchange rates(1)
H1 2011
Change on a
Reported
basis
Change at
constant
exchange rates
Net sales
euro 8,349m
+0.5%
+6.9%
euro 16,128m
-0.5%
+1.0%
Business net income(1)
euro 2,150m
-13.2%
-7.0%
euro 4,320m
-11.9%
-11.5%
Business EPS(1)
euro 1.64
-13.7%
-7.4%
euro 3.30
-12.2%
-11.7%
In order to facilitate an understanding of our operational performance, we comment on our business net income statement. Business net income(1) is a non-GAAP financial measure. The consolidated income statement for H1 2011 is provided in Appendix 7. A reconciliation of business net income to consolidated net income is provided in Appendix 6. Consolidated net income in H1 2011 was euro 2,224 million, compared to euro 3,421 million in H1 2010. Consolidated earnings per share in H1 2011 was euro 1.70 versus euro 2.62 in H1 2010.
Commenting on the Group's performance in Q2 2011, Sanofi Chief Executive Officer, Christopher A. Viehbacher said, "As expected, the second quarter is the most challenging this year, given the level of generic competition. Against this, growth platforms(2) continue to perform well and strong progress has been achieved in the integration of Genzyme and Merial."
Q2 2011 Performance
Total sales(3) grew 6.9%(4) to euro 8,349 million. Excluding Genzyme, sales were down 4.0% reflecting euro 778 million of sales lost due to generic competition vs. Q2 2010.
Growth platforms grew by 9.5% and including Genzyme accounted for 65.2% of total sales.
Genzyme sales were euro 796 million, up 16.0%5.
Diabetes sales grew 12.4% driven by a strong performance of Lantus® (+14.5%) and Apidra® (+29.5%). Additionally, Lantus® SoloSTAR® now accounts for 46% of Lantus® U.S. sales.
Emerging Markets(6) sales reached euro 2,533 million or 30.4% of Group sales, an increase of 7.1% excluding Genzyme and A/H1N1 vaccines.
Consumer Health Care sales were euro 644 million (+17.6%), as Allegra® OTC generated sales of euro 63 million in the U.S. The Generics business continued its dynamic growth (+17.6% to euro 434 million).
Business EPS(1) was euro 1.64, down 7.4% at CER.
As a result of the acquisition of Genzyme, net debt was euro 13.2 billion at the end of Q2 2011.
Outlook
Genzyme cost synergies are expected to reach $700 million by end 2013.
KynamroTM (mipomersen) was recently filed in the EU and 5 new products filings are expected in the next 9 months.
Additional Phase III study results are expected by the end of the year for LemtradaTM (alemtuzumab), AubagioTM (teriflunomide) and Lyxumia® (lixisenatide).
The Group expects 2011 business EPS(1) to be 2% to 5% lower than 2010 business EPS(7) at CER, barring major unforeseen adverse events. This guidance does not assume a return of generics of Eloxatin® in the U.S.
(1) See Appendix 10 for definitions of financial indicators; (2) See Appendix 4; (3) Growth in net sales is expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 10 for a definition); (4) Q2 2010 includes consolidated Merial sales (euro 524 million); (5) on a constant structure basis and at constant exchange rates; (6) See definition on page 8; (7) euro 7.06
2011 second quarter and first half sales
Unless otherwise indicated, all sales growth figures in this press release are stated at constant exchange rates(1).
In the second quarter of 2011, Sanofi generated net sales of euro 8,349 million, up 0.5% on a reported basis. Exchange rate movements had a negative effect of 6.4 percentage points, of which more than 70% was due to the weakening of the U.S. dollar versus the Euro. Various currencies from Emerging Markets (notably the Venezuelan Bolivar, Chinese Yuan and the Turkish Lira) also had an unfavorable impact. At constant exchange rates, and including changes in structure (primarily the consolidation of Genzyme from April 1st), net sales increased by 6.9%.
Net sales in the first half of 2011 were euro 16,128 million, a decrease of 0.5% on a reported basis. Exchange rate movements had an unfavorable effect of 1.5 percentage points. The depreciation of the U.S. dollar, and the Venezuelan Bolivar against the Euro was partially offset by the favorable effect of the Japanese Yen and the Australian dollar. At constant exchange rates, and after taking into account changes in structure (primarily the consolidation of Genzyme from April 1st), net sales increased by 1.0%.
Growth Platforms (see Appendix 4)
The Group's growth platforms grew by 9.5% and including Genzyme accounted for 65.2% of total consolidated sales in the second quarter of 2011, which is up from 54.9% in the second quarter of 2010. In the first half of 2011, the growth platforms and Genzyme comprised 62.3% of total consolidated sales compared with 54.4% for the first half of 2010. Over the period, growth platforms grew by 12.3% excluding A/H1N1 vaccines sales.
Pharmaceuticals
Second-quarter net sales for the Pharmaceuticals business were euro 7,147 million (up 7.7%), which reflects the positive impact (euro 796 million) from the consolidation of Genzyme from April 1st, 2011 as well as generic competition to Lovenox®, Ambien®CR and Taxotere® in the U.S., Plavix® and Taxotere® in the EU and the impact of U.S. healthcare reform and EU austerity measures. First-half 2011 net sales increased 3.3% to euro 13,730 million.
Flagship Products(8)
(millions of euros)
Q2 2011
net sales
Change at constant
exchange rates
H1 2011
net sales
Change at constant
exchange rates
Lantus®
969
+14.5%
1,894
+13.9%
Apidra®
53
+29.5%
102
+25.3%
Lovenox®
536
-34.8%
1,119
-30.9%
Taxotere®
204
-64.5%
586
-49.1%
Plavix®
510
-2.4%
994
-8.4%
Aprovel®
343
+3.6%
663
-0.3%
Eloxatin®
248
+194.7%
436
+185.6%
Multaq®
68
+89.7%
131
+114.3%
Jevtana®
48
-
96
-
Cerezyme®
166
+58.3%*
166
+58.3%*
Myozyme® / Lumizyme®
99
+42.0%*
99
+42.0%*
Renvela®/Renagel®
137
+14.6%*
137
+14.6%*
Synvisc®/Synvisc One®
89
+ 17.2%*
89
+ 17.2%*
* on a constant structure basis and at constant exchange rates
(1) See Appendix 10 for definitions of financial indicators
(8) See Appendix 2 for a geographical split of consolidated net sales by product
Diabetes
Net sales of the Diabetes division were euro 1,168 million (up 12.4%) and euro 2,281 million (up 11.5%) in the second quarter and first half of 2011, respectively. In the second quarter, Lantus®, the world's leading diabetes brand, delivered double digit growth (+14.5% to euro 969 million). Over the period, sales of the product grew by 12.4% in the U.S. reflecting additional sustained promotional effort implemented from mid-2010. The contribution from Lantus® SoloSTAR® in the second quarter represented 46.2% of total Lantus® sales in the U.S., an increase of 13.9 percentage points versus the fourth quarter of 2009. The growth of Lantus® was also sustained in Japan (+14.9%). Emerging Markets(9) grew 29.3% given robust performance in Russia (+55.0%), China (+50.6%) and Latin America (+38.0%). In Western Europe, sales in the second quarter of 2011 returned to more dynamic growth (+9.3%). First-half sales of Lantus® reached euro 1,894 million, up 13.9%. BGStar® and iBGStarTM, the first range of blood glucose monitoring systems (BGMs) co-developed by Sanofi and its partner AgaMatrix, were launched in France and Germany in the second quarter.
Net sales of the rapid-acting insulin analog Apidra® were euro 53 million in the second quarter, up 29.5%. Sales in the U.S. accelerated (+17.6%) driven by a new commercial approach. First-half net sales of Apidra® reached euro 102 million, an increase of 25.3%.
Despite 8.6% growth in Emerging Markets, net sales of Amaryl® decreased 9.5% (to euro 109 million) due to generic competition in Japan. First-half sales of Amaryl® were euro 217 million, down 7.7%.
Oncology
Net sales of Eloxatin® in the second quarter were euro 248 million (up 194.7%), reflecting recovery of U.S. sales (euro 182 million, versus euro 29 million in the second quarter of 2010). First-half sales of the product were euro 436 million, an increase of 185.6%, 25.5% of which (euro 111 million, up 11.0%) was generated outside the U.S. and Western Europe. Since June 30, 2010, following the settlement of the Eloxatin® U.S. patent infringement suits, generic manufacturers remain enjoined by the U.S. District Court for the District of New Jersey from selling their Eloxatin® generic products in the U.S. until August 9, 2012 or the earlier entry of a competing generic product. One generic manufacturer, Sun Pharmaceuticals, sought appellate review of the court's injunction. Following this appeal, Sun's case was remanded to the District Court for further consideration and the trial was held before the District Court on April 7, 2011. In the event Sun prevails before the District Court, the generic manufacturers could re-enter the market prior to August 9, 2012.
Second-quarter net sales of Taxotere® declined by 64.5% to euro 204 million reflecting rapid generic erosion in the U.S. (sales down 84.0% to euro 34 million) and in Western Europe (sales down 73.3% to euro 51 million). First-half sales of Taxotere® were euro 586 million, down 49.1%, 44.2% of which (euro 259 million) was generated outside the U.S. and Western Europe.
Jevtana® (cabazitaxel) recorded second-quarter net sales of euro 48 million. Sales in the U.S. reached euro 35 million. Jevtana® was launched in Germany and France in Q2 2011 and generated sales in Western Europe of euro 9 million.
Worldwide presence(1) of Plavix®/Iscover®
The second quarter worldwide presence of Plavix® was euro 1,767 million, up 11.1%, reflecting strong growth in the U.S. (sales were euro 1,215 million, up 16.9% - net sales consolidated by Bristol-Myers Squibb), Japan (+21.7% to euro 162 million), and China (+28.1% to euro 72 million). Sales in Europe were euro 149 million, down 29.8% due to generic competition. The first half worldwide presence of Plavix® reached euro 3,501 million, an increase of 5.9%. Consolidated sales in Japan and China were euro 301 (up 24.6%) and euro 132 million (up 29.5%), respectively.
(9) World excluding the U.S. and Canada, Western Europe, Japan, Australia and New Zealand
(1) See Appendix 10 for definitions of financial indicators
Worldwide presence of Plavix®/Iscover®: geographic split
(millions of euros)
Q2 2011
Change at
constant
exchange rates
H1 2011
Change at
constant
exchange rates
Europe
149
-29.8%
302
-35.3%
United States
1,215
+16.9%
2,415
+12.2%
Other Countries
403
+16.3%
784
+13.1%
TOTAL
1,767
+11.1%
3,501
+5.9%
Worldwide presence(1) of Aprovel®/Avapro®/Karvea®/Avalide®
The second quarter worldwide presence of Aprovel® was euro 469 million, down 8.2%, impacted by growing penetration of losartan generics. The performance in "Other Countries" was supported by sales of the active ingredient to our Japanese partners. Consolidated sales of Aprovel® in Emerging Markets grew by 11.6% to euro 95 million in the quarter. The first half worldwide presence of Aprovel® was euro 951 million, a decrease of 8.9%. Consolidated sales in Emerging Markets increased by 11.4% to euro 188 million.
Worldwide presence of Aprovel®/Avapro®/Karvea®: geographic split
(millions of euros)
Q2 2011
Change
constant
exchange rates
H1 2011
Change at
constant
exchange rates
Europe
212
-13.1%
420
-14.4%
United States
93
-21.1%
209
-17.3%
Other Countries
164
+10.2%
321
+7.3%
TOTAL
469
-8.2%
951
-8.9%
Other Pharmaceutical Products
Net sales of Lovenox® reached euro 536 million, down 34.8% in the second quarter, reflecting additional loss of market share against generic competition versus the first quarter of 2011 in the U.S. (U.S. sales were euro 160 million, down 64.7%). Lovenox® delivered sustained performance outside the U.S. as sales increased 9.8% in Western Europe (to euro 212 million) and 9.6% in Emerging Markets (to euro 142 million). First-half sales of Lovenox® were euro 1,119 million, down 30.9%, 65.9% of which (euro 737 million) was generated outside the U.S. (up 7.5%).
Multaq® recorded net sales of euro 68 million in the second quarter, of which euro 47 million was generated in the U.S. and euro 17 million in Western Europe. First-half sales of Multaq® were euro 131 million of which euro 91 million was generated in the U.S. and euro 34 million in Western Europe.
In January 2011, Sanofi issued a Dear Health Care Provider Letter worldwide. The regulatory agencies also issued a Drug Safety Communication on hepatic events reported in patients treated with Multaq®. The revised product information was updated accordingly. Sanofi announced in July that the company has discontinued the PALLAS Phase IIIb trial in patients with permanent Atrial Fibrillation (AF). It was a seeking indication trial. Multaq® (dronedarone) is currently approved in non permanent AF patients. The decision follows recommendations from the study's Operations Committee and the Data Monitoring Committee which observed a significant increase in cardiovascular events in the dronedarone arm. The decision to terminate the study was not related to any hepatic adverse event. The benefit/risk assessment of Multaq® by the agencies is ongoing.
Net sales of the Ambien® family of products were euro 116 million in the second quarter, down 45.5% due to the generic competition of Ambien®CR in the U.S. (sales decreased by 91.1% to euro 9 million). In Japan, Myslee®, the leading treatment for insomnia on the market, showed 7.7% growth to euro 65 million. First-half sales of the Ambien® family were euro 232 million of which euro 17 million was for Ambien®CR in the U.S. (down 92.1%). Sales of Myslee® in Japan reached euro 129 million, up 10.8%.
Allegra® as a prescription drug recorded euro 119 million of net sales in the second quarter led by the performance in Japan (up 22.8% to euro 88 million) sustained locally by a strong allergy season. Allegra® moved to the OTC market in the U.S. in March 2011 (sales booked in CHC). First-half sales of Allegra® were euro 335 million, 81.8% of which (euro 274 million) was generated in Japan and increased by 34.1%.
Second-quarter net sales of Copaxone® were euro 119 million, down 9.9%, reflecting the end of the co-promotion agreement in certain countries notably the U.K. in the fourth quarter of 2010. First-half sales of the product reached euro 233 million, down 11.8%.
In the arbitration proceeding between Sanofi and Warner Chilcott, an arbitration panel decided on July 14, 2011 that the termination by Warner Chilcott of an ancillary agreement did not give rise to the termination of the Actonel® Alliance. Following this decision, the Alliance remains in force until January 1, 2015.
In July, Sanofi announced the strategic divestiture of its dermatology business, Dermik, to Valeant Pharmaceuticals International for a total cash consideration of U.S. $425 million. The scope of this transaction includes Dermik assets, which consist of an aesthetic and therapeutic business in the United States and Canada, as well as an aesthetic business around the world with sales of U.S. $206 million in 2010. Sanofi decided to divest its dermatology business with the intention of further focusing on its growth platforms. The closing of the transaction is subject to customary conditions, including clearance by certain antitrust authorities.
Genzyme(10)
(euro million)
Q2 2011
net sales
Change on a constant
structure basis and at
constant exchange rates
Cerezyme®
166
+58.3%
Myozyme® / Lumizyme®
99
+42.0%
Fabrazyme®
30
+3.5%
Renagel®/Renvela®
137
+14.6%
Synvisc®
89
+17.2%
Total Genzyme
796
+16.0%
Second-quarter net sales of Genzyme reached euro 796 million, an increase of 16.0%.
Net sales of Cerezyme® were euro 166 million in the second quarter, an increase of 58.3%. Overall market share in the second quarter remained stable from the first quarter of 2011. The second quarter of 2011 benefited from greater product availability compared to the first quarter of 2011, particularly in Europe and Japan, where production delays affected patient dosing schedules in the first quarter. Cerezyme® sales also benefited from shipment timing in Latin America related to tender processes.
Net sales of Myozyme®/Lumizyme® were euro 99 million, an increase of 42.0%. Growth in the second quarter was driven by continued growth of Lumizyme® in the U.S. and volume growth from patient accruals in Europe.
Net sales of Fabrazyme® in the second quarter were euro 30 million (up 3.5% versus Q2 2010), reflecting continued supply constraints.
Sales of Renvela®/Renagel® were euro 137 million in the second quarter, an increase of 14.6%, driven by U.S. market share growth and the continued European adoption of Renvela® through penetration of the market for chronic kidney disease.
Net sales of Synvisc®/Synvisc One® were euro 89 million up 17.2% supported by recent launch in Japan and growing uptake of Synvisc One®.
(10) sales growth of Genzyme are stated on a constant structure basis and at constant exchange
Consumer Health Care
Sales of the Consumer Health Care (CHC) business increased by 17.6% to euro 644 million in the second quarter reflecting the success of the launch of Allegra® OTC in the U.S. (sales of euro 63 million) by Chattem and the positive impact from acquisitions (mainly BMP Sunstone in China). First-half sales of CHC totaled euro 1,356 million, up 28.1%. First-half sales of Allegra® OTC in the U.S. reached euro 143 million.
Generics
The generics business recorded sales of euro 434 million in the second quarter, an increase of 17.6%, led by sales of authorized generics of Taxotere® (sales of euro 24 million) and Ambien®CR (sales of euro 15 million) in the U.S. and losartan. Sales in Emerging Markets reached euro 279 million, up 13.8% supported by the roll out of Medley products in additional countries in Latin America (+21.7%). In the U.S., sales increased by 85.7% to euro 34 million boosted by recently launched authorized generics. First-half sales of the generics business grew by 17.3% to euro 848 million.
Human Vaccines
Second-quarter consolidated net sales for the Human Vaccines business totaled euro 706 million, an increase of 3.4%, excluding A/H1N1 influenza vaccine sales (or 2.5% including A/H1N1 sales). Growth from 2010 was impacted by the timing of 2010 Southern Hemisphere seasonal influenza sales shipped in Q2 2010. First-half consolidated net sales for the Human Vaccines business were euro 1,308 million, an increase of 6.0% excluding A/H1N1 influenza vaccine sales booked in the first half 2010, or a decline of 20.3% including A/H1N1 vaccines sales.
Seasonal influenza vaccine sales were euro 57 million in the second quarter, down 21.1% due to timing of Southern Hemisphere seasonal influenza sales in the second quarter of 2010. First-half sales were very strong for seasonal influenza vaccine, which recorded sales of euro 158 million, an increase of 41.6% due to strong Southern Hemisphere seasonal sales. In May, Fluzone® Intradermal was approved by the FDA as the first influenza vaccine licensed in the U.S. that uses a novel microinjection system for intradermal delivery.
Second-quarter sales of Polio/Pertussis/Hib vaccines were euro 267 million, up 1.8%. Pentaxim® sales reached euro 65 million, an increase of 36.8% reflecting strong performance in Emerging Markets. In May, Pentaxim® was launched in China which is the first 5-in-1 combination vaccine in this country to immunize against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b. First-half Polio/Pertussis/Hib vaccines sales reached euro 494 million, up 4.1%, including euro 121 million of Pentaxim® sales (+29.7%) and euro 150 million of Pentacel® sales (+5.7%).
Menactra® sales were euro 97 million in second quarter, down 1.4%. Menactra® showed strong resilience despite the introduction of a competitive offering and the declining catch-up cohort in the U.S. adolescent population. Additionally, Menactra® declines were offset slightly by uptake of the ACIP (Advisory Committee on Immunization Practices) recommended booster dose for adolescents in the U.S. In April, the FDA has granted licensure to expand the indication for Menactra® to include a two-dose schedule for infants and children 9 months through 23 months of age. In June, the ACIP recommended that children as young as 9 months old who are at high risk for meningococcal disease should be vaccinated with the quadrivalent meningococcal vaccine. First-half sales of Menactra® were euro 139 million, down 15.9%.
Second-quarter adult boosters net sales increased by 9.8% to euro 110 million, sustained by the performance of Adacel® (sales of euro 68 million, up 7.3%). First-half sales of adult boosters reached euro 206 million, an increase of 15.6%, including euro 131 million of Adacel® sales (+ 21.6%).
Net sales of Travel and other endemic vaccines were euro 90 million in the second quarter, down 7.9% primarily due to lower sales of Hepatitis A and Yellow fever vaccines over the period. First-half sales of Travel and other endemic vaccines reached euro 171 million, down 10.9%, also reflecting lower sales of rabies vaccines in the first quarter.
Consolidated vaccines sales
(millions of euros)
Q2 2011
net sales
Change at
constant
exchange rates
H1 2011
net sales
Change at
constant
exchange rates
Influenza Vaccines (incl. Vaxigrip® and Fluzone®)
57
-26.8%
158
-69.9%
of which seasonal vaccines
57
-21.1%
158
+41.6%
of which pandemic vaccines
0
-100.0%
0
-100%
Polio/Pertussis/Hib Vaccines (incl. Pentacel® and Pentaxim®)
267
+1.8%
494
+4.1%
Meningitis/Pneumonia Vaccines (incl. Menactra®)
121
+0.2%
183
-12.6%
Adult Booster Vaccines (incl. Adacel ®)
110
+9.8%
206
+15.6%
Travel and Other Endemics Vaccines
90
-7.9%
171
-10.9%
Other Vaccines
61
+85.3%
96
+39.9%
TOTAL
706
+2.5%
1,308
-20.3%
Net sales of Sanofi Pasteur MSD (not consolidated by Sanofi), the joint venture with Merck & Co in Europe, recorded second quarter net sales of euro 170 million, down 7.3% on a reported basis. Gardasil® sales were euro 47 million, down 26.1% on a reported basis. First-half net sales of Sanofi Pasteur MSD were euro 308 million (-14.9% on a reported basis), reflecting a decrease in Gardasil® sales (-26.9% on a reported basis to euro 89 million).
Animal Health
Second-quarter net sales of Merial were euro 496 million, an increase of 1.1%. First-half net sales were euro 1,090 million, an increase of 6.7%, and were driven by the performance of production animal sales.
Sales of the companion animals segment were euro 323 million in the second quarter (down 0.3%), reflecting a 6.8% decrease of Frontline® family sales due to a strong early spring campaign in the U.S. in the first quarter. The Frontline® family of products delivered a good performance in the second quarter in Western Europe and in Emerging Markets with a sales increase of 9.3% (euro 58 million) and 9.5% (euro 23 million), respectively. First-half sales of the companion animal segment were euro 733 million, an increase of 5.2%, reflecting the record performance of the Frontline® family (up 4.7% to euro 459 million).
At the end of June, the U.S. District Court for the Middle District of Georgia found Velcera and Cipla Ltd. in contempt of a previous court order by acting in concert to develop and sell PetArmorTM Plus products. Finding that these actions violated Merial's U.S. patent covering Frontline Plus®, the court barred those two companies from further sales of these products in the U.S. and ordered the seizure of any existing inventory in the U.S. This decision is temporally stayed pending appeal.
In July, Merial launched a new combination parasiticide, Certifect®, in the U.S. which is a new topical flea and tick control product for dogs.
Sales of the production animals segment reached euro 173 million (up 3.7%) in the second quarter, led by the good performance of the Ruminant and Avian segments. First-half sales of this segment were euro 357 million, an increase of 10.0%. In July, Merial launched Zactram® (gamithromycin) for bovine respiratory disease.
Emerging Markets grew by 9.8% in the second-quarter (to euro 129 million) led by the Ruminant segment. First-half sales in Emerging Markets were euro 245 million, up 16.2%, led by the Ruminant segment and Avian segments which was boosted by the success of the vaccine Vaxxitex®.
Net sales by geographic region
(millions of euros)
Q2 2011
net sales
Change at
constant
exchange rates
H1 2011
net sales
Change at
constant
exchange rates
United States
2,416
+3.3%
4,580
+0.3%
Western Europe*
2,380
+0.9%
4,631
-6,4%
Emerging Markets**
2,533
+12.3%
4,919
+4.9%
of which Eastern Europe and Turkey
687
+4.6%
1,350
+2.0%
of which Asia
581
+18.1%
1,152
+13.1%
of which Latin America
798
+20.3%
1,481
+1.4%
of which Africa
238
+7.8%
470
+8.8%
of which Middle East
204
+6.0%
418
+5.9%
Rest of the world***
1,020
+18.8%
1,998
+14.4%
of which Japan
699
+26.6%
1,368
+20.4%
TOTAL
8,349
+6.9%
16,128
+1.0%
* France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark
** World less the U.S. and Canada, Western Europe, Japan, Australia and New Zealand
*** Japan, Canada, Australia and New Zealand
Second quarter net sales in Emerging Markets were euro 2,533 million, an increase of +7.1% excluding Genzyme and A/H1N1 vaccines (+6.9% excluding Genzyme). BRIC countries grew by +14.8% excluding Genzyme and A/H1N1 vaccines. Asia (excluding Pacific region) and Latin America delivered double digit sales growth. Sales in China reached euro 230 million, an increase of 41.4% (+39.0% excluding Genzyme) and were supported by strong performances for Plavix® (+28.1% to euro 67 million) and Lantus® (+50.6%) and the contribution from BMP Sunstone. Sales in Brazil increased by 16.7% to euro 386 million, due to strong performance from generics and the contribution from Genzyme. Sales in Russia were euro 184 million, up 7.7%. Sales in Eastern Europe were euro 687 million, up 4.6% (-1.0% excluding Genzyme) and were impacted by a decrease in sales in Turkey due to generic competition for Taxotere®. First-half sales in Emerging Markets were euro 4,919 million, an increase of 10.5% excluding Genzyme and A/H1N1 vaccines (euro 361 million, primarily in Latin America and Middle East), or an increase of 2.2% excluding Genzyme.
Japan recorded net sales of euro 699 million in the second quarter, an increase of 26.6% (+14.3% excluding Genzyme), sustained by Plavix® (up 21.7% to euro 162 million), Allegra® (22.8% to euro 88 million) and vaccines (+63.9%) and the contribution from Genzyme. First-half sales in Japan were euro 1,368 million, (up 20.4%, or up 14.0 % excluding Genzyme) of which euro 301 million were generated by Plavix® (+24.6%) and euro 274 million by Allegra® (+34.1%), respectively.
Second quarter net sales in the U.S. reached euro 2,416 million, an increase of 3.3%, reflecting the acquisition of Genzyme (sales of euro 379 million). Excluding Genzyme, sales in the U.S. were down 12.9%. This decrease reflected the impact of generics of Taxotere®, Lovenox® and Ambien®CR, which was partially offset by sales of Allegra® OTC, Jevtana® and Multaq® and strong growth of Lantus®. First-half sales in the U.S. were euro 4,580 million (up 0.3 % and down 8.6% excluding Genzyme).
Western Europe achieved second-quarter net sales of euro 2,380 million, an increase of 0.9%. This figure included sales of Genzyme of euro 219 million. Excluding Genzyme, sales in Western Europe were down 9.4%, reflecting generic competition for Taxotere® and Plavix®, as well as the impact of austerity measures. First-half sales in this region were euro 4,631 million (down 6.4% and down 11.5% excluding Genzyme).
R&D update
Since the last R&D update on April 28, significant progress in the portfolio was achieved with positive Phase III data announcements for LemtradaTM (alemtuzumab) in patients with relapsing remitting multiple sclerosis, ZaltrapTM (aflibercept) in second line metastatic colorectal cancer, Lyxumia® (lixisenatide) in Type II diabetes and VisamerinTM / MulsevoTM (semuloparin) for the prevention of venous thrombo-embolism events in cancer patients initiating a chemotherapy regimen. Several compounds entered Phase I or Phase II and additional partnerships were also signed over the period.
As a result of the number of positive Phase III trial results obtained since the beginning of the year, filings for 6 products are now expected over the next 3 quarters:
KynamroTM (mipomersen) - licensed from Isis Pharmaceuticals Inc - U.S. filing for the homozygous familial hypercholesterolemia (hoFH) indication is expected in the fourth quarter of this year. A Marketing Authorisation Application (MAA) for Mipomersen was submitted to the European Medicines Agency in July for the treatment of patients with hoFH and severe heterozygous familial hypercholesterolemia (heFH).
Visamerin®/Mulsevo® (semuloparin) in the EU and U.S. in the third quarter of 2011 for the prevention of Venous Thrombo-Embolism events in cancer patients initiating a chemotherapy regimen.
AubagioTM (teriflunomide) in the U.S. in Q3 2011 for the treatment of relapsing multiple sclerosis. Filing in the EU is expected in the first quarter of 2012.
ZaltrapTM (aflibercept) - alliance with Regeneron - in the U.S. in the third quarter and in EU in the fourth quarter of 2011 in second line metastatic colorectal cancer.
Lyxumia® (lixisenatide) - licensed from Zealand Pharma - in the EU in the fourth quarter of 2011 for the treatment of type 2 diabetes.
LemtradaTM (alemtuzumab(11)) is expected to be filed in the U.S. and EU in the first quarter of 2012 for relapsing remitting multiple sclerosis. The product has been granted fast track designation by the FDA.
At the end of July, the R&D portfolio comprises 65 NME (New Molecular Entities) projects and vaccines in clinical development of which 17 are in Phase III or have been submitted to the health authorities for approval.
Evolution of the late stage portfolio:
In May, Sanofi announced the Phase III results of GetGoal-L of the GetGoal program assessing the efficacy and safety of Lyxumia® (lixisenatide) - licensed from Zealand Pharma -, a once-daily GLP-1 receptor agonist, as an add-on to basal insulin (in association with or without metformin) in patients with Type 2 diabetes. This study achieved its primary efficacy endpoint of significantly reducing HbA1c versus placebo for patients with Type 2 diabetes without significantly increasing their risk of hypoglycemia.
GetGoal-L is one of nine studies in the GetGoal Phase III clinical program, and the second trial to investigate the benefits of lixisenatide 20μg once-daily combined with basal insulin.
In May, at the American Diabetes Association, results of two other Phase III studies from the GetGoal program were presented:
GetGoal-X: This study showed that once-daily Lyxumia® demonstrates non-inferior reduction of blood glucose and less hypoglycemia versus exenatide twice daily in Type 2 diabetes patients.
GetGoal-L Asia: This study demonstrated that Lyxumia® significantly improves glycemic control in asian patients with Type 2 diabetes insufficiently controlled on basal insulin + or - sulfonylurea.
(11) Genzyme is developing alemtuzumab in Multiple Sclerosis in collaboration with Bayer HealthCare
Thus, four positive Phase III studies of the GetGoal clinical trial program (GetGoal MONO, GetGoal L-ASIA, GetGoal-X and GetGoal-L) have now been released and all met their primary HbA1c endpoint and confirmed the efficacy and safety profile of Lyxumia®, once-daily, in patients with Type 2 diabetes. Most remaining studies of the GetGoal program are expected to be completed by the end 2011. Regarding the development of the combination of lixisenatide / Lantus®, the group expects to be in a position to start Phase III in early 2013 with the device intended for commercial use.
In early June, Sanofi and Regeneron announced that the Phase III VELOUR trial showed that the investigational agent ZaltrapTM (aflibercept) significantly improved survival in previously treated metastatic colorectal cancer patients. Results from VELOUR trial were presented at the ESMO World Congress on Gastrointestinal Cancer in June, and demonstrated that the addition of ZaltrapTM to the FOLFIRI regimen significantly improved both overall survival and progression-free survival in patients with metastatic colorectal cancer previously treated with oxaliplatin.
In addition to VELOUR, the development program of ZaltrapTM includes one Phase III trial and one Phase II trial, both of which are fully enrolled:
VENICE: First-line treatment for hormone-refractory metastatic prostate cancer in combination with docetaxel and prednisone (Phase III). In July, Regeneron announced that the VENICE study will continue to completion as planned, with no modifications due to efficacy or to safety concerns. This decision is based on a recent recommendation of an independent Data Monitoring Committee (DMC) following a planned interim analysis.
AFFIRM: First-line treatment in metastatic colorectal cancer in combination with FOLFOX regimen (Phase II). Final results are expected during the second half of 2011.
Results of the SAVE-ONCO study which assessed the efficacy and safety of Visamerin®/Mulsevo® (semuloparin) for the prevention of symptomatic deep vein thromboembolism (DVT), non-fatal Pulmonary Embolism (PE) and venous thromboembolism (VTE) - related death in cancer patients initiating a chemotherapy regimen were presented in June in an oral presentation at the Annual Meeting of the American Society of Clinical Oncology (ASCO), and were selected for the Best of ASCO. In this placebo control study, semuloparin significantly reduced the risk of the composite of DVT, non-fatal PE or VTE-related death by 64%, meeting the study primary endpoint. Semuloparin reduced the risk of this type of veinous thromboembolism event without increasing the incidence of major bleeding.
In June, new data for iniparib (BSI-201), an investigational agent, in metastatic triple-negative breast cancer (mTNBC) and recurrent ovarian cancer was presented at the Annual Meeting of the American Society of Clinical Oncology (ASCO):
In a pre-planned sub-group analysis of the Phase III randomized, open-label trial investigating the use of gemcitabine and carboplatin with or without iniparib in mTNBC, the subgroup of patients in the 2nd and 3rd line settings exhibited a median PFS (Progression-Free Survival) of 4.2 months in the iniparib arm, compared to 2.9 months in the chemotherapy alone arm (HR=0.67, 95% CI [0.5, 0.92]) and a median OS (Overall Survival) of 10.8 months vs. 8.1 months (HR=0.65, 95% CI [0.46, 0.91]). As previously reported, the study did not reach statistical significance for the co-primary endpoints of OS or PFS.
Data from preliminary analysis of two ongoing multi-center, single-arm Phase II trials evaluating gemcitabine and carboplatin in combination with iniparib in recurrent ovarian cancer showed an ORR (Overall Response Rate, complete plus partial responses) of 65% in 40 evaluable platinum-sensitive patients and of 25% in 32 evaluable platinum-resistant patients.
In early July, data from a randomized Phase II study in advanced NSCLC (non-small cell lung cancer) were presented during the World Congress on Lung Cancer. The trial, which evaluated gemcitabine/cisplatin/iniparib vs. gemcitabine/cisplatin in previously untreated patients with stage IV NSCLC, did not meet the primary endpoint of improvement in objective response rate. Mature progression-free survival and overall survival data - secondary endpoints - will be available early 2012. The Phase III trial for patients with squamous NSCLC is ongoing. In addition, activities are being conducted in the biomarker and translational medicine research area.
Additional analyses from Phase III studies of KynamroTM (mipomersen) were presented at the European Atherosclerosis Society (EAS) Congress. Data from two randomized, placebo-controlled Phase III trials in patients with heFH showed that mipomersen reduced Lp(a), LDL-Cholesterol, and other measures of atherogenic lipoproteins when added to existing lipid-lowering therapy. Lp(a) is an independent risk factor for heart disease and cardiovascular events. A presentation also focused on mipomersen's potential to reduce the necessity for lipid-apheresis by lowering LDL-Cholesterol values below thresholds for apheresis eligibility.
Sanofi and its subsidiary Genzyme announced in July positive top-line results from CARE-MS I, the first of two randomized, Phase III clinical trials comparing the investigational drug LemtradaTM (alemtuzumab) to the approved multiple sclerosis therapy Rebif® in patients with relapsing remitting multiple sclerosis (RRMS). In the CARE-MS I trial, two annual cycles of alemtuzumab treatment resulted in a 55 percent reduction in relapse rate compared to Rebif® over the two years of the study (p<0.0001), hence satisfying the first primary endpoint, and therefore meeting the predefined protocol criteria for declaring the study a success. Statistical significance was not achieved for the second primary endpoint, time to six month sustained accumulation of disability, as compared to Rebif®. At the two year time point, 8 percent of alemtuzumab treated patients had a sustained increase in their Expanded Disability Status Scale (EDSS) score (or worsening) as compared to 11 percent of those who received Rebif® (Hazard Ratio=0.70, p=0.22). The safety profile was consistent with the Phase II clinical trial experience.
A second Phase III clinical trial, CARE-MS II, is currently underway, evaluating alemtuzumab against Rebif® in relapsing-remitting multiple sclerosis patients who have relapsed while on therapy. Top-line results from this trial are expected in the fourth quarter of 2011.
In July, Sanofi and Regeneron announced results from Phase IIb trials in rheumatoid arthritis (RA) and ankylosing spondylitis (AS) with sarilumab (REGN88/SAR153191), a novel, high-affinity, subcutaneously administered, fully-human antibody targeting the interleukin-6 receptor (IL-6R). The Phase IIb MOBILITY trial in rheumatoid arthritis demonstrated at 12 weeks that patients treated with sarilumab in combination with a standard RA treatment, methotrexate, achieved a significant and clinically meaningful improvement in signs and symptoms of moderate-to-severe RA compared to patients treated with methotrexate alone. In the Phase IIb ALIGN trial in ankylosing spondylitis (AS), sarilumab did not demonstrate significant and clinically meaningful improvements in signs and symptoms of active AS compared to placebo in patients who had inadequate response to NSAIDs (nonsteroidal anti-inflammatory drugs).
The Phase III study evaluating the efficacy of Jevtana® (cabazitaxel) in first line prostate cancer started enrolling patients during the quarter.
Evolution of the early stage portfolio:
Four compounds entered Phase I:
SAR125844, a Met Kinase inhibitor in oncology;
SAR407899, a RHO Kinase inhibitor for diabetic nephropathy;
SAR126119, a TAFIa inhibitor for Acute Ischemic Stroke, back up of SAR104772, currently in Phase I.
SAR339658/GBR500, a monoclonal antibody to treat Crohn's Disease and other chronic autoimmune disorders, entered into the portfolio in Phase I with the license agreement signed with Glenmark Pharmaceuticals S.A.
Based on negative Phase IIb data, the development of celivarone has been discontinued for the prevention of shocks and major clinical outcomes in patients with implanted cardiac defibrillator.
Several regulatory milestones were reached during the period for vaccines:
In May, the FDA approved the biologics license application for the Fluzone® Intradermal vaccine. Fluzone® Intradermal is indicated for active immunization of adults 18 through 64 years of age against influenza disease caused by influenza virus subtypes A and B contained in the vaccine. Fluzone® Intradermal is the first influenza vaccine licensed in the U.S. that uses a novel microinjection system for intradermal delivery.
In July, Sanofi Pasteur started the licensure process of HexaximTM, the only ready to use 6-in-1 vaccine to protect infants against diphtheria, tetanus, pertussis, hepatitis B, poliomyelitis and invasive infections caused by haemophilus influenzae type b. A Common Technical Document (CTD) was submitted to the European Medicine Agency following the "Article 58" procedure for evaluation of medicinal products intended exclusively for markets outside the European Union.
Several partnerships were also signed:
A license agreement with Glenmark Pharmaceuticals S.A. was announced in May for the development and commercialization of GBR500, a novel monoclonal antibody to treat Crohn's Disease and other chronic autoimmune disorders. GBR500 is an antagonist of the VLA-2 (alpha2-beta1) integrin. GBR500 has completed a Phase I dosing study in the US and has been well tolerated with a good pharmacokinetic profile.
An alliance agreement was signed in May with Medicines for Malaria Venture (MMV) to research malaria treatments. The first research project agreement within the framework of the alliance was also announced.
A three-year research collaboration agreement was announced in May with Drugs for Neglected Diseases initiative (DNDi) for the research of new treatments for nine neglected tropical diseases, listed by the World Health Organization (WHO) for which new, adapted, and efficient tools are urgently needed to treat patients in endemic countries.
A two-year research collaboration with the biopharmaceutical company Audion Therapeutics started in June to develop potential treatments for hearing loss through the optimization of small molecules by using a regenerative medicine approach. Under the terms of the agreement, Sanofi has an option to license technology rights from Audion related to research conducted under the collaboration.
A research collaboration with Weill Cornell Medical College was announced in June to identify new anti-infectives that aim to shorten the course of treatment of tuberculosis (TB) and could provide effective therapies against drug-susceptible and drug-resistant strains of TB.
An exclusive research collaboration agreement and option for license with Rib-X Pharmaceuticals, Inc. for novel classes of antibiotics resulting from Rib-X's RX-04 program for the treatment of resistant Gram-positive and resistant Gram-negative pathogens.
Second-quarter financial results
Business Net Income(1)
Second quarter net sales of Sanofi were euro 8,349 million, up 0.5% on a reported basis. At constant exchange rates, sales were up 6.9%, reflecting the acquisition of Genzyme (euro 796 million) and the impact from U.S. health- care reform, EU austerity measures, and the loss of euro 778 million of sales due to generic competition. "Other revenues" were euro 422 million, an increase of 2.4%, reflecting growth of Plavix® in the U.S. partially offset by an unfavorable dollar effect.
Gross profit reached euro 6,183 million, up 1.8% at constant exchange rates or down 5.0% on a reported basis. The ratio of cost of sales to net sales was 31.0%, 4.4 percentage points higher than in Q2 2010, but close to Q1 2011 level (30.4%), mainly due to the impact of generic competition (accounted for 2.5 percentage points) as well as exchange rate impact.
Research and development expenses were euro 1,197 million, an increase of 7.0% (or 12.6% at constant exchange rates). Excluding Genzyme, R&D expenses decreased 1.0% at constant exchange rates. The ratio of R&D expenses to net sales was 14.3%, up 0.8 percentage point versus the second quarter of 2010.
Selling and general expenses reached euro 2,268 million, an increase of 6.7% (or 13.3% at constant exchange rates). Excluding Genzyme, SG&A expenses were stable (+0.1%) at constant exchange rates and included the global roll-out costs of Jevtana® in EU, investment in Allegra® OTC in the U.S. and increased promotional effort on Lantus® in the U.S. The ratio of selling and general expenses to net sales was 27.2%, 1.6 percentage points higher than Q2 2010.
Other current operating income net of expenses showed a net income of euro 7 million versus net income of euro 27 million in the second quarter of 2010 and included euro 23 million of fees related to the acquisition of Genzyme. This line also includes a slight foreign exchange gain attributable to the hedging policy, compared with a loss in Q2 2010.
The share of profits from associates reached euro 278 million, up 12.1% compared to Q2 2010. The share of after-tax profits from the territories managed by BMS under the Plavix® and Avapro® alliance was euro 274 million up 11.3%, driven by the performance of Plavix® in the U.S.
Net income attributable to non-controlling interests was euro 58 million, down 17.1%. The pre-tax profits paid to BMS from territories managed by Sanofi declined by 19.7% to euro 53 million as a result of competition from clopidogrel generics in Europe.
Business operating income was euro 2,945 million, a decrease of 15.2%, or down 9.5% at constant exchange rates.
Net financial expenses were euro 100 million, compared to euro 95 million, reflecting the low funding cost for the acquisition of Genzyme. The average gross debt increased by euro 11.2 billion (to euro 20.5 billion) compared to Q2 2010, and the cost of the debt was reduced by 2.1 percentage point to 2.0% over the same period.
The effective tax rate was 26.5%, compared to 28.1% in Q2 2010. This decrease is due to lower expected full year tax rate, reflecting positive effect from countries with lower tax rate.
Business net income(1) was euro 2,150 million, down 13.2%. At constant exchange rates, business net income was down 7.0%.
Business earnings per share(1) (EPS) was euro 1.64, down 13.7% versus the 2010 second quarter figure. At constant exchange rates, business earnings per share(1) decreased by 7.4%.
(1) See Appendix 10 for definitions of financial indicators, and Appendix 6 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi
First-half 2011 financial results
Business Net Income(1)
First-half net sales of Sanofi were euro 16,128 million, a decrease of 0.5% on a reported basis. At constant exchange rate, sales increased 1.0%, reflecting the consolidation of Genzyme from April 1st and the impact from U.S. health care reform, EU austerity measures, and the loss of euro 1,347 million of sales due to generic competition. "Other revenues" reached euro 835 million, up 3.5%, positive impact from Plavix® growth in the U.S. (+12.2%) was partially offset by an unfavorable U.S. dollar impact.
Gross profit reached euro 12,013 million, a decrease of 4.9% or 3.0% at constant exchange rates. The ratio of cost of sales was 30.7%, 3.6 percentage points higher, mainly due to the impact of generic competition.
Research and development expenses were euro 2,297 million, up 1.4% or 3.2% at constant exchange rates. Excluding Genzyme, R&D expenses were down 3.5% at constant exchange rates reflecting the benefit from reorganization put in place in the recent years. The ratio of R&D expenses to net sales was 14.2%, 0.2 percentage point higher than in H1 2010.
Selling and general expenses reached euro 4,201 million, up 6.0% or 7.9% at constant exchange rates. Excluding Genzyme, SG&A expenses were up 0.8% at constant exchange rates, reflecting launching costs for Jevtana® in EU, and Allegra® in the U.S. on the OTC market and higher promotional effort on Lantus® in the U.S. as well. The ratio of selling and general expenses to net sales was 26.0%, compared to 24.5% in H1 2010.
Other current operating income net of expenses was an income of euro 23 million versus an income of euro 102 million in H1 2010 which included a euro 87million payments in Q1 2010 received from Teva on sales of Copaxone® in North America (theses payments ceased at the end of Q1 2010). This line also includes a slight foreign exchange gain attributable to the hedging policy, compared to a loss in 2010.
The share of profits from associates was euro 570 million, up 16.1% compared to H1 2010, due to a 15.4% rise in the share of after-tax profits from the territories managed by BMS under the Plavix® and Avapro® alliance (euro 548 million).
Net income attributable to non-controlling interests was euro 136 million, down 8.1% due to competition from clopidogrel generics in Europe (profits paid to BMS from territories managed by Sanofi were euro 125 million, down 8.8%).
Business operating income reached euro 5,972 million, a decrease of 12.7%, or 12.4% at constant exchange rates.
Net financial expenses were euro 178 million versus euro 140 million in H1 2010, despite the acquisition of Genzyme. Net financial expenses also included a capital gain of euro 47 million on the sale of the stake in Novexel booked in the first quarter 2010.
First-half effective tax rate was 27.5% compared with 28.2% in H1 2010.
Business net income(1) was euro 4,320 million, a decrease of 11.9%, or 11.5% at constant exchange rates. The ratio of business net income(1) to net sales was 26.8% compared to 30.3% in H1 2010.
Business earnings per share(1) (EPS) was euro 3.30, a decrease of 12.2% over H1 2010 figure of euro 3.76. At constant exchange rates, business earnings per share(1) decreased by 11.7%.
(1) See Appendix 10 for definitions of financial indicators, and Appendix 6 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi
From business net income to consolidated net income (see Appendix 6)
In H1 2011, the main reconciling items between business net income and consolidated net income attributable to equity holders of Sanofi were:
A euro 1,701 million amortization charge against intangible assets arising on the application of purchase accounting to acquired companies (primarily Aventis: euro 1,059 million, Genzyme: euro 242 million and Merial euro 165 million) and to acquired intangible assets (licenses/products: euro 94 million). The second quarter amortization charge against intangible assets was euro 965 million (primarily Aventis: euro 523 million, Genzyme euro 242 million and Merial euro 84 million), euro 44 million of which related to acquired intangible assets (licenses/products). This item has no cash impact on the Group.
An impairment loss against intangible assets of euro 69 million (including euro 37 million in the second quarter related to several products). This item has no cash impact on the Group.
A charge of euro 66 million reflecting an increase in the fair value of contingent considerations related to TargeGen business combination (euro 47 million), and Genzyme including the impact of Bayer contingent consideration (euro 14 million) and the CVR (euro 5 million).
A charge of euro 264 million arising from the workdown of inventories of acquired companies remeasured at fair value due to the application of purchase accounting to acquisitions, of which euro 262 million in the second quarter (due to Genzyme). This item has no cash impact on the Group.
euro 467 million of restructuring costs (including euro 345 million in the second quarter related to continuing transformation of R&D, Industrial Affairs and Operations in Europe).
A non-recurring amortization charge of euro 517 million booked in Q1 2011 due to the change of plan for Merial assets that were previously classified as held for sale or exchange in accordance with IFRS5: this charge corresponds to the depreciation and amortization of Merial assets that would have been recognized for the period from September 18, 2009 to December 31, 2010, had these assets not been classified as held for sale or exchange. This item has no cash impact on the Group.
A euro 1,002 million tax effect arising from the items listed above, comprising deferred taxes of euro 559 million generated by amortization charged against intangible assets and by the non recurring amortization charge on Merial assets, euro 78 million by the workdown of inventories of acquired companies and euro 150 million linked to restructuring costs. The second quarter tax effect was euro 492 million, including euro 296 million of deferred taxes generated by amortization charged against intangible assets, euro 78 million by the workdown of inventories of acquired companies and euro 108 million linked to restructuring costs (see Appendix 6).
In "Share of profits/losses from associates", a charge of euro 14 million (of which euro 7 million in Q2 2011), net of tax, mainly relating to the share of amortization of intangible assets. This item has no cash impact on the Group.
Strong cash flow from operating activities in H1 2011 (See Appendices 8 and 9)
Net cash generated by operating activities after changes in working capital and before restructuring costs was euro 4,362 million, a decrease of 11.7% compared to H1 2010. This amount largely provided finance for capital expenditures (euro 768 million), the dividend paid by Sanofi (euro 1,372 million), repurchasing of shares (euro 113 million), and restructuring costs (euro 353 million). The acquisitions and partnerships made during the period (euro 13,999 million) were mainly Genzyme (euro 13,528 million) and BMP Sunstone (euro 363 million) and led to an increase of net debt from euro 1,577 million at December 31, 2010 to euro 13,231 million (debt of euro 19,793 million, net of euro 6,562 million cash and cash equivalents) at the end of the second quarter
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Limited review procedures on the half-year consolidated financial statements are complete. The limited review opinion is currently issuing"
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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 products candidates, the absence of guarantee that the products candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, the Group's ability to benefit from external growth opportunities 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, 2010. 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:
2011 second-quarter and 2011 first-half consolidated net sales by product
Appendix 2:
2011 second-quarter and 2011 first-half consolidated net sales by geographic region and product
Appendix 3:
Consolidated net sales by business segment
Appendix 4:
Net sales of Growth Platforms
Appendix 5:
2011 second-quarter and 2011 first-half business net income statement
Appendix 6:
Reconciliation of business net income to net income attributable to equity holders of Sanofi
Appendix 7:
2011 second-quarter and 2011 first-half consolidated income statement
Appendix 8:
Change in net debt
Appendix 9:
Simplified consolidated balance sheet
Appendix 10:
Definitions
Appendix 1: 2011 second-quarter and first-half consolidated net sales by product
(euro million)
Q2 2011
net sales
Change at constant
exchange rates
Change on a
reported basis
Lantus®
969
+14.5%
+4.6%
Apidra®
53
+29.5%
+20.5%
Insuman®
33
+3.0%
0.0%
Amaryl®
109
-9.5%
-13.5%
Total Diabetes
1,168
+12.4%
+3.5%
Lovenox®
536
-34.8%
-38.1%
Plavix®
510
-2.4%
-5.2%
Taxotere®
204
-64.5%
-65.9%
Aprovel®
343
+3.6%
+1.5%
Eloxatin®
248
+194.7%
+163.8%
Multaq®
68
+89.7%
+74.4%
Jevtana®
48
-
-
Stilnox®/Ambien®/Ambien CR®/Myslee®
116
-45.5%
-47.3%
Allegra®
119
-18.2%
-19.6%
Copaxone®
119
-9.9%
-9.2%
Tritace®
95
-6.6%
-10.4%
Depakine®
100
+7.3%
+4.2%
Xatral®
64
-9.1%
-16.9%
Actonel®
43
-31.3%
-32.8%
Nasacort®
31
-39.3%
-44.6%
Other Products
1,461
-3.9%
-7.3%
Consumer Health Care
644
+17.6%
+11.4%
Generics
434
+17.6%
+13.9%
Genzyme
796
ns
ns
Total Pharmaceuticals
7,147
+7.7%
+1.6%
Vaccines
706
+2.5 %
-5.6%
Animal Health
496
+1.1%
-5.3%
Total
8,349
+6.9%
+0.5%
Vaccines
(euro million)
Q2 2011
net sales
Change at constant
exchange rates
Change on a
reported basis
Polio/Pertussis/Hib Vaccines
267
+1.8%
-5.0%
Influenza Vaccines*
57
-26.8%
-30.5%
Meningitis/Pneumonia Vaccines
121
+0.2%
-9.7%
Adult Booster Vaccines
110
+9.8%
-1.8%
Travel and Other Endemics Vaccines
90
-7.9%
-10.9%
Other Vaccines
61
+85.3%
+60.5%
Total Vaccines
706
+2.5%
-5.6%
*Seasonal and pandemic influenza Vaccines
Animal Health
(euro million )
Q2 2011
net sales
Change at constant
exchange rates
Change on a
reported basis
Frontline® and other fipronil products
189
-6.8%
-14.1%
Vaccines
159
+4.4%
-0.6%
Avermectin
93
+9.9%
+2.2%
Other
55
+9.4%
+3.8%
Total
496
+1.1%
-5.3%
(euro million)
H1 2011
net sales
Change at constant
exchange rates
Change on a
reported basis
Lantus®
1,894
+13.9%
+10.4%
Apidra®
102
+25.3%
+22.9%
Insuman®
64
-4.5%
-4.5%
Amaryl®
217
-7.7%
-7.3%
Total Diabetes
2,281
+11.5%
+8.6%
Lovenox®
1,119
-30.9%
-31.6%
Plavix®
994
-8.4%
-7.4%
Taxotere®
586
-49.1%
-48.1%
Aprovel®
663
-0.3%
-0.3%
Eloxatin®
436
+185.6%
+172.5%
Multaq®
131
+114.3%
+107.9%
Jevtana®
96
-
-
Stilnox®/Ambien®/Ambien CR®/Myslee®
232
-48.8%
-47.4%
Allegra®
335
-1.6%
+5.0%
Copaxone®
233
-11.8%
-11.1%
Tritace®
194
-7.1%
-8.1%
Depakine®
196
+6.0%
+6.5%
Xatral®
129
-13.1%
-15.7%
Actonel®
91
-28.2%
-26.6%
Nasacort®
74
-26.9%
-28.8%
Other Products
2,940
-3.6%
-3.9%
Consumer Health Care
1,356
+28.1%
+26.8%
Generics
848
+17.3%
+17.1%
Genzyme
796
ns
ns
Total Pharmaceuticals
13,730
+3.3%
+1.9%
Vaccines
1,308
-20.3 %
-22.7%
Animal Health
1,090
+6.7%
+5.1%
Total
16,128
+1.0%
-0.5%
Vaccines
(euro million)
H1 2011
net sales
Change at constant
exchange rates
Change on a
reported basis
Polio/Pertussis/Hib Vaccines
494
+4.1%
+2.3%
Influenza Vaccines*
158
-69.9%
-70.3%
Meningitis/Pneumonia Vaccines
183
-12.6%
-18.3%
Adult Booster Vaccines
206
+15.6%
+10.8%
Travel and Other Endemics Vaccines
171
-10.9%
-11.4%
Other Vaccines
96
+39.9%
+29.7%
Total Vaccines
1,308
-20.3%
-22.7%
*Seasonal and pandemic influenza Vaccines
Animal Health
(euro million)
H1 2011
net sales
Change at constant
exchange rates
Change on a
reported basis
Frontline® and other fipronil products
459
+4.7%
+2.9%
Vaccines
325
+9.7%
+8.7%
Avermectin
198
+6.4%
+5.3%
Other
108
+6.7%
+3.8%
Total
1,090
+6.7%
+5.1%
Appendix 2: 2011 second-quarter and first-half consolidated net sales by geographic region and product
Second-quarter 2011
Pharmaceuticals
Q2 2011 net sales (euro million)
Western
Europe
Change
at CER
United
States
Change
at CER
Emerging
Markets
Change
at CER
Rest of
the World
Change
at CER
Lantus®
188
+9.3%
566
+12.4%
160
+29.3%
55
+16.7%
Apidra®
20
+25.0%
18
+17.6%
11
+50.0%
4
+66.7%
Amaryl®
9
-18.2%
1
-57.0%
57
+8.6%
42
-26,8%
Insuman®
26
-3.7%
0
7
+33.3%
0
Total Diabetes
247
+9.3%
585
+12.5%
235
+24.4%
101
-4.7%
Lovenox®
212
+9.8%
160
-64.7%
142
+9.6%
22
+4.8%
Plavix®
110
-37.0%
53*
-5.4%
173
+10.6%
174
+25.9%
Taxotere®
51
-73.3%
34
-84.0%
73
-30.4%
46
-24.6%
Aprovel®
200
-6.2%
13*
+44.4%
95
+11.6%
35
+43.5%
Eloxatin®
10
-9.1%
182
+613.8%
40
+16.2%
16
+11.8%
Multaq®
17
+157.1%
47
+74.2%
2
-
2
Jevtana®
9
-
35
-
3
-
1
-
Stilnox®/Ambien®/Ambien CR®/ Myslee®
13
0.0%
20
-81.7%
16
-10.5%
67
+8.1%
Allegra®
4
-33.3%
0
-
26
+16.7%
89
+23.6%
Copaxone®
113
-7.4%
0
-
0
-100.0%
6
0.0%
Tritace®
44
-10.2%
0
-
47
0.0%
4
-28.6%
Depakine®
37
0.0%
0
-
59
+13.0%
4
0.0%
Xatral®
16
0.0%
32
-14.0%
16
-11.1%
0
-
Actonel®
15
-46.4%
0
-
21
-18.5%
7
-22.2%
Nasacort®
8
16
-53.8%
6
0.0%
1
-50.0%
Consumer Health Care
157
+1.3%
145
+73.4%
283
+10.6%
59
+3.6%
Generics
111
+13.4%
34
+85.7%
279
+13.8%
10
+10.0%
Others
614
-8.5%
127
-24.5%
528
+5.6%
192
+6.2%
Genzyme
219
379
115
83
Total Pharma
2,207
+1.0%
1,862
+3.8%
2,159
+14.5
919
+19.5%
*Sales of active ingredient to the American entity managed by BMS
Vaccines
Q2 2011 net sales (euro million)
Western
Europe
Change
at CER
United
States
Change
at CER
Emerging
Markets
Change
at CER
Rest of
the World
Change
at CER
Polio/Pertussis/Hib Vaccines
7
-58.8%
109
-8.2%
112
+12.6%
39
+48.1%
Influenza Vaccines*
0
0
55
-16.2%
2
-78.6%
Meningitis/Pneumonia Vaccines
1
0.0%
96
-1.8%
22
+15.0%
2
Adult Booster Vaccines
22
+69.2%
78
+1.1%
5
-28.6%
5
+75.0%
Travel and Other Endemics Vaccines
7
+75.0%
24
+17.4%
48
-21.0%
11
-16.7%
Other Vaccines
3
-25.0%
50
+100.0%
3
+25.0%
5
+279.5%
Total Vaccines
40
+2.6%
357
+5.4%
245
-3.4%
64
+10.2%
*Seasonal and pandemic influenza Vaccines
Animal Health
Q2 2011 net sales (euro million)
Western
Europe
Change
at CER
United
States
Change
at CER
Emerging
Markets
Change
at CER
Rest of
the World
Change
at CER
Frontline® and other fipronil products
58
+9.3%
101
-13.4%
23
+9.5%
7
-36.4%
Vaccines
42
-4.5%
32
+12.5%
82
+9.0%
3
-33.3%
Avermectin
13
0.0%
47
+3.9%
15
+23.1%
18
+28.6%
Other
20
-13.0%
17
+5.0%
9
0.0%
9
Total Animal Health
133
0.0%
197
-4.6%
129
+9.8%
37
+16.1%
First-half 2011
Pharmaceuticals
H1 2011 net sales (euro million)
Western
Europe
Change
at CER
United
States
Change
at CER
Emerging
Markets
Change
at CER
Rest of
the World
Change
at CER
Lantus®
362
+5.3%
1,129
+13.5%
296
+24.7%
107
+22.9%
Apidra®
39
+21.9%
33
+12.9%
21
+37.5%
9
+100.0%
Amaryl®
17
-22.7%
2
-33.3%
114
+7.2%
84
-20.4%
Insuman®
50
-9.1%
0
14
+16.7%
0
Total Diabetes
472
+4.2%
1,164
13.3%
445
+19.9%
200
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