FORM 20-F
`2016
`
`.
`
`. .. . ..
`~ ' ,.'
`•. ~ , -, .
`. . •
`, ...
`•
`
`SANOFI
`
`MYLAN - EXHIBIT 1092 - Part 1 of 4
`Mylan Laboratories Limited v. Aventis Pharma S.A. IPR2016-00712
`
`

`

`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`
`Washington, D.C. 20549
`
`FORM 20-F
`
`(Mark One)
`0 REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
`OF 1934
`
`or
`~ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year an dad December 31, 2016
`Or
`0 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`Or
`0 SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`Date of event requiring this shell company report
`For the transiUon period from
`to
`Commission File Number: 001-31368
`Sanofi
`(Exact name of registrant as specified in its charter)
`N/A
`(Translation of registrant's name into English)
`Franca
`(Jurisdiction of incorporation or organization)
`54, Rue La Bottle, 75008 Paris, Franca
`(Address of principal executive offices)
`
`Karen Linehan, Executive VIce President Legal Affairs and General Counsel
`54, Rue La Bo6tia, 75008 Paris, Franca. Fax: 011 + 331 53 n 43 03. Tal: 011 + 331 53 n 40 00
`(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
`
`Securities registered or to be registered pursuant to Section 12(b) of the Act:
`Title of each class:
`Name of each exchange on which registered:
`American Depositary Shares, each representing one
`half of one ordinary share, par value €2 per share
`New York Stock Exchange
`New York Stock Exchange (for listing purposes only)
`Ordinary shares, par value €2 per share
`NASDAQ Global Market
`Contingent Value Rights
`Securities registered pursuant to Section 12(g) of the Act: None
`The number of outstanding shares of each of the issuer's classes of capital or common stock as of December 31, 2016
`was:
`Ordinary shares: 1,292,022,324
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
`Act. YES ~ NO 0.
`If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports
`pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934. YES D NO ~-
`Indicate by check mark whether the registrant (1) has flied all reports required to be flied by Section 13 or 15(d) of the
`Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
`to
`required
`file such
`reports), and
`(2) has been subJect
`to such
`filing
`requirements
`for the past
`No D
`90 days. Yes ~
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
`every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
`chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
`such files). Yes D
`No D
`Indicate by check mark whether the registrant Is a large accelerated flier, an accelerated flier, or a non-accelerated flier.
`See definition of "accelerated filer and large accelerated filer'' in Rule12b·2 of the Exchange Act. (Check one):
`Accelerated filer D
`Non-accelerated filer D
`Large accelerated filer~
`Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements Included
`in this filing:
`
`International Financial Reporting Standards as issued by
`Other D
`U.S. GAAP D
`the International Accounting Standards Board~
`If "Other'' has been checked in response to the ~revious question, indicate by check mark which financial statement
`item the registrant has elected to follow. Item 17 D
`Item 18 D
`If this Is an annual raport, Indicate by check mark whether the registrant Is a shell company (as defined In Rule 12b·2 of
`the Exchange Act). Yes 0
`No ~-
`
`

`

`Presentation of financial and other infonnation
`
`The consolidated financial statements contained in this
`annual report on Form 20-F have been prepared
`in
`accordance with International Financial Reporting Standards
`(IFRS) as issued by the International Accounting Standards
`Board (IASB) and with IFRS as adopted by the European
`Union, as of December 31, 2016.
`
`Unless the context requires otherwise, the terms "Sanofi,"
`the "Company: the "Group," "we,· "our" or "us" refer to
`Sanofi and its consolidated subsidiaries.
`All references herein to "United States" or "US" are to the
`United States of America, references to "dollars" or "$• are to
`the currency of the United States, references to "France" are
`to the Republic of France, and references to "euro" and "€"
`are to the currency of the European Union member states
`(including
`France)
`participating
`in
`the European
`Monetary Union.
`
`Brand names appearing in this annual report are trademarks
`of Sanofi and/or its affiliates, with the exception of:
`
`•
`
`trademarks used or that may be or have been used under
`license by Sanofi and/or its affiliates, such as Actonef!!l, a
`trademark of Actavis; Afrezz#J, a trademark of Mannkind
`Corporation; Aldurazyma®, a trademark of the Joint
`Ventura Biomarin/Genzyme LLC; Avilomics®, a trademark
`of Avila Therapeutics, Inc.; Cialis® OTC, a trademark of
`Eli
`Lilly; Copaxone®,
`a
`trademark of Tava
`Pharmaceuticals Industries; Cortizone-10®, a trademark
`of Johnson & Johnson (except in the United States where
`it is a Sanofi trademark); Fludara® and Laukine®,
`trademarks of Alcafleu; Flutiform®, a trademark of Jagotec
`AG; Gardasif!!l
`and
`Zostavax®,
`trademarks of
`Merck & Co.; Hexyon® and Repevax®, trademarks of
`Sanofi Pasteur MSD; RetinoStat® and UshStat®,
`trademarks of Oxford Biomedica; Spedra® and Stendra®,
`trademarks of Vivus Inc.; and Zaltrap® a trademark of
`Regenaron in the United States;
`
`•
`
`trademarks sold by Sanofi and/or its affiliates to a third
`party,
`such as AHace®, a
`trademark of King
`Pharmaceuticals
`in
`the United States; Hyalgan®, a
`trademark of Fidia Farmaceutici S.p.A.; Liberty®, Liberty®
`Herbicide, Libertylink® Rice 601, Libertylink® Rice 604
`and Starlin!<®,
`trademarks of Bayer; Maalox®, a
`trademark of Novartis in the United States, Canada and
`Puerto Rico; and Sculptra® a trademark of Valeant; and
`
`• other third party trademarks such as Advantage® and
`Advantix®, trademarks of Bayer; Atelvia®, a trademark of
`Actavis in the United States; DDAVp®, a trademark of
`Ferring (except in the United States where it is a Sanofi
`trademark); Enbref!!l, a trademark of lmmunex in the
`United States and of Wyeth in other geographical areas;
`GLAAS®, a trademark of Immune Design; Humalog®,
`HumulinTM, Miriopen®,
`Basaglar41>
`and Kwikpen®,
`trademarks of Eli Lilly;
`iPhone® and
`iPod Touch®,
`
`trademarks of Apple Inc.; Lactacyd®, a trademark of
`Omega Pharma NV in the EU and several other European
`countries; Rituxan®, a trademark of Biogan Idee, Inc. in
`the United States and Canada, and Ganantech in Japan;
`Squarakids®, a trademark of Kitasato Daiichi Sankyo
`Vaccine Co., Ltd.; Unisom® a trademark of Johnson &
`Johnson in certain geographical areas (except in the
`United States and Israel where it is a Sanofi trademark
`and Canada where
`it is a
`trademark of Paladin
`Labs, Inc.); and Yosprala®, a trademark of Pozen, Inc.
`Not all trademarks related to investigational agents have
`been authorized as of the date of this annual report by the
`relevant health authorities; for instance, the Lyxumia® trade
`name has not been approved by the FDA.
`
`The data relating to market shares and ranking information
`for pharmaceutical products, in particular as presented in
`"Item 4.
`Information on the Company - B. Business
`Overview- B.6. Markets- B.6.1. Marketing and distribution,"
`are based mainly on sales data from QuintilesiMS (MIDAS)
`on Moving Annual Total September 2016, in constant euros
`{unless otherwise indicated), supplemented by country(cid:173)
`specific sources.
`
`While we believe that the IMS sales data we present below
`are generally useful comparative indicators for our industry,
`they may not precisely match the sales figures published by
`the companies that sell the products (including our company
`and other pharmaceutical companies). In particular, the rules
`used by IMS to attribute the sales of a product covered by an
`alliance or license agreement do not always exactly match
`the rules of the agreement.
`
`In order to allow a reconciliation with our basis of
`consolidation as defined in "Item 5. Operating and Financial
`Review and Prospects - Presentation of Net Sales," IMS
`data shown in the present document have been adjusted
`and include:
`
`{i) sales as published by IMS excluding Sanofi sales
`generated by the vaccines business, equating to the
`scope of our pharmaceutical operations;
`
`(ii) IMS sales of products sold under alliance or license
`agreements which we recognize in our consolidated net
`sales but which are not attributed to us in the reports
`published by IMS; and
`
`{iii) adjustments related to the exclusion of IMS sales for
`products which we do not recognize in our consolidated
`net sales but which are attributed to us by I MS.
`
`Data relating to market shares and ranking information
`presented herein for our Consumer Healthcare products are
`based on sales data from Nicholas Hall.
`
`Data relating to market shares and ranking information
`presented herein for our vaccines business are basad on
`internal estimates unless stated otherwise.
`
`

`

`Product indications described in this annual report are
`composite summaries of the major indications approved in
`the product's principal markets. Not all indications are
`necessarily available in each of the markets in which the
`products are approved. The summaries presented herein for
`the purpose of financial reporting do not substitute for careful
`consideration of the full labeling approved in each market.
`
`Cautionary
`statements
`
`statement
`
`regarding
`
`forward-looking
`
`This annual report contains forward-looking statements. We
`may also make written or oral forward-looking statements In
`our periodic reports
`to the Securities and Exchange
`Commission on Form 6-K,
`in our annual report
`to
`shareholders, In our offering circulars and prospectuses, In
`press releases and other written materials and In oral
`statements made by our officers, directors or employees to
`third parties. Examples of such forward-looking statements
`include:
`
`• projections of operating revenues, net income, business
`net Income, earnings per share, business earnings
`capital
`expenditures,
`cost
`savings,
`per
`share,
`restructuring costs, positive or negative synergies,
`dividends, capital structure or other financial
`Items
`or ratios;
`
`• statements of our profit
`trends, plans,
`forecasts,
`objectives or goals, including those relating to products,
`clinical trials, regulatory approvals and competition; and
`
`• statements about our future events and economic
`performance or that of France, the United States or any
`other countries in which we operate.
`
`is based on data, assumptions and
`information
`This
`estimates considered as reasonable by Sanofi as at the date
`of this annual report and undue reliance should not be
`placed on such statements.
`
`Words such as •believe," "anticipate," "plan," "expect,"
`•intend," ,arget," •estimate," •project," •predict," "forecast,"
`•guideline," "should" and similar expressions are intended to
`identify forward-looking statements but are not the exclusive
`means of identifying such statements.
`
`Forward-looking statements Involve Inherent, known and
`the
`unknown, risks and uncertainties associated with
`regulatory, economic, financial and competitive environment,
`and other factors that could cause future results and
`objectives to differ materially from those expressed or
`implied in the forward-looking statements.
`
`Risk factors which could affect future results and cause
`actual results to differ materially from those contained in any
`forward-looking statements are discussed under •Item 3. Key
`Information- D. Risk Factors". Additional risks, not currently
`known or considered Immaterial by the Group, may have the
`same unfavorable effect and Investors may lose all or part of
`their investment.
`
`Forward-looking statements speak only as of the date they
`are made. Other than required by law, we do not undertake
`any obligation to update them In light of new Information or
`future developments.
`
`

`

`ABBREVIATIONS
`
`Principal abbreviations used in the Annual Report on Form 2D-F
`
`ADR
`ADS
`
`AFEP
`
`American De~sita~ Receil!!
`American Depositary Share
`Associstion franyaise des enll8priBfRl priv6es (French Association
`of Large Companies)
`
`AutorttfJ des mai'C:Ms financiers (the French market regulator)
`AMF
`ANDA Abbreviated New Drug Application
`Biologic License Application
`BLA
`BMS
`Bristol-Myers Squibb
`CEO
`Chief Executive Officer
`CER
`Constant exchange rates
`CGU
`Cash generating unit
`CHC
`Consumer Healthcare
`
`CHMP Committee for Medicinal Products for Human Use
`Contingent value right
`CVR
`European Central Bank
`ECB
`EMA
`European Medicines Agency
`European Union
`EU
`us Food and Drug Administration
`FDA
`GAVI Global Alliance for Vaccines and Immunisation
`GBU
`Global Business Unit
`GLP-1 Glucagon-like paptida-1
`Good manufacturing practice
`GMP
`Hlb
`Haemophilus influenzae type b
`Health, Safety and Environment
`HSE
`lntemational Accounting Standards Board
`IASB
`
`ICH
`IFRS
`IPV
`
`lntemational Council for Harmonization
`lntemational Financial Reporting Standards
`Inactivated polio vaccine
`
`I SIN
`J-MHLW
`LSD
`MEDEF
`
`lntemational Securities Identification Number
`Japanese Ministry of Health, Labor and Welfare
`Lysosomal storage disorder
`Mouvement des entr&prises de France (French business
`confederation}
`Multiple sclerosis
`MS
`NASDAQ National Association of Securities Dealers Automated
`Quotations
`New Drug Application
`National Health Insurance (Japan)
`New York Stock Exchange
`Organisation for Economic Co-operation and Development
`
`NDA
`NHI
`NYSE
`OECD
`
`OPV
`OTC
`
`PMDA
`PRV
`PTE
`QIV
`R&D
`
`ROA
`SA
`SEC
`SPC
`TSR
`UNICEF
`us
`WHO
`
`Oral polio vaccine
`Over the counter
`
`Pharmaceuticals and Medical Devices Agency (Japan}
`Priority Review Voucher
`Patent Term Extension
`Quadrivalent influenza vaccine
`Research and development
`
`Retum on assets
`Soci6t6 anonyme (French public limited corporation)
`US Securities and Exchange Commission
`Supplementary Protection Cerllftcate
`Total shareholder retum
`United Nations Children's Fund
`United Stales of America
`World Health Organization
`
`

`

`Table of contents
`(Part I
`
`E. Dilution
`
`F. Expenses of the Issue
`
`Item 10. ADDITIONAL INFORMATION
`
`A. Share Capital
`
`B. Memorandum and Articles of Association 187
`
`186
`
`186
`
`187
`
`187
`
`200
`
`200
`
`201
`
`205
`
`205
`
`205
`
`205
`
`206
`
`210
`
`216
`
`216
`
`Hem 1.
`
`IDENTITY OF DIRECTORS, SENIOR
`MANAGEMENT AND ADVISERS
`
`Item 2. OFFER STATISTICS AND EXPECTED
`TIMETABLE
`
`Item 3.
`
`KEY INFORMATION
`
`A. Selected Financial Data
`
`B. Capitalization and Indebtedness
`
`C. Reasons for Offer and Use of Proceeds
`
`D. Risk Factors
`
`Item 4.
`
`INFORMATION ON THE COMPANY
`
`A. History and Development of the Company
`
`B. Business Overview
`
`C. Organizational Structure
`
`D. Property, Plant and Equipment
`
`ltam4A. UNRESOLVED STAFF COMMENTS
`
`Item 5. OPERATING AND FINANCIAL REVIEW AND
`PROSPECTS
`
`1
`
`1
`
`1
`
`1
`
`3
`
`3
`
`4
`19
`20
`
`20
`
`73
`
`C. Material Contracts
`
`D. Exchange Controls
`
`E. Taxation
`
`F. Dividends and Paying Agents
`
`G. Statement by Experts
`
`H. Documents on Display
`
`I. Subsidiary Information
`
`Item 11. QUANTITATIVE AND QUALITATIVE
`DISCLOSURES ABOUT MARKET RISK
`
`Item 12. DESCRIPTION OF SECURITIES OTHER
`THAN EQUITY SECURITIES
`
`74
`
`77 (Part II
`
`78
`
`78
`128
`
`Item 13. DEFAULTS, DIVIDEND ARREARAGES AND
`DELINQUENCIES
`
`Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS
`OF SECURITY HOLDERS
`
`A. Operating results
`B. Liquidity and Capital Resources
`C. Off..Balanc:e Sheet Arrangements I
`Contractual Obligations and Other
`Commercial Commitments
`DIRECTORS, SENIOR MANAGEMENT AND
`EMPLOYEES
`
`A. Directors and Senior Management
`
`Item 6.
`
`B. Compensation
`
`C. Board Practices
`
`D. Employees
`
`E. Share Ownership
`
`Item 7. MAJOR SHAREHOLDERS AND RELATED
`PARTY TRANSACTIONS
`
`A. Major Shareholders
`
`B. Related Party Transactions
`C. Interests of Experts and Counsel
`FINANCIAL INFORMATION
`
`Item 8.
`
`A. Consolidated Financial Statements and
`Other Financial Information
`
`B. Significant Changes
`
`Item 9.
`
`THE OFFER AND LISTING
`
`A. Offer and Listing Details
`B. Plan of Distribution
`
`C. Markets
`D. Selling Shareholders
`
`129
`
`132
`
`132
`
`152
`
`168
`
`173
`
`175
`
`179
`
`179
`
`180
`
`180
`
`181
`
`Item 15. CONTROLS AND PROCEDURES
`
`Item 16.
`
`[Reserved]
`
`Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
`
`Item 16B. CODE OF ETHICS
`
`Item 16C. PRINCIPAL ACCOUNTANTS' FEES AND
`SERVICES
`
`Item 16D. EXEMPTIONS FROM THE LISTING
`STANDARDS FOR AUDIT COMMITTEES
`
`Item 16E. PURCHASES OF EQUITY SECURITIES BY
`THE ISSUER AND AFFILIATED
`PURCHASERS
`
`Item 16F. CHANGE IN REGISTRANT'S CERTIFYING
`ACCOUNTANT
`
`Item 16G. CORPORATE GOVERNANCE
`
`Item 16H. MINE SAFETY DISCLOSURE
`
`181
`
`184 (Part Ill
`
`185
`
`185
`
`186
`
`186
`186
`
`Item 17. FINANCIAL STATEMENTS
`
`Item 18. FINANCIAL STATEMENTS
`
`Item 19. EXHIBITS
`
`216
`
`216
`
`217
`
`217
`
`217
`
`217
`
`217
`
`218
`
`218
`
`219
`
`220
`
`220
`
`220
`
`

`

`Table of contents
`(Part I
`
`E. Dilution
`
`F. Expenses of the Issue
`
`Item 10. ADDITIONAL INFORMATION
`
`A. Share Capital
`
`B. Memorandum and Articles of Association 187
`
`186
`
`186
`
`187
`
`187
`
`200
`
`200
`
`201
`
`205
`
`205
`
`205
`
`205
`
`206
`
`210
`
`216
`
`216
`
`Hem 1.
`
`IDENTITY OF DIRECTORS, SENIOR
`MANAGEMENT AND ADVISERS
`
`Item 2. OFFER STATISTICS AND EXPECTED
`TIMETABLE
`
`Item 3.
`
`KEY INFORMATION
`
`A. Selected Financial Data
`
`B. Capitalization and Indebtedness
`
`C. Reasons for Offer and Use of Proceeds
`
`D. Risk Factors
`
`Item 4.
`
`INFORMATION ON THE COMPANY
`
`A. History and Development of the Company
`
`B. Business Overview
`
`C. Organizational Structure
`
`D. Property, Plant and Equipment
`
`ltam4A. UNRESOLVED STAFF COMMENTS
`
`Item 5. OPERATING AND FINANCIAL REVIEW AND
`PROSPECTS
`
`1
`
`1
`
`1
`
`1
`
`3
`
`3
`
`4
`19
`20
`
`20
`
`73
`
`C. Material Contracts
`
`D. Exchange Controls
`
`E. Taxation
`
`F. Dividends and Paying Agents
`
`G. Statement by Experts
`
`H. Documents on Display
`
`I. Subsidiary Information
`
`Item 11. QUANTITATIVE AND QUALITATIVE
`DISCLOSURES ABOUT MARKET RISK
`
`Item 12. DESCRIPTION OF SECURITIES OTHER
`THAN EQUITY SECURITIES
`
`74
`
`77 (Part II
`
`78
`
`78
`128
`
`Item 13. DEFAULTS, DIVIDEND ARREARAGES AND
`DELINQUENCIES
`
`Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS
`OF SECURITY HOLDERS
`
`A. Operating results
`B. Liquidity and Capital Resources
`C. Off..Balanc:e Sheet Arrangements I
`Contractual Obligations and Other
`Commercial Commitments
`DIRECTORS, SENIOR MANAGEMENT AND
`EMPLOYEES
`
`A. Directors and Senior Management
`
`Item 6.
`
`B. Compensation
`
`C. Board Practices
`
`D. Employees
`
`E. Share Ownership
`
`Item 7. MAJOR SHAREHOLDERS AND RELATED
`PARTY TRANSACTIONS
`
`A. Major Shareholders
`
`B. Related Party Transactions
`C. Interests of Experts and Counsel
`FINANCIAL INFORMATION
`
`Item 8.
`
`A. Consolidated Financial Statements and
`Other Financial Information
`
`B. Significant Changes
`
`Item 9.
`
`THE OFFER AND LISTING
`
`A. Offer and Listing Details
`B. Plan of Distribution
`
`C. Markets
`D. Selling Shareholders
`
`129
`
`132
`
`132
`
`152
`
`168
`
`173
`
`175
`
`179
`
`179
`
`180
`
`180
`
`181
`
`Item 15. CONTROLS AND PROCEDURES
`
`Item 16.
`
`[Reserved]
`
`Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
`
`Item 16B. CODE OF ETHICS
`
`Item 16C. PRINCIPAL ACCOUNTANTS' FEES AND
`SERVICES
`
`Item 16D. EXEMPTIONS FROM THE LISTING
`STANDARDS FOR AUDIT COMMITTEES
`
`Item 16E. PURCHASES OF EQUITY SECURITIES BY
`THE ISSUER AND AFFILIATED
`PURCHASERS
`
`Item 16F. CHANGE IN REGISTRANT'S CERTIFYING
`ACCOUNTANT
`
`Item 16G. CORPORATE GOVERNANCE
`
`Item 16H. MINE SAFETY DISCLOSURE
`
`181
`
`184 (Part Ill
`
`185
`
`185
`
`186
`
`186
`186
`
`Item 17. FINANCIAL STATEMENTS
`
`Item 18. FINANCIAL STATEMENTS
`
`Item 19. EXHIBITS
`
`216
`
`216
`
`217
`
`217
`
`217
`
`217
`
`217
`
`218
`
`218
`
`219
`
`220
`
`220
`
`220
`
`

`

`ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
`
`PART I
`Item 1. Identity of Directors, Senior Management and Advisers
`
`N/A
`
`Item 2. Offer Statistics and Expected Timetable
`
`N/A
`
`Item 3. Key Information
`
`A. Selected Financial Data
`
`SUMMARY OF SELECTED FINANCIAL
`DATA
`
`The tables below set forth selected consolidated financial
`data for Sanofi. These financial data are derived from the
`Sanofi consolidated
`financial statements. The Sanofi
`consolidated
`financial statements for the years ended
`December 31, 2016, 2015 and 2014 are included in Item 18
`of this annual report.
`
`The consolidated financial statements of Sanofi for the years
`ended December 31, 2016, 2015 and 2014 have been
`
`prepared in compliance with IFRS issued by the International
`Accounting Standards Board (IASB) and with IFRS adopted
`by the European Union as of December 31, 2016. The term
`"IFRS" refers collectively to international accounting and
`financial
`reporting standards (lAS and
`IFRS) and
`to
`interpretations of the interpretations committees (SIC and
`IFRIC) mandatorily applicable as of December 31,2016.
`Sanofi reports its financial results in euros.
`
`Sanofi • Form 20-F 2016 11
`
`

`

`ITEM 3. KEY INFORMATION
`
`SELECTED CONDENSED FINANCIAL
`INFORMATION
`
`(€ million, except per share data)
`IFRS Income statement data
`
`Net sales(bl
`
`Gross profit
`
`Operating income
`
`Net income excluding the held-for-exchange
`Animal Health business
`Net income attributable to equity holders of
`Sanofi
`
`Basic earnings per share (€)1cJ:
`
`Net income excluding the held-for-exchange
`Animal Health business
`Net income attributable to equity holders of
`Sanofi
`
`Diluted earnings per share (€)1dl:
`
`Net income attributable to equity holders of
`Sanofi
`
`IFRS Balance sheet data
`
`Goodwill and other intangible assets
`
`Total assets
`
`Outstanding share capital
`Equity attributable to equity holders of Sanofi
`
`Long term debt
`
`Cash dividend paid per share (€)<1l
`
`Cash dividend paid per share ($)(f)llhl
`
`-{,j[;i
`
`As of and for the year ended December 31,
`2015
`2014
`2013
`
`33,821
`
`24,006
`
`6,534
`
`34,060
`
`23,942
`
`5,624
`
`31,380
`
`21,769
`
`6,064
`
`30,693
`
`20,989
`
`4,982
`
`4,486
`
`4,512
`
`4,392
`
`3,797
`
`2012!01
`
`34,743
`
`24,859
`
`6,430
`
`4,709
`
`4,287
`
`4,390
`
`3,716
`
`4,888
`
`3.42
`
`3.66
`
`3.38
`
`3.28
`
`3.25
`
`3.34
`
`2.75
`
`2.81
`
`_(a)
`
`3.70
`
`3.63
`
`3.25
`
`3.30
`
`2.77
`
`3.68
`
`51,166(e)
`
`51,583(e)
`
`104,672
`
`102,321
`
`2,544
`
`57,554
`16,815(e)
`
`2.96(g)
`
`3.12(g)
`
`2,603
`
`58,049
`13, 118(e)
`
`2.93
`3.19
`
`53,740
`
`97,392
`
`2,620
`
`56,120
`13,276
`
`2.85
`3.46
`
`52,529
`
`96,055
`
`2,641
`
`56,904
`10,414
`
`2.80
`3.86
`
`58,265
`
`100,399
`
`2,646
`
`57,352
`10,719
`
`2.77
`
`3.65
`
`(a) For 2012, the lines Net Ales, GIDUproftt, and Operating Income include the Animal Health business. For the other periods (2013 to 2016), the net results of
`the Animal Health business a18 Pf8SSntad in a separate line item, Net lnr:omel(lou) of the held-for.exr:hange Ani~MI HNith bu.ln ... , in the consolidated
`Income statements.
`(b) Due to a change in accounting prasentation, VaxSarve ssles of non-Sanofi products a18 included in other rennues from 2016 onwards (see Notes A.5. and
`B. 14.). The pnlsentalion of prior period Net aales and other nwanuea has been amended acoorriing/y (see Nota A. 5.).
`(c) Based on the weighted average number of shaffl8 outstanding in each period used to compute basic earnings per sha18, equal to 1,286.6 million shaffl8 in
`2016, 1,306.2 million shaffls in 2015, 1,315.8 million shaffls in 2014, 1,323.1 million shaffl8 in 2013 and 1,319.5 million shaffl8 in 2012.
`(d) Based on the weighted average in each period of the number of shaffl8 outstanding plus stock options and fflstricted shaffls with a potantia//y dilutiva effect; i.e.,
`1,296.0 million shares in 2016, 1,320.7 million shares in 2015, 1,331.1 million shares in 2014, 1,339.1 million shares in 2013 and 1,329.8 million shares in 2012.
`
`(e) As fflported, excluding the Animal Health business clarified in tha /ina item, Asam held for Ale or exchange and ll•blllt/u reletad to ~~Ueta held for ••le
`
`or exchange as of December 31, 2015 and December 31, 2016.
`(f) Each American Depositary Shaffl, or ADS, nlpnlsents one half of one shaffl.
`(g) Dividends for 2016 will be proposed for approval at the annual geneml meeting scheduled for May 10, 2017.
`(h) Based on tha ffllavant year-6fld exchange rate.
`
`2 I Form 20-F 2016 • Sanofi
`
`

`

`ITEM 3. KEY INFORMATION
`
`SELECTED EXCHANGE RATE
`INFORMATION
`
`The following table sets forth, for the periods and dates
`indicated, certain information concerning the exchange rates
`for the euro from 2011 through March 2017 expressed in
`US dollars per euro. The
`information concerning
`the
`US dollar exchange rate is based on the noon buying rate in
`New York City for cable transfers in foreign currencies as
`certified for customs purposes by the Federal Reserve Bank
`of New York (the ·Noon Buying Rate"). We provide the
`
`exchange rates below solely for your convenience. We do
`not represent that euros were, could have been, or could be,
`converted into US dollars at these rates or at any other rate.
`For information regarding the effect of currency fluctuations
`on our results of operations, see "Item 5. Operating and
`Financial Review and Prospects" and •Item 11. Quantitative
`and Qualitative Disclosures about Market Risk."
`
`(U.S. dollar per auro)
`2011
`
`2012
`
`2013
`
`2014
`
`2015
`
`2016
`
`Last 6 months
`
`2016
`
`September
`
`October
`
`November
`
`December
`
`2017
`
`January
`
`February
`
`March(bl
`
`Period-
`end Rata
`1.30
`
`Average
`Rateeol
`1.40
`
`1.32
`
`1.38
`
`1.21
`
`1.09
`
`1.06
`
`1.12
`
`1.10
`
`1.06
`
`1.06
`
`1.08
`
`1.06
`
`1.05
`
`1.29
`
`1.33
`
`1.32
`
`1.10
`
`1.10
`
`1.12
`
`1.10
`
`1.08
`
`1.05
`
`1.06
`
`1.07
`
`1.05
`
`High
`1.49
`
`1.35
`
`1.38
`
`1.39
`
`1.20
`
`1.15
`
`1.13
`
`1.12
`
`1.11
`
`1.08
`
`1.08
`
`1.08
`
`1.05
`
`Low
`1.29
`
`1.21
`
`1.28
`
`1.21
`
`1.05
`
`1.04
`
`1.12
`
`1.09
`
`1.09
`
`1.04
`
`1.04
`
`1.06
`
`1.05
`
`(a) The average of the Noon Buying Rates on the last business day of each month during the relevant period for the full year average, and on each business day of
`the month for the monthly average. The latest available Noon Buying Rate being February 24, 2017, we have used European Central Bank Rates for the period
`from February 27, 2017 through March 2, 2017.
`(b) In each case, measurad through March 2, 2017.
`
`On March 2, 2017 the European Central Bank Rate was 1.05 per euro.
`
`B. Capitalization and Indebtedness
`
`N/A
`
`C. Reasons for Offer and Use of Proceeds
`
`N/A
`
`Sanofi • Form 20-F 2016 13
`
`

`

`ITEM 3. KEY INFORMATION
`
`D. Risk Factors
`
`Important factors that could cause actual financial, business,
`research or operating results to differ materially from
`expectations are disclosed in this annual report, including
`without limitation the following risk factors. Investors should
`carefully consider all the information set forth in the following
`risk factors before deciding to invest in any of the Company's
`securities. In addition to the risks listed below, we may be
`subject to other material risks that as of the date of this
`report are not currently known to us or that we deem
`immaterial at this time.
`
`Risks Relating to Legal and Regulatory Matters
`We rely on our patents and other proprietary rights to
`provide exclusive rights to market certain of our products,
`and if such patents and other rights were limited or
`circumvented, our financial results could be materially
`and adversely affected.
`
`Through patent and other proprietary rights such as data
`exclusivity or supplementary protection certificates
`in
`Europe, we hold exclusivity rights for a number of our
`research-based products. However, the protection that we
`are able to obtain varies in its duration and scope from
`product to product and country to country. This protection
`may not be sufficient to maintain effective product exclusivity
`because of local differences in the patents, in national laws
`or applicable legal systems, or developments in law or
`jurisprudence, which may give rise to inconsistent judgments
`when we assert or defend our patents.
`
`Moreover, patent and other proprietary rights do not always
`provide effective protection for our products. Manufacturers
`of generic products or biosimilars are increasingly seeking to
`challenge patent validity or coverage before the patents
`expire, and manufacturers of biosimilars or interchangeable
`versions of the products are seeking to have their version of
`the product approved before the exclusivity period ends.
`Furthermore, in an infringement suit against a third party, we
`may not prevail and the decision rendered may not conclude
`that our patent or other proprietary rights are valid,
`infringed. Our competitors may also
`enforceable or
`successfully avoid patents, for example, through design
`innovation, and we may not hold sufficient evidence of
`infringement to bring suit.
`
`In addition, if we lose patent protection in patent litigation as
`a result of an adverse court decision or a settlement, we face
`the risk that government and private third-party payers and
`purchasers of pharmaceutical products may claim damages
`alleging they have over-reimbursed or payed a drug. For
`example,
`in Australia, our patent on clopidogrel was
`ultimately held invalid. Following this decision, the Australian
`Government is seeking damages for its alleged over(cid:173)
`reimbursement of clopidogrel drugs due to the preliminary
`injunction we had obtained against the sale of generic
`clopidogrel during the course of the litigation.
`
`4 I Form 20-F 2016 • Sanofi
`
`In certain cases, to terminate or avoid patent litigation, we or
`our partners may be required to obtain licenses from the
`holders of third-party intellectual property rights that cover
`aspects of our existing and future products in order to
`manufacture, use and/or sell them. Any payments under these
`licenses may reduce our profits from such products and we
`may not be able to obtain these licenses on favorable terms or
`increased
`the proportion of biological
`at all. We have
`in our pipeline relative to
`therapeutics
`traditional small
`molecule pharmaceutical products. Typically, biological
`therapeutics face
`third party
`intellectual property rights,
`otherwise known as freedom to operate (FTO) issues, more
`than small molecule therapeutics because of the types of
`patents allowed by national patent offices. Further, our ability to
`successfully challenge third party patent rights is dependent on
`the laws of national courts. Certain countries have laws that
`provide stronger bases for challenging third party patent rights
`compared to the laws that are available to challenge patents in
`other countries. Therefore, we may be able to invalidate a
`certain third party patent in one country but not invalidate
`counterpart patents in other countries. Third parties may also
`request a preliminary or a permanent injunction in a country
`from a court of law to prevent us from marketing a product if
`they consider that we infringe their patent rights in that country.
`For example, Sanofi is currently party to patent infringement
`proceedings in several countries initiated against us and
`Regeneron by Amgen relating to Praluent® in which Amgen
`has requested injunctive relief (see Note D.22.b) to the
`consolidated financial statements included at Item 1 8 of this
`annual report and Item 8 B. of this annual report for more
`information). If third parties obtain a preliminary or permanent
`injunction from a court of law or if we fail to obtain a required
`license for a country where the valid third-party intellectual
`property right, as confirmed by a court of law, exists or if we
`are unable to aHer the design of our technology to fall outside
`the scope of third-party intellectual property rights, we may be
`unable to market some of our products in certain countries,
`which may limit our profitability.
`
`Also, some countries may consider granting a compulsory
`license to a third party to use patents protecting an
`innovator's product, which limits the value of the patent
`protection granted to such products.
`
`We are involved in litigation worldwide to enforce certain of
`our patent rights against generics, proposed generics and
`biosimilars of our small molecule and biological
`B.
`products
`(see
`"Ite