THOMSON REUTERS STREETEVENTS
`EDITED TRANSCRIPT
`SAN.PA - Sanofi SA at Citi Global Healthcare Conference
`
`EVENT DATE/TIME: FEBRUARY 26, 2013 / 3:20PM GMT
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`FEBRUARY 26, 2013 / 3:20PM, SAN.PA - Sanofi SA at Citi Global Healthcare Conference
`
`C O R P O R A T E P A R T I C I P A N T S
`Anne Whitaker Sanofi SA - President, North America Pharmaceutical Operations
`
`P R E S E N T A T I O N
`Anne Whitaker - Sanofi SA - President, North America Pharmaceutical Operations
`
`And thanks to everybody for the opportunity to be here. It's great to be here. And today, what I thought I would do is to share a little bit with you
`about our global Sanofi business and the strategy that we've taken, talk a little bit about performance as well, but then dive a little bit deeper on
`our North America, our US business, as it's one of our key regions for growth going forward, and share with you some of the pipeline products that
`we're excited about as well.
`
`So, first of all -- I've got to get past the legal statement, too. But, first of all, if you really look at the history of Sanofi over the past decade, I mean,
`it's -- you can divide it into three chapters. The period between 2003, 2005 was really the time when the organization was focused on blockbusters.
`
`We were fortunate to have a number of blockbusters, over nine blockbusters that really built the company. And in that period of time, as we came
`to the close of 2008, there was still that focus of the heavy blockbuster attention but with sort of a blind eye about what was coming with the
`looming patent cliff. Some didn't even acknowledge it.
`
`And it was when Chris Viehbacher came onboard in 2008 and started to lay out the new strategy for Sanofi, building an organization that was more
`diversified, more sustainable, not solely dependent on blockbusters. I think Chris said he had faced a number of blockbusters as I have as well in
`my career. And he never wanted to face another blockbuster again. And therefore, we laid out the strategy to really transform Sanofi into that
`diversified business.
`
`Going forward, now, between 2009, 2012, we've done just that. We've diversified the business as we've established our growth platforms, diabetes
`being one of the key ones that you'll see makes up a large percentage of our business, animal health, one that we had a joint venture with Merck,
`Muriel. We purchased or did the full acquisition there.
`
`Consumer healthcare that we've built out, when we started in consumer healthcare, we weren't even on the charts anywhere. We weren't in the
`top five. We've moved to be in the top three worldwide with consumer healthcare. And I'll share a little bit of detail with you about our Chattem
`business, which we're quite proud of here in the US, which is our consumer healthcare business.
`
`Genzyme acquisition, which was a big one that I think a lot of people were skeptical of, could we integrate a big biotech company and keep the
`culture and keep the assets? And I think we've proven that that acquisition of Genzyme built a great platform for us for rare disease and is adding
`-- excuse me, adding value as well.
`
`And so, that diversification strategy, we're leaders in emerging markets. You see that as a growth platform for us, too, and now actually has overtaken
`the US as the primary market for us.
`
`Now, as we go forward in 2013, you see that this is really more of our investment phase for Sanofi. We've built these platforms. We've taken out
`costs from our model. There's still probably more cost to get out of our model as we've delivered a EUR2 billion in savings, cost savings, by 2012.
`We've initiated another cost savings program of EUR2 billion by 2015. And we're making good progress there.
`
`But, you'll hear Chris Viehbacher and other senior managers talk about now is the time that we're really going to be investing in these growth
`platforms. You can expect to see sustainable growth from Sanofi and continuing to launch innovative products. And some of those I'll share with
`you today.
`
`So, just to give you a little bit more about the history, you probably have certainly been following this slide, the sales. If you look over the past since
`2008 and despite those patent challenges that I mentioned and patent cliff that we saw, we continue to deliver growth and top-line sales.
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`FEBRUARY 26, 2013 / 3:20PM, SAN.PA - Sanofi SA at Citi Global Healthcare Conference
`
`That was through a combination of both organic growth, about 50% of that was through organic growth, by really investing in those growth
`platforms, and 50% through acquisitions.
`
`So, we've spent about $24 billion in -- or, excuse me, EUR24 billion in acquisitions, 32 deals. But, that has really added to continuing to keep our
`top line sales growing. And we expect that to continue. So, that's the chart that we want to continue to see.
`
`Just to give you, again, a sense of all those key blockbusters that went off patent, it's hard to believe that people looked out and didn't see the
`patent cliff when you could see very clearly that, in 2010, there was going to be significant loss.
`
`And while some might criticize and say, well, the acquisitions, were they necessary? Could you have done something else with that capital? I can
`say, looking at these products and looking at that sales chart before that we had done nothing. If we had done nothing with regard to acquisitions,
`we would've seen EUR5 billion walk out the door.
`
`And I've been part of a company before where we had that slide with the door opening and $4 billion walked out. And we didn't want to sit idly
`by and see that happen.
`
`So, this slide gives you a sense of how we're really progressing with those growth platforms. On the left here, you see that, back in 2008, 43% of
`our business essentially was in these growth platforms. Some might describe those growth platforms back then as fledgling businesses. So, the
`diabetes business was not growing like it is today. And I'll share you some results, recent results that we have with our diabetes business.
`
`We were partially in animal health. We were kind of in consumer healthcare in some parts of the world. We were certainly a leader in emerging
`markets but weren't necessarily investing like we were a leader.
`
`So, through really investing and broadening those growth platforms, we see that shift to almost 70% of our sales now being in the growth platforms.
`And on the opposite side, you see the impact of what I talked about with the EUR5 billion that would've walked out the door between 2008 and
`2012, in 2008 27%. Almost 30% of our business was made of those products that you saw on the previous slide.
`
`Today, it's at 6.4%. It never goes completely to zero. In the US, we're still facing the washout period of Eloxatin in the first half of the year. But, in
`the US, we expect to see growth in the second half of the year.
`
`So, now, I'll focus just a little bit more specifically on the US business and what I have responsibility for primarily. But, first of all, I think just to leave
`you with the message that the US is absolutely a key growth region for Sanofi, second to the emerging markets. Emerging markets actually did
`take over us -- take over the US region with regard to percentage of sales in 2012.
`
`But, really, the two major drivers for Sanofi going forward will be emerging markets and the US market. We expect that the European market,
`unfortunately, will continue to decline. And some project by 2015, it'll be down closer to 20% of our business.
`
`On the right-hand side, you see what makes up our US sales. You will see that growth platform that's quite predominant in the US, so diabetes
`making up 29% of our sales, vaccines six -- when you look at our global vaccines business, 60% of the sales are here in the US. You see the nice
`addition of Genzyme. That's 5%. But, we expect that to grow with the addition of franchise -- the MS franchise. And you see the other pieces that
`make up that business.
`
`The one thing I'll point out with the oncology business, it's currently at 11%. You -- and I will talk a little bit about how we've transformed our
`oncology business. It was a story, really, of two different oncology businesses, previously Taxotere, Eloxatin, multiple indications for those products
`now moving into more targeted therapies that will have single indications.
`
`So, I think, also, just important to note with Genzyme, there was more to that business than just the rare disease business. We brought in the renal
`business, which is a unique capability that we have for dialysis clinics in bringing a really full portfolio there, as well as biosurgery, which we're
`interested in really beefing up, and added to our oncology business with the hematology franchise that was brought in by Genzyme.
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`©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without
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`FEBRUARY 26, 2013 / 3:20PM, SAN.PA - Sanofi SA at Citi Global Healthcare Conference
`
`So, now, I'll just dive a little bit deeper on some of the growth platforms for the US and starting out with the most important, the biggest one,
`diabetes, this is a nice picture of Lantus. This has been a record year, this past year 2012, for sales of Lantus.
`
`This is in euros. But, on US dollars, we reached over $4 billion in sales, which was a nice milestone. If you look, compared to 2008, we essentially
`have doubled the Lantus business in the US. And if you look at the CAGR, I mean, that's a really strong CAGR of 20%. And we expect there's still a
`lot of growth to gain from Lantus. And we expect that there is because it's not just about Lantus. Our diabetes portfolio will include a broader
`offering, which I'll share some specifics of those products we're excited about that are coming.
`
`We also know that there -- basal insulin is a key pillar of the care of diabetes patients. And this is a market where there are essentially three players
`in the insulin market. And we don't see anybody new coming in but necessarily right away because it would take time to build that infrastructure,
`to build that know-how. And therefore, us, Novo, and Lilly are really the primary players.
`
`With Lantus, too, we have two presentations, the vial and the SoloSTAR. One of the primary strategies for Lantus is to drive more business into
`SoloSTAR, number one, because it is an easier-to-use formulation for patients, easier to titrate.
`
`Also, as we know that physicians have less time to spend with their patients, this is largely becoming a disease that's treated by primary care
`physicians. It's easier for them to train patients, too, and coach them on use of their pen. So, you see we've made nice progress, 53% of the dollar
`sales for Lantus is represented by SoloSTAR. And that continues to increase every year. And that's a major strategy for us.
`
`Now, I mentioned it's not just about Lantus. We have a broader offering that we're bringing to bear because we recognize that GLP-1 is an important
`category. And we believe we have GLP-1 and lixisenatide that will be the perfect match with Lantus as an add-on therapy because, with lixisenatide,
`this is more of a post-prandial GLP-1. And we've learned that there are more of the fasting and prandial GLP-1s. And with lixisenatide, as I'll share
`with you, with the program, the extensive development program that we have, we feel very good about this program and being on top of Lantus.
`
`It also comes in a very simple-to-use pen, one pen for each of the doses at an easy titration. We have had our file accepted in F -- by the FDA in
`February. So, we are in launch mode, preparation for launch.
`
`So, this is the program, just to give you a sense of the lixisenatide program, which is GetGoal. It is a extensive international program, 11 studies,
`includes a cardiovascular outcome study, EXILA, which I think is going to be one of the first. We'll have that kind of data to come out. And this
`picture on the right really gives you a sense of why there is a need to have a GLP-1 or an add on to basal insulin.
`
`We know 8 million patients worldwide are on basal insulin, type 2 patients. But, only 4 million of them are actually achieving their HbA1c level of
`a goal of less than 7%. And this is a real issue. And most of those patients are fasting. Blood glucose is controlled by that basal insulin. But, what is
`not controlled is that post-prandial effect.
`
`And so, lixisenatide, because of its unique mechanism of action and impact on gastric emptying, we believe that it will have a real benefit there
`and be a good match with Lantus.
`
`In addition to Lantus and building on that experience with Lantus, we want to improve perhaps on perfection you might say. We think Lantus is
`-- certainly is the most used insulin, basal insulin, out there. But, we see the patients who take higher-dose insulin, that's a lot of volume for them
`to take.
`
`So, we've in research been looking for a more compact molecule of Lantus in order to -- for those patients who are taking high dose to have to
`take less volume and to get that sustained PK/PD profile that they're looking for that gives them good 24-hour coverage.
`
`So, we're very excited about this new formulation of glargine that will be coming out. We'll have headline results this year. So, you can expect to
`hear more then.
`
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`companies.
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`Mylan Ex.1065
`Mylan v. Sanofi - IPR2018-01675
`
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