Q1 2009 Earning Report of Sanofi Aventis
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Transcript of Q1 2009 Earning Report of Sanofi Aventis
1
Q1 2009 ResultsApril 29, 2009
2
Forward Looking Statements
This presentation 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 financial and product development projections and estimates and their underlying assumptions,
statements regarding plans, objectives, intentions and expectations with respect to future events, operations, products and services, 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-aventis’
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-aventis, 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 EMEA, 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 as well as those discussed or identified in the public filings with the SEC and the AMF made by sanofi-aventis, including those listed under “Risk Factors”
and “Cautionary Statement Regarding Forward-Looking Statements”
in sanofi-aventis’
annual report on Form 20-F for the year ended December 31, 2008.Other than as required by applicable law, sanofi-aventis does not undertake any obligation to update or revise any forward-looking information or statements.
3
Agenda
Q1 2009 AchievementsChris Viehbacher, Chief Executive Officer
R&D Portfolio Update Marc Cluzel, Senior VP, Research & Development
Q1 2009 Market PerformanceHanspeter Spek, Executive VP, Pharmaceutical Operations
Q1 2009 Financial PerformanceJérôme Contamine, Executive VP, Chief Financial Officer
Q&A Session
4
Q1 2009 Achievements
Chris ViehbacherChief Executive Officer
5
Delivering
a Good Start into
the Year
Q1 2009Strong
underlying
sales performance(1)
of flagship
products
and vaccines
+3.0% for Pharmaceuticals
+9.1% for Vaccines
Continued cost management
Good growth
of adjusted
EPS(2)
+9.8% at
constant exchange rates (CER)
+16.8% on a reported
basis
Transforming
initiatives well
underway
Acquisitions in line with
strategy
Positive FDA Ad Com for Multaq®
(dronedarone)
(1) Growth is on a constant structure and exchange rates basis(2) Excluding selected items
6
(1) Worldwide presence for Plavix®/Iscover® and Aprovel®/Avapro® /Karvea® includes sales consolidated by sanofi-aventis and BMS(2) Sanofi Pasteur MSD is a 50/50 joint venture with Merck(3) Merial is a 50/50 joint venture with Merck(4) Including the acquisition of Symbion * Sales figures correspond to Q1 2009 sales and growth is at constant exchange rate
A Diversified
Healthcare
Company with
Several
Growth
Platforms*
Animal Health(3)
Sales: $684m, +2.0% (non-consolidated)
GenericsSales: €93m, +18.3%
OTC / OTX(4)
Sales: €378m, +9.9%
Vaccines(2)
Sales: €627m, +9.1%
Sales: €254m, -8.7% (non-consolidated)
Sales: €762m,
+1.3%
Worldwide
presence(1)
€1,699m, +8.6%
Sales: €534m,
+8.3%
Sales: €747m,
+27.1%
Worldwide
presence(1)
€507m, +6.1%
7
5.49
5.00
5.10
5.20
5.30
5.40
5.50
5.60
5.70
5.80
5.90
6.00
6.10
2008 2009
Guidance for FY 2009 Reiterated
In 2009, sanofi-aventis expects growth of adjusted EPS excluding selected items(1)
of at least 7%at constant exchange rates(2),
barring major adverse events
(1) FY 2008 adjusted EPS excluding selected items: €5.49(2) Based on actual 2008 average exchange rates for all currencies
Adjusted EPS excluding selected items (€)
At
least +7%
8
Rolling-out our
Three-Pronged
Strategy
Increase innovation
in R&D
Transforming Program to ensure
sustainable, profitable growth and improved
risk
profile
Adapt our
company
to future challenges
Pursue external
growth
opportunities
9
BiPar
acquisition illustrating strong commitment to oncology
Novel tumor- selective approach
BSI-201, potential first-in-class compound in Phase II for TNBC(1)
New data at ASCO
Important Milestones
Reached
in R&D
Fulfilling a clear unmet patient need in AF
Creating value for payors
Positive FDA Ad Com on March 18
Potential EMEA decision and U.S. launch in Q3 2009
Thorough and rigorous process
Moving high priority projects forward
Discontinuing 4 Phase II and 4 Phase III projects
Freeing up resources for external R&D
PORTFOLIOREVIEWR&D
(1) Triple Negative Breast Cancer
10
Leadership reinforced
in emerging
marketsAdditional
stream
of sales growth
complementing
our
branded
business
Improving
access
to medicines
for a wider
populationOur priority is to expand search for licensing or acquisition deals maintaining a disciplined approach
Three
Bolt-on
Acquisitions to Strengthen
our
Growth
Platforms
2008 Sales: ~€736mLeader in branded generics in CEE, Turkey and Russia Portfolio of more than
400 products
2008 Sales: ~€153m#1 generic company in BrazilPortfolio of 127 generic products
2008 Sales: ~€26mA leading generic company in MexicoPortfolio of > 50 active ingredients
11
Key Achievements
to date & Next
Milestones
Good Q1 Results -
On track to deliver FY 2009 guidance
Appointment of new Chief Financial Officer
New organization set by Chief Strategic Officer
New external R&D deals (eg. BiPar)
Disciplined investments in Generics regional growth platforms
Completion of R&D pipeline review
FDA decision for Multaq®
(dronedarone) expected in Q2 2009
Emerging Markets Thematic Investor Seminar in Paris on July 2
Q2 Results and Roadmap for Transforming Program in July 29
12
R&D Portfolio Update
Marc CluzelSenior VP, Research & Development
13
Conduct a detailed objective review of our R&D pipelinePortfolio Prioritization1
Decision Making Redefine
investment
decision
making
process2
Partnerships Reallocate
resources
to external
R&D partnerships3
Strategy Focus R&D strategy on key technologies and disease areas4
Organization Implement new R&D organization to encourage innovation5
R&D Transformation Process is Ongoing
14
Rigorous and Thorough Portfolio Review
Complete portfolio review covering Research & Development
Multidimensional views aimed at understanding the unique value proposition for each compound
Portfolio evaluated across 4 key dimensions:
Engaged cross-functional internal expertise while leveraging neutral external party to run the process
Going forward, a complete R&D pipeline review will be conducted regularly by newly-created “Portfolio Management Group”
Degree of innovation
Extent of patient need addressed
Technical & commercial
risk
Overall value
/ Return on investment
15
AVE0657
(sleep apnea)
SSR180575
(diabetic polyneuropathies)
AVE1642(1)
(breast cancer)
Melanoma
vaccine
4 Phase II and 4 Phase III projects discontinued since Feb 11, 2009
6 Phase I projects also discontinued in the recent portfolio review
Rationale for termination included:Lack of efficacy
Safety findings
Limited value proposition
4 compounds with an upcoming Go/No-Go milestone
Reassessment of compounds to be performed once milestones reached
Outcome
of Portfolio Review
on Clinical
Projects
4 Phase II 4 Phase III
TroVax®(2)
(cancer)
Saredutant
(depression)
AVE5530
(hypercholesterolemia)
Unifive™
(DTP-HepB-Hib)
(1) AVE 1642: project returned to ImmunoGen, Inc.(2) TroVax®: project returned to Oxford BioMedica Plc
Project NameProject Name Next MilestoneNext Milestone
AVE1625
(schizophrenia) xaliproden
(peripheral sensory neuropathies)
idrabiotaparinux
(DVT/PE and AF)
West Nile vaccine
4-6 months
4-6 months
6 months
6-9 months
16
Main Achievements
in R&D Pipeline since
Feb
11
BSI-201, PARP inhibitor, in Phase II in triple negative breast cancer*SAR110894, H3 antagonist, entering Phase I in Alzheimer'sSAR164877, anti-NGF mAb, entering Phase I in pain management
3 New Projects in Clinical
Development
Plavix®
combo with ASA re-submitted in EUFlu new formulation (Fluzone®
High Dose IM) in the U.S.
2 New Regulatory
Submissions
Apidra®
SoloSTAR®
in the U.S.Lovenox®
for VTE prevention in abdominal surgery in JapanApidra®
and Apidra®
SoloSTAR®
in JapanIntanza®
/ IDflu®
in EUEmerflu®
in Australia
5 New Regulatory Approvals
*BSI-201: project from BiPar Sciences, Inc.
17
Development portfolio balanced across phases and therapeutic areas*
Metabolic Disorders 2 0 1 0 3
Cardiovascular 1 1 1 1 4
Central Nervous System 5 4 1 1 11
Oncology 1 1 6 0 8
Thrombosis 0 1 2 0 3
Internal Medicine 2 2 0 0 4
Vaccines 4 6 7 1 18
TOTAL 15 15 18 3 51
R&D Pipeline Summary Table on April 29 New Molecular Entities and Vaccines
TOTAL
Regist
ration
Phase I
II
Phase I
I
Phase I
30 21
New Molecular Entities
& Vaccines
33
*See appendices for list of R&D pipeline projects
18
R&D Pipeline Characteristics
49% of the development portfolio (from Phase I to registration) in biologics and 27% from external partnerships
73%
27%
Partnerships / collaborations
Internal
51%35%
Chemical
Entities
Other
Biologics
14%
Vaccines
19
Evolution on R&D Spend
in 2009
Full impact of large Phase III studies initiated in 2008 and before expected in 2009
Increased spend in R&D for Vaccines
New R&D deals (eg. BiPar)
Termination of clinical projects announced today
Expecting a low single digit decline of the R&D spend at constant exchange rates in 2009
R&D Pharmaceuticals
€3,246m
R&D Vaccines
Post-Mkg
Studies
Regulatory
Pharmacovigilance
Industrial
Split of R&D Spend
in 2008
Total R&D Spend
in 2008
€4,575m
20
Aflibercept -
A Unique Anti-Angiogenic
Agent
Aflibercept
(VEGF Trap): a fusion protein blocking VEGF, a well-
validated anti-angiogenic
approachBroad oncology development program in combination with common chemotherapy regimensFour Phase III studies ongoing
All studies ~ 50% enrolledInitial data expected in 2010
Two phase II studies ongoingData expected mid-2009 in symptomatic malignant ascitesCombination trial with FOLFOX in 1st
line metastatic colorectal cancer recently initiated
Study Indication / DesignTargeted
# of
patients
Data
expected
VELOUR
2nd
line metastatic colorectal cancer
+ FOLFIRI (folinic
acid / 5-FU / irinotecan)
1200 2010
VANILLA1st
line metastatic pancreatic cancer
+gemcitabine630 2010
VITAL2nd
line metastatic non-
small cell lung cancer
+Taxotere®900 2010
VENICE
1st
line metastatic hormone resistant
prostate cancer+Taxotere®
/ prednisone
1225 2011
Four Phase III studies
ongoing
FOLFOX: (folinic acid / 5-FU / oxaliplatin)
21
BSI-201 -
Potential to Become a Platform Therapy in Oncology
DNA-repair inhibition: a new “validated”
oncology target BSI-201: potential first-in-class and best-in-class PARP(1)
inhibitorTriple Negative Breast Cancer(2)
identified as the lead indication~ 20% of all breast cancersPoor prognosis and no specific treatment guidelines
Randomized phase IIb
study ongoingInterim results(3)
showed no significant toxicities attributable to BSI-201Results expected at ASCO 2009
Potential future expansion into non- TNBC breast cancer, ovarian cancer,
and other solid tumors
(1) PARP: Poly ADP-Ribose Polymerase(2) Lack ER/PR/HER2 receptors(3) Reported at the San Antonio Breast Cancer Symposium (Dec 2008)
DNA repair
PARP upregulation
+ BSI-201
Innovative
mode of action
Enhance
tumor
response
to chemotherapy
22
Developing a Safe and Effective Tetravalent Dengue Vaccine as Rapidly as Possible
Working closely with governments, public health officials and NGO’s to support the creation of appropriate immunization policies and
funding sources
Expected to be first to marketFiling planned in 2014
Global Prevalence
of DengueA major public health concernEstimated 230m people infected annually
2m, mostly children, develop dengue hemorrhagic fever
Our priority is to develop a safe and effective tetravalent dengue vaccine
Phase II studies initiated in 2009 in Thailand, the Philippines, Singapore, Vietnam, Mexico and Peru including adults, adolescents and children
Other studies in Asia and Latin America being planned
Areas infested with Aedes aegypti
Areas with Aedes aegypti and dengue epidemic activity
23
Anticipated
Newsflow
in 2009
Milestones TimingU.S. expected
decision
on Apidra SoloSTAR® Approved
FDA AdCom
for Multaq®
(dronedarone) 10 votes in favor vs 3 against
Plavix®
ACTIVE-A data presentation Primary endpoint met
EU regulatory
re-submission
of Plavix®
FDC with
ASA Filed
Expected
regulatory
decision
on Lovenox®
-
VTE abdominal surgery
(Japan) Approved
U.S. regulatory
submission
of Flu
new formulation Filed
Expected
regulatory
decision
on Apidra®
(Japan) Approved
Expected
U.S. regulatory
decision
on Multaq®
(dronedarone) Q2 2009
U.S. regulatory
submission
of Menactra®
Infant/Toddler
9-12 months Mid
2009
Expected
CHMP opinion on Multaq®
(dronedarone) Q3 2009
Plavix®
U.S. / EU regulatory
submission
for Atrial Fibrillation Q3 2009
Regulatory submissions
of Japanese
Encephalitis
Vaccine in Asia Q3 2009
Plavix®
CURRENT/OASIS-7 data presentation H2 2009
U.S. / EU regulatory
submissions
of cabazitaxel
in prostate cancer* Q4 2009
EU regulatory
submission
of Pediacel® Q4 2009
U.S. / EU expected
regulatory
decisions
on Ciltyri® Q4 2009* Filing date with interim “overwhelmingly positive data”
24
Next
Steps
in R&D
Focusing R&D resources on projects with best chance of success and acceptable returns
Accelerating R&D partnerships & alliances to expand access to new technologies and enrich our portfolio with innovative compounds in all stages of development
More details on R&D transformational initiatives related to Strategy and Organization expected for Q2 2009 results
25
Q1 2009 Market
Performance
Hanspeter SpekExecutive VP, Pharmaceutical Operations
26
Solid
Q1 2009 Sales Performance as Planned
€ m Q1 2009 % Change (1)
Pharmaceuticals 6,480 +3.0%
Vaccines 627 +9.1%
Total Sales 7,107 +3.5%
Europe 2,948 +0.4%
US 2,295 +5.1%
Rest
of the World 1,864 +7.3%
(1) Growth is on a constant structure and exchange rates basis
27
Leadership Reinforced
in Emerging
Markets
Robust Q1 2009 sales in emerging markets(1): €1,616m, +8.0%(2)
Strong BRIC-M sales: €562m, +13.5%(2)
Wholesalers tightly managing inventories in some LATAM countries
BRIC-M markets forecasted to deliver close to double digit growth in 2009(3)
Leadership position of sanofi-aventis reinforced by recent acquisitions
Increased market share(4)
of 6% in emerging countries
Well-positioned to increase pharma
sales by around 50% by 2012
(1) World less North America (USA, Canada), Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan and Australia/New Zealand
(2) Growth is at constant exchange rates(3) Internal analysis based on IMS market prognosis(4) IMS, based on pro forma 2008
Q1 2009 Sales Split by Regions
7,1%5,5%
5,1%
32,3%36,4%
7,2%6,4%
Asia
Pacific
USA
Eastern
Europe
Latin America
Western
Europe
JapanOthers
28
Becoming an Important Player in Generics
Successful acquisitions of Zentiva, Medley and Kendrick
Regional platforms with competitive development and production capabilities
Large portfolio of affordable and quality medicines
Commercial presence boosted in the generics market
Pro forma 2008 sales in generics increase to just over €
1,2 bn(1)
#8 generic player globally(2) with a targeted regional approach
#1 in Central & Eastern Europe
#1 in Latin America
(1) Internal sources & company reports on a pro forma 2008 basis(2) IMS MIDAS FY 2008 IMS Health except GERS (France), Cegedim (Romania), Business Credits (Ukraine)(3) Excluding OTC sales
0,4
11.2
0.4
0.2
0.6
OldPerimeter
NewPerimeter
Pro forma 2008 Sales in Generics
(1)
(€m)
(3)
29
Q1 2009 sales: €762m, +1.3%(1)
US: high basis for comparison in Q1 2008 due to UFH supply crisis
Mid-single digit growth in EU despite residual impacts of UFH crisis on product availability
EMEA guidelines on LMWH biosimilars now published
At least one large comparative clinical trial per indication needed to establish equivalence in terms of efficacy and safety
Impact from new oral anticoagulants still insignificant
Market share of dabigatran and rivaroxaban remaining below 1% in Germany, UK and France(2)
(1) Growth is at constant exchange rates (2) IMS February 2009, in treatment days, market : ATC B1B1, B1B2, B1E0, B1X0 + fondaparinux + bivaluridin
-
Sustained
Underlying
Growth
350
450
550
650
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
UFH supply
crisis
impact
Lovenox®
U.S. Sales ($m)
30
Strong Q1 2009 sales: €747m, +27.1%(1)
> 30% quarterly sales growth in the U.S.Successful ramp-up in Japan driven by SoloSTAR®
device
Growth potential for Apidra®
SoloSTAR®
from penetration of “Basal+”
regimen (Lantus®
+ Apidra®) in eligible sub- populations
Apidra®
SoloSTAR®
approved in the U.S. and Japan
(1) Growth is at constant exchange rates (2) IMS, market share in insulin, International Units
Lantus® Volume Share in Japan(2)
(%)
0%
10%
20%
30%
40%
50%
60%
70%
80%
Dec-07
Jan-0
8Feb
-08Mar-
08Apr-0
8May
-08Ju
n-08Ju
l-08
Aug-08Sep
-08Oct-
08Nov-08Dec-0
8Ja
n-09
Feb-09
-
Continued
Linear
Growth
Worldwide
Lantus®
SoloSTAR®
launch
Lantus®
NPH
detemir
31
Q1 2009 worldwide
presence(1)
: €1,699m, +8.6%(2)
Stable EU sales despite
competition
from
clopidogrel
besylate
in GERSustained
U.S. performance with
quarterly
sales growth
of +13.6%(2)
Strong
performance in Japan: €70m (+90.2%)
Positive ACTIVE-A data at ACC 2009Supporting the addition of Plavix®
to aspirin in AF patients unsuitable for OAC(4)
Significantly reduces stroke (-28%) with an acceptable increase in major bleedingContraindications to take OAC in up to 43% of AF patients(5)
Expected U.S. and EU filings for AF indication in Q3 2009
(1) Worldwide presence for Plavix®/Iscover® and Aprovel®/Avapro® /Karvea® includes sales consolidated by sanofi-aventis and BMS(2) Growth is at constant exchange rates(3) IMS MIDAS, except GERS for France(4) ACTIVE-A study, patients with atrial fibrillation who were at increased risk for stroke and could not take an oral anticoagulant (OAC) medication, taking Plavix® (clopidogrel bisulfate) in
addition to aspirin significantly reduced major vascular events by 11% over aspirin alone, at a median of 3.6 years of follow-up (6.8% vs. 7.6%per year, p=0.01).(5) Sudlow M et al. Lancet. 1998;352:1167-1171
-
Well-Established
Leadership
0
1
2
3
4
5
6
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Plavix®
Worldwide Sales(3)
(€bn)
32
Early
Stage Breast
Cancer Driving
Growth
Q1 2009 sales: €534m, +8.3%(1)
Growing penetration in Node(+) Early Stage Breast CancerLower wholesaler inventory levels in the U.S. in Q1 2009
GEICAM 9805 positive results driving use in Node(-) ESBC
Guidelines recently updated in FR, GER, SP, IT, UK and USNode(-) represents 65% of ESBC patients, 22% chemo-treated(2)
Approval of 1-vial Taxotere®
new presentation expected in 2009One vial, one single step for preparation Easier and time-saving preparation
(1) Growth is at constant exchange rates (2) Source: Affiliates Forecasting model, October 2008; Top 7 countries, Breast cancer epidemiology data, 2006
171 197
223231
90106
Q1 2008 Q1 2009
US Europe ROW
+18.9%
Global Sales of Taxotere®
(€m)(1)
+8.1%
+2.9%
33
-
Preparing for U.S. Launch
Positive vote from FDA Advisory Committee on March 18, 2009 recommending approval
Ongoing regulatory review in the EUExpected CHMP opinion in Q3 2009
ATHENA recently published in the NEJM
U.S. launch preparation building upon a strong commercial platform in cardiology
Low satisfaction level with existing AADs(1)
Multaq®
well-positioned to meet current market needs
U.S. sanofi-aventis sales force ranked in the top 3 among cardiologists (3)
(1) Source: U.S. Multaq® Physician Segmentation Research, 2009 (Fielded Nov/Dec 2008). (2) Idem supra, % physicians indicating product X is most associated (vs. other AADs) with each feature(3) SDI’s Sales Force Structures & Strategies 2008-2009 Ranking
Multaq®
Association with Product Attributes(2)
77%
0
25
50
75
100
Multaq®
Reduces risk of cardiovascular hospitalizationRequires minimal monitoringLow risk of pro-arrhythmiaEase of use
Low risk of organ toxicityMaintains sinus rhythm
®
34
Vaccines -
Solid Q1 2009 Performance
Q1 2009 sales: €627m, +9.1%(1)
Main contributors
Pediatric vaccines: €236m, +33.9% driven by Pentacel®
launch, + €73m
Seasonal influenza: €62m, +43.8%, impacted by the favorable timing of shipments in Southern Hemisphere
: €96m, -13.2%Next wave of growth: Infant/ToddlerU.S. filing planned mid-2009Expected to be first to market
Emerging markets continued growthLatin America: €81m, +51.1%Asia-Pacific: €63m, +16.8%
Q1 2009 Vaccines Sales Split (%)
(1) Growth is at constant exchange rates(2) 50-50 JV with Merck & Co (JV Perimeter is 19 European countries)
38%
10%19%
15%
12%
6%
Polio/Pertussis/Hib Influenza
Meningitis/Pneumo Boosters
Travel & Endemic Others
®
35
Q1 2009 -
A Solid
Start into
the Year
Overall sales performance and growth perfectly in line with plan despite current economic downturn
Significant strengthening of growth platforms in major products, regions, generics and emerging markets
FDA decision on Multaq®
(dronedarone) expected in Q2 2009
36
Q1 2009 Financial Performance
Jérôme ContamineExecutive VP, Chief Financial Officer
37
6937 6924 6924
183
7,1076,937
247234
Q1 2008 OrganicGrowth
Change inStructure
FX Impact Q1 2009
Q1 2009 Sales Growth
Reported net sales of €7,107m (+2.5% in reported sales or -0.2% at CER)Change in Group structure
Primarily reflecting the discontinuation of commercialization of Copaxone®
in North America since April 2008
Positive FX movementsSolid underlying sales growth of +3.5%(1)
(1) Growth is on a constant structure and exchange rates basis
In €m
38
Others
JPY5%
USD31%
EUR37%
Sales by Key Currencies
Others
JPY7%
USD32%
EUR36%
Q1 2009 Sales
€7,107m
Q1 2009 (%)
Q1 2008 Sales
€6,937m
Q1 2008 (%)
39
USD
JPY
69247107
Q1 2009 Sales CER
USD
240
JPY
121
+183
Q1 2009 Sales
In €m
Foreign Exchange Effect on Q1 2009 Sales
Other currencies
Russian Ruble
Australian Dollar
GB Pound
Other currencies
Russian Ruble
Australian Dollar
GB Pound
40
Cost
Management Continued
in Q1 2009(1,2)
€m Q1 2009 Q1 2008 % Change
(reported €)% Change
(CER)
Net sales 7,107 6,937 +2.5% -0.2%
Other
revenues 344 284 +21.1% +9.9%
Cost of sales (1,767) (1,889) -6.5% -5.9%
Gross profit 5,684 5,332 +6.6% +2.4%
R&D (1,152) (1,089) +5.8% +2.8%
SG&A (1,732) (1,783) -2.9% -5.6%
Other current operating income & expenses 148 104 - -
Amortization of intangibles (50) (42) - -
Adj. operating income current 2,898 2,522 +14.9% +8.6%
(1) Excluding selected items(2) See reconciliation of Adjusted Consolidated Income Statement excluding selected items to Consolidated Income Statement on slide 55
41
€m Q1 2009 Q1 2008 % Change
(reported €)% Change
(CER)
Adj. operating income current 2,898 2,522 +14.9% +8.6%
Net financial
expenses (44) (17) - -
Income
tax
expense (828) (741) - -
Effective tax rate 29.0% 29.6% - -
Share
of profit/loss
of associates 273 234 +16.7% +9.0%
Minority
interests (121) (115) +5.2% +5.2%
Adjusted net income 2,178 1,883 +15.7% +8.7%
Adjusted EPS € 1.67 € 1.43 +16.8% +9.8%
Strong
EPS Growth
in Q1 2009(1,2)
(1) Excluding selected items(2) See reconciliation of Adjusted Consolidated Income Statement excluding selected items to Consolidated Income Statement on slide 55
42
Significant
Operating Leverage
in Q1 2009(1)
40.8
36.4
33.034.035.036.037.038.039.040.041.042.043.0
Q1 08 Q1 09
30.6
27.1
23.024.025.026.027.028.029.030.031.032.033.0
Q1 08 Q1 09
24.425.7
20.021.022.023.024.025.026.027.028.029.030.0
Q1 08 Q1 09
24.8
27.2
20.021.022.023.024.025.026.027.028.029.030.0
Q1 08 Q1 09
COS/Sales Ratio (%)
SG&A/Sales Ratio
(%)
Operating Margin
(%)
Net Income/Sales Ratio
(%)
(1) Ajusted P&L excluding selected items
43
Foreign Exchange Effect Methodology and Sensitivity
Constant Exchange Rates methodology:To calculate growth at Constant Exchange Rates (CER), we exclude the impact of exchange rates by recalculating actual figures for the current period on the basis of exchange rates of the same period a year ago
Average ForEx
sensitivity on yearly basis for Adjusted EPS(1)
:EUR / USD: 1 cent movement in the rate 0.5% of EPS growth
(1) Excluding selected items
44
Strong
Financial Flexibility
Strong cash flow generation of €2.3bn
before financial
acquisitions in Q1 2009Reduction of net debt from €1.8bn
to €1.2bn
by end of
Q1 2009 despite Zentiva acquisition
Solid credit ratingsMoody’s:
A1 / Stable outlook
Standard & Poor’sAA- / Stable outlook
1.21.8
4.25.8
9.9
14.2
0
2
4
6
8
10
12
14
16
12/31
/2004
12/31
/2005
12/31
/2006
12/31
/2007
12/31
/2008
03/31
/2009
€bn
Net Debt (€bn)
45
Q1 2009 -
A Good Quarter
Solid underlying sales performance in-line with expectations
Continued cost management
Strong EPS(1)
growth and cash flow generation
Low net debt level
2009 EPS(1)
guidance reiterated
(1) Adjusted EPS before excluding selected items
46
Q&A SessionChris Viehbacher, Chief Executive Officer
Marc Cluzel, Senior VP, Research and Development
Hanspeter Spek, Executive VP, Pharmaceutical Operations
Jérôme Contamine, Executive VP, Chief Financial Officer
47
Appendices
R&D
48
Late Stage Pipeline –
Pharma & Vaccines
Phase IIILantus®
insulin glargine
Reduction in CV morbidity & mortality
Taxotere®
docetaxel
Pediatric
HIV
(Thailand) Prevention of infection; Proof of
concept
Lantus®
insulin glargine
Retinopathy labeling change, U.S.
AVE0010
GLP1 agonist T2 diabetes
aflibercept (VEGF-Trap) (AVE0005) Single: SMA; Combo:1st
line mProstate; 2nd
line NSCLC, 2nd
line mCRC, 1st
line mPancreatic
K
Adacel®
DTP 4-6 yearsMultaq®
dronedarone
Antiarrhythmic agent Atrial fibrillation
Aprovel®
irbesartan
Atrial fibrillation
alvocidib
(HMR1275) Cyclin-dependent kinase
inhibitor
CLL
IMOJEV™
Japanese Encephalitis Prevention of infection
Ciltyri®
eplivanserin
5-HT2A antagonist -
Insomnia
XRP0038
NV1FGF
Critical Limb Ischemia (CLI)
cabazitaxel
(XRP6258) Taxoid, tubulin
inhibitor
Prostate K
Flu Micro-injection
New Delivery U.S. Fasturtec®/Elitek®
rasburicase
Japan -
Malig./chemo-associated hyperuricemia; Hyperuricemia adult, U.S.
teriflunomide
(HMR1726) immunomodulator
Multiple Sclerosis (monotherapy)
AVE8062
Vascular disrupting agent
Sarcoma
Hexaxim™
DTP-HepB-Polio-HibPlavix®
clopidogrel
bisulfate Combo ASA, EU
Lovenox®
enoxaparin
Pen
larotaxel
(XRP9881) Taxoid, Tubulin
inhibitor
Pancreatic K, Bladder K
Pediacel®
EU
DTP-Polio-HibSculptra®
DL6049
Nasolabial
fold wrinkles, U.S.
Plavix®
clopidogrel
bisulfate AF; Pedi. extension; ACS high
loading dose; Stent, & PAD, Japan
xaliproden
(SR57746)
Neurotrophic
Peripheral sensory neuropathies
Menactra®
Infant / Toddler 9-12 monthsAllegra®
fexofenadine
ODT, Japan
idrabiotaparinux
(SSR126517)
Biotinylated
long-acting pentasaccharide; Indirect Xa
inhibitor Long-term treatment DVT/PE; AF
Xatral®
alfuzosin
BPH, Japan; Pediatric
Flu New formulation U.S.
AVE5026
Indirect Xa/IIa
inhibitor
VTE prevent. in ortho, abdo. surgery, cancer patients
Actonel®
risedronate
Pediatric, EU
Metabolic DisordersCardiovascular
Thrombosis
Central Nervous System
Internal Medicine
Oncology
Vaccines
Registration
Source: sanofi-aventis project direction April 29, 2009
N New Molecular Entity
PharmaceuticalsPharmaceuticals
Therapeutic areaTherapeutic area
N
N
N
N
N
N
N
N
N
N
N
N
N
49
Early Stage Pipeline –
Pharma & Vaccines
Phase I Phase IIAVE0897
Balanced PPAR α/γ
agonist
T2 diabetes
SAR3419
Maytansin-loaded anti-CD19 mAb
non-Hodgkin’s lymphoma
celivarone
(SSR149744) Antiarrhythmic agent
Ventricular Arrhythmia
ferroquine
(SSR97193) Antimalarial
Malaria
SAR351034
PPAR δ
agonist
T2 diabetes; Dyslipidemia
AVE0675
TLR9 agonist
Asthma
ataciguat
(HMR1766) Guanylate
cyclase
activator
Neuropathic pain
SAR97276
Antimalarial
Malaria
SAR407899
Rho-kinase
inhibitor
Erectile dysfunction; neuropathic pain
SAR153191
Anti-IL-6R mAb
Rheumatoid Arthritis
nerispirdine
(HP184) K+/Na+ channel blocker
Multiple Sclerosis
Dengue
Mild-to-severe Dengue Fever
SSR125543 CRF1 antagonist
Depression; PTSD
Flu Pandemia
Low DoseAVE1625
CB1 antagonist
Schizophrenia
DTP-HepB-Polio-Hib
SAR501788
PBR ligand
Sensory & motor neuron degeneration
Tuberculosis
Prevention of diseaseSSR411298
FAAH inhibitor
Depression
ACAM-Cdiff
Prevention of C. difficile associated diarrhea
AVE0118
K+ channel blocker
Obstructive sleep apnea (nasal route)
Meninge ACYW conj. 2nd
generation
Meningitis in infants
teriflunomide
(HMR1726)
Immunomodulator
Multiple sclerosis (adjunct. therapy)
Rabies
mAb
Post Exposure prophylaxis
SAR110894
H3 antagonist
Alzheimer's
Pneumo
Meningitis & pneumonia
in infants (Monovalent)
aflibercept
(AVE005) VEGF-Trap 1st line Colorectal K combi
Flu Cell Culture
New production method
SAR164877
Anti-NGF mAb
Pain
BSI-201
PARP inhibitor
Triple Negative Breast Cancer
West Nile
Prevention of disease
otamixaban
(XRP0673) Direct Xa
inhibitor ACS
Metabolic DisordersCardiovascular
Thrombosis
Central Nervous System
Internal Medicine
Oncology
Vaccines
Source: sanofi-aventis project direction April 29, 2009
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N N
N New Molecular Entity
PharmaceuticalsPharmaceuticals
N
50
Appendices
Finance
51
Q1 2009: Adjusted Consolidated Income Statement excluding selected items* (I)
* Non GAAP(1) Before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation
€
million Q1 2009 as % ofnet sales Q1 2008 as % of
net sales % change
Net Sales 7,107 100.0% 6,937 100.0% +2.5%
Other revenues 344 4.8% 284 4.1% +21.1%
Cost of sales (1,767) (24.8%) (1,889) (27.2%) -6.5%
Gross Profit 5,684 80.0% 5,332 76.9% +6.6%
Research & development expenses (1,152) (16.2%) (1,089) (15.7%) +5.8%
Selling & general expenses (1,732) (24.4%) (1,783) (25.7%) -2.9%
Other current operating income & expenses 148 - 104 - -
Amortization of intangibles (50) - (42) - -
Operating Income –
Current (1) 2,898 40.8% 2,522 36.4% +14.9%
Restructuring costs - - - - -
Impairment of PP&E and intangibles - - - - -
Gains and losses on disposals, litigation - - - - -
Operating Income 2,898 40.8% 2,522 36.4% +14.9%
52
Q1 2009: Adjusted Consolidated Income Statement excluding selected items* (II)
€
million Q1 2009 As % ofnet sales Q1 2008 As % of
net sales % change
Operating Income 2,898 40.8% 2,522 36.4% +14.9%
Net financial expenses (44) - (17) - -
Income Before Tax and Associates 2,854 40.2% 2,505 36.1% +13.9%
Income tax expense (828) - (741) - -
Share of profit/loss of associates 273 - 234 - -
Net Income Before Minority Interests 2,299 32.3% 1,998 28.8% +15.1%
Minority interests (121) - (115) - -
Net Income After Minority Interests 2,178 30.6% 1,883 27.1% +15.7%
Average number of shares outstanding (million) 1,305.5 1,320.8
Earnings per share (in euros) 1.67 1.43 +16.8%
* Non GAAP
53
Q1 2009 Reconciliation of Adjusted Consolidated Income Statement Excluding Selected Items to Consolidated Income StatementQ1 2009 €
millionAdjusted excl. selected items Selected Items Adjusted Adjustments Consolidated
Net Sales 7,107 - 7,107 - 7,107
Other revenues 344 - 344 - 344
Cost of sales (1,767) - (1,767) - (1,767)
Gross Profit 5,684 - 5,684 - 5,684
Research & development expenses (1,152) - (1,152) - (1,152)
Selling & general expenses (1,732) - (1,732) - (1,732)
Other current operating income & expenses 148 - 148 - 148
Amortization of intangibles (50) - (50) (844) (894)
Operating Income –
Current (1) 2,898 - 2,898 (844) 2,054
Restructuring costs - (8) (8) - (8)
Impairment - (20) (20) - (20)
Gains and losses on disposals, and litigation - - - - -
Operating Income 2,898 (28) 2,870 (844) 2,026
Net financial expenses (44) - (44) - (44)
Income Before Tax and Associates 2,854 (28) 2,826 (844) 1,982
Income tax expense (828) 10 (818) 284 (534)
Share of profit/loss of associates 273 - 273 (22) 251
Net Income Before Minority Interests 2,299 (18) 2,281 (582) 1,699
Minority interests (121) - (121) - (121)
Net Income After Minority Interests 2,178 (18) 2,160 (582) 1,578
Average number of shares outstanding (million) 1,305.5 1,305.5 1,305.5
Earnings Per Share (in euros) 1.67 (0.02) 1.65 (0.44) 1.21
(1) Before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation
54
Q1 2008 Reconciliation of Adjusted Consolidated Income Statement Excluding Selected Items to Consolidated Income Statement
Q1 2008 €
millionAdjusted excl. selected items Selected Items Adjusted Adjustments Consolidated
Net Sales 6,937 - 6,937 - 6,937
Other revenues 284 - 284 - 284
Cost of sales (1,889) - (1,889) - (1,889)
Gross Profit 5,332 - 5,332 - 5,332
Research & development expenses (1,089) - (1,089) - (1,089)
Selling & general expenses (1,783) - (1,783) - (1,783)
Other current operating income & expenses 104 - 104 - 104
Amortization of intangibles (42) - (42) (819) (861)
Operating Income –
Current (1) 2,522 - 2,522 (819) 1,703
Restructuring costs - (28) (28) - (28)
Impairment - - - - -
Gains and losses on disposals, and litigation - - - - -
Operating Income 2,522 (28) 2,494 (819) 1,675
Net financial expenses (17) - (17) - (17)
Income Before Tax and Associates 2,505 (28) 2,477 (819) 1,658
Income tax expense (741) 8 (733) 301 (432)
Share of profit/loss of associates 234 - 234 (20) 214
Net Income Before Minority Interests 1,998 (20) 1,978 (538) 1,440
Minority interests (115) - (115) - (115)
Net Income After Minority Interests 1,883 (20) 1,863 (538) 1,325
Average number of shares outstanding (million) 1,320.8 1,320.8 1,320.8
Earnings Per Share (in euros) 1.43 (0.02) 1.41 (0.41) 1.00
(1) Before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation
55
Q1 2009: Vaccines Adjusted Consolidated Income Statement* (I)
€ million Q1 2009 As % of net sales Q1 2008 As % of
net sales % change
NET SALES 627 100.0% 548 100.0% +14.4%
Other
revenues 8 1.3% 8 1.5% -
Cost
of sales (236) (37.7%) (214) (39.1%) +10.3%
GROSS PROFIT 399 63.6% 342 62.4% +16.7%
R&D expenses (109) (17.4%) (91) (16.6%) +19.8%
SG&A (130) (20.7%) (118) (21.5%) +10.2%
Other
current
operating income
& expenses - - 1 0.2% -
Amortization
of intangibles - - - - -
OPERATING INCOME CURRENT(1) 160 25.5% 134 24.5% +19.4%
Restructuring
costs - - - - -
Impairment
of PP&E and intangibles - - - - -
Gain/loss
on disposals, litigation - - - - -
OPERATING INCOME 160 25.5% 134 24.5% +19.4%
* Non GAAP(1) Before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation
56
Q1 2009: Vaccines Adjusted Consolidated Income Statement* (II)
€ million Q1 2009 As % of net sales Q1 2008 As % of
net sales % change
OPERATING INCOME 160 25.5% 134 24.5% +19.4%
Net financial
expenses (3) (0.5%) - - -
INCOME BEFORE TAX 157 25.0% 134 24.5% +17.2%
Income
tax
expense (52) (8.3%) (41) (7.5%) +26.8%
Share
of profits 5 0.8% 3 0.5% +66.7%
Minority
interests - - - - -
NET INCOME 110 17.5% 96 17.5% +14.6%
* Non GAAP
57
Definition of Net Sales at Constant Exchange Rate and Structure Basis
Net Sales at Constant Exchange Rate: When we refer to the change in our sales at Constant Exchange Rate, we mean that we exclude the impact of exchange rate movementsWe exclude the impact of exchange rates by recalculating sales for the current period on the basis of exchange rates used in the prior period
Net Sales at Constant Structure Basis:When we refer to the change in our sales at Constant Structure Basis, we mean that we exclude the impact of changes in Group structure (acquisitions and divestments of interests in entities and rights to products,
and changes in consolidation method for consolidated entities).We exclude the impact of acquisitions by including sales from the acquired entity or product rights for a portion of the prior period equal
to the portion of the current period during which we owned them, based on sales information we receive from the party from whom we make the acquisition.Similarly, we exclude sales in the relevant portion of the prior
period when we have sold an entity or rights to a product.
58
Definition of Adjusted Net Income
Net income+ Add back: Material impacts of the application of purchase accounting to acquisitions made by sanofi-aventis (primarily the acquisition of Aventis):
Charges related to remeasurement of inventories, net of tax
Amortization/impairment charges arising from remeasurement of intangible assets, net of tax
Any impairment of goodwill
+ Add back: Integration and restructuring costs specific to acquisitions, net of tax= Adjusted Net Income
59
Definition of “Selected Items”
We define “selected items”
as accounting items reflecting significant events occurring during the period that would alter a user’s understanding of our operational performance if they were not disclosed separately. Consequently, selected items are limited in number, unusual in nature, and involve significant amounts. Selected items are primarily recorded in the following line items:
Restructuring costs Restructuring costs include early retirement benefits, compensation for early termination of contracts, and rationalization costs relating to restructured sites. Asset impairment losses directly attributable to restructuring are also recorded on this line. Restructuring costs included on this line relate only to unusual and major restructuring plans.
Impairment of property, plant and equipment and intangibles This line includes major impairment losses (other than those directly attributable to restructuring) on property, plant and equipment and intangibles, including goodwill. It also includes any reversals of such losses.
Gains and losses on disposals, and litigation This line comprises gains and losses on major disposals of property, plant and equipment and intangible assets, and costs and provisions related to major litigation.
Income tax expense, as regards the effect of material tax disputes and any tax effects of other income or expenses that are treated as selected
items.