Sanofi Q2 2025 Earnings Report

Sanofi EPS Results

• Actual EPS: $0.90
• Consensus EPS: $0.96
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: $1.73

Sanofi Revenue Results

• Actual Revenue: $11.34 billion
• Expected Revenue: $9.91 billion
• Beat/Miss: Beat by +$1.43 billion
• YoY Revenue Growth: -7.00%

Sanofi Announcement Details

• Quarter: Q2 2025
• Date: 7/31/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 8:30AM ET

Sanofi (NASDAQ:SNY) is a global biopharmaceutical company headquartered in Paris, France, specializing in the research, development, manufacturing and marketing of prescription medicines, vaccines and consumer healthcare products. With a focus on addressing high unmet medical needs, Sanofi’s operations span a broad range of therapeutic areas, including immunology, oncology, cardiovascular disease, diabetes, central nervous system disorders and rare diseases.

The company’s vaccine business, operated under Sanofi Pasteur, is one of the world’s largest vaccine producers, supplying immunizations against influenza, meningitis, yellow fever, polio and other infectious diseases. Sanofi also supports patients through its specialty care division, which originated with the acquisition of Genzyme in 2011 and is dedicated to rare genetic disorders and multiple sclerosis therapies. In addition, the firm markets several prescription medicines for chronic conditions such as type 2 diabetes and cardiovascular risk management.

Sanofi maintains a presence in more than 100 countries, with major research and production facilities in Europe, North America and emerging markets across Asia, Latin America and Africa. The company collaborates with academic institutions, biotech firms and public health organizations to advance its pipeline of vaccines, biologics and small-molecule therapies. Through these partnerships, Sanofi aims to accelerate the development of innovative treatments and improve access to medicines worldwide.

Founded through a series of mergers—most notably the creation of Sanofi-Synthélabo in 1999 and the subsequent integration of Aventis in 2004—Sanofi traces its roots back to mid-1970s pharmaceutical ventures in France. Since September 2019, Paul Hudson has served as Chief Executive Officer, directing the company’s strategic priorities toward research investment, operational efficiency and sustainable growth in global healthcare markets.

Sanofi Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong Q2 sales growth of 10.1% and refinement of 2025 sales guidance to high single digits, while business EPS rose 8.3%.
• Positive Sentiment: Nine new product launches generated nearly €1 billion in Q2, now representing 10% of total sales and driving ongoing top-line momentum.
• Positive Sentiment: Dupixent sales climbed to €3.8 billion, up 21%, supported by strong uptake across existing and new indications, including CSU and COPD.
• Positive Sentiment: The Blueprint Medicines acquisition adds AYVAKIT, which achieved $175 million in Q2 sales, strengthening Sanofi’s rare immunology pipeline.
• Negative Sentiment: Regeneron profit-sharing reimbursements will fully offset development balance by 2026, leading to ~€300 million negative BOI impact in 2026 and ~€800 million in 2027.

Presentation

[Thomas Kudsk Larsen, Head - IR at Sanofi]

Hello, everyone. This is Thomas Busladen from the Sanofi IR team. Welcome to the Q2 twenty twenty five Conference Call for Investors and Analysts. As usual, you can find the slides on sanofi.com. Please turn to Slide number three.

[Thomas Kudsk Larsen, Head - IR at Sanofi]

Here we have the usual forward looking statements. We would like to remind you that information presented in this call contains forward looking statements, which are subject to substantial risks and uncertainties that may cause actual results to differ materially. We encourage you to read the disclaimer in our slide presentation. In addition, we refer you to our Form 20 F on file with the U. S.

[Thomas Kudsk Larsen, Head - IR at Sanofi]

SEC and our French universal registration document for a description of these risk factors. As usual, we'll be making comments on our performance using constant exchange rates and other non IFRS measures. Numbers used are in millions of euros and for Q2 twenty twenty five unless stated otherwise. Please turn to slide number four. First, we have a presentation, then we'll take your questions.

[Thomas Kudsk Larsen, Head - IR at Sanofi]

We have kept the presentation as short as in the past as other companies report today, and we aim at keeping the call to maximum one hour, all included. For Q and A, we have Brian, Olivier, Thomas to cover our global businesses as well as Roy, our General Counsel and Brendan, Head of Manufacturing and Supply. For the Q and A, you have two options in Zoom. Raise your hand or submit your question using the Q and A function. With this, I'll hand you over to Paul.

[Paul Hudson, CEO & Director at Sanofi]

Well, thank you and hello everyone on the call. We delivered another strong quarter with double digit sales growth. Our strategic focus on innovation continues to drive our top line performance with significant contributions from our new launches, vaccines and Dupixent. The performance of our growth drivers made us more confident in our full year business outlook. With that, we've refined our 2025 sales guidance to high single digit percentage sales growth at constant exchange rates.

[Paul Hudson, CEO & Director at Sanofi]

Let me highlight the performance of our new launches on Slide six. In Q2, our launches generated close to EUR 1,000,000,000 in sales, continuing the momentum we saw in Ultibio extended its strong performance, increasing market share through patient switches. The presence of Viforadenant in Southern Hemisphere countries was further expanded in Q2. Keep in mind, these are smaller markets compared to our key launch countries in the Northern Hemisphere. Qpypia, following the FDA approval at the end of Q1, has recorded initial sales.

[Paul Hudson, CEO & Director at Sanofi]

Uptake has been as expected, and we're pleased to be able to offer an additional treatment option to health care professionals and patients living with hemophilia A or B. Together, these nine launches now represent 10% of our total sales, demonstrating our successful execution in bringing innovative medicines and vaccines to patients. Dupixent sales reached €3,800,000,000 up 21% in Q2, driven by the continued strong demand in approved indications across geographies. Momentum has been driven by market growth across all indications where biopenetration remains low as well as by recent launches, including COPD. In The U.

[Paul Hudson, CEO & Director at Sanofi]

S, sales reached €2,800,000,000 up 22.7% as Dupixent continues to lead in both new to brand prescriptions and total prescriptions across all established indications. The CSU launch is off to a promising start supported by positive feedback from physicians and patients and broader payer coverage in the first two months. Outside The U. S, sales again exceeded the $1,000,000,000 mark driven by volume growth in key markets. Eight years after its initial launch of atopic dermatitis, Dupixent continues to demonstrate strong and sustained growth with blasphemphigoid being its eighth indication approved in The U.

[Paul Hudson, CEO & Director at Sanofi]

S. Our ongoing efforts in deepening biologic penetration and expanding indications support our ambition of reaching sales of approximately EUR 22,000,000,000 in 02/1930, in line with previous communications at Q4. Our Vaccine business delivered solid growth in Q2, with sales increasing by 10.3%, driven by the Vaportis expansion that I just mentioned and benefiting from the effect of a late twenty twenty four-twenty twenty five flu season in the Northern Hemisphere. As a reminder, the larger portion of our vaccine business is in the second half of the year due to the seasonality of flu and RSV in key markets in the Northern Hemisphere. Francois will provide our indication for 2025 Bifordis and flu vaccine sales in just a minute.

[Paul Hudson, CEO & Director at Sanofi]

Our vaccine franchise was further strengthened this quarter by several important R and D and regulatory milestones. A key example is the extended duration of protection for up to six months in the EU label of Buphortis. And we continue to invest in the future of vaccines, most recently entering an agreement to acquire ViseBio. ViseBio would represent a strong strategic fit with our ambition to develop vaccines that can protect against multiple respiratory pathogens. It would also add an innovative technology for combination vaccines, specifically designed for vulnerable groups like the older adults and those at increased risk of severe RSV and HMPV infections.

[Paul Hudson, CEO & Director at Sanofi]

Moving to Slide nine, the completion of the Blueprint Medicines acquisition just two weeks ago marked a major milestone in our strategic capital redeployment. Blueprint significantly strengthens our position in rare immunology diseases, particularly with AYVAKIT in systemic mastocytosis, along with a promising pipeline. We are very encouraged by the strong performance of AYVAKIT, reaching USD 175,000,000 in sales in Q2. While this performance is not included in the Sanofi Q2 financials, it underscores both the high unmet need and AYVAKIT's potential as the first approved medicine in advanced and indolent systemic mastocytosis. The addition of BLUEPRINT brings an established presence amongst allergists, dermatologists and immunologists, enhancing our ability to advance our own pipeline in immunology.

[Paul Hudson, CEO & Director at Sanofi]

With the acquisition now completed, I would like to formally welcome the talented teams of Blueprint to Sanofi. Together, we look forward to the potential of AYVAKIT as one of Sanofi's next blockbusters. Here, I'd like to highlight our progress in sustainability leadership. We are proud that Time has again ranked Sanofi as the world's tenth most sustainable company across all industries and number one in pharma and biotech. A good example is the eco eco design approach we're taking to reduce the environmental footprint of our medicines and vaccines.

[Paul Hudson, CEO & Director at Sanofi]

By 2025, all new medicines and vaccines will incorporate eco design principles, extending to our 20 top sellers by 2,030. We're already seeing impressive results with Dupixent, TEJA and Hexacene through optimized manufacturing, packaging and production. Thank you. I'll now hand over to Francois, our CFO for more details on the financials.

[François Roger, EVP & CFO at Sanofi]

Thank you, Paul, and hello to everyone. As highlighted earlier, net sales increased by 10.1 at constant exchange rates in Q2. This growth was primarily driven by immunology, biopharma launches and by Befortus. Gross margin improved by 1.5 percentage points, largely led by an improved product mix and efficiencies. R and D expenses increased by 17.7% due to the lower base of comparison last year with the onetime reimbursement from Sobeys.

[François Roger, EVP & CFO at Sanofi]

Underlying R and D expenses excluding this reimbursement increased by around 7%. We expect a moderate increase of R and D expenses in H2. Business EPS was €1.59 up 8.3 reflecting our strong sales performance and improved gross margin. Let me make a few comments beyond Q2 and discuss H1. SG and A is increasing in H1 at around half of the rate of our sales growth and 70% of the increase in SG and A goes to sales and marketing investments to support growth that we have and future launches that are coming.

[François Roger, EVP & CFO at Sanofi]

Business EPS in the first six months of the year is up 12%, which is fully supporting our expected strong EPS rebound for the full year of 2025. Moving to the next slide. In Q2, we continue to execute our capital allocation priorities. After having received in April around €11,000,000,000 from the sale of a controlling stake in Opela, we have been actively redeploying this capital. Indeed, we have announced the acquisition of Drains Bio Doctor0201, Vigil Neuroscience, Blueprint and last week Vice Bio.

[François Roger, EVP & CFO at Sanofi]

These acquisitions are perfectly aligned with our strategy and meet our three main expectations. First, strategic fit within our core therapeutic areas. Second, scientific relevance offering differentiated medicines and vaccines. And third, financial attractiveness. Three of our four announced acquisitions reflect our interest in early stage assets.

[François Roger, EVP & CFO at Sanofi]

While BLUEPRINT is at the higher end of our targeted price range, we are confident in its strategic value playing both in rare diseases and immunology areas and we are confident as well in its future financial returns. As previously indicated, early stage opportunities remain our primary interest. However, we always retain the flexibility to slightly expand beyond our pre established interests when compelling opportunities arise with attractive business cases. Looking ahead, we retain further capacity for business development and M and A while remaining committed to our AA credit rating. In parallel, we are executing our €5,000,000,000 share buyback program in 2025 with over 80% already completed as of today.

[François Roger, EVP & CFO at Sanofi]

We remain firmly committed to completing the full program by the end of this year. Moving to the next slide, I would like to highlight two key components of our ongoing financial performance namely the Regeneron development balance and the Amvutra royalties. First, it is important to note that the profit sharing payments to Regeneron are increasing in direct correlation with Dupixent profit growth. These payments are partially offset by the development balance compensation we received from Regeneron. As a reminder Sanofi has historically funded a larger share of Dupixent development costs compared to our partner.

[François Roger, EVP & CFO at Sanofi]

Under the agreement, Regeneron reimburses up to 50% of this cumulative cost by deducting them from our profit sharing payments. Based on current projections, we anticipate this development balance to be fully reimbursed by the 2026. This reimbursement arrangement is expected to result in a negative year on year BOI impact for Sanofi of approximately €300,000,000 in 2026 followed by a more substantial negative BOI impact of approximately €800,000,000 in 2027. From 2027 onwards R and D cost incurred will be shared within the same year. Second, new royalty streams are emerging as an increasingly important margin driver.

[François Roger, EVP & CFO at Sanofi]

For example, Ambutra was recently approved for a new indication in both The U. S. And EU with royalty rates up to 30% of sales. As illustrated on the right hand side of the slide, the expected royalty revenue of this medicine based on external consensus will have a significant contribution to our financial outlook probably until the end of the decade. Let me now give you a little bit more color on some key consideration for the balance of the year.

[François Roger, EVP & CFO at Sanofi]

Biportus had a strong momentum in 2024 with high vaccine coverage rates in many markets. We anticipate modest growth for 2025 with Q4 sales likely to be roughly similar to Q3. For flu, while we anticipate gaining market share, total sales are expected to decrease by a mid teens percentage versus last year due to competitive forces in particular in The U. S. And in Germany.

[François Roger, EVP & CFO at Sanofi]

We anticipate a sales split of about 75% in Q3 and 25% in Q4. For the full year 2025, operating expenses may increase slightly due to the previously announced acquisitions. ForEx impact is now estimated to be around minus 4% on sales and around minus 6% on EPS. Other items are similar to what we shared with you last quarter. For the full year 2025, we are now expecting sales growth at a high single digit percentage at the upper range of our previous guidance.

[François Roger, EVP & CFO at Sanofi]

This refinement of our sales guidance is not linked to BLUEPRINT, which is consolidated by the way from mid July twenty twenty five, but it is linked to the underlying performance of our business. We confirm our EPS guidance of low double digit percentage growth at constant exchange rates. This is also an implied upgrade of our EPS guidance as we now absorb a few hundreds of millions of additional costs from the newly acquired businesses largely in R and D. Finally, are navigating through a dynamic world with a lot of uncertainties from potential U. S.

[François Roger, EVP & CFO at Sanofi]

Tariffs and EU exports. However, all the details are still limited and not fully settled yet, we will update you along the way. I now hand over to Uman, who will provide an update on the progress of our innovative pipeline.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Thank you, Francois.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Since our last update, we received U. S. Approval for Dupixent, molispentheguide and MenQuadfi six weeks and last week, the EU approval for Sarclisa in newly diagnosed transplant eligible patients. Furthermore, Dupixent was submitted for review in Japan for BP and Sarazyme in The U. For Gaucher disease type three, with an FDA decision expected in January.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Despite itspecumab's mixed Phase three results, our pipeline continues to advance with new rabies vaccines showing consistent Phase three efficacy. We secured seven new regulatory designations, including orphan and fast track and had seven medicines featured in prestigious journals, which emphasizes our determination to accelerate our commitment in improving R and D. Last quarter, as Francois said, we acquired DR201 from Genbio, now entering Phase I in immunology. We've since made two acquisitions, BLUEPRINT with AYVAKIT and two new potential options in mid stage clinical development, the potential next generation molecule alimestinib for mastocytosis and BLU-eight zero eight in inflammatory indications and lastly, Vigil with VG3927, which has the potential to magnify and restore the neuroprotective function of microglia in Alzheimer's. We remain committed to expanding our pipeline with more opportunities, both internally and externally.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

We're excited about new monoclonal antibodies from multiple myeloma, which was recently designated an orphan drug, showcasing our ongoing innovation from our own research in France. Externally, we continue to augment partnerships and collaborations, working hand in hand with other leaders in the field to bring cutting edge treatments to patients. Next slide. We're committed to addressing the large unmet medical need for different COPD patients, with Dupixent, with uppecumab, and lastly, with lensecumab. At ATS, we present pooled data from BORIAS and NODIS Phase III studies showing significant reductions in exacerbations, FEV1 improvements, and quality of life, confirming our legacy in COPD with Dupixent.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

For atepecumab targeting former smokers, we're progressing the data analysis VERIFI-one and FIT phase three studies, including insights from other molecules targeting the same pathway. And once more advanced, we will discuss with regulatory authorities and provide an update on next steps. The data will be presented at the forthcoming medical meeting. Lastly, we announced our intention to evaluate lozecamin, our IL-thirteen TSLP pentavalent antibody in a Phase twothree COPD study this year. Based on its benefits in existing clinical study and two known and proven mechanisms of action, we have faith in its dual targeting nanobody technology with strong efficacy and proof of concept due to deeper access into lower respiratory tract airways.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Phase Ib data showed a 40.9 PPV reduction in FeNO levels in asthma with patients at day twenty nine. The medicine remains our main interest in respiratory conditions, thanks to its effect on biomarkers and symptoms. Next slide. Riluzobrutinib has emerged as a safe and highly effective platform for rare diseases. The regulatory decision is expected soon for ITP with a target action date for the FDA decision on 08/29/2025.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

It's received its first global approval recently in The UAE. Moreover, we are pleased by the recent designations received a fast track for IgG4 disease, an orphan drug for Weiha and sickle cell disease, all in The U. S, an orphan designation for IgG4 in The EU. To complement our presence in rare diseases, at ASCO we presented a subcutaneous Sarclisa data from three studies evaluating the convertibility of Sarclisa administered either by both on body injector or manual infusions compared to IV results from the study across different lines of regimens, which demonstrated non inferiority with most of the patients preferring the on body injector. Regulatory submissions are underway with acceptances expected soon.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Finally, efthoroprine alfa, our recombinant human AAT1 fusion protein in a Phase II superiority study for a one antitrypsin deficiency aiming for normal function normal functional AAT levels with greater convenience. Data is expected h 02/2025. Sanofi is deeply committed to rare diseases. We've established a global franchise with a strong presence in enzyme replacement therapies and hematology, as demonstrated by Altuveo and lastly, fitusiran. Based on this solid foundation, we're expanding our expertise in our pipeline to address the unmet medical need in patients with rare disease as well.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Our global reach, combined with our specialized knowledge, positions us uniquely to make a significant impact in the lives of those affected by rare disease. Really, Prubart, our C1S complement inhibitor for CIDP, we showed promising progress in an area with remaining unmet medical need, despite the availability of existing therapies. At PMS conferences that took place during the second quarter in Edinburgh, Scotland, we presented new long term extension data from our Phase II study. Part A demonstrated that most patients improved but remained stable on riliprovart at twenty four weeks. Results from the Part B confirmed finding across all CIDP patient subgroups, including those who are on standard of care, refractory or naive, where patients remained relapse free and sustained their response at week seventy six.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Patients showed thirty five percent reduction in NfL levels and a stronger sustained reduction in complement activity contented base. Reiprova offers potential of safe, effective subcutaneous option for CIDP and now also for antibody mediated rejection with orphan drug designations in Japan for CIDP and The US for AMR. Our Phase three programs includes two studies, Mobilize is for patients who have experienced failure or inadequate response to standard of care therapies, which are mostly IVIG or steroids depending on the country, and VITALIZE is the first head to head study for patients who are on IVIG and remain partial responders. Currently, both studies expect data from H2 twenty twenty six. I would like to conclude my usual flow slide for the next eighteen months, which includes a new view of 2026 split into two halves.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Key upcoming studies include the Phase II, they have doroprein alfa in AATD and DOTMATE with orano med, and two significant Phase III readouts with tolobrutinib in PPMS and the first data for amlotilumab in ADs this year. Next year, we expect the remaining Phase III data for amlotilumab in AD potentially followed by submission. The q four dosing in the phase three study is seeking to replicate positive data from the STREAM AD phase two study with an additional q 12 arm to assess the potential of longer dosing. The Q12 dosing is also used in the extension study. Our objective is to explore a more convenient treatment approach in AD with as few as four injections a year, potentially in the maintenance setting.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

As a reminder, recent results in asthma provided support for longer dosing interval potentially possible with OX40 ligand modulation on top of, the AAV phase two data that suggested sustained efficacy after ending treatment. While not while not all of our efforts will succeed, as is the nature of drug development, we're confident our skilled teams and advanced digital technologies will drive progress in our core therapeutic areas. I thank our R and D team and colleagues for their achievements, and they continue chasing the miracle of science to improve the lives of patients. With this, I will hand back to Paul.

[Paul Hudson, CEO & Director at Sanofi]

We'll now have the call to your questions. As a reminder, we would ask you to limit your questions to one or two. You'll be notified when your line is open to ask your questions. At that time, please make sure you unmute your microphone or option two, submit your question by clicking the q and a icon at the bottom of the screen. Your question will be read by our panelists. Now we'll take the first question. Please go ahead.

[Operator]

Your first question is from Wiza Eichter from Berenberg. Wiza?

[Luisa Hector, Head of Global Pharma Equity Research at Berenberg]

Hi there. Thank you for the call. So I wanted to touch on the R and D transformation because we see enormous amounts of progress at Sanofi across the whole organization, but the share price is still lagging and I think it's awaiting pipeline progress. So on the R and D transformation, I wanted to check your levels of confidence given some of your recent successes, but also some more mixed datasets, which are still in house. And if we go back to your December 23 R and D Day, where you laid out some objectives, you were targeting a 50% increase in Phase three trials for this year, 2025.

[Luisa Hector, Head of Global Pharma Equity Research at Berenberg]

You highlighted the new launch cohort with risk adjusted sales over EUR 10,000,000,000 in 2030 and your 12 blockbuster assets of which three of those could be over EUR5 billion. So I wonder if you could just comment on those specifically. Are you on track for the Phase III trials? Are you more confident in your EUR10 billion by 02/1930? And if so, has the mix changed now that you have more data in house? Thank you.

[Paul Hudson, CEO & Director at Sanofi]

Thank you, Luisa. Very comprehensive. Hooman, do want to get started?

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Yes. Luisa, thanks for the question, and I'll try to remain succinct. Sanofi has become an R and D driven company. We are committed to innovation in the service of future. A very of the opportunity we're we're direction. The

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

we're proof will be in the the pudding, and we remain very humble in the face of disease. My to answer your question specifically and very directly, of the three big ones that you described that we talked about on the 12/07/2023, amlutilumab was one of the three as well as was frexen and bevelamotemfib. We remain committed to all the molecules in our portfolio. Amlutilumab will read out in the relatively near future with its first phase three. We look forward to pressure testing, our predictions. I'll stop there and hand over to Paul.

[Paul Hudson, CEO & Director at Sanofi]

Yeah. I mean, you know, Luisa, and I think it's fair to say we've had plenty of time to reflect on the ups and downs of this year. And while not everything has gone our way, you know, the datasets have allowed us to do some good thinking around how to go forward or not as the case may be. You know, I think Hooman used the word humble, and I would add to that because I think, you know, this transformation has been moving at such a pace that we have spent the recent months literally going back and kicking the tires to make sure that we have dotted every I, crossed every t on the studies to make sure that we will continue to push science, of course, as expected of us. What we would like to avoid is stubbing our own toe. So we have some work to do.

[Paul Hudson, CEO & Director at Sanofi]

I think we remain on balance optimistic about the nature of the Big 12 and what that could mean for us. Of course, not everything will work. I'm very pleased with how the transformation has progressed. But I think you're right by the way, that is for some of jury remains out, that the progress is one thing, but it's revealing itself in successful Phase III. And I think I said this, I think maybe it was you that asked me a question for reflection on a previous call.

[Paul Hudson, CEO & Director at Sanofi]

You know, I'd like to think these things could have been done faster, but I've learned a few things about being patient. So we have to do the work, be diligent, be accurate and factual, and then we just have to turn the cards over. And we recognize that we're better just to keep up out of drive, get the results, share them and confidence will be built from there.

[Operator]

The next question is from Richard Vosser from JPMorgan. Please go ahead.

[Richard Vosser, Managing Director at JP Morgan]

First question, just on development of spend, little bit higher in the first half on both SG and A and OpEx, obviously, ahead of new launches on SG and A. Just how should we think about the development of that? Probably also thinking about '26 as well, you potentially have some interesting launches, maybe at the latter end of that year and in '27. So should we think SG and A goes up from here, R and D as well? Have we reached a level or with the trials that you're starting, should we expect that and BLUEPRINT to go up as well?

[Richard Vosser, Managing Director at JP Morgan]

And how should we think about the margin in '26? Is that sort of at a similar level of '25? And then just a quick bit on Dupixent, a little bit weak in China maybe, and we've seen that with some products in who have NDRL listing in China and some pressure in that market. Just thoughts about China, Dupixent and the rest of the portfolio and how we should think about the growth there going forward? Thanks very much.

[Paul Hudson, CEO & Director at Sanofi]

Thanks, Richard. I think and it's a couple of questions we've had throughout the day all morning. SG and A, R and D spend, of course, a little bit higher in the quarter, Francois. Where do you think how can you guide?

[François Roger, EVP & CFO at Sanofi]

Richard, it's a good question, Francois speaking. On R and D, obviously, I mean, reported an increase of 17% in the quarter. But if you put aside the exceptional item that exceptional revenue that we had from Sony last year, it's 7% underlying. As I said earlier, we expect to be probably around flat, maybe slightly up in R and D in the latter half of the year. So we will be for the full year where we said we would be which is slightly up for the full year.

[François Roger, EVP & CFO at Sanofi]

There might be a little bit of additional cost as well coming from LUTFRINE. But I mean, the guidance that we gave initially at the beginning of the year we will be there. So there is a little bit of a phasing issue between H1 and H2 have no concern whatsoever. On SG and A, you can see some increase as well. Just to give you a perspective I mentioned it earlier.

[François Roger, EVP & CFO at Sanofi]

We have a rate of increase of SG and A, which is half of our increase in sales, which means that we are benefiting from gross leverage. Do expect that to continue in the future. And if you look at it 7070% of the increase that we experienced in the first half went to an investment in sales and marketing to get growth which we have and to prepare for future launches. So I think it's very healthy because we are in an investment position. I do expect that to continue as well.

[François Roger, EVP & CFO at Sanofi]

Just to give you a little bit more color, I don't want to go into a guidance for '26 because it's too early and it's not the right time to do that. But just to give you a direction of travel, we do expect in the next couple of years to enjoy an attractive growth profile till 2031 at least. We will have a tight control on cost, which means basically G and A more or less flat. Sales and marketing up, but probably certainly at a lower level than sales. R and D will be certainly slightly up.

[François Roger, EVP & CFO at Sanofi]

Although there I want to be very careful, it will depend on readouts and it may be impacted a little bit as well by some acquisitions in BD and M and A. So we don't have necessarily the full visibility of where we can go year by year at this point in time. But anyway given that we will get some growth average do we expect your BOI to increase year after year in absolute value in the next coming years. Once again largely as a consequence of an attractive gross profile in sales with a benefit with a tight control on cost and gross leverage. We'll get that in 2025 and we'll get it in the coming years as well.

[François Roger, EVP & CFO at Sanofi]

That will give us space to absorb some specific items such as the one I mentioned earlier in the next couple of years like the Regeneron end of R and D reimbursement. That one we will be able to absorb in BOI. So do expect to see our BOI increasing year after year. And I'm very confident about it.

[Paul Hudson, CEO & Director at Sanofi]

Thank you, Francois. I think and well said, attractive growth profile, tight management on OpEx, r and d broadly flat depending on successes or the opposite in r and d for this year, little bit beyond we'll see. And, you know, we overlay that with the being one of the companies with the lowest genericization profiles over the next five, six, seven, eight years. So, you know, it's important that we advance the medicines that drive to growth and then fund the launches. But I think we've come a long way as a team reshaping the business, but we have to be extremely prudent with how we deploy those investments because we want increasingly profitable growth, it's just obvious. Brian, Dupixent China.

[Brian Foard, EVP & Head of Specialty Care at Sanofi]

Well, thank you, Richard, so much for the question. And I'll come to China in just a second. As you probably know, Dupixent is a pretty diversified product now around the world, a bunch of different indications. So we're in eight, as Paul alluded to already in The United States. And so while China is a very important marketplace, it is one of many where we're actually seeing continued underlying volume growth. And so I'd first start there.

[Brian Foard, EVP & Head of Specialty Care at Sanofi]

Actually in China, we've seen more than 30% volume growth in China. So really positive in China right now. Of course, as you mentioned, we will have pricing pressures from time to time in market, as is normally the case and as we plan for. And we will grow through the NRR deal actually eventually. But as we get more access to more indications in China, this is going be a really important marketplace for us moving forward, but one of many.

[Paul Hudson, CEO & Director at Sanofi]

Okay. Next question please.

[Operator]

Yes, please. Next question is from Matthew Weston from UBS. Matthew?

[Matthew Weston, MD - Pharmaceutical Research at UBS Group]

Thank you. Two questions for me please. One is on amlitelemab and human, if I'm a leading AD prescriber, I'd love to know what you think I want to see from amlutelimab. Do I want more efficacy than dupi? Do I want more efficacy than dupi in subgroups?

[Matthew Weston, MD - Pharmaceutical Research at UBS Group]

Or is it really about looking for the same efficacy as dupi but with that better duration of treatment? And then just one finance question. The additional comment on tariffs. I think the comment was that there was a lot that was unknown. Have you assumed anything in guidance for 2025?

[Matthew Weston, MD - Pharmaceutical Research at UBS Group]

Or have you assumed the basic level that's being discussed in the current EU U. S. Trade deal? Or just you've moved so much inventory, it doesn't matter this year? Thank you.

[Paul Hudson, CEO & Director at Sanofi]

Let's start there Francois.

[François Roger, EVP & CFO at Sanofi]

Yes, Mathieu. Anyway, it's difficult to comment on what we don't know. But we have run different scenarios obviously and we have based on what is widely reported in the media, we have looked at the impact that it could have on 2025 given that we are already fairly well advancing the year.

[François Roger, EVP & CFO at Sanofi]

And we confirm we did not factor it in our guidance, but it will have a limited impact on 2025 because we already have inventory in place in The U. S. So I don't think that it will in fact, with what we know today and what we read in the media, we don't think that it will impact our guidance in any way for 2025.

[Paul Hudson, CEO & Director at Sanofi]

Thank you. Hooman, what are you expecting to see?

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

So taking thanks for the question. Taking a step back, I think it's important to think about the atopic dermatitis landscape. And it remains a matter of some concern to me that only fifteen percent or sixteen percent of patients with atopic dermatitis, which who are biologic eligible are currently receiving therapies. Both from our own molecules and those of other pharmaceutical companies, we welcome new molecules in the space. And I think a leading KOL in the atopic dermatitis space and beyond will welcome more options for their patients.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Speaking specifically about amlatilumab, the value that, we see in this space is that there are a variety of patients that are highly heterogeneous, and need a variety of solutions, including the fact that agents, patients who are refractory to current agents demonstrate an upregulation of OX40 ligand in skin biopsies. What does that lead us to believe? All in all, the distillate of that is that I think that a new agent that comes in consistent with our, STREAM AD work that we've, previously published that provides both a longer interval of, treatment coupled with, magnitude of treatment consistent with the standard of care would be, significantly and hugely favored in the marketplace. One other final comment, newer agents that have significantly lower, efficacy than the standard of care have already garnered So a molecule that is comparable to the standard of care will be with a longer interval very substantially of value.

[Paul Hudson, CEO & Director at Sanofi]

Yeah. I think thanks from I think if you look at stream a d design, we had another arm to explore longer intervals. Think we'd love to see what that could do. We'll see. The data will tell us. Okay. Next question?

[Operator]

Yes. Next question from Florent Cespedes from Bernstein. Florent? Okay. Let's take the next question between next question from Shirley Chen from Barclays.

[Shirley Chen, VP - European Pharmaceuticals Equity Research at Barclays]

Hi, can you hear me?

[François Roger, EVP & CFO at Sanofi]

Yes.

[Shirley Chen, VP - European Pharmaceuticals Equity Research at Barclays]

Hi, thank you for taking my questions. So I have a question on Lou. You guided a meeting fine primarily due to price pressure. Could you please provide more color on how Sanofi plans to mitigate this aggressive pricing dynamic across multiple markets? And how are you thinking about the longer term pricing dynamics in flu?

[Shirley Chen, VP - European Pharmaceuticals Equity Research at Barclays]

And also, on top of that, how do you find so far, IFP Junior's leadership impact on the flu business in The U. S? And maybe on top of that, just you guided high single digit for the top line, given the flu headwinds that you have already flagged. I think it actually shows a resilient business on the top line at least. So can you please walk us through your confidence to reach that top end?

[Shirley Chen, VP - European Pharmaceuticals Equity Research at Barclays]

And like what which franchise will be doing the heavy lifting in the second quarter? Any color would be appreciated. Thank you.

[Thomas Triomphe, Executive Vice President of Vaccines at Sanofi]

Thanks for your question, Shirley. On the second part of your first question, so I don't have any specific comment on the new administration view on flu. But I can give you a bit more color on how we are seeing the full flu year in 2025. As we've mentioned and we are making addition to it, we foresee in 2025 a decrease of our sales in the mid teens percentage range with a Q3 to Q4 speed of 75% to 25% speed. You completely understood that it's linked to a competitive pricing pressure.

[Thomas Triomphe, Executive Vice President of Vaccines at Sanofi]

Let me give you some color around it. First of all, there is a one off impact in Germany. So it's a one off effect of 2025 only and will not replicate it moving forward, which is the fact that within the flu recommendation for Elder in Germany there is the addition of an adjuvanted competitor which automatically reset the price at approximately half what the price was in the previous year. So there's a one off there in 2025. The second part of that overall decrease for the year is linked to a competitive pricing pressure mostly in The U.

[Thomas Triomphe, Executive Vice President of Vaccines at Sanofi]

S. And a little bit in the international zones. I think there are a couple of points that are important I will highlight. First of all, we are a significant leader in the market. And let's be very clear, we expect our market share in Q2 to have to be a solid market share performance in 2025 despite this declining market in value.

[Thomas Triomphe, Executive Vice President of Vaccines at Sanofi]

Again maintaining our flagship position which obviously comes from the fact that we have a very strong differentiated portfolio with Fresenidus, Efuelta and Flublok. As for the long term, well I think that's quite in line with what we had in view and that's why we made the deal with Novavax and Nivaxovid because the way we foresee the market to evolve is first of all to keep evolving towards more different G2 vaccines like the ones we have that provide strong efficacy and good safety profile. And on top of that moving forward to flu COVID-nineteen combination where again you will be able to meet the quality in terms of efficacy of the differentiated vaccines, but of course also the tolerability profile. And I think that with our flu COVID-nineteen portfolio in development we have a good chance to get there.

[Paul Hudson, CEO & Director at Sanofi]

Thank you. Francois?

[François Roger, EVP & CFO at Sanofi]

Yes. On the question about landing in terms of sales growth for the full year, indeed we confirm our confidence for the high single digit level for the full year. First and foremost, we did 9.9% in H1.

[François Roger, EVP & CFO at Sanofi]

It does help for the full year. Second, we will continue to have a strong growth with Dupixent. Don't forget that we were at 21% of value growth in Q2. It's amazing by the way. It's even in the mid-20s by volume eight years after the launch really impressive.

[François Roger, EVP & CFO at Sanofi]

It's not only Dupixent. We are not Dupixent dependent. Launches they contributed 10% of sales, but they also contributed in Q2 almost one fourth of our growth and it's gaining traction quarter after quarter. And we have a resilient Genmed business or established product are very resilient as well. So we do confirm our high single digit guidance for the full year.

[François Roger, EVP & CFO at Sanofi]

Let's be careful with Q3. We have flagged it already since the beginning of the year. We had very high comps last year in Q3. So do expect to see a little bit of a slowdown in Q3 in terms of growth versus what we have experienced in H1, but once again full confidence with high single digit. By the way, I take the opportunity to say it, it's high single digit with and without BLUEPRINT.

[François Roger, EVP & CFO at Sanofi]

So it's not coming from BLUEPRINT high single digit, it's coming from the BEST business. Thank

[Paul Hudson, CEO & Director at Sanofi]

you. Next question.

[Operator]

Let's try again with Florent Cespedes from Bernstein. Florent?

[Florent Cespedes, Senior Sell-Side Analyst - European BioPharmaceuticals at Bernstein]

Yes. Good afternoon. Sorry about that. Thank you for taking my questions. Two, please.

[Florent Cespedes, Senior Sell-Side Analyst - European BioPharmaceuticals at Bernstein]

First, on Dupixent, could you maybe give a little bit more color on the ramp up in COPD as now we have the product available in certain countries and six more to come. Could you share with us if where you see the best adoption in this disease? That's my first question. Second question for Paul on pathway. With the recent Brooklinq acquisition and the really late stage products, is it fair to assume that in the future you will look for earlier phase assets and reduction that's more on what you used to call bolt on around CHF 2,000,000,000 to 5,000,000,000? Any color on that would be great. Thank you.

[Paul Hudson, CEO & Director at Sanofi]

Thank you. Brian?

[Brian Foard, EVP & Head of Specialty Care at Sanofi]

Yes. So thank you so much for your question. And first and foremost, double digit growth that we've seen just as Francois just said, really comes from across indications, across geographies. Our base business, actually our base indications of atopic dermatitis, asthma, nasal polyps, some of the first indications, we continue to see strong growth there. But it is really exciting to see also growth coming from new indications such as COPD, CSU and even recently BP.

[Brian Foard, EVP & Head of Specialty Care at Sanofi]

Now specifically as it relates to COPD, about nine months into the launch, we continue to see excitement from customers. And again, as a reminder, these are customers, these are really largely pulmonologists that have had a great deal of experience with DUPIXENT in asthma previously. So the best way to look at this, if you really look at the pulmonologist community and you look at how their prescriptions have changed, our volume has really grown strongly in the Poems offices, thanks to the launch of COPD in combination, of course, with asthma. And of course, that is, again, really positive and will continue to develop over time. So really, really positive start to launch of COPD.

[Brian Foard, EVP & Head of Specialty Care at Sanofi]

And we're seeing this pretty consistently across the markets, as you mentioned, thirteen and six more to go before the end of the year for launching in COPD.

[Paul Hudson, CEO & Director at Sanofi]

Thank you, Brian. On the second part, look, we've guided for quite a while on the two to five range. We we had said for maybe the last year or two, we'd step outside for the right opportunity, but first single digit. The BLUEPRINT opportunity was right in the sweet spot for us on this immunology rare axis, and we felt like we were quite uniquely positioned to be able to build on the great work Blueprint team had done and to really move quickly based on our experience from the world's leading rare disease companies. And I think don't forget that it's literally just in the launch phase.

[Paul Hudson, CEO & Director at Sanofi]

And of course, with the elanestinib behind that and perhaps even more of a more of a out of out of the, you know, more of a complicated but intriguing step is either way further back. It could be a game changer. Of course, these things could disappear quietly into the night. But we we feel like it really matched what we were trying to do. As for deals going forward, we sort of reiterate, I know you might say, well, you just did blueprint, but we get back into the 2 to 5 range, not because of the financial piece, but because we continue to look early, early, early, and they tend to be in that range.

[Paul Hudson, CEO & Director at Sanofi]

And we want to maintain our double a rating or at least we have flexibility there to do that. You know, Francois said it that our growth profile for the next five plus years is, you know, in in the top group of the industry. So it's really the emphasis remains early, early, early, but in the areas that we are strong in where the marginal cost to deploy a new asset would be modest. We just want to keep adding to that because as we get into the early thirties, you know, depending, that's when we need to be in launch swing for some of these assets. So it's better to go early.

[Paul Hudson, CEO & Director at Sanofi]

So I think we try and be disciplined. You know, we spend a lot of time on this, and we're very particular about what we think meets our bar. And I think we're happy with how we sit. Okay. Next question?

[Operator]

Yes. Next question from Sachin Jain from Bofar. Sachin?

[Sachin Jain, Vice President at Bank of America]

There. Thanks for taking my questions. A couple of product ones and then one clarification from me. So on amlitelemab, the answer to prior question, you flagged the importance of less frequent dosing. We haven't seen, I don't think, the K12 week ASPR data.

[Sachin Jain, Vice President at Bank of America]

So just any color you can give on the strength of that data read to AD. I just want to be clear that you put the K12 week data in the AD press release as I think it's a secondary endpoint. That's the first question. Second question on tadalafirin in SPMS. As we approach approval, just what should our expectations for the REMS be and how that might impact launch?

[Sachin Jain, Vice President at Bank of America]

And then just a quick clarification on a prior question on the BOI So in no doubt, should we see BOI margin growth as well as absolute growth? I heard the answer as a comment on absolute BOI, but I think the question was on the margin.

[Paul Hudson, CEO & Director at Sanofi]

Let's give us to him and Hamli.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Sachin, thank you for the question. Firstly, on Hamli, when I was referring to longer interval earlier, just for clarification for everyone and Paul, I was talking about Q4W, which is a differentiated interval currently for issue for the atopic dermatitis point one. Point two, and and, of course, ongoing theme through our AD trial starting with stream AD, which is q four w dosing and then into case one and case two, etcetera. So point one is that when I was asked about what a KOL would affect, I meant to Q4W dosing for an abundance of clarification. The second comment was your comment to Q12W, and there are three data points that I would direct you to.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Number one is the cessation study of STREAM AD, the off drug study component as it was described. As you know, over sixty percent of patients had a maintenance of their response at twenty four weeks, which is what the inspiration was to have a both induction and maintenance q twelve w dosing. And as you'll know from the corpus of studies, nine studies in the O'Shannon's program, we will see the red thread of QW go through at least four of those studies, include case one, case two, short, and one running into estery. And the final part of that Emily question was, thank you for noting on the asthma study that the Q12W dosing in asthma was promising and that adds to our understanding the OX40 ligand modulation of T cells in disease does have the potential to have a longer interval interaction. On SPMS and tolobrutinib, the only comment I'll make, and thank you for noting the importance of the REMS, the only comment I'd make is it's a subject of active regulatory discussion, and our practice is not to disclose any specific comments around this, especially at this delicate stage of discussions with the regulator.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

So we we found the collaborative interaction with the regulator extremely gratifying, and that's important.

[Paul Hudson, CEO & Director at Sanofi]

Okay. Thank you. Francois?

[François Roger, EVP & CFO at Sanofi]

Sachin on the increase of BOI you're absolutely right that what I said we will see our BOI increasing in absolute value in twenty twenty six, seven and in the following years as well. You're right I said in absolute value that I'm very confident.

[François Roger, EVP & CFO at Sanofi]

That being said, I don't want to commit at this stage as a percentage of sales. Don't forget this is what I mentioned in my presentation earlier. We have to absorb €1,100,000,000 of BOI that will not disappear, but that will go to a certain extent because of the end of the Regeneron reimbursement of R and D. So that's quite a significant amount. Even if we grow at a high rate and we will continue growing, I don't want to commit at this stage.

[François Roger, EVP & CFO at Sanofi]

We are working on it in order to try to make it valid as well as a percentage of sales, but I don't want to commit at this stage.

[Paul Hudson, CEO & Director at Sanofi]

Okay. Thank you. Next question?

[Operator]

Next question from Jimmies Fernandez from Guggenheim. Jimmies?

[Seamus Fernandez, Research Analyst - Healthcare at Guggenheim Partners]

Great. Thanks so much for the question.

[Seamus Fernandez, Research Analyst - Healthcare at Guggenheim Partners]

So just wanted to check-in on patent estates and the patent portfolio in terms of how you're thinking about the opportunity there. And then maybe just as an extension to that, life cycle management opportunities that you see on a go forward basis with your partner, Regeneron. And then just a quick second question. Hooman, it seems like you're commenting on the orthogonal combination potential that might exist with OX40. Are you really referring more to the potential to combine emotelimab with other assets?

[Seamus Fernandez, Research Analyst - Healthcare at Guggenheim Partners]

Or are you talking about the prospect of whether it be nanobody or other 40 ligand combinations? In particular, in HS, at least, we know, OX40 and the TNF, will be presented, I believe, at EADV. Just trying to get a sense of your thoughts around how broadly the OX40 mechanism could be applied in various disease states? Thanks.

[Paul Hudson, CEO & Director at Sanofi]

Roy, thank you. Roy?

[Roy Papatheodorou, EVP & General Counsel at Sanofi]

I guess the question was about Dupixent, but in general, also for Dupixent, I remind you that the compound pattern expires in The S. In March 31. In Europe, it expires in March with all the exclusivities, extensions attached to them. As Brian said, we've got eight indications. We've been spending a huge amount of money on development.

[Roy Papatheodorou, EVP & General Counsel at Sanofi]

You can rest assured that we have ensured that we protected all innovations that the company prepared around Dupixent. And we have a number of patents going well beyond the composition matter patent into the 40s, and it's too early to speculate as and when we'll keep you updated on the relevant developments.

[Paul Hudson, CEO & Director at Sanofi]

Thank you. Uman, FAST, if you can, LCM with our partner Regeneron.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

The LCM in discussion with Regeneron, active ongoing discussions within the Alliance. We work closely with them. We are excited by the ongoing relationship, which is active across existing molecules like DP and expect that, but also potential new opportunities that we're seeking to get.

[Paul Hudson, CEO & Director at Sanofi]

Thank you. And, Ambly, Tom Boes?

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

No. Firstly, let me just say on our dashboard at the moment, Ambly Mono is very much in the in the in the headline twin screen and every other part of the front of the car. Our focus is 100% on executing on delivering those studies over the next year or so at large Oceana program. And in terms of so that is absolutely our focus. In terms of combination therapies, OX40 Ligand is an important biological node, licensing B cell biology and far beyond, the opportunity to do combination therapies, as we've already demonstrated, with a positive result in BRAVECT and MIG in HS, as you say, which is about to be presented is going to open a whole new vista.

[Paul Hudson, CEO & Director at Sanofi]

Okay. Thank you. Next question.

[Operator]

Next question from Simon Baker from Redburn. Simon?

[Simon Baker, Partner & Head - Global Biopharma Research at Rothschild & Co Redburn]

Thank you for taking my question. Two quick ones, if I may, please. Firstly, could you just give us an update on the current trends and your outlook for Bay Fortis in The U. S? And then moving to BLUEPRINT and BLU-eight zero eight, the literature has been peppered with reports on KIT inhibition in inflammatory disease for a thick end of twenty years.

[Simon Baker, Partner & Head - Global Biopharma Research at Rothschild & Co Redburn]

So I just wonder if you could give us your thoughts, Hooman, on the on why you see KIT inhibition in that setting as an interesting area and specifically what appeals to you about the BLUEPRINT asset? Thanks so much.

[Paul Hudson, CEO & Director at Sanofi]

Thomas, Beforty.

[Thomas Triomphe, Executive Vice President of Vaccines at Sanofi]

So Beforty, as discussed before, we see some growth for Beforty overall in 2025. This will come from market expansion as Beforty's is going to more and more geographies. You know very well that there is a further competition entering into the field. I just want to take the opportunity that while the new product is also more plantivities both neurotransmitters are very different extremely very different half life.

[Thomas Triomphe, Executive Vice President of Vaccines at Sanofi]

Befortune has a life life of seventy one days. The other product has a life life of forty two days and very, very different real world experience with PFR2 being studied a quarter million of babies with outstanding results. Due to that we expect that overall U. S. This year will keep increasing this year and next year.

[Thomas Triomphe, Executive Vice President of Vaccines at Sanofi]

It takes three to five years of a pediatric intervention for vaccination coverage rates to reach their peak. So overall RSV prevention will increase and BFR2 will remain the dominant player thanks to his data set.

[Paul Hudson, CEO & Director at Sanofi]

Thank you. Briefly, Uman on ADAI.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Yeah.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Simon, I guess you can never take the chemist out of you when you speak. We're we're at firstly, let's start by saying we are honored and privileged to have the Blueprint team join us. They really are the experts in c k biology, and our industry is characterized by experts being able to achieve outstanding results. Speaking very briefly about mast cell biology, as you know, based on your background specifically, targeting wild type c kit has been a sort of holy grail of the industry for, for decades. You know very well from the times of William Oisler.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

So William Oisler, Marcel and their role in inflammation diseases, classical diseases, such as asthma, COPD, but far beyond have been important. If we can target wild type c k with an adequate therapeutic index, then it will open up a whole number of advantages.

[Paul Hudson, CEO & Director at Sanofi]

Yeah. I think, well, so do I think, ultimately, it's it's a nice shot to have in the pipeline. So it's been around a long time. If we get it right, this could be great. And if it doesn't, then it's early enough for us to make the tough call, but we're optimistic. Let's see. Okay. Next question.

[Operator]

Next question from Sarita Kapula from Morgan Stanley.

[Sarita Kapila, Co-Head - European Pharma Equity Research at Morgan Stanley]

Sorry to come back to margins, but maybe should we think about 26 margins being flat as a floor? And you provided more color on refunding income and future royalties, but should we expect divestment income, I believe it's $500,000,000 this year to continue into 'twenty six and 2027? And then just a quick one on BLUEPRINT and AYVAKIT competition from Cogent's bezulcastinib. Maybe you could have some words on the molecule given the liver tox. I'm sure you diligence the landscape, but do you believe BLUEPRINT adequately factored competition in the €2,000,000,000 peak sales guide? Thank you.

[Paul Hudson, CEO & Director at Sanofi]

Thank you, Francois.

[François Roger, EVP & CFO at Sanofi]

It's on the '26. I don't want to guide for '26. It's too early to do that. And so we'll do that on due time. But once again, I confirm the fact that we are working towards an increase in BOI next year that will start with the benefit of gross leverage and strong growth on the top line again. I do confirm what you said which is we do expect to get probably €05,000,000,000 Why not potentially more by the way from disposal in terms of capital gains from the disposal assets we regularly had about €05,000,000,000 might be a little bit more in the future, but at least that amount.

[Paul Hudson, CEO & Director at Sanofi]

Okay. I want to add to Brian, competitiveness of Avoca.

[Brian Foard, EVP & Head of Specialty Care at Sanofi]

Yes, think it's a fantastic question. And I'll start kind of the same way we talk about a lot of the disease states across immunology, which is first and foremost, this is a very underpenetrated marketplace. They've just launched into the space. And if you look at the growth for AYVAKIT, it is because they are finding new patients, getting new patients on therapy, keeping new patients on therapy. So as we've said before, new competition into any space like that is actually good for the space from a noise level standpoint, finding these patients.

[Brian Foard, EVP & Head of Specialty Care at Sanofi]

It's a really symptomatic disease state that presents itself on a lot of really important specialists that we call on a regular basis today and we'll continue to call on in the future. That said, I think that they have done a very nice job of factoring future competition into the mix, only for market growth, but also for leadership share. So we feel very confident with AYVAKIT and its profile, especially in recent light of the readout that we just saw from Bezu.

[Operator]

Next question from Peter Verdult from BNP. Peter?

[Peter Verdult, MD - Pharmaceuticals Equity research at BNP Paribas]

Peter Verdult, BNP. Just a couple of follow-up. Number one, interesting game team development enthusiasm around IL seventeen, becoming part of your pipeline portfolio in light of the growing opportunity in NHS and and data this week showing very promising efficacy in atopic dermatitis. And then secondly, Paul, sorry about the obligatory question on US pricing reform and the potential for Europe to step up and share the load. Just any interested in what your latest thoughts are.

[Peter Verdult, MD - Pharmaceuticals Equity research at BNP Paribas]

And just a very quick third, if I could squeeze one in for human. Just when should we expect to hear about next steps and plans and your go forward strategy? I need to pick a member whether it it will get terminated. Is that something that we should expect to hear about this year, or are you still doing work?

[Paul Hudson, CEO & Director at Sanofi]

Okay. Peter, thanks very much. I'm not sure what the question was in IL 17. Was it was it I I can't read that. So you'll have to tell me what was the question.

[Paul Hudson, CEO & Director at Sanofi]

It was in AD? Yes. Okay. I'm I'm not sure. Sorry.

[Paul Hudson, CEO & Director at Sanofi]

Let's go to another question the other part of the question. Kuman, maybe it's a pecumap, and then I'll answer pricing, and and then we'll come back to that question.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Okay. So it's a pecumap. We were obviously hoping for better results than our mixed results. We're working closely across the alliance with Regeneron, working through the the basis for the difference in RFI one and two. And once we figured that out, we you know, we have to recognize that RFI two failed.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

We will go back to the regulator for next steps.

[Paul Hudson, CEO & Director at Sanofi]

Okay. So then, you know, Peter, maybe it was just us here, but you really broke up on the first part. I think the question was about IL-seventeen for sure. The UCB, I think, had some early data. I think that's what we've coupled together here.

[Paul Hudson, CEO & Director at Sanofi]

Look, we believe the assets we have in AD will be the difference. There's no surprises there. We'll get dose one, see how that looks, decide how competitive it is. I think in immunology, there's always an opportunity to show an impact whether you can really make a difference. We will see.

[Paul Hudson, CEO & Director at Sanofi]

I'm very familiar with IL-17s, but I think our emphasis has been on breakthrough technologies and opportunities and intervals to try and really improve the patient outcome. U. S. Pricing, I think you said at the second part of it and what and and the the relationship between Europe and The US. But just very quickly, we don't know the final voting from the White House on how we'll look between the two through the 32 investigation, MFN and tariffs.

[Paul Hudson, CEO & Director at Sanofi]

And tariffs, once they are established and we know them, important step, then we'll know what the relationship is like with the other two components and know whether it's a 15% tariff with a caveat or 15 plus or 15 less. We don't know, and nobody knows. But we prepared for delivering the guidance this year, that's the minimum. So don't feel casual about it because we're absolutely not. I've been on record as many CEOs now about innovation access in Europe.

[Paul Hudson, CEO & Director at Sanofi]

And there's part of me as a parent and as a member of society would still concern that more than 50% of medicines approved in Europe are not available to patients in Europe. I think the value of a medicine should be paid for. And I mean there's a lot of people who could contribute to economies and GDP if medicines were made available to them. I'm as interested in budgets for healthcare, giving access to innovation for more patients as I am in the pricing conversation. We will see where that's out.

[Paul Hudson, CEO & Director at Sanofi]

When we have the facts, we will share them. But we're a health care company, we'd like to see more patients get access to more Next question?

[Operator]

Yes. Next question from David Risinger from Leerink. David?

[David Risinger, Senior Managing Director, Biopharma at Leerink Partners]

Yes. Thanks very much. So I just have one question, please. Could you discuss your expectations for tolobrutinib in PPMS human? And if you could just comment on efficacy expectations and also what you're anticipating from the liver toxicity data in that trial? Thanks very much.

[Paul Hudson, CEO & Director at Sanofi]

Thank you. Herman?

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Yes. So thanks for the question. Succinctly, there's a significant biological overlap between SDMS and PPMS.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

There was a major paper around the genetics of progressive disease a couple of years ago from Australia. Our view is there is at least some biological reasons to believe that smoldering inflammation and brain compartment inflammation are important in both diseases and that there may be some read through. We look forward to seeing these results later in the year. And with respect to toxicity profile with liver, we expect it to be commensurate with what we see in SPMS.

[Paul Hudson, CEO & Director at Sanofi]

Okay. I think maybe we have time for one more.

[Operator]

One more question and final from Ben Jackson from Jefferies. Ben?

[Ben Jackson, Equity Research Senior Associate at Jefferies]

Great. Thanks for the question. Just one final one for me then on omlutetamab. If we think about the efficacy that we've been talking about in several questions here, what is it specifically that you think physicians and patients are looking for in terms of which endpoint? We've obviously had a lot of noise recently about perhaps how an itch benefit is helping to drive penetration to the market.

[Ben Jackson, Equity Research Senior Associate at Jefferies]

And clearly, within your phase three designs, you have built in some itch endpoints into that. So I guess, which of the endpoints we should be paying most attention to? And then secondly, is there any reason to believe that the ops 40 mechanism could perhaps have a beneficial effect on itch? Thank you.

[Houman Ashrafian, EVP & Head - Research & Development at Sanofi]

Yes. So again, briefly, I think that your second question first, the OX40 ligand biology that Chimera had already worked out, specifically the ligand is likely through its effect on T cells and neuroinflammatory axis have an effect certainly on the atopic dermatitis and possibly itch. There's a literature on that. How can you assess it offline? And with respect to the endpoints, I think that the key here, both regulatory and from a community perspective, is IJ zero one and EAC 75 are obviously the things that the entry ticket and I in a in a disorder which has significant low bio pen rate, I think that those would be the entry tickets for what we do.

[Paul Hudson, CEO & Director at Sanofi]

Okay, Ben. Thanks for that. Last question. We delivered strong performance in Q2 with 10.1% sales growth, refined our 2025 sales guidance. At the same time, we confirmed our guidance of strong business EPS rebound.

[Paul Hudson, CEO & Director at Sanofi]

Our pipeline continued to make progress despite the mixed results for itapacumab and COPD, and we eagerly anticipate several important Phase III data readouts in the second half of the year, including amitelimab, volubrutinib. Augmenting our own pipeline, we closed the acquisition of BLUEPRINT rare diseases. We'll remain focused on strategically redeploying capital towards pipeline and growth as we continue to advance our strategy. With this, I wish everyone a good summer. We'll close the call.

Participants

Executives

• Thomas Kudsk Larsen, Head - IR
• Paul Hudson, CEO & Director
• François Roger, EVP & CFO
• Houman Ashrafian, EVP & Head - Research & Development
• Brian Foard, EVP & Head of Specialty Care
• Thomas Triomphe, Executive Vice President of Vaccines
• Roy Papatheodorou, EVP & General Counsel

Analysts

• Luisa Hector, Head of Global Pharma Equity Research at Berenberg
• Richard Vosser, Managing Director at JP Morgan
• Matthew Weston, MD - Pharmaceutical Research at UBS Group
• Shirley Chen, VP - European Pharmaceuticals Equity Research at Barclays
• Florent Cespedes, Senior Sell-Side Analyst - European BioPharmaceuticals at Bernstein
• Sachin Jain, Vice President at Bank of America
• Seamus Fernandez, Research Analyst - Healthcare at Guggenheim Partners
• Simon Baker, Partner & Head - Global Biopharma Research at Rothschild & Co Redburn
• Sarita Kapila, Co-Head - European Pharma Equity Research at Morgan Stanley
• Peter Verdult, MD - Pharmaceuticals Equity research at BNP Paribas
• David Risinger, Senior Managing Director, Biopharma at Leerink Partners
• Ben Jackson, Equity Research Senior Associate at Jefferies