Ladies and gentlemen, thank you for standing by. Welcome to today's Sanofi First Quarter 2019 Earnings Conference Call. I would now like to turn the call over to George Grofik, Vice President, Head of Investor Relations at Sanofi. Thank you, and please go ahead, sir..

Good morning, and good afternoon to everyone on the call. Thank you for joining us to review Sanofi's first quarter results. As usual, you can find the slides of this call on the Investors page of our website at sanofi.com. Moving to Slide 2.

I would like to remind you that information presented in this call contains forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially.

I refer you to our Form 20-F document on file with the SEC and also our Document de Reference for a description of these risk factors. With that, please advance to Slide 3, and let me introduce our speakers today. With me are Olivier Brandicourt, Chief Executive Officer; Jean-Baptiste de Chatillon, Executive Vice President and Chief Financial Officer.

Olivier will discuss key highlights, after which Jean-Baptiste will review the financials.

Joining us for Q&A will be Olivier Charmeil, Executive Vice President, China and Emerging Markets; Karen Linehan, Executive Vice President, Legal Affairs and General Counsel; and David Loew, Executive Vice President, Sanofi Pasteur; Alan Main, Executive Vice President, Consumer Healthcare; John Reed, Executive Vice President and Global Head of R&D; Bill Sibold, Executive Vice President, Sanofi Genzyme; and Dieter Weinand, Executive Vice President, Primary Care.

And with that, I'd like to turn the call over to Olivier..

Thank you, George. Good morning, and good afternoon to everyone, and welcome to our first quarter earnings conference call. On Slide 5, Sanofi delivered strong first quarter results. At constant exchange rates, sales and business EPS grew by 4.2% and 9.4%, respectively.

Sales growth on a constant structure basis was close to 4%, demonstrating the new growth phase which began in the third quarter of last year. Slide 6 breaks down our first quarter sales performance to show the drivers of our organic growth.

You can see that as in the past two quarters, our growth drivers continue to move and offset the impact of US LoEs. On Slide 7, you can see the sales picture across our 5 GBUs. This was a strong quarter overall with double-digit growth in each of Specialty Care, Vaccines and our new China & Emerging Markets GBU.

Elsewhere, CHC delivered on a modest growth as a result of the headwinds we highlighted on our Q4 earnings call, while Primary Care continue to face pricing pressure in the US and Europe. On Slide 8, is our new you GBU structure allowed us to manage the impact of LOEs in Primary Care and the weaker CHC performance in mature markets.

If we look at first quarter sales by geography, emerging markets continue to be an important drivers, which sets up by 13.6%, highlighted by the strong contribution from our new GBU China and emerging markets. Looking at our Specialty Care franchises on Slide 9. Sales grew by 18% at constant structure.

Beginning with launches, our immunology franchise continues to perform exceptionally well driven by Dupixent both in AD and asthma, and I will come back to this shortly. Sales of our Rare Blood Disorder franchise increased by 1% due to headwinds from the tender loss in Canada in second quarter '18 and from competition to Eloctate in the US.

Looking specifically at Eloctate, we gained market share in the factor replacement category, but this was more than offset by the share capture by emicizumab since its approval in the non-inhibitor space. Looking forward, this is an evolving situation.

We have strengthened our messaging on the data demonstrating the benefits of Eloctate in joint protection and joint health, which is an area of high unmet need for these patients.

For example, in retrospective studies, Eloctate has been shown to result nearly 100% of target joints and has demonstrated continuous joint health improvement over three years with prophylaxis. In oncology, our legacy franchise performed strongly in emerging markets, notably, China.

Importantly, Libtayo strong launch continued in advanced cutaneous squamous cell carcinoma in the US and I will come back to this shortly as well. In Multiple Sclerosis, we delivered 12% increase in sales of Aubagio.

And finally, rare disease reported another double-digit growth quarter globally with good performances from each of our core franchises of Pompe, Gaucher and Fabry driven by treatment-naive patients accruals. On Slide 10. I want to update you on two important launches, which will help drive our Specialty Care business.

We think the Rare Blood Disorder franchise, Cablivi's, the first therapeutic approved for aTTP in Europe and the US, continues to have encouraging uptake.

We launched Cablivi into US on April 2nd, we have seen significant interest from treatment centers with patients already being treated with Cablivi ahead of inclusion on formularies and to help with access we have established with Cablivi Patient Solutions program.

In Europe, we launched Cablivi in Germany in October, and it is available in France through a managed access program. First quarter sales in these two countries where at EUR5 million, we are now rolling Cablivi out in additional European countries with launches under way in Denmark and Austria and further launches planned into Nordic region in 2019.

So second important launch is our PD-1 Libtayo for the treatment of advanced cutaneous squamous cell carcinoma. Libtayo is a first and only FDA approved therapy in this indication, which is responsible for around 7,000 death per year in the US. So, US launch is going well and we expect the European approval decision in the second quarter this year.

We also receive approval in Brazil and Canada in recent weeks.

Initial uptake into US has been helped by the broad access and the reimbursement we have been able to secure, more patients being treated for locally advanced or metastatic CSCC, initiating Libtayo than any other PD-L1 or eGFR inhibitor quickly establishing Libtayo as a standard of care agent for the CSCC patients.

Many oncologist will and only see one or two cases per year. So it's a breadth of ordering speaks to the ability of our team to quickly educate physicians about this new treatment option. Looking ahead, we intend to strengthen Libtayo's position as a standard of care in advanced CSCC and we will start Phase III adjuvant trial in mid 2019.

On Slide 11, I want to update you on to launch of Dupixent, sales reached EUR329 million into quarter, as we continued to execute impressive global launches in adult AD, US asthma and most recently US adolescents AD.

If we look at the US alone, prescriptions of Dupixent grew by 18% sequentially, but new-to-brand prescriptions grew by 32% indicating as a strong momentum. In adult AD, we are seeing continued growth into US as positive real world patient experiences driving awareness and willingness to receive treatment.

We are also seeing deeper penetration of the prescriber base with close to half of HCPs now having written prescriptions for at least four patients. Like the US, globally launches are outperforming analogs. Turning to asthma.

We think the opportunity lies in growing biologic penetration in this market and we are seeing exactly that with three quarters of Dupixent patients being new to biologics. Since launch in October, Dupixent has achieved unprecedented access in this indication, with around 90% of commercial lives now covered.

Feedback from patients and physicians has been remarkable and new-to-brand data suggests, we have outperformed recent biologic launches in the category. Outside the US, we have received a positive decision from the CHMP and we recently launched in Japan. Finally, in adolescent AD, we launched in US on March 11.

So target patient population size is around half the adult population, and we are already seeing good demand based on the significant unmet need in this population. Overall, given the current trajectory planned launches and potential approval in new indications, including nasal polyposis. We remain very confident in the outlook for Dupixent.

On Slide 12, I'm turning now to vaccines. Here our first quarter sales grew by 20%, driven by strong performances from our pediatric portfolio and Menactra.

Our pediatric vaccines where is a primary driver, sales grew by 26%, supported by the recovery and growth of Pentaxim in China, good performance in other emerging markets, and by order phasing in Japan. Menactra reported a good quarterly performance with sales up 21%, due to continued strong orders in the Middle East.

We also saw double-digit growth from our travel and endemic portfolio, as a result of rabies vaccine sales in the US and Europe. Looking forward, I'll remind you that Pentaxim resupply in China will benefit year-on-year comparison for vaccines in the second quarter as will low base for comparison of CDC orders.

As we move into the second half of 2019, these factors will normalize. Turning to Primary Care on Slide 13. Sales were down 4.7% at constant structure. Diabetes sales declined 6.9%, we achieved solid growth outside the US, mainly in emerging markets. However, this was more than offset by a 23% decline in US sales including the 37% decline in Lantus.

As we signaled higher rebates and the increased Part D coverage gap contribution that put further downward pressure on net pricing. As you can see on graphic, we are becoming less and less exposed to the US Lantus alone. Turning to Praluent, while overall sales grew 10%, sales in the US declined by 27%.

We are experiencing volume growth in the US, which we expect to continue. Following our label update for the reduced risk of cardiovascular events and the uptake of the lower priced NDC, However, net pricing has been heavily impacted by higher rebating.

And looking forward, you should expect continued pressure on average US net pricing for Praluent, as we negotiate to further improve patient access and affordability. Established product sales were down 3.8% adjusting for the EU Generic divestment.

Performance was impacted by accelerated biosimilar erosion of Lovenox, which was partly offset by good growth of Plavix and Aprovel in China. Turning to CHC on Slide 14. Sales grew by 0.6%. This below trend performance was consistent with our commentary in February on the adverse impact of seasonal factors and divestments in first quarter.

Looking in detail, at the quarter, we achieved growth in our three largest categories allergy, cough and cold, pain, but also digestive. The highlight was our emerging market performance where sales growth of 8% was again driven by our strong business in LATAM, but also by improvement in Russia and China.

In mature markets, we saw a decline in sales as a result of the slow start to the allergy, season in the US and a weaker cough and cold season in Europe. These seasonal factors are affecting all major players in allergy, cough and cold and in fact, industry data suggests that that Sanofi CHC continues to perform at the high-end of our global peers.

Finally, the divestment of non-strategic brands in Europe and Canada had an additional adverse impact. Without this, growth in CHC would have been 1 percentage point higher, and looking ahead, you should expect further portfolio rationalization in the coming quarters.

On Slide 15, our emerging markets business continues to be a core strength for Sanofi with double-digit growth in the quarter. China remains a key driver with broad-based growth of 22%.

Looking ahead, there is a new volume-based procurement system has recently been introduced in the 11 large cities and this is expected to result in lower growth rates for Plavix and Aprovel for full year of 2019. As a result, the first quarter performance will likely be as the strongest quarter of the year for China.

On my final slide, I want to update you on key upcoming R&D milestones. In term of regulatory approvals, we expect decisions on several key opportunities this quarter, including Libtayo in Europe and Dupixent for nasal polyposis in the US.

We also have a number of pivotal read-outs due to the coming months including sutimlimab in Cold Agglutinin Disease, Zynquista in Type 2 diabetes, and our second pivotal trial of Isatuximab in refractory multiple myeloma. Lastly, we expect a number of proof-of-concept read-outs.

This include our Anti-IL33 in asthma and COPD, as well as our SERD in breast cancer. So it will be another busy year for R&D organization. And with that, I hand over to Jean-Baptiste..

Thank you, Olivier. Good morning and good afternoon to everyone. But before discussing the details of the P&L, I would like to highlight the positive impact of ForEx on our reported first quarter figures, this mainly resulted from the stronger US dollar. In total, the benefit to sales on business EPS was 2% on 1.5%, respectively.

Slide 19, we delivered a double-digit increase in BOI in the quarter. This was driven by a combination of the solid top-line growth, which Olivier described together with favorable geographic and product mix, which benefited the gross margin on good cost control. If I touch briefly on operating expenses.

In SG&A, we kept the increase less than 1%, despite launch cost.

We're looking at the 5% increase in R&D, keep in mind this included incremental cost for Bioverativ and Ablynx, excluding divestments on acquisition R&D expenses would have been up 1.9%, This impact of acquisitions will diminish beginning next quarter of the acquisitions completed in March and June of last year, respectively.

The only other item I would draw your attention to is other operating income and expense. This line includes our share of the profit and loss of the Regeneron of the monoclonal antibodies Alliance, net of marketing expenses incurred by Regeneron.

The combined cost in the quarter increased to EUR68 million versus EUR18 million in Q1 2018, which reflects the progress of the Alliance toward profitability. Taken together, we delivered an 11% increase in BOI in the quarter.

On slide 20, moving down to P&L, net financial expense in the quarter reflected a high base of comparison from the financial gain in last year's first quarter. While the effective tax rate of 22% was in line with our full year guidance and unchanged from the prior period. With the average share count, also broadly flat.

We delivered strong business EPS growth of 9.4%. Slide 21, looking in detail at our cost line. On Slide 21, the gross margin increased on a reported basis by 170 basis points to 72.7%. At CER, the increase was 140 basis points. The uplift in the quarter resulted from favorable product mix on strong growth in China.

You should not extrapolate our first quarter performance for the full year, as the China growth is not expected to repeat. Furthermore, our flu vaccine sales, which carry a lower gross margin out weighted toward the second half. As a result, it remains our expectation that the gross margin will be around 70% at CER this year. Turning to OpEx.

Combined R&D and G&A expense grew by 2.1% in the quarter, if we adjust for acquisition on divestitures, OpEx would have grown 0.7% with SG&A in particular flat. As I mentioned earlier, on the same basis, R&D would have grown by just under 2%.

Overall, I remain confident that we will keep OpEx growth for the full year to around 1% with a similar trend over the next couple of years.

On Slide 22, we confirm our full year guidance for 2019 business EPS to grow between 3% on 5% at CER, of course, having delivered a high single-digit growth in the first quarter, we are confident that we are on track to meet this range. Regarding ForEx, we now expect this to be approximately [Technical Difficulty].

All participants are on the line. Okay, My apologies to everyone on the call for that interruption. We'll resume the call again.

Operator, are we live?.

George, I'm here, John..

Yes, sir. The call is live. Please go ahead..

Okay, very good. Sorry everyone, we just face a terrible technical issue for few minutes, we're going to resume and we understand that you have not been able to hear us after Slide 22. So I was going to just go back to the closing remarks.

And what I was telling you is that we sustain our new growth phase in the first quarter, we did pretty impressive launch execution with Dupixent. We continue to face backdrop of price pressure in US Primary Care and taken together, we deliver the strong growth for the year with double-digit BOI growth and high single-digit business EPS growth.

And so message here is consequently, we are confident we will deliver our full year guidance. But I wanted also to show you my final slide, where I want to mention that we look forward to seeing many of you at our Meet Sanofi Management event in Paris on Wednesday, June 26.

The format will include presentations and a series of roundtable discussions, which will allow you to spend in-depth times with our management team, and the primary focus of the day will be on Q&A and interactions with management. Okay. So we are now back to the beginning of our Q&A session. Thank you very much, and apologies again..

I now request and as a reminder, we'd like ask you to limit your questions to two each..

Thank you. Your first question comes from the line of Peter Verdult of Citi. Please ask your question..

Thank you. Peter Verdult, Citi. Two questions. Firstly, for J-B or Olivier, I know Sanofi historically doesn't play around with guidance so early in the year. But just trying to get a better sense on the level of conservatism that you applied given the start of the year.

Particularly, I wanted to get a handle on the relative contribution from China stocking for Avapro and Plavix versus the underlying positive mix effects and the absence of BMS royalties. And here, I'm thinking very much about the gross margin and how that plays out for the remainder of the year. Secondly, for David, in Vaccines.

I know that Fluzone High-Dose QIV has been accepted for review in the US. Could you remind us with respect to Sanofi portfolio where we are with the sort of portfolio upgrade strategy? Again, trying to get a sense of the degree of margin upside potential as you transition more and more patients to the Fluzone family? Thanks very much..

Thank you very much, Peter. I'll start, and then I'll pass it over to Jean-Baptiste. And maybe on China, to Olivier also. So first, I mean, you heard us, so we're very confident on the 3% to 5% at CER. Although the phasing versus what we told you previously is expected to be different maybe than we had anticipated.

So of course, we're not providing quarter-by-quarter guidance, right, on EPS, but you have to remember that Vaccines is likely to remember to normalize growth from the second half. And you mentioned China.

Well, China is unlikely to repeat the strength of the first quarter, and that's the reason why I would like to -- you to hear from Olivier directly. You mentioned the first quarter gross margin performance, but again, I would say you should not extrapolate automatically the performance there.

We should also remind you that the second quarter of last year, our P&L was in fact benefiting from a number of non-comparable gains, which were totaling about EUR123 million.

And to the point I think you are alluding to, our guidance includes an appropriate level of conservatism around the competitive dynamics, both in hemophilia and the PCSK-9 class. So that would be my overall summary.

Now do you want to add anything, Jean-Baptiste, on the overall guidance or the gross margin?.

No. Maybe China is responsible for both the increased sale in Q1, but also has a positive impact on the gross margin. Just to remind you that it's a geographic mix is favorable there also. So it explains both Q1 phasing. That's it, I guess what you just mentioned..

Okay.

Words on China, Olivier?.

Yes. So Peter, as you mentioned, we had a very strong quarter and continue to be very happy with the operation in China with the growth of 20% for the quarter. The growth is very much driven by our pharmaceutical products.

And it's really a cost now of our portfolio with a strong growth of our established product portfolio growing 13%, strong growth of our all legacy brand in Oncology growing 28% and the continued growth on diabetes.

So how will we look at it at the end of the year given the new volume-based procurement system that is going to impact Aprovel and Plavix in roughly 30% of the total market? So we are still expecting overall good growth for 2019, but it's likely, as Olivier alluded to, that the first quarter performance will be the strongest in the year..

Okay.

Vaccine, David, please?.

Yes. Hi, Peter. So on Fluzone High-Dose, as you've said, we filed in the United States, and we are filing this quarter in Europe. In the US, the Fluzone High-Dose TIV so that the previous version versus what we have just filed now, which is the QIV, is having a very strong performance. And we are by far the market leader with the highest market share.

So we anticipate that we are going to launch the QIV in the United States next year and in Europe in 2021 where Fluzone High-Dose so far was not available. So we have not just a new version of Fluzone, but we also have a geographical expansion, which we did not have before.

Regarding your pricing question, obviously since it is a QIV and not a TIV, yes, there will be a pricing upside. We need to, of course, be mindful. There are also some competitors on the market, but we are very confident in our very large AdCom-based clinical trial data that we have. And so I think we will assume leadership worldwide.

In addition, we added Flublok, as you know, that we have launched very successfully last year and which we anticipate to have continued growth..

Thank you, sir. And your next question comes from the line of Florent Cespedes with Societe Generale. Please ask your question..

Good afternoon, gentlemen. Thank you very much for taking my questions. Two quick ones. First, on Aubagio, this multiple sclerosis product continues to grow dynamically when some of your competitors are less successful.

Can you share with us what is the cause behind this product in the US and Europe? And my second question is a follow-up following Olivier's comments regarding the full year guidance. You said that the full year guidance carries some conservatism on PCSK-9 and hemophilia.

Could you elaborate a bit? Do you assume an acceleration of the PCSK-9 going forward? Or what kind of magnitude of hemophilia growth do you anticipate in the short, medium term? Thank you..

Very good. Thank you very much, Florent.

Aubagio, Bill?.

Yes. So thanks for the question. Really, what's behind the Aubagio growth is that it's a great product that as physicians and the community use it more and more, it continues to be reinforced. And we've seen strength not only in the US, but we've seen global strength with double-digit growth. So it remains the only growing oral product.

And we remain confident in its performance going forward..

Okay.

The guidance question, Dieter, do you want to answer the question on Praluent's?.

Yes. So Praluent continues to grow very nicely in volume in the United States where we had a TRX growth of some 53% in the first quarter.

That did not completely offset the pricing pressure we've experienced to maintain our level of sales before, but it was very important that we maintain very broad access to realize the full potential of the product going forward. As you know, there are new guidelines in place now for the PCSK-9 class.

We're expecting the new labeling in the US that would expand the use of Praluent. We hopefully will achieve that. And we've introduced a lower NDC -- lower-priced NDC Praluent to gain -- regain share in the Medicare market.

So the outlook for Praluent in the US is more volume growth going forward, offset by continued price pressure to maintain the access, while in Europe, we have seen very good growth in Europe with 53% increase via Praluent. We expect that to continue going forward..

Alright. So we're confident to increase volume, pressure on pricing in the US And ex-US, we definitely doing well. So branding is doing well with a very significant growth rate.

Eloctate, Bill?.

Yes, sure. Absolutely. So thanks, again, for the question. With Eloctate, I think, first of all, I'll just provide a little bit of perspective on our hemophilia portfolio. And we have a long-term commitment to hemophilia. That's with the current products that we have with Eloctate and Alprolix.

Clearly, the phase with what we have, but we also have the pipeline, which is emerging, where we have BIVV001, which is next generation of factor replacement, followed by fitusiran, our novel RNAi therapy and, ultimately, our San Rafael gene therapy programs.

So as Olivier has stated, the market is currently dynamic in hemophilia with the competitive environment. And it's -- I think if you look at the underlying dynamics, on the one hand, patients have continued to switch from a short-acting factor to Eloctate at a similar pace to 2018 so that our shared factor replacement category has actually increased.

In fact, Eloctate now shares the lead for prophylactic factor replacement in market share. But on the other hand, we've seen prophylaxis patients switch to emicizumab following its launch in the noninhibitor space last October. So Olivier gave some of the numbers upfront.

The two factors that were driving the performance in this quarter was the average -- lower average utilization of Eloctate for patients and, as we said a little bit earlier, the Canadian situation as well as the competitive future. So now we think that the hemophilia market is an exciting place for us to be now and in the future.

We're through this period of a dynamic business, if you will, and believe that factor is fundamental. And ultimately, that is what patients are going to require, is replacement of factor. And we believe that Eloctate is the best factor that there is. So ongoing, we're committed to this space and excited to be there..

Thank you very much..

And then if I may just add one thing. Joint health is, in our opinion, the biggest unmet need in hemophilia. And it happens that Eloctate is the first and only therapy that has shown to improve long-term joint health in a retrospective study. And it has been shown also to resolve almost 100% of target joints.

So we will -- we are working on using this data and positioning Eloctate even more strongly in joint health in the coming months. I just wanted to share that because I do believe it's a very strong differentiation factor for Eloctate and Alprolix by the way, but it's definitely a very important feature..

The next question comes from the line of Graham Parry. Please ask your question..

Great. Thanks. It's Graham Parry from Bank of America.

So firstly, could you just give us a little bit more detail on the cost saving measures that you've put in place during the quarter? And what you expect to do and progress, let's say, through the remainder of the year? How that breaks out across headcount reductions, T&E reductions, for example? Just help us understand how you're going to achieve the low operating OpEx drive that you've talked about.

Secondly, on Dupixent, could you break out how much of volume and value is driven by asthma? You indicated that you've got data showing faster launch than FASENRA. Any color in the space, in the asthma space? So presumably, yours, you have a good split.

Out of how much of the growth is there? And help us also understand where the continuous growth is in the atopic dermatitis sector.

And on the expansion of Dupixent into the adolescence, how much off-label usage do you think there already is in adolescence? So do you think you're really tapping into a relatively untreated population there? Thank you..

Alright. Thank you very much, Graham.

Jean-Baptiste, OpEx reduction?.

Well, yes, thank you for this question. We are effectively tackling many issues, which are failing potential mindsets. So it's not just a one-off or tackling one or two issues. It's really changing the way we are spending.

So we are developing across the board our methodology of smart spending, which is across and related between purchase and finance on business to really address things that are not only just one-off, but really deep insight the way we purchase, the way we spend.

Of course, our G&As on the normal things are being curbed, but it's really mindset performance that we are really developing inside the company.

So resulting of this, with the reinvestment we are doing behind our launch of new products in China or the launches in Genzyme, it's of course the 1% -- around 1% OpEx guidance that we have given for this year and the coming years. We start to see some results, but of course, we -- it's a journey and we will go on doing it..

Graham, if I can just build a few seconds on this. So what you're hearing from Jean-Baptiste and we're all aligned all around this table to deliver our commitment here. We're really pulling all the levers, right, to achieve those cost savings, which are in many different places.

And I can tell you, for instance, we're already executing on significant efficiency initiatives. We have announced in France and Germany early retirement programs already. Jean-Baptiste and the others are benchmarking ourself against a number of companies in many different buckets. Procurement comes first, and we think there are a lot of room there.

But we're doing also better inventory management. We're optimizing shared services. We have already in Q1, and we'll continue to reduce external consultancy costs and T&E.

And of course, we're benefiting from what we announced in the makeup, the formation of our Primary Care business unit by pulling DCV and established products in the developed markets. And we are seeing the impact of that already. So I just wanted to give you a little bit of color of what we're doing currently. Okay, so that's the first one.

Dupixent, AD versus asthma and AD in adolescents?.

Yes, thank you, Graham. So a couple of comments. We believe that we are actually tracking from a launch start perspective ahead of the other biologics. We have better visibility in pulmonology. It's more of an estimate that we have within allergy but, overall, believe that we are -- we're tracking ahead.

And we're seeing, actually, really strong performance across the board. As Olivier mentioned, 75% of the patients are coming in our new to biologics. So it was foundational for us to grow the overall penetration in that space, and we seem to be doing so. The market access is off to a very strong start.

Within a very short period of time, we have over 90% of plans that -- where there's a policy in place and over 90% of those are to label. The feedback that we're getting from the physicians is really strong as well. And really, we're at the very beginning with this one. We're encouraged on all the fronts that we're seeing.

I think to look ahead, as we have more indications and more aid groups, it becomes harder and harder to actually split out the contribution of each as you look forward. Now to specifically your question on adolescents, we are seeing patients coming in, adolescents being prescribed.

We can't really estimate what was happening from an off-label perspective previously, but we are seeing initiations starting now. So there is clearly a pool of patients there that are waiting for more benefit from the drug..

Your next question comes from the line of Richard Vosser. Please ask your question..

Hi, thanks for taking my questions. Can you just get back to the gross margin for a bit? Obviously, a good gross margin in the first quarter. I think if we think about vaccines over the last two years, yes, the lower margin than pharma, but the gross margin improves in the second half.

So just could you give us a little bit more color on that? It looks like the gross margin is tracking more to 70.5 rather than to the low 70s. So just some help there would be great? And then second question on the doughnut hole impact.

You kind of gave us the impact for the full year, but if you could just give us an idea of what the impact has been so far and how we should think about that phasing over the remaining quarters? Thanks very much..

Alright. Thank you, Richard.

You want to answer Jean-Baptiste gross margin and vaccine role during the second half?.

Yes. I suppose it grows from one half to the other, but it's still pushing back the other H on the whole of Sanofi. So I think we've commented quite heavily on that with the one-off of last year H2 on the phasing of China and also things which are one-offs, which are related to the gross margin.

And this quarter, we're like stopping paying the BMS royalties. So little to add. We said around 70. We repeat around 70..

Okay.

Maybe David, do you have any comments on gross margin of vaccines?.

Yes. I mean it's indeed correct that we have slightly improved the gross margin. That was driven by several factors. The first one is obviously Pentaxim coming back in China and the real growth of 30% of Pentaxim in China.

The second one is the mix of flu where we are getting more and more share with Fluzone High-Dose and converting patients from standard TIV to Fluzone High-Dose. And then we have also improved our industrial affairs performance somewhat. So indeed, we have a slight gain on the gross margin here..

On the doughnut hole maybe?.

Yes. So we have given up the number for the full year of EUR240 million..

It's evenly spread over the year..

It's evenly spread over the year. Okay. So, Richard..

Your next question comes from the line of Peter Welford of Jefferies. Please ask your question..

Thanks, yes, I've got two please. Firstly, just on R&D. I noticed there are no key significant programs that have been discontinued or deprioritized seemingly this quarter, but obviously, a number of programs have progressed forward.

I'm wondering if this, therefore, is like the end of the portfolio review for R&D to some extent, and now we should think about the pipeline is potentially expanding.

And I guess if so, what are your sort of key priorities with regards to business development, with regards to now potentially moving forward the pipeline? How do you feel? Are you in a good position at present? And then just secondly, I wonder.

On Dupixent, is it possible that you could give us any early insights on the asthma indication into the patient subgroups where you think you're perhaps gaining more ground. Is it largely the patients in the steroid category? Also, eosinophilic asthma? Or which sort of segments there have you gained -- capturing most patients from? Thank you..

Alright. Thank you, Peter. Yeah, you're right to remind everyone that we did announce the termination of 13 programs last quarter. So that was quite significant, and that was a result of a deep review done by John Reed and his team during the second half of 2018.

Now having said that, I would like to have John commenting whether or not he believes that this review is over and whether or not we're going to only expand from there.

So John?.

Yes. Well, thanks for the question. We're continuing to review the portfolio and, in fact, are in the process now of refreshing our disease area strategies and looking at one of the places where we will prioritize and focus. We continue to try to bring more focus to the R&D effort going forward.

So while I don't expect major changes of the type you saw last year, I think we'll continue to see an effort to focus the R&D organization that will involve some prioritization.

In terms of your question about BD, we'll, of course, remain very active in seeking opportunities to supplement the pipeline across all our therapeutic areas going forward, and that will continue to be an important part of our strategy..

Okay. Thank you, John. Bill, asthma..

Yes. Thanks, Peter. It's a little early to have a real pattern established. We're seeing patients coming from all areas. I think the OCS dependent part of the indication is very helpful, and we're certainly seeing patients there. But as we've said a couple of times, 75% of the patients are new to biologics. So I think we're driving people in.

I think that, ultimately, what is the differentiator is the profile of the product. And one of the key areas that we have spoken about is the comorbidities, right? We're the only product that has the atopic dermatitis indication as well. We know that allergists had about an 18-month head start in prescribing for atopic dermatitis.

So when they have their next indication, which is another Type 2 mediated disease, it just makes sense that that's a product that they're going to look to. So a little bit early. We'll report out as we get more information about the flow. But for now, it's a lot of new patients. We have some switches coming.

We have OCS patients, so we're getting a broad group of patients coming in..

Thank you. Your next question comes from the line of Thibault Boutherin. Please ask your question..

Thank you for taking my question. Its Thibault Boutherin from Morgan Stanley. My first question is on VaxServe. So you delivered another very strong growth for this business this quarter.

So just wanted to know if you could give some context around this performance? Is there any phasing of brilliance there and also your expectations for the rest of the year? Can we expect this kind of double-digit growth to continue in the coming quarters? And my second question on the new asset in Phase II the BTK inhibitor.

So obviously, multiple sclerosis is becoming a crowded field and there's more advance compound targeting the BTK pathway already.

So could you just tell us more about your ongoing probably certain and the potential for the transition doses what's already in the pipeline for the company?.

Alright. Thibault, thank you very much for your questions. So first, David, VaxServe impressive royalty this quarter.

What's behind it?.

So Thibault, thanks for the question. The very strong growth is driven by Shingrix. I would like to remind you how we are treating actually the VaxServe sales. So Sanofi Pasteur products, which go through VaxServe, will be booked on our normal sales line.

Products, which are not Sanofi Pasteur, so for example from GSK, they will be booked in other revenue. On those sales, we don't book it into the sales line but in the other revenue line. And we are making a small distributor margin, which is in a benchmark of other distributors.

So you can almost ignore that other revenue line because what comes down on the BOI is negligible. So when you see strong sales growth on other revenue, it doesn't really matter for the company..

Okay, well, it's clear. Thanks a lot, David.

John, can you make some comments regarding our BTK inhibitor please in MS?.

Yes. I'd be delighted to. We're very excited about that target because of its fundamental role in both B cell biology as well as in the so-called microglial cells in the brain, which are playing an important role in MS.

With respect to the competition in the space, the molecule that we have now in the portfolio from Principia is more brain-penetrant molecule. So we think that for some patients, this will lead to better efficacy.

And then the BTK classes will not be very heterogeneous in terms of their safety profiles, so there's a lot of nuances around where the compounds interact with their targets and other molecules that can impact that. So I think both -- all participants in this field will simply have to gather more safety data.

But so far, early going, the compound is doing quite well, so we're at least preliminarily pleased with that..

I think John, correct me if I'm wrong, but I think we believe it's significantly more selective, right? Then the first generation BTK inhibitors, like ibrutinib, right?.

Most certainly, and that should lead in to a better safety profile for this class of molecules. So that's part of what I was getting at in terms of safety profile, indeed, more selective indeed..

Thank you. Your next question comes from the line of Jo Walton of Credit Suisse. Please ask your question..

Thank you. I've got one question and just a couple of clarifications. So my question is about what may happen with healthcare reform in the US.

Because you've been an early adopter of trying to get lower prices to patients with Praluent, I wonder if you can tell us a little bit about -- a little bit more about your experience here and how payers have reacted to this versus the requirement to have not just a higher rebate if you got access but actually have that lower NDC price.

So a little bit about your thoughts on healthcare reform there, please. And just a clarification. You say that you think that your asthma uptake has been stronger than others. To put it in a commercial context for us simpletons, Glaxo did about $100 million in their first year with NUCALA in the US.

AstraZeneca has done about $200 million in their first year with FASENRA in the US. Does that suggest that you're on track for doing at least $200 million of your sales this year in the asthma indication in the US? And the final clarification, I just didn't understand.

On Eloctate, are you disappointed with the performance that you have seen? I think a lot of us would -- are not at all surprised to have seen so many patients switched to Hemlibra. So I was just a bit confused as to whether you thought this was in line with your expectations or not..

Okay. They are significant clarifications, but we'll go through that.

When it comes to -- Jo, when it comes to the healthcare reform, I think basically what you're talking about is the administration proposal, right, of eliminating the rebates, safe harbor, right? And there, I have to say that, at Sanofi, we definitely support the administration rebates part of proposal. We believe it should be implemented by 2020.

And we believe that because it support consumer approach to providing meaningful relief to patients.

And at Sanofi, and you may have seen the numbers because we went through different hearings and we published our numbers within '18, we paid over $7 billion in discretionary rebates to PBMs to secure affordable access for patients with both commercial insurance but also Medicare Part D.

And we believe strongly that those rebates should be used to lower out-of-pocket cost for patients who have been prescribed our medicines.

So in addition, and it's an important point, to fully meet the administration's objective, we as a company, we support -- and many companies in the industry, we support Congress expanding the rule to the commercial market because until now only Medicare is in the scope of that potential regulation starting in 2020.

Now that is linked to your question on Praluent, obviously, but that's the future. And what's happening now with something like the second NDC, I'll ask Dieter to give his opinion here..

So what we have seen is with the Repatha lower-priced NDC, they were making significant inroads, in particular, in the Medicare segment. Our objective with our lower-priced NDC was to improve access and lower the cost to patient and via the lower copay that's associated with that.

And it is -- feedback from the field is that, that is actually being achieved. We always strive to make our medicines more affordable to patients. And that was one way of doing that and improving access to patients in need. And we see that the initial feedback is that that's exactly what we are achieving with this lower priced NDC..

Yes. And they are significant, Jo, for instance, monthly saving for some of the patients if you pick some of the plan, silver script, it goes from $375 a prescription to $128. High mark is $368 to $143 and so on and so forth. So it's very significant. And that's the reason why we're expecting that pickup in Medicare Part D. Okay.

So let's move to clarification.

So Bill, asthma and Eloctate?.

Jo, thanks for the question. First of all, with the tracking compared to other asthma biologics, that's on an MBRx perspective, so price effect, dose, et cetera, but we're tracking ahead on that measure. And we're just two quarters in essentially or just a little under two quarters in. So we'll see how that continues to go.

Your question on Eloctate, if we're disappointed. I think that anytime you have a new product enter the market, it leads to you don't know what's going to happen, you don't know what the uptake is going to be. There is market research, but then it's ultimately how does the physician community behave and so forth. So I think we're still early in it.

I wouldn't call the ball on this one until we get a few more quarters to see what happens. Me personally, when I think about our own product, Eloctate, we believe it's the best product. And anytime that, that best product has a little bit of a decline like that, that's not -- it doesn't make me happy.

So we think we've got a great product, and we're confident in the long-term success of it..

Thank you. Your next question comes from the line of Luisa Hector of Exane. Please ask your question..

Hello. Thanks for taking my questions. On diabetes, I wonder if we could get an update on some of the pipeline there. So obviously, with Zynquista you've had a more positive experience in Europe than with the US.

So what are the next steps in each of those regions? And then your once-weekly GLP, just any comment on that ongoing Phase III given a lot of the new data and changes within that GLP segment? And maybe to go back to Dupixent.

Can you share with us any market share data for atopic dermatitis in the US? And any commentary around the persistence rates of treatment and where the patients are taking treatment holidays? And is there more penetration to come in that adult AD patient group? Or do you feel that you've fully penetrated there and that it's moving into the adolescents and the younger patients.

Thank you..

Okay.

Dieter, you want to start with diabetes and maybe give your status of our weekly GLP-1 development?.

Yes. So let's start with Zynquista that you asked about. We haven't -- we received a positive appreciation key opinion for Type 1 diabetes in Europe. We are confident that we will achieve approval certainly in the first half of the year. We intend to launch in Europe for Type 1 diabetes. With the US, you are aware of the status there.

We are currently seeking a meeting with the FDA for clarification of the next steps to take. That is very different from the Type 2 development program, which is ongoing.

It's one of the largest Type 2 programs -- Type 2 diabetes programs ever with multiple studies ongoing, particularly important would be the studies in the renal-impaired patients because I think there will be a differentiation potential based on the SGL 1 activity. And that program is proceeding very nicely. So that is pretty much the status on that.

I think maybe John can give a more detailed update on the pipeline products unless you want me to talk about that?.

Well, I mean, I think you can. Before moving to John, you can give where we are on the efpeglenatide maybe development..

So efpeglenatide development is also ongoing. We are trying to initiate additional Phase III trials and that program is also a very comprehensive trial. As you know that market is growing -- is one of the -- is the fastest growing market right now.

And we believe efpeglenatide actually has a potential for best-in-class efficacy from what we have seen from the Phase II data with a true convenience of -- with the current market leaders still to listen in based on the injector pen that we have with an invisible needle and so on, but no dialing necessary.

So I think that in part also holds significant potential and continues its development on track..

Okay.

John, do you want to add anything onto two diabetes product in development?.

I think Dieter handled well per Zynquista and for the efpeglenatide. As he said, we're starting another two Phase III studies this year with efpeglenatide. The first two are enrolling well and the cardiovascular outcomes study, enrolling well. And we expect to meet our targets on those.

And also with efpeglenatide, we're continuing to monitor for scientific differentiation the kinetics of how that GLP-1 agonist works with its on versus off rate, such that we're hopeful we may see less problems with desensitization and loss of efficacy as well as potentially a bit less nausea and vomiting.

But we'll need the fullness of the data to tell us about that. On the earlier pipeline, as we've said in previous calls, we're exploring some of these next-generation incretins. We have a dual agonist with GLP and glucagon activity in the clinic and bringing onboard a triagonist that has GLP, GIP and glucagon.

And so we'll be looking for early signs of efficacy and safety with those, particularly looking at the -- not only the glycemic control, of course, but the weight loss opportunities around the obesity piece. So those will be the key thing we'll be looking for as we go forward..

Okay. Thank you very much.

So now to Dupixent market share data, persistent rate and the penetration in AD?.

Great. Thanks for the question, Luisa. So we still consider ourselves at the very beginning of adult atopic dermatitis. Just to give you a couple of the stats again, we have over 50,000 patients of real world experience now with the product.

And keep that in mind, when you think about the initial population that we've said, it's about 300,000-plus in the US. So again very early into the penetration. And we don't have another biologic to compare to right now. So if you look at advanced therapy being the biologics, we've got all the market share. We are the market at the moment.

Now persistency, we've had a strong persistency equal to other biologics and were favorable. And it's at about 70 -- over 70% that we've seen of patients persistency. So the people -- that's a good sign. That says that we have a lot of people getting on the product, they're staying on the product and we continue to grow it.

So we're at the very beginning..

Thank you. And your next question comes from the line of Jean-Jacques Le Fur. Please ask your question. I'm sorry, that caller has disconnected. Your next question comes from the line of Tim Anderson of Wolfe. Please ask your question..

Thank you. A couple of questions. Sorry to go back to Eloctate.

Are you confident that, that product will grow when you're looking into, let's say, 2020 and beyond? Or is it in the realm of possibilities that that's going to permanently contract? It matters, of course, because that was lead asset in Bioverative? And then the second question is on insulin in the US going forward.

Toujeo and Lantus in US still sell collectively around 1.5 billion. And it sits in the category that's got a lot of attention. Lilly's lowered list price. We've got the possibility at some point through generics.

So can you kind of talk about the multiyear outlook for not only Lantus but also Toujeo and whether Toujeo could get kind of wrapped into the downdraft? Thank you..

Alright.

Bill, back to Eloctate and the outlook?.

Look, going back to the hemophilia market, there's substantial opportunity in hemophilia, and we believe that our franchise is really well positioned. We're going to move past the Canadian tender headwind by the second quarter of this year and the lower utilization per patient in the second half of the year.

And we should see some expansion into emerging markets as well. And I think the final piece is 65% of moderate to severe hemophilia A patients in the US, which is greater than 7,000 patients remain on the shortacting therapy.

And then remember, right behind Eloctate, we have BIVV001 coming, which we believe is going to provide really a new level of efficacy in the hemophilia A space..

Do you want to give some data around BIVV001, which we have already talked about in terms of coagulation?.

Yes. So look, as we reported at ASH in December, we think that this can really be transformational and be a real paradigm shift in how hemophilia A is treated. And our data shows that factor levels remained over 18% at seven days, and that's with a single 55 international unit per kg dose.

So that really gets you back into a place where you may expect no bleeds, which really raises the bar on the efficacy expectation in this space. And obviously, we'll continue to focus on joint health with that as well. Joint health is so fundamental in this space and a single bleed can lead to a permanent problem for that patient.

And so that's something that we will continue to explore, gather data on and make sure the community really understands what the benefits are on the products that we can provide..

Alright. Regarding diabetes, I'll start and I'll ask eventually Dieter to complete. I think your question is back to the new regulation and how certain biologics including insulins will be treated starting in March 2020. And we're regularly talking about that potential change and now it's relatively close to us now.

And therefore, insulins will be subject to the existing biosimilar pathway. We also based on the FDA released final guidance for transition products, which included insulin and which they issued last December, we understand that interchangeability is an additional standard which goes beyond the requirement for biosimilarity.

Clearly that's an important factor to keep in mind. So the approval of biosimilar with interchangeability is possibly -- is possible roughly around March of 2021 if you consider that a submission of one has been made as soon it was possible in March 2020. So if you're assuming a 12-month review, you are in March 2021.

And then because -- when interchangeability is granted, the first product which would be able to achieve it is going to be given one-year of exclusivity. So then the broader generic type of market if you want would be there in March of 2022.

So that's more or less the sequence we are seeing regarding that specific piece of your -- part of your question.

Now Dieter, do you want to answer the broader question of Tim?.

Yes. So the impact that we've seen on diabetic business today is actually driven by the Lantus LoE, the price pressure we see. And that is also impacted by the increase in the coverage gap in the United States, such as price pressure we're experiencing. Over time, Lantus will become less and less of a factor in the overall company.

Currently, it's only 22% of the business, and it's going to decline as a proportion of the Diabetics business as Toujeo and Soliqua will continue to grow. We launched Zynquista and the SGL to two market that is picking up in growth again as the impact of the kind of decline is leveling off. So we're launching a product into a very high growth market.

In addition to Toujeo, continued growth in Soliqua, very good continued growth that we're seeing. And hopefully that will be followed by efpeglenatide, the fastest growing GMP market with the differential pathway.

So outlook for the products that we have and the pipeline is very good, offset by Lantus continued pressure that we see price, particularly in US..

Thank you. And your next question comes from the line of Jordan McConnell of Deutsche Bank. Please ask your question..

Hi, thanks for taking my questions. Jordan McConnell from Deutsche Bank.

So the first question, could you just tell us what the underlying consumer health growth was in the quarter after adjusting for divestments and disposals? And then also just thinking about longer term market trends, how you're thinking about those over the medium and longer term, including any sort of reasonable differences in the outlook? And then second question, do you have any plans or is there a ton of possibilities to develop a subcutaneous version of BIVV001? Thank you very much..

Yes. Okay, good question.

We'll start with CHC and Alan, please?.

Yes. Thanks for the question. So I think as Olivier mentioned, if you added back the divestment of smaller tail brands that we disposed of last year, you get about another 1 percentage point onto our growth. So it will be up to close to 2%. And of course, we did mention also the seasonality impact from US on allergy, a slow start to the season.

Pollen incidence down by almost 6%, 7%. And also a relatively weaker cold season in Europe, where we are a little over indexed versus the competitor. But those are seasonal effects. I think the underlying growth rate, I mean, we just had some February end market data we collected for the top 39 countries.

And our underlying growth rate for the Sanofi CHC portfolio is in the range of 3% to 4%. So overall, we feel like that is a very good level of end market performance and pretty much at the top end of the top 10 multinational companies.

In terms of the outlook, the outlook, as you've seen it from some other commentators, I think as a whole, it's around 4% to 5% growth over the next 10 years. Some of that growth is driven by emerging markets and continued penetration of self care.

We also see potentially over the next five to 10 years some new switches coming, which are also adding to that growth rate. So for the top players, again, we are estimating between 3% to 5%. And we would certainly see given our pipeline of new products and our geographical spread that we would certainly be able to match that market growth rate..

Thank you very much, Alan.

John, do you want to take the question on BIVV001 subcu, please?.

Yes. We're doing exploratory preclinical studies to explore the possibility of that, but that's about all I can say at this point. We are exploring it..

Thank you. Your next question comes from the line of Simon Baker of Redburn..

Thank you for taking my question. I have two, please. Firstly, just going back to Praluent. It would appear from the script data that we have seen that there was indeed still good volume growth with -- for Praluent in the US despite the sales impacted by higher rebates.

So I wonder if you could give us your doubtless, more accurate data on volume trends for Praluent? And then secondly, moving on to China.

I wonder if you could discuss what impact if any, you've seen so far from the changes in the whole center system with the implementation of the two invoice system? Has that started to affect channel stocking level as some of your competitors have suggested? Do you expect it to affect you at all? And if so, when we expect to see any adverse movements in China affecting you this year? Thanks so much..

Alright. Thanks, Simon. Okay. Let's go to Praluent and to the volume growth rate..

So what I would say is the following. The volume growth that we have seen actually from the company exceeds that in terms for scripts. So that was influenced by a little bit of the launch of the lower priced NDC. So there would not really be a comparable number, I would say.

I would go back to the prescription growth, which is 53% TRX growth this quarter versus the quarter of the prior year. We anticipate the label expansion as well as the launch of the NDC -- the new NDC will continue to fuel that label growth now that the volume growth -- now that the label is in line with guidelines.

So yes, all that I think is very good for volume growth. And we need to just maintain access to realize that and unlock that volume growth..

Yes. So the answer is yes, we would continue to see a strong volume growth because of the three key drivers. But of course, that would be offset by contracting terms in order to get broader access. So it's always the same equation here, which will continue, but I think you have the answer on volume.

China, two invoices channel, what is the impact?.

So thank you for the question. We are not anticipating any significant change in terms of inventory and the trade. It probably reflects the fact that we have the level of inventory in the trade that is probably a little bit lower than our competitors. So no big change anticipated in the next 18 months..

Thank you. Your last question comes from the line of Seamus Fernandez of Guggenheim. Please ask your question..

Yes. Thank you very much for the question. So I just wanted to get a quick sense of how profitability is tracking relative to your expectations as part of the Regeneron collaboration.

And then just the final question, your team has a lot going on in the rare disease space that's actually kind of kicking in, in the back half of this year and into early next year. One product in particular is the GA-targeted agent that actually penetrates the blood brain barrier.

Just hoping that you guys could contextualize the opportunity for that product. I believe it sort of similar to Cerdelga, but by accessing the CNS, you have an upside opportunity there. So I'd just love to get some visibility on those two questions..

Alright. Thank you very much, Seamus. So Jean-Baptiste is going to give you the status of profitability with the different mAbs and Regeneron.

Jean-Baptiste?.

Yes. As we said, we are looking at things the partnership becoming profitable by 2020. Of course, with the excellent sales of Dupixent, it's ahead of our projection on that, which still are growing very strongly. This is confirmed. The timing should be sooner than later. So we are effectively very optimistic on the timing..

Okay.

And John, can you please give status of Venglustat and what is full development scale going on? What is it today?.

Yes. I'd be delighted to. Yes. So as you pointed, Venglustat is a brain-penetrant version of Cerdelga, if you will a very nicely crafted molecule. We have it in evaluation for five different indications.

In the rare disease area the better prepared course over the current molecules would be to access the brain and to help with the accumulation of the lipids and other molecules that are involved with these lysosomal storage diseases.

So Fabry, Gaucher Type 3, which is the one that manifest more in the brain and then GM2, which includes Tay-Sachs and Sandhoff are all moving forward in the pivotal studies.

And we've had a very compelling biomarker data because we can measure the glycolipids in these pathways in the CSF, in the cerebrospinal fluid and we know that we're achieving dose-dependent profound reductions. So we're confident that we're hitting the target and the molecules doing what it should.

And we've seen early clinical indications in some of these disorders that give us confidence. Broader than that, of course, is now moving into some more common diseases, particularly Parkinson's where we have a Phase II program.

Again, the brain-penetrant nature of the molecule makes this possible and it turns out that the most common genetic risk factor for Parkinson's among our general population is variations in the same gene across the Gaucher's disease, the GBA gene and patients who are -- who have variance of that gene with lower activity are at much higher risk for Parkinson's.

They get the disease much earlier in life and it's much more aggressive. In the US alone, that's about 50,000 people. So we are conducting a Phase II study now on that genetically defined subpopulation. And we will be taking a precision medicine approach here to moving this molecule into a common neurological disease like Parkinson's.

Finally, I will just say although it doesn't require brain penetration, we are pursuing Venglustat in autosomal dominant polycystic kidney disease. There's really compelling evidence that suggest that the same pathway we're hitting with Venglustat is also relevant with that.

And that's -- it's not really a rare disease even though it's genetically determined, 300,000 patients in US with the EU five, for example, and a very common genetically defined cause of renal failure. So that is also ongoing.

And we're quiet keen to see the results of those studies and see if they reproduce the profound improvements we saw in preclinical models of that disease where you can emulate the genetic effect in mice for example..

Thank you very much, John. Thank you, Seamus. That's the end of our call. And all of us here, we're looking forward to seeing you on June 26. Thank you very much, everyone. Bye-bye now..

Thank you, ladies and gentlemen. That does conclude our conference for today. Thank you all for participating. You may now disconnect..