On February 3, 2023 Sanofi reported its quarterly 2022 report (Press release, Sanofi, FEB 3, 2023, View Source [SID1234626830]).

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Q4 2022 sales growth of 2.6% at CER and business EPS(1) growth of 17.4% at CER
•Specialty Care grew 18.1% driven by Dupixent (€2,402 million, +42.1%) and new product launches
•Vaccines sales (-16.3%) reflecting influenza and PPH sales phasing (Q3 influenza sales: up 32.4%) as well as ramp up of non-consolidated Vaxelis sales
•General Medicines core assets up 8.0% while GBU sales were lower (-3.7%) mainly due to Lantus and spin-off of EUROAPI
•CHC sales increased 6.6% driven by double-digit growth of Digestive Wellness, Cough & Cold and Allergy categories
Full-year 2022 delivered 7.0% sales growth and 17.1% business EPS growth at CER
•Sales grew to €42,997 million driven by Dupixent (€8,293 million, +43.8%), adding €3 billion of incremental sales, Vaccines up 6.3% in line with the mid-term growth objective as well as CHC strategy execution (+8.6%)
•Mid-term BOI margin target of 30% and cost savings objective of €2.5 billion achieved
•Business EPS(1) of €8.26 up 25.9% on a reported basis and 17.1% at CER
•IFRS EPS of €5.37 (up 8.0%)
•Board held on February 2, proposes annual dividend of €3.56, an increase of 6.9%
Progress on Corporate Social Responsibility strategy in Q4
•Positive phase 2/3 results of acoziborole with the potential to further transform the treatment of sleeping sickness
•Accelerating our ambition towards net zero emissions by 5 years, now targeting 2045
Key R&D milestones and regulatory achievements in Q4
•Dupixent approved in Europe for prurigo nodularis and CHMP positive opinion for eosinophilic esophagitis
•Beyfortus (nirsevimab) approved in Europe for the prevention of RSV disease in all infants
•VidPrevtyn Beta approved in Europe as a booster for the prevention of COVID-19 in adults
•Enjaymo approved in Europe in adult patients with cold agglutinin disease (CAD)
Full-year 2023 business EPS guidance
•Sanofi expects 2023 business EPS(1) to grow low single digit(2) at CER, barring unforeseen major adverse events. Applying average January 2023 exchange rates, the currency impact on 2023 business EPS is estimated between -3.5% to -4.5%
Sanofi Chief Executive Officer, Paul Hudson, commented:
"We closed 2022, marking the successful execution of the first chapter of our 6-year ‘Play to Win’ strategy. Specialty Care delivered the highest sales among our businesses. Dupixent and Vaccines continue to be our leading growth drivers. We are particularly proud of the progress we made in R&D transformation with multiple approvals of transformative medicines and new product launches across Specialty Care. At the same time, we keep delivering strong proof points of our improved financial performance underpinned by the achievement of the 30% BOI margin. Moving to the next chapter of our strategy, we are looking forward to the planned launches of Altuviiio and Beyfortus as well as key pivotal readouts, including the COPD indication for Dupixent. With the view on the expected entrants of generic competition for Aubagio in the coming months, we remain confident in our outstanding commercial capabilities, including the ambition to reach sales of 10 billion euros for Dupixent in 2023, enabling us to guide to low single-digit EPS growth for the year."
Q4 2022 Change Change
at CER 2022 Change Change
at CER
IFRS net sales reported €10,725m +7.3% +2.6% €42,997m +13.9% +7.0%
IFRS net income reported €1,460m +29.1% _ €6,720m +8.0% —
IFRS EPS reported €1.16 +28.9% _ €5.37 +8.0% —
Free cash flow(3)
€2,546m +0.2% _ €8,483m +4.8% —
Business operating income €2,724m +20.7% +15.0% €13,040m +21.7% +13.3%
Business net income(1)
€2,141m +23.8% +17.6% €10,341m +25.9% +17.0%
Business EPS(1)
€1.71 +23.9% +17.4% €8.26 +25.9% +17.1%

Changes in net sales are expressed at constant exchange rates (CER) unless otherwise indicated (definition in Appendix 9). (1) In order to facilitate an understanding of operational performance, Sanofi comments on the business net income statement. Business net income is a non-GAAP financial measure (definition in Appendix 9). The consolidated income statement for Q4 2022 is provided in Appendix 3 and a reconciliation of reported IFRS net income to business net income is set forth in Appendix 4; (2) 2022 business EPS was €8.26; (3) Free cash flow is a non-GAAP financial measure (definition in Appendix 9).

2022 fourth-quarter and full-year Sanofi sales
—————————-
Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER1
———————
In the fourth quarter of 2022, Sanofi sales were €10,725 million, up 7.3% on a reported basis. Exchange rate movements had a positive effect of 4.7 percentage points, mainly due to the U.S. dollar. At CER, company sales were up 2.6%.
In 2022, Sanofi sales reached €42,997 million, up 13.9% on a reported basis. Exchange rate movements had a positive effect of 6.9 percentage points. At CER, company sales were up 7.0%.

Global Business Units
Fourth-quarter 2022 net sales by Global Business Unit (variation at CER; € million; % of total sales)
chart-8f98b6910d09426f888.jpg
Fourth-quarter 2022 net sales by geographic region (variation at CER; € million; % of total sales)
chart-77caa408d3724fb9a48.jpg
Fourth-quarter 2022 operating income
Fourth-quarter business operating income (BOI) increased 20.7% to €2,724 million. At CER, BOI increased 15.0%. The ratio of BOI to net sales increased 2.8 percentage point to 25.4% (25.3% at CER). In 2022, BOI increased 21.7% to €13,040 million. At CER, BOI increased 13.3%. The ratio of business operating income to net sales increased 1.9 percentage point to 30.3% (30.0% at CER).
1 See Appendix 9 for definitions of financial indicators.

Pharmaceuticals
Fourth-quarter Pharmaceutical sales increased 7.3% to €7,793 million, mainly driven by the Specialty Care portfolio (up 18.1%) with continued strong performance of Dupixent while sales in General Medicines decreased 3.7%. In 2022, Pharmaceuticals sales increased 6.9% to €30,688 million reflecting the strong performance of Specialty Care and General Medicines core assets.
Specialty Care
Dupixent
Net sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
Total Dupixent
2,402 +42.1 % 8,293 +43.8 %

In the fourth quarter, Dupixent (collaboration with Regeneron) sales increased 42.1% to €2,402 million. In the U.S., Dupixent sales of €1,890 million (up 43.8%) were driven by continued strong demand in the approved indications, atopic dermatitis (AD), asthma, chronic rhinosinusitis with nasal polyposis (CRSwNP) and the strong launches of AD in children as young as 6 months as well as eosinophilic esophagitis and prurigo nodularis. Dupixent total prescriptions (TRx) increased 34% (year-over-year) and new-to-brand prescriptions (NBRx) grew 48%. In Europe, fourth-quarter Dupixent sales grew 33.2% to €249 million reflecting continued growth in AD, asthma and CRSwNP. In the Rest of the World region, fourth-quarter sales reached €263 million, up 40.1%, driven mainly by sales in Japan and China. Full-year 2022 Dupixent sales reached €8,293 million, up 43.8%.
Neurology and Immunology
Net sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
Aubagio
493 -4.6 % 2,031 -4.3 %
Lemtrada
17 -15.8 % 80 -8.5 %
Kevzara
79 -17.6 % 339 +11.8 %
Total Neurology and Immunology
589 -7.0 % 2,450 -2.5 %

Fourth-quarter and full-year 2022 Neurology and Immunology sales decreased 7.0% (to €589 million) and 2.5%, respectively, mainly due to lower Aubagio sales.
Aubagio sales decreased 4.6% in the fourth quarter to €493 million mainly due to lower sales in the Rest of the World region as a result of generic competition in Canada. In the U.S., generics of teriflunomide could enter the market on March 12, 2023, as settled with generic makers in 2017. In Europe, teriflunomide generic competition is expected in the fourth quarter of 2023.
Fourth-quarter Kevzara (collaboration with Regeneron) sales decreased 17.6% to €79 million due to lower sales in Europe and the Rest of the World region. This is due to a high base in the fourth quarter of 2021 which benefitted from a temporary increased global demand for IL-6 receptor blockers.
Rare Disease
Net sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
Myozyme / Lumizyme
216 -17.7 % 958 -8.8 %
Fabrazyme
240 +3.6 % 938 +5.2 %
Cerezyme
159 -8.3 % 707 +2.6 %
Cerdelga
71 +1.5 % 288 +6.7 %
Aldurazyme
65 +1.6 % 267 +6.6 %
Nexviazyme/Nexviadyme
65 +306.7 % 196
–
Others Rare Disease 34 +126.7 % 91 +11.0 %
Total Rare Disease 850 +1.8 % 3,445 +5.7 %

In the fourth quarter, Rare Disease sales increased 1.8% to €850 million driven by the launch of XenpozymeTM. Full-year 2022 Rare Disease sales increased 5.7% reflecting growth across all three geographic regions and across all franchises.
Fourth-quarter sales of the Pompe franchise increased 0.4% to €281 million driven by the ramp up of Nexviazyme/Nexviadyme in the U.S., Europe and Japan. Sales of Nexviazyme/Nexviadyme were

€65 million in the fourth quarter (of which €49 million in the U.S.). Myozyme/Lumizyme sales decreased 17.7% to €216 million as a result of the conversion to Nexviazyme in the eligible Pompe population (late-onset disease).
Sales of the Gaucher franchise decreased 5.6% (to €230 million) in the fourth quarter. Cerezyme sales were down 8.3% to €159 million, mainly reflecting lower sales in the Rest of the World region due to unfavorable shipping patterns. Cerdelga sales were up 1.5% driven by new patients and Cerezyme switch.
Fourth-quarter Fabrazyme sales increased 3.6% to €240 million, reflecting growth in the U.S. and the Rest of the World region.
XenpozymeTM (olipudase alfa) was launched in the U.S., some European countries and Japan in 2022 as the first and only enzyme replacement therapy for the treatment of non-Central Nervous System (CNS) manifestations of Acid Sphingomyelinase. Fourth-quarter and full-year 2022 sales were €17 million and €21 million, respectively.
Oncology
Net sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
Jevtana
87 -24.5 % 391 -20.0 %
Sarclisa
86 +55.6 % 294 +60.2 %
Fasturtec
47 +7.3 % 177 +8.6 %
Libtayo
— -100.0 % 88 -34.1 %
Total Oncology 221 -11.7 % 952 -1.5 %

Fourth-quarter Oncology sales decreased 11.7% (to €221 million) reflecting the end of consolidation of Libatyo sales from the beginning of July. Excluding Libtayo, Oncology sales were up 3.4% with Sarclisa being the main driver. Full-year 2022 Oncology sales decreased 1.5% and increased 3.8% when excluding Libtayo sales in both years.
Sanofi stopped consolidating Libtayo non-U.S. sales from the third quarter of 2022 following the restructuring of its immuno-oncology collaboration with Regeneron Pharmaceuticals, Inc. Under the amended and restated license and collaboration agreement, Regeneron has obtained worldwide exclusive license rights to Libtayo. Prior, the companies had split equally Libtayo’s worldwide operating profits and co-commercialized Libtayo in the U.S., with Sanofi solely responsible for commercialization in the rest of the world.
Fourth-quarter Sarclisa sales were €86 million, up 55.6% primarily driven by performance in the U.S. Europe and Japan.
Fourth-quarter Jevtana sales decreased 24.5% to €87 million due to the entry of generic competition in Europe at the end of March 2021 and lower sales in the U.S., reflecting increased competition. In the U.S., Jevtana is currently covered by four Orange Book listed patents US 7,241,907, US 8,927,592, US 10,583,110 and US 10,716,777. Sanofi filed patent infringement suits under Hatch-Waxman against generic filers asserting the ‘110 patent, the ‘777 patent and the ‘592 patent in the US District Court for the District of Delaware. Sanofi has reached settlement agreements with most of the defendants and the suit against the only remaining defendant Sandoz is ongoing. In August 2022, the district court dismissed Sanofi’s infringement claim related to the ‘592 patent. A 3-day trial took place on January 11-13 2023 and Sandoz has agreed not to launch any generic cabazitaxel product until the earlier of a district court decision in favor of Sandoz or four months after the completion of the post-trial briefing.

Rare Blood Disorders
Net sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
Eloctate
138 -9.2 % 580 -5.9 %
Alprolix
141 +14.2 % 504 +10.4 %
Cablivi
62 +52.6 % 211 +20.7 %
EnjaymoTM
11
–
22
–
Total Rare Blood Disorders 352 +11.3 % 1,317 +5.6 %

Fourth quarter and full-year 2022 Rare Blood Disorders franchise sales increased 11.3% (to €352 million) and 5.6% respectively, driven by Alprolix, Cablivi and the launch of Enjaymo, more than offsetting lower Eloctate sales.

Eloctate sales were €138 million in the fourth quarter, down 9.2% reflecting lower sales in the U.S. due to competitive pressure.
Fourth-quarter Alprolix sales were up 14.2% to €141 million driven by the Rest of the World region which includes sales to Sobi.
Cablivi sales increased by 52.6% to €62 million in the fourth quarter supported by the performance in the U.S.
Fourth-quarter and full-year sales of Enjaymo, the first approved treatment for patients with cold agglutinin disease were €11 million and €22 million, respectively (launched in the U.S. and Japan in 2022 and approved in Europe in November 2022).
General Medicines
Fourth-quarter General Medicines sales decreased 3.7% to €3,379 million. The deconsolidation of EUROAPI2 third party sales had a negative impact of -3.6 percentage point (ppt) and divestments of non-core assets -0.7 ppt. Fourth-quarter Industrial sales were €177 million, down 22.7% and reflected deconsolidation of EUROAPI third party sales from May 10.
Full-year 2022 General Medicines sales decreased 4.2% to €14,231 million. The deconsolidation of EUROAPI third party sales had a negative impact of -2.4ppt and divestments of non-core assets -0.8ppt in 2022. In 2022, Industrial sales were €620 million, down 26.2% and reflected deconsolidation of EUROAPI third party sales. In 2022, core assets3 sales accounted for 47% of General Medicines sales compared with 43% in 2021 (excluding Industrial sales).
Core assets
Net sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
Lovenox*
289 -13.1 % 1,310 -13.8 %
Toujeo
272 +13.9 % 1,117 +9.8 %
Plavix
245 +11.7 % 983 +2.5 %
Praluent
96 +70.9 % 376 +65.1 %
Thymoglobulin
118 +26.4 % 446 +16.9 %
Multaq
104 -6.1 % 383 +4.3 %
Mozobil
69 +3.2 % 261 +4.3 %
Soliqua
55 -5.6 % 215 +1.5 %
Rezurock
63 +180.0 % 207
–
Others 287 +3.4 % 1,091 -0.2 %
Total core assets 1,598 +8.0 % 6,389 +5.2 %

*Excluding Auto generics
In the fourth quarter and full-year 2022, core assets3 sales increased 8.0% (to €1,598 million) and 5.2%, respectively, mainly driven by growth of Praluent, Toujeo, Thymoglobulin and as well as the strong performance of Rezurock, partially offset by lower sales of Lovenox.
Fourth-quarter Lovenox sales decreased 13.1% to €289 million, reflecting lower COVID-19 related demand compared to 2021, leading to a decrease of the Low Weight Molecular Heparins market. At the same time biosimilar competition increased.
Fourth-quarter Toujeo sales increased 13.9% to €272 million, due to strong growth in the Rest of the World region primarily driven by China reflecting increasing demand and a favorable basis for comparison. In Q4 2021, sales in China were impacted by price and inventory adjustment in anticipation of the Volume Based Procurement (VBP) for insulins. Sales in the U.S. were down 7.5% reflecting lower average price in the fourth quarter which more than offset volume growth.
Plavix sales were up 11.7% in the fourth quarter at €245 million, reflecting consistent volume growth in China (sales up 21.6% to €108 million) which largely offset lower sales in Europe and also Japan where the product was impacted by a mandatory price cut at the beginning of April.
Praluent fourth-quarter sales were €96 million, up 70.9%, driven by performance in Europe and an accelerated ramp-up in China due to the inclusion in the National Reimbursement Drug List (NRDL) effective January 2022.
2 EUROAPI third party sales were deconsolidated from May 10
3 Sanofi has prioritized core assets in its General Medicines portfolio with differentiated and/or established profiles that have significant opportunity for growth in key markets.

Multaq fourth-quarter sales decreased 6.1% to €104 million, reflecting a negative price effect in the U.S. despite higher volume.
Fourth-quarter Soliqua sales were €55 million, down 5.6% due to lower sales in the U.S. which more than offset growth in the Rest of the World region. Soliqua was approved in January in China and Sanofi will work with Chinese authorities to get access to patients through inclusion into the NRDL.
Sales of Rezurock were €63 million in the fourth quarter. Since launch more than 1400 patients have been treated with Rezurock (representing more than 30% of current addressable patient population) with strong persistency rates.
Non-core assets
Net sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
Lantus*
429 -27.6 % 2,259 -14.4 %
Aprovel/Avapro
104 -9.8 % 478 +7.6 %
Other non-core assets 1,071 -1.8 % 4,485 -7.7 %
Total non-core assets 1,604 -10.8 % 7,222 -9.0 %

In the fourth quarter, non-core assets sales decreased 10.8% to €1,604 million reflecting divestments (-1.9 ppt), and lower sales of Lantus in the U.S. In 2022, non-core assets sales decreased 9.0% (and 7.4% excluding divestments), reflecting VBP impact in China on Lantus, Eloxatin and Taxotere sales as well as lower Lantus sales in the U.S.
Lantus sales were €429 million, down 27.6% in the fourth quarter. In the U.S., sales decreased 56.7%, impacted by prior formulary losses as well as by erosion of the basal insulin market. In Rest of the World region, sales were down 7.7% reflecting the insulin VBP in China starting in May this year.
In China, Sanofi participated in the VBP tender for basal insulin analogues in November 2021 and was among the bidding winners in Group A with Toujeo and Lantus. In China, fourth-quarter Toujeo and Lantus sales were €51 million (up 18.6%), mainly reflecting higher Toujeo sales which benefited from growing demand and a favorable base of comparison due to price and inventory adjustment in the fourth quarter of 2021 in anticipation of the VBP. In 2022, Toujeo and Lantus sales were €447 million (down 10.7%), mainly reflecting lower Lantus sales which benefitted from higher volumes at significantly lower prices.
Fourth-quarter Aprovel/Avapro sales were down 9.8% to €104 million mainly due to lower sales in the Rest of the World region.
Pharmaceuticals business operating income
In the fourth quarter, business operating income (BOI) of Pharmaceuticals increased 19.1% to €2,490 million (up 15.1% at CER). The ratio of BOI to net sales increased by 1.8 percentage point to 32.0% (32.4% at CER), reflecting an improvement of the gross margin ratio, moderate growth of SG&A expenses despite continued increase in R&D expenses. In 2022, business operating income of Pharmaceuticals increased 17.4% to €11,043 million (up 10.5% at CER). The ratio of BOI to net sales increased by 1.1 percentage point to 36.0% (36.0% at CER).

Vaccines
Net sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
Influenza vaccines
(incl. Fluzone HD/ Efluelda, Fluzone, Flublok, Vaxigrip)
802 -32.0 % 2,977 +2.4 %
Polio/Pertussis/Hib vaccines
(incl. Hexaxim / Hexyon, Pentacel, Pentaxim and Imovax)
443 -16.9 % 2,285 +2.5 %
Meningitis vaccines
(incl. Menactra, MenQuadfi)
110 +14.3 % 703 -3.6 %
Booster vaccines (incl. Adacel )
148 +12.1 % 587 +11.3 %
Travel and endemic vaccines 121 +28.6 % 510 +57.8 %
Other vaccines 92 +309.1% 167 +86.9%
Total Vaccines 1,716 -16.3 % 7,229 +6.3 %

Fourth-quarter Vaccines sales decreased 16.3% (to €1,716 million) mainly reflecting accelerated supply phasing of influenza vaccines between the third and the fourth quarter 2022. In 2022, Vaccines sales were up 6.3%, reflecting progressive recovery of Travel and Booster vaccines.
Influenza vaccines sales decreased 32.0% to €802 million in the fourth quarter and accounted for 30% of northern hemisphere sales in the second half of 2022 compared to 45% in the fourth quarter of 2021.
New manufacturing capacity in the U.S. allowing for a new record year for influenza vaccines sales. This was again driven by continuous conversion to differentiated premium priced vaccines such as Fluzone HD in the U.S. and Efluelda in Europe that have demonstrated improved efficacy against a standard dose vaccine in randomized controlled trials. Full-year 2022 influenza sales reached €2,977 million.
In the fourth quarter, Polio/Pertussis/Hib (PPH) vaccines sales decreased -16.9% to €443 million reflecting lower sales in the Rest of the World region due to unfavorable purchasing pattern. In addition, Pentaxim sales in China decreased due to the COVID disruption. In the U.S. Vaxelis continues to capture market share progressively replacing pentavalent vaccines in the primary series of infant immunization. As a reminder, Vaxelis in-market sales are not consolidated and the profits are shared equally between Sanofi and Merck & co. Full-year 2022 PPH sales reached €2,285 million.
Fourth-quarter Meningitis sales increased 14.3% to €110 million, reflecting significant growth in the Rest of the World region. In the U.S., Meningitis sales benefited from favorable purchasing pattern.
Booster vaccines sales increased 12.1% in the fourth quarter to €148 million, driven by the Rest of the World region.
Fourth-quarter Travel and endemic vaccines sales increased 28.6% to €121 million, reflecting growth across all geographies in a post pandemic environment.
Sales of Other Vaccines were €92 million (up +309.1%) in the fourth quarter and included also sales of the recently approved monovalent recombinant-protein COVID-19 booster vaccine VidPrevtyn Beta.

Vaccines business operating income
In the fourth quarter, business operating income (BOI) decreased 8.3% (down 13.6% at CER) to €599 million compared to the same period of last year, reflecting earlier time to market of flu vaccines sales, higher R&D expenses related to the mRNA center of excellence which were partially offset by the capital gain generated by the sale of the Japanese encephalitis vaccine, a non-core vaccine. BOI to net sales ratio was 34.9% (34.3% at CER) versus 33.2% in the fourth quarter of 2021.
In 2022, BOI of Vaccines increased 21.4% (up 9.8% at CER) to €3,168 million reflecting strong sales growth, gross margin improvement, moderate SG&A evolution despite higher R&D costs. The ratio of BOI to net sales was 43.8% (42.6% at CER) versus 41.3% in 2021.

Consumer Healthcare
Net sales (€ million) Q4 2022
Change
at CER
2022
Change
at CER
Allergy 156 +15.0 % 734 +10.5 %
Cough & Cold 132 +11.2 % 478 +46.3 %
Pain Care 303 +8.7 % 1,213 +7.9 %
Digestive Wellness 306 +12.0 % 1,318 +12.4 %
Physical and Mental Wellness 124 -8.5 % 562 +0.7%
Personal Care 157 +8.3 % 586 +2.3 %
Non-Core / Others 38 -29.1 % 189 -27.4 %
Total Consumer Healthcare 1,216 +6.6 % 5,080 +8.6 %

In the fourth quarter, Consumer Healthcare (CHC) sales increased 6.6% to €1,216 million driven by growth in all regions. This global performance includes a positive price effect of 4.7 percentage points (ppt). The divestments of non-core products had a negative impact of 0.9 ppt in the fourth quarter mainly impacting the Non-core/others category. (The CHC organic sales growth was 7.5% in the fourth quarter excluding divestments impact). In 2022, CHC sales increased 8.6% supported by double-digit growth in Europe and the Rest of the World region. In 2022, the divestments of non-core products had a negative impact of 1.0 ppt. (The CHC organic sales growth was 9.6% in 2022 excluding divestments impact).
In the U.S., fourth-quarter CHC sales increased 3.9% to €326 million driven by Digestive Wellness and Personal Care categories.
In Europe, fourth-quarter CHC sales increased 8.7% to €371 million mainly reflecting double-digit growth of Cough & Cold season and Digestive Wellness categories.
In Rest of World, fourth-quarter CHC sales increased 6.6% to €519 million, supported by double-digit growth of Pain Care and Allergy categories.

CHC business operating income
In the fourth quarter, business operating income (BOI) of CHC increased 27.9% (up 25.5% at CER) to €381 million, driven by solid sales performance, moderate SG&A growth as well as higher capital gains related to divestments of non-strategic assets. The ratio of BOI to net sales increased 4.5 percentage points to 31.3% (31.6% at CER) versus the fourth quarter of 2021. In 2022, BOI of CHC increased 21.2% (up 15.8% at CER) to €1,810 million mainly driven by sales growth and higher capital gains related to divestments of non-strategic assets. The ratio of BOI to net sales increased 2.2 percentage points to 35.6% (35.6% at CER).
Company sales by geographic region
Sanofi sales (€ million) Q4 2022 Change
at CER 2022 Change
at CER
United States 4,671 +8.7 % 18,275 +12.2 %
Europe 2,636 -5.6 % 9,999 +2.4 %
Rest of the World 3,418 +2.4 % 14,723 +4.8 %
of which China 578 +2.3 % 3,123 +6.2%
of which Japan 406 +10.9 % 1,613 +3.1 %
of which Brazil 204 +4.9 % 927 -2.0 %
of which Russia
172 -0.7 % 674 +0.7%
Total Sanofi sales 10,725 +2.6 % 42,997 +7.0 %

In the U.S., fourth-quarter sales increased 8.7% (to €4,671 million), supported by the strong performance of Specialty Care driven by Dupixent.
In Europe, fourth-quarter sales decreased 5.6% (to €2,636 million) reflecting lower flu vaccines sales and deconsolidation of Libtayo sales, partially offset by Dupixent and CHC performance.
In the Rest of World region, fourth-quarter sales increased 2.4% (to €3,418 million), reflecting the performance of Specialty Care driven by Dupixent, growth of General Medicines core assets and CHC which largely offset lower Vaccines sales. Sales in China increased 2.3% to €578 million, driven by Dupixent, Praluent, Plavix and Toujeo which more than offset the VBP impact on Lantus and lower Vaccines sales. In Japan, fourth-quarter sales increased 10.9% to €406 million mainly driven by the

growth of Dupixent, Sarclisa and CHC. In Brazil, fourth-quarter sales were up 4.9% driven by General Medicines core-assets. Full-year 2022 sales in Brazil were down 2.0% reflecting lower Vaccines and Lovenox sales. In Russia, fourth-quarter sales decreased 0.7% to 172 million. In March 2022, Sanofi has stopped any new spending not related to the supply of its essential and life-changing medicines and vaccines in Russia. This includes all advertising and promotional spending.

R&D update at the end of the fourth quarter 2022

Regulatory update
•The European Commission (EC) approved Beyfortus (nirsevimab) for the prevention of respiratory syncytial virus (RSV) lower respiratory tract disease in newborns and infants during their first RSV season. RSV is a common and highly contagious seasonal virus, infecting nearly all children by the age of two. Beyfortus is the first and only single-dose RSV protective option for the broad infant population, including those born healthy, at term or preterm, or with specific health conditions. Beyfortus was also granted approval in the United Kingdom.
•The U.S. Food and Drug Administration (FDA) accepted the Biologics License Application (BLA) for Beyfortus for the prevention of respiratory syncytial virus (RSV) lower respiratory tract disease in newborns and infants entering or during their first RSV season and for children up to 24 months of age who remain vulnerable to severe RSV disease through their second RSV season.
•The EC expanded the marketing authorization for Dupixent (dupilumab) in the European Union to treat adults with moderate-to-severe prurigo nodularis (PN) who are candidates for systemic therapy. With this approval, Dupixent is the first and only targeted medicine specifically indicated to treat PN in Europe and the U.S.
•The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Dupixent, recommending the approval in Europe, to treat adults and adolescents with eosinophilic esophagitis (EoE).
•VidPrevtyn Beta was approved by the EC, as a booster for the prevention of COVID-19 in adults who have previously received an mRNA or adenoviral COVID-19 vaccine. Designed to provide broad protection against multiple variants, the protein-based COVID-19 booster vaccine is based on the Beta variant antigen and includes GSK’s pandemic adjuvant.
•The EC granted marketing authorization for Enjaymo (sutimlimab) for the treatment of adult patients with cold agglutinin disease (CAD), a rare, serious, and chronic autoimmune hemolytic anemia.
•Regeneron announced that the FDA approved Libtayo (cemiplimab-rwlc) in combination with platinum-based chemotherapy for the first-line treatment of adult patients with advanced non-small cell lung cancer (NSCLC) with no EGFR, ALK or ROS1 aberrations.This approval triggered Sanofi receiving a $100 million regulatory milestone payment

Portfolio update
Phase 3:
•The Dupixent Phase 3 results in adults and adolescents with eosinophilic esophagitis (EoE) were published in the New England Journal of Medicine. Dupixent is the first and only targeted medicine indicated in the U.S. to treat EoE patients aged 12 and older, weighing at least 40 kg.
•The tolebrutinib Phase 3 trial in nrSPMS (non-relapsing secondary progressive multiple sclerosis, HERCULES) was fully recruited in December 2022. Non-relapsing SPMS is an area of highest unmet need in MS as no approved treatments are currently available. Sanofi continues to recruit in PERSEUS, the trial for PPMS (primary progressive MS), outside of the U.S.
•The URSA study, a randomized, double blind, placebo-controlled trial evaluating the efficacy and safety of tolebrutinib in patients with moderate-to-severe myasthenia gravis (MG) was discontinued after careful evaluation of the emerging competitive treatment landscape in MG.

Phase 2:
•The study evaluating eclitasertib (RIPK1 inhibitor) in patients with ulcerative colitis (UC) enrolled its first participants.
•Sanofi decided to terminate its collaboration program with Revolution Medicines for the development of SAR442720 (SHP2 inhibitor) for the treatment of solid tumors, following a pipeline review and reprioritization of projects.

Phase 1:
•The development program for SAR444419 (anti-TNFa/IL-6 Nanobody VHH) in inflammatory indication was initiated.
•The study evaluating SAR444559, an anti-CD38 mAb of next generation in inflammatory indication enrolled its first participants.
•The study of the anti PD1/IL-15 fusion protein, SAR445877 (formerly known as KD050, entering our pipeline through Kadmon acquisition) in patients with solid tumors enrolled its first participants.

•The study evaluating the safety and tolerability of intravenous SAR446159 (also known as ABL301), an anti-alpha-synuclein/IGF1R mAb in Parkinson’s Disease, was initiated in collaboration with ABL Bio.
•The randomized, double-blind study evaluating the safety, tolerability, and activity of SAR439459 (anti-TGFb mAb), for the treatment of Osteogenesis Imperfecta, was initiated.
•Three Phase 1/2 studies with different LNP formulations evaluating the safety and immunogenicity of Quadrivalent Influenza mRNA vaccine in adults, enrolled their first participants.
•The Phase 1/2 study evaluating the safety and immunogenicity of the RSV mRNA vaccine in older adults, formulated with 2 different LNPs, enrolled its first participants.

Acquisitions and major collaborations
•Sanofi and Innate Pharma announced an expansion of their collaboration, with Sanofi licensing a natural killer (NK) cell engager program targeting B7H3 from Innate’s ANKETTM (Antibody-based NK Cell Engager Therapeutics) platform. Sanofi will also have the option to add up to two additional ANKETTM targets. Upon candidate selection, Sanofi will be responsible for all development, manufacturing and commercialization.

An update of the R&D pipeline at as of Dec 31, 2022, is available on our website: View Source

Corporate Social Responsibility update at the end of the fourth quarter 2022

Access to medicines
Positive Phase 2/3 results of acoziborole with the potential to further transform the treatment of sleeping sickness
Sanofi has collaborated with the World Health Organization (WHO) since 2001, with the objective to contribute to eliminate sleeping sickness, or Human African Trypanosomiasis (HAT), by 2030.
Sleeping sickness is a neglected tropical disease, which affects mostly poor populations living in remote rural areas of sub-Saharan Africa. If left untreated, the parasitic disease is usually fatal. Since the start of Sanofi’s collaboration with the WHO, the number of cases of sleeping sickness has fallen by 97%, from 26,950 in 2001 to 805 in 2021, dropping below 1,000 for the fourth consecutive year. Through Sanofi’s partnership with the World Health Organization (WHO), the company supports disease management, including screening of populations, disease awareness campaign, capacity building, as well as drug donation.
In September 2020, Sanofi and the Drugs for Neglected Diseases initiative (DNDi) signed an agreement to develop and roll out acoziborole, a single dose treatment administered at the point of diagnosis making it a potential game-changer to support the sustainable elimination of the disease once approved. This new chemical entity has been tested in Phase 2/3 clinical studies in Democratic Republic of Congo and Guinea. The results, which were published in the Lancet Infectious Diseases medical journal in November 2022, showed that the 18-month treatment success rate for acoziborole was 95% in late-stage g-HAT patients. The study shows that acoziborole has a favorable safety profile, with no significant drug-related safety signals being reported.
Upon approval, acoziborole could replace fexinidazole, also developed by Sanofi and DNDi and first approved in 2018. Fexinidazole is a ten-day once-a-day treatment that is effective in both the first and the second stages of the disease in adults and children aged six years and older.

Environment
Accelerating our ambition towards net zero emissions by 5 years, now targeting 2045
Sanofi is accelerating its efforts to address climate change and now build the road to net zero emissions across all operations (scope 1 & 2) and the entire value chain (scope 3) by 2045. This is an acceleration of 5 years compared to Sanofi’s previous commitment towards net zero emissions by 2050.
This new commitment will be building on years of work to reduce the environmental footprint of its products and activities. The progress of Sanofi’s environmental strategy is disclosed in appendix 10: CSR dashboards.

ESG ratings
Sanofi has been recognized again on the 2022 CDP’s Climate Change A List for its commitment and transparency in the fight against climate change. In addition, Sanofi has also achieved the leadership score (A-) for its actions to protect water resources.
Sanofi has also been awarded the 2022 Terra Carta Seal. The Seal is being awarded to companies from around the world who are driving innovation and leadership in their industry and tackling climate change. All recipients must have credible transition roadmaps underpinned by globally recognised, scientific metrics for achieving net zero by 2050 or earlier and have ambitions aligned with those of the Terra Carta, a recovery plan for Nature, People and Planet.

Additionally, in recognition of Sanofi’ continued CSR strategy implementation, a few of Sanofi’s ESG rankings have been positively updated:

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Fourth-quarter and full-year 2022 financial results
Business Net Income4
In the fourth quarter of 2022, Sanofi generated net sales of €10,725 million, an increase of 7.3% (up 2.6% at CER). Full-year 2022 net sales were €42,997 million up 13.9% (up 7.0% at CER).
Fourth-quarter other revenues increased 73.6% (up 58.2% at CER) to €731 million, including increased VaxServe sales of non-Sanofi products of €413 million (up 27.4% at CER). In 2022, other revenues increased 69.2% (up 51.9% at CER) to €2,392 million, including VaxServe sales of non-Sanofi products of €1,567 million (up 28.5% at CER).
Fourth-quarter Gross Profit increased 11.2% (up 5.4% at CER) to €7,722 million. The gross margin ratio increased 2.5 percentage point to 72.0% versus the same period of 2021, reflecting positive currency effect, improvement of the Pharmaceuticals gross margin ratio (which increased from 75.4% to 77.1%) driven by favorable product mix and efficiency gains and Vaccines gross margin ratio (58.9% from 56.0%), benefitting from a favorable comparison basis. CHC gross margin ratio increased 0.2 percentage point to 62.7%. In 2022, the gross margin ratio increased 2.4 percentage points to 73.7% (73.1% at CER) driven by Pharmaceuticals and Vaccines.
Research and Development (R&D) expenses were up 15.0% (up 10,1% at CER) to €1,823 million in the fourth quarter, reflecting increased expenses in pharmaceuticals priority assets and early-stage projects as well as in Vaccines. In 2022, R&D expenses increased 17.8% to €6,706 million (up 12.3% at CER).
Fourth-quarter selling general and administrative expenses (SG&A) increased 5.0% to €2,895 million. At CER, SG&A expenses were stable, reflecting efficiency measures which more than offset increased commercial investments in Specialty Care growth drivers. In the fourth quarter, the ratio of SG&A to sales decreased 0.6 percentage point to 27.0% compared to the prior year. In 2022, SG&A expenses increased 9.8% to €10,492 million (up 3.3% at CER) and the ratio of SG&A to sales was 0.9 percentage point lower at 24.4% compared to 2021.
Fourth-quarter and full-year 2022 operating expenses were €4,718 million, (up 8.6% and 3.7% at CER) and €17,198 million (up 12.8% and 6.6% at CER).
Fourth-quarter other current operating income net of expenses was €-276 million versus €-356 million in the fourth quarter of 2021. Other current operating income net of expenses included an expense of €659 million (versus an expense of €444 million in the fourth quarter of 2021) corresponding to the share of profit to Regeneron of the monoclonal antibodies Alliance, additional share of profit paid by Regeneron towards development costs (which increased from 10% to 20% from April 1st) and the reimbursement of commercialization-related expenses incurred by Regeneron. In the fourth quarter, this line also included €227 million of net capital gains related to portfolio streamlining compared to €61 million in the same period of 2021.
In 2022, other current operating income net of expenses was €-1,514 million versus €-946 million in 2021 and included €615 million of net capital gains related to portfolio streamlining compared to €318 million in 2021. In 2022 expense associated with the monoclonal antibodies Alliance with Regeneron was €2,367 million, which compared with an expense of €1,429 million in 2021 (see appendix 7 for further details).
The fourth-quarter and full-year share of profit from associates was €6 million and €88 million versus €18 million and €39 million in the same periods of 2021, respectively, and included the share of U.S. profit related to Vaxelis.
Fourth-quarter business operating income4 (BOI) increased 20.7% to €2,724 million. At CER, BOI increased 15.0%. The ratio of BOI to net sales increased 2.8 percentage points to 25.4%. In 2022, BOI was €13,040 million, up 21.7% (up 13.3% at CER). In 2022, the ratio of business operating income to net sales increased 1.9 percentage point to 30.3% (30.0% at CER).
Net financial expenses were €-28 million and €-234 million in the fourth quarter and full-year 2022, respectively, versus €-83 million and €-328 million in the same periods of 2021.
Fourth-quarter effective tax rate was 20,6% versus 20.5% in the same periods of 2021. Full-year 2022 effective tax rate was 19.3% versus 20.9% in 2021. Sanofi expects its effective tax rate to be around 19% in 2023.
Fourth-quarter business net income4 increased 23.8% to €2,141 million and increased 17.6% at CER. The ratio of business net income to net sales increased 2.7 percentage points to 20.0% versus the fourth quarter of 2021. In 2022, business net income increased 25.9% to €10,341 million and increased 17.0%
4See Appendix 3 for 2022 fourth-quarter consolidated income statement; see Appendix 9 for definitions of financial indicators, and Appendix 4 for reconciliation of IFRS net income reported to business net income.

at CER. The ratio of business net income to net sales increased 2.4 percentage points to 24.1% versus 2021.
In the fourth quarter of 2022, business earnings per share4 (EPS) was €1.71, up 23.9% on a reported basis (up 17,4% at CER). The average number of shares outstanding was 1,254.0 million versus 1,254.9 million in the fourth quarter of 2021. In 2022, business earnings per share8 was €8.26, up 25.9% on a reported basis and up 17.1% at CER. The average number of shares outstanding was 1,251.9 million versus 1,252.5 million in 2021.

Reconciliation of IFRS net income reported to business net income (see Appendix 4)
In 2022, the IFRS net income was €6,720 million. The main items excluded from the business net income were:
•An amortization charge of €2,053 million related to fair value remeasurement on intangible assets of acquired companies (primarily Genzyme: €535 million, Bioverativ: €377 million, Boehringer Ingelheim CHC business: €188 million, Ablynx: €168 million and Kadmon €159 million) and to acquired intangible assets (licenses/products: €334 million). These items have no cash impact on the Company.
•An impairment of intangible assets of €1,700 million of which €1,586 million are related to SAR444245 recorded in the third quarter.
•An upfront payment of $900 million (€856 million) and a regulatory milestone payment of $100 million (€96 million) received by Sanofi from Regeneron following the restructuring of the Immuno-Oncology agreement and collaboration. These items are included in Consolidated income statements line Other Operating Income (see Appendix 7).
•Restructuring costs and similar items of €1,336 million related to streamlining initiatives.
•Other gains and losses, and litigation charge of €370 million, mainly including costs related to major litigations (including the estimated future defense costs relating to the Zantac litigation).
•A €962 million tax effect arising from the items listed above, mainly comprising €771 million of deferred taxes generated by amortization and impairments of intangible assets and €231 million associated with restructuring costs and similar items (see Appendix 4).

Capital Allocation
In 2022, free cash flow before restructuring, acquisitions and disposals decreased by 10.8% to €8,902 million, after net changes in working capital (€-477 million) and capital expenditures (€-1,594 million). After acquisitions5 (€-824 million), proceeds from disposals5 (€1,531 million) and payments related to restructuring and similar items (-€1,126 million), free cash flow6 increased 4.8% to €8,483 million. After the acquisition of Amunix (-€875 million), the dividend paid by Sanofi (-€4,168 million), net debt decreased from €9,983 million at December 31, 2021 to €6,437 million at December 31, 2022 (amount net of €12,736 million cash and cash equivalents).