On February 5, 2021 Sanofi reported close to double-digit Q4 2020 business EPS(1) growth at CER (Press release, Sanofi, FEB 5, 2021, View Source [SID1234574680])

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Q4 2020 sales growth(2) of 4.2% and business EPS growth of 9.8% at CER
•Specialty Care sales grew 18.3%, driven by strong Dupixent performance (+54.2% to €982 million).
•Vaccines up 14.6%, driven by record demand for differentiated influenza vaccines and continued growth of PPH.
•General Medicines declined 7.5%, reflecting lower U.S. Diabetes sales, COVID environment and portfolio streamlining.
•CHC down 3.0% due to decreased sales of Cough & Cold related portfolio in Europe partially offset by Digestive Health brands.
•Leveraged business EPS as the result of prioritization within R&D and continued execution on smart spending initiatives.
•Sales down 2.4% and business EPS flat on a reported basis, as a result of the overall adverse impact from foreign currency rates.
Full-year 2020 performance
•Sales increased 3.3% to €36,041 million, driven by Dupixent (€3,534 million, up 73,9%) and Vaccines.
•Business EPS of €5.86, up 3.9% on a reported basis and 9.2% at CER ahead of the guidance of 7% to 8%.
•In 2020, cost savings of €1,680 million were realized of which approximately 60% were reinvested .
•IFRS EPS of €9.82 (up 338.4%), reflecting capital gain from sales of Regeneron.
•Entering the sustainable finance landscape with two revolving credit facilities linked to selected sustainability KPIs.
•Board meeting held on February 4, proposes annual dividend of €3.20.
2021 financial outlook
•Sanofi expects 2021 business EPS(1) to grow high single digit(3) at CER, barring unforeseen major adverse events. Applying average January 2021 exchange rates, the currency impact on 2021 business EPS is estimated to be between -4.5% to -5.5%.
Sanofi Chief Executive Officer, Paul Hudson, commented:
"While last year was an extraordinarily challenging year for all, I am incredibly proud of the measurable progress we made within the backdrop of a global pandemic. Our teams across the world have relentlessly delivered on our strategy with a sharpened focus on operating and financial efficiencies. We bolstered our R&D pipeline with the completion of the Synthorx and Principia acquisitions, met several regulatory milestones to bring our important medicines to patients, and have seen several proofs of concept which reassure us about the priorities we chose. We continue to work in parallel on our two COVID-19 vaccine candidates, with clinical trials starting in the coming weeks. At the same time we want to make a more immediate contribution to help saving lives, which is why we have decided to provide manufacturing support to BioNTech and Pfizer. The continuous uptake and potential of Dupixent for patients, our contribution to population health with Vaccines, reinforced with the resiliency of our General Medicines and Consumer Healthcare portfolios are all solid foundations to build upon in 2021, helping us achieve our ambition of bringing breakthrough medicines and vaccines to people around the world."

2020 fourth-quarter and full-year Sanofi sales
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Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER1
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In the fourth quarter of 2020, Sanofi sales were €9,382 million, down 2.4% on a reported basis. Exchange rate movements had a negative effect of 6.6 percentage points, mainly driven by the decrease of the U.S. dollar, Brazilian real, Turkish lira, Russian ruble, Mexican and Argentine pesos. At CER, Sanofi sales increased 4.2%.
Full-year 2020, Sanofi sales reached €36,041 million, down 0.2% on a reported basis. Exchange rate movements had a negative effect of 3.5 percentage points. At CER, Sanofi sales were up 3.3%.

Global Business Units
Fourth-quarter 2020 net sales by Global Business Unit (€ million; % of total sales)
2020 fourth-quarter and full-year business operating income
Fourth-quarter business operating income (BOI) increased 0.3% to €2,052 million. At CER, BOI increased 9.9%. The ratio of BOI to net sales increased 0.6 percentage points to 21.9% versus the prior year. Full-year 2020, BOI increased 4.4% to €9,762 million. At CER, BOI increased 9.7%. The ratio of business operating income to net sales increased 1.2 percentage points to 27.1%.
Pharmaceuticals
Fourth-quarter 2020 Pharmaceutical sales increased 2.4% to €6,293 million, with double-digit growth of the Specialty Care portfolio mainly driven by the strong performance of Dupixent which largely offset lower sales in General Medicines partially due to pricing pressures on the Diabetes franchise in the U.S. In 2020, Pharmaceuticals sales increased 3.1% to €25,674 million driven by the strong performance of Specialty Care.

Specialty Care

Dupixent
In the fourth quarter, Dupixent (collaboration with Regeneron) sales were strong despite the COVID-19 environment and increased 54.2% to €982 million. In the U.S., Dupixent sales of €773 million (up 52.7%) were driven by continued strong demand in atopic dermatitis (AD) in adult and adolescent patients, rapid adoption in children aged 6 to 11 years (approved in May 2020), continued uptake in asthma and chronic rhinosinusitis with nasal polyposis (CRSwNP). Dupixent total prescriptions (TRx) increased 65% (year-over-year) and new-to-brand prescriptions (NBRx) grew 18% despite fewer in-person physician visits which remain below the pre-COVID level. In Europe, fourth-quarter Dupixent sales grew 76.9% to €115 million reflecting continued growth in AD in key countries and additional launches in asthma in European markets. In Japan, sales were €58 million (up 30.4%), where strong demand was moderated by the government price decrease implemented in April 2020. Dupixent was approved in China for the treatment of adults with moderate-to-severe AD in June and will be listed on the NRDL (National Reimbursement Drug List) as of March 2021. In 2020, Dupixent sales reached €3,534 million, up 73.9% reflecting increased penetration into eligible AD and asthma populations as well as expansion in additional geographies and new indications in younger populations. At the end of 2020, Dupixent was launched in 47 countries with approximately 230 000 patients on therapy.

Multiple Sclerosis/Neurology/Other Inflammation & Immunology
In the fourth-quarter and full-year Multiple Sclerosis/Neurology/Other I&I sales were down 1.3% (to €553 million) impacted by the Lemtrada sales decline. In 2020, the franchise’s sales were up 3.9% driven by Aubagio and Kevzara sales growth.
Aubagio sales increased 3.7% in the fourth quarter to €472 million, driven by Europe (up 16.0%), mainly benefiting from demand growth and an earlier price increase in Germany. In the U.S., Aubagio sales were stable reflecting lower new patient starts related to increased competition. Full-year 2020 Aubagio sales increased 10.6% mainly driven by demand and price increases in the U.S and Germany.
Fourth-quarter and full-year Lemtrada sales decreased 60.3% (to €21 million) and 58.7%, respectively, primarily due to the COVID-19 pandemic, which has led to a decrease in infused immune reconstitution therapies such as Lemtrada.
Fourth-quarter and full-year Kevzara (collaboration with Regeneron) sales were up 16.7% (to €60 million) and 30.3%, respectively, reflecting growth in Europe and Rest of the World.
In the fourth quarter, Rare Disease sales increased 3.0% to €734 million, primarily driven by demand partially offset by sales phasing. In 2020, Rare Disease sales increased 5.7% driven by Rest of the World.
Fourth-quarter Cerezyme sales increased 0.6% to €160 million, driven by strong growth in Rest of the World. Fourth-quarter Cerdelga sales increased 12.7% to €59 million driven by patient accruals in Europe. Sales of the Gaucher franchise (Cerezyme + Cerdelga) increased 3.4% (to €219 million) in the fourth quarter and 7.1% in 2020.
Fourth-quarter Myozyme/Lumizyme sales increased 3.8% to €235 million supported by new patient accruals in the U.S. In Rest of the World, sales decrease reflected COVID-19 impact on demand. Full-year 2020 Myozyme/Lumizyme sales increased 6.0% driven by new patient accruals in the U.S. and Rest of the World.
Fourth-quarter Fabrazyme sales decreased 0.9% to €200 million reflecting lower sales in the Rest of the World, due to unfavorable order phasing. Fabrazyme was launched in China in May and is the first treatment for Fabry disease approved in China. Full-year 2020 Fabrazyme sales were up 3.2%, reflecting new patient accruals in Europe partially offset by COVID-19 impact and lower sales in Japan due to government price decrease in April 2020.
Fourth-quarter Oncology sales increased 24.6% to €213 million, driven by Sarclisa and Libtayo launches and growth from established franchises. In 2020, Oncology sales were up 27.1% supported by growth in all three regions.
Fourth-quarter and full-year Jevtana sales increased 7.0% to €131 million and 12.2%, respectively and benefited from increased demand in metastatic castration-resistant prostate cancer following publication of the results of the CARD study in this disease setting at ESMO (Free ESMO Whitepaper) (European Society for Medical Oncology) and in the NEJM (New England Journal of Medicine) in September 2019. In the U.S., the Jevtana composition of matter patent will expire in September 2021. From May to July 2020, Sanofi filed patent infringement suits against all generic filers on Jevtana under Hatch-Waxman in the U.S. District Court for the District of Delaware asserting two method of use patents (US 10,583,110 and US 10, 716,777), both of which lasts until October 2030. Sanofi has reached settlement agreements with some of the defendants and the suit against the remaining defendants are ongoing. In Europe, generic competition is expected from end of March 2021.
Libtayo (collaboration with Regeneron) approved for the treatment of patients with metastatic cutaneous squamous cell carcinoma (CSCC) or locally advanced CSCC who are not candidates for curative surgery or curative radiation had ex-U.S. sales of €19 million in the fourth quarter and €67 million in 2020. Sales were driven by new country launches. To date, Libtayo has been launched in 18 countries outside the U.S. Libtayo sales in the U.S. are reported by Regeneron.
Sarclisa was approved in March in the U.S. for the treatment of adults with relapsed refractory multiple myeloma (RRMM) who have received at least two prior therapies including lenalidomide and a proteasome inhibitor and in June by the European Commission in certain adults with RRMM. Fourth-quarter Sarclisa sales were €25 million of which €12 million was generated in the U.S. Sarclisa is now launched in 12 countries (including the U.S., Japan, UK, Netherlands, Canada, Sweden, Switzerland and France).
In the fourth quarter and full-year Rare Blood Disorder franchise sales were up 11.0% (€317 million) and up 7.1%, respectively, driven by Alprolix and Cablivi performance which more than offset Eloctate sales decline in the U.S. Excluding industrial sales of Alprolix and Eloctate to Sobi, fourth quarter and full-year Rare Blood Disorder sales grew 2.6% and 2.2%, respectively. Industrial sales to Sobi were higher than usual in the fourth quarter and full-year 2020 due to a change in the supply agreement (in 2020, sales to Sobi represented 17% and 11% of Alprolix and Eloctate sales, respectively). Alprolix and Eloctate industrial sales to Sobi are expected to be significantly lower in 2021.
Eloctate sales were €156 million in the fourth quarter, down 6.8% due to lower U.S. sales (-10.6%) as a result of ongoing competitive pressure. Full-year Eloctate sales decreased 5.7% driven by competitive pressure in the U.S partially offset by the Rest of the World (up 15.6%) which includes industrial sales to Sobi. Excluding industrial sales to Sobi, Eloctate fourth quarter and full-year sales decreased 8.9% and 9.8%, respectively.
Fourth-quarter and full-year Alprolix sales were up 27.8% (€131 million) and up 15.0%, mainly driven by patient switches from short-acting factors, prophylaxis conversion and increased industrial sales to Sobi. Full-year Alprolix sales were up 15.0%. Excluding industrial sales to Sobi, Alprolix fourth quarter and full-year sales each increased 6.3% and 7.4%, respectively.
Cablivi for the treatment of adults with acquired thrombotic thrombocytopenic purpura (aTTP) generated sales of €30 million in the fourth quarter of which €18 million from the U.S. In Europe, where the product is commercially available in several countries and has a temporary license to be sold in France, sales were €12 million. Full-year 2020 Cablivi sales were €113 million of which €72 million from the U.S. In July, the International Society on Thrombosis and Haemostasis (ISTH) published the first evidence based global guidelines on the diagnosis and treatment of thrombotic thrombocytopenic purpura (TTP) in the Journal of Thrombosis and Haemostasis. The ISTH guidelines suggest treatment with Cablivi in combination with plasma exchange and immunosuppressive therapy for first episode or relapse in all adult aTTP patients. In addition, real world evidence from three published manuscripts from over 230 patients with confirmed aTTP in France, the United Kingdom and Germany continues to demonstrate the benefits of using Cablivi in combination with plasma exchange and immunosuppresive therapy. This growing body of data confirms HERCULES Phase 3 results and continues to support frontline use of Cablivi for aTTP treament.

General Medicines

Diabetes

In the fourth quarter, global Diabetes sales decreased 8.4% to €1,087 million, due to a continued decline in the average U.S. glargine price (Lantus and Toujeo), as well as some impact from the COVID-19 environment, mainly in the Rest of the World. Full-year 2020 franchise sales were down 4.8% mainly due to lower Lantus and Admelog sales in the U.S.and lower Amaryl sales in China partly offset by Toujeo and Suliqua growth.
Lantus sales were €587 million in the fourth quarter, down 13.6%. mainly due to a continued decline in average U.S. price, patients switching to Toujeo and biosimilar glargine competition. In Rest of the World, sales decreased 4.1%, reflecting some COVID-19 impact on the out-of-pocket market as well as an unfavorable phasing effect. Full-year 2020 Lantus sales decreased 8.5%, mainly due to lower sales in the U.S. and to a lesser extent in Europe, despite double-digit growth in China.
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Fourth-quarter Toujeo sales were stable at €221 million, as growth in Rest of the World and Europe offset lower sales in the U.S. In the U.S., fourth-quarter Toujeo sales decreased 18.2% due to a continued decline in the average price which more than offset volume growth. Toujeo was launched in China in the fourth quarter. In 2020, Toujeo sales increased 8.4%, driven by strong performance in Rest of the World and Europe.
Fourth-quarter and full-year Amaryl sales decreased 7.6% (€68 million) and 15.9%, respectively, due to lower sales in China reflecting the second wave of the VBP program which includes glimepiride (compound name of Amaryl). As previously disclosed, Sanofi opted not to participate in the bidding for Amaryl.
Fourth-quarter Soliqua/Suliqua sales increased 25.6% to €46 million driven by launches in Rest of the World. Full-year 2020 Soliqua sales increased 36.1% supported by strong growth in all three regions.
In the fourth quarter, Cardiovascular and Established Rx Products sales decreased 7.1% to €2,407 million, partially due to the COVID environment and divestments as well as lower Renagel/Renvela sales.
Fourth-quarter Lovenox sales increased 13.7% to €356 million, driven by Rest of the World (up 17.6% to €159 million), and Europe (up 9.7% to €189 million) reflecting recent guidelines recommending the use of low molecular weight heparins in hospitalized COVID-19 patients which more than offset biosimilar competition in several European countries. Full-year 2020 Lovenox sales were up 4.5% driven by Rest of the World sales growth which more than offset biosimilar competition in Europe.
Plavix sales were down 1.4% in the fourth quarter to €202 million. In China, fourth-quarter Plavix sales were €64 million, up 18.2%. Full-year 2020 Plavix sales decreased 30.1%, mainly reflecting lower sales in China (down 52.5% to €341 million) due to net price adjustments following the implementation of the VBP program partially offset by strong volume gains.
Fourth-quarter Aprovel/Avapro sales were down 9.2% to €115 million, primarily reflecting lower sales in Europe. In China, fourth-quarter Aprovel/Avapro sales were €37 million, down 7.5%. Full-year 2020 Aprovel/Avapro sales decreased 15.9%, mainly reflecting lower sales in China (down 33.4% to €190 million) due to net price adjustments following the implementation of the VBP program partially offset by strong volume gains.
Full-year 2020 volume growth of Plavix and CoAprovel increased by 78% in China, achieving the more than 60% target.
Fourth-quarter Praluent sales decreased 8.0% to €65 million, due to lower sales in the U.S. which more than offset performance in Europe (up 44.0% to €35 million). Praluent was launched in China in April. Effective April 1, 2020, Sanofi has sole responsibility for Praluent outside the U.S. while Regeneron has sole responsibility for Praluent in the U.S. Both companies have entered into agreements to support manufacturing needs in the near term and Sanofi booked sales of Praluent in 2020 in the U.S. In the first quarter of 2021, Sanofi will book limited Praluent sales in the U.S. Full-year 2020 Praluent sales grew 2.3% driven by Europe. Excluding the United States and Japan, Praluent sales grew 13.3% in 2020.
Pharmaceuticals business operating income
In the fourth quarter, business operating income (BOI) of Pharmaceuticals increased 3.7% to €1,695 million. At CER, BOI increased 12.1%. The ratio of BOI to net sales increased by 1.9 percentage points to 26.9% reflecting lower operating expenses, specially R&D due to prioritization and resources reallocation. Full-year 2020, BOI of Pharmaceuticals increased 8.0% (12.0% at CER) to €8,833 million. The ratio of BOI to net sales increased 2.6 percentage points to 34.4%.
Fourth-quarter Vaccines sales increased 14.6% to €2,060 million reflecting the strong influenza vaccines performance in Europe and in the U.S. and higher PPH and meningitis sales partly offset by lower sales of travel vaccines and adult booster due to the COVID-19 pandemic. Full-year 2020 Vaccines sales grew 8.8% driven by influenza vaccines as well as expansion of pediatric combinations which more than compensate the negative COVID-19 impact on the other vaccine franchises.
Influenza vaccines sales increased by 24.6% in the fourth quarter to €1,228 million, reflecting strong demand in the northern hemisphere. In Europe, sales grew 118.3% to €305 million driven by increased vaccination coverage and the launch of the differentiated portfolio (Efluelda, a quadrivalent Influenza Vaccine-High Dose and Supemtek, a recombinant influenza vaccine). In the U.S. sales increased 10.2% to €729 million benefiting from the increased demand. Full-year 2020, influenza vaccines sales increased 37.9% to €2,472 million with more than 250 million doses shipped.
In the fourth quarter, Polio/Pertussis/Hib (PPH) vaccines sales increased 20.3% to €494 million driven by Rest of the world (PPH sales were up 30.6%) which benefited from expansion of Hexaxim and favorable phasing of polio vaccine. Full-year 2020, PPH vaccines sales were up 12.6%.
Fourth-quarter Menactra sales were up 7.3% to €125 million, driven mainly by catch up after low immunization in summer due to COVID-19. Full-year 2020 Menactra sales decreased 15.0% to €559 million reflecting the COVID-19 impact.
Adult Booster vaccines sales decreased 11.6% in the fourth quarter to €123 million, primarily reflecting the COVID-19 impact on Adacel in the U.S. and Repevax in Europe. Full-year 2020 Adult Booster vaccines sales decreased 14.9% due to the COVID-19 environment.
Fourth-quarter and full-year 2020 Travel and other endemic vaccines sales decreased 35.8% and 43.2% respectively, due to extensive travel restrictions globally.
Vaccines business operating income
In the fourth quarter, business operating income (BOI) of Vaccines increased 16.2% to €825 million. At CER, BOI increased 25.1%. The ratio of BOI to net sales increased 2.8 percentage points to 40.0% versus the prior year. Full-year 2020, BOI of Vaccines increased 4.4% (up 11.2% at CER) to €2,276 million. The ratio of BOI to net sales was stable at 38.1%.
In the fourth quarter, Consumer Healthcare (CHC) sales decreased 3.0% to €1,029 million primarily reflecting a weak cough and cold season due to social distancing measures and wearing of masks. Sales were also impacted by divestments of non-core products and product suspensions due to changing regulatory requirements. Full-year 2020 CHC sales decreased 1.9% as a result of the voluntary recall of Zantac in October 2019, as well as divestments of non-core products and product suspensions. Excluding the Zantac recall, full-year 2020 CHC sales were stable.
In Europe, fourth-quarter CHC and full-year 2020 CHC sales decreased 9.7% (to €318 million) and 4.3%, respectively, mainly reflecting lower demand for cough and cold products due to social distancing measures and wearing of masks, divestments of non-core products and product suspensions due to changing regulatory requirements.
In the U.S., fourth-quarter CHC sales increased 2.4% to €238 million, reflecting growth in the Allergy (Allegra and Xyzal) and Digestives categories. Full-year 2020 U.S. sales decreased 1.6%, reflecting the impact of the Zantac recall which offset the growth in the Allergy and Nutritionals categories. Excluding the impact of the Zantac recall, full-year 2020 US sales would have increased by 5.7%.
In the Rest of the World, fourth-quarter CHC sales decreased 1.1% to €473 million, while full-year 2020 sales slightly decreased (0.4%), mostly driven by the performance of the Allergy, Cough & Cold category.
CHC business operating income
In the fourth quarter, business operating income (BOI) of CHC decreased 10.2% to €307 million. At CER, BOI increased 1.8%. The ratio of BOI to net sales increased 0.1 percentage point to 29.8% versus the prior year. Full-year 2020, BOI of CHC decreased 14.4% (down 8.1% at CER) to €1,419 million. The ratio of BOI to net sales decreased 3.0 percentage points to 32.3%.
Fourth-quarter sales in the U.S. increased 5.3% to €3,611 million driven by the strong sales performance of Dupixent as well as Vaccines. Full-year 2020 U.S. sales increased 8.2% mainly driven by Dupixent which more than offset lower Diabetes sales.
In Europe sales were up 6.0% in the fourth-quarter to €2,534 million. Dupixent, influenza vaccines, Aubagio and oncology sales growth more than offset lower sales of General Medicines and CHC. Full-year 2020 sales in Europe were up 1.5% reflecting strong sales performance of Dupixent and influenza vaccines which more than offset lower General Medicines and CHC sales.
In the Rest of the World, sales increased 1.7% to €3,237 million in the fourth quarter driven mainly by the performance of Vaccines, Dupixent, Lovenox and Rare Blood Disorders franchise which more than offset lower Established Rx Products sales. Sales in China increased 9.9% to €492 million, driven by CHC and established Rx Products. In Japan, fourth-quarter sales decreased 4.8% to €419 million due to lower sales of Established Rx Products as well as CHC. In the Rest of the World, full-year 2020 sales increased 0.2%, reflecting the impact of the VBP program in China during the first nine months of the year .

R&D update at the end of the fourth quarter 2020
Regulatory update
•The European Commission (EC) extended the marketing authorization for Dupixent in the European Union (EU) to include children 6 to 11 years of age with severe atopic dermatitis who are candidates for systemic therapy. Dupixent is the only systemic medicine approved in the EU to treat these patients.
•The U.S. Food and Drug Administration (FDA) issued a Complete Response Letter (CRL) regarding the BLA for sutimlimab, an investigational monoclonal antibody for the treatment of hemolysis in adults with cold agglutinin disease. The CRL refers to certain deficiencies identified by the agency during a pre-license inspection of a third-party facility responsible for manufacturing. There were no clinical or safety deficiencies noted in the CRL with respect to the application. Satisfactory resolution of the observations by the third-party manufacturer is required before the BLA can be approved and Sanofi remains in close contact with the FDA and the third-party manufacturer to reach a resolution in a timely manner.
•The EC approved MenQuadfi for active immunization of individuals from the age of 12 months and older against invasive meningococcal disease caused by Neisseria meningitidis serogroups A, C, W and Y, based upon results from a robust and comprehensive international clinical program, including seven pivotal Phase 2 and 3 randomized, active-controlled, multi-center studies.
•The EC granted a marketing authorization for Supemtek, a quadrivalent (four-strain) recombinant influenza vaccine, for the prevention of influenza in adults aged 18 years and older. This is the first and only recombinant influenza vaccine now approved in the European Union. The authorization is based on clinical data demonstrating safety, immunogenicity and efficacy of Supemtek in two Phase 3 randomized controlled trials involving more than 10,000 patients in total. Outside of the EU, Supemtek is also approved in the U.S. under the tradename Flublok Quadrivalent.
•The FDA accepted for priority review the supplemental Biologics License Application (sBLA) for PD-1 inhibitor Libtayo in monotherapy, to treat patients with first line locally advanced or metastatic non-small cell lung cancer (NSCLC) with ≥50% PD-L1 expression and in patients with second line and advanced Basal Cell Carcinoma BCC. The target action date for the FDA decision is February 28, 2021 (for NSCLC) and March 3, 2021 (for BCC).
•The National Institute for Health and Care Excellence (NICE) issued a Final Appraisal Determination (FAD) recommending Sarclisa for in combination with existing treatment (pomalidomide and dexamethasone) for adults with relapsed/refractory multiple myeloma who have received three prior lines of treatment and at least two prior therapies including lenalidomide and a proteasome inhibitor and have demonstrated disease progression on the last treatment.
•The FDA accepted for priority review the Biologics License Application (BLA) for avalglucosidase alfa for long-term enzyme replacement therapy for the treatment of patients with Pompe disease (acid α-glucosidase deficiency). The target action date for the FDA decision is May 18, 2021.
•Aubagio was granted priority review with a PDUFA date of May 2, 2021 for treating pediatric Relapsing Multiple Sclerosis.
•Fitusiran, a potentially transformative siRNA therapy for people with hemophilia A or B, with or without inhibitors was granted Fast Track Designation by the U.S. FDA for all indications.
•The FDA granted Fast Track Designation (FTD) to the oral investigational Bruton’s tyrosine kinase (BTK) inhibitor, rilzabrutinib, which has the potential to be the first BTK inhibitor for the treatment of immune thrombocytopenia (ITP). Rilzabrutinib received orphan drug designation from the FDA for the treatment of ITP in October 2018.
•The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) has adopted a positive opinion for an additional indication for Plavix (clopidogrel) in adult patients with high-risk transient ischemic attack (TIA) or minor ischemic stroke (IS). This new indication includes Plavix used alongside aspirin within 24 hours of an event and continued for 21 days, followed by long-term single anti-platelet therapy. The additional indication is based on the results of two double-blind, randomized, placebo-controlled investigator-initiated Phase 3 trials.
•FDA has designated SAR442257, (CD38/CD28xCD3 tri-specific) as a Fast Track development program for the investigation in patients with multiple myeloma who have received at least 3 prior lines of therapy, and are refractory to a proteasome inhibitor, an immunomodulatory agent and an anti-CD38 monoclonal antibody.

Portfolio update

Phase 3:
•A Phase 3 trial investigating amcenestrant with palbociclib as first line therapy for patients with ER(+) HER2(-) advanced breast cancer enrolled its first patients.
•Three Phase 3 trials for Dupixent started: Chronic Inducible Cold Urticaria (LIBERTY-CINDU CurIADS), Chronic Sinusitis without Nasal Polyps (CRSsNP) and Allergic Fungal Rhinosinusitis (AFRS).
•Tolebrutinib, a brain penetrant BTK inhibitor, enrolled patients into the Phase 3 study for Primary Progressive and Secondary Progressive Multiple Sclerosis.
•A Phase 3 study for itepekimab in Chronic Obstructive Pulmonary Disease (AERIFY-1) started.
•Patients have now been re-started on fitusiran in the Phase 3 adolescent and adult clinical studies following a voluntary pause in Q4 2020. An amended protocol was adopted in December and will be presented later today at the European Association of Haemophilia and Allied Disorders (EAHAD) congress. These revisions are aimed at further strengthening the benefit-risk profile of fitusiran for patients.
•The Phase 3 trial for rilzabrutinib in adults and adolescents with persistent or chronic Immune Thrompocytopenia (LUNA3) started.

Phase 2
•Romilkimab, anti-IL4/IL13 bispecific mAb will not be pursued in systemic scleroderma.
•Itepekimab, anti-IL-33, will not be pursued in asthma.
•Isatuximab in combination with cemiplimab for lymphoma was discontinued.
•The venglustat Phase 2 trial in Parkinson’s disease with GBA mutations did not meet the primary endpoint (end-January) and the indication was halted. Safety profile continues to be favorable and the development moves forward as planned in other Rare Disease indications.

Phase 1
•Sanofi and GSK reported interim results of a Phase 1/2 clinical trial to evaluate the safety, reactogenicity (tolerability) and immunogenicity (immune response) of a COVID-19 vaccine candidate. These results demonstrated an insufficient response in older adults and need to refine the concentration of antigen in order to provide high-level immune response across all age groups. The companies plan a Phase 2b study with an improved antigen formulation which with support from BARDA is expected to start this month.
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•SAR444245 (THOR707), a non-alpha IL-2, added a cohort in combination with pembrolizumab in solid tumors.
•SAR443820, a RIPK1 inhibitor, being developed for Amyotrophic Lateral Sclerosis (ALS) transitioned to the clinic and started a Phase 1 safety and tolerability study.
•SAR442501, (FGFR3 antibody) being developed for Achondroplasia, transitioned to the clinic and started a Phase 1 safety and tolerability study.

An update of the R&D pipeline at as of December 31, 2020, is available on our website:
View Source

Sustainable performance update
Sanofi became the first large biopharmaceutical company to integrate environmental and social features in two sustainability-linked credit facilities. The interest rate is linked to two sustainability key performance indicators (KPIs) and achieving the set sustainability targets leads to a lower interest rate.
The two facilities include a new €4 billion revolving credit facility expiring December 2025, with two extension options of one year each, and an amendment of the €4 billion revolving credit facility expiring in December 2021 with the addition of two extension options of one year each.
The cost of the facilities is linked to the achievement of annual targets for two sustainable KPIs, contribution to Polio eradication and carbon footprint reduction. The innovative character of the transaction lies on Sanofi’s commitment to invest yearly a fixed contribution to both Sanofi’s Espoir Foundation and Sanofi Planet Mobilization program to fund social and environmentally responsible projects and maximize its impact on the two objectives. In case Sanofi achieves its yearly sustainability performance targets, Sanofi’s lending banks will support this contribution through a discount on the margin.
2020 fourth-quarter and full-year financial results2
Business Net Income2
In the fourth quarter of 2020, Sanofi generated net sales of €9,382 million, a decrease of 2.4% and an increase of 4.2% at CER. In 2020, Sanofi sales were €36,041 million, a decrease of 0.2% and an increase of 3.3% at CER.
Fourth-quarter other revenues decreased 13.4% (down 7.1% at CER) to €354 million, reflecting lower VaxServe sales of non-Sanofi products (€308 million, down 7.5% at CER). In 2020, other revenues decreased 11.8% (down 9.5% at CER) to €1,328 million, including lower VaxServe sales of non-Sanofi products (€1,136 million, down 8.4% at CER).
Fourth-quarter Gross Profit decreased 4.0% to €6,298 million (up 2.5% at CER). The gross margin ratio decreased 1.2 percentage points to 67.1% (67.1% at CER) versus the prior year. This decrease reflected the erosion of the Pharmaceuticals gross margin ratio (from 72.5% to 70.7%). The margin accretion from Specialty Care was more than offset by the lower gross margin ratio from General Medicines, reflecting increased net price adjustments for U.S. Diabetes, and evolution of product mix. Vaccines gross margin ratio improved 0.2 percentage point to 60.5%. CHC gross margin ratio decreased from 65.8% to 64.6%. In 2020, the gross margin ratio decreased 0.9 percentage point to 70.1% (69.9% at CER) versus 2019, reflecting the lower gross margin ratio in Pharmaceuticals.
Research and Development (R&D) expenses decreased 10.1% to €1,516 million in the fourth quarter. At CER, R&D expenses decreased 6.8% reflecting reallocation of resources towards priority assets which did not fully offset significant diabetes development costs in the fourth quarter of 2019. The ratio of R&D to sales decreased 1.3 percentage points to 16.2% compared to the prior year. Full-year 2020 R&D expenses decreased 8.1% to €5,529 million (down 6.8% at CER) reflecting reprioritization of resources not fully offsetting the decline in diabetes development expenses. In 2020, the ratio of R&D to sales decreased 1.4 percentage points to 15.3% compared to 2019.
Fourth-quarter selling general and administrative expenses (SG&A) decreased 5.0% to €2,601 million. At CER, SG&A expenses were up 0.3%, reflecting increased investments in Specialty Care and Vaccines which offset smart spending and operational excellence initiatives. In the fourth quarter, the ratio of SG&A to sales decreased 0.8 percentage point to 27.7% compared to the prior year. Full-year 2020 SG&A expenses decreased 5.0% to €9,390 million (down 2.4% at CER). In 2020, the ratio of SG&A to sales was 1.3 percentage points lower at 26.1% compared to 2019.
Fourth-quarter operating expenses were €4,117 million, a decrease of 6.9% and 2.4% at CER. Full-year 2020 operating expenses were €14,919 million, a decrease of 6.2% and 4.0% at CER.
Fourth-quarter other current operating income net of expenses was -€125 million versus -€70 million in the prior year. This line included an expense of €289 million (versus a €241 million expense in the fourth quarter of 2019) corresponding to the share of profit to Regeneron of the monoclonal antibodies Alliance, reimbursement of development costs by Regeneron and the reimbursement of commercialization-related expenses incurred by Regeneron. In 2020, other current operating income net of expenses was -€562 million versus -€382 million in 2019 and included a gain of €157 million related to a revaluation of retained Regeneron shares in the second quarter. The full-year 2020 expense associated with the monoclonal antibodies Alliance with Regeneron was €1,001 million, which compared with an expense of €681 million in 2019 (see appendix 7 for further details).
The share of profit from associates was €4 million in the fourth quarter versus a loss of €13 million in the prior year. Following the sale of its Regeneron stake at the end of May 2020, Sanofi restated its previously reported non-GAAP indicator (Business Net Income) and excluded the effect of equity method of accounting for Regeneron investment in 2019, Q1 2020 and Q2 2020. In 2020, the share of profits from associates was €16 million (versus €9 million in 2019).
Fourth-quarter business operating income2 (BOI) increased 0.3% to €2,052 million. At CER, BOI increased 9.9% reflecting the operational leverage driven by smart spending and operational excellence initiatives as well as R&D prioritization. The ratio of BOI to net sales increased 0.6 percentage points to 21.9% versus the prior year. In 2020, BOI was €9,762 million, up 4.4% (up 9.7% at CER) and included €1,680 million of saving initiatives (including around €230 million of savings related to COVID-19). In 2020, operational excellence and deprioritized businesses generated savings of €564 million and €500 million, respectively while smart spending initiatives realized €616 million. In 2020, the ratio of BOI to net sales increased 1.2 percentage points to 27.1% (27.5% at CER), driven by Pharmaceuticals.
Net financial expenses were €94 million in the fourth quarter versus €73 million in the same period of 2019. Full-year 2020 net financial expenses were €337 million versus €303 million in 2019.
Fourth-quarter and full-year 2020 effective tax rate was stable at 22.0% versus the prior period. Sanofi expects its effective tax rate to be around 21% in 2021, everything being equal in the U.S.
Fourth-quarter business net income2 decreased 0.5% to €1,527 million and increased 9.4% at CER. The ratio of business net income to net sales increased 0.3 percentage points to 16.3% (16.8% at CER) versus the fourth quarter of 2019. In 2020, business net income2 increased 4.2% to €7,347 million and increased 9.6% at CER. The ratio of business net income to net sales increased 0.9 percentage point to 20.4% (20.7% at CER) versus 2019.
In the fourth quarter of 2020, business earnings per share2 (EPS) was stable at €1.22 on a reported basis and increased 9.8% at CER. The average number of shares outstanding was 1,255.1 million versus 1,253.1 million in fourth
quarter 2019. Full-year 2020, business earnings per share2 was €5.86, up 3.9% on a reported basis and up 9.2% at CER. The average number of shares outstanding was 1,253.6 million in 2020 versus 1,249.9 million in 2019.

Reconciliation of IFRS net income reported to business net income (see Appendix 4)
In 2020, the IFRS net income was €12,314 million. The main items excluded from the business net income were:
•An amortization charge of €1,681 million related to fair value remeasurement on intangible assets of acquired companies (primarily Genzyme: €549 million, Bioverativ: €331 million, Boehringer Ingelheim CHC business: €202 million, Ablynx: €168 million, Aventis: €104 million) and to acquired intangible assets (licenses/products: €89 million). These items have no cash impact on the Company.
•An impairment of intangible assets of €330 million related to several projects including Diabetes.
•Restructuring costs and similar items of €1,064 million is mainly related to streamlining initiatives in Europe.
•A pre-tax gain of €136 million mainly arising from the divestment of Seprafilm to Baxter.
•A gain of €7,225 million related to the sale of the majority of Sanofi’s Regeneron shares completed on May 29.
•A €264 million tax effect arising from the items listed above, mainly comprising €541 million of deferred taxes generated by amortization and impairments of intangible assets and €293 million associated with restructuring costs and similar items and -€477 million of tax related to the sale of Regeneron shares (see Appendix 4).
•€313 million corresponding to the share of income related to equity accounting from Regeneron until May 29, 2020. Sanofi non-GAAP indicator (Business net income) does not include the share of income related to equity accounting since it ceased to be an associate on May 29, 2020.

Capital Allocation
In 2020, free cash flow3 increased by 16.1% to €6,982 million, after net changes in working capital (-€35 million), capital expenditures (-€1,329 million) and other asset acquisitions4 (-€562 million), proceeds from disposals4 (€930 million), and payments related to restructuring and similar items (-€910 million). Over the period, acquisitions5 were -€5,786 million (-€3,029 million related to Principia and -€2,245 million related to Synthorx) and proceeds from disposals5 net of tax were €10,370 million (sale of Regeneron shares). As a consequence, net debt decreased from €15,107 million at December 31, 2019, to €8,789 million at December 31, 2020 (amount net of €13,915 million cash and cash equivalents).

Financial statements are not audited. The audit procedures by the Statutory Auditors are underway.