IR Thematic Seminar in LatAm
São Paulo - November 29th - 30th, 2012
2
Forward Looking Statements
This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995,as amended. Forward-looking statements are statements that are not historical facts. These statements includeprojections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions andexpectations with respect to future financial results, events, operations, services, product development and potential, andstatements regarding future performance. Forward-looking statements are generally identified by the words "expects","anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi's management believesthat the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict andgenerally beyond the control of Sanofi, that could cause actual results and developments to differ materially from thoseexpressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertaintiesinclude among other things, the uncertainties inherent in research and development, future clinical data and analysis,including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when toapprove any drug, device or biological application that may be filed for any such product candidates as well as theirdecisions regarding labeling and other matters that could affect the availability or commercial potential of such productcandidates, the absence of guarantee that the product candidates if approved will be commercially successful, the futureapproval and commercial success of therapeutic alternatives, the Group's ability to benefit from external growthopportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies andsubsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in thepublic filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "CautionaryStatement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December31, 2011. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise anyforward-looking information or statements.
33
LatAm Highlights
● Hanspeter Spek, President, Global Operations
Brazil Overview
● Heraldo Marchezini, SVP, Latin America and General Manager, Brazil
Genzyme
● Rogerio Vivaldi, MD, SVP, Head of Rare Diseases - Genzyme
Consumer Healthcare
● Heraldo Marchezini, SVP, Latin America and General Manager, Brazil
Q&A
Break
AgendaNovember 29, 2012
44
Diabetes
● Fernando Sampaio, General Manager, Sanofi Pharma, Brazil
Generics
● Heraldo Marchezini, SVP, Latin America and General Manager, Brazil
Animal Health
● José Barella, SVP, Animal Health - Merial
Vaccines
● Patrice Lebrun, VP, Latin America - Sanofi Pasteur
Q&A
AgendaNovember 29, 2012
55
The Interfarma Perspective on Brazil(1)
● Antônio Britto, Executive President of Interfarma
LatAm Industrial Affairs
● François Blanot, VP Industrial Affairs, Latam
Q&A
Suzano Plant Visit
The Brazilian Pharmaceutical Market
● Herbert Gonçalves, Partner at Primeira Consulta
Q&A
AgendaNovember 30, 2012
(1) Interfarma: Brazil Research-based Pharmaceutical Manufacturers Association
LatAm Highlights
6
Hanspeter Spek
President, Global Operations
A Strong and Experienced Group of Managers Presenting at the IR Thematic Seminar on LatAm
Patrice LebrunVP, Latin America Sanofi Pasteur
Fernando SampaioGeneral Manager, Sanofi Pharma, Brazil
Rogerio Vivaldi, MDSVP, Head of Rare DiseasesGenzyme
Heraldo MarcheziniSVP, Latin America and General Manager, Brazil
José BarellaSVP, Animal HealthMerial
7
François BlanotVP Industrial AffairsLatin America
Latin America - A Fast Growing Region
Agenda
88
Sanofi - The Market Leader in LatAm
Latin America Is a Region of Diversity
9
CAMAC(2)
GDP: $305bnPopulation: 70m
VenezuelaGDP $338bn
Population: 30m
ColombiaGDP: $365bnPopulation: 47m
ChileGDP: $268bnPopulation: 17m
BoliviaGDP: $27bnPopulation: 11m
MexicoGDP: $ 1,163bnPopulation: 115m
BrazilGDP $ 2,425bn
Population: 197m
ArgentinaGDP $475bn
Population: 41m
UruguayGDP: $50bn
Population: 3m
ParaguayGDP: $26bn
Population: 7m
PeruGDP: $200bnPopulation: 30m
EcuadorGDP: $71bnPopulation: 15m
(1) IMF World Economic Outlook Database, October 2012 (2) CAMAC: Central America & Caribbean Countries
● A large population● ~600m people or 8% of the world‘s
population
● Diverse political systems and unequal distribution of wealth ● LatAm per capita income only 30%
of the U.S.
● Regional development gaps● >30 distinct Emerging Markets
● Disparities in affordability● Public funding vs out-of-pocket
expenditures for Healthcare
Market Characteristics(1)
The Economic Outlook for LatAm Remains Positive
10
LatAm GDP Growth(1)
GDP in %Inflation rate in %
● Economic indicators show resilience● Fairly stable GDP growth projected ● Recent slowdown in larger economies
(Argentina, Brazil) balanced by faster growth in smaller economies (Colombia, Peru, etc...)
● Appreciation of most currencies (except Brazilian Real in 2012)
● Unemployment rate at historic low level: 6.8% for LatAm in 2011(2)
● Mix of external economic factors ● Weaker prospects in advanced
economies (Eurozone, U.S.)● Commodities and food prices boom● Capital inflow surge
(1) IMF World Economic Outlook 2012(2) International Labour Organization 2012
ProjectionsActuals
The Unequal Evolution of Healthcare Expenditures Reflects a Diverse Socio-Economic Environment
11
Evolution of Health Expenditures(1)
(% of GDP per country)
Venezuela
EcuadorMexico
Brazil
Colombia
Argentina
● LatAm healthcare expenditures growing faster than GDP● 8% of GDP in 2010(1)
● Continued strong growth expected in healthcare expenditures as a percent of GDP in key markets ● Brazil, Mexico, Colombia
● Disparities in the development of healthcare infrastructure across LatAm countries● Tailored approach to local markets
required
(1) World Bank
LatAm Markets Are Largely Out-Of-Pocket but Public Funding Is a Growing Percent of Healthcare Expenditures
● Large portion of out-of-pocket healthcare expenditures typical of Emerging Markets ● High percent of out-of-pocket spend
on Pharmaceuticals (>80% in Brazil)
● Significant public sector funding through healthcare programs in key countries● Government purchases by "Sistema
único de saúde" (SUS) in Brazil● "Seguro popular" in Mexico
● Private health insurance gaining traction among the middle-class
12
Split of PharmaceuticalExpenditures (%)(1)
(1) IMS World Review Q1 2012 and Sanofi internal analysis
A Growing and Aging Population with Increased Purchasing Power of a Larger Middle Class
13(1) Latin America and Caribbean Demographic Center (CELADE) – Population Division of ECLAC and United Nations, 2011 (2) Wolfensohn Center for Development at Brookings Institution, 2010
Total Population & People ≥60 in LatAm(1)
(in millions)Middle Class Population in LatAm(2)
(in millions)
(1) World Bank
Healthcare Expenditures in LatAm Are Projected to Continue to Expand
14
% Population ≥ 60 years old relative toHealthcare expenditures per capita(1)
% Population over 60 years
Hea
lthca
re e
xpen
ditu
res
per c
apita
(U.S
.$)
5% 10% 15% 20% 25% 30%0
1000
2000
3000
4000
5000
6000
7000
8000
● LatAm healthcare expenditure per capita still low at U.S. $671 vs.global average of ~U.S. $1,000(1)
● Growth of average healthcare expenditure per capita in LatAm>10% in 2010
● Market attractiveness to support growth in the medium term● Economic expansion of the region● Aging population ● Chronic diseases on the rise● Growing upper and middle-class
LatAm Pharmaceutical Markets Are Expected to Reach Over $100bn by 2016
Rank in 2000(1) Rank in 2016e(2)
1 U.S. 1 U.S.
2 Japan 2 China
3 Germany 3 Japan
4 France 4 Brazil
5 UK 5 Germany
6 Italy 6 France
7 China 7 Russia
8 Brazil 8 Italy
9 Canada 9 India
10 Spain 10 Canada
11 Mexico 11 UK
12 Argentina 12 Spain
13 South Korea 13 South Korea
14 India 14 Australia
15 Australia 15 Mexico
16 Turkey 16 Argentina
17 Netherlands 17 Turkey
18 Poland 18 Venezuela
15
LatAm Pharmaceutical Marketas % of Emerging Markets(3)
(1) IMS World Review 2000 (US$)(2) IMS Market Prognosis 2011-2016 (US$)(3) World excluding USA, Canada, Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland,
Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia /New Zealand
Top 3 Countries Make Up ~70% of Pharmaceuticalsin LatAm
16
$29.0bn
$12.2bn
Market size $68bn
$6.6bn
$5.7bn
$4.1bn
Expected market size $102bn
$10.9bn
$47.4bn
$15.0bn
$5.4bn
$8.5bn
$11.7bn
$13.6bn
2011 2016e
(1) IMS Market Prognosis 2011-2016 (US$)
Agenda
1717
Latin America - A Fast Growing Region
Sanofi - The Market Leader in LatAm
(1) World excluding USA, Canada, Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia /New Zealand
LatAm Is a Significant Contributorto Sanofi’s Leadership in Emerging Markets
18
(1)
LatAm~30%
€3,111m€2,963m
€1,913m
>€3,300m
2009 2010 2011 2012e
LatAm Sales
2012e: ~€11bn
Emerging Markets Sales
OtherEmergingMarkets
70%
9M 2012
1. 7.3%
2. PFIZER 6.9%
3. NOVARTIS 6.6%
4. MERCK 5.3%
5. BAYER 4.3%
6. GSK 4.1%
7. ROCHE 3.9%
8. ABBOTT 3.1%
9. J&J 3.0%
10. ASTRAZENECA 2.8%
Sanofi Is the Market Leader in LatAm
19(1) IMS MIDAS MAT Q2 2012
MAT Q2 2012(1)
19
2008(1)● Sanofi: an undisputed market leader in LatAm for several years● Overall market share of 7.5%
in Pharmaceuticals(2)
● Strong presence in most LatAm countries
● Leader in Brazil, the largest market
● Significant changes in the LatAm market ● Most multinational companies
losing market share● Increasingly fierce domestic
competition
1. 7.5%
2. NOVARTIS 5.6%
3. PFIZER 5.2%
4. EMS 4.2%
5. GSK 4.0%
6. MERCK 3.9%
7. BAYER 3.7%
8. ROCHE 3.3%
9. ABBOTT 3.2%
10. HYPERMARCAS 3.0%
Sanofi Is a Well Diversified Player in LatAmwith Multiple Sources of Sustainable Growth
20
14%
12%
8%
Generics12%
New Genzyme5%
Animal Health8%
Vaccines
OtherPharmaceuticals 41%
CHCDiabetes
LatAm Sales Split by Business (2012e)
20
Brazil and Mexico Represent >2/3 of Sales and Headcount for Sanofi in LatAm
21
Geographic Sales Split
2012e
> €3,300m
33%
21%
46%
Headcount Split
2012e
> 10,000 people
29%
20%
51%
Other LatAm
Mexico
Brazil
Sanofi’s Leadership in LatAm Is Illustrated byits Broad Industrial Footprint and Significant Headcount
22
LatAm Headcount per Function2012e
39%
38%
6%18%
R&D
Manufacturing
Sales Force
Others
(1) Sanofi’s Business Operating Margin excluding central administrative and R&D costs was around 40% in 2011 in Emerging Markets
● A network of 10 plants dedicated to the LatAm market● ~3,900 people in Manufacturing● Branded pharmaceuticals, Generics,
CHC, Vaccines, Animal Health● 95% of Pharma volumes sold in
LatAm produced locally
● A strong sales force ● ~3,900 commercial people
● A solid operating margin ● In line with business operating
margin for the whole Emerging Markets perimeter(1)
LatAm Represents a Strategic Opportunity for Sustainable Growth
2323
Historical presence
● Leverage unique accumulated local experience and diversified product portfolio
Market reach ● Expand product portfolio to address growing middle-class
Manufacturing capacity
● Leverage network of industrial sites to serve increasing volumeand ability to produce at local costs
Quality of management ● Attract, train and retain local management talent
Local innovation
● Use local R&D capabilities to participate in global clinical trialsand to respond to LCM needs in LatAm
Bolt-on acquisitions
● Continue to enlarge our portfolio by successfully identifying and integrating M&A targets
Brazil Overview
2424
Heraldo Marchezini
Senior Vice President, Latin Americaand General Manager, Brazil
The Pharmaceutical Market in Brazil
Brazil - A Country on the Rise
Agenda
2525
Sanofi’s Leadership in Brazil
Brazil - A Country on the Rise
● Significant growth potential● 6th largest economy worldwide(1)
● 5th largest population (~200m)(2)
● Public debt under control ● Public debt / GDP ratio: 35% in
September 2012(3)
● Policy tightening to contain inflation● Stable inflation targeted below 6%(3)
● Economic growth expected to rebound in 2013(4)
● 2011 GDP: +2.7% ● 2012e GDP: +1.5%● 2013e GDP: +4.0%
26
(1) IMF 2012, World Bank (2) IBGE – Instituto Brasileiro de Geografia e Estatistica (2010 Population census) (3) Brazilian Central Bank(4) IMF, World Economic Outlook database, October 2012
26
2007 2008 2009 2010 2011 2012e
Brazil Nominal GDP(3,4)
(BRL in trillion)4.5
2.7
Brazil Benefited Significantly from a Period of Stability and Rising Living Standards from 2000 to 2011
● Increase in employment levels and salaries boosted consumption
● Emergence of a large middle class● Consumer credit expansion
created opportunities for the middle class
● Large foreign investment inflows● Cumulative value of €288bn(1)
from 2000-2011
● Lowest unemployment rate in Brazil’s history reached in 2011● 4.7% vs. 11.7% in 2003(2)
27
(1) Brazilian Central Bank(2) IBGE (Average unemployment rate of major metropolitan regions)(3) Socio-Economic Database for Latin America and the Caribbean (CEDLAS and The World Bank) 27
Population Shares of Income Categories in Brazil ($ per day)(3)
Agenda
2828
The Pharmaceutical Market in Brazil
Brazil - A Country on the Rise
Sanofi’s Leadership in Brazil
Brazil Is Expected to Become >$47bn Pharmaceutical Market by 2016
29
>+10%CAGR
(1) IMS Market Prognosis 2012 and internal estimates
● Brazil expected to become the 4th
largest Pharma market by 2016
● Private demand accounts for the vast majority of the market ● Retail sector represented >70%
of total market in 2011(1)
● Public market growth accelerated by “Plano Brasil Maior”
● Generics segment expected to outpace market growth● Expansion of public sector coverage ● “Farmacia popular” program to
expand access to medicines for chronic diseases
Pharmaceutical Market by Segments(1)
$47.4bn
$29.0bn
● Evolving regulatory framework● Unified Healthcare System (SUS)(1)
established in 1988 ● Pipeline Patent Law of 1996● ANS(2) created in 1998● Generics Law introduced in 1999● Guidelines for Biosimilars in 2011
● Stricter regulatory procedures implemented by ANVISA(3)
● Bioequivalence tests for all branded Generics/Similares required by 2014
● Tight price control through CMED(4)
● Annual price adjustments based on multiple criteria
30
Changing Dynamics in a Competitive Marketplace
(1) SUS- Sistema Único de Saúde (2) ANS - Agência Nacional de Saúde Suplementar(3) ANVISA - Agência Nacional de Vigilância Sanitária(4) CMED - Câmara de Regulação do Mercado de Medicamentos(5) IMS Health 2012
Regulatory Environment Competitive Environment
● Government policies implemented to boost national industry● Growing share of domestic players
46% in 2012, up from 37% in 2007(5)
● “Profarma” - Government incentives for local manufacturers
● Public-Private Partnerships (‘PPP’) for improved technology transfers
● Fast growing number of generics ● Use driven by government policies
● More Multinationals with “local” base● Consolidation in the distribution
channels● Drugstore chains with regional
expansion strategies
Drugstore Chains are Increasingly Important Players in the Retail Market
● Drugstore chains capture share in a growing retail market● Investments in regional expansion● Modern retail concepts with
state-of-the-art infrastructure● Launch of private labels
● In-store shopping experience increasingly important to consumers● Large product assortments
appealing to the new Middle-class● Combination of Health, 'Well-being'
and Beauty product offerings● Strong presence in retail channels
key to market share expansion
31(1) IMS Latin America 2012 (IMS Distribution Study, Company Annual Reports, Midea, IMS analysis)
4-6%
35-39%
57-61%
Sales Split by of Point of Sales Type(1)
Agenda
3232
The Pharmaceutical Market in Brazil
Brazil - A Country on the Rise
Sanofi’s Leadership in Brazil
Sanofi’s Largest Operation in Emerging Markets
● Commercial presence since 1955● Headquartered in São Paulo
● Also LatAm regional HQ
● Sanofi’s 5th largest country by sales● Sales of €1,522m in 2011 (+17%)(1)
● 4.6% of Group sales in 2011
● >5,200 employees
● Manufacturing capabilities at 4 sites● Market leadership gained through
acquisition of Medley in 2009 ● Five of Brazil’s top 20 pharma
products are from Sanofi(2)
3333
Brasilia
Sao Paulo
€767m
€1,522m
(1) 2011 sales growth at CER excluding A/H1N1 sales of €204m in 2010(2) IMS MIDAS August 2012
€1,458m
Sales in Brazil(1)
(in €m)
A/H1N1€1,254m
A Diversified Portfolio Enhanced by the
Acquisition of Medley
Our Continued Success is Based on 3 Pillars
34
1
Sustainable growth driven by strengths in the local market
A Preferred Partner Status at Pharmacies
2
A Committed Organization
3
Sanofi: Well Diversified with Leading Presence in Key Pharma Market Segments in Brazil
● Strong local brands including OTX and Mature or Off-Patent Rx Drugs● >50 brands actively promoted
● Unique combination of medical detailing expertise and media/POS know-how
● More than 150 products and >500 presentations manufactured
● Broad offerings adapted to local needs● 92% of sales are from non-patented drugs
● New line extensions fueling growth
35
Share of Market Segments in Brazil(1,2,3)
#1 in Pharmaceuticals
Total Pharmaceutical Market (in %)Retail + Non Retail
CHC (in %)Retail
Generics (in %)Retail
#2 in CHC
9.8%
EMS8.9%
Novartis7.8%
Hypermarcas12.0%
Eurofarma7.4%
EMS7.3%
11.9%
#1 in Generics
OthersOthers Others
EMS24.1%
28.7%
(1) IMS MAT September 2012(2) In value(3) Only Pharma (Sanofi and Genzyme) - Excluding Vaccines and Merial
Drive performancein Ethical Rx
Consolidate leadership in Generics
Strong Outlook for Future Growth of Pharmaceuticals in Brazil
36
● Strengthen diabetes leadership in private and public markets, based on success of Lantus®
● Successfully launch new products
● Continue innovation through life cycle management
● Leverage broad CHC portfolio through extended distribution channels
● Execute new launches in a brand-driven consumer market
● Penetrate into high growth CHC segments
● Benefit from increasing demand for affordable drugs by the emerging middle class
● Seize opportunities with launches of high-demand off-patent products
● Secure industrial capacity to accommodate growth
Expand presencein CHC
A tailored approach in each market segment
Genzyme
37
Rogerio Vivaldi, MD
Senior Vice President, Head of Rare Diseases
Agenda
38
Genzyme - A Leader in Treating Rare Diseases in LatAm
Genzyme’s History in LatAm
Building a Presence in Multiple Sclerosis in LatAm
MexicoBrazil
- A Transformative Therapy
Genzyme - A Commitment to Changing the Lives of Patients with Rare Diseases
39
Applying Genzyme’s Deep Commitment to Rare Diseases in LatAm
● Latin America followed Europe and became a major geographic region of expansion for Genzyme
● Brazil office established in 1997● Sales in LatAm of €160m in last
four quarters● Growth of +20% reported in Q3 2012
versus Q2 2012
Expanding Rare Disease Treatment Global Rare Diseases Sales(1)
(1) Key Rare Diseases brands include Cerezyme®, Myozyme®, Fabrazyme®, Thyrogen®, and Aldurazyme®
40
2011
€470m
2012
Genzyme Benefits from a Strong History in LatAm
41
● Headquarters in Rio de Janeiro, Brazil (1997)
● Presence expanded over time across LatAm:● Buenos Aires, Argentina (1997)● São Paulo, Brazil (2000)● Bogotá, Colombia (2002)● Mexico City (2003)● Santiago, Chile (2004)● San Jose, Costa Rica (2005)● Caracas, Venezuela (2007)● Panama City, Panama (2010)● Montevideo, Uruguay (2010)● Lima, Peru (2011)
Mexico city
Buenos AiresSantiago
Bogotá
San Jose Caracas
Panama city
Montevideo
Lima
Rio de JaneiroSão Paulo
Genzyme Pioneered and Overcame Challenges in LatAm
Challenges Genzyme Expertise
Socialized Medicine Navigating bureaucratic systems
Centralized Tender Bids Past success with tender offers
Complex Reimbursement Process Experienced professionals
No Orphan Drug Legislation Participating in Brazil’s Fast Track process
Patient Advocacy Groups Vital role understood
Limited Patient Data Comprehensive patient registries
42
Today, Genzyme Is Well-Established in LatAm
Leader in LatAm treating patients with Enzyme Replacement Therapy (ERT)● Focused efforts on diagnostic capacity
● Early investment in the region
● >1,700 patients treated with Genzyme’s products(1)
First fully established biotech company in LatAm● >300 employees and support staff in 15 countries
● Benefit of aligning with Sanofi’s large infrastructure
Strong partnerships with key stakeholders● Governments, Patient Groups, Academia and Research
43
1
2
3
(1) Including Gaucher patients enrolled in clinical trials for the investigational agent eliglustat tartrate
Agenda
44
Genzyme - A Leader in Treating Rare Diseases in LatAm
Genzyme’s History in LatAm
Building a Presence in Multiple Sclerosis in LatAm
Genzyme’s Rare Disease Business in LatAmHas a Promising Growth Outlook
45
LatAm Rare Diseases Sales(1)
(1) Key Rare Diseases brands include Cerezyme®, Myozyme®, Fabrazyme®, Thyrogen® and Aldurazyme®
● LatAm sales represented 10% of Genzyme total sales in 9M 2012
● Genzyme comprised 5% of Sanofi LatAm business in 9M 2012
● Solid recovery in Brazil attributable to improved supply situation
● Brazil accounted for 46% of Genzyme sales in LatAm in Q3 2012
● Significant room for expansion exists in other LatAm countries
€48m
2011 2012
Genzyme’s Growth Expected to Come from Newly Identified Patients and Full Supply Situation
46
Patients on Treatment in LatAm(1)
2011 2012
~1,700Eliglustat tartrate
(1) Including Gaucher patients enrolled in clinical trials for the investigational agent eliglustat tartrate
● First Gaucher patient treated with Cerezyme® in 1992
● Cerezyme® is an established market leader● Treating >500 Gaucher patients out
of an estimated total population of 660 patients treated in Brazil(1)
● ~86% patient share(2)
● Proven commitment to Gaucher community with ongoing development of eliglustat
Brazil Has the Second Largest Gaucher Patient Population in the World(1)
47
76%
10%
10%3%~1%
(1) Estimates based on public information and internal data(2) Including Gaucher patients enrolled in clinical trials for the investigational agent eliglustat tartrate
Brazil: Gaucher-Treated Patient Share(1)
86% of all Gaucher-treated patients(2)
● >100 patients enrolled in LatAm in eliglustat Phase 3 trials ● Largest clinical trial in the Rare
Disease field ever conducted
● Sites in Argentina, Brazil and Mexico
● Estimated product launch 2014~400
48
(1)
(1) Includes Phase II participants
~170~160
~40
Eliglustat Expected to Expand Genzyme’s Gaucher Franchise
Eliglustat Clincal ProgramPatients Enrolled(1)
~400
Agenda
49
Genzyme - A Leader in Treating Rare Diseases in LatAm
Genzyme’s History in LatAm
Building a Presence in Multiple Sclerosis in LatAm
The Multiple Sclerosis Market in LatAm Is Poisedfor Significant Change
(1) Based on IMS data and Genzyme estimates(2) Disease Modifying Therapy(3) Lemtrada™ is the proprietary name submitted to health authorities for the company’s investigational multiple sclerosis agent
alemtuzumab being co-developed with Bayer Health Care
● Market estimated to be ~€375m in 2011(1)
● ~23,000 patients on DMTs(2)
● 80% of treated patients in Brazil, Mexico and Argentina
● Standard injectable therapies available ● Beta-interferons, glatiramer acetate
and natalizumab
● Reimbursement programs exist● Public and private payors
● Pricing for branded DMTs in range of EU and U.S.
Under regulatory review in Brazil, Mexico and Argentina● Regulatory approvals expected in 2013
Regulatory submissions in Brazil, Mexico and Argentina expected in Q1 2013●Regulatory approvals expected in 2014
®
50
(3)
Well Established Rare Disease presence in LatAm● Largest pool of patients treated(1)
● Successful government tenders● Experienced with payors
Existing scope for expansion● Identify new patients● Increase publications, education and training on rare diseases● Create next generation products
Future roll-out of Multiple Sclerosis franchise in LatAm● High unmet need● Sizeable market● Leverage success of rare disease experience in the region
1
2
3
51
Genzyme Contributing to Sanofi’s Growth in LatAm
(1) Based on public information and internal data
Paulinho, Brazil
52
Consumer Healthcare
53
Heraldo Marchezini
Senior Vice President, Latin Americaand General Manager, Brazil
Sanofi’s Successful Brand Strategies in LatAm
Consumer Healthcare Market in LatAm
Agenda
54
LatAm is One of the Fastest GrowingRegional Consumer Healthcare Markets Worldwide(1)
55
+8%+20%
9%
+41%
+15%
-0.2%
Total CHC Market in LatAm in 2012 ~€8.7bn, +14%(1)
in €bn
(1) Nicholas Hall OTC Year Book, DB6 2012(2) IMS MIDAS MAT August 2012(3) IMS OTC Market MAT August 2012
The CHC Market Remains Very Fragmented in LatAm
56(1) IMS MIDAS MAT August 2012
Top 10 CHC Companies in LatAmby Market Share(1)
Hypermarcas
Bayer
GSK
EMS
J&J
BoehringerNestle
PfizerGenomma
Others
● Strong presence of multinational companies ● Six MNCs within Top 10● Sanofi: #1 player in CHC in LatAm
● Domestic players in leading positions at a national level● Hypermarcas #1 in Brazil(1)
● Genomma Lab #1 in Mexico(1)
● Grupo Pharma #1 in Venezuela(1)
● Growing competition from private label brands
The CHC Market in LatAm Has Grown Double-Digits for Many Years
57(1) IMS Retail MAT June 2012 - Growth is at constant x-rate
+14%
+10%
+17%
+17%
+11% +17% +20% +14%
28.7
45.0
● Experiencing solid double-digit growth for more than 10 years● 2012 CHC growth slightly slower
than for total market ● Recent re-acceleration, driven by
Brazil and Venezuela
● CHC growth reflects country specific out-of-pocket spend levels● Brazil (+15%), Venezuela (+41%),
Argentina (+20%)● Mexico, Uruguay, Ecuador (<10%)
● Opportunities in new segments driven by lifestyle changes● New focus on nutrition, “well-being”
(€m)
Sanofi’s Successful Brand Strategies in LatAm
Consumer Healthcare Market in LatAm
Agenda
58
Sanofi is #1 in CHC in LatAm
59(1) IMS OTC Market MAT August 2012(2) Vitamins, Minerals & Supplements
CHC Quarterly Sales(€m)
2009 2010 2011 2012
€130m
● CHC is a key contributor to Sanofi’s growth in LatAm● Sales of €470m in last 4 quarters● Brazil is the 4th largest contributor
to Sanofi CHC sales
● Focus on leadership in key categories● Pain, Gastrointestinals,
VMS(2)/Nutraceuticals, Intimate Hygiene
● Strength built on heritage products and brand recognition ● Dorflex® in Pain● Lactacyd® in Feminine Hygiene
● Launch of new products in growth categories● DePura® and Gelicart® /Trivance®
in VMS/Nutraceuticals
Strategic Investment Focused on Regional Brands and Local Heroes
60
Pain Gastro-intestinal
Cough & Cold
VMS/Nutra-ceuticals, ‘Well-Being’
Feminine Hygiene
Others
Skin careEyes care
Others
Local Brands
Adermicina
Regional Brands
LocalHeroes
Calmidol
Enterolyte
SINUBERASE
PAX
BioGripBioGrip
- The Champion in Brazil Keeps Growing
61
sales (in €m)
(1) IMS MIDAS, August 2012
● Top selling brand(1) in the pharmamarket in Brazil since 2006● #1 out of >11,500 registered brands
● Key contributor to Sanofi’s revenue base in Brazil● >€100m sales expected in 2012
● Competitive presence at the Point of Sale key for continued growth
● Potential to leverage brand by using U.S. Chattem portfolio
and One Brand Equity
&A Successful CHC Growth Story in LatAm
62
LatAm Brazil
● “Intimate Hygiene” : a new category with low household penetration ● Sustainable growth
● High consumer loyalty to established products with high brand recognition● Low price sensitivity
● Brand not subject to patent cliff or impact from generics● Long duration asset
● #1 category brand in ten LatAm countries(1)
● Growth of >40% expected in 2012● Geographic expansion● DTC and brand LCM
(1) IMS MIDAS, August 2012(2) Direct-to-consumer
- Innovation and Growth in the Category via Geographical Expansion in LatAm
63
Launch in Mexico
Launch inVenezuela, Colombia,
Central America
Launch inPeru, Ecuador,
Uruguay, Paraguay
Life-cyclemanagement,Introduction of
capsules
Launch inArgentina
Q4 2012Launch in
Brazil
in €m
● Strong relationship and brand equity with physicians and patients● Physician and DTC educational program
● Expansion through regionalization strategy● Currently launched in >10 countries
● Balanced high double-digit growth across all countries● Growth of >50% in Latin America expected in 2012
DePura® - A New CHC Brand Launched by Sanofi in the Brazilian Vitamins Market
64
● Regulatory status of a food supplement and promoted as an ethical medicine
● Developed locally by Sanofi Brazil● Manufactured in Suzano facility
● Launched in Brazil in 2011 and reached market leadership in July 2012(1)
● DePura® kids launched in March
● Launch in LatAm planned for 2013● ~100m consumers aged 50+ are
targets for vitamin D supplementation
(1) IMS PMB July 2012
>2x
Strategic Focus Has Driven Performance of Sanofi’s CHC Growth Platform in LatAm
Revenue Base in Latin AmericaExpected to Double Over 3 Years
2009 2010 2011 2012e
Launch innovations and new variants
Strategic Priorities in the CHC marketin LatAm
Drive regional expansion
Boost sales ofexisting brands
€242m
€418m
65
Sanofi is #1 in Consumer Healthcare in LatAm(1)
● Broad portfolio of well-established brands with name recognition at the country level (“local heroes”)
● Execution of regionalization strategies replicates business modelin multiple markets (“regional brands”)● Strong Brand Equity ● Professional Endorsement by Physicians● Execution at the Point of Sale
● Steady flow of new products in high growth CHC categories
(1) IMS MIDAS, August 201266
1
2
3
Diabetes
67
Fernando Sampaio
General Manager, Sanofi Pharma, Brazil
Agenda
68
Sanofi - A Leader in Diabetes
The Diabetes Market in Latin America and Brazil
Broadening Access with A Patient Centric Approach
Diabetes is a Large Growth Opportunity in LatAm
Adults with diabetes in Latin America(1) 36m
Percent of patients not achieving glycemic control target values in Latin America(3) >70%
Patients undiagnosed in Latin America(2) ~45%
Expected size of Latin America diabetes market in 2015(4) €2.55bn
Expected CAGR growth of diabetes market between 2011 and 2015(4) 25%
69
(1) IDF. Diabetes Atlas 5th Edition, 2011(2) Pramparo P et al. Prevention and Control (2006) 2, 149–157(3) Lopez Stewart G et al. Pan Am J Public Health 22(1), 2007 (4) Internal Data (IMS projection)
Diabetes Prevalence(1)
70
Diabetes Prevalence is Rapidly Growing in LatAm
● Expected growth of diabetes prevalence in LatAm is significantly higher than the U.S. or Europe
● Patients are predominately treated with first generation therapies
● Lifestyle of middle class changing (i.e. increasingly sedentary, diets including fast food) leading to higher diabetes prevalence
● Health Authorities focus on chronic diseases, prevention programs and treatment
(1) IDF. Diabetes Atlas 5th Edition, 2011
36m
56m51m
38m
53m
64m+58%+36%
+22%
20 Million Diabetic Patients Expected in Brazil by 2030
● Aging population with increased incidence of lifestyle related diseases
● Market is largely out-of-pocket and for high-end treatments
● Increased purchasing power of growing middle and low income classes
● Treatment of chronic diseases is a priority of the Health Authorities● Glibenclamide and NPH are provided
free of charge through “Farmácia Popular”
Brazil: Number of Diabetic Patients(1)
2030e2011
(1) IDF Diabetes Atlas 5th Edition , 2011 – Country Estimates Table
12.5m
19.6m
71
Other LatAm Markets Also Hold Sizable Potential
● 10.3m type 2 diabetes patients(1), one of the highest prevalence rates in LatAm
● Low rate of insulinization (<10%), low average daily dose and 95% of patients not at treatment goal(2)
● Innovative approach: Sanofi integrated solutions program proposed to the gov’t
● Government increasing coverage reaching ~50% of the diabetic population
● Diagnosis and treatment is increasing due to social programs
● Sanofi is increasing educational programs for GPs and at hospitals
Mexico
ArgentinaVenezuela
● Government programs offering last generation diabetes therapies & devices
● All patients are reimbursed for insulin treatment from HMOs based on protocols and local legislation for diabetes
Colombia
● Healthcare reform covers ~90% of the population
● Analogue insulins now reimbursed on basic formulary, increasing insulin usage
● Sanofi is increasing investment by ~50% with a focus on patient education
72(1) IDF Diabetes Atlas 5th edition, 2011(2) ENSANUT 2006. salud pública de méxico. 2010 (52) suppl 1:S19-S26
73
80%+16%
5%-4%
15%+23%
Brazil(2)
Market Share (%) Growth vs. prior year (%)
Basal
Short-acting
Premix
Basal Insulins Are the Largest and Fastest Growing Insulin Segment in LatAm
Insulin Market Share by Type (Value)
72%+27%
14%+23%
14%+16%
Latin America(1)
Market Share (%) Growth vs. prior year (%)
(1) MAT IMS MIDAS June 2012; Retail + Non-Retail(2) MAT IMS August 2012; Retail + Non-Retail
€459m market size(1) €222m market size(2)
Agenda
74
Sanofi - A Leader in Diabetes
The Diabetes Market in Latin America and Brazil
Broadening Access with A Patient Centric Approach
Sanofi: A Track Record of Strong Growth in Diabetes in LatAm
● LatAm Diabetes sales in 2012 expected to approach €300m and grow more than 20% at CER
● Fastest growing markets(1)
● Mexico (+33% at CER) ● Colombia (+67% at CER) ● Venezuela (+73% at CER)
● LatAm Lantus® sales in 2011 were €176m, up 35% at CER
● Lantus® is #1 product for Sanofi in LatAm
75
Diabetes LatAm Sales (€m)
186 (+26%)
2010 2011 2012
228 (+35%)
(1) Based on 9M 2012 results
Lantus® is the Cornerstone of our Diabetes Franchise and our LatAm Presence is Well-Diversified
76
77%
23% 29%
26%
10%
11%
13%
11%
Sales Split by Product(1)% of Sales
(1) Based on 9M 2012 reported sales(2) Amaryl®, Apidra®, Insuman®
Sales Split by Country(1)% of Sales
Lantus®
Others(2)Brazil
Mexico
Venezuela
Others
Colombia
Argentina
Sanofi: The Leader in Diabetes in LatAm
(1) Year-to-date IMS MIDAS Data, Quarterly (as of June); Retail + Non Retail(2) Source: Diabetes Image and Company Performance (180 physicians) 77
● Sanofi has a leading share of the diabetes market in LatAm
● Broad leadership across LatAm markets(1):
● #1 in Mexico (27% share)● #1 in Venezuela (22% share)● #2 in Brazil (20% share)
● Provide integrated patient solutions treating multiple patient comorbidities
● Sanofi diabetes has solid company image:
● #1 ranking among endocrinologists and diabetologists in Brazil(2)
21.1%
9.1%
15.3%
8.6% 8.5%
LatAm Diabetes Sales: Market Share(1)
Sano
fi
Mer
ck K
GaA
Nov
o
Lilly
Mer
ck
40%+25%
39%-3%
19%+44%
Sanofi Has the Highest Insulin Market Share in LatAmand Brazil
78
Market Share (%) Growth vs. prior year (%)
Brazil(2)
42%+34%
35%+14%
19%+28%
3%+30%
Market Share (%) Growth vs. prior year (%)
Latin America(1)
Sanofi
Lilly
Novo
Others
Insulin Market Share by Company (Value)
(1) MAT IMS MIDAS June 2012; Retail + Non-Retail(2) MAT IMS August 2012; Retail + Non-Retail
2%nm
Sanofi: A Strong Heritage of Diabetes Solutions in Brazil
1972
● Launched Daonil®, the leading sulphonylurea until 1999
● Launched Amaryl®, leader in the OAD market from 1999 to 2002
● Completed 46 in licensing agreementsccc
● Launched Lantus®, a novel basal insulin & became the leading insulin
● Unique patient support programs: 24/7 call center, educators, etc.
1996
● Launched Insuman® and pushed the market towards devices
2000 2004 2010
®Daonilglibenclamida
79
Agenda
80
Sanofi - A Leader in Diabetes
The Diabetes Market in Latin America and Brazil
Broadening Access with A Patient Centric Approach
Patients’ Purchasing Power Limits Private Market Growth
Income per Household Brazil(households in millions)
11.1
13.8
22.3
3.3
9.3
14.0
29.3
4.2
Low< €0.2k
2004 2009
Mid-Low€0.2 - 0.4 k
Middle€0.4 - 2.2 k
High> €2.2 k
MonthlyIncome Change
-1.8
+0.2
+7.0
+1.0
Source: IBGE (PNAD 2009/2004), Analysis Primeira ConsultaEuro = 2,3 Reais; 2004 income adjusted by inflation to 2009 figures(1) Internal research
● Outpatient drugs are out-of-pocket expenses in Brazil
● Patients generally allocate 3% to 10% of their income to pharmaceutical spend(1)
● <10% of the population can afford the average cost of Lantus®
therapy(1)
● Economic growth is increasing the affordability of medications but access challenges remain
81
Lantus® is Not Sufficiently Accessible in Brazil
● Insulin analogues are priced at a premium
● Lantus® market share is concentrated in income class “A”
● Main objective is to expand access to the middle class● Target groups “B”, “C” and “D”
represent nearly half of insulin patient population
(1) Source: Vidalink analysis / Primeira Consulta; patient share by volume(2) A = >4,500 BRL per month; B = 3,000 to 4,500 BRL per month; C = 2,000 to 3,000 BRL per month; D = 1,000 to 2,000 BRL per month;
E = < 1,000 BRL per month
1% 1%3%
4%
19%
< 1,0K 1,0 - 2,0K 2,0 - 3,0K 3,0 - 4,5K > 4,5K
Brazil: Lantus® Share By Income Class(1,2)
Target Groups
D C B AE
82
“Alcance” Project Expands Lantus® Access in Brazil and Supports Volume Expansion
● Selectively targets patients that cannot afford Lantus® therapy
● Individual screening process adjusts benefit to each patient’s need and income
● Reduces the overall treatment cost for diabetes patients
● Leverages multiple partners and Sanofi’s broad portfolio
● Offers patients a comprehensive solution treating diabetes and other co-morbidities
83
Sales in Brazil Accelerated following Implementation of Alcance
0
Lantus® Sales Growth: Private Sector (€m)
A key growth driver for Lantus® in Brazil
20112008 2009 20102007
33%
27%
13%
22%24%
Alcance Implemented
84
Delivering More Value to Patients in Brazil
85
® Brazil has key competitive advantages to leverage the opportunity, including Alcance and superior share of voice with physicians
2013Anticipated launch
Sanofi will bring the most integrated and complete offering for diabetes treatment in Brazil including disease management
2013Anticipated launch
A new “pen” device developed exclusively for the emerging markets
2014Anticipated launch
Insupen needle aims to improve patient satisfaction; Sanofi has a broad distribution system and strong customer service
2012On the market
Diabetic foot ulcer is a common complication of diabetes; Hidrastar is a moisturizing cream for daily use
2013Anticipated launch
An Integrated Solution Provider for Diabetic Patients
(1) Product is not yet commercially available in Brazil(2) In-licensed from Zealand Pharma A/S. Lyxumia® is the proprietary name submitted to health authorities for
investigational GLP-1 RA lixisenatide. Lixisenatide is not currently approved or licensed anywhere in the world.
Value Market
VolumeMarket
Core Brands Devices/Services
Tailored Offering
Patient Value
Patient Access
● Lantus®
● Amaryl®
● Apidra®
● Lyxumia®(2)
● BGM(1)
● SoloSTAR● Moisturizer(1)
● Call Center● Educators● Other Services
● Alcance● All-Star pen(1)
● Insuman®(1)
● Generics
86
Key Pillars to Fuel our Diabetes Growth in LatAm
87
Generics
88
Heraldo Marchezini
Senior Vice President, Latin Americaand General Manager, Brazil
Agenda
89
Medley - A Major Player in the Generics Market
Generics - A Fast Growing Market Segment
Medley’s Strategy for Continued Strong Profitable Growth
Generics Are a Fast Growing Segment in the LatAm Pharmaceutical Market
90(1) IMS Midas MAT Q2 2012 (Retail only, Pharmacy Purchase Price (PPP) not included)
● Drivers of generics market growth:● Lack / loss of exclusivity of patented
originator drugs
● Government expenditures providing access to medicine and coverage to a broader population
● Aging population and increased prevalence of chronic diseases
● “Branded Generics” represent majority of generic market in value
● Further acceleration of generics market expected● Strong national manufacturers
LatAm Pharmaceutical Sales(1)
(in €bn)
Continued Leadership in the Generics Market is Key to our Growth Strategy in LatAm
91
Total Market Generics
+13% +16%
+5% +8%
+25% +31%
+19% +20%
+8% +11%
+3% +4%
LatAm generics market expected to reach ~€35bn in 2017
(3)
(1) IMS MIDAS MAT Q2.2012 (Retail only, PPP not included)(2) IMS Prognosis and internal estimates(3) International Nonproprietary Names
Sales in €bn in 2012(1) Expected growth 2012-17(2) (CAGR)
The Brazilian Generics Market Offers Two Distinct Business Models
Rx Originator Pure GenericsINN
“Similares”Branded Generics
Price • High Reference Price• Low discounts
• Mandatory % below branded reference price
• High discounts
• Equivalent to Generics• Low discounts
Investment,Promotion
• Field force• Concept selling
• Sales Channels• Investment at POS(1)
• Added Value
• Field force• Branding, Sampling• Pharmacy presence
1 2
92(1) Point of Sale
Agenda
93
Medley - A Major Player in the Generics Market
Generics - A Fast Growing Market Segment
Medley’s Strategy for Continued Strong Profitable Growth
- A Powerhouse for Affordable Medicines
94
● Total sales of €370m in 2011(1)
● ~1,800 employees● Headquartered at Campinas site
in São Paulo, Brazil● Strong operations and market reach
● ~550 sales representatives
● Worldclass industrial facilites ● ~1,000 employees in Industrial
Affairs
● Customer service to 25,000 pharmacies and 80,000 physicians
● Generics INN, Branded Generics
(1) Generics sales in LatAm were in total €441m in 2011 (of which Medley was €370m)
95
A Highly Competitive Portfolio Aligned with Market Demand in Brazil
77 molecules account for
~80% ofGenericmarket volume
77molecules
313molecules
Total Genericsmarket
Total Genericsmarket
~20% volume
~80% volume
65molecules
108molecules
Rank Molecule TotalMarketBRL(in m)
Market Leader
Market Share
1 Losartan 71.7 19.6%
2 Sildenafil 36.6 26.3%
3 Pantoprazole 33.0 51.3%
4 Omeprazole 29.6 40.9%
5 Enalapril 29.2 28.0%
6 Simvastatin 27.3 35.2%
7 Amoxicillin 21.2 27.5%
8 Clopidogrel 21.1 30.7%
9 Metamizole Sod. 19.4 46.9%
10 Atenolol 18.1 35.7%
Medley‘s portfolio includes 65 out of 77 high-volume generics molecules(1)
Medley leads the market owning 7 out of the top 10 generics molecules in value(2)
(1) IMS MAT September 2012(2) IMS September 2012 in local currency – generic market
High Exposure to the São Paulo State Market Provides Opportunity for Geographic Diversification
96(1) IMS YTD August 2012 (units)
Market Share per Region(1)
(in volume)
São PauloState,41%
24%
20%
22%
25%
São PauloState
Volume Split by Region in Brazil(1)
A Compelling Presence at the Point-of-Sale
● Exploit selling space to raise awareness for preferred brand
● Wealthier middle class asking for increased number of product presentations
● Favorable purchasing conditions at modern pharmacy chains
● Secure profitability throughreturns from trade marketing investments
97
Agenda
98
Medley - A Major Player in the Generics Market
Generics - A Fast Growing Market Segment
Medley’s Strategy for Continued Strong Profitable Growth
99
Generate synergies from Sanofi’s leading position in LatAm
- Consolidate Leadership Position in the Generics Market in LatAm
Extend geographic reach
3 Strategic Levers for Future Growth in Brazil and LatAm
Broaden position in Branded Generics
Maintain leadership in volume market
Focus on high consumption molecules
• Expand in Branded Generics
1 2 3
Leverage existing strong image
• Address growing demand from population segments• Middle class, Aging population
• Enlarge business model across LatAm markets
• M&A(1)
(1) Genfar - The closing of the transaction is subject to certain conditions precedent and is expected to occur in Q1 2013
Esomeprazol - A Major Launch Success in 2012
100
12%
in k units
(1) IMS PMB September 2012
● Esomeprazol: a high volume molecule● Launch of generic version of Nexium®
by Medley in July 2012● Medley rapidly expanding its unit share
● Medley achieved 29% market share of generic esomeprazol in September(1)
● Medley’s esomeprazol is the #1 generic version in Brazil(1)
24%
29%
Share of esomeprazol market in Brazil(1)
therapeutic classes
101
Portfolio Expansion into Key Countries Across LatAm
101
78
150 products in its portfolio, in over presentations500
25 countries with Medley’s products in Latin America
dossiers prepared since LatAm platform was established in 2010645
262 dossiers approved
ACHIEVEMENTS(where Medley is present):
(1) Based on units sold per month in Latin America YTD October 2012; internal analysis
- A Brand With a Growing Reach
102
~24 million patients buy Medley products
monthly(1)
HONDURASQ4 2011
MEXICOQ3 2011
GUATEMALAQ4 2010
EL SALVADORQ3 2011
COLOMBIAQ1 2012
PANAMAQ4 2011
VENEZUELAQ3 2011
BRAZIL
Branded GXINN
INN
INN
Branded GX
Branded GXINN
INN
INN
Branded GX
22.6% 22.5%
10.9%
6.7%
Generics Segment in Colombia by Market Share (value)(2)
MC
KE
SS
ON
(1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013(2) IMS MAT June 2012 (Generics and Branded Generics)
11.3%
Genfar Acquisition in Colombia to Accelerate Growth Path towards Leadership in Affordable Medicines
103
LA S
AN
TE
LAFR
AN
CO
L
Sanofi and Genfar to reach ~30% share of Gx market
● Sanofi to acquire Genfar S.A.(1) in Colombia● #1 position by sales(2)
● One of the fastest growing companies
● Genfar has a commercial presence in more than 10 countries in the Andean countries & Central America
● >1,200 employees in the region● Sales of $133m in 2011
● 30% of sales outside of Colombia
● Industrial facilities located in Cali● Large portfolio of affordable medicines
Genfar – A Complementary Footprint in the Andean and Central American Region
104(1) IMS MAT June 2012
● A commercial presence covering a region of 200m people● Andean and Central America generics
market of $5.2bn growing at +12%(1)
● Solid awareness of Genfar brands in large markets● Colombia, Peru, Venezuela
● Leadership positions in Generics in most markets after acquisition
● A strategic fit with Sanofi's portfolio● Improves leverage with existing
relationships in the distribution channels
Sustaining Leadership in the Generics Market in LatAm
105
● Generics are expected to remain the fastest growingsegment in Pharmaceuticals in LatAm
● Medley is the leader in affordable medicines● Broad product portfolio● High brand recognition● Local manufacturing capabilities
● Medley is poised for future growth ● Maintain leadership in the volume market● Enlarge position in Branded Generics● Extend geographical reach in the region
● Genfar acquisition to further boost leadership position in affordable medicines across the Andean region
Animal Health
106
José Barella
Senior Vice President, Animal Health
Merial - A Leading Presence in Latin America
Production Animal Health - Growth Drivers
Strategic priorities in Latin America
Agenda
Companion Animal Health - Growth Drivers
107
Merial: An Animal Health Leader with a Broad, Diversified Geographic Footprint
● Merial global sales were €2bn in 2011● Globally ranked #1 in the Pets market(1)
and #3 in Production Animals(2)
● 25% of sales in Emerging Markets, approaching Western Europe in size (vs. 20% in 2008)● Growth driven by Asia and LatAm● Room for further expansion● Expected to grow twice as fast as
developed markets from 2012-2015(1, 2)
● LatAm accounts for ~50% of MerialEmerging Markets sales
42%U.S.
27%WesternEurope
23%Emerging
Markets
Other Countries
Merial 2011 Sales Split by Region
(1) Source: Vetnosis Companion Animal 2012 Study(2) Source: Excludes Medical Feed Additives; Vetnosis 2012 Avian Study, Vetnosis 2012 Pig Study, Vetnosis 2012 Cattle Study,
Vetnosis 2012 Sheep study
8%
25%
27%
40%
108
Merial: A Leading Presence in LatAm
Merial: LatAm Quarterly Sales (€m)(1)
● LatAm sales in 2012 expected to approach €270m, up double-digits at CER
● Paulinia, Brazil manufacturing site is one of the largest AH facilities in the southern hemisphere
● Leading positions in key LatAm markets:
● #1 ranking in Argentina(2)
● #3 ranking in Brazil(3)
● #4 ranking in Mexico(4)
● Brazil, Mexico and Argentina accounted for ~75% of YTD 2012 LatAm sales
2010 2011 2012
228 (+8%) 246 (+11%)
(1) Growth at constant exchange rates(2) Source: CARPROVE(3) Source: IMS-SINDAN(4) Source: KLEFFMANN Goup
109
Merial: Double-Digit Growth in Both Production and Companion Animal Health Businesses
Merial Sales in Latin America (€m)
2008 2009 2010 2011 2012e2008 2009 2010 2011 2012e
Production Animal Health Sales Companion Animal Health Sales
185 61CAGR +14%
CAGR +10%
110
Merial LatAm Well Positioned with a Wide Range of Leading Premium Brands
(1) Compiling data from IMS-SINDAN, CARPROVE and KLEFFMANN
#1 Pets brand in LatAm(1)
Parasiticide controlling fleas and ticks for pets
Recombinant DNA vaccine – advanced protection
#1 internal / external parasiticide control in LatAm for cattle and swine(1)
Pour-on broad spectrum parasiticide for cattle
Leading innovative recombinant vaccine for poultry
Leading Foot and Mouth disease supplier in LatAm
111
Merial - A Leading Presence in Latin America
Production Animal Health - Growth Drivers
Strategic priorities in Latin America
Agenda
Companion Animal Health - Growth Drivers
112
Latin America Is a Top Producer of Meat Globally
LatAm: Feeding the World
26% of world bovine
production
21% of world poultry
production
16% of world meat
production
6% of world pork
production
#1in the world
#2in the world
#5in the world
#2in the world
Source: Vetnosis STORM 2012113
Brazil Ranks #3 in Meat Production Globally(1)
Brazil accounts for 3% of world pork production(1)
●Ranks #4 globally
9.99.0
2011 2020e 2020e2011
14.2
11.7
2020e2011
3.8
3.2
Beef Meat(1)
(mn tons)Chicken Meat(1)
(mn tons)Pork Meat(1)
(mn tons)
Brazil accounts for 11% of world poultry production(1)
●Ranks #3 globally
Brazil accounts for 14%of world bovine meat production(1)
●Ranks #2 globally
(1) Vetnosis114
Increase in Production and Yield Improvement Drive Growth of the Production Animal Health Market
2010 2015e 2020e 2010 2015e 2020e
LatAm: Meat Production(1)
(ktons)LatAm: Production Animal Health(1)
(m€)
CAGR +2%CAGR +7%
39,623
1,211
(1) Vetnosis STORM 2012115
Increased Spending Per Head Is The Major Driver of Growth in Production Animal Health in LatAm
3.92
2.35
2011 2020e
6.25
3.63
2011 2020e
Large Animals (Swine & Ruminant)(1)
(€ per Medicalized Treatable Unit)Avian(1)
(€ per 100 x Medicalized Treatable Unit)
(1) Vetnosis STORM 2012116
Spending Per Head
Merial - A Leading Presence in Latin America
Production Animal Health - Growth Drivers
Strategic priorities in Latin America
Agenda
Companion Animal Health - Growth Drivers
117
The Pet Moves “From the Backyard to the Bed” with Growing GDP per Capita
0
20
40
60
80
100
FRANCE
USA
MEXICO
BRAZILJAPAN
GERMANY
GDP/Capita 2009 (US$)50,00030,00010,000
UK
40,00020,0000
Mature MarketsEmerging Markets
Food Consumption/Pet 2009 (kg)
COLOMBIA
ARGENTINA
Source: Euromonitor 2009118
Substantial Opportunity for Growth as LatAm Markets Spend More on Pets
Animal Health Expenditures per Pet ($)
Latin America Developed Markets
2.1 2.25.2 6.4
20.0
25.6
29.6
34.8
Source: Euromonitor 2009, Vetnosis STORM 2010119
A Fast Growing Companion Animal Health Market
LatAm: Companion Animal Health Market(1)
(€m)
429
2010 2015e 2020e
CAGR +8%
● LatAm Companion Animal Health market is expected to more than double over a 10 year period(1)
● Improvement in the general welfare in LatAm
● Increased spending per pet: “Pet as a family member”
● Brazil represents ~30% of the LatAm companion Animal Health market(1)
(1) Vetnosis STORM 2012120
Merial - A Leading Presence in Latin America
Production Animal Health - Growth Drivers
Strategic priorities in Latin America
Agenda
Companion Animal Health - Growth Drivers
121
Sustaining Growth, Entering New Markets and Leveraging our Leading Portfolio
● Sustain Avian leadership● Leverage leading vaccines
business● Provide services in a partnership
approach with producers
● Expand ruminants business● Develop new local brands● Enter fast growing categories● Expand into new geographies
● Develop swine via customized vaccine platform from recent Newport acquisition
122
LatAm Production AH
● Steady growth of purchasing power in LatAm to benefit Frontline
● Introduce new parasiticides and vaccines● Increase strength of local portfolio
and defend against generics
● Leverage government partnerships to improve rabies business
● Introduce new therapeutics
LatAm Companion AH
New Initiatives to Capture Growth in Latin America
Creation of a local R&D Center to meet local needs
Establish LatAm headquarters in Campinas, Brazil
Genfar acquisition(1) and Colombia as a new subsidiary
Fully capture potential of Brazil’s Northern & Midwestern regions
123(1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013
Latin America Animal Health – Well Positioned for Continued Strong Growth
● Double-digit LatAm growth for Merial expected over the next few years
● Increasing world protein consumption to fuel Production AH growth
● Increasing welfare of population to drive Companion AH growth
● Geographical expansion through increased investments
● Increase presence in less penetrated regions of major countries
● Create new affiliates in smaller LatAm countries
● Newly established local R&D center will develop local brands
● Leveraging premium brands
● Opportunistic business development transactions
124
Vaccines
125
Patrice Lebrun
Vice President, Latin AmericaSanofi Pasteur
Agenda
126
Sanofi Pasteur - A Well Entrenched Player
Vaccines - A Sizeable and Attractive Market
Dengue - A Significant Opportunity
The Vaccines Market in LatAm is Sizeable
127
Total Population: 596m(2)
Birth Cohort: 10.7m(2)
LatAm Market(1) (1
(1) Sanofi Pasteur internal estimates for market size and growth (2) PAHO Health Situation in the Americas – Basic Indicators 2012
● ~€1.4bn sales in 2011
● +19% CAGR over 2008-2011
● Brazil and Mexico: ~60% of market
● Public market: 75% of sales● Governments increasingly attracted
by innovative products
● Private market for “non-covered” vaccines
● Growing trend towards local production
Market Characteristics(1)
2011 MarketSize: €280m
2011 MarketSize: €590m2011 Market
Size: €520m
Projected LatAm market growth over 2012-17(1): +13% CAGR
Immunization Schedule(2)
Brazil MexicoBCG 0 0
Hep B 0 0, 2, 6m
OPV 6, 15m 3 campaigns per year for 2m – 5y
IPV 2, 4mDTP 15m, 4y 4y
DTP-Hib-HepB 2, 4, 6mDTaP-Hib-IPV 2, 4, 6, 18mPneumo_conj 2, 4, 6, 12m 2, 4, 12m
Rotavirus 2, 4m 2, 4mMR > 13y
MMR 12m, 4y 12m, 6yMenC_conj 3, 5, 15mPneumo 23 > 60y, @risk > 65y
Td >20y, pregTdaP > 12y, preg
Yellow Fever 9m, ev 10y
Influenza 6-24m, > 60y, preg, HCW, @risk
6-59m, > 60y,@risk 11-60y
HPV > 9y
Mexico and Brazil Constitute the Bulk of Market
128(1) Sanofi Pasteur internal estimate (2) As of October 2012
● Mexico and Brazil● 55% of LatAm population● 4.8m birth cohort● Vaccines sales >€800m(1)
● Public immunization programs drive market growth ● Public and industrial partnerships key
for market access● Opportunities with private market● Room for adoption of new and
innovative vaccines and services
● Markets becoming increasingly competitive
Agenda
129
Sanofi Pasteur - A Well Entrenched Player
Vaccines - A Sizeable and Attractive Market
Dengue - A Significant Opportunity
(1) Sanofi Pasteur internal estimate(2) Including pandemic A(H1N1) Flu vaccines salesPPH – Pertussis, Polio, Hib
Sanofi Pasteur is a Leading Player in LatAm
130
● €374m sales in LatAm in 2011● +14% CAGR over 2008-2011● 2nd player with 29% market share(1)
● 34% of vaccine sales in Emerging Markets
● Brazil and Mexico: 2/3 of sales
● Undisputed position in flu immunization
● Strong positions in pediatric and endemic vaccines
● Industrial presence and strong local partnerships
Others
130
2011 Sales Split by Country2008-2011 CAGR(2)
CAGR +26%
CAGR+11%
CAGR+9%
53%
18%
20%
Brazil
Mexico
Flu
Others
PPH
2011 Sales Split by Product% of Sales
9%Travel & Endemic
Local Industrial Capabilities Providea Strategic Advantage to Sanofi Pasteur
● Hepatitis B antigen for pediatric hexavalent vaccines Hexaxim™ in LatAm and other international markets
● 50m dose capacity● €60m investment
Birmex – Biologics and Reagents Laboratories of Mexico
Pilar, Argentina
Ocoyoacac, Mexico
● Flu vaccines● Up to 25m dose capacity ● €100m investment● 1st lots being shipped for the 2012-13 season● Partnership with Mexican federal vaccine
manufacturer Birmex
131
Brazil Illustrates Strong Track Record of Partnerships with Sanofi Pasteur
132
● Sanofi Pasteur, an historical partner to Brazil public health● Meningitis outbreak (1974)● Yellow fever outbreak (2008)● Pandemic A/H1N1 flu (2009-2010)
● Case-study with Butantan Institute● Goal: building capacity for flu
vaccine production and maintaining reliable and consistent supply
● Partnership with Fiocruz for IPV introduction in NIP in 2012● Opportunity to build long-term
technical and scientific cooperation
Quality control tests
Filled vaccine
Formulated bulk
Blending, filling & packaging
Production technology1st shipment expected in 2013
Partnership with Butantan Step-wise technology transfer process
initiated in 1999-2000
Butantan Institute – Biomedical research center affiliated with the São Paulo State Secretary of HealthFiocruz – Oswaldo Cruz Foundation’s vaccines unit is Immunobiological Institute of Technology (Bio-Manguinhos)IPV – Inactivated Polio Vaccine NIP – National Immunization Program
Support&
Assistance
Sanofi Pasteur Remains the Undisputed Leader in the Rapidly Growing LatAm Flu Market
133
2008 2009 2010 2011
Seasonal Flu Vaccines Sales(in €m)
€197m
€107m
● Seasonal flu sales in 2011: €197m ● >70% market share (public+private)(1)
● Market driven by public policies:● Public market: 70% of sales(1)
● Most countries recommend:children up to 24-36 months and elderly > 60 yrs - Extension expected
● Mexico influenced by U.S. policy
● Private market offers opportunities● IDflu, Private companies, Pharmacies
● Evaluating further opportunities for local partnerships in 2013
(1) Sanofi Pasteur internal estimates
Lead Market Entry of Inactivated Polio Vaccine and Acellular Pertussis Combo Portfolio in LatAm
134
● Major role in the switch from OPV to IPV post-polio eradication● IPV included in the Brazilian national
immunization program as of 2012
● Pentaxim®: 5-in-1 pediatric combo ● Already launched in Mexico and
some other countries● Evaluating local agreements for
broader market access
● Future launch: Hexaxim™, first fully-liquid hexavalent pediatric combo ● Includes Hepatitis B antigen
produced in Argentina (Pilar)
Immunization Rate(1)
(in %)
Pentaxim® – Diphtheria, Tetanus, Pertussis, inactivated Polio, and HaemophilusHexaxim™ – 5 above antigens plus Hepatitis BOPV – Oral Polio Vaccine IPV – Inactivated Polio Vaccine wcP – whole cell Pertussis acP – acellular Pertussis (1) Sanofi Pasteur estimates applicable for birth cohorts in LatAm – Primary series in 3 doses for each antigen.
100%
0%
wcP
acP
OPV
IPV
Pertussis Polio
Private Vaccine Market in LatAmProvides New Growth Opportunities
Evolution of Offering in Brazil
Flu Vaccineindividual companies
1997 2007
Flu Campaign OfferRegional SESI
2012
Services OfferNational SESI
Volumes in SESI 0 0.5md >1 md
SESI – Serviço Social da Indústria (Social Services of the Federation of Industries)(1) OCDE Americas Market Intelligence 2012 135
Middle Class Consumer Spending(1)
(in trillion U.S. $)
$1.5 tr
$3.1 tr
2009 2030
● Solid Private Market evolution● CAGR 2008-2011: +11%
● Growth fueled by rising middle class ● Looking for higher standards of health
● Uncovered teens / adults population reached via new channels
● Emergence of new stakeholders ● Leveraging vaccines as differentiation
(e.g. SESI in Brazil, Pharmacies - Walmart in Mexico & Central America, Locatel in Venezuela, Obras Sociales in Argentina)
● Moving from product sales to vaccination campaign and services
Brazil and Mexico Expected to Remain Largest Opportunities for Sanofi Pasteur in LatAm
136CONAVA – National Vaccination Council
Key countries for potential Dengue vaccine introduction
expected in 2014
● Continuous process of technology transfer for Flu while private Flu market progressively evolves
● Adacel® Quadra launched in 2011● IPV introduction in public market
in 2012● Market entry of Hexaxim™ and
Menactra® expected in 2014
Brazil
● Unique Flu industrial plant in LatAm● Strong performance of Pentaxim®
● Avaxim® : new CONAVA Hepatitis A recommendation in 2010 for at-risk children - Future extension expected
● Adacel® launched in 2012● Multiple new launches expected:● 2013: Tetraxim® and Menactra®
● 2014: Hexaxim™
Mexico
Agenda
137
Sanofi Pasteur - A Well-Entrenched Player
Vaccines - A Sizeable and Attractive Market
Dengue - A Significant Opportunity
Dramatic Increase in Number of Dengue Caseswith Broad Geographical Expansion
138
< 50
50 - 100
> 100 - 200
> 200
Unavailable data
Without indigenous cases
1990 - 19991980 - 1989
Dengue Incidence, 1980-2010(1)
(per 100,000 by country)
(1) Source: www.paho.org
2000-2009 2010
Dengue Hyperendemic State in LatAmCreates Public Health Concerns
139
Period 80’s 2008-11Dengue cases 1.0m 4.8m
DHF 13.4K 128.7K
DHF as a % of total cases 1.3% 2.7%
Fatalities 242 2,861
Increasing Morbidity and Mortality(1)
PAHO – Pan American Health Organization DHF – Dengue Hemorrhagic Fever(1) San Martin JL et al. Am. J. Trop. Med. Hyg., 82(1), 2010, pp.128-135 for the 80’s, and www.paho.gov for 2008-2011(2) Shepard DS et al. Am. J. Trop. Med. Hyg., 84(2), 2011, 200-207
● Estimated 400m people living in at-risk or endemic areas
● Incidence typically higher in adolescents and young adults ● Trend towards infection in younger
ages
● Dengue seasonality depends on rainy season in each country
● 4 serotypes circulating with epidemiology changes over time
● Public health priority for health authorities and PAHO
Aggregate annual costs in the AmericasEstimated at $2.1 billion for the period 2000-2007
Peak at $3.1 billion in 2007
40% in Brazil alone
Cost of Dengue Illness(2)
Dengue Vaccine: Seeks to Address a Major Threatin LatAm
140
(1) ClinicalTrials.gov Identifier: NCT01374516 ANVISA – National Health Surveillance Agency COFEPRIS – Federal Commission for the Protection against Sanitary RiskINVIMA – National Institute for Drug and Food Surveillance MoH – Ministry of Health
Clinical Program in LatAm(25,000 subjects)
MEXICOPh I, II, III (efficacy, co-administration)
PUERTO RICOPh II, III (efficacy)
BRAZILPh II, IIII (efficacy)
COLOMBIAPh II, III (efficacy)
PERUPh II (co-administration)
HONDURASPh II, III (efficacy)
PANAMA(co-administration)
● Phase III trial ongoing in LatAm(1)
● 21,000 subjects – 23 centers● Efficacy results expected in 2014
● Main channel expected to be the public segment● Significant opportunities in private
markets for “non-covered” age groups
● Regular contact with regulatory agencies● ANVISA (Brazil), COFEPRIS (Mexico)
and INVIMA (Colombia)
● Strong partnerships engaged with health authorities and international organizations (e.g. PAHO)
Multiple Opportunities Exist in LatAm for Future Growth
● Solidify existing businesses
● Introduce new products and indications
● Leverage industrial assets and strong public health relationships
● Partner locally to expand market access
● Secure profitable segments/offer expansion in private market
● Continue market preparation for Dengue
141
Launching Dengue vaccine will be keyto exceeding market growth in next 5 years
Industrial Affairs
François Blanot
Vice President Industrial Affairs, Latin America
142
LatAm Manufacturing Capabilities: a Strategic Advantage
Suzano: A Key Site in LatAm
Agenda
143
Industrial Affairs Are Committed to Support Sanofi’s Strategy in LatAm
SanofiThree Point
Strategy
Grow LatAm presence, a key contributor to Emerging Markets
Focus on growth platforms
Achieve profitable organic growth coupled with bolt-on acquisitions
IndustrialAffairs
Execution
Pro-actively manage industrial network
Constantly adapt to business competitive needs
Support active acquisition policy and Life Cycle Management
1
2
3
1
2
3
144
● State of the art in-house manufacturing
● Wide product portfolio and strong Generics expertise
● Product development capabilities with regional to global potential
● Long-term performance track record of Industrial Operations
● Longstanding industrial presence in LatAm
● Pharma products: 637m(1) units manufactured, 3,350 employees(2)
● Successful Generics integration: Medley, Kendrick
● Merial & Sanofi Pasteur: 20m(3) units and 35m(3) doses respectively, 480 employees in total
Sanofi Benefits from a Strong Industrial Network in LatAm with 10 Plants Dedicated to the Regional Market
Mirador
Guarenas
Cali
Brasilia
Our strengths
Broad industrial footprint
Sanofi Pharma plant
Regional Headquarters
Sanofi-Pasteur plant
Merial plant
Industrial hub
Pilar
Industrial Network
145
95% of Pharma volumes sold in LatAm are produced locally(1) 2011 figures, excluding external manufacturing(2) Figures as of September 2012(3) 2011 figures and estimated 2012 production for Ocoyoacac Vaccines
Ocoyoacac
CampinasPaulinia
SuzanoSao Paulo
Our Pharma Industrial Network Is Tailored to Regional Business Needs
(1) LatAm Pharmaceutical Markets ranking 2011, in Units, source IMS MIDAS 146
CountryRank (1)Site
Suzano
Campinas
Production split
Ocoyoacac
Textitlan
Mirador
Guarenas
Cali
980
550
225
190
110
230
Headcount Markets supplied by the plants
Brazil (95%)
Other LatAm countries (5%)
Mexico (90%)
Other LatAm countries (10%)
Argentina (96%)2/3 Sanofi, 1/3 toll-in
Other LatAm countries (4%)
Colombia (73%)
Other LatAm countries (27%)
Venezuela (99%)
Other LatAm countries (1%)
1
2
3
4
5
920
Industrial Capacities Strengthened by Recent Bolt-on Acquisitions and Pro-active Plant Management
Year 2008 2009 2010 2011 2012 2013e
147
Ocoyoacac P(1)
Suzano
Cali
Guarenas
Pilar
Brasilia
Textitlan
Campinas
Sumaré
Mirador
Ocoyoacac V(2) Paulinia
Campinas
Mirador
Ocoyoacac P
Ocoyoacac V
Suzano
Cali
Guarenas
Pilar
Paulinia
5
+ 3
+ 2+ 1
12
- 2
Textitlan
Sumaré
Acquired companies
Built capacities
Existing network
Genfar(3)
Share of
production
outsourced
Industrial
network in
LatAm
(1) Ocoyoacac Pharma(2) Ocoyoacac Vaccines(3) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013(4) 2012e
Increased capacity allowed to reduce outsourcing and to manage rapid volume growth
(4)
148
Double-Digit Growth in Pharma Production Supports Dynamic Local Sales Growth
Pharma Sales Growth in LatAm (€m) Volume Growth produced in LatAm (Mu)
Key Answersto Production Growth needs
Acquisition and successful integration of targets2009: Medley, Kendrick2010: Mirador site2012: Genfar(1)
Consistent investments to increase capacity and launch new products€110m(2) of cumulative Capex 2008-2011
Increased industrial productivity through LEAN manufacturing implementation
CAGR 25 %
(1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013(2) At CER, 2011 exchange rate
1,516 1,6332,134
CAGR 18 %
2,490
● Two sites dedicated to regional market and emerging countries
● Take advantage of regional footprint
● Foster market access
● Invest in new facilities
● Leverage the Group’s industrial presence
LatAm industrial strategy
● One site providing a competitive export platform
● To supply regional market with vaccines
● To fuel global needs in pharma products
● To source innovative soft chewable galenic forms
● Seize external growth opportunities
LatAm industrial strategy
Animal Health and Vaccines Industrial Networks Align with Merial and Sanofi Pasteur Strategies
Industrial network in LatAm
SiteProduction
splitHC(1)Markets supplied
Capacity(m doses)
100Ocoyoacac 25 Influenza Mexico
80Pilar 50 Hepatitis International markets
Industrial network in LatAm
ANIMAL HEALTH VACCINES
SiteProduction
splitHC(1)Markets supplied
VolumeIn m units
300Paulinia 20
LatAm markets for vaccines
Worldwide for pharma
149(1) Headcount
Local Industrial Presence in Main LatAm Markets Remains Key to our Commercial Success
Well adaptedto localmarketfeatures
Foster market access conditions• National regulations and institutional buyers support local production• Lower tariffs and import restrictions inside free trade areas
Mitigate currency risks
Manage portfolio diversity and customer alignment
Adapt quickly to market changes and demands
Expand regional portfolio and implement local LCM• CHC and nutraceuticals
150
151
Pharma Industrial Affairs Manages a Diverse Portfolio in LatAm with Competitive CoGS
Sanofi pharma Industrial Affairs LatAm positioning
100
500
6570
125
15
500
Barriers to entry CostsTechnology Portfolio Complexity
Main Competitors Commodities companiesBig Pharma Local to Regional players
Type of
drugs
RxOTC
GxPublic tenders
Production
costs of
products
0
LatAm volume
distribution
● Global Industrial KPI Scorecard enforced
LEAN implementation●LEAN culture propagated in plants
● LEAN leaders
●LEAN tools implemented with high commitment from operators
● SMED(1), Visual Management
●Rethinking of production lines through Value Stream Mapping
● Overall Equipment Efficiency (OEE) on track to increase 9 pts 2010-2012
● Optimizing investments through productivity improvements
● Managing high capacity loads
● Plant Cycle Time and Work In Progress reduced
152
Industrial Affairs are Driven by Continuous Search for Improved Performance
Initiatives enforced Key results achieved
Format and packaging harmonization ● Permanent efforts of standardisation between
operations and Industrial Affairs
Better stock management● From local suppliers to local markets to minimize
cashflow
Standardization of policies
(1) SMED: Single Minute Exchange of Die
Generics Are Expected to Remain a Key Growth Driver in LatAm
Campinas
Brasilia
153(1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013
● Move to Generics executed through acquisitions
● Acquisition of Medley and Kendrick● Strong brand image of Medley
among patients
● New industrial capabilities
● Synergies delivered, e.g. with manufacturing repatriation of Kendrick products from Textitlan
● Further expansion ongoing with Genfar(1) acquisition
● New Brasilia plant construction to focus on fast-growing hormonal segment● Low competition
● Double-digit growth
Genfar(1) Acquisition Strengthens Sanofi Leadership in Affordable Pharmaceuticals
● Creation of a new industrial hub in Colombia
● Sanofi: one existing highly competitive manufacturing site in Cali
● Diversified production fueling both local and export markets (Central America and Venezuela)
● Genfar(1): a large and extensible asset ● 2 sites: Bogota and Villa Rica● 80,000 m2 with current capacity of
150 Mu● Extension capabilities above 100 Mu
Genfar
Affordable pharmaceuticals Animal Health
154(1) The closing of the transaction is subject to certain conditions precedent and is expected to occur in the first quarter of 2013
LCM department as a catalyst for new product development
Innovative Life Cycle Management Team Supports Sanofi’s Growth Platforms
Launched June 12
Launched June 12
Launched March 12
155
LCM in Latin America
● LCM department created in 2009 in LatAm to:
● Foster innovation in pharma products
● Optimise time-to-market● Mutualize expertise
● 150 people in 4 plants with different focus ● CHC: Suzano, Ocoyoacac● Generics: Campinas, Cali
Recent Launches
LatAm Manufacturing Capabilities Provide Sanofi with a Strategic Advantage
Industrial Network SupportsGrowth
Platforms
State of the art facilities aligned with Sanofi manufacturing standards
Local manufacturing to foster market access
Double-digit production growth to meet strong demand
Continuous productivity efforts to provide affordable medicines
Innovative LCM to boost sales growth and build profitable franchises
1
2
3
4
5
156
LatAm Manufacturing Capabilities: a Strategic Advantage
Suzano: A Key Site in LatAm
Agenda
157
Suzano Ranks Among the Largest Plants of the Group
Suzano strengths
● Productivity in line with Sanofi’s best sites
● Outstanding customer-service track record
● Product development capabilities with regional potential
● Strong focus on sustainable performance
● Wide range of galenic forms
A diversified portfolio manufactured at competitive costs
158
4 types of Galenic forms(1) 4 market segments(2) Emphasis on local market(1)
(1) 2011 figures(2) 2011 figures, excluding toll-in
Suzano Produces LatAm Star Products in All Market Segments
159
Ethical drugs Customer Health Care and OTC
Affordable medicines
Drops
Tablets Drops
Capsules Liquid SoapCreams
SprayTablets
Quality is a
core value
Quality brings a competitive advantage to Industrial Operations• Dedicated to patient safety and customer satisfaction
Quality is a strong driver of performance• Only one batch rejected out of more than 5,000 tested(1)
• Right First Time at 99%(1)
HSE(2)
is a mindset
HSE is a daily concern for each employee• Zero LTI(3) in Suzano for the past two years
Energy efficiency leads to financial savings• New boilers, LED technology…
Suzano is Designed According to Sanofi Manufacturing Standards
Suzano combines competitiveness with the highest standards of Quality and HSE
160
(1) 2012 YTD figures at September end(2) Health Safety & Environment(3) LTI: Lost Time Injury
Suzano Effectively Contributes to Sanofi Growth Platforms
Development center: strong focus on Growth Platforms
161
(1)
(1) Hours spent on projects by Suzano development center in 2011(2) June 2012: base value of 100 -volume-
Example of LCM impulsed by Suzano: Dermacyd (CHC)
New scentDermacyd
Breeze
100(2)
30
New formula
Dermacyd Infantil
Newformula
Dermacyd Teen
Launch LactacydCentral America
New format
DermacydPocket
2008 20122009 2010 2011
New formula
Dermacyd 24H
Fueling LatAm star CHC products
Improvement of industrial processes,
Formulations, Packaging
Ethical drugs,Generics,
Access to Medicine
Suzano Combines Operational, Financial and Environmental Performance
HSE initiatives examplesLEAN initiative example
162
SMED(1) on Puran packaging line
● Two workshops organised with operators ● Team training on LEAN tools● Movie analysis● Creation of a check-list● Visual Management to monitor
performance
● Quick and sustainable results● OEE(2) : +33%● Change-over time: -47%
● On-demand steam boilers ● New air compressors● HVAC(3) rest-mode● Chillers efficiency increase
● Suzano HSE(4) commitment is recognised by international standards● ISO 14001● OHSAS 18001
Production Cost
per Unit
(1) SMED: Single Minute Exchange of Die(2) OEE: Overall Equipment Efficiency (3) HVAC: Heating Ventilation & Air Conditioning
100(5)
70
(4) Health Safety & Environment(5) 2010: base value of 100, in local currency
2012e2010 2011 2013e
ExpectedCost
Improvements
-29%(2010-2013e)