QUARTERLY RESULTS
April 28, 2011
Q1 2011
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 include projections and estimates and their
underlying
assumptions,
statements
regarding
plans,
objectives,
intentions
and
expectations
with
respect
to
future
financial
results,
events,
operations,
services,
product
development
and
potential,
and
statements
regarding
future
performance.
Forward‐looking
statements
are
generally
identified
by
the
words
“expects”,
“anticipates”,
“believes”,
“intends”,
“estimates”,
“plans”
and
similar
expressions.
Although
sanofi‐aventis’
management
believes
that
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
and
generally
beyond
the
control
of
sanofi‐aventis,
that
could
cause
actual
results
and
developments
to
differ
materially
from
those
expressed
in,
or
implied
or
projected
by,
the
forward‐looking
information
and
statements. These risks and uncertainties include 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
to approve
any
drug, device
or biological
application that
may
be
filed
for any
such
product
candidates as well
as
their
decisions
regarding
labelling
and
other
matters
that
could
affect
the
availability
or
commercial
potential
of
such
products
candidates,
the
absence
of
guarantee
that
the
products
candidates
if
approved
will
be
commercially
successful,
the
future
approval
and commercial success
of therapeutic
alternatives, the Group’s ability to benefit from external growth opportunities as well
as those
discussed
or
identified
in
the
public
filings
with
the
SEC
and
the
AMF
made
by
sanofi‐aventis,
including
those
listed
under
“Risk
Factors”
and
“Cautionary
Statement
Regarding
Forward‐Looking
Statements”
in
sanofi‐aventis’
annual
report
on
Form
20‐F
for
the
year ended December 31, 2010.
Other than as required by applicable law, sanofi‐aventis does not undertake any obligation to update
or revise any forward‐looking information or statements.
3
Key Highlights
Christopher A. Viehbacher, Chief Executive Officer
Business Performance
Hanspeter Spek, President, Global Operations
Olivier Charmeil, Senior Vice President, Vaccines
R&D Update
Dr. Elias Zerhouni, President, Global Research & Development
Financial Performance
Jérôme
Contamine, Executive Vice President, Chief Financial Officer
Q&A Session
Agenda
Key Highlights
Christopher A. Viehbacher
Chief Executive Officer
5
Q1 2011 ‐
Solid
Underlying
Sales Performance
Q1 2011 sales reached €7,779m
Q1 2010 sales included €413m of A/H1N1 vaccine sales
Excluding A/H1N1, Q1 2011 sales growth was:
+0.1%
at
CER(1)
€7,485m€7,107m
Q1 2009 Q1 2010 Q1 2011
Total Sales (€m)
€7,898m
A/H1N1
€413m
(1)
Growth is at CER (Constant Exchange Rates) vs. Q1 2010(2)
In Q1 2009, Merial
Joint Venture sales of €521m were not consolidated by sanofi‐aventis
With a 50% share of Merial
Joint Venture sales, sanofi‐aventis pro forma
sales would be €7,367m(3)
Q1 2010 and Q1 2011 sales include 100% of Merial
sales of €513m and €594m, respectively
€7,779m
(3)
(2)
6
Q1 2011 sales of key genericized
products reduced
by >€1bn
vs. Q1 2009:
Lovenox®
U.S.
Plavix®
Western EU
Taxotere®
Western EU & U.S.
Eloxatin®
U.S.(1)
Ambien CR®
U.S.
Allegra®
U.S.
Aprovel®
Western EU
Others(2)
€1,488m
€2,014m
Q1 2009 Q1 2010 Q1 2011
Key Genericized
Products Sales (€m)
(1)
Generic makers (Teva, Fresenius Kabi
(formerly Dabur), Sandoz, Mayne/Hospira, MN/Par, Actavis
and Sun) have been required to cease selling
in the U.S. since June 30, 2010 but litigation continues.(2)
Other genericized
products include Xyzal®, Xatral®
and Nasacort®
in the U.S.
Q1 2011 ‐
Getting through the Patent Cliff
€945m
7
Sales from growth platforms represented 59.2%
of total
sales
in Q1 2011 vs. 42.2% in Q1 2009
An increase
of >€1.3bn vs. Q1 2009 pro forma
sales(2)
Excluding A/H1N1, our growth platforms grew in Q1 2011 by
+15.5%
at
CER(1)
€4,262m
€3,002m
Q1 2009 Q1 2010 Q1 2011
Growth Platforms Sales (€m)€4,607m
€3,849m
A/H1N1
€413m
(1)
Growth is at CER (Constant Exchange Rates) vs. Q1 2010(2)
In Q1 2009, Merial
Joint Venture sales of €521m were not consolidated by sanofi‐aventis
With a 50% share of Merial
Joint Venture sales, sanofi‐aventis pro forma
growth platforms sales would be €3,262m(3)
Q1 2010 and Q1 2011 sales include 100% of Merial
sales, respectively €513m and €594m
(2)
Q1 2011 ‐
Strong Performance from Growth Platforms
(3)
8
Q1 2011 ‐
Resilient
EPS despite
Generic
Headwind
Q1 2011 Business EPS was €1.66
€0.20
of Q1 2010 Business EPS was related
to A/H1N1 vaccine
sales
Excluding A/H1N1, Q1 2011 Business EPS was 6.0%
lower
at
CER(1)
€1.66
Q1 2010 Q1 2011
Business EPS (€m)€1.86
€0.20 €1.66
(1)
Growth is at CER (Constant Exchange Rates) vs. Q1 2010. Q1 2011 Business EPS excluding A/H1N1 vaccine sales was flat on a reported basis
9
Merial
‐
A Fully
Owned
Consolidated
Growth
Platform
#3
Animal Health player(1)
with sales of €2bn(2)
#1
in Companion Animals and Parasiticides(1)
Double‐digit growth in Emerging Markets
High operating margin(3)
Opportunity for synergies
New innovative brands, geographic expansion and bolt‐on acquisitions to drive future growth
(1)
Vetnosis
2010 Annual Report(2)
FY 2010 Sales: €1,983m(3)
FY 2010 Business Operating Margin: 31.3%
Key Brands
10Genzyme
‐
A New Platform for Sustainable
Growth with
Near
Term
Value Drivers
Business EPS accretion expected already in 2011
Cost of financing <2%
before tax in 2011
Integration
progressing well
Manufacturing
recovery on‐track
Remediation plan submitted to FDA
All fill & finish activities in Allston to be
completed by target date of August 2011
Pre‐launch activities for LemtradaTM
(alemtuzumab)
in
MS
Detailed identification of synergies
ongoing
Preliminary R&D
portfolio review conducted
#1Delivering high value
products
11
Multiple Milestones
over the Next
12 Months
2011
Q2 Q3 Q4
Phase III data of
Zaltrap®
(aflibercept)
in 2nd line mCRC
Launch of Jevtana®
in
2nd line mHRPC
in EU
Phase III data of
lixisenatide
in T2 DM
Phase III results of
semuloparin
in VTE
prevention in cancer
patients
Launch of Certifect®
for dogs
in the U.S.
Phase III top‐line results
of LemtradaTM
in MS
(CARE‐MS 1)
Regulatory submission
of teriflunomide
in U.S.
Further Phase III data
of lixisenatide
in T2 DM
Regulatory submission
of mipomersen
in EU
for hoFH
and severe heFH
Regulatory submission
of HexaximTM
for
Emerging Markets
Exit fill/finish at Allston
Landing
facility for ex‐US
IR thematic
seminar
on Strategy
& Outlook
Phase III top‐line results
of LemtradaTM
in MS
(CARE‐MS 2)
Regulatory submission
of lixisenatide
in EU
Phase III top‐line results
of teriflunomide
in MS
(TENERE)
Regulatory submission
of mipomersen
in U.S.
for hoFH
Start of Phase III for
Anti‐IL‐6 Receptor mAb
in RA and AS
Regulatory decision on
Framingham
plant for
Fabrazyme®
Q1
Regulatory filings of
LemtradaTM
in MS
Regulatory submission of
teriflunomide
in EU
Start of Phase III for
anti‐PCSK9 mAb
in
hypercholesterolemia
2012
Targeted
Dates for Selected
Upcoming
Milestones
mHRPC: metastatic Hormone Refractory Prostate Cancer
T2 DM ‐
Type 2 Diabetes Mellitus VTE ‐
Venous Thrombo‐Embolism
mCRC: metastatic Colorectal Cancer
MS: Multiple Sclerosis RA: Rheumatoid Arthritis
AS: Ankylosing
SpondylitisFH: Familial Hypercholesterolemia
EM: Emerging Markets
12
Outlook for 2011
The lack
of A/H1N1 vaccine
sales only
affects Q1 2011
Currently in the U.S., there is no generic of Eloxatin®
on the market(1)
and
only one generic of Lovenox®
On April 8, 2011, sanofi‐aventis announced
the closing
of the Genzyme
acquisition and integration
decisions
will
be
announced
before
summer
2011
FY 2011 outlook
will
be
revised
at
half‐year
results
(1)
Generic makers (Teva, Fresenius Kabi
(formerly Dabur), Sandoz, Mayne/Hospira, MN/Par, Actavis
and Sun) have been required to cease selling
in the U.S. since June 30, 2010 but litigation continues.
Business Performance
Hanspeter Spek
President, Global Operations
Olivier Charmeil Senior Vice President, Vaccines
14
Q1 2011 Group Sales (€m)
€7,898m
Q1 2010 KeyGenericizedProducts
GrowthPlatforms
Others Q1 2011
Growth Platforms ‐
Delivering +15.5% at CER (excluding A/H1N1)
(1)
Key genericized
products include Lovenox®, Taxotere®, Ambien CR®, Eloxatine®, Allegra®, Xyzal®, Xatral®
and Nasacort®
in the U.S.
as well as Taxotere®, Plavix®
and Aprovel®
in Western Europe(2)
Growth platforms: Emerging Markets, Diabetes, Vaccines excluding
A/H1N1, CHC, New products (Multaq®
and Jevtana®) and Animal Health
Q1 2011 sales: €7,779m, almost stable
Non‐recurring €413m sales of A/H1N1
vaccine
in Q1 2010
Growth platforms
more than compensated for
the impact of key genericized
products
(2)
(1)
‐€569m
A/H1N1
€413m +€595m
‐€21m
Fx
€289m
€7,779m
15
28.9%
12.5%
27.8%
Emerging Markets
Western
Europe
USA
RoW(3)
(1)
World less North America (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 and New Zealand(2)
Emerging markets sales growth including A/H1N1 sales of €355m in Q1 2010 was +1.0% on a reported basis or ‐2.6% at CER(3)
RoW: Japan, Australia, New Zealand, Canada
30.7%
Emerging Markets ‐
Expanding our Leadership
Q1 2011 sales in Emerging Markets(1): €2,386m, +14.6%
at CER excluding A/H1N1(2)
Emerging Markets sales exceed the U.S. and Western Europe
All growth platforms delivered double‐digit
growth in EM
Cardio‐thrombosis
franchise continues to grow: +10.4%
at CER
Q1 2011 Sales Breakdown
16
An Update on the Situation in Japan
All employees
safe
and secure
Medicines
and monetary
donations from company
and employees
to support aid
relief efforts
Kawagoe factory
and distribution centers unaffected
‐
No stock‐out situation
Solid Q1 2011 sales: €665m, +13.7%
at CER despite crisis situation
Allegra®
: +41.1%
Plavix®
: +28.8%
Myslee®
: +14.7%
Lantus®
: +34.8%
Earthquake
-
March 11, 2011
Sanofi‐aventis headquarters,
manufacturing
and R&D sites
(1)
Growth at constant exchange rates (CER)
17
Diabetes ‐
Back to Double‐Digit Growth in Q1 2011
Q1 2010 Q1 2011
(1)
Growth at constant exchange rates (CER)
U.S.
Emerging
Markets
Western EU
Others
+14.7%
+1.2%
+31.4%
+19.1%
Q1 Sales(1)
Q1 2011 sales: €925m, +13.2% at CER
Reacceleration of growth in the U.S. following increase in Share of Voice
Stable EU sales: volume growth counter‐balanced price cuts
Launch of BGStar®
and i‐BGStar® in Germany (April)
and France
(May)
18
New Products
‐
€111m in Q1 2011
Q1 2011 sales: €48m
54% share of U.S. patients in 2L mHRPC(1)
EC approval on March 18, 2011
Launch
in Germany in April
Most EU countries expected to launch
before the end of 2011
Q1 Sales (€m)
®
24
63
48
Q1 2010 Q1 2011
Q1 2011 sales: €63m
Revised label
Two
new major
U.S. Managed
Care wins
with
Tier
2 unrestricted
status(2)
On‐going EMA benefit/risk assessment
®
(1)
IntrinsiQ
Research Diag
Drug LOT ‐
Feb 2011(2)
United Healthcare Medicare and Commercial
€111m
19
Consumer Health
Care ‐
Doubled
Sales in only
2 Years
€339m
€491m
Q1 2009 Q1 2010 Q1 2011
Q1
Sales (€m)
Q1 2011 sales: €712m, +40.3%
at CER
CHC
driven by organic growth(1)
and acquisitions in the U.S. and China
Allegra®
OTC successfully launched in the U.S. in March
Q1 2011 sales: €80m
Outselling Zyrtec
OTC as early
as week 2(2)
Already our #1
OTC brand
Leveraging the acquisition of Chattem
(1)
Growth at constant perimeter and exchange rate was +23.0% in Q1 2011(2)
Nielsen Food, Drug and Mass excluding Walmart
(represents 54% of All Outlets) through 3/19/11
€712m
20
Q1 2009 Q1 2010 Q1 2011
Generics
‐
An Additional
Key Growth
Driver
Q1 2011 sales: €414m, +16.9% at
CER
Authorized
generics
of Ambien®
CR and Taxotere®
launched
in the U.S.
: 3rd
largest
player(1) and among
fastest
growing
generic
companies
in Europe
: leader in Brazil(2)
and expanding
in Latin America
Q1 Sales (€m)€414m
(1)
Adapted from IMS MIDAS Feb 2011(2)
IMS MIDAS
U.S.
Emerging
Markets
Western
Europe
Others
€343m
€93m
21
Animal Health
‐
Strong
Growth
in Q1 2011
Q1 2011 sales: €594m, +11.5%
at CER
sales up +15.1%(1)
Emerging Markets sales up +24.7%(1)
driving growth in
Avian segment
Expected launch of new combination product in Q2 2011 in the U.S.
eliminates fleas and ticks
within 24h on dogs
Equine
3.0%
Avian
11.3%
Swine
3.0%
Pets
66.1%Ruminant
10.9%
VPH(2)
5.7%
Q1 2011 Sales Breakdown
Europe
29.8%
Emerging
Markets
19.5%
U.S.
43.6%
RoW
7.1%
(1)
Growth at constant exchange rates (CER)(2)
VPH: Veterinary Public Health
22
Q1 2011 Sales: €602m, +9.6%
at CER excluding A/H1N1(1)
Strong Emerging Markets sales of €282m,
+37.1% at
CER excluding
A/H1N1, driven by:
Record seasonal flu campaign
Solid growth of
Good performance of and in the U.S.
FDA approval granted for for
infants and toddlers
(1)
Q1 2011 sales decreased
by ‐38.3% at
constant exchange rates when
including
€413m of A/H1N1 vaccine sales in Q1 2010
Q1 2010 Q1 2011
Polio/Pertussis/Hib Seasonal InfluenzaMeningitis/Pneumonia BoostersTravel & Endemics OtherPandemic Influenza
Vaccines ‐
Good Start to the Year
Vaccines Consolidated Sales (€m)
A/H1N1
€413m €602m
R&D Highlights
Dr. Elias Zerhouni
President, Global Research & Development
24
DISCOVERYVEGF Trap
VEGFR1
VEGFR2 Fc
IgG
DISCOVERYVEGF Trap
VEGFR1
VEGFR2 Fc
IgG
Bound
VEGF
VEGF Trap
ZALTRAP®
(aflibercept): a novel anti‐angiogenic
agent
ZALTRAP®
(aflibercept)
VEGF Trap(1,2): a fusion protein blocking VEGF,
a well‐validated anti‐angiogenic
approach
: positive Phase III results in
2L‐mCRC with OS primary endpoint met(3,4)
Regulatory filings expected in H2 2011
: accrual completed in Phase III
trial in 1L‐mHRPC(5)
Final results expected in mid 2012
AFFIRM: final analysis of Phase II trial
in 1L‐mCRC expected in H2 2011
(1)
Partnership
with
Regeneron(2)
VEGF: Vascular Endothelial Growth Factor (3)
mCRC: metastatic
Colorectal Cancer(4)
OS: Overall
Survival(5)
mHRPC: metastatic
Hormone Resistant
Prostate Cancer
25
Lixisenatide(1)
: A GLP‐1 Tailored for PCPs(2)
(1)
In‐licensed
from
Zealand
Pharma(2)
PCPs: Primary
Care Physisians(3)
PPG ‐
Prandial Plasma Glucose
Opportunity to expand GLP‐1 market
Benefits of lixisenatide:
Effective reduction of HbA1C and PPG(3)
Low incidence of hypoglycemia
Weight loss
Ease of use (once‐daily injection,
simple titration and device)
Expected compelling value proposition
Planned submissions in EU in H2 2011
and the U.S. in H2 2012
lixisenatide
GetGoa
l Mono
HbA1c
change from baseline (%)
‐0.2
‐0.4
‐0.6
0.4
0.2
0
‐0.8
‐1.0
GetGoa
l‐L Asia
lixisenatide
(2‐step titration)
lixisenatide
(1‐step titration)
GetGoa
l‐X
GetGoa
l‐S
26
Teriflunomide: A Potential First‐Line Oral DMT in RMS
(1) Results presented at 2010 ECTRIMS congress(2) Adjusted for Expanded Disability Status Scale score strata at baseline and takes duration of treatment into accountRMS ‐
Relapsing Multiple Sclerosis ARR ‐
Annualized Relapse Rate IFN ß
‐
Interferon‐beta RRR ‐
Relative risk reduction
HRR ‐
hazard ratio reduction
New disease modifying therapy
2‐year placebo‐controlled study
(TEMSO) completed(1)
2nd
placebo‐controlled study
(TOWER) fully recruited
Comparative study vs. IFN‐β
1a
(TENERE) fully recruited
Phase III adjunctive therapy
to IFN‐β
(TERACLES) ongoing
Planned submissions in the U.S.
in Q3 2011
and EU in Q1 2012
teriflunomide
0 0,1 0,2 0,3 0,4 0,5 0,6
T. 14 mg
T. 7 mg
Placebo
TEMSO: Reduction in Adjusted(2)
AAR
RRR: 31.2%p=0.0002
RRR: 31.5%p=0.0005
0 12 24 36 48 60 72 84 96 1080%
20%
10%
HRR: 23.7%p=0.0835
HRR: 29.8%p=0.0279
30%PlaceboT. 7 mgT. 14 mg
Week
TEMSO: Reduction in Disability Progression (%)
27
: A Promising New Therapy for MS
Potential for alemtuzumab
in MS:
Strong efficacy shown in Phase II(1)
65% of patients free from clinically
active disease at 5 years
Improvement in disability
Convenient dosing
Manageable safety and tolerability
profile
Planned U.S. and EU filings in early 2012
Fast track status granted by the FDA
(1)
Results from CAMMS223 Phase II trial
CARE‐MS I CARE‐MS II
Patients 581 840
Study
Duration
2 years 2 years
Patient
Population
Treatment
naïve
Treatment
experienced
Treatment
Arms
Alemtuzumab
vs. IFNβ
1aAlemtuzumab
vs. IFNβ
1a
Co‐primary
Outcomes
Relapse RateDisability
Progression
Relapse RateDisability
Progression
Data Timing Early Q3 2011 Q4 2011
Financial Performance
Jérôme Contamine
Executive
Vice President, Chief
Financial Officer
29
Resilient
Sales Performance in Q1 2011
(1)
Organic sales growth is on a constant structure and exchange rate basis
7,7797,385
+289‐38
+513+43
7,898
‐413
Q1 2010Reported
Merial Q1 2010Pro Forma
A/H1N1 OrganicGrowth
Change inStructure
FX Impact Q1 2011
‐1.5%
Chattem
: +36
USD: +61
YEN: +78
BRL: +26
AUD: +22
CNY: +14
Others: +88
Q1 2011 sales (€m)
+0.1%
(1)
30Solid
Business Operating Income
Excluding
Impact of A/H1N1 sales and Copaxone®
payment
in Q1 2010
€m Q1 2011 Q1 2010 % Change
(reported €)
% Change
(CER)
Net sales 7,779 7,898 ‐1.5% ‐5.2%
Other
revenues 413 395 +5.1% +1.5%
Cost of sales (2,362) (2,177) +8.5% +5.6%
Gross profit 5,830 6,116 ‐4.7% ‐8.2%
R&D (1,100) (1,146) ‐4.0% ‐6.0%
SG&A (1,933) (1,840) +5.1% +1.7%
Other current operating income & expenses 16 75 ‐ ‐
Share of Profit/Loss of associates 292 243 ‐ ‐
Minority interests (78) (78) ‐ ‐
Business operating income 3,027 3,370 ‐10.2% ‐15.5%
Business operating margin 38.9% 42.7% ‐ ‐
CER: constant exchange rates
31As Expected, Further
Generic
Competition Leads
to Slight
Increase
in CoS
in Q1 2011
Higher Cost of Sales (2.8 ppt)
in Q1 2011
vs. Q1 2010 due to:
Key genericized
products
A/H1N1 vaccines
Cost of raw heparin
Quarterly Cost of Sales ratio aligned with
expected level for FY 2011
Cost of Sales (%)
27.6%
30.4%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
32
Sustained
Control of R&D Expenses
in Q1 2011
R&D/Sales Ratio (%)
14.5%14.1%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
Q1 2011 R&D expenses of €1,100m,
down ‐6.0%(1) driven by:
Lower Internal R&D spend
R&D/Sales ratio reduced to 14.1%
(1)
Reduction at constant exchange rates (CER)
33Slight
Increase
in SG&A to Sales Ratio in Q1 2011 Excluding A/H1N1
SG&A/Sales Ratio (%)
Q1 2011 SG&A expenses of €1,933m,
up +1.7%(1)
SG&A/Sales ratio relatively stable
in Q1
2011 vs. Q1 2010 excluding A/H1N1 (24.4%)
reflecting:
SG&A decrease in EU
given ongoing new
organizational model
for Commercial
Operations
Strong SG&A decrease in the U.S.
partially
offset by investment in Allegra®
OTC,
increased promotional spend on Lantus®
as well as the impact of the excise fee
Flat G&A
expenses
Continued investment in Emerging Markets
(1)
Growth at constant exchange rates (CER)
23.3%24.8%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
34
€m Q1 2011 Q1 2010 % Change
(reported €)
% Change
(CER)
Business operating income 3,027 3,370 ‐10.2% ‐15.5%
Net financial
expenses (78) (45) ‐ ‐
Income
tax
expense (779) (898) ‐ ‐
Effective tax rate ‐28.5% ‐28.4% ‐ ‐
Business net income 2,170 2,427 ‐10.6% ‐16.1%
Net margin 27.9% 30.7% ‐ ‐
Business EPS € 1.66 € 1.86 ‐10.8% ‐16.1%
Resilient Business EPS in Q1 2011
CER: constant exchange rates
Excluding A/H1N1 vaccine sales, Q1 2011 Business EPS growth was flat
on a
reported basis or down 6.0%
at CER
35
Underlying
Net Profit Growth
of +10.5% in Q1 2011
2 170
2,427
Q1 2010 A/H1N1 Key GenericizedProducts
Copaxone andOthers
Underlying NetProfit Gain
FX Impact Q1 2011
Q1 2011 Business Net Income (€m)
-10.9%
-13.0%
+10.5%
+5.5%
-2.7%
(1)
Key genericized
products include Lovenox®, Taxotere®, Ambien CR®, Eloxatine®, Allegra®, Xyzal®, Xatral®
and Nasacort®
in the U.S.
as well as Taxotere®, Plavix®
and Aprovel®
in Western Europe
®(1)
36Stable FCF despite
Lack
of A/H1N1 in Q1 2011 and Net Debt
Free Status
at
the End of Q1 2011
-1 750
-1 250
-750
-250
250
750
Net Debt Dec 31, 2010
Net Cash fromOperatingActivities CapEx
Acquisitions &Licensing
Restructuring Costs & Others
Net Debt Mar 31, 2011
€m
+16
‐340
+2,346
‐382
Change in
Net Debt
+1,593
FCF +2,006(1)
‐31
(1)
FCF: Free Cash Flow before restructuring costs(2)
Includes €336m for BMP Sunstone acquisition(3)
Includes €162m of restructuring costs
‐1,577
(3)(2)
37
Investing in Sustainable Growth
Strong double‐digit
sales growth of our growth platforms(1)
On‐track to deliver cost savings
of €2.0bn by end of 2011(2)
Limited erosion of Business EPS excluding impact of A/H1N1 and Copaxone®
Strong free cash flow
generation lead to net
debt free status at the end of March
before Genzyme
acquisition
(1)
Emerging Markets, Diabetes Brands, Vaccines (excluding A/H1N1 sales), Consumer Health Care, New Products and Animal Health(2)
Before inflation and tax on a constant structure basis vs. 2008(3)
In Q1 2009, Merial
Joint Venture sales of €521m were not consolidated by sanofi‐aventis
With a 50% share of Merial
Joint Venture sales, sanofi‐aventis pro forma growth platforms sales would be €3,262m(4)
Q1 2010 and Q1 2011 sales include 100% of Merial
sales, respectively €513m and €594m
Proportion of Sales from
Growth
Platforms(1)
Q1 2009
42.2%
Q1 2010
51.4%
Q1 2011
59.2%
(3) (4) (4)
Appendices
R&D
39
Late Stage Pipeline –
Pharma & Vaccines
N New Molecular Entity
G GenzymeCentral Nervous SystemCardiovascularGenetic diseases
OncologyMetabolic Disorders
Thrombosis VaccinesInternal Medecine
Fluzone®
ID
Seasonal influenza vaccine
Intradermal micro‐injection, U.S.
Plavix®
clopidogrel
bisulfate
Atrial
fibrillation, U.S.; Pediatric, EU;
Stent, Japan
DTP‐HepB‐Polio‐Hib
Pediatric hexavalent
vaccine
Dengue
Mild‐to‐severe
dengue fever vaccine
Fluzone®
QIV
Quadrivalent inactivated influenza
vaccine
Hexaxim™
DTP‐HepB‐Polio‐Hib vaccine
Quadracel®
Diphtheria, tetanus, pertussis
& polio vaccine; 4‐6 y of age
Plavix®
clopidogrel bisulfate
PAD, Japan
semuloparin
(AVE5026)
Indirect Xa/IIa
inhibitor
VTE prevention in cancer patients
otamixaban
Direct Xa
inhibitor
ACS
Allegra®
fexofenadine
Dry syrup, Japan
teriflunomide
Multiple
sclerosis
(monotherapy, adjunct therapy & CIS)
Multaq®
dronedarone
Permanent atrial
fibrillation
lixisenatide
(AVE0010)
GLP‐1 agonist
Type 2 diabetes
Lantus®
insulin glargine
ORIGIN*; Pediatric, EU
ombrabulin
(AVE8062)
Vascular disrupting agent
Sarcoma
Zaltrap®
(aflibercept)
(VEGF‐Trap)
2nd
line mCRC;
1st
line mHRPC
iniparib
(BSI‐201)
mTNBC; squamous
LC
N
N N
N
N
Registrationeliglustat
tartrateGlucosylceramide
synthetase
inhibitorGaucher
disease
LemtradaTM
(alemtuzumab)Anti‐CD52 mAbMultiple sclerosis
prochymalMesenchymal
stem cellGraft‐versus‐host disease
Clolar®
/ Evoltra®Purine
analogueAdult acute myeloid leukemia (AML)
mipomersenApolipoprotein
B‐100 antisensehoFH; severe heFH
N
N
Phase III
G
G
G
G
Recombinant human
TSH
Modified (rhTSH‐M)Goiter
G
G
G N
N
atalurenTranscription modulator
Cystic fibrosis
NG
N
MACI®Cell‐based treatment
Articular
cartilage defects
Biosurgery
* ORIGIN: Evaluation of Lantus®
in reducing cardiovascular morbidity & mortality
40
Early Stage Pipeline –
Pharma & Vaccines
Multaq®
Antiarrhythmic
agent
Atrial
fibrillation Japan
celivarone
Antiarrhythmic
agent
Ventricular arrhythmia
SAR110894
H3 antagonist
Alzheimer's disease
SAR164877
Anti‐NGF mAb
Pain
(on clinical hold)
FOV2304
Bradykinin
B1 antagonist
Diabetic macular edema
FOV2302
Plasma kallikrein
inhibitor
Retinal vein occlusion induced
macular edema
FOV1101
FDC prednisolone/ cyclosporine
Allergic conjunctivitis
Meninge
ACYW conj.
2nd
generation meningococcal
conjugate Infant vaccine
Rabies VRVg
Purified vero
rabies vaccine
Rabies
mAb
post exposure prophylaxis
SAR153191
Anti‐IL‐6R mAb
RA ; Ankylosing
spondylitis
ferroquine
Antimalarial
Malaria
SAR231893
Anti‐IL4 mAb
Asthma;
Atopic dermatitis
SAR236553 (RENG727)
Anti‐PCSK‐9 mAb
Hypercholesterolemia
SAR245409
(XL765)
Oral dual inhibitor of PI3K & mTOR
Cancer
SAR245408 (XL147)
Oral PI3K inhibitor
Endometrial cancer
SAR256212
(MM‐121)
anti‐ErbB3 mAb
Breast cancer
Zaltrap®
(aflibercept)
VEGF‐Trap
1st line colorectal cancer
iniparib
(BSI‐201)
Ovarian cancer, non‐squamous
NSCLC,
neoadjuvant
breast cancer
N N
N
N
N
N
N
N
N
N
N
N
N
Acid sphingomyelinaseNiemann‐Pick type B
N
Gene therapy
(AAV‐AADC)Parkinson's disease
fresolimumab
(GC1008)TGFβ
antagonistFibrosis
N
G
G
G
Phase II
Central Nervous SystemCardiovascularGenetic diseases
OncologyMetabolic Disorders
Ophthalmology Vaccines
Internal Medecine
N
ACAM‐Cdiff
Clostridium difficile
Toxoid
vaccine
N New Molecular Entity
G Genzyme
41
Early Stage Pipeline –
Pharma & Vaccines
Tuberculosis
Recombinant subunit vaccine
Pseudomonas aeruginosa
Antibody fragment product
Prevention of
ventilator‐associated pneumonia
Streptococcus pneumonia
Meningitis & pneumonia vaccine
Rotavirus
Live Attenuated Tetravalent
Rotavirus oral vaccine
SAR411298
FAAH inhibitor
Cancer pain
SAR152954
H3 antagonist
Sleep disorders
SAR114137
Cathepsin
S/K inhibitor
OA pain &
Peripheral neuropathic pain1
RetinoStat®
Gene therapy
Wet
age‐related
macular
degeneration
(AMD)
SAR292833 (GRC15300)
TRPV3 antagonist
Neuropathic pain, osteoarthritic
pain
SAR650984 Anti‐CD38 naked mAb
Hematological malignancies
SAR 156597
IL4/IL13 Bi‐specific
mAb
Idiopathic
Pulmonary
Fibrosis
SAR104772
TAFIa
inhibitor
Acute ischemic stroke
SAR97276
Antimalarial
Malaria
SAR100842
LPA‐1/LPA‐3
Internal medicine
SAR113945
IKK‐β
inhibitor
Osteoarthritis
SAR302532 (RENG846)
Internal medicine
SAR101099
Urotensin
II receptor antagonist
Diabetic nephropathy
lixisenatide
+ Lantus®
GLP‐1 agonist + insulin glargine
Type 2 diabetes
SAR 307746 (REGN 910)
Anti‐Ang2 mAb
Cancer
SAR566658
Maytansin‐loaded anti‐DS6
Solid tumors
SAR302503 (TG101348)
JAK‐2 inhibitor
Myelofibrosis, refractory polycythemia
SAR103168
Multikinase
inhibitor
AML
SAR256212
(MM‐121)
anti‐ErbB3 mAb
Solid tumors, ovarian cancer
SAR3419
Maytansin‐loaded anti‐CD19 mAb
non‐Hodgkin’s lymphoma
SAR153192
Anti‐DLL4 mAb
Cancer
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
N
Thrombosis
Genz644282Topoisomerase‐1 inhibitor
Solid tumors
N
Mozobil®
(plerixafor)
CXCR4 Antagonist
Tumor Sensitization
tasidotin
GC1008 topoisomerase
inhibitor
tubulin
binding agent
Melanoma
N
Oral clofaribinePurine
analogueMyelodysplastic
syndromes
Gene therapy
(sFLT‐01)Age related Macular Degeneration
(AMD)
N
G
G
G
G
GSAR279356 (F598)
Anti‐PNAG mAb
Serious infections
Phase I
SAR 3077646 (REGN 910)Anti‐Ang2 mAb
Cancer
N
N
N
Central Nervous SystemGenetic diseases
OncologyMetabolic Disorders
Ophthalmology VaccinesInternal Medecine
N New Molecular Entity
G Genzyme
42R&D Pipeline Summary Table New Molecular Entities and Vaccines
40211Metabolic Disorders
30201Thrombosis
10010Cardiovascular
150339Oncology
40031Ophthalmology
70223Central Nervous System
64
14
11
1
1
0
162027TOTAL
544Vaccines
047Internal Medicine
TOTAL
Registration
Phase III
Phase II
Phase I
47 17
New Molecular Entities
& Vaccines
50
50221Genetic Diseases
43
Expected
regulatory
submission
of mipomersen
in U.S. for hoFH
Phase III top‐line results
of LemtradaTM
in multiple sclerosis
(CARE‐MS 2)
Anticipated
R&D Newsflow
H2 2011Phase II results
of Zaltrap®
in 1st line mCRC
(AFFIRM)
Q1 2012Expected
regulatory
submission
of teriflunomide
in EU
Q4 2011Phase III top‐line results
of teriflunomide
in multiple sclerosis
(TENERE)
Q4 2011Expected
regulatory
submission
of lixisenatide
in EU
Q2 2011Phase II interim analysis
of iniparib
in Ovarian
Cancer
Q2 2011Phase III results
of semuloparin
in VTE prevention
in cancer patients
(SAVE ONCO)
Q2 & Q3 2011Lixisenatide in Type 2 diabetes
‐
Further
Phase III data presentation
Mid
2011Phase III interim
analysis
of Zaltrap®
in 1st
line mHRPC
(VENICE)
Q3 2011Expected
regulatory
submission
of teriflunomide
in U.S.
Key Milestones
‐
Pharmaceuticals Timing
H2 2011
Q4 2011
Q1 2012Expected
regulatory
submission
of LemtradaTM
in MS
H2 2011Expected regulatory submission of Zaltrap®
in 2nd
line
mCRC
in U.S. and EU
Early
Q3 2011Expected
regulatory
submission
of mipomersen
in EU for hoFH
and severe
heFH
Early
Q3 2011Phase III top‐line results
of LemtradaTM
in multiple sclerosis
(CARE‐MS 1)
44
Anticipated R&D Newsflow
Key Milestones ‐
Vaccines TimingExpected
regulatory decision on Fluzone®
ID in US Q2 2011
Start of Phase III efficacy trial for Dengue Vaccine in Asia Pacific and Latin America Q2 2011
Expected regulatory submission of HexaximTM
for Emerging Markets Q3 2011
Start of Phase III for IMOJEVTM
in India Q3 2011
Appendices
Finance
46
Business Net Income Statement
* Net of tax** Determined on the basis of Business income before tax, associates, and non‐controlling interests*** Based on an average number of shares outstanding of 1,305.2 million in the first quarter of 2011 and 1,307.3 million in the first quarter of 2010
(1) The results of operations of the Merial business previously presented as “held‐for‐exchange”
were reclassified and included in income from continuing
operations in accordance with
IFRS5 §36, following the announcement to maintain Merial and Intervet/Schering‐Plough as two separate organizations.
First-quarter 2011 Pharmaceuticals Vaccines Animal health Other Group Total
Millions of euros Q1 2011 Q1 2010 % change Q1 2011 Q1 2010 % change Q1 2011 Q1 2010(1) % change Q1 2011 Q1 2010 Q1 2011 Q1 2010 % change
Net sales 6,583 6,441 +2.2% 602 944 (36.2%) 594 513 +15.8% 7,779 7,898 (1.5%)
Other revenues 404 385 +4.9% 5 5 4 5 (20.0%) 413 395 +4.6%
Cost of sales (1,927) (1,725) +11.7% (268) (300) (10.7%) (167) (152) +9.9% (2,362) (2,177) +8.5%
As % of net sales (29.3%) (26.8%) (44.5%) (31.8%) (28.1%) (29.6%) (30.4%) (27.6%)
Gross profit 5,060 5,101 (0.8%) 339 649 (47.8%) 431 366 +17.8% 5,830 6,116 (4.7%)
As % of net sales 76.9% 79.2% 56.3% 68.8% 72.6% 71.3% 74.9% 77.4% Research and development expenses (940) (993) (5.3%) (125) (117) +6.8% (35) (36) (2.8%) (1,100) (1,146) (4.0%)
As % of net sales
(14.3%)
(15.4%)
(20.8%)
(12.4%)
(5.9%) (7.0%)
(14.1%)
(14.5%)
Selling and general expenses (1,645) (1,565) +5.1% (127) (136) (6.6%) (161) (139) 15.8% (1,933) (1,840) +5.1%
As % of net sales
(25.0%)
(24.3%)
(21.1%)
(14.4%)
(27.1%) (27.1%)
(24.8%)
(23.3%)
Other current operating income/expenses 62 101 1 (2) (17) 5 (30) (29) 16 75
Share of profit/loss of associates* 283 236 (4) (1) 13 8 292 243
Net income attributable to non-controlling interests (78) (78) (78) (78)
Business operating income 2,742 2,802 (2.1%) 84 393 (78.6%) 218 196 11.2% (17) (21) 3,027 3,370 (10.2%)
As % of net sales 41.7% 43.5% 14.0% 41.6% 36.7% 38.2% 38.9% 42.7% Financial income and expenses
(78) (45)
Income tax expense (779) (898)
Tax rate** 28.5% 28.4%
Business net income 2,170 2,427 (10.6%)
As % of net sales 27.9% 30.7%
Business earnings per share*** (in euros) 1.66 1.86 (10.8%)
47Reconciliation of Business Net Income to Net Income attributable to Equity Holders of sanofi‐aventis
(1) The results of operations of the Merial business previously presented as “held‐for‐exchange”
were reclassified and included in income from continuingoperations in accordance with IFRS5 §36, following the announcement to maintain Merial and Intervet/Schering‐Plough as two separate organizations.(2) Of which amortization expense generated by the remeasurement of intangible assets as part of business combinations: €
686 million in the first quarter
of 2011
and €
801 million in the first quarter of 2010. (3) In 2011:
“Catch up”
in respect of 2009 and 2010 depreciation and amortization expense on PP&E* and intangible assets of Merial, previously classified
as “Assets
held for sale or exchange”
(IFRS5 §27).(4)
Based on an average number of shares outstanding of 1,305.2 million in the first quarter of 2011 and 1,307.3 in the first quarter of 2010.* Property, Plant and Equipment..
Millions of euros Q1 2011 Q1 2010(1) % change
Business net income 2,170 2,427 (10.6%)
Amortization of intangible assets(2) (736) (848) Impairment of intangible assets (32)
Fair value remeasurement of contingent consideration liabilities (46)
Expenses arising from the impact of acquisitions on inventories (2) (62)
Restructuring costs (122) (167) Other gains and losses, and litigation(3) (517) Discontinuation of depreciation of PP&E* (IFRS5) 18
Tax effect of 510 349 Amortization of intangible assets 263 282 Impairment of intangible assets 10 Expenses arising on the workdown of acquired inventories 17
Restructuring costs 42 56 Other gains and losses, and litigation 195 Discontinuation of depreciation of PP&E * (IFRS5) (6)
Other tax items 4 Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures
(7) (7)
Net income attributable to equity holders of sanofi-aventis 1,218 1,714 (28.9%)
Consolidated earnings per share(4) (in euros) 0.93 1.31 (29.0%)
48
Consolidated Income Statements
Millions of euros Q1 2011 Q1 2010(1)
Net sales 7,779 7,898
Other revenues 413 395
Cost of sales (2,364) (2,227)
Gross profit 5,828 6,066
Research and development expenses (1,100) (1,143)
Selling and general expenses (1,933) (1,837)
Other operating income 118 152
Other operating expenses (102) (77)
Amortization of intangible assets (736) (848)
Impairment of intangible assets (32)
Fair value remeasurement of contingent consideration liabilities
(46)
Restructuring costs (122) (167)
Other gains and losses, and litigation (517)
Operating income 1,358 2,146
(1)
The results of operations of the Merial business previously presented as “held‐for‐exchange”
were reclassified and included in income from continuing
operations in accordance with IFRS5 §36, following the announcement to maintain Merial and Intervet‐Schering Plough as two separate organizations.
49
Consolidated Income Statements
(1) The results of operations of the Merial business previously presented as “held‐for‐exchange”
were reclassified and included in income from continuing operations in accordance with IFRS5 §36, following the announcement to maintain Merial and Intervet/Schering‐Plough as two separateorganizations.
(2)
Based on an average number of shares outstanding of 1,305.2 million in the first quarter of 2011 and 1,307.3 million in the first quarter of 2010.
Millions of euros Q1 2011 Q1 2010(1)
Operating income 1,358 2,146
Financial expenses (101) (103)
Financial income 23 58
Income before tax and associates and joint ventures
1,280 2,101
Income tax expenses (269) (545)
Share of profit/loss of associates and joint ventures
285 236
Net income 1,296 1,792
Net income attributable to non‐controlling interests
78 78
Net income attributable to equity holders of sanofi‐aventis
1,218 1,714
Average number of shares outstanding (million) 1,305.2 1,307.3
Earnings per share(2) (in euros) 0.93 1.31