Sanofi (SAN) Earnings Call Transcript & Summary

Good afternoon, everybody. Welcome to our next company session at the Global Healthcare Conference. I'm delighted to welcome Sanofi to the GHC this year. Sanofi is represented by Dietmar Berger, who is Chief Medical Officer and Global Head of Product Development at Sanofi. Dietmar, thank you so much for joining us.

Thank you, Geoff. Thanks for having me.

So a lot going on at Sanofi. We just came out of the Capital Markets Day. Perhaps you could just give us a sense of sort of what the largest development programs now going on at Sanofi are? And just help us understand where you're allocating your resources, your development capital by different therapeutic area and program?

Yes. No, thanks for that question. What you've hopefully seen at Capital Markets Day and at other venues is that we've really transformed the company. We've made a major shift from primary care to specialty care. And in specialty care, the key focus areas are really around immunology, oncology, neurology, rare disease. And then obviously, we have the other global business units, where you focus on vaccines, where you focus on consumer health and general medicines, obviously. From a research and development perspective, obviously, for me, a lot of the focus is on specialty care. In that specialty care area, we've definitely made a point at Capital Markets Day that immunology is like a thread that's really across the different therapeutic areas. And the major investments are going into immunology and oncology at this point with additional investment, obviously, also into the other therapeutic areas like neuro, like rare.

Okay. And could you -- I know I've talked to John Read recently about this, but could you give us your view on, the first pass, it looks as though you're just throwing a lot of targets against the wall in some of these immunology indications, such as atopic dermatitis or asthma and COPD. You've got early programs that were going against these same diseases and then you've got products in the market like Dupixent. So can you help us understand what the benefit of having all of these different -- development strategies against these diseases might be?

How we look at it, how I look at it is we have strategies at different levels. We have a strategy, obviously, for each molecule. We have a strategy by therapeutic area, so for example, for immunology. And we have an overarching R&D strategy and strategy for the company. And just stepping back for a second, I would argue that we have clearly identified what our priority molecules are. Dupixent is one of them. We have other key priority molecules like tolebrutinib, our BTK inhibitor in neuro; like Amcenestrant, our third in oncology and in breast cancer; like our hemophilia portfolio, like nirsevimab in RSV. And those are, at the same time, also for some of those areas, those are really anchor molecules that we're building around and that we're really driving. We've also spoken about additional priorities like the BTK portfolio also with rilzabrutinib, that goes into the question that you've just mentioned, like how do you strategize then, for example, in immunology, or like THOR-707 in oncology, which is our non-alpha-IL-2. In immunology, we really have to think about not only Dupixent, Dupixent is a key focus area for us, and we should actually speak more about the opportunity around Dupixent. But then we need to think broadly as we're aspiring to be a leader in immunology. And I think we have an industry-leading portfolio in immunology. We need to think about the different mechanisms in immunology. There's type 2, there's non-type 2, there's IL-17, there's B-cell-driven mechanisms, et cetera. And those are driving a spectrum of diseases that, obviously, we want to attack, where we want to be active. And we need to think about that both from a broader penetration perspective, how can we target those diseases in the optimum way. We also need to think about this in a -- from a perspective of sequencing. What comes -- for example, in some patients, what comes after Dupixent? Or how can we look at different segments of patients, type 2 versus non-type 2? I did mention that already. So we really want to offer different solutions for different diseases and different patient segments.

Okay. So I'd like to play a little game with you. So I'm going to go through all of those immunologic pathways that you just mentioned. I really appreciate if you could say what you view as the biggest disease indications in each of them? And then what your preferred development program is against each of them? So I'll give you an easy one to begin with. We'll start off with Th2.

Well, that's obviously the Dupixent piece. And Dupixent, diving a little deeper into that, is really around how can you build the molecule to the mega-brand that it absolutely is? How can you unlock that opportunity further? And excuse me, we're obviously focusing on dermatologic indications, on respiratory indications, on other indications beyond that. And if we just look at respiratory, for example, you've got asthma, which we're starting with in the established markets there, then you've got the regional component, how can you grow beyond that? How can you, for example, grow in different regions like Japan and eventually in China and other areas? And then you've got the broader potential beyond that, which is really an opportunity where you look at adjacent diseases, right? You look at 6 to 11 years of age, you look at chronic sinusitis with and without nasal polyps. We have, for example, COPD as a potential respiratory indication. So those are the types of focus areas, and we have a whole wave of additional indications, but with a focus on respiratory, dermatology and then some other, for example, the eosinophilic esophagitis, more in the gastrointestinal space.

Okay. I just want to follow up on that before we move to the next pathway. But -- so your partner, Regeneron, recently spent quite a bit of time articulating a strategy of going after a variety of overtly allergic conditions. So pollen allergies, animal allergies, food allergies. Starting with Dupixent and then potentially adding other things onto that. But I haven't heard Sanofi talk a lot about that opportunity. And indeed, you didn't list it in that portfolio right there. Is that something -- is that a difference between the partners? Or is that something that you really haven't explored yet? I'm just trying to reconcile the different emphasis of the 2 companies.

Well, I don't think it's a difference between the partners because we're really working jointly on the molecule, and we're closely collaborating also when it comes to selection of the indications. I'm really more speaking about as an example, the respiratory space. And in some of those areas, like we've announced, we're looking at allergic fungal rhinosinusitis, those overlap areas where you're coming from a type 2 paradigm, but you're also exploring more of an allergic paradigm. And we know areas like, for example, this condition of the atopic march where you have this increasing sensitization and allergic reactions that we need to look into. And I think there is, like our colleagues at Regeneron think, there's real opportunity in there, but we obviously need to demonstrate some of those data in order to realize those opportunities.

Okay. So I'll jump to another one of those targets. So let's say, IL-17. What do you see is the cardinal diseases there? And then what is Sanofi's development strategy there?

We've not communicated broadly around the development strategies there. I think the -- we should actually go a little more by the molecules that we have in the portfolio, like where we have some of the strategies defined, but eventually, we're in a broad exploratory space at this point in time. We're also taking this more from a precision immunology perspective, where we're trying to further understand the pathways and then come up with the -- with really the more distinctive development pathways for those.

Okay. So should we be thinking about that being principally psoriasis? Or what do you think, in your mind, is the main indication opportunities in IL-17s would open up?

Yes, psoriasis is one of the key areas that you would think about that. That's definitely the right way of thinking about it, I agree.

Okay. And then what about Th1, of course, which has clearly overlapped with IL-17, but some massive markets there. And to a certain extent, in talking about being an immunology company, you don't really have development strategies in that Th1 axis. What do you have in mind, at least?

But we are exploring that, again, we have various different molecules that we're thinking about. And I cannot go into too much detail there yet because we really have not communicated that. But we think about it as different nodes that we are exploring in the immunology paradigm, whether that's like the BTK pathways that are broader, whether that's the IRAK4 we're looking into, but it's really a little early to talk about very specific development programs around us because we are still in an exploratory stage there. But we have programs that will address also the Th1 space.

Okay. And then lastly, on the B-cell-driven diseases. Maybe you could talk a little bit about what you see as the commercial opportunities in that type of diseases? And then what's your development strategy there?

I mean on the B-cell side, we have communicated, well, we're definitely there in the -- BTK inhibitory space is one of those areas we're looking into. We have acquired Principia because we feel their portfolio is differentiated. We can obviously talk more about tolebrutinib as the brain-penetrant BTK inhibitor, covalent-binding brain-penetrant that we feel offers a key opportunity in multiple sclerosis and potentially adjacent neurological diseases, also, again, because of the brain penetrance. And then you've got the tailored covalency platform where rilzabrutinib is the key molecule we're talking about. And there, we have a molecule that already is in different trials. We have a Phase III trial for pemphigus vulgaris. We have a Phase III trial that is just starting for ITP. We have additional indications that had been communicated, for example, IgG4-related disease, but we will also be -- because due to the tailored covalency and the impact on B cells, but also macrophages, plasma cells and other cell types, we are also exploring other indications like, for example, atopic dermatitis, like asthma and other adjacent indications that we feel could potentially offer an opportunity for that drug as well. As a third molecule, we have a topical BTK inhibitor also in the Principia portfolio, which, of course, would primarily be for dermatological diseases.

Okay. So just on rilzabrutinib, could you talk a little bit biologically about the basis for thinking that the B cells might be significant actors in atopic dermatitis and asthma? I mean what gives you the confidence to go and explore those indications with what typically is thought of as more of an autoantibody kind of type of medicine?

I think the key here is that we believe rilzabrutinib is not entirely a B-cell-targeted molecule. It's actually a BTK targeting molecule. And BTK plays a broader role, right? You have BTK in plasma cells. So there, you've got your antibody connection. ITP is most likely also an autoantibody-driven disease. Pemphigous, antibodies play a role. And that's where we think it's actually broader than the pure B-cell targeting, and the opportunity is broader than pure B-cell targeting. And eventually, we're going to have to demonstrate that in clinical trials, but that's where we're doing those early signal-generating studies makes a lot of sense.

Okay. And I'm a little surprised that you haven't taken these 2 medications, tolebrutinib and rilzabrutinib to help create a pincer movement on the really overtly antibody-mediated diseases, such as NMO, MG, and then that whole host of things that are going -- that the FcRns are going after. Is that something that's on the horizon?

That's certainly something that we can envision, right? And we -- as I said, we have not communicated all of our plans here. We've done deep dives into the BTK inhibition space and what are the right diseases that we want to look into. And there's various factors that come in here when you think about that portfolio. There is this factor of brain penetrants versus nonbrain-penetrants, of covalent-binding versus noncovalent or tailored covalency in the Principia portfolio. That's also the question of what are the, I want to say, high return on investment indications, where's the largest unmet medical need. So all of those will need to figure into those types of decisions. And as you know, for example, in the NMO space, there's different NMO spectrum type of disorders that you can think of, and we can also think about moving forward. We need to think about what's the right level of differentiation for those different subtypes.

Okay. But once upon a time, we used to think about these BTK inhibitors as either Rituxan in a pill or maybe FcRn in a pill. I'm not quite sure which. Is that still the right way to think about them?