Sanofi (SAN) Earnings Call Transcript & Summary

Well, good morning, and welcome to the Sanofi session of Cowen's 42nd Annual Healthcare Conference. We're very pleased to have Sanofi back again with us this year. Representing the company, Dietmar Berger, who is Chief Medical Officer. For those clients who have been participating in the conference all week, you've already heard a lot of positive mentions on Sanofi, on the derm panel, the commentary on Dupixent probably could not have been more positive. On the breast cancer panel, the KOLs predicted the amcenestrant Phase II trial, AMEERA-3 will achieve its endpoint, and it will be a fully competitive molecule. And on the nonmalignant heme panel, the KOL spoke about BIVV001 as having a very desirable and competitive profile. Also, I should note that Sanofi will be having an immunology event on March 29 that will be live in Boston. So that will be another opportunity to learn about Sanofi's broad and deep pipeline. So Dietmar, thank you so much for being with us at our event.

And I'd like just to jump right into the questions, and we'll start out with Dupixent in atopic dermatitis. So of course, there's a multitude of novel targets that are being explored by Sanofi and competitors. What is there to improve upon within Dupixent? It looks like kind of an ideal molecule, but what is there to improve upon?

Yes, Steve, first of all, thanks for having me, and thanks for the positive comments. That's, of course, great to hear here. We think we've made good progress, and it's great to hear that people also see that kind of progress. No, but to your specific questions about Dupixent and atopic dermatitis, the atopic dermatitis market is still early, right? And there's definitely the possibility for growth for advanced therapies. We are looking to address atopic dermatitis really across the, what we call the patient journey, right? It's -- Dupixent plays in that space where you are basically needing a biologic. But when you look at it from a patient perspective, they're often starting with a topical, they're then going to like an oral, safe oral, we could say. And then if that doesn't work, they go to a biologic. And as we're building our portfolio, and I really believe we have an industry-leading immunology portfolio, and we're also set to be the leading company in immunology. We're really looking at this as how can we address the patient the disease at the different stages. So for atopic dermatitis, we have molecules like amlitelimab that would also play in that in that biologic space, but has a highly different mechanism of action. That's our OX40-Ligand antibody, and we've also just communicated that we added it to the list of our priority assets, which allocates additional funding and really allows accelerated development of the program. That's a unique molecule potential first-in-class and best-in-class. And the Phase II data that we've already seen indicates really clinically meaningful safety and efficacy advantage. We also think focusing on the OX40-ligand rather than on OX40 will have a greater impact on T-cell stimulation, while still maintaining regulatory T cells and avoiding any autoimmune side effect, right? It also shows a longer half-life amlitelimab, which then could allow, for example, for extended dosing in patients. When we think about the safe oral space, we have rilzabrutinib, which is one of our BTK inhibitors, and it's in Phase II development as a potential oral treatment option. And then we're even working on the topical space where, again, we have a topical BTK inhibitor option for patients with either the milder atopic dermatitis or then even patients that still have the need for topical treatments while they are on some type of systemic treatment. So really thinking about this from a perspective of how can we address the needs that patients have across the disease.

I see. I see. So let's stick with Dupixent because there's so much going on with it. We're awaiting the data in CHF -- excuse me, COPD. What is your level of confidence in that readout? And/or how would you suggest investors approach the COPD readout?

Yes. The COPD is chronic obstructive pulmonary disease is obviously a very challenging indication as we all know, and there are currently no approved biologics. We have 2 biologics in the space that we're evaluating and obviously Dupixent, but then also itepekimab, our IL-33 antibody. The reason to believe why we have confidence in Dupixent in COPD is based on several data points. One is when we looked at patients in our asthma studies, there are some subgroups of patients that have features of features of COPD in the QUEST study. And we did see a reduction in exacerbations in those patients. We have also conducted an analysis of the subset of patients who had clinical features of COPD in our study of Dupi in nasal polyposis, the chronic renal sinusitis with nasal polyposis the sinus study. There was a group of 49 patients that had clinical features of COPD. And again, the patients on placebo saw a clear deterioration in lung function before bronchodilators, whereas those on Dupi demonstrated some significant improvement. And then the third point is, we've taken this in a -- I think, in a more staggered fashion, where we started our first Phase III study the [ BORA ] study, and then we did an interim analysis of that first study and that interim analysis had to be passed in order to kick of the second study, the NOTA study. And we passed that interim analysis, and that again gives us additional confidence that Dupi might be effective in patients with COPD.

Okay. So asthma is an existing indication and presumably doing quite well. But you have a new competitor on the horizon as tezepelumab. So from the medical standpoint, how do you see the molecule stacking up?

Yes. I think it's all coming back to, do you address Type 2 inflammation? Do you address the underlying biology in asthma? There are several factors that make health care providers and patients choose a specific therapy, right? One is what do you see in exacerbation reductions? How do you lessen the emergency room visits. Then do you see a rapid and sustained lung function improvement and also an improvement in quality of life in these patients? Can they walk? Can they exercise. Then do you see a reduced dependence on oral corticosteroids because corticosteroids can lead to other health issues, as we know, especially when they use for a longer period of time. And then what is really the balance of efficacy and safety in the long term? What do you see in long-term safety? And when we look at those different parameters, we just think that Dupixent has the stronger profile. And Type 2 asthma, the one that's really defined by the higher level of eosinophils of FeNo, is responsible for more than 80% of the uncontrolled severe asthma and that's where we see the really strong exacerbation rates, that's where we see the lung function improvement, that's where we see the better expiratory volume, the FEV1. And that's where we also see the long-term efficacy and safety. And we've seen that also during the pandemic that, that efficacy and safety profile is really convincing to people. Tezepelumab really is insufficient in blocking of the Type 2 inflammation, and that has also been demonstrated as it's been failing in 2 studies in atopic dermatitis. So we believe overall that with Dupi, we have the much stronger profile.

Okay. One more question on Dupixent, and that is in CSU. So the Phase III readouts have been a bit mixed. What likely explains the discrepancy and efficacy between the biologic naive and the biologic experienced patients?

Yes, we had for everybody, we had these 2 studies in CSU. One was in the earlier population, which is really patients inadequately controlled and antihistamines. And study B, the second study was in a difficult-to-treat subset of the CSU population, refractory to local therapies like omalizumab, like high-dose and antihistamines and then potentially also to immunosuppressants. And we believe that these may be different populations just from a perspective of biology. CSU is chronic spontaneous urticaria, is a complex disease. It's heterogeneous. It has a complex pathophysiology. And we've seen these strong efficacy data in the study in the earlier line therapy post antihistamines, and then the subset that had seen all these different therapies, that's where we were disappointed by the data. We are confident that we can deliver a potentially best-in-class disease options for CSU patients via the Study A. We're also in discussions obviously with regulatory authorities about that. And like with other type 2 inflammatory diseases, the positive Phase III results in that earlier study reinforced that IL-4 and IL-13 play a key role in that disease as well.

I see. Okay. So let's move to another molecule, and I realize this is a little bit outside of your area of responsibility at Sanofi, but nirsevimab is a molecule, which is on lots of investors' radar screens. So I just would like to ask one question about it. We're, of course, going to get a lot of RSV vaccine data this year. When we see the RSV vaccine data, what would you urge us to look at so we could be enlightened as to why antibodies are a better way to go?

Yes. No, the nirsevimab and that's the short answer. The short answer is the only option that can provide protection for all infants. And we believe that's important, including preterm infants, including infants with comorbidities. And when you look at the efficacy and safety data that we've published in the New England Journal, you send efficacy against the primary endpoint, which is really reducing the incidence of medically attended lower respiratory infections, and you do get 77% efficacy against RSV associated hospitalizations. And you do get that with a really good safety profile. The -- when you compare that to other approaches, including, for example, maternal vaccinations, you see the limitations of that. For example, the availability during his season will be important. Do you get protection throughout the whole RSV season? When you vaccinate the mother, it really depends on the time point of that vaccination, whether you get the protection of the infant during the RSV season. And you need that protection basically for a year to get every infant protected, you look at, for example, vaccination of the mother and then you have a preterm infant, the protection may just not be there yet, right? The efficacy is much more spotty. So if our vision is that we want to protect all infants from RSV and it's really the key RSV, as you know, is the key reason for death in infants, if we want to extend that protection to all infants then nirsevimab is the treatment of choice.

I see. That makes sense. Okay. So I'll turn it to Michael to continue on with some additional molecules.

Thanks, Steve. Maybe we can start with tolebrutinib, which -- for which you just presented some really interesting long-term Phase II data in RMS. If I understood the charts right, it looked as though GD positive T1 lesions in the high-dose group, so the dose script that started on the 60 mgs and stayed on 60 mgs, appeared to be trending upward over time. Was that just noise? Or is that some type of expected phenomenon? And what absolute mean number of GD positive T1 agents would represent a concerning increase from mutual data?

Well, this is a long-term that's really not powered to look at any of those differences. But let's look at the data for a second, right. Initially, we saw the mean number of gadolinium positive Type 1 lesion we saw that over 12 weeks at 0.13. And now with much longer follow-up, right, you see that at 0.17, which really is not a difference, which is really type of -- in my mind, you used the term noise, I think that describes it accurately. It is still a really low rate, and we still have the vast majority of patients on the study remaining on study because they experienced the benefit. And we also have about 85% of patients free of relapses, right? So that we believe that type of data really confirms the efficacy of tolebrutinib and the study we're following up on is a long-term safety study. So it's also important to inform us on the long-term safety, which we believe is still stellar, right? Overall, the aspiration is tolebrutinib will treat the entire disease, and that reduction in gadolinium part depletions really indicates that we can achieve that at the dose of 60-milligrams that we're using in all our studies.

Great. At that data presentation, I think it was the first time as well that we saw an annualized relapse rate from this study. And to your point, this is a relatively small trial, not powered for this type of endpoint. But did you gain confidence from that number? It looked competitive? Is that at all reliable? Or does it inform at all how we should think about the likelihood the Phase III primary employment?

I think this is an important data point. And when you look at the types of annual relapse rates that you've seen with other products and then the readout of the Phase III studies, it's really confirmed that these low annualized relapse rates have into the long-term outcomes and also into positive Phase III. So I'm confident with regards to the Phase III studies. Obviously, we will have to demonstrate that with the data. It also comes, I think, with more biological data that we've recently presented that demonstrate that in the CNS, we do achieve bioactive doses, that also further underlines the mechanism of action that we've seen and really underlines that inhibition of microglia and then B cells is possible also in the brain, and that may lead to, I think, a really differentiated profile as well.

Great. Let's move to amcenestrant, your oral SERD, AMEERA-3, the trial in late-line breast cancer patients, it actually already passed its estimated primary completion on clinicaltrials.gov, and that endpoint has changed the actual from estimated. So does Sanofi have the data in-house and might we see some time soon?

So we've always communicated that we will communicate data in the first quarter of this year. That's only a few more weeks. We are on track to deliver that. I have not seen the data yet. If that's your question. So I cannot answer further in that regard. But yes, we will absolutely communicate over the next few weeks, right, within this quarter.

Got it. So we had a breast cancer panel yesterday, and the cables that panel indicated that a PFS benefit of around 2 months would be sort of the minimum bar that they'd expect in this setting for the oral SERDs. Is that how seeing a few things about the bar for amcenestrant will deliver?

Well, this is a study in the second third-line metastatic hormone receptor positive breast cancer setting. And we're somewhat in uncharted territory because classically, the study is in the second third-line setting, we're in a less pretreated patient population. Now the vast majority of these patients have gone through CDK4/6 inhibitors, et cetera. So it's really difficult to describe the benefit. What we've always said is we need to see clinically meaningful benefit. And it's good to hear right you had experts on the panel. -- think they described to you what they think they feel clinically meaningful benefit is. And we've clearly highlighted that we want to see clinically meaningful benefit as well.

Great. When the data are released, what would you urge us to focus on? Is there any particular element of the data set that you think will be important to pay attention to?

Yes. It's a smaller study. So in that sense, we need to look at the overall population. It's also important to realize that we want to develop amcenestrant as a real hormonal backbone therapy, right? So we have a study ongoing in the first-line metastatic setting in combination with the CDK4/6 inhibitor that compares to an aromatase inhibitor. We also have a study in the adjuvant setting that eventually compares via tamoxifen. All these settings, it's -- there are different factors that are important. One is, obviously, efficacy. Another really important factor is also tolerability. And we believe amcenestrant has the potential for first-in-class and best-in-class characteristics in both of these areas. So I would encourage you to not only look at efficacy, but also look at safety and to because that will be really informative also for the earlier line settings. The comparisons in the different studies are different. I'm always trying to highlight that, right? In AMEERA-3, the vast majority of patients in the control group have received a SERD. So you're eventually having a SERD versus SERD comparison. Whereas in AMEERA-5 in the first-line study, you have a SERD versus amcenestrant versus an aromatase inhibitor in combination with a CDK4/6, right? And then in the adjuvant setting, we are comparing amcenestrant as SERD versus tamoxifen, right? So that gives you actually different studies and also different evaluations. And I think that's where really it's important to realize that the second third line setting is the smallest setting from a commercial perspective and from a patient perspective. And the more important ones are the different comparisons in the first line and in the adjuvant setting.

Understood. Let's stay in oncology. I'm curious about an agent that doesn't get a ton of attention, the anti-CEACAM5 ADC, that you all are developing. Not a ton of attention, but it has a Phase III trial readout, I believe, expected this year. Am I right about that? Should we see data from the Phase III trial this year? And if so, how -- maybe you could help frame our expectations.

Yes, of course. So CEACAM5 is an interesting target that's in the broader kind of CEA family, right? And there's different subtypes. That's why it's called CEACAM5. And there's differential expression of that in tumor tissues versus normal tissues. And this is an antibody drug conjugate with a toxin and linker and the antibody. And we are, in fact, broadly developing the molecule we have the Phase III study ongoing, which is called CARMEN-LC03, that's a study in the second line non-squamous, non-small cell lung cancer cell setting, and we're comparing there versus docetaxel. That Phase III study, the PFS readout, the primary PFS readout is actually in 2020. But there's a possibility for an interim analysis that could also read out in 2022, but I really want to steer you more towards 2023 in that setting. We also have 4 Phase II studies ongoing with this antibody drug conjugate, and that will provide us further information regarding how broad can we go. And that's obviously -- some of that is in combination, for example, with ramucirumab in the second line, non-small cell lung cancer setting, but we're also doing studies in breast cancer and in pancreatic cancer. The unmet need for this type of therapy is high because we're talking about what can we offer patients after they have seen a checkpoint inhibitor plus chemotherapy in first line, right? So there's definitely a need for improving outcomes for patients in the second-line setting. But I also want to mention that we are also developing to tusamitamab ravtansine that's kind of the mouthful for the CEACAM5 ADC. We're also developing tusa in order to then get to the earlier line setting where we feel that there's also an unmet medical need and there be a potential for the molecule.

Got it. Another important development program for Sanofi is its IL-2, THOR-707 was the original name. We're actually going to get multiple Phase III readouts for a competitor IL-2 this year. Would there be any impact based on those readouts on THOR-707 development program? And can you explain to us again, I know that Sanofi has mentioned in the past, but how might your molecule be differentiated from competitors IL-2s?

Yes. I'm excited about 707 or how we call it now SAR'245, which is our non-alpha IL-2 Interleukin-2 who has been around for such a long time, it's the biology is very clear. It has a major impact on T cell differentiation and survival and also on activity of T cells and also potentially on NK cells. There is just such a natural molecule to think about in immuno-oncology. We just couldn't use the native IL-2 because of all the adverse events. And that's where you've got different molecules in development currently in this kind of modified IL-2 space. And I think the data for one of the competitor IL-2 molecules, they will read out Phase III studies quite soon. And it would be great to see positive data because it would really validate the concept, it will validate interleukin-2 as a key combination partner in immuno-oncology and really confirm that what I believe is just massive potential for the for the combination. We still think that 245, our molecule is clearly differentiated. Because when you look at the competitor molecules, for example, you look at Bempegaldesleukin. That molecule is PEGylated but not PEGylated in a targeted fashion, right? Our molecule is modified in a very targeted way based on synthetic biology principles where we know exactly where we PEGylate so that we can steer whether our molecule binds to alpha beta gamma interleukin receptors, right, interleukin-2 receptors. So that gives you a very specific profile. And we have a clear non-alpha IL-2 that stimulates T effector cells that also stimulates NK cells. We've demonstrated the biomarker data for those factors very clearly, and that has the potential to realize really this T cell stimulatory effect without all the adverse events that you get from the alpha stimulation. So without for example, the vascular leak syndrome without the effect on regulatory T cells, et cetera, et cetera. So we believe we have a clearly differentiated molecule, and you can already see that because we can achieve higher doses. So we're really looking forward also for our molecule, we have it with SAR'245 in 5 multi-cohort studies. We're broadly evaluating it, and we're looking forward to present early data from those multi-core studies, hopefully later during this year.

Great. Another exciting pipeline agent in oncology is your anti-ILT2. This is a target that has garnered an increasing level of interest from our clients and from your peers. Could you characterize Sanofi's level of interest around this molecule? And when might we see data?

Yes, that's a great pick. This is one of the, what I believe, more exciting next-generation IO targets, right, as you know, in cancer. Unlike PD-1, this target is expressed on macrophages, but also on NK cells and T cells. So you get a broader immuno-oncological effect even with ILT2. This may be a true first in class agent. There are some competitors out there, which focus on ILT4, where the expression is more limited to macrophages. So ILT2 is the broader expression then on this molecule with Biond Biologics. It's currently in the in the dose escalation studies, and those include the monotherapy cohort and also combination cohorts. So this is a really exciting target, and I think it has to potential in immuno-oncology.

Wonderful. Any chance we'd see data this year?

We've not communicated any time lines, and we will -- we can't do that here because that was material to the partner.

Fair enough. One more product-specific question, and I'll pass it back to Steve. On fitusiran, we saw some great data at ASH. I'm curious for the lower-dose cohorts that are being explored now, should we expect an ABR that's somewhat similar to what we've seen so far?

Yes. The short answer would be, yes, you should. Because what we're doing with the lower dose is we're defining clearly what type of antithrombin III levels do we want to achieve, right? And there's a very clear correlation here. And we're trying to keep patients in this antithrombin III in a specific level of antithrombin III in order to get the benefits of fitusiran, but to avoid any kind of thromboembolic events. And that seems to work very nicely. And at this point in time, the modeling at least indicates that we're maintaining efficacy with that antithrombin III band that we're trying to achieve. Obviously, we will need to show you that with data that we are generating. But where I said, I'm confident that we will see good efficacy also at the reduced dose because I know what the AT3 levels are that we're targeting, right? And that's the important factor.

Makes sense. Back to you, Steve.

Just a few more questions. Actually, I think we're out of time, so we'll have to be quick. So at your March 29 event, you have a lot to talk about, but should we also expect to learn more about some of the molecules you have in development? Is that likely to be part of the meeting?

Yes, I'm not going to see the thunder of the meeting, but yes, you should. We're obviously talking about Dupi about the overall expectation about how the program is moving forward. But then also about the portfolio, we have to talk about the portfolio because we believe it's an industry-leading portfolio. And you've seen we've -- as I mentioned, we've moved amlitelimab to priority status. So there will be definitely further information on that portfolio as well.

Okay. Second question. Just very quickly, and unfortunately, with the situation in Eastern Europe, I'm compelled to ask, what is the clinical trial network of Sanofi in troubled regions of Europe? And is there any disruption that is likely to stem from that?

Yes. First of all, the situation is, of course, horrible. We all see these pictures and our first concern is about patients, and that's both patients that are on our marketed products, but also patients in the clinical trials. And we're doing what we can currently to support those patients. And interestingly, right, there are still sites that are open in the Ukraine, and we're trying to take care of those patients as well. As many companies, we have sites in the Ukraine and in Russia. Those have been important countries from a clinical development perspective. We are currently still analyzing that situation. But on the positive side, our global development programs are truly global. We are conducting our studies in the U.S., in Europe, in Latin America, in China and then also in these Eastern Europe areas. So we can mitigate that impact, right? And it's actually not dissimilar from what we've seen with our COVID studies where you saw the pandemic ebb and flow in different areas around the globe and you had to adjust your footprint in order to adjust to how the pandemic evolves. Here, you have to adjust the footprint, obviously, to a human catastrophe, and we will be able to do that.

Got it. Last question, very briefly. But Dietmar, as you look at a decade ahead, and you have maybe some vision of where Sanofi is headed, what do you think will be the biggest change or surprise at Sanofi that we on the outside do not see now?

Yes. I'm hoping we will see positive surprises, obviously. I'm actually really not thinking you will see major surprise. I hope you see a steady development in terms of really a focus on high unmet medical need areas and a steady development of drugs that can make a key difference to patients. But to be a little more concrete what you will see is I'm confident about that is immunology leadership. That is important, I believe, because in immunology, you have these areas of broad potential where as you hit those central nodes in immunology, you also have access to a variety of disease. It is still large unmet medical need in those areas, and it's great to have a portfolio that -- where we can address those needs. You will also see, I'm confident about that, come our -- you also see our efforts in other therapeutic areas really come to fruition and that specifically in oncology, where we see exciting changes to the portfolio. That's also with regards to vaccines, that's with regards to genomic medicines that we're moving forward and also with regards to really areas like hematology, neurology, rare disease. So I hope we can surprise you in a positive way, but I also hope we can really demonstrate that steady development that will make a difference for patients in a broader fashion.

Sounds like an exciting future, and thank you for sharing a bit of it with us today. And that concludes our session. I'd like to thank everyone for participating. Thank you, Dietmar, for your time. It's always a pleasure.