Sanofi (SAN) Earnings Call Transcript & Summary

[Audio Gap] today. Now some of you will have an older version of the itinerary and realize that I don't have Bill Sibold sitting next to me. But rather than just canceling on us after Bill's departure last week, [indiscernible] stepped up and have given us 2 speakers, really topical. Brian Foard, who did run Dupixent and some of you met him at the immunology session last year. He's now the Head of Specialty Care North America and Country Head for the U.S. and Kim Tutwiler, Head of RSV Development. So very timely to have both of you here, and thank you very much for just pulling out and coming. So I'll try and make this as interactive as possible. Those that know me will know I always say this here to moderate, not monopolize. If any of you want to ask questions, shout out, stick your hand up or actually have been told in the back, wait for the mic before you ask your questions. But before we do that, I think Brian wants to make some opening remarks, and then we'll go into some Q&A. So Brian, Kim, thank you. Over to you.

Yes. First and foremost, a huge thank you. Thank you for having us. We're really excited to be here. This is an important part of our journey with Sanofi. It's a really exciting time to be at Sanofi. I think as we cross the end of 2022, we were through the first 3 years of what was laid out, I guess, it was in December of 2019, the play-to-win strategy by Paul Hudson, that he laid out. So as we cross the end of 2022, we had marked kind of the end of the first half. And now 2023 is really a cornerstone year for us as well. And actually, if you think about what we accomplished before that, it was 10 quarters of growth. Obviously, our pipeline continuing to develop at the time. As we started this year, we actually put out a new -- or we actually said we would likely achieve the waypoint -- the first waypoint of over 10 billion for Dupixent this year. We saw the first half of this year. Actually, the pipeline continuing to develop with approvals, but also really positive readouts. So this was a really pivotal year for us as well. And so as we look forward and kind of the next chapter of this play-to-win strategy, that's a lot of what we're talking about here, where are we going with Beyfortus, where are we going with Altuviiio, where are we going with -- what our future pipeline looks like with CD40 ligand and so on and so forth. So I'd say really exciting time. I'm happy that I can fill in for Bill. I've got the same haircut luckily. So that was a pretty easy switch. But we really are excited to be here and answer all of your questions. I will make one last plug because some of the answers -- some of the questions we may get might be better answered even in our December 7, R&D Day. So we are going to be having another R&D Day. And it's a great opportunity for us to really go deeper into our pipeline, contextualize how we're thinking about each of the assets, contextualize the size of the market, the competitors so on and so forth. So I'll make a plug for that as well.

Very good. Okay. So perhaps do differently, everyone want me or expect me to start with, Dupixent, but let's not do that for a change, but I don't -- I won't ignore that. But in all the years I've covered Sanofi, I can't recall many drug launches, let alone 3 at the same time. And the one that I want to kick off with you, Kim, is Beyfortus because [indiscernible] victory lap, but that ACIP meeting pretty much went best-case scenario. So just to make sure everyone in the room is at the same speed as you, where are we -- how do you feel about how that went? What have you been doing from a launch perspective? And then I have a few follow-ups after that.

Sure. So thank you for the opportunity to talk with all of you today. I'm very excited to be able to talk about Beyfortus. So this is a huge priority for us, and it's a huge passion for us because we set out on this journey a few years ago to try to figure out how to protect all infants from RSV. Because in the past -- in the past 20, 30 years, it's really been thought of as just a disease that impacts premature babies and youngest babies, and the truth is it impacts every baby. And so we set on this journey to get to exactly where we are today. We were really excited by the ACIP meeting, as you mentioned. I think this went -- but to be honest, we expected this. We were confident that this is the way this would go with a recommendation for all infants. And I'll contextualize that in a moment, just explain a bit about how that works, the vaccines for children funding because the goal of this is to take a monoclonal antibody and to have it treated and used like a vaccine so that it can have the impact across the broad population of all infants. That's never been done before, but in this case, medically, is the right thing to do because we need a solution for all infants for RSV, and this is the right way to do that. So to give a little bit about -- I'm just going to describe quickly on the market, and then I'll talk about what we've been doing in terms of preparation. When you think about the market, the pediatric market of infants for RSV, there's really 3 groups of babies to think about. The first are the babies who are born during the season. The RSV season is November to March, and these babies need to be protected immediately at birth because they're born in the thick of the RSV season with the virus circulating. The second group are the babies who are born before the season begins. Think of a baby born in June. And by the time they get to October, they're a few months old, but they're still very naive to the RSV virus. They have no experience with it, they have no immunity to it, and they still need to be protected as they come into that RSV season. And the third are babies that are born prematurely or preterm. So they need to be protected and it's a bit -- you can't predict that because you don't know exactly when they'll be born. The beautiful thing about a mAb is a routine immunization, a long-acting mAb that is, is that it can protect all 3 of those groups. And that's exactly what Beyfortus does. And so one of the key things that we've been doing in terms of preparation for launch, this has been several years long. It's just making sure that, that priority is known that the education around which babies need protection, it's an easy answer, it's all of them that need it, but why and helping to kind of explain that and make sure that's clear. Since the ACIP meeting, what we've been focused on is making sure that providers are ready. We have had a several year long journey with key opinion leaders. We have good support. I think they really understand the medical piece of this, and they also have a lot of passion for making sure that babies are protected. So we have a good core group of KOLs that are helping. We've also been working with our large customers, our largest health systems, hospital systems, pediatric groups to make sure that they're ready. Obviously, we're in close partnership with the CDC. The Vaccines For Children program is critical to this product being able to be used equitably across all infants. And so we're in close partnership with them and getting ready. And I think there's a couple of wins that have happened even kind of as we come into the ACIP meeting and since that are going to help the implementation, some of the logistics of how you record an immunization being given. This has been worked out in good time and is very much like the traditional process for a vaccine. Same thing is true for coding and reimbursement. Those elements really matter for physicians to be able to use the product easily. So we have good progress and really fast progress there. And I think we're getting a lot of enthusiasm from physicians and from healthcare providers, who are ready to get this done for the season. So what we anticipate is there will be a catch-up period. That's probably in October and into early November, where the babies that have been born so far this year get a catch-up dose. They get immunized with Beyfortus to make sure they're protected for the season that is coming. That will be in the pediatrician office. And then starting with the in-season, babies born during the season, we have 2 opportunities to catch them. One is in the hospital, and that's for baby to be immunized before discharge. And so we'll work with the hospital systems for that. There's -- in the U.S. market, there's actually a very good opportunity. A few days after birth, baby goes to the pediatrician office. So if they somehow don't get immunized in the hospital, I do think that hospital segment will take a little bit to get up and running because that's a bigger change for them. The pediatric office can catch that a couple of days later, and baby is still protected. So we feel good about our ability to cast a good net. I'm asked often how do we see the trajectory and sort of how do we see the launch. So I'll say it because he's going to ask me in a minute anyway so I'm just going to go ahead and go there. We have a couple of analogs that we've used because we're trying to predict it just as you are. So the analogs that we've used are really Rota and Prevenar to kind of look at historical first year pediatric launch performance. These are very successful pediatric immunization launches. And so that's what we have looked at. And it's always going to be progressive. So several of you have heard me say this maybe earlier today, but it's not like turning the faucet on and everything automatically happens at 100%, it's going to build over some time. But I will say that I think we have seen a lot of enthusiasm and a lot of energy, which we're really excited about because we have a lot of passion for this mission of all infant protection with Beyfortus. So I'll pause there just on opening things, and we'll see what else Peter wants...

I've got a few. So 1 thing I'd touch upon is capacities because I think we all know the numbers, 4 million birth per annum in the U.S., something similar in Europe. There's China at 16 million long term and also the mechanism because now that this is on the national immunization program, forgive me, I'm an American, but I believe the payers have a year before they have to make it available. So it's not -- let's not get carried away. But if you do the simple math, which I'm good at, $400 to $500, which is a price that was discussed at ACIP that was seen as sensible. I mean, you're looking at a couple of billion opportunity alone in the U.S. So the question is how quickly can it get there? But also can you -- on top of that, how limited -- how limiting or not is the capacity? And what -- how will Beyfortus roll out beyond the U.S. because you've got approval in the Europe as well?

Yes. All good questions. So -- 2 comments in terms of capacity. We don't anticipate any capacity limitations as we go. So we have -- this is a partnership with our friends at AstraZeneca. I think we have a really good ongoing relationship on this point. So we don't anticipate any issues there. So I think that's the first piece. I think it will be progressive across all markets, not just the U.S. So what you'll see in this first year in 2023, France and Spain will come on board with all infant programs in both these countries. We're really excited about that because those are also both heavily accelerated. That really shows the passion and I think the excitement and the energy that those countries had because normally, and if you follow the French market, it usually takes quite some time to get there. And I think they have really done the job of saying, this is important, we need to accelerate it, we need to do it quickly. And so we're very excited about that for both France and Spain. Obviously, we have ambitions across the rest of Europe. I think we'll see a lot more of those countries come on board next season. I think we'll see contraries throughout Asia and throughout Latin America, South America come on board next season. The 2 next big ones are probably China and Japan. And so we anticipate those in the next couple of years. ______________China is probably the most interesting market because it's the one market that doesn't have SYNAGIS. So they have the lowest RSV awareness, I think, around the world because they have not had a solution that's been available to them. The other markets have had SYNAGIS available, which, although it's just for extremely premature and high risk, there's some awareness about RSV. And so you just need to kind of help reset the thinking and the boundary on that, but China really is a bit new. But we will start a pilot there -- a very, very small one, kind of a concierge level pilot there this year. We're excited about that because it will give us some experience in that market and start to help us understand exactly how we have locked there, but that's clearly a big priority for us.

And the figures -- like me say in this. So the bar has been set by Sanofi in terms of the new launches over 400 million and the grading has been Altuviiio, Beyfortus, Tzield but from everything that you're saying, it doesn't feel that you set the bar particularly high, should we say. I mean it does feel that you're going to smash through that basically. I realize you can't comment and give forward-looking statements, but I just wondered, given everything you've said, where am I wrong in terms of coming to the conclusion?

I don't -- I think in general, you're not wrong in terms of things that we got the recommendation. But those things were already baked in, to be honest. We were pretty bullish in the assumptions that we were making about that piece of it, to be clear. However, I think probably what's -- what we have to see, usually, you do have a progressive uptake. So it does not go as quickly as you might imagine. So all the things that we're seeing are very good, and that's exactly what you want. I think it's going to help make sure that, that curve goes as we expect, and we don't hit sort of snags along the way. I don't think it's going to happen overnight. Would I be happy if it did, of course, I wouldn't, but I don't think you're going to see that overnight. So I'm not trying to say that it's different than what the guidance or the expectations you have. It isn't that we baked those assumptions in, but we were also pretty bullish with the assumptions we baked in.

Okay. Okay. And then just finally -- just to round out the discussion on Beyfortus, you've got your friends of Pfizer with their maternal vaccine. I'd love you to -- how you're thinking about the positioning relative market shares or just what the advantages are. And then just generally speaking, I mean, there's a little bit of COVID fatigue, right, in terms of vaccination rates. Is it just because it's involving kids that you think that's going to be less of a barrier, there will be less inertia? Or do you accept that, that will probably be something that holds you back initially in terms of raising awareness and getting people -- getting buy-in from doctors and new mothers.

Both good questions. So actually, I'll start with the second part, just to round up the coverage rate and the immunization expectations and then I'll talk about competition. So yes, we do anticipate that part of turning the faucet on is not just the logistics and the providers, but it's also the -- making sure that the willingness is there, and that you don't have any sort of big resistance. With pediatric vaccines and pediatric immunizations, what we have typically seen is the pediatrician recommendation usually wields the most power. So it's a little less, if it's adult immunizations. Adults make their own mind up at that level. So I do think you see a lot more COVID fatigue there. I think you see less of it in the pediatric space, but I do think it's still there. and I think probably more so about questions. And in fact, one of the things that we've been working closely to prepare for customers and to make sure folks are ready is how do we explain this is new, what is it? And how do they explain it in the right language and the way that makes mom very comfortable with what they're getting. So I do think that will be a factor in terms of the curve, a little less so in pediatrics and adults. On competition, so the Pfizer maternal vaccine will have a recommendation from ACIP later this month. I think many of you probably know. What I would say is I'll give just -- I'll give a view of what can and can't be just from the profiles of the products. And then I'll talk about what we've heard ACIP say so far and remains to be seen what they'll say in September. Mentioned earlier that there are 3 groups of babies to think about in the pediatric market, born in season, born out of season, premature. A maternal vaccine has the ability to protect babies born in season. It does not have the ability to protect babies born out of season or premature babies. And that's because it's timed to the birth and not the season itself, and the duration of protection is not long enough to last. So that's a class effect, I would say, from a maternal immunization. Pfizer-specific product, I'll let them speak to that. I think there have been some questions from a safety perspective, and the label is pretty narrow in terms of the period of time when mom can get immunized. And so practically and pragmatically, I think that's a bit of a challenge, but let's see how that plays out. What ACIP has said when they talked in June about both products being considered together in terms of the guidance is basically that there are scenarios where if a maternal vaccine was given, you'd still need to -- you would have either the freedom or maybe you would want to also give Beyfortus. If you can't validate that mom was vaccinated, if you're not sure when she was vaccinated, was it in the right amount of time for antibodies to build and be transferred, do you feel the baby is for any reason at high risk, and so there's a bit of a judgment call. I don't think anyone would say from a health economic standpoint, that it makes sense for both products to be used together all the time. But what I would say, practically speaking, is this, if you're a physician, you will always need to have Beyfortus on hand. Do not need to have a maternal vaccine on hand because all 3 groups can be addressed by Beyfortus, but all 3 groups cannot be addressed by a maternal vaccine, if that makes sense. So we'll see what their guidance says. We feel confident, most of the time, a recommendation is obviously a really important driver, but also the profile of the product and the efficacy and the safety of the product are critically important to getting choice from providers. So we feel really confident with the profile of Beyfortus. So I don't know if that helps, but just an overview.

Very clear. I'm going to pause before I move off just to let the audience if there is any final questions on Beyfortus. Okay, no. Brian, back to you then. So Dupixent, lots to discuss. I went through sort of multipart questions. You mentioned you're already well on track to be over 10 billion this year based on the H1 numbers. Could you just brief the audience the trends that you're currently seeing, whether it's atopic dermatitis, asthma, but just current trends, how you're feeling about -- how the second half has started for Dupixent?

Yes. So again, it's another interesting asset where the science leads us, I mean, at the end of the day, and that's what we're continuing to see. As we've rolled out, this year is a lot about those foundation indications, which we've already been indicated for, so atopic dermatitis, asthma and nasal polyps. But it's also about -- it's still really the first full year of launching continually in EoE and prurigo nodularis specifically in the U.S., and we're now starting to see some of those approvals around the world and launches around the world and those indications. So it's kind of the -- we're still just -- we like to say we're still just getting started. So the growth rates, where is our sources of growth coming from? First and foremost, is coming from -- there's low advanced therapy penetration, which we've pretty consistently said, first and foremost, in those foundation indications, so atopic dermatitis still roughly around 12% if you think about it in the adult population. If you look at the overall population, now we're down to 6 months of age, it's still roughly just over 9%. That's a long way to go before where we think it's going to get to roughly 25% to 30% when it's all said and done. We're going to see that continue to grow. So that's a big source of growth. And then when you think about market share, again, we get a lot of questions about the competitive landscape. It's like, oh, the atopic dermatitis market is about to get competitive. Well, we've seen some incredible players come into the space with multiple assets over the last several years in atopic dermatitis. And what we still see there, as we've indicated before, we continue to see that Dupixent is the preference of when the physicians reach for the therapy of choice, it's going to be Dupixent of these patients. And it's based on both an efficacy and safety profile that's extremely well balanced for this patient population. So I don't see that changing. So as you look to the second half of the year, what we've continued to communicate is that our growth is going to come from continued growth and the indications that have been out there for a while, complemented with the new indications that we've just launched in. So eosinophilic esophagitis, prurigo nodularis, kind of adding on top of things. And then the geographic side of things. So the wave of kind of -- we're seeing kind of consistent trends, as you would typically see, as you launch around the world. Every time that we launch a new indication, it starts back in the U.S. first and then you launch around the world. And so you continue to see that kind of wave indication by indication. So we're seeing really positive growth ex-U.S. as well. We've seen Europe is well on track to be -- they're now -- run rate is over 1 billion. You see ex U.S. is well over 2 billion now run rate wise. So we're very confident, and we're seeing very good trends about how it's rolling out pretty typical to what you would see with any other kind of advanced therapy like this from where is your growth coming from? So I still feel very good about Dupixent, still the beginning of the journey.

And then just on COPD -- I think everyone around the room that knows [indiscernible] let us not repeat that, but I think the questions that everyone wants to ask are the obvious ones. Number one, every time since the data drop, it was great data, people have asked are you going to be able to file on a single study. And it's been -- we have to have this conversation with the FDA. So given one opportunity you here next to me, how those -- where are we on that? Or is there no change? Number two, on notice -- I believe BOREAS was done during COVID. Notice wasn't -- apart from that, they are pretty much a clone of a trial. But just -- what you don't want to see is what BOREAS grade and suddenly a mismatch. So if anything gives you confidence that, that will not happen. And then just from a commercial perspective, I mean, as you said yourself, Dupixent is now 10 billion, it's accretive to the BOI margin after the pay away. When you launch -- when you think about the commercial footprint and your area of expertise in North America, do you need to add to that to launch in COPD? Or does your asthma team get you -- I mean can you leverage the asthma team? Or does that require another field force to add on top. So a few questions there, but let's...

Yes. And I'll kind of -- I'll start with the strategy first, which will start to address your last part of your question. I'll kind of come back around that way, was because if you think about this asset, again, first and foremost, we -- this is living that kind of first-in-class, best-in-class type of breakthrough science that's going to transform patients' lives. This is really at the foundation of play-to-win, if you think about it, even though that was rolled out shortly after we had launched in Dupixent. We've really followed the science there, and we've learned as we've gone. Really, it is about treating those diseases that are driven by underlying type 2 inflammation. And so again, if you thought about -- again, the way we articulated this before in the past was there were some anchor indications that we went after. So it's atopic dermatitis and asthma. And then very quickly, we moved to this whole host of other disease states that would be adjacent. We thought about it very strategically that would drive efficiencies as well. You didn't just -- we didn't do kind of a string of pearls strategy of wherever it works, we're going to go. It's very much a dermatology strategy. It was very much a respiratory strategy and very much then we've moved into gastro. So kind of to answer your question on COPD, we thought about that with COPD whenever we took the bold move to go straight into a Phase III even in COPD and lo and behold, obviously, it worked -- the science worked. And so that community has known us for a while. Those individuals that are treating those patients, those respiratory patients, asthma patients, the pulmonologists, we have now been in their offices for quite some time. But I will tell you, I'd be remiss if I didn't say, will we invest behind this launch? Absolutely. We've invested behind each launch, but there are efficiencies there across the alliance, which make a lot of sense. But this is a community that knows us, that trusts us that we've built that over time. And so I feel like we're in an excellent position, not only in the U.S. but other major markets around the world that when that indication does come, we will be extremely well positioned to maximize it without it being, hey, nice to meet you for the first time. As you think about COPD, just a bunch of big questions, I'd say, first and foremost, it starts with -- again, this was a bold type of move to go into this disease state, third leading cause of death. Nothing's really worked in this particular space. It's kind of a graveyard of previous assets that have tried it. And our trial is on top of background therapies, and this gets to the confidence of the drug with a second trial. Those other agents that these patients were on are very effective in COPD. They are triple agents and so on and so forth. It's about as severe as you can get or effective therapies as you can get before going to a potential biologic like this, which they just don't simply have. So the fact that the data was that good on top of that, really almost no matter when the trial ran, gave us a great degree of confidence that you've got a second trial that -- yes, there are some differences between the time period. And we'll have to see what that -- kind of how that plays out in the trial, but we're very confident in the data, I'd say, in a second trial. When you're talking about a 30% improvement in exacerbation rate -- annual exacerbation rate on top, you see the lung function improvement, you see quality of life improvement, the hierarchy really didn't break. So that coupled with then getting to the FDA discussion was, of course, then they wanted to talk to us. And so across the alliance, we had the discussions with them, and they gave us breakthrough designation, which what that means is, of course, we get to talk to them more. We get to have that conversation back and forth. The base case scenario still remains the same, is that they expect us to have 2 replicate trials to file with. So that means notice will be done. We'll be filing -- so we'll see the readout in the first half of 2024, file second half of 2024. That's kind of the base case. But of course, we're having a couple of discussions with the FDA to say. Okay, what would be acceptable? Would there be some type of interim analysis that we could possibly run? Would that be acceptable to you, then we'd have to be comfortable with the risk that might be associated with doing something like that before we would ever consider doing anything like that. So again, base case remains, but the breakthrough [indiscernible] that dialogue because we do share and the FDA was very clear about that. We do share a common interest of bringing an innovative medicine to patients who today really, there's not many options past the therapies that they're on. It still exacerbates.

Clear. Just Dupixent question, but I want to come to your earlier comment because we are at the sort of transition period where some of the -- Sanofi is about to step into a new paradigm in terms of outlook on top line growth, driven by the growth drivers and the new products and some of the headwinds like Aubagio pricing going to the rearview mirror. But when I think about the market -- a key debate in the market with investors, particularly for next year, is this lebrikizumab launching the underappreciated threat from an aggressive bridging program. I mean, if I look -- if we look at the net price of Dupixent over the last 5 years, it's been rock solid. It's been pretty stable. So the idea that we hear the argument about where penetration is on the market, the breadth of indications, I get that. But just the loss of patients to a very aggressive bridging program. So could you give your perspective as to whether that is -- we reflect some of that in our numbers. We still get to a huge number at long term, but it does lead to an impact in growth for next year but just -- whether you think that is a misplaced concern? And if so, why?

Again, I think it's always going to be a concerned anytime you have a new competitor, and that's kind of why I said what I said at the beginning is that we've seen competitors come into the place. We had some of the same questions. Each of these other competitors knew the space. They all came with the aggressive types of programs at the very beginning to gain trials from the physicians and for patients. We've seen those. We have similar programs, by the way. I mean, it's just as easy to go to the clinic right now and get Dupixent. We have great coverage, great bridge. We have a great option for them as far as free goods goes or program that -- patients that have or lower economic status. They can actually get Dupixent as well. So we have -- And we have great coverage. Pretty easy to get Dupixent, if that is what in fact the doctor believes is right for you today. So it's hard to believe that no matter what type of program a company would put out there that would make it that much easier to get another product, quite frankly, and we've seen that before with the other agents. So that's why it gives us a great deal of confidence with that. Again -- but I still do come back to it that we've seen the analogs thrice as well. Every time a new asset comes into the marketplace, we're hoping for that part of the market growth. I think I got challenged in one of these meetings 1 time. It was -- aren't hoping for competitors because they will help grow the marketplace. And that is true. They will and we've seen that. But at the end of the day, it still will come down to why would I choose one versus the other. This one, as we have said before, same thing with trailer. We've seen another IL-13 come into the marketplace for over a year now. This is coming from a dermatology company with LEO. So they know the dermatologist community quite well. They had an aggressive bridging program as well from the very beginning. And we've seen what that asset has done over time. So it's still -- the mechanism is just incomplete at the end of the day. So we're very confident with where we are, but we're not going to take them lightly. Eli Lilly is a great company.

Okay. Last 2 on Dupixent, just pausing for any questions in the room. The last 2 questions on Dupixent, probably not your wheelhouse, but is there anything to say. I mean, Jean-Baptiste mentioned a couple of years ago and Paul likes to [indiscernible] that you got the HUMIRA lawyers looking -- the lawyers at the HUMIRA IP now looking at Dupixent, is there any word or developments on the IP situation on Dupixent? And then from a strategy perspective, we're going to see more OX40 data. Sanofi is very keen to highlight that as being, maybe not first-in-class, but definitely best-in-class. How does that fit into -- if you have Dupixent and now OX40, maybe even the BTK, how that will -- how do you think about the positioning of those respective assets within immunology?

Yes. And really as it relates to IP, I mean, obviously, this is some something very important to let the players and others sort that out. But we still got -- like we said, we're still very much at the beginning of the journey. We've got some time, but we've been thinking about that, and that leads to the kind of the OX40 ligand discussion. We've been thinking about this journey for a long time because we've seen other companies go through it. You have the great success of an asset, and you need to already be thinking about what life might be like after that asset. And again, I can't imagine life after Dupixent, quite frankly, today. And luckily, we don't have to for quite some time, but we have to think about it for a while up to and including the types of deals that we did, the Kymab deal that we got -- that we did to achieve or to acquire amlitelimab. So IP side, we've got quite a good runway still to go there, and I'm sure there'll be updates on that as kind of how the lawyers draw in and those guys to sort that out and across the lines. As it relates to OX40 ligand and amlitelimab, I think it first and foremost starts again back to the science. We had a brilliant group of research group that was our precision immunology group that really looked at this and said, hey, this is based upon everything we know about atopic dermatitis disease state, we know about the science here. This is going to be an interesting mechanism because it's a very heterogeneous disease state, and we're learning a lot about atopic dermatitis. There is a big patient pool that is still, like I said, massively underpenetrated, but it's extremely heterogeneous. So we think having an asset like this that is -- and again, specifically as it targets the ligand, it's a little broader than Dupixent from a mechanism of action standpoint, but very specific on the ligand bringing these patients back to kind of homeostasis. You could be looking at an agent that actually more broadly treat beyond the type 2 patient population from an atopic dermatitis standpoint. So then number one, it's a little bit broader patient population. Number two, because of the mechanism there, we actually believe you could have a durability of effect. That's quite substantial. You could be thinking about much less frequent intervals of dosing to where patients can almost forget they have the disease for a period of time, which would be incredibly pleasant, I think, for the patients while achieving a certain level of efficacy. And then like I said, I always come back to -- this is going to be a marketplace that's always going to have a big spot projection. Like I said, I can't imagine without it because it's such a big marketplace. I have seen Dupixent continue to grow, and OX40-Ligand will be just another class that comes in that helps us grow that penetration rate that we've been talking about, kind of like what you've seen, frankly, in the psoriasis space.

When you talk about durability really and treatment frequency, are you talking [ series ] like once every 3 months or beyond that?

Could be. And we'll have to see the data, will have to sort that out, but that is absolutely what we are -- we believe the mechanism could do. And again, that could be something that the marketplace would see is valuable later on in the development of this marketplace.

Great. I won't ask you or grill you on Tzield. I don't know if you want to say anything about Tzield. I realize it's not your wheelhouse, but it's an area of focus at least topical given the launch and upcoming data sets with fitusiran and the gene therapy story. And just as a shameless plug we're hosting Professor Gary Kupfer after this session in the governors room to talk all things great and beautiful about hemophilia. But anything you're willing to say on how that launch is going, anything that you would like to share with the audience? .

I'd say before -- I know you mentioned it's not in my wheelhouse, obviously, being at Sanofi and talking about being the leaders world in immunology, I think Tzield is a really interesting immunology asset. This is that first-in-class, best-in-class type of therapy that we're thinking about. So before I leave that, again, I'm not the subject matter expert to go too deep on that by any stretch of the imagination, but that is very much in line as we talked about our kind of leadership in immunology around the world. That is an interesting type of asset where, again, very high unmet medical need patient population, first-in-class, best-in-class and with dosing, could you actually delay the onset of type 1 diabetes. It's pretty interesting. Now we've got to unlock the marketplace, reeducate the marketplace as we've seen in a lot of different areas, but I think that's also one that fits very nicely into our strategy. As it relates to Altuviiio, yes, this is very much in my wheelhouse now in my old new job. My old new job in the U.S. actually was right at the time that we were launching Altuviiio in the United States. And so yes, I've entered into the rare blood space, and it's been really exciting to be quite frank. I have not worked in that space in my career. And what I've seen is it is a community. I mean it is a really impressive community, whether it's the physicians, whether it's the individuals that have chosen professionally to work in that space, the patient population. And so we're very pleased with the launch of Altuviiio thus far. Now again, this is a patient population. This is a physician population that is -- again, as I said, these patients are on therapy. So it's a switch market. And so we've really had to go in there, as we said from the very beginning, and we really point out the difference of this particular agent with the once-weekly infusion, bringing patients to near normal factor levels to where -- for most of the week to where they can really live their life and be active and not worry about those breakthrough bleeds the same way that they have with most of the therapies out there. And you can see that's really starting to cut through. What we're seeing so far is that we saw, said this even in Q2, was our target audiences, which is a pretty target-rich audience. Over 80% of them have already prescribed Altuviiio, number one. Number two, about 70% of the switches from factors are going to Altuviiio. So it's already now the choice from a switch standpoint. 2/3 of our switches are actually coming from competitors as we also, I think, previously communicated and actually 10% of that is actually Hemlibra. So factors make the most obvious switch sense. Hemlibra, though, we've seen -- obviously, the efficacy messages holding -- become very important for both the patient and the physician community to see that type of switch as well from Hemlibra. So we're very, very pleased with the launch thus far. Still a lot of work to do. It was a busy summer, but off to a very good start.

I'm going to pause to see if there any questions before I change subjects. We entered sort of the final 5 minutes, just a couple of high level and I'm not realizing that you can go -- get the definitive answer, but I would be interested -- I mean IRA -- here and now, IRA is not -- Sanofi is probably more on the least impacted sort of end of the scale than most impacted, but it's more than just here and now. It's about how it's changing the discussions that you're having as teams thinking about pipeline, capital allocation, BD. So can you just share sort of not the ins and outs, but just how it has changed the thinking within Sanofi about going forward capital allocation, et cetera, et cetera.

Yes. I think first and foremost, as you said, Sanofi is -- we're not 1 of the drugs listed in the first 10 group. Certainly, as we think about the future, we have a low exposure from a government reimbursement standpoint. So we're in a really good spot as you said. But I'd say how it changed is it's in every conversation like this. It's in every strategic conversation that we have. It is a part of now how we have to think for the future. We have to think about what does this mean for that particular patient population because, again we're concerned about how do we get innovation to these patients still at the end of the day, but how do you do it in a way in which it's going to still be adding value an organization like ourselves. So I'd say it's in every strategic discussion, but everyone is a little bit different based upon where the disease state is, where the science is heading and so on and so forth. But put it this way. There's very few conversations that it's not a part of anymore in strategy, and it just simply wasn't the case before that happened.

And then this is a cheeky question. The R&D Day, you gave it a plug, you want to talk about science. There's an opportunity for the new Head of R&D to sort of make his mark. I think he starts as early as October. But we're now 4 years since Paul and the team stood up and talked about BOI margins and free cash flow. And given where you said yourself, that was the first half transition year in '23, new story in '24, so just feel a little bit backward looking to have midterm targets for BOI margin and free cash flow focus. So do I ask -- at what point do you think Sanofi will choose to perhaps provide a new outlook to mark, as to what the aspirations are and move away from margins and free cash flow to perhaps grow top line?

Yes. And again, I think I'll -- I'm very fresh into this interim role, so I'll try and keep it that way. So I won't say anything necessarily outside of what's already been probably communicated, which is whenever we see the valuations of Sanofi continue to change, like in other words, each and every 1 of you say that it's working. What you're doing is working and the valuation comes a little bit more in line with what we think it is. I think that's what Paul has articulated before in the past. It's almost like when you tell us that it's the right time to stop talking about that, then we will. But I do -- I will say that I'll go back to it. It's less about the number for us and how we operate on a day-to-day basis, is we have started thinking about the modernization of the company. And you think about the types of assets that we're now launching versus the Sanofi type of assets that we were launching back in the day. And it is a different type of organization that's required to do that, first-in-class, best-in-class type agents, sometimes really competitive marketplaces. And I think that is as much about the margin side of things as it is, are we fit for purpose for being able to launch these types of assets. So that's kind of my extra point that I would add to that. And that actually feels quite good from a cultural standpoint. Having been in the company now a little over 6 years to see that transformation, which we don't talk a lot about here because culture is one of those things that you kind of feel when you're inside of it. That's as much about that journey as it is, I'd say, what we say as far as margin goes.

Perfect. I've been clear again -- given your new role is only about a week, it's a bit unfair. But one area, obviously, in specialty care neurology. We've got Aubagio coming off sort of next year. The CD40 data did look pretty cool, and that's going into Phase III. Now Sanofi was mentioned as a potential bidder for [indiscernible] you're not going to comment on that, I know that. But from my perspective, you've got a period, you've got Aubagio going now and you've got tolebrutinib and CD40 post '26. So having a neuro asset to sort of buy the time, so to speak, is sensible. But given your new role, how are you thinking about neurology. It's a bit of an unfair -- but look, it's an important part of the story so anything you would say that would be helpful.

Well, not unfair at all. I mean, actually, in my U.S. role, we were thinking -- we talk about this a lot. And actually, I'm not sure how we've talked about that before in the past. But I think what you can see -- just what we've shared up here on the stage today, and there's a lot more behind this of other team members that have a lot to share about what's going on in the organization. There is a lot to do in our organization now. That's why I say it's very exciting. It's not like our growth rates are -- you've seen them, right, looking backwards. And we're very bullish about what they might look like moving forward. So I would say this way, there is -- we are -- we need talent. And there is plenty to do in this organization. And that team has proven that they're incredibly talented, and they know what to do with great assets. They helped to build quite frankly what Sanofi became, I think, in the specialty care with moving into a very competitive neurology space in MS. So we have found in the lack of them needing to do what they were doing before. In most cases, we have found incredible things for the ways to deploy them in little drugs like Dupixent and actually across GBUs. We've actually had some talent go across GBU. So we are -- we don't let go a talent very easily. We find things for that talent to do that makes the most sense at that moment. And it's again another really great thing, I think, about our culture, is we try and repurpose that when it makes sense to repurpose it as opposed to saying, we're done with that for right now, we'll see if we can find you a little later on. Now the good news is we know where to find them whenever we need them again in the neurology space, which if you look at how our pipeline is developing, we will need them again before too off along.

Any final questions from the audience before we wrap up? No problem. . Kim, Brian, thank you very much. Good luck in your established role, but good luck in your new role, and look forward to your progress over the coming quarters. Thank you.

Thank you very much.

Thank you.