Sanofi (SAN) Earnings Call Transcript & Summary

Welcome to the Q4 and Full Year 2024 Conference Call for investors and analysts. As usual, you can find the slides on sanofi.com. Please turn to Slide #3. Here, we have the usual forward-looking statements. We would like to remind you that information presented in this call contains forward-looking statements, which are subject to substantial risks and uncertainties that may cause actual results to differ materially. We encourage you to read the disclaimer in our slide presentation. In addition, we refer you to our Form 20-F on file with the U.S. SEC and our French registration document for a description of these risk factors. Financials reported are under the new reporting scope that excludes Opella, Consumer Health. As usual, we will be making comments on our performance using constant exchange rates and other non-IFRS measures. Numbers used are in millions of euros and for Q4 2024, unless stated otherwise. Please turn to Slide #4. First, we have a presentation, then we will take your questions. Because this is full year results, we have a few more slides. We still have time for lots of questions as we added 15 minutes to the call time on top of the usual 1 hour. With Q&A, we have Brian, Olivier, Thomas, to cover our global businesses as well as Roy, our General Counsel; and Brendan, Head of Manufacturing and Supply. [Operator Instructions] With this, I'll hand you over to Paul.

Well, thank you, Thomas. Hello, everyone, on the call. We've made significant progress in 2024 towards becoming a focused, science-driven biopharma company. Our strategic progress was emphasized by the decision to sell a controlling stake in a Opella and further prioritize R&D. On the business, we achieved double-digit sales growth with strong contribution from launches. This included by Beyfortus that achieved blockbuster status in its first full year of sales. In R&D, we're pleased with the positive Phase III results of fitusiran, rilzabrutinib, and tolebrutinib. They provide the foundation for potential launches this year underpinning our sustainable growth. We are thrilled by the Phase II of duvakitug that is ready to move to Phase III, pending regulatory feedback. Houman will share more pipeline details later. Looking at Q4 on Slide 6, we reported double-digit sales growth for a third consecutive quarter, supported by our key drivers, vaccines, Dupixent and pharma launches. Taking a closer look at the launches on Slide 7. In Q4, Beyfortus sales were as high as those in the first 9 months of the year combined. We now have expanded RSV protection to more than 6 million babies around the world. In hemophilia, an increasing number of patients switched to ALTUVIIIO from both factor and nonfactor therapies. We're seeing strong patient benefits and sales reached almost EUR 0.25 billion in Q4. We are confident in our expectations that ALTUVIIIO will become a blockbuster this year. Moving to Slide 8. Dupixent exceeded the target of EUR 13 billion in sales, driven by the demand for more than 1 million patients globally. In Q4, Dupixent grew by 16% from strong prescription trends in all geographies. In the U.S., Dupixent continued its leadership in new-to-brand prescriptions across all indications, in line with the first 9 months of the year. U.S. sales growth in the quarter reflected fewer business days compared to prior quarters and the normal year-end gross to net adjustments. In countries outside the U.S., Dupixent delivered more than EUR 3.5 billion on a full year basis. In COPD, we are in the early stages of the launch, and we're seeing positive feedback from patients and prescribers. We expect the inflection point to be this year and COPD to become an important growth driver due to the large unmet medical needs. As we expand the benefits of Dupixent to more patients, we're pleased with the continued work on new indications, including EoE for children in the EU, CSU outside Japan and BP globally. New uses, increased penetration in approved indications and further geographic expansion are all important future drivers for Dupixent. Moving to Slide 9. 2024 marked a sales record for our vaccines business. Crossing an EUR 8 billion milestone, up by 13.5%. This performance was driven by Beyfortus, offering a marked reduction in hospitalization across more than 20 countries with all infant programs. We have the only RSV mAb with real-world data showing greater than 80% effectiveness in more than 100,000 babies. Our flu franchise was resilient, keeping its status as the world leader. 2024 sales exceeded initial expectations, driven by our differentiated Fluzone High-Dose and Flublok. In Q4, we also made significant progress with our vaccines pipeline with the start of 6 new vaccine studies, including the Phase III study for a pneumo vaccine PCV21 in children. Our R&D efforts in vaccines continue to be recognized by health authorities with the FDA granting Fast Track Designation to our 3 new Phase I/II flu programs. I'm pleased to share with you Sanofi's remarkable achievement in the 2024 Access to Medicine Index. We have improved our ranking and moving from eighth to third place, underscoring our commitment to global health. Important factors for this result are governance of access, R&D and product delivery. The Sanofi Global Health unit is an important role by delivering crucial medicines from the Impact brand portfolio to 30 low and middle income countries. Ending on such a positive note, I would like to take this opportunity to thank all Sanofians for their continued commitment to improve the lives of millions of patients. Thank you. I'll now hand over to Francois, our CFO, for more details on the financials.

Thank you, Paul, and hello to everyone. Before I begin, just a reminder that our Q4 and full year results reflect our new reported scope, excluding Opella. In the quarter, net sales increased by 10.3% at constant exchange rates to EUR 10.6 billion, marking our third consecutive quarter of double-digit growth. As mentioned earlier by Paul, growth was driven by new product launches as well as Dupixent. Gross margin was 74.3%, down slightly from the previous year, primarily due to the absence of COVID revenues in 2024. Excluding this COVID impact, our gross margin increased by 0.8%. The increase in operating expenses was driven by R&D, reflecting a high activity level in the quarter and brought us in line with our commitments for the full year. Business EPS was EUR 1.31, mainly reflecting a lower gross margin and increase in R&D and a higher tax rate following the OECD Pillar 2 implementation. Now turning to our full year results. Net sales increased by 11.3% at constant exchange rates, to EUR 41.1 billion, driven by our new product launches, including Beyfortus that became a blockbuster as well as Dupixent that exceeded our ambition of EUR 13 billion in sales. Gross profit grew by 10.3% at constant exchange rate to EUR 31.1 billion with a gross margin of 75.7%. Our gross margin declined slightly due to the absence of any COVID revenue in 2024 and the remaining impact of the Aubagio LOE. R&D expenses increased by 14.6% at constant exchange rates to EUR 7.4 billion, fully in line with our ambition to step up investments in our pipeline in 2024. SG&A expenses increased by 4.5%, providing an attractive growth leverage benefits. Business EPS increased by 4.1% at constant exchange rates to EUR 7.12 exceeding our full year guidance. We landed our 2024 business EPS more than 6 percentage points above our initial guidance at the beginning of the year. These results reflect our ability to drive strong growth while investing for the future and while carefully managing our cost base at the same time. Looking ahead to 2025, we would like to provide an overview of anticipated key business dynamics, which may be helpful for modeling purposes. As a reminder, at the beginning of the year, we expect to see the usual impact from the annual reset of insurance deductibles which leads to higher utilization of our co-pay assistance program for specialty medicines in the U.S. market. We anticipate only modest headwinds from the introduction of changes to Medicare Part D under the IRA. We continue to simplify our portfolio of other medicines, and we expect around EUR 250 million of sales reduction from disposals. We expect Beyfortus to grow further with additional penetration and geographic expansion. Our gross margin is expected to increase in 2025. R&D expenses will be slightly up, and there was a one-off Sobi item last year. SG&A will also slightly increase in preparation for upcoming launches, and we expect capital gains from portfolio simplifications to be again around EUR 500 million. Our effective tax rate should remain broadly stable compared to 2024. For our 2025 guidance, we have decided to expand our disclosure by providing sales growth in addition to EPS growth. For 2025, we project sales to grow at a mid- to high single-digit percentage at constant exchange rates. This guidance now excludes any impact from hyperinflation, which accounted for about 1.8 percentage point of sales growth in 2024. We estimate a positive foreign exchange impact on sales of approximately plus 2% to 3% in 2025. Business EPS growth is expected to grow at a low double-digit percentage at constant exchange rates before foreign exchange and before share buyback impact. We estimate a positive business EPS impact from currency of approximately plus 2% to 3% as well. Shifting to our free cash flow in 2024, which was mainly impacted by 3 one-offs: first, the impact of price cuts of Lantus in the U.S. in H1 for EUR 1.1 billion. Second, the entire elimination of all factoring of receivables for EUR 1.4 billion; and third, an unfavorable exchange rate impact of EUR 0.8 billion. All of it resulting in a closing free cash flow of EUR 6 billion. We expect our free cash flow ratio to be back to our historical levels steadily over 2025 and 2026. The slight increase of our net debt at the end of 2024 reflects our strategic investments, including the acquisition of Inhibrx as well as our value proposition to shareholders in the form of a growing dividend. Our net debt-to-EBITDA ratio, which is actually pretty close to our net debt to BOI ratio was at 0.7x at the end of 2024. This showcases a low gearing ratio and an optimal balance between strategic capital allocation and financial flexibility. In 2025, Sanofi will receive a cash consideration in the high single digit in billions of euros from the Opella transaction at the earliest in Q2, while retaining a significant stake in the company above 48%. Let me conclude by confirming our existing capital allocation policy. Our primary focus is to invest in our business to drive growth, demonstrated by our increased investment in R&D last year as well as ongoing investments in manufacturing, in AI, in digitalization as well as in sales and marketing. We will continue to explore external growth opportunities to strengthen our 4 existing therapeutic areas and potentially cover white spaces. In all our external investments, we maintain strict discipline and focus on value creation for our shareholders. Our preference remains for investments in a range of EUR 2 billion to EUR 5 billion each. We are committed to maintaining our AA credit rating in the short to medium term. In line with our commitments to shareholders, Sanofi intends to execute a share buyback program of EUR 5 billion in 2025. These repurchases will be conducted preferably through block trades and in the open market. Shares acquired will be canceled and will have an accretive effect to Sanofi's earnings per share, mitigating part of the Opella dilution. This commitment underscores our confidence in Sanofi's future and our commitment to delivering long-term shareholder value. Our proposed dividend of EUR 3.92 per share for 2024 marks the 30th consecutive year of dividend increase further reflecting the emphasis we put on shareholder reward and the dependability of our dividend policy. With the proposed dividend and the share buyback combined, we will reward shareholders with almost EUR 10 billion in 2025. This would be a record year in terms of shareholder return for Sanofi. I now hand over to Houman to provide an update on the progress of our innovation pipeline.

Thank you, Francois. 2024 accelerated the transition into a company with increased focus on science with our pipeline is starting to deliver meaningful benefits to patients and health care systems and growth opportunities for our company. We presented convincing clinical trial results at recent medical meetings, including for tolebrutinib in SPMS, rilzabrutinib in ITP, and fitusiran in hemophilia, the molecule from our pipeline that we are incidentally preparing for launch this year. As we look holistically at R&D productivity, scientific publications in high-impact journals underpin our commitment to developing science and bringing new medicines and treatments to patients. We have an increasing trend of high-impact publications and we now plan to closely track this leading indicator of improved productivity over time. Our pipeline has continued to deliver positive results, including 8 positive Phase III readouts in 2024. We've initiated 18 mid- to late-stage studies with 7 Phase IIIs and 6 new molecular entities moving into the clinic. This increased level of activity is the main driver of R&D spend that Francois covered earlier. On the regulatory side, we've made substantial progress with 21 acceptances of our regulatory submissions, including for the new -- for the 3 new molecules for the year. None of these are benefiting from priority review. We received 14 approvals, supporting the ongoing new launches. Please turn to the next slide. We are pleased with the significant process made -- progress made for Sarclisa in 2024 including approvals of the IMROZ study in the U.S. and EU last week. During the ASH meeting, data were presented in the frontline treatment option in multiple myeloma, both for patients eligible and ineligible for autologous stem cell transplant. On the left, we have the PFS curve from the HD7 study, where Sarclisa, added to a standard frontline combination demonstrated a 43% improvement in PFS based on a hazard ratio of 0.7 We're very pleased that Sarclisa continues to shine in terms of patient benefits by offering a new standard of care. On the right, we referenced the IRAKLIA Phase III study of subcutaneous Sarclisa meeting both co-primaries, noninferiority endpoints in addition to confirming a safety profile. Additional data from ongoing studies in combination with different standards of care and across multiple lines of treatment will support a broad application for subcutaneous administration, which we think will bring new benefits to patients and health care systems. The first regulatory submission is expected in the first half of 2025. On Slide 21, our commitment to rare diseases remains steadfast. Rilzabrutinib is one of the new additions to this portfolio with potential in ITP and far beyond. At ASH, we shared the Phase III data in ITP with rilzabrutinib meeting its primary endpoint of a durable platelet response in 23% of patients compared to 0% on placebo at week 25. In addition, a platelet response defines a platelet count achieving at least [ 50x10^9 ] per liter or a platelet count between [ 30x10^9 ] per liter and [ 50x10^9 ] per liter that double from baseline was achieved in 65% of our patients after only 15 days of treatment. As rilzabrutinib pleiotropically addresses the underlying immunological mechanisms of the disease instead of just boosting platelets per se as some existing medicines do, it confers an improvement in the quality of life of clinical symptoms and fatigue even in nondurable response. We anticipate global approvals this year and launch as regulatory reviews are ongoing in EU, China and in the U.S. for the PDUFA date of the 29th of August. In addition, we now have meaningful benefit in wAIHA igG4-related disease from our Phase II program with IgG4 being shared for the first time today. We're evaluating the move into Phase III with at least 1 of these 2 indications. As we remain committed to rare disease, we believe rilzabrutinib can bring significant patient benefit as we unleash the potential of pleiotropic immune modulation. On Slide 22, our partner Teva recently announced positive duvakitug Phase IIb results in IBD. IBD remains an important unmet medical need in immunology where we are underrepresented today. Duvakitug represents a meaningful opportunity for Sanofi to begin to bring new science and benefit to IBD patients, continuing immunology and far beyond. We saw statistically significant and clinically meaningful benefit in ulcerative colitis and Crohn's disease with all endpoints met and faring pleasingly competitively with a TL1A class. It is the first and only TL1A to demonstrate benefit in Crohn's disease. Patients achieved strong placebo-adjusted responses across both indications as high as 27.4% clinical remission in UC and 34.8% endoscopic response in Crohn's disease, both at the high dose level tested. Combined with a favorable safety and tolerability profile, these positive results offer an opportunity to advance the program into Phase III development and potentially offer an improved outlook for patients with moderate to severe inflammatory bowel disease relatively soon. Additionally, data will be presented at the ECCO meeting later this month. I'd like to conclude with my usual news flow slide now with 2026 news flow for the first time. We plan 12 Phase III readouts, 15 regulatory submissions and 13 regulatory decisions in multiple jurisdictions increasingly capturing the improving value of [ our clients ]. Importantly, we also see the intensity of the news flows increase over the coming 2 years, building on our earlier comments about our focus on improving R&D productivity. The cadence and the volume of the R&D drumbeat continued to quicken. We look forward to updating you on our progress. As I regularly say, we remain humble in the face of disease and regrettably, not everything will work. However, I'm optimistic that the impact of talented science-focused teams coupled with our increasing exposure to breathtaking digital technologies will drive this unique pipeline in our core focused therapy areas in the service of patients. I would like to thank all of my brilliant R&D team members and colleagues across the company for the positive progress made this year, we are indeed chasing the miracles of science to improve people's lives. With this, I hand back to Paul for Q&A.

Well, thank you, Houman. Thank you, Francois. We'll now call to questions. [Operator Instructions] Now we'll take the first question, please.

The first question will be from Luisa Hector from Berenberg.

On the buyback, perhaps you could just comment on the rationale for the size, the EUR 5 billion and how soon you might start the buyback? And then any color on plans for the rest of your proceeds? So essentially, just latest thoughts on M&A targets by development stage therapy area size, et cetera. Perhaps then I could move to vaccines. I would like to ask Thomas some questions. Maybe on the pneumococcal vaccine. So the Phase III entry very exciting. Perhaps a bit more color on what you're looking to show in Phase III and how you see the competitive landscape because there are others coming forward with vaccines perhaps with higher valent C24/31. So how you see a 21-valent vaccine fitting in?

Thank you, Luisa, I counted 8 questions. So okay. So buyback, sizing, timing, proceeds. Over to you, Francois.

Yes. See, the rationale for the EUR 5 billion, actually, we wanted to mitigate part of the dilution of Opella. So I think that we are addressing that with the EUR 5 billion. What we did as well was to listen to you as analysts and to listen our shareholders as well. And we found that EUR 5 billion was actually the amount that -- on which there was a consensus as well on your side. The starting point, we expect to start the share buyback in the middle of next week, actually, or relatively quickly. The rest of the proceeds is part of our capital allocation. You saw that, first and foremost, we want to invest in our business, which is what we did in R&D last year which is what we do as well on a permanent basis in AI, in manufacturing. There will be more coming in, in sales and marketing ahead of quite a few launches coming in. Obviously, we are looking as well very seriously at external growth opportunities, BD and M&A without any pressure because we have a strong growth outlook ahead of us because we have a strong pipeline as well. I mean, Houman just covered it a few minutes ago. That being said, we have a strong balance sheet. As you could see, we have a limited amount of debt as at the end of '24, so which gives us a certain number of opportunities, but we don't feel any pressure to go crazy on M&A and BD. So we will remain very disciplined while having the opportunity to complement whatever we have in our pipeline. So the main focus will be essentially on our 4 therapeutic areas, which you know plus potentially some white spaces, once again, without feeling any pressure and always focused on creating value for our shareholders.

Thank you. Thomas, PCV21 competitive landscape?

Thank you, Luisa. Indeed, Sanofi was very pleased to announce the start of the Phase III program for PCV21 [ valent ] product. The study is progressing as per plan. And in total, we are expecting to include more than 7,000 infants into the overall Phase III program. More broadly and in line with the question. As you know very well, first of all, it's exactly at the heart of what we're doing today at Sanofi vaccines. It's reaching either the pediatric for this Phase III program or the elderly segments, both segments where we are very well positioned. So it fits perfectly with our portfolio. It will be nicely complementary. It's a big space today. You know that pediatric is about 70% of the business altogether. And basically, as per the competitiveness of the program, I think I have a couple of things to highlight. First of all, PCV21 program is going to be the first pediatric vaccines against pneumococcal disease that will enter into a national immunization schedule, the first one with more than 20 valencies. So I think that it will position well as a starting point. As you've noticed also from our December announcement, we've announced a refocusing of the alliance with our partner, SK, which means that it's a starting point. It's not an ending point. We'll start with PCV21 and of course, our objective is to be competitive all over the marketplace. Therefore, we'll keep going forward with more and more valencies. So we appreciate obviously that other companies are working on other candidates in this space, but we do believe that we are very well positioned to start a significant entry into that place and will be remain competitive in the future.

Great. I think the first, as you said, over 21 or 21 valencies and a couple years ahead in the pediatric market, which is the biggest segment of [ all in that ].

Next question is from Graham Parry from BofA.

So firstly, on Dupixent and just the gross to net adjustment in the fourth quarter. Can you just clarify that was just a one-off adjustment catch-up for channel mix, rebate levels through the whole year of 2025 and just the extent to which that drove the EUR 150 million miss. Is that just the majority of that compared to, say, invoicing days? And then just any comments you've got on how that could progress into 2025. And then secondly, on Beyfortus, just given clesrovimab potential for approval this year, possible inclusion in the season. What are you assuming in your guidance for the year on Beyfortus, is it expected to grow? And then finally on tolebrutinib, if you could just update us on the indication that you're expecting for tolebrutinib in nonrelapsing SPMS. Is it classically defined nonrelapsing SPMS you're discussing? Or is there any potential here to get a broader label for progression independent of relapse activity?

Thank you, Graham. Brian, Dupixent, gross to net and outlook for '25.

Yes. Thanks so much, Graham, for the question. And I'll first start off by reiterating what Paul said in his opening remarks, we couldn't be more pleased with Dupixent's full year performance, delivering greater than EUR 13 billion. As you guys know, we provided the target of EUR 13 billion for the year, 23% growth this previous year. And again, it's underlying demand driven is what's happening here. We have strong TRx growth across indications and across geographies. And that's the same actually for Q4. Q4 was really strong performance with double-digit growth in terms of sales and TRxs. And it's just exactly as you said. I think you said it in your question, it was really due to the Q4 net sales reflects some one-off items in the U.S. So there's some true-ups there and of course, there is a little bit of the fewer business days. There's a little bit of each of the 2 mixes. But overall, again, really, this doesn't affect volume. We're in a really strong position as far as volume goes. And now having 2024 behind us that even further reinforces our commitment to our longer-term guidance that we provided. So we feel like we're in a very good shape exiting '24 and entering '25.

And you see the script trends since we started the year, so very encouraging already. Beyfortus, guidance, Tom and competitive set.

So thanks for the question, Graham. First of all, maybe before we switch on to 2025, a couple of thoughts on 2024, very happy about the first year of Beyfortus. First full year of sales, we reached close to EUR 1.7 billion, unprecedented pediatric immunization launch in the history of pediatric immunization. So I think that's a proof point of our capabilities. Now it's also a point of the capability of the product because you've seen that not only we are happy about the sales, but most importantly, we're very happy about the impact we have seen on hospitalization in the newborn population. Now moving forward from 2024 to 2025, we see further growth in 2025. That's very clear when you look at the penetration of the number of countries we can go to, there's more penetration in some markets, and there's a couple of more markets, notably in Europe or Asia, where we could grow in the coming year in 2025 and after in 2026. So obviously, we also recognize that there are more competition coming down road. You've pointed another monoclonal antibody that could come in 2025. We expect this other monoclonal antibody to come in 2025 in the U.S. As we discussed before, I think first impact would be the fact that we will talk more about the importance of our RSV prevention. So it will raise the importance of the awareness of RSV disease. That's the first thing. And then, of course, while there will be more competition down the road. We believe that we have a competitive profile with nirsevimab. We have an extensive amount of real-world evidence. You've seen many countries showing 80% or 90% reduction in hospitalization. And you've seen the very pristine safety on a large scale that is provided with the Beyfortus moving forward. So I think from a real-world evidence, from the competitive profile that we have also with a significant half-life compared to the other antibody, we are well positioned to grow in 2025.

Thank you, Thomas. Houman, tolebrutinib and potential label?

Yes. So thanks for the question, Graham. Tolebrutinib has been submitted in line with our previous guidance last year. We're excited about the data for tolebrutinib as you suggested, secondary progressive MS, and we are equally excited about the readout later in this year for PPMS. This is a demonstration of Sanofi's commitment -- unwavering commitment to patients with MS.

Next question is from Seamus Fernandez from Guggenheim.

I'll just go simple and try to abide by the one question request. So actually, the question is for Paul and Houman sort of simultaneously. If you each wouldn't mind offering up the catalysts that you're most excited about, in 2025, in particular, I think most investors anticipate the results of itepekimab most eagerly, but love to just kind of hear your thoughts on maybe your top 3 and if perhaps they might differ slightly, it would be fun to hear that as well.

All right. So the old, which is your favorite child. For me, it's the one that called me most recently, given things for -- maybe Houman you start now.

Yes. So I'll be very quick, top 3. I think we're excited about the launch of GP in COPD, which my beloved colleague Brian has already talked about, I think, bringing itepekimab alongside that for patients with -- who are former smokers will be very exciting and reinforcing our position in pulmonary inflammation and immunology. I think it's an exciting time for amlitelimab as we continue the quickening drumbeat, particularly in disorders like asthma and in hidradenitis suppurativa. And finally, I'm very excited about the ongoing activity around our -- completely internally generated bispecific activity in lunsekimig. So those are my 3, but it would be remiss of me not to comment on our 3 launches that are coming up.

I'm excited about all of our Phase II programs, just to give it -- I think the quality of what we're putting in means that we're more confident in what comes out, of course, the normal risks around that. Probably a bit of overlapping with you, Houman, and the itepekimab COPD, is game changer for former smokers. So I think that is going to be really interesting. And I could pick from 3 or 4 other things. But on the later stage, I think it's primary progressive MS with tolebrutinib. I think they're all big deal and I think we can go a bit deeper into the Phase II. But it's an exciting year for us, no LOEs, mid-high single-digit growth, strong rebound in EPS and pipeline catalysts. I mean that's where we want to go top line pipeline. Next question?

Next question from Peter Welford from Jefferies.

So I'll ask 2. Firstly, just on Beyfortus. Could you just comment there on 2 things, both in terms of -- you said growth for 2025, can we expect U.S. growth within your assumption for 2025? And what's regarding the -- is the actual doses that you shipped at the moment in the U.S. or indeed other markets, have they been used? Or are there still doses at the moment that are outstanding that are presumably likely to be used during the first part of the year as the season continues? And then secondly, I just wonder if you can comment on the potential for lunsekimig there. I think that catalyst has been pushed into 2026. Is that -- does that reflect any changes to the data you're awaiting or any change to the Phase II? Or is that purely just a timing from the point of view of recruiting and getting sufficient data on board for the decision in as for Phase III?

All right, Peter. Tom on Beyfortus, U.S. growth and doses shipped?

Yes. We don't -- thanks for the question first, Peter. We don't provide exact number of doses shipped by provider or to each country. But I can still give a bit more color on 2025 and versus what happened to 2024. So I think what's at the heart of your question for 2024 is how did we deliver the growth in 2024? And what does that mean for -- how should you think about 2025? So first of all, we had a significant increase in supply in 2024, all the teams have been remarkably working on both sides of the partner to deliver that. That has enabled us to deliver in Q4 2024, enough doses to cover for the 2024 needs and the Q1 2025 needs because, as you know very well, RSV is not flu. And therefore, you have babies being born in January and February and some more catch up. So there will be RSV immunization in January, February and March, and we've shipped doses in Q4 2024 for that to happen. So this is what accounted for. I still believe that when it comes to penetration, there is an opportunity to increase in the U.S. in the coming years. Of course, as always, when it comes with VCR, it's year-by-year progressively. There's a lot going on in the U.S., as you know very well. So we'll know more in the coming few weeks. But when you look at the profile of the product, we believe that there is a good space for the product moving forward.

Thank you, Thomas. Houman, lunsekimig?

Yes. So as I said, thanks for asking the question. We're very proud of lunsekimig combining the potency of TSLP and IL-13, best-in-class, first-in-class unprecedented molecule with the best FeNO data that's out there. Your specific question was about the implication of the move into '27 of that. I just want to -- I want to take a step back. I think the Sanofi has adopted a new discipline. This is part of our credo now. We're an organization that is robust in our use of data. And what all we've done, as you can see, by outlining and dimensionalizing our pipeline timing. What we've tried to do is align that beautifully with clinical trials. That's all we're doing. There is no implication for lunsekimig. In fact, our commitment both to moderate to severe asthma as well as high-risk asthma underlines the importance of this potential molecule to both increased efficacy ceiling and possibly drive durability. So simple answer to your question, we remain super confident.

It is really actually quite an exciting product, given in particular on high-risk asthma. I really - I've been in asthma 35 years, and I think this is a real incredible opportunity.

Next question from Jo Walton from UBS.

I have 2 questions, please. Firstly, can I push you a little bit more on vaccines. Perhaps you can give us some idea of what you think the penetration today in relevant infants is in the U.S. and what that would be compared to some other sort of early pediatric vaccines, just to give us a sense of what upside for the market there is. And also within vaccines, can you tell us a bit more about the proportion of your sales that go to, let's say, adolescents with mandates? Because I think people are fearful that whilst everyone is going to be allowed the choice to have a vaccine going forward, perhaps some of the mandates that really pushed people to vaccination may weaken anything to do with individual choice and you do tend to see lower vaccination rates. So I'd like you to discuss that a little bit in more detail, if you could. And could you also just please tell us a little bit more about health care reform in the U.S., your assumption of how much more you're going to have to pay for the Part D for those patients who are in catastrophic cover? And whether you see any offsets in terms of increased volume from lower patient co-pays, more adherence, for example, for things like Dupixent in the elderly?

Okay. Thank you. Francois, maybe I'll give to you on the last one on the assumptions. Some very specific questions, Tom, I'm not sure that you can answer them specifically, but you can certainly share what you think. .

Yes. And if I cannot answer them specifically in this call that's why we're having quarterly call. Maybe some of the quarters down the road. now. What I mean by that, sorry, Jo. And back to your first question on the penetration in the U.S. It will be today in January, a bit premature because I said before, you have the full data a few weeks after injection, and we know very well that RSV immunization are going to go still in January, February and March. So it's a bit early to say. I would expect a significant percentage of the U.S. birth cohort has been protected against RSV this year, but -- which means more than the majority, more than half, if you wish. But it's way too early to be a bit more precise, wait for a couple of 1 or 2 earning calls, and we'll do a bit more. It will give you more idea of further room today. But there is -- as for any immunization coming into the market, it takes 2 or 3 years to peak in terms of VCR. So I think that's what we should expect for the product, especially as the whole category. Now on your second question, which is very different on a percentage of adolescents with corresponding to mandated or potentially mandated immunizations in the U.S. I understand where the question is coming from. A bit early there. I would say that, if you want to have an idea, the immunizations you're talking about are some boosters in adolescents and some meningococcal shots in adolescence, so many and boosters. However, if you're looking at the heart of your question, I personally do not believe that mandatory or not monetary situations will make a big difference into the vaccination coverage rate. So we are not specifically worried for that. Of course, it's something we are monitoring as a field. But when you look at the clear benefits risk of our products moving forward between disease and not disease, those onetime immunizations are very clear in terms of safety and benefits. So again, there are some decisions that will happen in the coming few months or quarters maybe, let's see. Let's not have too many hypothesis, but whether or not monetary situation are removed, I do not foresee today a major impact on our sales.

Francois speaking. On the Medicare Part D, as I said, we expect a modest impact. It has been fully built in our 2025 guidance on budget obviously. You talked about the volume elasticity, that is very difficult to assess, but we don't expect a significant positive volume elasticity out of it. But maybe I'll let Brian complement what I said.

Yes. I think as Francois said, we're a little bit less exposed versus some of the other organizations as well based upon the nature of our portfolio. Again, more innovative medicines and vaccines. So you tend to have a little bit less exposure there. As well, you see a lot of our business even for Dupixent, we've said 70% of our business really primarily comes from commercial versus again in the government channels. But nevertheless, I think, Jo, you hit the nail on the head a little bit. What we haven't seen yet is will we actually have a little bit of volume improvement based upon the 2,000 annual out-of-pocket cap for patients, which could lead to improve compliance for patients as well. So that's really to be determined that, but that could be a potential slight offset, if you will. But we feel like we're in a very good position as we enter 2025.

Next question is from Richard Vosser from JPMorgan.

Two, please. One on amlitelimab. Just as we think about the asthma data that's coming up and the 12-week dosing. Could you just talk through your level of confidence that you'll see no detrimental reduction in efficacy there through the data? And then secondly, a question on itepekimab. Obviously, Dupixent in COPD has a broader label. The launch is going exceptionally well from the script trends. But what implications does that have for the residual opportunity for itepekimab in COPD?

Okay. Houman?

Thanks, Richard. Two quick answers, and thank you for both questions. So just categorically, I obviously haven't seen the data, just to be clear, but I don't expect, based on the pharmacodynamics of amlitelimab and atopic dermatitis, a condition, which is both clinically overlapping and pathophysiologically overlapping, I don't expect any drop off at week 12. In fact, what we saw with amli is progressive increase throughout the duration of atopic dermatitis over 52 weeks. So I'm actually comfortable that the pharmacodynamic half-life of amli will continue to grow throughout the course of asthma. We remain seriously awaiting the outcome of the amlitelimab asthma result, which should be this half of the year. And then specifically talking about itepekimab. Just to challenge a little bit of the underlying premise of the question, while we were appropriately rewarded with a broad label the dupilumab with type 2 chronic bronchitis. I think that the population of former smokers is a very substantial one and one that we led to science with both genetically and in terms of characterization of the patients, where IL-33 secretion is substantially increased in bronchi lavage. So actually, if anything, the opportunity is very substantial in the former smokers who have significant morbidity and mortality associated with COPD, and we remain steadfast in our view that in a success scenario, which we'll know fairly soon, the combination of products will reach a peak sales of more than $5 billion a year. Brian, any further thoughts?

Yes, I'd like to complement that with, again, like other therapeutic areas or disease states that we've gone in with our immunology portfolio, again, we're the first mover into the marketplace. So the bio penetration rate today is, again, just what we're doing with Dupixent and COPD, number one. And so as we go in there with both of these agents, we're going to be able to continue to grow patients, I think, on those therapies. But just nicely, as you said, this is going to open up the population. And across the 2, we've shown you that 2 by 2 before in the past and itepekimab plus Dupixent will open up the opportunity to reach more than 80% of the COPD population. Again, around 2 million patients, if you think about it across the G7, if you will. So they're both uniquely sit in unique places. They overlap ever so slightly, I think, in the above 300 eos level in the type 2 COPD patient population. But I think the complement to the 2 really shows that we're going after this disease state from all angles because there will be different patient populations that will benefit from both drugs.

Brian, just a quick addition before we go back to Paul, which is I just want to remind everybody that itepekimab works in the high eosinophil and the low eosinophil population equally in terms of relative risk reduction. And we do have a life cycle management strategy for itepekimab with CRS with NP. Our Dupixent story is now being rolled out in conjunction with our extremely valued partners at Regeneron.

Thank you, Richard allowing Houman an opportunity to hijack the call. .

Next question is from Florent Cespedes from Bernstein, Societe Generale.