Sanofi ($SAN)

Hello, everyone. This is Thomas Larsen from the Sanofi IR team. Welcome to the First Quarter 2026 conference call for investors and analysts. As usual, you will 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 new Form 20-F on file with the U.S. SEC since February in our French Universal Registration Document for a description of these risk factors. As usual, we'll be making comments on our performance using constant exchange rates and other non-IFRS measures. Numbers used in millions of euros and for the first quarter, unless stated otherwise. Please turn to Slide 4. First, we have a short presentation, then we'll take your questions. We aim at keeping it all to 1 hour, including the questions. We are mindful that other companies are also reporting today. For the Q&A, we have Manuela and Thomas to cover our global businesses as well as Roy, our General Counsel; and Brendan, Head of Manufacturing and Supply. You can participate in this Q&A in 2 ways, either raise your hand in Zoom or submit your questions using the Q&A feature. With that, I'll now hand you over to Olivier, our Interim CEO.

Hello, everyone, and thank you for joining our conference call. As Thomas mentioned, I'm the interim CEO before our new CEO, Belen Garijo, joined Sanofi in May after next week's Annual General Meeting. Before we get started, I also want to thank Paul Hudson for his work as CEO from 2019 to 2026, and his work with the management team here at Sanofi. Now on results, I'm pleased to report that we delivered a strong start in 2026 with double-digit sales growth and earnings growth, reflecting strong performance across our company. Pharma launches performed well, driven by Ayvakit, ALTUVIIIO and Sarclisa. This exemplifies our ability on the commercial side. Modest vaccine growth was led by our expanded PPH portfolio, which now includes the hepatitis B vaccine Heplisav-B, following the Dynavax acquisition that closed in February. Other metrics were impacted by the ongoing divestment of legacy medicines and modest contraction in older medicines in the rest of the world. Dupixent continued its strong performance with continued underlying volume growth across indications and market, while dollar growth was boosted from a lower base of comparison in the U.S. in 2025. Overall, the first quarter demonstrated solid progress across our key growth drivers and sets up well for the remainder of the year guidance and change. Turning now to Slide 6. Our launches continue to drive strong momentum and represented 14% of total sales. The performance was led by ALTUVIIIO with EUR 325 million in sales up 42%, followed by Beyfortus with EUR 284 million, reflecting continued global expansion. Sarclisa grew by 30% to EUR 167 million, driven by higher demand in all geographies, reflecting increased use in the frontline setting. We saw medicines and vaccines from our recent acquisitions contribute meaningfully to growth. Ayvakit delivered EUR 170 million and Heplisav-B contributed EUR 46 million since the completion of the Dynavax acquisition. Recently launched Wayrilz, Qfitlia and Myqorzo continued to make progress as we expand access for patients. Overall, our launch portfolio grew by 44% versus last year or approximately 22%, excluding acquisitions. The performance of our launches reflects our continued force on commercial delivery across the business. Turning now to Slide 7. Dupixent continued to deliver exceptional sales growth, with first quarter sales approaching EUR 4.2 billion. Strong year-over-year growth was driven by continued market penetration across existing and new indications as well as a lower basis of comparison in the U.S. last year. As we had previously, we anticipated volume-driven growth to continue with some normalization in the second half of the year as new launches annualized and comparisons are getting tougher. Dupixent remains the #1 prescribed biologic medicine, across top specialist in the U.S., reflecting the confidence of physicians in Dupixent's efficacy and safety profile. This performance underscores our ability to successfully launch and scale across multiple indications and geographies, with U.S. approval in February, allergic fungal rhinosinusitis, Dupixent is now approved in 9 indications and reached more than 1.4 million patients. Moving now to Slide 8, where we outlined the multiple options we have in place to sustain value creation for the Dupixent franchise. Let me walk you through each of distributors. First, defend, we have a robust patent portfolio of issued patents and pending applications with expiration dates running from 2031 to 2045 million. We have a vigorous defense plan with the expectation to protect Dupixent's innovation beyond the U.S. company patent expiration in March 2031. Second, extend. We have the potential to extend Dupixent's dosing interval to every 4 weeks to improve patient convenience. We will pursue this through 2 approaches, higher dose approach in asthma where development is currently ongoing and a coformulation approach for which clinical studies are expected to start in the second half of 2027. And third, innovate. We can potentially pursue new molecules to leverage our existing alliance infrastructure to bring new medicines to patients. Together, these 3 pillars represent multiple complementary options for continued value creation to sustain the long-term durability of the Dupixent franchise. Turning now to Slide 9. Rare disease are named rare as they affect relatively 2 people, fewer than 5 in 10,000 people according to the EU and in the U.S., a rare disease affects fewer than 200,000 people. But collectively, rare disease impact hundreds of millions of individuals worldwide. Many people face years of misdiagnosis and limited treatment options. Sanofi has built a deep differentiated expertise across rare disease, spanning from lysosomal storage disease, rare blood disorders, and more recently, systemic mastocytosis disorders. With this, we now have a very sustainable and competitive business. In Q1, this business reached nearly EUR 1.8 billion, and grew by 20%, led by Ayvakit and ALTUVIIIO. Our growth is fueled by innovation and by new launches, which contribute to almost half of sales. Sanofi's mission in this space is clear, to bring transformative therapies to patients faster and to remain a long-term partner to the rare disease communities we serve. On Slide 10, vaccine sales reached EUR 1.3 billion in the first quarter, reflecting solid underlying fundamentals. Following the consolidation of Dynavax in February, PPH and Booster now include Heplisav-B, which grew by 18% on a market pro forma basis. Now I want to share some recent headlines. A new study published in the Lancet infectious disease showed for the first time the benefit of Beyfortus in the second. On top of an 86% reduction in RSV LRTI hospitalization in the first season. It demonstrated a 55% reduction in hospitalization for infants immunized in the first season. This underscores the Beyfortus differentiated clinical profile and long-term value for patients. Additionally, Nuvaxovid our non-mRNA COVID-19 vaccines continues to differentiate tolerability as supported by the data presented at ESCMID a key advantage that could help drive higher COVID immunization rates. In the first quarter, our vaccine business demonstrated resilience and depth. We continue to deliver on our commercial priorities, strengthen our pipeline through disciplined business development and build a real world evidence that supports the long-term value. This gives us confidence in the trajectory ahead. Before moving to the financials, I'm pleased to highlight Sanofi's 25 years partnership with the WHO to eliminate sleeping sickness, a neglected disease affecting vulnerable population in Africa. Since 2001, we have achieved 3 major milestones. In 2009, together with partner, we introduced the first effective and safe combined therapy to treat late-stage sleeping sickness. Then we co-developed with DNDi the first oral treatment, which is approved in 2018. These efforts helped reduce new cases by 98% between 2001 and 2024. In February, Acoziborole also codeveloped with DNDi received a positive CHMP opinion. Acoziborole is the first single-dose treatment and requires no hospitalization or lumbar puncture. Due to its simplicity, it can be easily administered in a remote village supporting the WHO goal to eliminate the disease by 2030. Through the Sanofi Foundation, we donated these medicines free of charge to patients. Thank you. And I will now hand over to Francois, our CFO, for more detail on the financials.

Thank you, Olivier, and hello to everyone. Starting with Slide 13. Net sales grew by 13.6% to EUR 10.5 billion in the first quarter. Our growth was supported by 3 main drivers: Dupixent, our recent launches and recent acquisitions as well. On a like-for-like basis, group sales increased by 12%. At constant exchange rates, both gross profit and margins were up, supported by favorable product mix and continued operational efficiencies. Operating expenses increased by 7%. This was driven by increased SG&A spend due to 2025 BD and M&A activity, including Blueprint and Dynavax as well as some one-off items. As a percentage of sales, OpEx came down by 1.9 percentage points, showing the ongoing impact of our efficiency programs. BOI was up by 10.9% and BOI margin was slightly down due to higher profit sharing and the phasing of capital gains which were approximately EUR 230 million last year versus only EUR 40 million this year. Our tax rate was in line with the rate of the first quarter of 2025 with a similar additional French corporate income tax contribution in both years. Finally, business EPS grew strongly at 14%, driven by operational leverage. Turning to our 2026 outlook on Slide 14. We confirm our guidance of high single-digit sales growth at constant exchange rates with business EPS expected to grow slightly faster than sales. Please note that we have a tougher comparison base in H2, with Dupixent's new indication launches and the consolidation of Ayvakit, which started in July 2025. We now expect approximately EUR 400 million of capital gains from divestments in 2026. In March, we signed an agreement to divest Medley our Brazilian generics business under very favorable market conditions. This incoming disposal will be booked below BOI and is subject to antitrust approvals. We expect to close this transaction at the earliest around the end of 2026. Profit sharing will continue to grow faster than Dupixent sales and financial expenses are expected to increase this year with higher debt level for BDM&A activities last year and potentially further deals this year. Finally, I'm pleased to confirm that we will complete our EUR 1 billion share buyback program in the coming days. I will now hand over to Houman for an update on our pipeline.

Thank you, Francois. The first quarter demonstrated continued momentum across our portfolio. Let me walk you through some of the key highlights. Dupixent received multiple label expansions in the EU for chronic spontaneous urticaria, children in Japan for bullous pemphigoid and in the U.S. for allergic fungal rhinosinusitis, further advancing our commitment to reach more patients through new indications. We also obtained EU approval for Rezurock in third-line chronic graft versus host disease, marking an important milestone for patients with limited treatment options. And finally, we are pleased with the U.S. label expansion in TCL to delay the onset of Stage III type 1 diabetes and children as early as 1 year of age that we received just. We reported a positive Phase III result of venglustat where the primary endpoint was achieved in type 3 gates disease, rare disease or the Phase III study in Fabry's disease did not meet this program. We initiated a new Phase III study for frexalimab in kidney transplantation, expanding into CD40-ligand mechanism of action in transplant biology. On the regulatory front, Wayrilz received orphan designation in Japan for wAIHA and IgG4-related disease, along with breakthrough designation in the U.S. venglustat was also granted breakthrough therapy in the U.S. for type 3 Gaucher disease. . After a solid start to the year, now let's explore each of these areas in more detail. Starting with dermatology, where we presented the amlitelimab data and the recent AAD medical meeting. Across all 3 pivotal studies, case 1, case 2 and sure and across both primary endpoint, easy, amlitelimab showed continuous improvement for both every 4- and 12-week pacing schedules versus placebo through week 24 with no evidence of plateau. There was further -- this is further supported by the Atlantis Phase II results through week 52. In addition, introductions were similar across both dosing schedules, enabling the potential of very infrequent dosing. On safety, amlitelimab was well tolerated with low conjunctivitis pyrexia, chills and headache that were observed with other molecules. No cases of Kaposi's sarcoma were observed in these Phase III studies. However, as reported, there was 1 observed in ATLANTIS, the Phase II study and 1 observed in the SG Phase III extension study. These cases are both cutaneous in nature and both patients are recovering after discontinuation of treatment. In general, overall rates of malignancy were similar to placebo. We look forward to share more data from the SG 3 Phase III extension study as we approach the regulatory submission anticipated at some point in H2 2026. In atopic dermatitis, we plan to prioritize efforts on amlitelimab and our first STAT6 inhibitor that recently entered Phase I with our partner Recludix. Now moving to our respiratory portfolio on Slide 18. We are building a differentiated and innovative pipeline and have made further progress this quarter. We reported top line results of lunsekimig, our anti-IL-13 TSLP bispecific when used on top of background inhaled therapies and 2 distinct key indications. In moderate to severe asthma, the AIRCULES Phase II study demonstrated statistically significant and clinically meaningful reduction in exacerbations regardless of biomarker dates over 48 weeks. And similarly, a significant -- statistically significant and clinically relevant improvement in lung function that's measured by pre bronchodilator FEV1, also at 48 weeks. The ongoing AIRLYMPUS Phase II study will further expand the use in patients with high-risk asthma and suffering from high exacerbation rates despite symptom control. And inadequately controlled chronic rhinosinusitis with nasal polyps, the DUET Phase II study of lunsekimig demonstrated statistically significant and clinically meaningful change also in nasal polyps score, patient-reported nasal congestion and obstruction and the Lund-Mackay CT score at week 24. Both studies showed acceptable safety profile. We are pleased with the lunsekimig results in asthma and chronic rhinosinusitis with nasal polyps and look forward to discussing Phase III studies soon. The results are encouraging, and we look forward to lunsekimig's ongoing PERSEPHONE and THESEUS replicate Phase II/III studies and in the inadequately controlled COPD patients with an eosinophilic phenotype. Recall our December late-stage pipeline review, we made the decision to prioritize medicines to specific indications where the mechanisms may work best. Amlitelimab with new priority asthma to focus resources on the most promising opportunities. As for itepekimab, the CEREN 1 and 2 Phase III studies in chronic rhinosinusitis with nasal polyp are ongoing with the readouts anticipated next year. In COPD, we're in discussions with the regulatory authorities and with our partner Regeneron and a potential Phase III study. There was no final decision made yet, and it will be subject to overall portfolio prioritization. Overall, our portfolio is advancing and then lunsekimig emerging as a potentially important medicine across multiple respiratory indications. Turning now to Slide 19 with a release new CCD Phase II study following 4 900-milligram induction, duvakitug achieved ulcerative colitis clinical remission, placebo-adjusted rate of 27% and Crohn's disease endoscopic response placebo-adjusted rate of 35%. During monthly maintenance and industrial responder patients, duvakitug demonstrated UC clinical emission rate of 58% and CD endoscopic response rates of 55%. The maintenance response suggests robust sustained efficacy with a convenient monthly subcutaneous dosing. Consistent benefits were observed across clinical endoscopic patient-reported endpoints and the safety profile was well tolerated and consistent with the end of the study. These data support our ongoing Phase III programs and potential life cycle management. Then on business development, we've had 2 molecules to potentially used in chronic versus host disease, and other immune indications. With Rovadicitinib, a JAK/ROCK inhibitor from Sino Biopharm is already approved in China for first-line myelofibrosis, which fits with our focus on rare blood diseases with an ongoing Phase III study in third-line graft-versus-host disease. Sanofi is responsible for the Phase II development, second line, extending our presence alongside Rezurock. From Kali Therapeutics, we licensed in the CD19, BCMA, CD3 T cell engager currently in Phase I in immune-mediated disease with Sanofi responsible for the Phase II development. These additions reflect our focused approach to business development in the areas of high unmet medical need within our strategic scope. Now pivoting to Slide 20 with rare diseases, which remains a core pillar of our strategy with historic presence across lysosomal storage diseases and a deep commitment to our patients. As previously mentioned, venglustat its primary endpoint in a LEAP 2 mono-phase III study in type 3 Gaucher disease, representing a significant milestone for patients with this debilitating neurological form of the I can potentially augment our established medicine, Cerezyme and Sadalca. It was also designated U.S. breakthrough therapy, which was announced recently. In Fabry's disease, the PERIDOT Phase III study did not meet its primary endpoint, the CARAT Phase III studies ongoing as we have evaluated the path for the. Across acids, finger melange deficiency or [indiscernible] disease type 1 mucopolysaccharides and Pompe's disease, our established portfolio affects our long-term commitment [indiscernible] On Slide 21, now let me share an update on the key mid- and late-stage pipeline development are using this slide from our December late-stage pipeline review. Our immunology pipeline has progressed by having delivered most of our amlitelimab's Phase III program in AV and by lunsekimig's positive results announcement, CRSwNP. In neurology, tolebrutinib is still under review with the EU for SPMS for frexalimab in Phase III for RMS and SPMS and riliprubart in Phase III for CIDP, the latter 2 with data next year. In rare diseases in oncology, Wayrilz is advancing with its life cycle management plans beyond IT and the designation discussed earlier, venglustat for GD3 and Sarclisa expanding with a subcutaneous formulation with recent positive EU recommendations. Our vaccines portfolio await future data across pneumococcolysis and other opportunities. Finally, on Slide 22, let me cover the expected '26 and '27 key news flows. The remainder of this year, we expect the last Phase III amlitelimab in AV required for regulatory submission. We also anticipate multiple regulatory submissions based on data we already received last and this year is where regulatory decisions for medicines and vaccines under review. Next, you will get the IIb data for brivekimig –and HS followed by Phase III studies of frexalimab and RMS and riliprubart CIDP. My sincere thanks to all Sanofi R&D colleagues, and more broadly, Sanofi colleague, who share my commitment to advance science and Sanofi, improve our pipeline from research and regulator approval and get new medicines for patients who need us. With this, I hand back to Olivier for Q&A.

Thank you, Houman. We will now open the call to your questions. [Operator Instructions] Now we will take the first question. .

The first question is from James Gordon from Barclays. .

James Gordon from Barclays. First question was on monthly Dupixent. So I've seen clinical studies to start in H2. But can you help -- what are you going to co-formulate Dupi within AT and what would the development pathway and time lines look like and when could this come to market? And would it be quicker for asthma versus AD? That's the first question, please. And then the second question would be for lunsekimig. So the Phase II headlines look very encouraging. So your T-cell 13 in asthma. But are you confident you've demonstrated a materially stronger profile than existing T-cell monotherapies, such as test already on the market would you develop this against like with the study against test bio or just against placebo. So is this a much better product or really just another T-cell?

Yes. So maybe, James, thank you for your question. And maybe we start by the first question on Dupixent AD Manuela.

Yes. So I would ask Houman also to complement here. So first of all, your question was on the LCM profile of Dupixent. And we are evaluating strategic options, a broad set of strategic options as Olivier reiterated in his remarks, one is on IP. The other part is on formulations. Houman will talk a little bit about the formulations but there are broader options for Dupixent that we're looking at and that we're considering including coformulation, including higher doses with the Q4W dosing to basically provide more options for patients and also elevate and enhance the patient experience. Houman, maybe over to you.

Manuela, thank you for that. Very quickly, James, I think just to be super clear, with a high data we're going into asthma, development plan for that will be relatively conventional and we'll give you more details of that alongside our partner Regeneron going forward. Importantly, with a formulation that we anticipate going relatively broadly -- the formulation has been well worked out and will be germane and pertinent to many relevant atopic -- I'm sorry, Dupixent indications. The clinical development of those are just being worked out. .

On the second question related to lunsekimig Phase II result, differentiated product, Houman?

Yes. So again, state of Rob simply, we're enthusiastic by the results as I just called out in severe asthma and CRSwNP, both of which strongly type 2 disorders, and we've been excited by the results we've seen, albeit recognizing that this is -- these are early studies, Phase IIb study, just to be very specific, as you asked the specific asthma study I make 3 points. Number one is we comfortably hit our primary endpoint, but statistically and clinically in all comers as anticipated, number two, speaking to differentiation, as called out on FEV1 and PROs, we were specifically differentiated. Number three, further details of differentiation in the overall population, and in the relevant subgroups will be presented at a medical meeting in the relatively near future. I just want to caveat that while we are excited about lunsekimig in the tree of codependent diseases of asthma COPD and CRSwNP we remain thoughtful about how we go forward with these diseases as this was a relatively early study, but it does perform provide a foundation for our respiratory disease.

Next question.

Is from Florent Cespedes from ODDO. Florent?

Florent Cespedes from ODDO BHF. So 2 quick ones. First, on Dupixent. In Q1, the drug was less impacted by pricing pressure in the U.S. Maybe could you give us more color on why this happened? And how do you see the next discussions with the payers? And my second question, just to follow up on lunsekimig, I just like to know if you will wait for the Phase II results on the high-risk asthma next year before taking a decision launch of Phase III program? Or if you could decide in the near future or the next step for lunsekimig?

So first question, Manuela, on price pressure on Q1.

Yes. So thank -- thank you, Florent. So first of all, we're very pleased with Dupixent's continued strong performance, the 31% of growth that we have shown in Q1, which is largely driven by underlying demand, strong underlying demand across established indications but also driven by strong uptake at recent launches. As you rightly pointed out, the Q1 performance partly reflects a low basis of comparison due to higher gross to net price adjustments in Q1 2025. But again, if you correct for that, the sales growth is largely driven by volume demand. You know that GTN fluctuates from quarter-to-quarter due to many different factors. Q1 in the U.S. usually is higher because of the annual insurance benefit resetting. But to your question on payer pressure, we have a robust strategy in place which we continuously evolve to ensure long-term profitable growth while maintaining a favorable patient access for Dupixent in general. One thing to know though, we expect a strong demand growth to continue. But at the same time, we will -- we expect some moderation in the second half of the year as recent launches will annualize.

So going to the question on lunsekimig and the development strategy.

Yes, very straightforward, 2 bullet points. Number one is we do not anticipate waiting for the results before we move forward and material pressure to Phase III will all be subject to, obviously, internal portfolio decision making, but currently a regulatory conversation.

Yes. Next question is from Luisa Hector from Berenberg. Luisa?

I wanted to follow up on the longer-acting Dupixent, please. Could you comment on actual technology? Is this with a partner? Are there additional pay aways? And can we assume the financials with Regeneron remain the same? And perhaps just a question, could you stretch it even longer than every 4 weeks? And then second question, Olivier, great to have you on the call. So thank you. We've had you just for a few weeks as interim CEO, but obviously, you have an impressive amount of experience at Sanofi, and you've made a contribution to the significant transformation over the last 5 years. So the question for you is what advice might you give to Belen when she arrives in a week or so?

So on the first question related to the longer-acting Dupixent, I give it to Houman.

Yes, I'll be short because we want to alleviate response. The -- Luisa, thank you for your thoughtful question. Yes, the technology is pretty straightforward. It is with a partner, it is precedented and we're here being used in -- across the majority of Dupixent indication.

So on the -- thank you for your question, Luisa. First, I'm very happy to work again with of course, Belen with whom have worked in the past, and I know pretty well I would be very cautious and the advice that I would give her. But the first one is to take some time to make the right diagnostic. I think the company has considerably changed in the last 5 to 10 years. The way the company has modernized is was very impressive. I think in the last few years, a lot of -- we have gained a lot in terms of better prioritization, internalization of the company, we have also significantly increased our capabilities, notably in the U.S. in terms of marketing and commercial. Of course, it's going to be a period after the agnostic where she needs, of course, to be decisive and knowing her, I know that she will make the right choices. She will examine of course and review the portfolio. I can tell you that in order that she gets prepared who have prepared with my team, a solid program so that she can -- when she joined early May be up and running from day 1 and clearly work on the topics that really matter for the future of Sanofi.

Next question is from Steve Scala from TD Cowen.

I'm just curious why a year ago, Sanofi wouldn't speak to Dupixent LOE extension, but now includes slides in the deck. It seems that there are 4 possible reasons for this change. The first is that Sanofi now has more confidence, and I'm wondering why. Second, the outlook for the pipeline assets expected to form the next generation is unclear. Third, the LOE is near or fourth, a change in communication strategy may be related to the CEO change. In the absence of any other information, I think we have to assume it's the pipeline. I'm wondering if you would push back on that.

So we can start maybe on the question that is related strictly to the LOE with our general counsel.

Thanks for the question. We've always been consistently saying that we have a very strong alternative portfolio and that we tend to because defend Dupixent and that we expect it to go beyond the compound calendar years, which is mostly on I think you see it on the slide for the first time because you see some other things there regarding the fit of the alliance, and it was just put in writing. We had the same question last quarter, and I answered it, Francois, on the slide maybe.

Yes. No, Steve, I think that anyway, there is a logic that we talk about it because we get nearer to the LOE. And we see that there is a very strong appetite from the investor community to understand what's coming after the Dupixent, it's a major product for us. So I think we see that there is an interest on me to answer with the investor community. This has been done, by the way, perfectly aligned with our partner as well. Regeneron made some communication about it as well at JPMorgan. So there is a logic that we talk about it as well. So I don't think there is any defensive view on that matter.

Yes. And the last point, Steve, thank you for your question is that it has nothing to do with the change of CEO, Paul took the commitment in H1 to make an update on the Dupixent LOE.

Next question is from Sachin Jain from BofA.

Just another one on the Dupixent extension slide, if I may. So I wonder if you could ode a bit more detail on the right hand, deep innovation column and where you the assets being discussed within the alliance of the IL-4 receptor, and then level of progress on discussions around whether each party would put other assets into the collaboration when we might hear on that? And then I just wanted to go back to a prior question. There was a question on the Q4 week DP and whether you could extend beyond that. I wonder if you could just address that, just wondering whether Q4 week is enough of extension relative to existing given the competitive landscape by the time you launch.

So Houman, you take the 2 questions, maybe you start by the Q4 extension.

I'll answer to the question. At the moment, we are very focused around the Q4, and we are confident that the Q4 -- let's just take a step back 1.4 million patients dosed with DP. It is the immunology molecule of the moving to Q4 is engineering innovation that we -- that will serve in patients -- so number one is, at the moment, we're focused on the Q4 and providing that in multiple indications, et cetera. And then we'll move forward on any further innovations. And you wouldn't expect us at this point to show our hand too much on those further innovations. And the question one, we work very closely along the alliance specifically with the Tingson, George and land on those various I think you call the right-hand column indications, whether it's Super Dupi or other molecules that we've talked about and these molecules are being progressed together, certainly [indiscernible] in the -- and we're excited moving this forward. We'll tell you more about those over the next few years. .

Next question is from Richard Vosser from JPMorgan. Richard?

A couple of questions, please. Firstly, just on amlitelimab. I wondered if you could give us a bit of color from feedback on physicians from AAD around the date you presented. And in particular, the Kaposi Sarcoma events any concerns you're hearing from physicians around use of amlitelimab because of those events. And then a second question also on the pipeline. You mentioned an outstanding Phase III decision on itepekimab. We've seen another IL-33 from a competitor have a couple of positive Phase IIIs or maybe 3 Phase III trials positive, just what sort of impact does that have on your thinking around pursuing a further trial given the time required to do such a trial?

So Houman, maybe we start by the last question on itepekimab before moving to amlitelimab maybe Manuela, you take the question.

On number one, listen, we are -- as you say, there's an outstanding question about the IL-33, pack out molecule. We are in the midst of our regulatory discussions and discussions with our partners will come forward relatively soon, I guess, with a decision, which will be a portfolio position. Importantly, we take into account all the data, both in the private and public domain regarding molecules that target an pathway. And let me -- why don't I just pick up the amlitelimab one as well Manuela, happy with me just to do that while I've got the microphone. . With respect to amlitelimab, we out of an abundance of desire to demonstrate the manifest benefit risk of this molecule. We presented the data at AAD super clearly let me be clear on 3 things, AAD still represents an area which is substantially biologic underpenetrated with significant heterogeneity in disease and there are opportunities for novel mechanisms of action, point number one. The efficacy has been laid out. I won't repeat it, but Case 1, Case 2 and sure Atlantis have been absent and showed that there is no plateau effect to 24 weeks and with Atlantis improving up to 52 weeks. And thirdly, we've now put as much safety data and blinded and unblinded data that we've got in the public domain up to 4,500 patients approximately. And we remain confident in the benefit risk ratio of this molecule, you ask a question, and I'll be very succinct about physician and other responses. We've seen no impact on enthusiasm physicians and payers -- particular physicians and patients for this drug based on the data we presented at AAD.

Next question is from Sarita Kapila from Morgan Stanley.

So you talked about expanding the DP LOE beyond March 31, which patents are you most confident in for extension. So is it the method of treatment patterns so potentially extending exclusivity to 2034. And then the second question was on riliprubart, could you help us understand what's driven the 1 or 2 delays to the readout. One of your competitors has alluded to recruitment issues given the trial design and a lack of a Part A component. So I was wondering if you could give us some more color, please.

Okay. Maybe we start by the question related to DP patents.

Thanks a lot. Picking one patents out of tens of patents is not a good testament to the amount of innovation we've done for Dupixent over the years. We have multiple strong patents going up to 2025. We believe we have a very strong patent portfolio and intend to be a lean all of them.

So now moving to riliprubart recruitment.

Yes. Really had a great set of Phase II results in both patients with standard of care responsive and nonresponsive, we were straight to Phase III. I think we've learned as we initiated the Phase III what works better and what doesn't work, that's particularly at the screening stage of those studies, and I'm pleased to say that recruitment is picking up. So as you articulated, we needed to learn something from the screening of those patients, and now we're moving on. We are optimistic about the impact riliprubart can have on patient outcomes based on the totality of the data in the public domain. .

Next question is from Seamus Fernandez from Guggenheim.

So first, on the patent side, just to me to get a little bit more clarity on how we should be thinking about the timing of potential resolution of the result typically, we see something like a major series of settlements 2 to 3 years before. Can you say that you're proactively working on that kind of an outcome to happen sooner rather than later? Or should we anticipate a standard extended process in the core, particularly in the U.S. And then the second question is really, can you just update us on I believe you were studying lunsekimig in atopic dermatitis, hoping to get a better understanding of where or when we're likely to see those data? And if the data there happens to be something that you remain encouraged by or if you're likely to move on?

Maybe we start my second question, Seamus, thank you for question. the lunsekimig AD, Houman.

Yes. Thanks for the question. We've been delighted by the lunsekimig results. And as I said, the triad of the respiratory, this orders, our focus is in respiratory disease at the moment. We will make a decision on atopic dermatitis at a later point, but our priorities restructuring. .

Now moving to the question related to Dupixent patent.

Thanks. I'm sure your experience in following how other drugs have evolved over time. Reminder that there's a biologic you're asking me about settlements, and we are sitting here with a pattern of 50-plus patents in the U.S., none of which have yet been challenged. So if we wanted to give clarity to our investors on the strength and even if we have people lining up to discuss, there is nobody at the moment because nobody has challenged our patents. Typically, these haven't closed for biologics, is closer to launch. We do intend to vigorously defend all these patterns. To the extent we feel at some point that people understand the strength of our case, and we want to give people clarity, we will do that, but we are quite away before that because we have not been challenged at this stage. .

Next question is from Graham Parry from Citi.

Just going back to the Q4 weekly Dupixent. Can you just confirm if it's highly on a days, co-formulation, who the partner is and what commercial pay ways you might have on that? And what formulation studies have been completed to date, and there's any public data or if you intend soon public data on that. And then if there is a IP extension you think the formulated Q4 might give you on the asset overall? And then secondly, on the IL-4 receptor, what are the milestones from that in terms of data points and what would be the threshold for a decision for the collaboration to invest fully in that project going forward given it's already covered by the collaboration?

Okay. So Houman on the first question on the Q4 formulation.

Yes, I can confirm that it is probably wrong days with a partner we might disclose any more than that at this stage. And then on the second question, we don't disclose the milestones for internal decisions around the R4. .

On the next -- the queue on the Q4W patterns, any...

We protect every innovation. I think the objective here is patient convenience, and we'll see what that means.

Next question is from Peter Verdult from BNP Paribas Exane. Peter? .

Peter of BNP. Two questions, please. One on the pipeline, one on capital allocation. I'm sorry to labor the point, but coming back, can we go back to the itepekimab question. What are the exact go-forward plans? Because it seems to be dragging somewhat. I think we all ERI 55would have begun quite a number of months ago. So can you just clarify when in fact, ERI 55 might be it in recruitment? Or does the developments across the pond or across the channel at Astra sort of change your thinking about the commercial potential here? And then on capital allocation, just for Olivier or Francois, EUR 10 billion to EUR 15 billion the right characterization of Sanofi Firepower for BD, given you want to maintain a AA rating, and given your comments, and you're clearly signaling that you're doubling down on rare diseases, is this the area where we should expect for BD?

Houman, first question on itepekimab.

So I just want to make sure that I was clear on the last question on the R4 result to Alpha point. I just want to be clear that while we don't disclose the exact stage gates or milestones within the nature of the alliance -- it is in the alliance, and we are moving forward. with it. So we will tell you more about that as we go forward. Pete, to your question about itepekimab, there's no sight of hand on itepekimab. We have to get regulatory approval before and a regulatory opinion before we move forward, we have to align with our partner, Regeneron. I'd like to reassure everybody that it's high on our dashboard, Manuela and I on this side of the alliance partner and we will come back to you as soon as we can. As I said earlier, we're taking the totality of data, not just Astrazeneca's data is one, but there's a number of IL-33 data points that we need to take into account before we move forward with CDPD.

So Francois, you want to take the question on the M&A.

So on capital allocation, I said last time when we -- as full year disclosure that we could invest up to EUR 15 billion this year on retain of rating in BDM&A, by the way, it depends on what we buy because if we buy commercialized asset, it would go probably even maybe potentially up to EUR 10 billion more. If we were only buying the one asset, it will be probably significantly less than that because it would weigh on our BOI. So we are looking at opportunities anyway, time frame. So as soon as we get 1 quarter the amount in places to a certain extent as well because we generate additional cash flow and we have a strong growth profile as well, given that we grew double digit. In terms of areas and therapeutic areas, exactly as we did last year. You could see that last year, we invested in 3 of our 4 main therapeutic areas, namely immunology, Raticide and vaccines. So we are targeting as a priority, I would say, the same 3 therapeutic areas, why we don't eliminate either the possibility to invest in white spaces as we did as well last year, for example.

Yes. The next question is from David Risinger from Leerink.

Great. I just have one. So Francois, can you discuss the quarterly EPS progression ahead, including the impact of the Dupixent Alliance R&D reimbursement step down?

Are you talking about Q1 or for the full year?

Looking out to later in the year when the reimbursement is eliminated.

Okay. So you know that we are coming to the end of the R&D reimbursement from Regeneron. We will have a negative impact on BOI of probably 400 -- a good EUR 400 million this year. We expected initially to have another negative impact of EUR 800 million next year, which will be a bit less because we are anticipating. This is partly linked to the fact that since Dupixent is growing faster than we expected, we are anticipating a bit faster the end of the reimbursement. So probably net around EUR 400 million negative impact BOI this year, and maybe EUR 700 million next year negative again on the top of what we get this year. It may accelerate a bit depending on what we do this year with Dupixent, but that's what is likely to happen. We expect the balance to be fully reimbursed around Q2 2026, but obviously, this is the reason why it will have an impact on up to Q2 2027. You may remember as well that we said that in spite of that, our BOI will increase both in margin and in absolute value, both in '26 and '27, so we'll be able to absorb it through our growth profile and profitable growth as well.

Next question.

Yes. Next question is from Matthew Weston from UBS. Matthew?

Took forever to get signal. Two questions, please. First amlitelimab, in your opening comments, you said would you concerned over the Kaposi sarcoma cases because the rates of malignancy in the control arm. Kiran observed exactly the same, but said that sarcoma being mechanistic that was a reason to kill the program. Why is he write and Kirin wrong? And then secondly on Blueprint. A key element to Blueprint acquisition, as I recall, was as a fund for Sanofi stand-alone immunological efforts beyond [indiscernible] now that there's a lot of talk about reinventing the original [indiscernible] that means you're deemphasizing investment in standalone immunology drug.

So the line was pretty bad. So I'm -- maybe on the first question on, [indiscernible].

Yes. Matt, thank you for your question. I'm not I wouldn't speculate on the decision-making within Kali and Amgen. From our own perspective, all I can tell you is that the benefit risk of amlitelimab is differentiated. And we are consistently with the opinion that we bring that to patients. Just to be very specific, our rates of chills and pyrexia are extremely low and lower than any other molecule on the ops pathway. Number 2 is that we've in -- as I said, about 4,500 patients in unblinded study demonstrated 2 cases of pots, both of which we continue -- both of which are improving. And then number 3 is across our other side effects and other issues, they're balanced across placebo and treatment arm. So overall, we remain confident at present around the value of amlitelimab in patients with benefit risk intention for the atopic dermatitis. Olivier, over to you.

Yes. So Blueprint as several dimensions. There is an immunology dimension, but there is also rare disease dimension. And this is why we have positioned it in our air disease franchise because we think that it's the best hole for Blueprint. Next question?

So the next question is from Michael Leuchten from Jefferies. So on Slide 8, you talk about innovation, new assets and new assets to leverage the JV infrastructure. Can you clarify all that links with BD and how you would work with parties having an economic stake? And then the second one is for Francois, EBD, on post until Belen arrives, our East Capital deployment in flight or on an ongoing strategy.

We want to start by the first question. I think we have been very active, including in the last few weeks on the billing side, but you might want to complement.

No. But I mean, obviously, we are looking forward to welcoming Belen in a few days, but business goes on in the meantime. So we haven't stopped working. We have not stopped being active in the market, including Belen. So as Olivier said, we have been very active, and we have an acting CEO as well with Olivier, we have the Board of Directors and the entire management is totally mobilized to continue business, while waiting for Belen's arrival in a couple of days.

On -- Michael, on your question regarding any potential joint venture, I would say that, of course, everything is subject to discussion with Regeneron.

So the next question is from Simon Baker from Redburn. .

Two quick ones, if I may, please. Going back to Florent's question right at the beginning. We get a lot of debate now about the competitive landscape within immunology. I was just wondering if you could give us a little more detail on an indication-by-indication basis, how you're seeing that evolve. Overall, clearly, Dupixent is outpacing our expectations. But any color on that would be very helpful. And then a quick one for Francois. On net financial expense, you did guide for the full year being a little higher than last year because of higher debt, in Q1, it was a lot more than we were expecting. So I was just wondering if you could give us some pointers on the evolution and cadence of net financial expenses as the year goes on?

Simon, thank you for the question. So Francois, a little bit more color on the financial expenses? .

On net financial expenses, you probably remember that anyway, last year, Q1 was before we received the proceeds from we had a rather a still relatively high level of net on gross debt, which is the reason why we had the olefins cost that was relatively high. We gave a guidance at the beginning of the year on the fact that our finance cost would increase this year that -- and we mentioned immediately that would be subject to additional BD and M&A. We have not been -- we have not bought large assets in Q1, so -- which is the reason why there was no impact in Q1. So it may be the M&A for more significant amounts, if any, insist may come a bit later in the year than maybe what we were anticipating when we were doing our budget. So can probably factor the fact that there might be a little bit less than what we thought initially for the full year. That being said, I still expect an increase in terms of financing costs versus last year, that may be a bit more moderate than we saw due to some time delay in M&A.

Manuela, on the broad question on immunology. .

Yes. And I'll keep it short because we're almost at time. I think the question is a really good one, more competition in immunology. But at the same time, you also have to look at how nascent some of these therapeutic areas still are. Let's just take atopic dermatitis as an example. We're really above 18% advanced therapy penetration, and new entrants, new mechanisms of actions in all of these categories, more competitors, more players is actually helping to create more awareness and more adoption of advanced treatments. So that's what we're looking for. And there's definitely -- in all of those bases, there's still significant unmet needs that we're trying to meet ourselves but also with additional MOAs. So yes, more competition, but we're actually welcoming it.

Next question is from Rajesh Kumar from HSBC.

Just a bit of clarification on capital deployment strategy. You indicated that if you were to buy a late-stage asset, the firepower could be greater than $15 billion. Are you thinking of buying a late-stage asset? That's the first question. Second question I have is, obviously, Dupixent, you are going to work on life cycle management, itepekimab, we don't know what you're going to do, you're dependent on what the regulators are saying. A little in my view, are a lot more confident than -- so if I take all of those, how are you thinking the R&D investments in these projects are factored into your capital allocation framework. We truly appreciate what sort of fresh weighting you put to these different scenario outcomes.

So thank you. On the first question on late-stage assets related to capital allocation.

Yes. Rajesh, I cannot comment on what we are looking at today because it's obviously a confidential by nature. But we -- I think we have a duty to look broadly at the asset that makes sense from a strategic point of view, from a scientific point of view, from a financial point of view. So we are looking at a certain of asset, including net stage assets, also speaking, we have said it over the last couple of quarters, our interest is more for early stage assets, but we are not eliminating our discounting any opportunity either in late-stage assets. As I said, if we were buying late stage assets as for -- or commercialized asset, as we did with Blueprint last year, obviously, it adds some BOI. And as a consequence of that, it does give us a little bit more opportunity in terms of leverage. But -- so we -- once again, we are looking at a fairly broad spectrum of assets as we always do, and I think we have a duty to do that.

Rajesh, maybe getting back to your second question. Can you be a little bit more precise with your question? On is life cycle management and allocation of resources. .

Sorry. You're going to do some development expenditure there, right, for different formulations and you're going to come up with a strategy to manage the life cycle. So you're going to spend money on R&D, right? So how much of that was already factored into your earlier medium-term R&D spending run rate? And how much is incremental and new?

So how much is incremental, how much is already factored in our plan.

Yes. Much of it is factored in. And of course, it's part of the alliance relationship with Dupixent, and so that's pretty straightforward.

Okay. So thank you, Rajesh, for this last question. So we had a very strong start to 2026 with double-digit sales and EPS growth. Sales advanced by 13.6%, supported by pharma launches and recent acquisition and business EPS was up by 14%. We obtained 5 regulatory approvals all immunology achieved 1 positive Phase III study readout for venglustat in rare disease and reported encouraging Phase II data for lunsekimig in respiratory disease. And finally, we reiterate our guidance for 2026 and the commitment to deliver profitable growth. With this, I would like to thank you for the interest in Sanofi, and we will now close the call. .

I will now close the session. Everybody, have a great day.