Sanofi (SNY) Earnings Call Transcript & Summary

Thanks for joining us at the next session. I'm Graham Parry from Citi, and it's a pleasure to be able to introduce Sanofi and in particular, to introduce Paul Hudson, the CEO. It's great to have you here in Miami, Paul. I'm sure it's nothing to do with the sand and the sea that interest you here. It's purely been the investment community. But perhaps if I can get you to kick off with some high-level sort of the opening remarks just to talk about where you think Sanofi is at the moment. And I guess the thing that's on a lot of investors' minds still is how Sanofi planning, the Dupixent LOE in 2031 and the sort of Sanofi look like post that date.

So a few things. We've come a long way. Just to give you some headlines. We were, I don't know, $33 billion in revenue when I joined around $45 billion now. We were 118,000 people in 2019. We're around about 72,000 now. We forget how many, but upwards of 70 sites in manufacturing, we're now 38. We've really tried to modernize the company, we exited consumer. We've tried to turn ourselves into an R&D led pharma company because we felt we were structurally going to be behind our peers. We had to do a lot and invest a lot in our own pipeline and we even recommitted our buyers to that in '23 when we took quite a hit saying that we needed to do this. And we needed to do it partly because that's the future revenue generator of the industry, but also with Dupixent ahead of us, we have U.S. at 2031 and Europe at 2033. Some external watchers have us at around 2033 in the U.S. We have a lot of patents. We have some good ideas that we haven't shared yet. We'll share those in time when we feel comfortable without giving too much away. But in essence, we have to get the medicines launched. And what I learned over the last years, we're a really good commercial organization. I mean we're really nailing it. We're growing close to double digit. Dupixent, despite the threats and the wonderful people in this room that predicted our demise with lebrikizumab and everybody else coming, we grew 26% in Q3. This is the real deal. We know how to commercialize. And what that brought home to me over the last few years was we do need to get those drugs over line out of R&D. If we can get tolebrutinib approved, if we can get amlitelimab COAST 2 as a positive readout. If we can get lunsekimig into Phase III, we really know what to do. And it's been a bumpy ride. I should have perhaps signposted it more than it might be a bit bumpy. It's not my natural style. But I'm really happy where we are right now. We have a lot to do, but I think I'm really happy with how we're set up with what we have plus the acquisition of Blueprint to come through the Dupi LOE. Should we underwrite that a bit? Should we add some things? Maybe that's part of the conversation? Probably. Yes, yes.

Okay. I was going to ask this. So when you look at your mix now between internal pipeline and M&A or BD, how do you see that going forward relative -- if you look at the strength of what you've got internally at the moment and the need to do additional deals perhaps to continue to fill out the pipeline?

Well, I think we -- if I look at the number of preclinical Phase I versus our peers, I think we're light. I think we're not where we need to be. We might be somewhere between 5 and 15 programs short -- high-quality programs, I think, short. We brought in our new Head of R&D a couple of years ago because he has reflexes in that area, perhaps even more so in the earlier space. We're looking at a lot of things we'd like to add. I think we need to because if we turn the mid late-stage pipeline into what we expect, we'll have enough confidence to ride through Dupi grow EPS. But then the question will be, well, we're not so sure about your growth story, 33% to 40%. Well, actually, you can be more confident because these assets are now in Phase II, III as we get through the end of the decade. And I think that work is also for those that follow us, which is making sure that we've spent all the time and effort becoming an R&D-led real pharma that we don't leave ourselves with a gap longer term. So we can do much more there. On the sort of mid-late stage, if everything that we have -- not everything. Out of the 12 drugs that we have, if 4 or 5 are wins, we have enough to cover and to grow and to grow EPS. If we get 3 or 4 failures out of the next steps, then we're going to have to think more creatively about what we get from outside. So you should see the emphasis in preclinical Phase I. You; should see as opportunistic in later stage. The Blueprint deal was really about underwriting the top line growth all the way through to the early 30s by saying, "Look, we're going to give you top decile performance on growth." As we turn the cards over and you get more confidence in the pipeline, you'll start to feel like now we're worth a re-rate. We waited a while, right? And it is what it is. But I like the way that's come together. The Blueprint deal was a little bit above what we were planning, but we were disciplined and I think to pick Ayvakit, which will be a blockbuster next year and then a little bit of pipeline behind it turned out to be a good deal.

Okay. And I guess the other thing that's been a focus of investors is margin progression. You're a bit clearer on Q3 about how you see '26 panning out. But I think the '27 commentary is a little bit more cautious, and this is -- the extent to which -- if you can just clarify the extent to which that's just around the Regeneron R&D offset going away?

Yes. Look, it's been a big deal, and it's in the high hundreds of millions. Of course, the AMVUTTRA royalty is coming up fast. And while they're not like-for-like, the gap will close. I don't want you to have a consensus for AMVUTTRA in '27, but it's a big number. And we're looking at 30% of that. So I think we feel quite well placed for bridging that. Plus we move towards a more specialty care-led portfolio, which has a mix benefit. We're becoming more efficient in general as a business. And you should look back -- if you look at Q3, we were 8.8% growth on the top line. We were 9.7% growth in BOI. We were 12.4% growth in EPS and minus the buyback 10.2%. We like the shape of that. I'm not saying the numbers will be the same when we guide for '26. We won't guide for '27. But you should see us driving numbers that show our efficiency and our ability to execute and show an attractive P&L at the same time as growing the top line and investing in R&D. That's the job, right? But I feel we -- in Q2, we were not clear enough about our desire to run a leveraged P&L. And we went to great length at Q3 to make sure that there was no misunderstanding. The company where we're at still with a sort of could do better in R&D, then we must deliver the financials.

And as is the case, not everything hit through the course of the year. So to what extent was the ability to grow BOI next year -- margin next year down to perhaps a lowered R&D budget? Or does the R&D commitment stay there and you just refunnel it into earlier-stage projects, if you're not running quite as many Phase III?

Well, I think some stuff graduates. Some of the OCEANA, the amlitelimab program graduates. So it leaves us a bit of capacity. I know people would love to say, "Well, if nothing hits, we will redirect the resources. Things not hitting is more of an issue than the R&D spend. And that would force us out to try to buy things that would come with R&D spend most likely. I think we are in the sort of 8 and change region for R&D. And I think that we should try and manage within that. And should we do something opportunistic, maybe add a little bit. But I don't think we should get ahead of ourselves. For a decade plus, we were around EUR 5 billion. It was never going to be enough to replenish what we had ever and we made the tough decision to add more and take the hit back in '23. We shouldn't blink now, particularly as we have an approval ahead of us, the second Phase III pivotal on amli lunsekimig phase II. I think we have enough going on to say, "Just stick with us, we'll do that." The Phase Is, we can add them. We can add them a little bit later in the year, even we don't have to see a big rise in R&D spend. We've kept G&A roughly flat the entire time I've been in the company. And where we pushed the sales piece, we've had it back in top line growth. So I think we're doing things right. The question is, is the total R&D investment getting the return and I think there's still a question mark. When I look at some of the bumpiness of this year, it's often attributed in sentiment-wise to just can Sanofi really just get out of their own way and do some R&D. But we had a standout win on itepekimab Study 1 and Study 2 or fail. Roche had 2 underwhelming study reads out, AZ failed a Phase II, and we'll go to Phase III, in my opinion, without a recognized subpopulation. And so we're all finding some of these things quite difficult. It's not just us. We've chosen a difficult area, but we've chosen an area that's high reward as well because we know this, and I've spent some time, some of you in the room have heard me mention this today already. There is something special about immunology. While it may be harder and there may be some risk when you do get approved, a company like ours that can execute you have a multibillion-dollar drug literally by just being not the other things. That's the function of highly heterogenous, highly symptomatic patients that are never happy with their treatment. And so getting approved and then putting in our commercial hands is really the meat and potatoes now for us.

Got it. And then the other sweetener, I guess, on the margin has been the capital gains. So you've done about EUR 0.5 billion a year. That's been pretty consistent. I'm not quite sure where you find all the products from. So how long can you keep finding products?

Well, I think the history of this company, there's no short supply of products. One of the interesting things when I joined in '19, I went around the world, and everybody that presented to me had a different portfolio. So we've managed -- one of the reasons we dropped the number of sites, we were, I think, 300,000, 400,000 SKUs. I think we're around about 200,000 now. All of these are the efficiency gains. We will make around about EUR 0.5 billion in capital gains. We'll drop about EUR 200 million in revenue that we'll have to make up for those divestments. But that's good business, good pruning. And I should have said this earlier and I didn't when you asked about R&D spend, but the -- we're also pruning some of the R&D. So what you don't see is a little bonsai work that's going on where perhaps we were trying to get beyond indication 1 and 2 with some of the immunology drugs because you can. And I think we've sat back and reflected and say, while we could go after some smaller indications, 80% to 90% of the value was on indication, indication 1 and 2. So why don't we just do that and remove the opportunity costs on doing the other indications that may have washed their pace, but that money is better for us deployed elsewhere in R&D. You don't feel that pruning, but that's going on regularly.

Got it. And just moving to the pipeline, you touched on a few of the things. There's been -- as you say, there's been a few -- some hit some misses. I go back to the R&D Day 2023, there's a sort of basket of products you put in the EUR 2 million to EUR 5 billion peak sales range and then some at EUR 5 billion plus. So if you assess your scorecard on that, how happy are you with where you've got to today? And would you reorder those 2 to 5 and 5 pluses?

It's probably better you tell me because we -- if I look at where we are, where we could be with the next steps, I have amlitelimab squarely in the 5-plus. And I'm actually more confident now than I've ever been. Again, when we released the phase I data, we crushed primary and secondary endpoints. The market, I think, was a bit underwhelmed because of the effect size comparison to Dupixent because everybody sees it as a DECT comparator. Dupixent grows until its end. Stop worrying about that. We have a plan for that. The question is, can amli -- amlitelimab be EUR 5 billion on its own? Does it stand on its own? Think of it as sitting in another company. We were blown away by the fact we could start patients and have success on a Q12 regime. It's the same group of people that asked me, "Paul, are you interested in this company with a long-acting IL-13?" And I'd say, "Not really." And then I'd say, "Well, I have a long-acting OX40-Ligand." It's almost like the same person can't think about the same thing twice. And we -- if we're really Q12, you know how it will work for biologic naive, the physician will tell people for the first time, you're going to have to go on an injectable treatment. The patient will say, how often? The physician will say, every 2 weeks, maybe every 4 weeks or there's 1 every 12 weeks. They won't even ask what it is. And we love Dupi, Dupi grows. A group of patients just don't want to do it, and we'd rather do a Q2. That is a major percentage of naive. With amli on top, there's a chance of drug-free, disease-free remission for a small population, but the promise of it at initiation is enough to inspire people that amli is certainly worth 1/3 of new patient's initiation. That's why we go beyond 5%. There'll be a debate about how quickly the efficacy is onset. So I think we should not try and appear as the first choice for a patient that is what I call the hot patient who comes in highly symptomatic and need something quickly. I think for the 91%, we should be looking at taking a 1/3. So I'm very happy with the number.

Yes. Okay. And you said, as you pointed out, the effect size numerically when you compared it to Dupixent was low, and it actually looked more like the Amgen rocatinlimab data, both of which had looked for higher effect size in Phase II. So just talk us through what your thoughts are on why you saw a drop off in or a numerical -- numerically lower effect size in Phase III versus Phase II?

Well, I think I mean just take one step back. Look at the consensus for the other drugs, we could pick NEMLUVIO for a moment. We know that up to 50% of the patients drop out at 6 months because their idea is no better. Consensus is around EUR 3 billion. The effect size is lower than every drug you mentioned. So let's take it on both levels. What are we really talking about? We're talking about new mechanisms with long interval with an increasing efficacy because we were only 24 weeks in that study. So we feel very good about the class. We feel very good about the ligand. It's not really an issue. I think what has materialized and you've seen it with some drugs, IL-17s that have surprisingly failed or IL-5s that have failed in certain diseases. Where you choose to do your study and who you choose to include is more important than it's ever been. When Dupi was first out of the blocks and everybody was naive, the effect size is massive, everybody is excited. It's a miracle. I've been there before when we launched REMICADE 1,000 years ago. If you were to do the Dupi studies now, I think as amazing as this medicine is, you may find it middle of the pack, not because it deserves to be, but the patient selection is getting more demanding. And I think we're going to find, by the way, a more complex set of results from biologics in autoimmune disease over the next half decade until people iron that out. Many drugs are already in flight. So it's getting very specific and very important to know your biologic experience versus naive in your sights and not just look at the total and make sure the screening is perfect. So I don't worry about that. I know that if you can give somebody incredible benefit over a 12 weekly regime with an efficacy that keeps improving with a chance of remission, you are a major player in atopic dermatitis. That's all I really care about. Again, we know how to commercialize things. That's not really the issue. That profile, but I spoke to our commercial leaders after COAST 1, they're like, "Can we go now?" That's -- they know what they have. And so we should really wait until we're approved. So we'll get COAST 2, and then we'll deal with it after that. But that's the sentiment because we know while you guys like your cross-trial comparisons, we like the fact that patients who need a great medicine with the right profile will get it and we'll go fight there.

I think in the past, you've alluded to or talked about the fact that in immunology patients cycle through therapy for looking at psoriasis, multi-class drove a lot of penetration, et cetera. Do you think that is how, ultimately, the AD class will? So therefore, do you see that if the Aquis results are positive in the Dupi experience patients, that, that is also a sizable part of the EUR 5 billion that you talked about?

I think Dupi is going to grow to the end. We gave some ideas around EUR 22 billion, I think it was in 2030. People last when we gave EUR 10 billion in 2019, nobody is really laughing at the EUR 22 billion. So Dupi is so well understood and so many indications and so trusted this profile is without question. I think what's going to happen is there's going to be an absolute mirror replay of psoriasis. And I find it a bit surprising sometimes that people haven't sat back and said, "How can 4 IL-17s be successful in psoriasis and HS? And how many advanced therapies are there? 10, is it all blockbusters? One oral is not going to get to blockbuster status, but everything else that's injectable is a blockbuster. And when we look at head-to-heads and we do effect size comparisons, don't forget that most patients, and I think you touched on this, will have 2 to 3 or more biologics in their life with the disease. Everybody is moving all of the time. These patients whose lives were horribly impacted, they go on a great medicine. They get 95% clear and they're pissed about the last 5%. And a few years later, they say, "I need something else." It's normal. Expectations get raised. We've seen it play out carbon copy in psoriasis. And in '23, when we did the R&D Day, we used psoriasis as the example. We said you go from the first drugs, which are not normally as good as Dupi, but come in like a HUMIRA or REMICADE or Enbrel, in fact, then you become more selective and more efficacious. Well, Dupi sets some of that bar, but there's still room. And then you go to interval and then you go to oral. And all of these things take the patient pool. And we know -- we absolutely know for sure that the reason Dupi grew 26% in Q3 despite 2 or 3 new entrants is because biologic penetration is less than 15%. So 85% of the patients that should be on Dupixent are not on Dupixent, which means that every time there's a new entrant, all boats rise, and we're the market leader. It's going to be the same, exactly the same. That's why I find it a bit perplexing when people don't study psoriasis and say, "Let's apply that to AD. Hey, and let's apply that a bit to asthma, slightly higher penetration. But what happens if it plays out the same? It's going to play out the same.

Yes, yes. In the AQUA Study, I think the patients enrolling are allowed to have failed a biologic or a JAK. But in the treatment paradigm, JAKs tend to get used later unless they're sort of used for an immediate flare resolution in the short term at the beginning. So in that study, will you be able to tease out the patients who have Dupi or biologic failure rather than from the JAK failure patients to get a clearly defined population?

Yes. But the goal of the OCEANA program was do we believe this drug can be one of the winners to go beyond EUR 5 billion in asthma, of course, but importantly, in AD. When we put the program together, we tried to understand what the physicians might want to see. It was less about competing with JAKs or Dupi. It was more about saying, "Can you recapture a significant efficacy response in patients pretreated with advanced therapy?" It's more that. It's more on top of topical corticosteroids in AQUA. It's more saying, in your practice, in your office, who you're seeing? Can you have confidence to initiate for naive? Can you have confidence efficacy -- so post? Do you have confidence that efficacy will continue and mature SGRE? Can you go on top of other things, AQUA or responders? Sure, rather, for TCS. So that the position builds extreme confidence in being able to say, I see the utility at first advanced therapy or later, it's worth us trying. We just wanted to put the full data set together, so get close to and move from there.

And if I sort of understand it correctly, the way you talked about it initially, you talked about the frontline naive market, the first and potential for remission. So if you think about that 5 plus for you, is that more weighted into the naive patients than it is into the post DP3?

I would -- I know I read some of the notes and things and the sort of overly simplified view sometimes of those that watch us is, well, if you're not as good, you've used afterwards. It's really the opposite. The question is, what are the things that drive penetration? It will be interval in that case, chance of remission. And so if offered to naive patients, that's a huge amount of naive patients. So if that -- in that context for me, and I have the numbers close to hand, that would be 1/2 to 2/3 of the patients. And of course, just because you're not an IL-13 means you get used later. You just get us later. Again, if you're an IL-31 and one of the comments on the label is may make AD worse. The real thing is you're 31, you're not a 13. And I think that's what gets physicians excited to try a different mechanistic approach. I have to say, I agree with that. I think that's the right thing. So we'll get a lot later, but we'll get more naives than people realize. Most likely again, needle burden and for many who don't want to ever do that themselves 4 times a year is actually, you know what, I may just get it done in the office. That's a tiny bit easier for everybody. And you don't have to meet a certainty. So maybe I'll do my class and then go the following week. That level of flexibility is pretty extraordinary. So I think we will get a lot more naive than people realize.

And I might switch to one of the other assets that's more imminent, I guess, as well even tolebrutinib. So you have the PDUFA date coming 28th of December, which is delayed. Perhaps to the extent you can talk about sort of what label you're aiming for or hoping for from the -- in the non-relapsing secondary progressive setting?

Well, what we had in the study was no relapses in the last 2 years and still progressing. That's 25% to 30% of the MS patients. I'm okay with that. If we get PERSEUS data that gives us a SNF at the primary progressive, could be another 5%, 10% of the population. Overall, that's a big population for us to go for, more than enough to make it a multibillion-dollar drug back to the -- can it be 5? Can it be more? I think the reality for us is we would just like to get approved. We used the voucher. We got earlier review, and then we lost the early because of the FDA taking more time. I don't regret on that unmet need, not a well-understood part of the disease because there's never been any drugs. Also incumbent upon us to make sure the REMS is perfect. I said it to a few people today and yesterday, but said it to the team, launch uptake is not my concern. REMS uptake is my concern. Perfect REMS Perfect, perfect, perfect. So that if that means you take longer to have an end-to-end, nurse visits your home, blood draw, physician sent labs, physician confirms receipt of labs, physician confirms reading, it's like getting your -- whatever it's called, do you confirm your reservation for dinner and everybody is scrambling to -- that is what -- how we want people to feel because if you're doing weekly for 90 days and the physician gets the labs and acknowledges reading them, if they're elevated, you stop them. And if they're not elevated, you continue. It's that simple. It's that simple. There's no burden. But if you mess that up, you get a halo you don't need, it stays around. And given that it's unlikely we'll have a competitor for 5, 6, 7 years at best, no need to rush that. No need to rush that. We have modest expectations for '26, and we have more demanding expectations thereafter.

Yes. And just going back to the label. So do you -- I guess the question is that the FDA ahs never actually approved non-relapsing progressive MS drug with that label or definition. And it feels like the McDonald criteria is shifting. So is that a definition that you're discussing...

Are you coming back to active versus nonactive?

No, no, just more about is it going to be an MS label defined population or wording of non-relapsing secondary progressive because the physicians all recognize what that is, but FDA has never recognized that. So...

Yes. Well, that's right in front of us. That's I mean, literally right in front of us now because I think that's part of the challenge you go on, sometimes with the regulator, you -- everybody agrees with the study, everybody agrees you're trying to treat. You do all the work. And then when it gets to it, like and say, right now, you -- and there's a little bit, I think because of the elevated liver, I think there was a little bit of, let's try and be really sensible about who's defined. Our position stays firmly. It's those that we studied. There is no point trying to recharacterize. Should, by the way, the MS definitions change completely. You know this, but the entire specialty says it's phases of disease. It's not different diseases. So everybody is progressing some more than others and some are having relapsed some more than others and it may change on their journey. So let's address -- it's funny enough. It's one of the reasons why frexalimab will be in the top club because of its impact on innate and acquired immunity, It may be the one medicine that actually is stand out like best-in-class on efficacy and relapsing, but actually addressing disease progression at the same time. We thought for a while should we do CD40 ligand frexa and tolebrutinib, should we do combo. And I think we're going to find out does the data emerge with frexalimab that it addresses progression enough for it to be the one and done. That's going to get interesting too, but the definitions are completely out of touch with reality. So what do we care about making sure that the population that will benefit is the population in the label and that we're not constrained for reasons that make no sense.

And the delay happened just after the GEMINI data on disability progression were presented. So is that the -- what was filed with FDA that led to the delay and the major amendment? Was it specifically the disability progression data from the relapsing studies?

Yes, the -- as we said, and they know the GEMINI population is not the secondary progressive population, HERCULES. So you don't learn a lot. I think they wanted to see all the data. Remember, we have over 4,300 patient years on tolebrutinib and I think it's okay to ask for more data. If we were in a race to launch with somebody else, I'd be irritated, but the truth is we're not. So I'd like everything to be done. It's painful for me much easier to get approved. People take that overhang off. We move the short term has disappeared and everything is happy. But in reality, a great label, perfect rems are the only things that I care about because that's long-term value creator. So we will see. A question I've been asked quite a bit since I've been here, in fact, is, well, will they ask to see the PERSEUS data? And if the PERSEUS data is great, I hope so. But there is a chance, and there's no indicator for this. But if the PERSEUS data comes while we're still talking about the label, what if they ask. And the answer is I don't know, and I've been telling people for the last few days, I really don't know. I worry less if it's great data than I do if it's not. But I think if there's been an extreme safety signal, we would know about it already. So maybe it's just more data. As it happens, we say we look forward to the PDUFA on December 28. We've given them everything that they could possibly want and we take it from there.

Got it. Fast forward to December 30, if you assume you've got an approval with nonrelapsing SPMS, how easy a population, identified or population do you think that is for treated patients because who are already sitting on an anti-CD20, but haven't had a relapse for 3, 4 years?

Well, it's easier than we would have imagined. It's -- they're not identified, but they're known. And what do we mean by that? And many neuroscientists at Mount Sinai not that long ago, where they're explaining to me, they know exactly who the patient is. But right now, they're not recorded as non-relapsing secondary progressive MS because if they are, their insurance company won't pay for OCREVUS if they give them a definition that's not covered by the label, therefore, the insurance. So they leave them on the old definition because they don't want to take their OCREVUS away. I think that's fair. While there may be no data to support it, and this is just anecdotal what we hear. I think it's quite important that the patient feels they're doing something, right? And OCREVUS is an excellent medicine. So I think what -- they're not identified, but they're known. And if we're going to go slow and perfect on REMS, every has plenty of time to know who it will be. I can tell you since the delay and the PDUFA, the number of e-mails and letters I've had from patients saying, "Hey, you are going to get this done, aren't you?" I'm like, "I got enough pressure from investors. I don't need real pressure, but we joined the industry to do that, and that's what we're doing.

And aside from that, do you think there's a community of patients or a pool of patients who just dropped off therapy? Or are they new patients on some...

There may be. We've done a lot of research. It's hard to tell because I think if you're a secondary progressive patients and you're using a cane. And I'm oversimplifying, but the journey is towards a wheelchair. And the data doesn't support it, but you feel like it might help, you don't really drop off. There will be some, particularly in the constrained markets in Europe where they never use advanced therapies at that stage January. But by and large, in America, I think it's not the case.

Yes. Okay. move shift gears on to itepekimab. So one hit, one miss. Maybe just run through the differences that might account for the differential results and then what your sort of steps forward from here will be?

Well, that was is because that sort of was our run into that part of the year where a home run would have been nice, get coast 1, get coast 2. And it's hard for me to be press with the team because they did 2 studies perfectly. They just got different outcomes. That's the business we're in. I did tell you earlier suggest that it's getting harder to take for granted studies in immunology. You've got to be much more real time. AERIFY-2, we believe, not 100% of the reason. So I won't -- I'll deny it, if you say I said that. But one of the leading reasons for AERIFY-2 was the legacy of COVID restrictions. So remember, with COPD patients, we struggle a little bit, they struggle with infections that lead to exacerbations that lead to problems -- and that's the background expectation. And that was demised because many patients would have got an infection didn't go out or war a mask. So we made it harder to get a delta -- and it looked like people are doing much better on control than you ever imagine. Well, they weren't. They were just taking these incredible precautions. So we needed to have that sort of bias to understand. I said that we shouldn't really do another Phase III. If we're not sure that -- if we have the same probability of success we had with the other 2, we feel confident that a major contributor to say like that is COVID and that we can do something about that now. Again, don't forget, Roche struggled with both studies. AZ failed the Phase II at least from recollection. So what that means is, whereas I would have hesitated if we were falling behind in order of entry. My real clock is ticking is kind of get to market with itepekimab before I lose leverage of Dupixent rebate with payers. If I can get there before the end of the decade. And if IPD are right and we're through 2033, then I have 3, 4 years to deploy rebate to make us the preferred 33. People say, what about PBM reform, 25 years and waiting. We may have a shot of making itepekimab the outright winner in the 33s. If we leave it too late, more complicated. And so that's still the plan.

So AstraZeneca has got Phase III data on tozorakimab coming next year. Their studies were post COVID. So if you're right and it's COVID, they may not have that inhibition could be in the market earlier. So is there a risk they just still particularly the lower eosinophil segment, which is kind of the obvious...

It's very possible. It's very possible. And look, we'll take lunsekimig into COPD. Look, we're back to what we said about psoriasis. People should not get hooked on winners and losers. They should get hooked on biologic eligibles and penetration. That's where you go to know if all boats will rise. I think it's better to have more mechanisms for patients. We take a 13 TSLP and we can get a high T2s, who knows. I wish everybody want them all to do well because these patients are struggling. Again, they could be before us. I think one word of caution, I don't remember, you'll remember the study better than I do that the -- I think there are old comers. And we saw Roche do the same. We focus on former smokers. We think the delta is bigger there. And so we will see how that plays out.

Got it. Okay. And just as you mentioned the lunsekimig, what was the rationale for taking lunsekimig into a Phase III COPD before you've seen the Phase II asthma? Do you just feel that it's totally unrelated and there's a mechanistic rationale in COPD to go straight to Phase III?

Yes. Look, they're different diseases. And there's -- I wish I could tell you there's a good reason to wait. I want it to work in both. Well, the question we have to ask is, would we stop the COPD work if we fail in asthma? And the answer is no. So why wait? And we know IL-13 and TSLP work extraordinarily well. We know IL-13 works well in AD, but not so well in asthma. We know TSLP works very on asthma, but not so well in AD. But we know it may work not so well, but there is a 1 plus 1 equals 3. In May '23 in D.C. at ATS, we saw a Pheno drop of 1 plus 1 equals 3. And so our bet is for the high inflammatory burden COPD patient, if you're going to get efficacy, it will work. And same in asthma. Our hope is that lunsekimig is the standard of care where efficacy is the lead consideration in asthma, we'll find out.

I'm just checking if there's any other questions. I might just throw one in on you're taking on the pharma chair. What's top of mind in the agenda as you go into that role?

Well, I would just -- as I pivot into that, I would say what we've been able to talk about is duvakitug, which I think is going to turn out to be one of the best deals I ever did, the TL1A with Teva. I think it was smart for them with us. I think it's smart for us. The data is telling us we may have best-in-class. We'll find out. We're already in the Phase III with UC. And I would put that up there with the big medicines now because it could be. The other one, just to point it out because of the continued -- the philosophy of markets growing, Brivekimig, the TNF OX40 in HS will be -- we think it will be a 2 product race eventually, which puts us at a multibillion-dollar drug. And so don't -- again, everybody is looking at winners and losers. Do not think winners. The only thing winners and losers if you're 80% biologic penetrated. If you're 18% or less or whatever, everybody wins is degrees of win. Everybody is an EUR 2 billion-plus drug, everybody, summer 5. That's where the differentiation and the commercial execution makes the ultimate difference. As for the Pharma Chair, you get on the journey to that 5 years earlier. You run through each committee, and you just assume you'll get there at some point. It's a big responsibility and honor, of course, and I represent Europe at a time when that may be more important than people think in the room in terms of medicines. 54% of medicines approved in Europe are not available to patients in Europe through reimbursement. I spoke to [indiscernible] his team, President Macron. And there's some sensitivity, the fact that with MFN that medicines may not get approved in Europe because they'll be at U.S. prices. Well, they'll get approved, they won't be reimbursed. And they look at me like, this is tough. I said, before Trump, 54% of medicines are not getting reimbursed. So that you've got some work to do long before that. And so it can only get worse. I feel some responsibility for that. I didn't join the industry to drive further health and equity. So I don't like that. I would like to try and bring the President wrote to 17 CEOs. He did not write to Pharma. I'd like to get pharma back to be the convener. I'll try and play my part in that. I'd like to turn some attention to PBMs as tough as it is. And I would like to try and get a much more active debate on the fraud of 340B and duplicate discounting. So if I can do some things that capture the President's imagination that are good for patients and good for us, I would like to stand for that. You had 2 halves as Pharma Chair, your own company. And Albert showed sometimes you have to make the company core. I respect him for that. I hope to continue to wear 2 hats through my tenure and do something good with it.

Fantastic. We're up against time. So that's very interesting as always. Thanks, Paul. Great interview.

Thank you.

Thanks, everybody, for listening in. Thank you.

Thank you. Thank you.