Sanofi (NASDAQ:SNY) Q1 2024 Earnings Call Transcript

Sanofi (NASDAQ:SNY) Q1 2024 Earnings Call Transcript April 25, 2024

Sanofi reports earnings inline with expectations. Reported EPS is $0.96 EPS, expectations were $0.96. Sanofi isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Paul Hudson: Welcome to the Q1 2024 conference call. You can find the slides of this call on the sanofi.com Investors Page. I’d like to remind you that the information presented in this call contains forward-looking statements, which is subject to substantial risks and uncertainties that may cause actual results to differ materially. I encourage you to read the disclaimer in our presentation. In addition, I refer you to our Form 20-F on file with the SEC [Foreign Language] for a description of these risk factors. I’m pleased to welcome our new CFO, François to the presentation, and François will be followed by Houman, our Head of R&D on the pipeline. For Q&A, we have Brian, Olivier, Thomas and Julie to cover the global business units and Roy, our GC.

For the Q&A, you have two options to participate. In Zoom, Raise Your Hand to submit your questions in Q&A. Those have been explained on the slide. Let’s turn to the business. We had an excellent start in 2024 with 7% sales growth, in line with our fast-moving portfolio transformation, growth was driven by launches, including new and existing indications for Dupixent and this performance fully underpins our 2024 EPS guidance as CEO. Dupixent continues to increase penetration in all approved indications, and we saw performance diversified further across all geographies, plus, of course, the usual US insurance plans. Pharma launches were led by Nexviazyme and Altuviiio with more details to come a little later. Launches also boosted the performance in Vaccines with Beyfortus making further progress including in countries in the southern hemisphere.

In Consumer Health, growth of 9% reflected the consolidation of the Qunol acquisition as well, of course, as organic growth. We’re progressing the plan to separate this business as discussed in the past. Overall, we’re pleased with the ongoing portfolio transformation, which is becoming more visible, also in our cost lines with more resources going into the pipeline and less into SG&A. This is exactly the development we set out last year and when we announced the next chapter of our strategy. Before moving on, I’d like to extend my thanks to all the Sanofi colleagues for their dedicated work and their commitment to patients, of science to improve people’s lives. Dupixent continues to perform a strong demand-driven growth. Therein sales of more than €2.8 billion in the first quarter.

Sales of this unique medicine increased by 25% globally, fueled by the accelerated growth from indication expansions in the ex U.S. markets, where sales grew as much as 51%. With now more than 850,000 patients worldwide, the strong contribution from countries like Japan, China and Germany highlights the tremendous growth potential for Dupixent across all indications and geographies. In the U.S., sales exceeded €2 billion in the quarter, up 17% and as we can see every year, U.S. growth reflects the impact from the customary dynamics of the annual reset of insurance plans. Almost eight years into its initial U.S. launch in atopic dermatitis, this effect underscores the large size and rapid growth of Dupixent with the leadership positions in new prescriptions across all five approved indications.

As we look ahead to Q2, we remain very excited about the outlook for Dupixent’s outstanding commercial success across all geographies, supported by regulatory progress towards launching multiple new indications in major markets. And with our strong Q1 performance, we’re extremely confident in delivering our previously communicated objective of around €13 billion in sales for the full year. As one of the leading medicines in immunology respiratory is a core disease area for Dupixent, well ahead of any of the competing — of any other competing biology medicine. Dupixent has established and maintained a distinct leadership position in new prescriptions amongst pulmonologists across asthma and chronic rhinosinusitis with nasal polyps in the US.

We believe in the growing importance of pulmonologists in adopting biologics to treat respiratory diseases, but also confident that they’re growing familiarity with Dupixent in type 2 inflammation will play a key role in the adoption of Dupixent as the potentially first advance therapy in COPD in more than a decade if approved. We also continue to build a growing body of scientific evidence around Dupixent in addressing airway inflammation in the VESTIGE study, which was recently presented at the Quadruple AI Congress, Dupixent demonstrated reduced airway inflammation of mucus plugging in functional respiratory imaging in house. We have an ambition to potentially introduce a new standard-of-care with Dupixent in COPD for patients with type 2 inflammation.

As you may recall, significant regulatory progress has been achieved with Dupixent’s potential in COPD across key markets. We are preparing for a potential launch in the U.S. as early as late June if approved by the FDA and plan for additional potential approvals in Europe and China by the end of the year. We’re excited about the outlook for Dupixent’s potential to become a breakthrough medicine for COPD, a leading cause of death worldwide. Dupixent is well-positioned to potentially address the high unmet need in COPD with a strong clinical profile across two large Phase 3 studies and more than seven years of real-world evidence of — real-world evidence data on safety across five approved indications. Dupixent addresses unmet medical need of a well-defined population of roughly 300,000 patients in the U.S. alone, whose disease is driven by type 2 inflammation and uncontrolled despite standard-of-care therapies.

COPD is a historically difficult disease area and a heterogeneous disease with multiple development failures in the last decade. Over time, many patients become resigned to their medical condition with an experienced team that has a track record of development and commercial excellence in respiratory, we planned a targeted approach to drive the awareness and identification of COPD with type 2 inflammation among patients and pulmonologists. As we’ve seen with our launches across other major indications, the adoption of Dupixent as the first and only biologic in the COPD indication will require some time initially and the inflection of sales growth and is most likely to come in 2025 after the U.S. launch. We are confident that if approved, COPD will become the next major growth pillar for Dupixent.

And together with our second potential blockbuster developed for COPD, itepekimab, we continue to expect peak sales of more than €5 billion for both products combined. Let’s now move to the new launches as Q1 further demonstrates our ability to execute successful launches and bring new medicines to patients. This quarter, all our new launches including Beyfortus made up close to €1 billion in sales or 9% of our total biopharma business. Beyfortus continued its global rollout in the quarter with the launch in the Southern Hemisphere countries of all interim protection programs in some Australian states and Chile. As RSV is seasonal, Beyfortus will have a sales pattern like what many of you know from flu vaccines. Nexviazyme grew strongly from new patients as well as patients converting from older medicines in the Pompe franchise.

We’re pleased with the overall growth in franchise sustainability. ALTUVIIIO is soon annualizing its launch. It has been — it has seen continued strong uptake with most of the growth coming from other factor medicines [indiscernible] and even some uptake from patients not on factor medicines. It showed us how innovation can help to revitalize hemophilia and grow Sanofi’s total share. Other launch medicines also did well in growth in absolute terms, including Sarclisa approved in multiple myeloma. Taking a closer look at Beyfortus, what we’re really focused on are proud of is the impact on improving public health and benefit for thousands of families. We’ve now real-world results from last year’s implementation of broad immunization programs in the U.S., France, and Spain with Beyfortus.

The results are strikingly impressive. You can see the dramatic reduction of hospitalizations by the numbers on this slide. These real-world results are either consistent or even better than those from the clinical trials. The U.S. CDC recently published our effectiveness data for Beyfortus at 90%, and in Europe, we have seen similar results for hospitalization reduction across France and Spain. Overall, following the first season in the three launch countries where Beyfortus is used for all in from protection, this means that nearly 40,000 hospitalizations have already been avoided for families. This is the impact that matters most. This also provides a perspective for Beyfortus global health benefit as we plan to launch in additional countries in H2.

Together with AZ, we’re working with the regulatory authorities and extending the manufacturing network to make Bay Beyfortus more available for the upcoming season, as we’re glad to see such enthusiastic demand. We’re confident that where we will meet anticipated customer demand and look forward to extending all in from protection programs in the upcoming Northern Hemisphere RSV season. On my final slide, I wanted to highlight some progress on our ESG ambition exemplified by the work of our Global Health unit. Since its launch in 2021, the essential medicines from our GHC portfolio have supported close to 550,000 patients suffering from noncommunicable diseases in 31 countries, with the objective to reach two million NCD patients by 2030. An additional differentiator is the meaningful work done by our teams to help building sustainable health care systems through partnerships with the Ministries of Health, trainings of healthcare professionals and our impact investment fund focused on supporting exclusive start-ups and businesses.

I now have great pleasure to hand over to François, our new CFO.

François-Xavier Roger: Thank you, Paul. I’m pleased to have joined the team here at Sanofi earlier in April, and I’m looking forward to interacting with all of you in the future. Sales were up 7% in the quarter, and as Paul mentioned, growth was driven by our ongoing portfolio transformation towards biopharma medicines with Dupixent sales up by 25% and the new launches, including Beyfortus, up by 150%. Excluding the impact of AUBAGIO loss of exclusivity and COVID-19, growth was 12%. This analysis does not aim at removing all headwinds, but simply illustrates what the new Sanofi may look like in the future. On gross margin at 73.5% was down by 2.6 percentage points, mainly due to AUBAGIO and due to the absence of COVID-19 vaccine sales this year.

In addition, the quarter was impacted by a one-off inventory adjustment to reflect declining standard costs. R&D expenses increased by 12% at constant exchange rates in line with our ambition to invest more in our pipeline. Resources are being deployed to advance late-stage immunology and neurology projects. SG&A increased by less than 3% below half of sales growth, illustrating our strategic reallocation of resources. Our business operating margin decreased to 27.2%, mainly due to the gross margin decline, the step-up in R&D expenses and an increase in the profit sharing with Regeneron. As expected, EPS was down 7.4% in Q1, also partly impacted by a higher tax rate. Just one word on cash flow. It will be impacted in 2024 by our lower business operating income and by the phasing of rebate payments in the U.S. related to prior year sales.

Let me now give you some additional information on our coming quarter. In Q2 2024, we expect Dupixent on the new pharma launches to grow further, while we continue to see the impact of the Aubagio loss of exclusivity in Europe. Of note, we don’t expect any Beyfortus sales in Q2 due to early delivery in Q1 in some Southern Hemisphere countries, while shipments in Northern Hemisphere countries are not expected before the second half of 2024. For the full year 2024 sales outlook, we expect Dupixent to reach around €13 billion and the vaccine franchise to grow mid-single-digit, with Beyfortus anticipated to reach blockbuster status. The Aubagio loss of exclusivity will continue to impact the top line, mainly in H1. Finally, planned divestments will lower our sales by around €300 million over the year.

For the full year P&L, we expect our gross margin to decrease slightly due to Aubagio and the absence of COVID-19 sales and revenues this year. OpEx is expected to grow with about €700 million step-up in R&D, while SG&A expenses are expected to remain stable. Finally, our tax rate will increase to around 21% due to the implementation of the OCD Pillar 2. We confirm our full year 2024 expectation of a low single-digit decline of our business EPS at constant exchange rates. Excluding the impact of the higher tax rate, the full year 2024 business EPS is expected to be roughly stable. On foreign exchange, we see a negative currency impact to EPS of around 6% based on April 2024 average exchange rates. As a reminder, we continue to anticipate strong business EPS rebounds in 2025.

And as we have mentioned earlier, in 2024, we are transforming the company for long-term value creation. With that, I will now hand over to Houman.

Houman Ashrafian: Thank you, François. We’ve seen substantial Phase 2 — we’ve seen substantial positive pipeline progress already in Q1 where we continue to deliver a consistent news flow of clinically important data and scientific publications and congresses. Frexalimab’s encouraging Phase 2 data and multiples choices was recently published in the New England Journal, but updated with data from the 48-week open-label extension, which we presented last week at the AAN Conference supporting our commitment to MS patients. In atopic dermatitis, we have the potential to further establish our leadership with amlitelimab, where we presented the Phase 2b data at AAD where largely sustained effective amlitelimab on atopic dermatitis symptoms, which demonstrated after 52 weeks of dosing.

Later, I will further talk about the data presented from these two pipeline projects. On the regulatory side, we’ve reached an impressive pace of approvals with two of them for Dupixent in multiple indications within different countries. FDA discussions regarding Dupixent’s SBLA in COPD are ongoing under the priority review process, as Paul has mentioned. As usual, it’s always possible that the FDA could require additional information to complete the priority review of our submission to finalize labeling. As a reminder, there is currently no biologic treatment approved in COPD underlining our commitment to make Dupixent available to as many patients as possible as quickly as possible and supporting the ambitions to Dupixent that Paul has already outlined.

Amlitelimab, our non-depleting OX40 ligand monoclonal antibody, has shown potential best-in-class efficacy with a durable clinical response rate after 52 weeks from the STREAM AD Phase 2b study. The responder percentage is reflected in the IIGA 0/1 and the EG75 scores, which are both surrogate endpoints AD were maintained and still significant, in fact, following the withdrawal from the drug at week 24. As you can see from the bar chart, at week 52 results on and off medicine are similar, which shows the persistence of response, suggesting the potential normalization of inflammatory T cell activity and potential effect on type 2 and non-type 2 biomarkers. These important data support the viability of the 12-week extended dosing interval, which will improve the patient’s treatment paradigm and potentially expand Sanofi’s presence in AD and beyond has been interpreted by some to hit the potential disease-modifying activity.

The opportunity of treating patients by treating this core central pathway with consistently good safety in both parts of the study signals that amilitelimab has the potential to reach much beyond AD and become pipeline [indiscernible]. The cleanest AE profile in this class may reflect the importance of nondepleting mechanism differentiating amilitelimab. The enrollment of all 4 studies Phase III studies is on track for the first regulatory submission expected in 2027. Now switching to frexelimab, our CD40 ligand antibody high-efficacy nonlymphocyte depleting potential MS treatment also has a pipeline and a product potential with multiple indications under development. Most importantly, in relapsing remitting MS, the 48-week data from the Phase II open-label extension study has shown a sustained reduction of disease activity monitored by a mean number of gadolinium-positive type 1 lesions occurring appearing at each MRI.

As you can see on the bar chart, patients who have switched from the placebo arm to the frexelimab arm, both IV and subcu have shown an impressive decrease of MS. It’s important to mention that nearly every patient on frexelimab IV had no new lesions presented at a near to zero annualized relapse rate at 48 weeks. 87% of participants completed the extension and frexelimab once again proved to be well tolerated with an acceptable safety profile. Phase III studies are relapsed on remitting MS and NRPMS have initiated and the first regulatory submission is expected in 2027. Frexelimab has the potential to provide additional benefits to patients and extend Sanofi’s presence in multiple sclerosis. Switching gear now turning to rilzabrutinib, our oral BTKi, one of our 12 priority medicines.

As you can see, we’re developing this medicine in multiple indications such as in ITP and rare hematological diseases, but also in our main key therapeutic area immunology, including asthma and chronic spontaneous urticaria. We were pleased to announce earlier in the week the positive readout of the LUNA 3 Phase III study in ITP, a rare autoimmune bleeding disorder characterized by abnormally low levels of platelets, persistent and disabling fatigue and increased hemorrhage. These results confirm the positive Phase II data with additional details to be presented at forthcoming medical meetings and a regulatory submission later this year. Alongside this positive news, we also received more Phase II data in asthma. This time at the high dose, confirming the previous positive trends.

We are very excited by the opportunity to present the data at the ATS conference next month. We can’t wait to see that. Positive data in the third indication CSU were presented in February at the AAI AI Annual Meeting with Phase III starting later this year. These datasets are important stepping stones of our R&D transformation journey, emphasizing our commitment to rare diseases and to unlocking the important potential for BTK inhibitors and also highlighting the value that our experience in immunology can bring to the development of a medicine that started its life in another company. Having recently reshaped our overall oncology strategy, we want to cover this in a little greater detail. Our strategy is one of selectively investing in areas where we believe we have a chance to make a meaningful difference based on our expertise in immunology.

Our aim is to focus on critical unmet medical need for patients benefiting from immune mechanisms and related mechanism of action, such as our NK cell engagers and using our technologies and platforms with the ABCs of the nanobody. I would like to end this slide on the positive news for the cancer community, where we are pleased by the recent positive U.S. development supporting the use of minimal residual disease or MRD has clinical endpoint in myeloma. When recognized by the FDA, this potentially bring new effective treatments to patients earlier. We currently have Sarclisa, our CD38 with a best-in-class potential and approvals in more than 50 countries as an option in the relapse myeloma setting. Last December, the readout of the IIa study marked the fifth positive Phase III study and second positive in transplant eligible, newly diagnosed multiple myeloma patients, where 77% of patients received — reached MRD negativity versus 67% in the comparator arm.

The Sarclisa Group had a 60% higher chance of achieving these states. Additionally, we had the Phase III study which was positive, and we look forward to sharing the LatAm upcoming Medical Congress anticipated — with anticipated submission in trial. To end my part of the presentation on a positive note showing our ongoing commitment to deliver clinical data in the service of patients, I would like to highlight the upcoming Phase III and Phase II readouts, as well as regulatory submissions occurring in 2024 and 2025. As you can see, news flow will increase and become busier as we move into 2025, supported by the step-up in R&D investments that François just mentioned. I’m enthusiastic and impatient at the same time, has the news flow keeps on getting richer and better, thanks to the clinical study that we are constantly started.

With this, I hand back to Paul.

Paul Hudson: For sure, enthusiastic and impatient, I can confirm that. We’ll now open the floor for questions. As a reminder, we would ask you to limit your questions to one or two. As you can see, you have two options for Q&A. Click the Raise Hand icon, you’ll be notified your line is open. So do remember to unmute or submit your question through Q&A function and your question will be readout by us. Over to you.

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Q&A Session

Operator: Yes. The first question will be from Peter Welford from Jefferies. Peter?

Peter Welford: Hi. I hope you can hear me? Thanks very much for the question. Can we just start off with Dupixent and just thinking about the momentum we’ve seen, but all the more important new indications COPD. I guess, I just wanted if you can sort of square up some of the very positive commentary. I guess, we heard on the potential for this indication, obviously, significant unmet medical need and that there also is some perhaps word of caution does not get to ahead of ourselves. I guess, certainly challenging, we’ve done a lot of doctors seem to think that COPD patients, they already know whether they have type 2 information in many cases or not. So if you could talk about, from your point of view, what the challenges are here and why we shouldn’t expect at least initially a potential bolus of patients given they currently have no other options available and potential challenges, I guess, what would you think about that?

And then if I could just ask a second question just quickly to François, you mentioned on the gross margin just with regards to a onetime adjustment. I would maybe just go into that in a little bit more detail? And is that very much onetime for the first quarter? And then perhaps you could be possible quantified would help? Thank you.

Paul Hudson: Hi, Peter, thank you. Brian, Dupixent, COPD.

Brian Foard: Yeah. Thank you so much for the question. Really, as we get ready for the launch in COPD, first and foremost, it all starts with the patients. And I think what we’ve seen with this brand is that by going into diseases that are driven by underlying type 2 inflammation, we’ve really opened up new treatment opportunities for these patients and really transform a lot of patients’ lives, I think, as Paul mentioned, over 850,000 patients already on therapy. Many of those actually happen to be asthma sufferers and are treated by the pulmonologist community. So as you can imagine, as we’ve spoken with pulmonologists, they’re extremely excited about having potentially a new option to treat these patients that, quite frankly, are on the highest dose of therapy, and that’s why I think to contextualize them, these patients are on the highest doses of therapy and still exacerbating.

So we have to contextualize that the right way. And then you saw our reductions in both the BOREAS and areata trials, how effective they were at actually adding reduction in exacerbation rates of 30% and 34%. So we’re very positive about this. I think the challenge with this particular patient population is probably less about the patient population and more about the fact that whenever you bring a new therapy like this in more than 10 years, biologic ramp will take just a little bit of time. Even though there’s a burden of disease there for the patients, they will take a bit of time to get these physicians used to using biologics. That said, the pulmonologist community does use biologics today. So we feel like we’re in a good spot and preparing the marketplace really quite well.

But excited about bringing it whenever it comes to the market.

Paul Hudson: Thank you, Brian. Houman, anything to add?

Houman Ashrafian: Yeah. Hi, Peter. You asked a very specific question about the patient burden of disease and patient population. I just want to be clear about how we develop this molecule, both in BOREAS and areata. We were very specific about our stratification strategy, we thought very deeply about the EOs concentration in the blood and specifically the pheno. We stuck to our knitting very specifically on what we saw in the Phase II and that reflected in an outstanding reduction in the exacerbations in our Phase III studies. I think it’s really important to recognize the Sanofi goes forward. But our development strategy, is laser focused to enable launch in the highest unmet medical need population. And that’s what we’ve done. So that’s why we have confidence in the way this population launch will expand.

Paul Hudson: Let me just add. I think, Brian, just on it, too. But remember — and I have to give Regeneron some credit for really pioneering in AD with us back in the beginning, but they were strong on that. We had to really build out the education around these things. We enter new areas you have to do the proper amount of education and work, make sure the right patients are identified and get supported. And that’s why I think we’ve shared that we expect an inflection point in the business evolution more likely to be in 2025 because we have got work to do. François?

François-Xavier Roger: Yes. Good afternoon, Peter. So the question on the inventory adjustment, it’s a one-off essentially for the Q1. What happened is that our standard costs are moving down, which is actually a good news for the medium-term. But we had to revalue as a consequence of that, our existing inventory to the lower standard cost and this is a one-off adjustment that we booked in Q1. We don’t expect to get much of it in Q2 and Q3 and for the balance of the year. And it was relatively sizable because it was close to half of the gross margin decline in Q1, so which means that we can expect that our gross margin should not see the same negative deviation versus last year as we progress further into the year.

Paul Hudson: Thank you. Next question.

Operator: The next question is from Luisa Hector from Berenberg. Luisa?

Luisa Hector: Hello. Thanks for taking my questions. I wonder if we could just get an update on consumer factors that will determine your exit strategy and the timing and pros and cons of the different exit routes for maximizing shareholder value? And then I wanted to ask on rilzabrutinib. So good data in ITP. Just how you think about that sales opportunity — and also the asthma, so the Phase II positive for the high dose, I think, in asthma, any more color around the safety profile and how you can proceed in asthma. I think the next step was Phase IIb, but any more color on the endpoints, trial design and that stepping stone to Phase III? Thank you

Paul Hudson: Okay. Good. François, CFC?

François-Xavier Roger: Yes, Luisa, François speaking. So I’ll take the question on consumer. As of now, we want to keep all options open. So which means, basically, you can consider that we can consider a potential spin-off an IPO, probably partnering as well with private equity. So we keep all options open with one single idea, which is to maximize value creation for shareholders. So I don’t want to comment on the pros and the cons of each of the options for the time being given that we are working on with a very open view for the time being. But we’ll keep you posted as we progress further into the year. But don’t be worried, this is about creating value for shareholders.

Paul Hudson: Do you want a quick comment about where we’re at in terms of technically being ready?

Unidentified Company Representative: Sure. I mean, first, I can confirm that we’re excited and that we’re on track and to give maybe a little bit more color on the practical side, all our system cloning activities that had to happen successfully happened actually just last week and moreover, we’re well advanced in determining the scope of all the transition service agreements, which are very important as well. And in the meantime, we continue to focus on our three strategic priorities as we execute our overarching mission to make self-care as simple as it should be. So we’re well underway.

Paul Hudson: Thank you, both. Good questions on rilzabrutinib. Houman, I don’t remember Brian, do you want to comment on potential value in ITP, or Houman can either. But Houman, do you want to start off with…

Houman Ashrafian: Let me start — actually, Brian and I will tag team this one. Luisa, thanks for the question. So let’s — you have two parts to your question. There was ITP and asthma tolerability. So I’ll just hit this very directly. I think that there still is a major unmet medical need in ITP. As you know, it’s 50% of patients remain undercovered for care, particularly in terms of a lack of stability of platelet count, they also suffer very substantially from fatigue. Rilzabrutinib is something a great joy to me personally having treated these patients. The beauty of this treatment has a number of elements. One is, it obviously prevents the production of B cells, hence the BTKi, the inhibition, but also prevents phagocytosis of those platelets and reducing their platelet count.

So mechanistically interesting compared to standard of care today, which undercovers 50% of patients, but also in some cases, required relatively extreme dietary modification, wills are offers real opportunity, point one. Point two, you asked about tolerability. To date, what we’ve seen has been gratifying in terms of tolerability in every aspect. So that’s pretty exciting. And then your question about asthma is super clear. We presented our latest asthma data last year. As you know, we are excited by that data. The opportunity for Realtor to become the first oral advanced asthmatic treatment is remarkable, but it has the potential to change the paradigm of how we treat asthma compared to what we have today. All I can say is that it is with very substantial pleasure that I will invite everyone on this call to come to the ATS meeting just the outcomes of our study, which we could not be more thrilled in sharing.

With that, to dimensionalize the market, I’m going to hand over to my friend, Brian.

Brian Foard: So I think it’s a really good question. I think as you saw on R&D Day, when we really started to talk about the 12 assets. This was one of those assets we talked about. So the slide I think that was presented earlier was really impressive to show that in three potential indications, CSU, ITP and then in asthma. This can be really differentiated versus the competition in each of those therapeutic areas. Now specifically as it relates to ITP, and maybe I’ll go a little bit broader and just say in rare blood space. We actually think that this could be potentially a blockbuster across both ITP and combined. But contextually speaking, I mean, if you think about the two of them, obviously, ITP will be a little bit bigger than what we see in just based on the size. I think there’s about 50,000 patients we see as being eligible for ITP. So really excited about this differentiated profile and bringing it to patients as soon as possible.

Paul Hudson: Thank you. I’ll be in San Diego at ADS for the weekend between other meetings. So I’m looking forward to seeing the data presented to. Next question?

Operator: Yeah. Next question from Graham Parry from BofA. Graham?

Graham Parry: Great. Thanks for taking my questions. So first one is just on tolebrutinib and just thinking about scenarios for the readout of the data there. Just given the low likely annualized relapse rate that you’re going to see in the control arm, if you assume it’s going to be similar to ibrutinib. Do you see that there’s a thought process here that perhaps actually progression would be the better primary endpoint? And is there a possibility here to change the statistical analysis plan for those relapsing studies to disease progression? And alternatively, in the event that you didn’t see that you met the primary endpoint on the GEMINI studies and this you do hit endpoints in the progressive trials. Do you think that this could be something which should be priced higher in the market for that smaller overall MS patient population, but just as a progressive MS drug?

So that’s first on tolebrutinib. Second one, Beyfortus supply. You said you can do — make this a blockbuster this year. I think my understanding was that, that’s sort of based on what you know you definitely have for supply, but you’re working on increased supply So perhaps could you sort of dimensionalize or quantify the upside here from bringing more supply on through the course of the year? I think if you just assumed you’re able to satisfy the U.S. birth cohort alone that would be €1.5 billion or so. And you did talk about launching an additional market. So perhaps help us to dream a little about Beyfortus revenue for the year? Thanks.

Paul Hudson: Okay. We’ll help you dream a little in a moment, Graham, but first that well, maybe there to tolebrutinib. Houman?

Houman Ashrafian: I’ll start before Paul breaks out to song. I’m going to — just tolebrutinib, and thanks for the question, Graham, deeply thoughtful as always. So first part of the question was on scenarios. As you know, there’s a bunch of scenarios. We have two relapsing remitting trials running GEMINI I and II. We’ve got and I think going into all the permutations of those scenarios are challenging. But let me just be — let me just dimensionalize this across those indications. Firstly, in terms of relapse and remitting, you make an excellent point about previous failures, particularly in comparison to Let me just remind everybody very briefly on this call that in terms of penetration across the CSF by a physical property and actually some of the biological properties we’ve seen with tolebrutinib, these are outclassed in some cases, by two log orders, any of the other molecules in the space, even ibrutinib’s primary biological capability is very substantial.

Second point, I’ll remind you when we talk about mechanism is compared to some of our competitors out there, patients who come off standard of care and go on to tolebrutinib have a continuing reduction in the neurofilament light. These two parameters make us optimistic about — yet cautious in the role of tolebrutinib both in relapsing and progressive, so it’s point one. Point two, in terms of your specific question, which you asked about endpoints. Of course, you’re right that in 2024, ARR is currently the endpoint of choice. However, most of the community and most of the physicians that are looking after these patients will point you to the fact that actually composite confirmed disability progression is much more important to the patients.

And indeed, many of the endpoints that are currently use a relapsed independent progression rate. So the short answer to this question is, we’ll see where we get with GEMINI I and II, but I would strongly suggest that the regulator and the patients care deeply about disease progression, and we are well-powered to address that question. On the progressive disease, we’re very substantially hopeful because of the data we’ve discussed before. And of course, there is no AUBAGIO comparator arm in that population. I think that provides you with a nice wrap-up of tolebrutinib, I’m going to hand over to Brian on that.

Brian Foard: Yeah, I think the question on price is really the question on value, I think, more than anything else. It starts with there’s no more differentiated program, I think, in MS for sure than this tolebrutinib program. So we’ll see what the scenarios are. It’s hard to guess today what the final scenarios will likely be, and we’ll determine the value based upon that, and we’ll comment on price probably at that particular point, but not now.

Paul Hudson: Thank you, Brian. Thomas, Beyfortus supply?

Thomas Triomphe: Exciting to speak. So where we are on Beyfortus. First of all, you’ve seen the strong performance in Q1. I start by reminding at that point. With a significant amount of sales above €180 million just in Q1, I’m mentioning that to highlight the fact that it covers not only NH23, 24 last shipment for Northern Hemisphere, but also the first shipment of Southern Hemisphere with two South Hemisphere countries where we have started. So that’s the first part. As you have seen also, we mentioned through François, that we will not expect sales of Beyfortus in Q2 has nothing to do with supply, simply related to the fact that we were able to actually ship the South Hemisphere supply in Q1 and not in Q2. And, of course, the rest of the sales for this year will come with Northern Hemisphere in Q3 and Q4.