Sanofi (NASDAQ:SNY) Q4 2022 Earnings Call Transcript

Sanofi (NASDAQ:SNY) Q4 2022 Earnings Call Transcript February 3, 2023

Eva Schaefer-Jansen: find the slides to this earnings call on the Investors page of our website at sanofi.com. Moving to slide 3, I would like to remind you that information presented in this call contains forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. I refer you to our Form 20-F document on file with the SEC and also our Document d’Enregistrement Universel for a description of these risk factors. With that, please advance to slide 4. Our speakers on the call today are: Paul Hudson, Chief Executive Officer; the Global Business Unit Heads, Bill Sibold, Thomas Triomphe, Olivier Charmeil and Julie Van Ongevalle; and Jean-Baptiste de Chatillon, Chief Financial Officer.

For the Q&A, you have two options to participate: option one, click the Raise Hand icon at the bottom of your screen; or option two, submit your question by clicking the Q&A icon at the bottom of the screen. And with that, I’d like to turn the call over to Paul.

Paul Hudson: Well, thank you, Eva. Nicely done. And thanks to everyone for joining our call today. I’m delighted to be here and together with members of the executive team to take you through our 2022 business and financial performance. We’re proud of the progress we made in transforming our R&D organization by delivering on operational and financial performance. With 10 consecutive quarters of growth, we’re successfully closing the first chapter of our €˜Play to Win’ strategy. Moving on to the next chapter. Well, we are looking forward to the upcoming launches, key readouts as well as Dupixent that is set to reach €10 billion in 20 23. On slide 6, starting with the full year view, 2022 marks the first year, where Specialty Care delivered a highest sales amongst our businesses.

The main driver of this performance is Dupixent. This unique medicine, which we identified in 2019, is a core driver of our transformation. The biologic profile of Dupixent, to this day, we believe remains the best in its class with exceptional ability to balance high efficacy with compelling safety. Blazing the trail in markets that are underpenetrated in terms of eligible patient populations, Dupixent keeps adding significant patient pools through multiple approvals in diseases that are still underserved. Without question, this medicine is now a key cornerstone in treating chronic Type 2 inflammatory diseases. 2022 also marks another successful year for vaccines. We maintained our leadership in flu and are getting momentum quickly as the pediatric vaccines company of choice.

In fact, Thomas will share with you in a few minutes how well our latest pediatric launch is performing. In the second half of the year, we’ll be ready to launch Beyfortus. This winter almost everybody learned how contagious the virus such as RSV can be, with the potential to cause a serious respiratory illness requiring hospitalization in those that need protection most. Switching to Consumer Healthcare. We continue to be pleased with performance and consistent growth since Julie took over. And Julie has reshaped the business and the CHC GBU is now executing successfully in its prioritized franchises. We have carved in a standalone structure over the past few years and we are embarking on the next phase, enabling CHC to fully manage all its corporate functions independently.

Finally, the progress we’re making in streamlining GenMed also delivered encouraging results. Notably, the core assets we are prioritizing are increasingly contributing to GenMed’s performance, now totaling €6.4 billion of sales, up 5.2% from last year. While our CFO, J-B, will detail our financial performance in his section, I would like to highlight our strong earnings of €8.26 per share, growing 17.1% at a CER and continuing the strong trend we set in 2019. Moving to slide 7, let me remind you of the achievements of the first chapter of our six-year strategic plan. As a few proof points of our transformation thus far, I highlight the 10 consecutive quarters of growth, the 540 bps BOI margin improvement, and the €2.7 billion of cost efficiencies, which we reinvested behind growth drivers in our pipeline.

To accelerate our R&D pipeline, we also deployed cash to value-creating transactions securing access to external innovation. We are committed to continue investing in BD and M&A activities to bolster our priority TAs. We see digital transformation as a key area for enabling further productivity and efficiency gains, employing insights from AI and predictive analytics across the organization. On the next slide, let us pivot to some leading indicators of our transformation to an innovation led company. In 2022, our R&D efforts were recognized by as many as nine publications in major peer reviewed medical journals, including New England Journal of Medicine and the Lancet. We have received five priority reviews or breakthrough designations and launched two new molecular entities in 2022 Xenpozyme for the treatment of SMD and Enjaymo for cold agglutinin disease.

Bill will explain to you in just a moment how meaningful those launches are for our longstanding leadership and commitment in rare diseases. Turning to the next slide, 2022 has been a landmark year in Sanofi positioning — sorry, in Sanofi positioning itself as a player to drive global ESG initiatives, which we presented to you by the way back in July €˜22. Our commitment to society is exemplified in our R&D efforts to address underserved populations, and I’m particularly proud to give you the latest update on our dedication to eliminating sleeping sickness, a terrifying disease killing patients in less than two years of untreated and still endemic in very remote areas of sub-Saharan Africa. Sanofi has been partnering with the World Health Organization for more than two decades, donating drugs and providing financial support, and as a result, the number of diagnosed patients fell by 97% since 2001 to reach as few as 800 cases last year.

Incredible work really. At the same time, we’ve continued R&D efforts in order to push those numbers even lower. Acoziborole is a potentially transformative treatment and it raises hope for the elimination of sleeping sickness in Africa. Phase 2/3 trial results show compelling efficacy and safety, and the key advantage of acoziborole is simplification and accessibility, providing an oral one and done dosing option. Patients can be treated with no need for hospitalization, and our regimen could also include the treatment of children. Looking ahead, 2023 will mark two major first-in-class or best-in-class launches, for the first time in the Company’s recent history. We plan to launch Altuviiio in Hemophilia A, a medicine with a compelling profile that is poised to capture market share, both from factor and non-factor therapies.

Equally exciting, we are ready to launch Beyfortus for RSV prevention in time for the next season, providing all infant protection. We have — we expect to have two pivotal readouts this year as well. Dupixent in COPD and tolebrutinib in relapsing remitting MS. For both, we hope to see breakthrough data sets, particularly in COPD. When you think about the huge unmet need and the challenges that patients and healthcare systems face, this could be a real game changer. With 27 earlier stage readouts from assets with first or best-in-class profiles, especially in immunology, we are set to deliver on our ambition to transform the practice of medicine. Although all research and development in our industry involves risks, we are committed to break new ground and to chase the miracles of science.

Across the organization, our teams have been relentlessly executing our plan over the last three years, and I want to take this opportunity to express my gratitude for all their hard work. During the 2023 to 2025 period, our action will be focused on our existing objective to achieve more than 32% BOI by 2025. We are steadfast in our ambition to reach this target with new launches, continuous Dupixent profitability improvement, and by further streamlining our portfolio. Now, what will lead us into the next chapter of our growth story? While 2026 and beyond is not fully laid out yet, we have previously guided you on growth targets for the second half of the decade, the immunology and vaccines. Unlike any of our peers in the industry, we are in a unique position with the portfolio uncompromised by a meaningful LOE exposure over this period.

To fuel this next chapter of growth, we are confident in our improved R&D productivity, driving a pipeline made up of at least 70% biologics with 90% to 95% of products being best in class or first in class. This lays a promising foundation for us to bring three to five products to market with €2 billion to €5 billion peak sales potential each in the second half of the decade. Significant unmet need remains in immunology, neurology, oncology, and vaccines, where our science is gaining momentum as we continue to focus on winning product profiles, including medicines such as to tolebrutinib, itepekimab and amlitelimab. On the next slide, let me transition to the business performance of Q4, which will be led by our GBU heads. Bill will start by highlighting Dupixent’s growth we’ve shown again in Q4, driving Specialty Care performance to new heights.

Bill, over to you.

Bill Sibold: Well, thank you Paul. Q4 has been another extremely successful quarter for the Specialty Care with solid double digit growth. Dupixent remains the top driver of this growth fueled by strong demand across indications, geographies, and age groups. In 2022 alone, we managed to add 225,000 new biologics eligible patients with the addition of asthma in the EU to treat 6 to 11 year olds, EoE in the U.S. for 12 years and up, AD in the U.S. for ages from six months to five years, and finally prurigo nodularis in the U.S. targeting adults with high unmet need. Switching to rare diseases, I am pleased with our performance in this core TA where we not only continue to add new patients in our LSD franchises, we are also starting to benefit from the contribution of recent new launches.

I would specifically point out the quick ramp up of Nexviazyme and Xenpozyme where we have rapidly established the standard of care. Turning to oncology and neurology, as you know, we anticipated lower sales in the quarter due to a number of factors related to late life cycles. In particular Jevtana in the U.S. and the Aubagio LoE in Canada, which gives us an indication of the very significant impact we can expect from U.S. generic entrants to Aubagio beginning as early as March of this year. In Europe, the first generic entrant is expected in the fourth quarter of 2023, based on confidential agreements Sanofi concluded. On slide 15, let me draw your attention back to Dupixent’s growth trajectory, set to reach €10 billion in sales in 2023.

Q4 delivered another quarter of more than 40% sales growth globally, ex U.S. sales are now annualizing over €2 billion and incremental €3 billion were added in 2022 globally, also benefiting from the strong U.S. dollar. Going forward, this currency benefit on a reported basis may not continue at the same rate. We keep making tremendous progress with our regulatory milestones. Not only did we launch Dupixent for PN in the U.S. in the fourth quarter, but we also received approval for this indication in Europe in December, making Dupixent the first and only biologic available for the treatment of this dermatological disease. For chronic spontaneous urticaria, in short CSU, we had already shared in January the submission to the FDA. This indication has the potential to add another 308,000 biologics eligible patients to receive treatment for a highly debilitating skin disease.

If approved, we have the potential to add a population close to the size of the market targeted with Dupixent in COPD. As a quick reminder, the usual dynamics around co-pay assistance programs that typically take place at the beginning of the year are expected to weigh on reported sales figures in Q1. Now on the next slide. Dupixent’s leadership amongst specialty respiratory biologics is depicted by the pie chart on the left side, reaching 37% NBRx share. More importantly, as you can see in the table on the right, the asthma biologics market in the U.S. remains largely underpenetrated. Today, only 22% of biologics eligible asthma patients above the age of 12 receive an advanced therapy, and as such, represents an enormous potential for future growth with Dupixent in this indication alone.

In children, the opportunity to treat biologics eligible patients with unmet need is even higher. Furthermore, as Paul already mentioned, our teams are highly excited about Dupixent’s potential to become the first biologic to treat COPD, a devastating disease that has seen no innovation in the field for the last decade and is the third leading cause of death worldwide. On slide 17, switching now to some recent innovative launches in our rare disease portfolio. Here are some great examples of how Sanofi’s R&D transformation has translated to the expansion of our portfolio to address significant unmet medical need. While the targeted patient populations for these products may be small individually, the importance of improving people’s lives with these first-in-class therapies continues to reinforce our leadership in rare diseases.

Specifically, in Q4, we have seen strong adoption of Xenpozyme and Cablivi. Enjaymo has seen meaningful growth in new patient starts. Moving to my final slide, I want to zoom in on our expected upcoming launch of Altuviiio. We see this medicine as an important future growth driver for Sanofi overall and building on our expertise in the greater than €10 billion hemophilia A market. With Altuviiio, we have a best in class factor treatment with the potential to set a new efficacy standard by providing a near to normal range of factor VIII levels for most of the week, coupled with its reduced treatment burden of once weekly dosing. With the PDUFA date later this month, we believe Altuviiio will be the first breakthrough medicine to enable new daily lifestyle possibilities for hem A patients.

To-date, we are particularly excited about the positive physician and patient feedback we have received over the time of its development. In addition, the recent New England Journal of Medicine publication highlighted Altuviiio’s potential to transform the treatment landscape for people with hemophilia A. With that, I hand over to Thomas to update you on the Vaccines business.

Thomas Triomphe: Thank you, Bill. Q4 Vaccines sales were €1.7 billion, 16% down versus prior year as expected, owing to strong operational execution leading to the shipment of large volumes of flu vaccines already in Q3. We delivered another record sales year for flu, driven by our differentiated vaccines. I will touch on this more on my next slide. PPH sales were lower compared to the same quarter last year due to the COVID-19 situation in China, disrupting the routine infant vaccination at the centers of care. In addition, Vaxelis sales keep growing in the U.S. Given it’s a JV between Merck and Sanofi, those sales are not consolidated in our sales line. We continue also to observe progressive recovery of booster and travel vaccines, but the latter have not yet fully reached their pre-pandemic level.

And finally, sales in the others category benefited from our COVID-19 booster VidPrevtyn Beta in Europe. Depending on individual countries supply arrangements, those revenues were either booked in the sales or in the other revenues line. Moving on to slide 20 for flu. With almost €3 billion sales, we achieved another record year of flu sales in 2022 in a challenging vaccination environment marked by both, patient and provider fatigue. Our strategy to focus on vaccines offering protection beyond flu is paying off and is driving the flu franchise growth, Fluzone high dose and Flublok represent the majority of our flu sales since 2021 and do continue to grow. In the U.S., although overall vaccination rates decreased this season, the senior market has been stable and Fluzone high dose remains the market leader, gaining 4 points share in this segment.

Photo by National Cancer Institute on Unsplash

In Europe, we observed a similar trend in those countries where we have launched Efluelda. After Germany in 2021, some regions in Italy and in Spain have awarded their influenza tenders to Efluelda to vaccinate their seniors in 2022, thus providing the most vulnerable vaccine with demonstrated efficacy against both flu infections and its dramatic consequences. Next slide, please. As we start the year, we are set to build up our strong position in pediatric vaccines. First, Vaxelis, the first and only hexavalent pediatric vaccine available in the U.S. reached 26% share of the 3 dose primary service at the end of 2022, 18-month only after launch, gaining share from the pentavalent pediatric vaccines. We expect Vaxelis to be the leading pediatric vaccine in the very near future.

Second, we’re getting ready to launch Beyfortus for the next RSV season. As soon as we get the license and ACIP recommendation. RSV is creating havoc this season. It has put heavy burden on healthcare systems and emotional strain on families, which reinforces the value of Beyfortus as a solution for an important unmet medical need. We’re working closely with the FDA to expedite review timelines given the urgent unmet public health need caused by RSV, and to ensure equitable access to Beyfortus to protect all infants against RSV as soon as possible. Finally, on the R&D side, as announced at our vaccines event in December 2021, we now have interim results of our PCV21, RSV toddler, and Meningitis B programs. These interim results give us confidence on the path forward for these programs.

We will host a vaccine R&D event in the first half of this year to share detailed results and to give a broader update on our pipeline. Very much looking forward to this event, I hand over the call to Olivier.

Olivier Charmeil: Thank you, Thomas. Moving now to general medicine on slide 22. The execution of our strategy continues to deliver as planned. In Q4, general medicine sales decreased 3.7% to €3.4 billion. The impact of the consolidation of EUROAPI third party sales was minus 3.6 percentage points while the impact of divestments of noncore assets was minus 0.7 percentage points. Our core assets grew 8% in Q4 despite the decrease in Lovenox sales, which continues to be affected by a low molecular weight heparin markets, decline following high demand during the COVID period. Our strong brands, Praluent, Toujeo, Thymoglobulin and Plavix all delivered double-digit growth in Q4. Furthermore, the adoption of Rezurock was robust with more than 1,400 patients treated since launch.

The noncore asset sales decreased 10.8% in Q4, reflecting portfolio streamlining and Lantus decline in the U.S. as well as in China due to VBP implementation in May. Moving now to slide 23. For the full year 2022, General Medicine sales reached €14.2 billion. Importantly, our core assets were up 5.2%, in line with our ambition to grow our core asset mid-single-digit CAGR over the period of 2020 to 2025. Our core assets now represent 47% of GenMed sales versus 43% in 2021. Across our core brands, Praluent, Thymoglobulin, and Rezurock performed well, and we are specifically proud of reaching blockbuster status for Toujeo for the first time. This year, our total glargine sales, Toujeo and Lantus were down 10.7% in China. VBP implementation in May 2022 impacted Lantus sales as expected, but we saw a strong ramp-up of Toujeo, which benefited from a demand increase.

Looking forward, we remain confident in the performance of our core assets. Our transplant franchise is expected to continue its growth path driven by Rezurock despite the loss of exclusivity of Mozobil in July in the U.S. Praluent’s strong performance should continue driven by Europe and China. Soliqua was approved in China in January 2023 and we plan to launch in Q2 of this year. We will work with Chinese authorities to get access to patients to NRDL. In parallel, we will continue to leveraging the compelling SoliMix data to source market share from the premixed insulin in the Rest of the World region. The strong performance of Plavix in China is also expected to continue in 2023. In 2023, we expect Toujeo to continue to be a significant contributor to the growth of General Medicines across many geographies, including China.

The streamlining of the GenMed established product portfolio continues. In Q4, we closed two further local deals in Germany and Spain, ending the year with 122 product families from originally more than 300 in 2018. In summary, our recent performance and streamlining efforts gives us confidence in our ability to further drive the share of core asset sales to 60% of total GenMed sales by 2025. With that, I hand the call over to Julie.

Julie Van Ongevalle: Thank you, Olivier. The Consumer Healthcare market continues to post double-digit growth in several of the categories, with price contributing way more than volumes. Q4 was notably affected by the tripledemic with high levels of influenza, COVID-19 and RSV across all geographies. This high level of incidence drove consumers to purchase significantly more Cough & Cold than general pain remedies to protect themselves and their families. Sanofi CHC participated in the strong Cough & Cold momentum with our European portfolio. However, our absence from this segment in major markets like the U.S., where market dynamic has been very strong, with over 30% growth, drove our latest rolling 12-month growth to lag slightly behind the market.

Nonetheless, I’m proud to share that Sanofi CHC has delivered a fourth consecutive quarter of double-digit growth on a rolling 12-month basis, with strong performance across Digestive Wellness, Allergy and Cough & Cold categories. Our Digestive Wellness portfolio, in particular, continues to deliver outstanding results with 19 months of consecutive share gain. On the organization side, we’re also taking the next big step towards becoming a fully standalone business within Sanofi. Effective January 1, 2023, all core functions such as finance, legal, HR and digital have been integrated under the unique CHC umbrella. These remaining functions are essential to the development of our integrated FMCH operating model to further accelerate our agility and consumer relevance.

In particular, dedicated digital systems and the IT teams joining our CHC forces enable us to initiate our disentanglement and further optimize and upgrade our road map with a clear end-to-end perspective. As a result, Q1 2023 onwards, we will be reporting results as a fully formed CHC organization, carrying our full portion of the support function expenses that were shared across the organization so far and reflected in the section, Other. J-B will explain the details in a minute. For CHC, taking full ownership of our P&L will enable us to tackle our opportunities and increase our competitiveness in order to further drive growth. Moving on to Q4 net sales. We delivered 6.6% sales growth and 7.5% excluding the impact of divestments as a result of our portfolio simplification.

Many of our major categories, Digestive Wellness, Pain Care, Allergy, and Cough & Cold generated meaningful gains during the quarter. The Digestive Wellness brands, I highlighted last quarter in Enterogermina, Buscopan and Dulcolax continue to deliver outstanding growth, maintaining their leadership position and expanding new market share. Additionally, our leading local and regional brands delivered high growth. For instance, Eve, the number one general pain relief brand in Japan has delivered phenomenal market performance and sales growth in Q4. Strong marketing, commercial and pricing execution have resulted in driving market share above pre-COVID levels. Our Cough & Cold brands enjoyed double-digit growth in Q4 and have been the largest contributors to our strong full year performance.

This is a result of robust consumer demand. Coupled with a very relevant and impactful global campaign, Don’t Hide your Cough, rolled out across more than 30 markets with brands like Mucosolvan and Bisolvon Europe or East Asia and Mexico. This campaign drove significant improvement in brand equity, reached the highest brand scores in the key countries and won Euro Effie Award. In summary, 2022 was another year of strong performance, growing 8.6% in net sales and almost 10% organically, while transforming our business into a standalone organization. With that, I’m handing it over to Jean-Baptiste, our CFO.

Jean-Baptiste de Chatillon: Thank you. Thank you very much, Julie. Yes. As Paul mentioned, I would like to pick a few drivers of our strong financial performance in 2022, obtained in spite of a challenging macroeconomic environment. Full year company sales reached almost €43 billion, growing 7% at constant exchange rate. Adjusting for divestments on EUROAPI sales in the prior period, sales growth would have been 8.6%. Other revenues benefited from higher VaxServe sales as well as COVID-19 vaccine-related revenues. The gross margin improved by 180 basis points driven by product mix and efficiencies that more than offset increased cost of energy and transportation as well as higher labor cost. Operating expenses grew roughly in line with sales, the majority coming from R&D to fund and expand our pipeline for future growth.

Other operating income, mainly driven by the Regeneron profit share was up more than 25% versus prior year due to the outstanding success of Dupixent. We also recorded capital gains from divestments totaling €615 million in this line. We continue to identify assets across GenMed and CHC that are noncore and expect to generate capital gains from divestments of a similar magnitude in 2023. As a reminder, the upfront payment on the regulatory milestone payment linked to the Libtayo license agreement are only recorded in our IFRS P&L. Our BOI margin reached 30% at constant exchange rate and 30.3% at published. An improved effective tax rate of 19.3% on higher financial income also contributed to the business EPS growth 17.1% at CER. On slide 29, our pipeline being now mainly biologics, on our new manufacturing facilities becoming fully versatile, we have decided to combine vaccines and pharma manufacturing operations.

This will trigger new efficiencies, eliminate duplications and will increase flexibility. This will be effective January 1, 2023. CHC, on the other hand is successfully implementing its standalone model, driving significant improvement in performance over the last two years. This year, we have moved to the next level of autonomy by transferring remaining global functions. As such, beginning with Q1 2023, we will report a fully loaded segment P&L for CHC. 2022 comparable figures will be provided ahead of Q1 earnings. To sum up, starting from Q1, we will present our divisional business, P&Ls categorized by Biopharma, Consumer Healthcare and Other. As a result, you can expect a much enhanced CHC disclosure, allowing you easy peer comparisons and for our team, benchmark will be easier and more compelling.

With support functions now largely allocated to the businesses, so section other will be significantly reduced. Turning to slide 30. Reducing greenhouse gas emissions to net zero is an unprecedented challenge. With the consequences of climate change becoming very visible, it has become critical to set higher ambitions to effectively address these challenges. At Sanofi, we are bringing forward the time line of our ambition to net zero emissions to 2045. This marks a five-year acceleration versus our previous target, building on great work already done. For example, increasing our renewable electricity use and transitioning to a carbon-neutral car fleet, that has allowed us to already reduce emissions from our activities by 29% since 2019. We’ll also continue to work closely with our suppliers to reduce our Scope 3 emissions.

These have come down 7% since 2019. On slide 31, our gradually growing dividend remains an important element of our capital allocation policy and ranks only behind organic investment on business development in our priorities. This is reflected in the fact that the Company has consistently increased its dividend payments for the last — for the past 28 years. For the year 2022, we announced that the Board has proposed a plus 6.9% increase in the dividend to €3.56. Advancing to my final slide, we expect full year 2023 business EPS to grow in the low single digits at constant exchange rate. On ForEx, based on January 2023 average exchange rates, we see a currency impact of minus 3.5% to minus 4.5%. Now, we can open the call to Q&A.

Eva Schaefer-Jansen: So, we will now open the call for your questions. As a reminder, we would like to ask you to limit your questions to two each. And I will now repeat, for the Q&A, you have two options to participate: option one, click the Raise Hand icon at the bottom of your screen, and you will be notified when your line is open to ask your question, at that time, please make sure you unmute your microphone; or option two is to submit your questions by clicking the Q&A icon at the bottom of the screen, and then your question will be read by our panelists. Can we have the first question, please?

See also Buffett Stock Portfolio: Recent Buys and Dividend Capture Strategy Stocks to Buy.

Q&A Session

Operator: Yes. The first question will be from Graham Parry from BofA.

Graham Parry: Great. Thanks for taking my question. So, first one is on tolebrutinib. So, the FDA has had the Hepatic Assessment Committee’s results since, I think, the end of September and your own data monitoring committee was happy to restart recruitment in Rest of World study. So just what’s holding the FDA back if you have any direct dialogue with them? And if not, when would that happen? And do you think those discussions will define the label there? And then secondly, on Beyfortus. Just interested to understand why the FDA didn’t give priority review given breakthrough therapy designation, huge epidemic. I saw in your press release that said you work — they would be working to expedite the review. But what does that mean? So could you still hit the June ACIP panel meeting for Beyfortus, do you think?

Paul Hudson: Okay. Thank you, Graham. So, great questions. So, John, an update on tolebrutinib FDA interaction, if you can, and expectations.

John Reed: Yes. Graham, thanks for the question. The — we’re still conducting the work that FDA had requested to try to gain a mechanistic understanding and to why a handful of patients out of over 2,000 on the studies have experienced liver injury. That work is ongoing. In the interim, as you know, 3 of the 4 studies are fully recruited, the 2 GEMINI study is for relapsing remitting and the HERCULES study for non-relapsing secondary progressive. The PERSEUS study for primary progressive continues to recruit ex U.S. And — so we’ll keep working towards that ambition of understanding more mechanistically why a rare occasional patient might have a liver issue. I would note that in the world of MS drugs, it’s not uncommon for practitioners to have liver monitoring as part of the onboarding of a patient as they started a new initiation of therapy when you ask about what the label might bring.

I can’t really speculate, but I suspect it would have monitoring in the early going — and that’s not uncommon among MS medicines.

Paul Hudson: Maybe — thanks, John. And maybe — you touched on already, there is no drug, I think, specifically designed for secondary progressive MS and progressive nature of the disease. So that study has recruited as you mentioned, primary progressive still recruiting. And it’s not uncommon for additional steps and initiation. So really, still a very compelling story for us, and we’d rather spend the time now with the regulator getting it right and making sure we all understand where we are. And of course, the regulator decides because those studies are fully recruited. So, it’s worth spending the time to make sure we’re good. Thomas, a question for you on, will we make June ACIP based on the decision to give a standard review.

Thomas Triomphe: We are definitely going to launch Beyfortus in the U.S. in 2023, Graham. So, getting back to your question, we’re not going to speculate about the rationale by the FDA. Clearly, what’s very important is that as you’ve pointed out, after the approval in the UK, there has been a clear understanding by the agency and as well by the ACIP of the importance of Beyfortus to tackle RSV, which is the number one cause of hospitalization in the U.S. or in Europe or worldwide, actually in the first year of life. So, that’s been clearly very important and fruitful dialogue. We’re all moving forward to be ready for the launch. And I clearly don’t see — and we’ve been working a lot also with the ACIP member, as you know very well. Good progress, up and ready for the 2023 launch with both a licensure and ACIP recommendation.