Okay. Good afternoon and good morning to those of you following us from the U.S. Welcome to our 2010 annual results conference. As you well know, this conference is also available by webcast and the slides that we'll cover today can be found on our website. As always, I must advise you that today's presentation will contain forward-looking statements, and those statements involve known and unknown risks and uncertainties which may cause actual results to differ, and I encourage you to refer to our Document de Reference and our 20-F for more details on those risk factors. So with that, let me just introduce our agenda for the day and our speakers. We'll have our CEO, Chris Viehbacher, who will cover the 2010 achievements and the 2011 guidance, followed by Jerome Contamine, our CFO, who will cover the financial performance for 2010. We will then have Hanspeter Spek, president of global operations, who will provide you with a business update. Then Olivier Charmeil will cover the vaccines business. And then Dr. Elias Zerhouni will give you an update on R&D and after that we'll have about 45 minutes left for Q&A. So with that, I'll leave the floor to Chris.

Thank you Sebastien. Good afternoon everybody. Sebastien's already made some introductions, but perhaps just a warm welcome to first, Olivier Charmeil on your outer right, who's just been named head of Sanofi Pasteur. And of course a warm welcome to Dr. Elias Zerhouni. We're very excited that Elias has agreed to become president of our global R&D operations. As some of you know, Elias led the National Institutes of Health for six years in the United States, was dean of the school of medicine at Hopkins, but you may not know that he's actually also an entrepreneur, has created five companies. So he's got a broad science and business background as we'll talk about in a little while, we're moving from cleaning up and restructuring R&D to growing R&D, and I think Elias is extremely well-placed to do that. Olivier, I think, is extremely well-placed also for Sanofi Pasteur. There's a huge opportunity in emerging markets and Olivier most recently has been very ably leading our pharmacy business in Asia-Pacific, and you'll see some of the results on that. So let's talk a little bit first about 2010, and then I'll touch on the 2011 and then we can go into some of the detail. It's been very interesting. I was at Davos and ran into Joe Jimenez just after he had reported his first time results, and I think they were up plus 15% and the share price dropped 2.4%. So he was a little discouraged. And I said, you know, don't worry about it. This is an industry that tends to focus on the negative. People start worrying about patent expires the day after you launch a new product. If you're any good in R&D they're not going to give you any value for it in your portfolio…

Thank you Chris. Good afternoon or good morning everybody. So I will get you rapidly through some of the key elements of our financial accounts for the whole year. I start with sales. Here you have the Q4 sales. Inevitably you see a decline on the organic growth line. Keeping in mind that we booked all our sales of [inaudible] or vaccines in 2009 during Q4. In fact, if I exclude the H1N1, the decrease has been 2.2%, half compensated by the acquisitions, which are mainly Chattem during this period, and also helped by the FX impact which has just for the fourth quarter contributed EUR470 million. So you could say, in fact, that the Q4 sales, excluding the H1N1, really consistent with what we report for the full year, which is a slight decrease on an organic basis, 2.7%, totally linked with generics, [inaudible] to that already. [inaudible] we feel more around that. We have lost a bit more than EUR2 billion of sales from generic competition. All we have [inaudible] EUR 1.2 billion organic growth of our growth platforms. On top of that, we have the acquisitions, which [inaudible] on a full year basis by 1.9%, half of it coming from Chattem. And we have a very significant positive tailwind coming from the FX, as you can see, because all over the year it means EUR1.3 billion of extra contribution. You should always be very careful with prognosis about exchange rate, but I'd like to just insist up on one point, that maybe it's not just by coincidence that we have benefited from this positive impact of FX valuation. As long as we benefit from the broad geographical presence of the company, our large presence in the emerging markets, showing that we are both mitigating our exchange rate…

Good morning, good afternoon. I would like to give you a short overview about the performance of the company in terms of operations during 2010. My first chart shows what Chris already has mentioned. You see the significant impact of EUR2 billion lost sales due to generification. You see not precisely, but I remind you that we lost about another EUR450 million due to the American healthcare reform and the European measures, mainly on price. So through the growth platforms, which are diabetes, developing countries, CHC, vaccines, etc. we have created EUR1.7 billion new sales, and yes it is true we have been also helped this year in 2010 favorably by a forex impact of approximately EUR1.3 billion. Amazing to say, despite a slightly negative growth rate, a constant exchange rate of 0.8%, the group has achieved the highest sales number ever, nearly EUR30.4 billion. Now, on more detail, some of the growth platforms. I start with the legendary growth platform of emerging markets. You see that since 2005 we always had double-digit growth and you see that as of 2009 we even have an acceleration of growth of 19% and then in 2010 16% in those markets where we have as I said 16.3% constant exchange rate growth and 23% on a reported basis. Unique our group, Sanofi-Aventis, also in this respect to my knowledge the only company which is achieving equal sales in all three major segments, precisely 30% in emerging markets, equally 30% in the U.S.A. and 30% in Western Europe. The 11% remaining for the rest of the world in essence is Japan and Australia. We assume, of course, that this will continue, and that as of 2011, emerging markets will grow well above the 30% share you had last year. What is behind this? Yes,…

Thank you Hanspeter. Good afternoon. Good morning. I'm very excited in my new role of Sanofi Pasteur, the vaccine division of Sanofi Aventis and the [inaudible]. I'm going to start by giving you an overview of our performance in 2010. It has been another solid year for Sanofi Pasteur. Our sales have reached EUR3.8 billion, growing 4.8%, including the impact of the pandemic sales. If we exclude the impact of the pandemic sales, sales growth has reached 5.5%. We had a strong fourth quarter, reaching EUR890 million, growing 12.6% excluding the impact of the pandemic sales. The performance of 2010 has not only been driven by the strong growth of our key franchises, but also significant growth in the emerging markets. In 2010 we had a record year for flu vaccine, growing by more than 18.7%. The split between our pandemic sales and our seasonal sales, according to the guidance we provided you at the beginning of the year, our pandemic sales reached in 2010 EUR452 million, which is very consistent and very close to the amount of pandemic sales that we sold in 2009 that reached EUR440 million. We are very happy about the resilience we show, and with Menactra in the U.S., in an environment where we are able to keep an extremely high market share, significantly above 90%. We continue rollout on the international front, and we are starting to have significant sales, especially in the Middle East. We have a solid performance on Adacel, our ACP IPV combination, where not only in the U.S. we have a strong fourth quarter but also, and we continue the rollout of our internationalization program, and we are growing nicely. The most interesting feature is probably our growth in the emerging markets, and this is for the first time that…

Good afternoon. This is actually my first meeting. It's sort of my coming out party, and I want to really expose the fact that although I started in January, January 1st, my job as president of global R&D actually I know about Sanofi R&D and I have known about it for almost a year and a half as I was advising Chris in the R&D organization about what is fundamentally an issue that permeates the industry. If it was only Sanofi that had a problem in R&D productivity, you'd say it's a Sanofi problem. But if it's the entire industry, despite great investments from the public sector and the private sector in research and development, you have to realize that we're facing a fundamental issue. And I think my job going forward is going to complete the work that we've done in the first 18 months. And I think it's important to realize that R&D operations are fundamentally very hard to change, because the programs tend to be multiyear and once you've made a choice it's very difficult to change that choice. Second, the traditional mindset of R&D has been more of a closed innovation mindset, where you really try to develop everything in confidential ways, and try to truly have a strategy that reaches market in the shortest time possible in an area that you feel is going to be successful. And once you reached registration, you knew that your commercial operations were going to sell the product. Well, that part of history is over. If you are successful in R&D, there's no doubt that you can do very well, but you can only do well if the payers are willing to pay. And therefore, the fundamental mindset about how do you decide, what products do you choose, and…

So we've been through pretty much everything in the company, from all the way down through the pipeline through cash flows, from vaccines to R&D. So over to you.

A few questions. First, on your acquisition of Shantha, which you mentioned. What can be expected? Where are we in the reregistering of vaccines and what will be the future? On Multaq, could you come back on the patent life? Because this is one of the limitations in the U.S. Are there any initiatives here that could go through? Also there are some issues in Q4 in emerging and OTC which are a bit, especially in Brazil. So could you come back on that and elaborate? And more generally, if I may, your loss with Iniparib, potentially loss a major gross rival long-term. How do you react to that and how you see the future of the company with a decline in EPS this year, probably next year? Are you intending to accelerate shareholder value in one way or another in acquisitions or share buyback? I know it's not [inaudible] at Sanofi. Could you elaborate on that?

So we'll start with Shantha?

On Shantha, we had a setback, and we are busy fixing the Shantha five issue. We aim at participating to the new WHO Unicef bid that is going to take place in the second part of 2012. We remain very positive. The rational of the Shantha deal hasn't changed. We need to fix the issue, but in terms of business opportunities, we don't see a large opportunity with a cost-effective manufacturing base and the right portfolio in the south for the southern hemisphere.

Perhaps I'll take Brazil. What you see in the Brazilian CHC sales is a technical effect coming from changes in the trade and I think also there was a change in the sales tax, which led the wholesalers to deplete the stock by the end [inaudible]. So it's truly technical. I have to admit, I did not phonetically understand your question on Multaq -

Patent life I think. Karen? We have our general counsel here. Can you give us anything on Multaq?

Right now we're working very hard to ensure that Multaq has longer than the stated patent life. It has five years from launch, but we're working to ensure that through life cycle management it has a longer lifetime and in Europe it has the 10 years.

So basically, in Europe you've got 10 years and in the U.S. you've got 5 years, but you can't file a generic in those 5 years, so you end up with roughly 7. So that's where we are still. Nothing has changed on that. Jerome, just on Iniparib, I guess, and longer term growth. I don't want to ever be in a position, quite honestly, where if one drug changes, a dozen [come], that this changes the company. I think the challenge that we have still is on the one hand, nobody in our investment community thinks that the small molecule blockbuster model is a good one to go with. But equally, we haven't been very successful in selling the diversified model to the investment community, because essentially if you have an Iniparib or you have a Lantus, or you have a Multaq, or you have a [inaudible]. It doesn't really matter what it is, but most people want to see a blockbuster, and that's kind of still a millstone around our necks. So I think one of the things that we're really setting ourselves a target of doing is trying to really show the composite value of this company. If you think about a vaccines business, what's a vaccines business worth today? You have EUR4 billion of vaccines business. What's that worth? And what's a consumer health company work that's doing EUR2.2 billion? What's a generics business worth? You think about how much money people are paying for companies in India and the like. So I think the problem is that we're still looking at patent expires and new molecules in a very traditional way and we have to do a better job of explaining that. And I think that's really the objective we're setting ourselves for with this…

Three questions please. The first one is a basic question on guidance for 2011. Can you clarify what is in the guidance or out of the guidance? I'm talking about Eloxatin, Lovenox, and Taxotere, and especially that's for Lovenox and Taxotere. Do you expect for Lovenox a second generic company to launch? And if, when. For Taxotere in the U.S., is it really in the guidance or not? The second question is on diabetes. You have again said that your target is to become the world leader in diabetes. How can you convince investors doing that, given the fact that you have Lantus, which will be out of patent protection after 2015, Lixisenatide, which is a GLP-1 not superior to Victoza. It's noninferior to Byetta, but Victoza is superior to Byetta. And it is not on the market still. And lastly, the BGM business, which is something on which we can be optimistic, but maybe not sufficient. So how to convince investors. And finally, the last question is on R&D, how to drive R&D productivity and basically what's your view regarding the two types of strategy, to put it simply, the Merck strategy of sustainable R&D spending, or the Pfizer strategy of a big cut in R&D in order to reallocate money and give money back to shareholders?

All right, let me, just on the guidance, be very simple. If tomorrow we woke up and found that there was a second generic for Lovenox, and there was a generic for Taxotere, that would have no impact on our guidance. If tomorrow we found out the Eloxatin deal fell apart and we were losing Eloxatin, we'd probably wait and see what happened with Taxotere and Lovenox, if I could put it that way. But Eloxatin is at the moment, we have assumed that we maintain that for the year, but we've assumed also - but that's a little bit why you've got the range. Let me ask Hanspeter to respond on diabetes and then Elias on the research and development.

I mean diabetes, as you say, is a commitment, and we have to show it. And I believe that at the end of the day we will convince all investors only if we have showed it. The elements are clear. First of all we have to accelerate. The 9.7% or 9.8% growth we had in 2010 is not sufficient. We believe there is opportunity for acceleration in the U.S. whereas I mentioned we have a nice increase in the second half of prescriptions and if we continue to do so we will have stronger growth, significantly stronger growth, in the U.S. in 2011. And in the emerging markets, giving you an example, just before Christmas we have obtained full reimbursement for Lantus in Shanghai, which represents about 20% or 25% of the Chinese market. We believe that the approval in Beijing is imminent. If we continue to do so, we will get the significant sales out of Asia, also out of Pacific, where in the second half of 2010, in Japan, the product has a very good performance. As far as blood glucose monitoring is concerned, we believe we have good products, we have better products. We believe we can leverage the fact that we are the sole company which can offer insulin and meters and yes, it's to some extent a bet, but first of all it's a commitment and we have to deliver. I don't share your point of view on Lixisenatide. I strongly believe that Lixisenatide is superior to Byetta and being it already just was effected, Lixi is once a day and the other product is twice a day. And against the Merck product, we have ongoing trials. We have to see what comes out of it. And it's premature, but yes, of course, we have [inaudible] a better product.

And I would just add a few things. First of all, I don't think we have, we're missing, anything that Novo has. I am a little surprised that people can see a value in Degludec, which is essentially a "me too" of Levemir, but don't want to believe the same thing about a Lixisenatide versus a Lictoza, so somewhere I guess we've got to get a little bit better at investor relations, perhaps. I think we've got a GLP-1. We've got a long-acting insulin. We've got a better position in emerging markets. We'll probably be faster with a combo. We are slower on GLP-1 than they are, obviously. We're into blood glucose meters and they're not yet. So you know, this is a huge market. Patent expiry, let's wait and see what that brings, but I don't think at this stage today that anybody really sees a patent expiry as being of a dramatic nature, certainly where we are and especially when you start looking beyond the traditional markets of Europe and the U.S. We are busy switching our business in the U.S. to the SoloStar. We're up to 40% conversion in the U.S., and we've still got another four or five years before we are really at that stage yet. So at the same time, I think as Hanspeter said, we want to see some acceleration in that business. We will be investing and that's part of the reason why we also said we need to be a diabetes company. As long as we're just going to be managing a brand, we're not going to be really developing a diabetes business. So we've got all the elements, and it now has to come together and it now has to be executed. And I think we would certainly expect that we have to execute better, no question about that. But I wouldn't say that, hey, our product lineup is not as good. Lantus is still the number one brand in the entire diabetes world. And you know, given everything that has happened to try to knock Lantus off its perch, I think actually it's shown a tremendous amount of brand loyalty and resilience. Elias, the sustained budget of Merck versus budget cutting of Pfizer? I'm interested in this one too, so -

You're putting me in a tough spot here. But before I do this, I'd like to ask something about the diabetes question, because I completely agree with what Hanspeter and Chris have said, but there's a dimension that I think people don't see in why we went this direction. And the dimension is this, is that diabetes is only the tip of the iceberg for many other chronic conditions, chronic diseases, that are directly related to diabetes. The comorbidities in eye disease, hence our investment in Fovea in eye. The comorbidity in the cardiovascular system, the renal system. And the epidemiology growth of this disease says that there is a need for you to look at holistically diabetes not from the end of product, you know, insulin and Lixisenatide, but the end of the other part of the spectrum, a population to which you provide a continuum across the entire spectrum. And remember that chronic disease management is going to grow, we believe, as a part of every public health system response. You're not going to take care of patients with diabetes in hospitals. So you're going to develop systems that are going to be intertwined with the solutions that are provided over the continuum of pathologies. Remember that diabetes is part of the metabolic syndrome diseases. It's part of that, and that's why we have it in our portfolio, the PCSK9 molecule, antibody, which is essential to that population and a sub-part of the population. So I'd just like to add that dimension. Beyond 2015, beyond expirations, you have a different strategic vision when you talk about diabetes. Diabetes is just the sort of anchor of many other associated comorbidities and conditions which tell you that unless you're a strategic player, you're just not going to be a player.…

Yeah, I mean if the company's spending EUR5 billion year-over-year and cuts its budget in half, but nothing comes out of it, the company's still wasted EUR2.5 billion. So I think a lot of it is either a huge waste of money or it's fabulous value, but it's probably not somewhere in between. And that's where I think Elias's point is extremely important, about looking at fixed versus variable costs, and really trying to get the things right. But the problem is there's no correlation today between how much you spend and how successful you are in R&D.

Just to follow up on the guidance, so you've given the range as if there were generics tomorrow, but if there were no generics does that get you to the top end of your range minus five - no generics by the end of the year? And then Hanspeter, just to follow up on emerging markets, if we look specifically at the fourth quarter, the growth in pharma was just 6% and there seems to be weakness in Africa - Plavix and Taxotere. Is there any color you can give us on those three specifically? And maybe for Jerome, just a quick question on the cost savings. Is it fair to assume that around half will be reinvested?

On the question on guidance, I mean yes, if we have given a range, because we don't know precisely when either the generic of Taxotere or the second generic of Lovenox are going to come into the market, because at the end of the day, everybody was convinced, even ourselves, that by before year end 2010 there would be a generic of Taxotere on the market in the U.S. So the basic reason why we have given this range is exactly what you said, meaning that if everything goes right, we will be on the high side of the range. Maybe I can just go on to the cost savings. There are two questions. In the cost savings we measure on the constant [parameter] basis. So we have taken the 2008 structure of Sanofi Aventis. We have put acquisition aside and accretions we did in 2009 and 2010, and we measure the overall cost comparing to '08 to '11 before tax. And this is where we generate the EUR2 billion of savings. In other terms, if I were to just measure all what we have cut, without taking into account what we have invested, the savings would be much more than that. Now we have invested, either in emerging markets - if you think about the commercial investment in emerging markets, we are increasing it by, let's say, EUR200 million every year? Roughly? And we have also supported more [inaudible]. We have launched Multaq. We've launched Jevtana. We're on the verge of launching BGM. So all this is investment. But the EUR2 billion is from 2008 to 2011 on a constant [parameter] basis, so before the impact of acquisition and you compare the overall cost, whether it is op ex or evolution of cost of goods.

I think when you look at the guidance, Jerome confirmed if there were no generics on Taxotere and Lovenox it's minus five. We say why minus five? Well, remember that just the drop because of H1N1 is 2-3 points already, plus you've got the whole Lovenox effect even if there's not a second generic. Remember, they only came in halfway through, so you've got a whole year's effect of Lovenox in 2011. Plus you've got Ambien CR, and you've got Xyzal. You've got U.S. healthcare reform. And then you've got some reinvestment going on. So pretty much, you could probably get to between flat and a couple percent if you ignored H1N1 and you ignored - but you also have Taxotere in Europe, where there clearly will be generics, so there is a cumulative effect. So that's how we roughly, I mean in broad numbers, obviously get to some of that. And I think you had a question for Hanspeter.

In the emerging markets there's really nothing but some seasonality. I just was asking Olivier. He tells me that there was a lack of season for example in Russia. So I also can indicate that we have a very strong start in 2011. Evidently we already closed the first month. So what you see is purely seasonal and there is no change in trend at all. I have to admit we have to see what happens in Africa due to the events in Tunisia, which we are a market-leading company, and in Egypt, where I think we are number two or number three. If this has an impact. We will see something I believe in Australia due to the flood. December and January was very dead, but [inaudible] not going to our terminology of emerging markets. So there is nothing but a little bit of technical.

We also had the - in Brazil we shipped, we went to direct shipping -

What I said before, we had a change in the distribution system and in the tech system in Brazil. On the other side, Taxotere doesn't play any significant role in those markets at all.

Jerome, there was an announcement this morning that you gave the shareholders an election to proceed with dividends in shares instead of cash. I just wondered where the shares are coming from. Are you going to issue new shares? Or do you have treasury shares that you're going to use to recycle for that? Second question is for Hanspeter. Could you give us an idea what kind of pricing impact you expect in 2011, and ideally separately for the pharma business and for your generics divisions? And the third question I had for Olivier, for vaccines, you said your key focus will be to grow the emerging market business. Do you have any vaccines in your existing portfolio? I know you have some candidates from Shantha, which will allow you to capture additional volume through innovative pricing modules?

On your question, it's an option given to shareholders. So it's a free option let's say. Clearly you don't know - I cannot know, what shareholders will decide. It's common practice in the CAC 40 companies, and we decided to do that also to give a chance to whoever shareholder may be. [inaudible] shareholders to reinvest in the company. Now, is it going to create new shares? Mechanically, yes. Legally, yes. But on the other hand, we can continue to monitor the number of our outstanding shares by doing some share buyback, as we did in 2010, where because of stock options there was some new shares which were created, and we brought back the shares in order to maintain the number of our outstanding shares. So I tend to consider there is one thing which is I would say a dividend policy. Another thing, which is a [inaudible] of the capital structure on the number of outstanding shares, and here again, depending upon - clearly today we are more thinking about looking at possible acquisitions or using our cash for these acquisitions, but still, we can clearly monitor the number of outstanding shares.

On pricing, I think we are active in about 18 markets, and if I look to 80 budgets, we have one form where we see the volume growth and the price growth. I would say in less than ten I see a positive development on price. In all the remaining 70 I see a negative, and this will not change in 2011 for reasons we all know. So I believe the more difficult question is what happens in the volume column. And of course, classical example, in China the volume column for the time being and I believe also in 2011, will be largely positive because there is more and more access, there is more and more reimbursement. There is more and more kind of system. Now I admit, remaining in the example as more and more [inaudible] are given access there will be more and more pressure on the price. But as I've said before, I believe that in countries like Brazil, Russia, and China, the volume side will for years to come overpass the growing negative effect on the price column in my budget form, and we will continue to make, of course, good business. But in the historical markets as the U.S. and evidently Europe, there is not a single one where we would have a positive effect on price in our anticipations and unfortunately this will continue and we have to continue to adapt.

On the emerging markets, if we look a little bit where the incremental volume growth could come from our existing portfolio, I'm not looking to the potential opportunity of Shantha, which is of course big, we see some opportunities on Menactra. [inaudible] and with the early development in some part of the emerging markets and more specifically in the Middle East area as well as in Latin America. So in the long run, could we grow faster in terms of volume for Menactra. Second, we have opportunities evidently with Pentaxim. We have very strong growth, over 40%. At some point we will move to [inaudible], which will be a big opportunity as well. On the last front, evidently on flu we have a very significant market share in the emerging market, above 70%. You know that we have recently built two plants, one in Mexico and one in China that puts us in a situation in terms of market access that is very favorable. So in the short-term, before we get access to the Shantha portfolio, and this could be the main driver, without forgetting Adacel, which continues to expand in the international region.

Just three questions. Jerome, on the dividend, I was surprised that you only committed to a stable dividend given the large opportunity for working capital restructuring and the significant growth in free cash flow that you've generated this year and you should continue to do. On vaccine margins, they seem to have progressed at the EBIT level every year for the last two years. Cleary there's some H1N1 impact in there, but is that sustainable going forward? Could you give us some idea of a level? And then just finally, on the cost restructuring, clearly you have some more challenges to deal with next year. Should we continue to assume that you push those restructuring levels further going forward?

On your question about dividends, if I speak historically, we have tried to have a dividend policy which is consistent with our strategy. And our strategy is to resume growth and to resume growth with more sustainable growth and [inaudible]. So all the idea around dividends is to have a dividend payment or dividend trend which is consistent with that, i.e. the ability to sustain a regular growth of dividends, not having any short-term movement in terms of the evolution of the dividend more looking medium term. This is really why we saw that, yes, short-term you could decide to give back more to shareholders. But on the other hand we clearly want to commit to continue to grow the dividend even if the profit is going to decrease, for instance, next year. So that's what I would say on dividends. On the cost cutting, A) let's reach the EUR2 billion. There's still 11 months ahead of us. You could say, well, this is behind us, but this is still to be done. B) There are some actions which have been undertaken which will deliver extra savings beyond 2011 already. Typically all what has been launched in terms of industrial reorganization as usual takes some time to deliver its contribution to improved profitability or productivity just because it takes you 2 to 3 years to go strong for the projects and close the [inaudible] of the corresponding facilities. So we know from what [inaudible] has launched that there will be some extra hundreds of savings in the cost of goods in the year 2012-2013. We have just recruited now, less than one year ago, a global head for purchasing and clearly we have not driven all what we can get on taking advantage of our purchase power, on the renegotiating as well as streamlining the numbers of suppliers and the number of type of sources we use. So there is still some more to come from that. And not to speak about any further reorganization, but here I would say that all what we have guided is really to try to do it to the extent possible once for all. So clearly what we've done in the U.S. was really to put behind us all the restructuring and to a large extent this is now ongoing in Europe. So I would say that yes, there is more potential. The update we plan to do - in the middle of the year would typically be the right time to give you some revised figures both in terms of cost cutting as well as long-term outlook for the company.

And what about the EBIT margin on vaccines? I mean, there was clearly a benefit from H1N1 because you've got essentially a cost with no marketing outlay against that.

So there has been an improvement in the - I would answer this way, the gross margin in 2011, as compared to 2010 and even more 2009, has increased, has improved, and this is largely linked to the H1N1. And you could say while you've sold as many doses of H1N1 in 2011 as compared to 2009, but in 2009 we had some extra costs linked to the use of the facilities and also some R&D, or clinical spending or clinical costs. So yes, in gross margin I think that there is something in the range of 2% that may lose, or go back let's say, to the previous situation in 2011 as compared to 2010 as a result of no H1N1 sales.

And I think just on the cost reduction, I can tell you when we introduced a EUR2 billion program two years ago that nobody internally thought we could do this. And I think the company's come a huge, long way on this. But the first part of it has also been the hardest part in terms of actually doing the restructuring, getting through social plans and the like. But pharmaceutical companies have never really been run to the last penny, and so there are lots of reserves in the company. It's purchasing, it's package redesign ahead of manufacturing. As I said, 30% of our SKUs in production account for 1% of sales. So there are a number of opportunities there. So we're not going to stop at the EUR2 billion. But it's probably going to be around some of these, you know, let's be really a lot more sensible about how we spend money. Now, in terms of the dividend, also I think we're clearly looking at having a sensible level of debt on the balance sheet. So we've seen that we reimbursed the first EUR9 billion of transactions pretty fast. If we actually do Genzyme, and that's going to put EUR10 billion of debt on the balance sheet, as that gets reimbursed then you're also going to make, at any time, a decision on capital allocation. Do you actually do more acquisitions, or at that point do you increase dividend, or do you do share buyback? You know, the share buybacks in my view really only make sense if you have a company that's got a stable outlook. If you have a company, and today most, not all, but most companies are in a perspective of a declining asset base. So the buyback probably is a waste of money. But if you have a stable outlook, then that might actually start to look like it has value. So we're going to try to keep a sensible level of debt on the balance sheet. Now, exactly how that gets used is something that is a dialog between our board and shareholders and management.

Just one question. Just if we listen to you carefully, it looks like free cash flow could be a better metric than EPS or results. If we look at 2011, to what extent, according to what you know about working capital and what you're doing on cap ex, do you think that free cash flow could remain into the positive territory versus a minus 5% or 10% decrease in the results?

It's a difficult question. You have to look at it two ways. One is basically the cash flow you generate is very much linked to your profit in this industry, unless you improve your working capital or you spend less on cap ex. So I will say that we are going to continue to make efforts to reduce the working capital requirement for the company. I would not like to commit today, in front of you, a [inaudible] figure, but I can tell you we have put in place an organization which is there to really try to capture any way to improve that, knowing nevertheless that as long as you expand your business in the emerging markets you tend to have delays of payments, which on average are higher than what we are used to. I say on average because I will say in a way, today, the ration of the receivables is somewhat longer in southern Europe than it is many emerging markets. Not to speak about countries where the habits are different, particularly Japan, a practice of the business. Now on cap ex I think we could assume that the cap ex for 2011 should be in line with what we have in 2007.

One financial question please to Jerome. You made an interesting comment about the dividend, that you're committing to keeping it at least constant, but you would commit to continued growth as soon as you have visibility on some additional issues driving the growth beyond 2013. So I was just wondering what are these issues beyond obviously the outcome of Genzyme. And how confident are you that you're going to have the answers by the mid-year seminar? And my second question is for Chris, relating to pricing and rare diseases. The space is attracting new entrants that might not have the same level of pricing discipline, nor in fact [as you get vocal] about it, and I was just wondering if you sort of run a stress test, if you had like one or two rare disease drugs launched at prices that are maybe a fraction of what we're currently seeing, how long do you think the current prices and margins of the existing drugs could probably be sustained?

You know, on dividend, it's a decision which you take year-on-year, and I think this is one decision which boards like to keep to [inaudible] decision year after year [inaudible], whether we like it or not. Once again, I think that we are entering into two years where the results will be more difficult for the reasons we all know, which are the patent expiries of some of our main products. So the first idea, which is to say well, whatever happens on the profit - and we know what will happen on the profit in 2011, and you can all of you around this room make your own calculation on what will happen on the profit in 2012. I mean it's not rocket science. I think you can do that. And I mean all what I have given also today on the underlying of on the other businesses give you also ways to refine your calculations. So I will say that by committing to at least maintain the dividend we clearly give an indication that we are committed to deliver shareholder value short-term. We still believe that really to deliver shareholder value that's in the medium term, and we are back to what Chris said on the [inaudible] of our seminar. It's all about how do we resume growth, and how do we give visibility and credibility, that our whole portfolio has changed dramatically, and that you can compute an underlying growth for several years beyond 2013, as many as possible. In that case, I think you would share with me that the multiple, we deserve a higher multiple than what we have today. And if you get that, what about dividends you give back to the shareholders, it is at much more value to shareholders. So all the focus is on how do we deliver the highest visibility on growth on 2013 onwards, I think we have to [inaudible]. The third thing, and maybe we'll have more visibility by mid-year, is having to have a clear overview on the acquisition of Genzyme, obviously by mid-year we'll know, and then it will also give us a better picture, not only on the trends, not only on the cost savings, but also on the cash flow available to accelerate, let's say, dividend payment or cash being sent back to shareholders, either through dividends or through share buybacks. Share buybacks being [inaudible] totally what Chris said, making sense only if you are not declining, decreasing, your set of assets.

So rare disease pricing. I get this question a lot. Is it a risk? Absolutely it's a risk. But is it a greater risk than anything else that we're doing? I'm not so sure about that. First is there's kind of a misnomer that the high prices are only in rare diseases. When you actually look at the top 20 most expensive drugs, you've got an awful lot of orphan diseases that are in cancer indications. So when you actually look at the price of an Avastin, for example, where you might be prolonging life for a number of months, versus a drug for Gaucher's disease where you can allow a child to grow up and live a normal adult life, you've got different value propositions on this. When you look at the top 20 most expensive drugs, you're going to find that there's a mix of big companies and small companies, so I think the idea that big companies can't charge as much as small companies - it has to do with the value proposition, I think, today. The interesting thing about rare diseases is you typically know whether the drug works or not. You put it in a patient and it works. If you think about how much money is spent in healthcare systems for treating people with drugs that don't necessarily work for everybody, that's a much bigger budget item for them in most cases. The whole global rare disease market is something like 1% of the total healthcare market. So there's a lot of headline numbers in it. So to me we live with a lot of risks anyway. I mean, European price cuts, are they really going to pick off products that actually are helping children to grow up and lead normal lives? Or are they going to go out saying do we really need to be reimbursing Viagra, which happens in a number of markets? So you know, we can't discard any of that, and all of this is a balance, but I actually think that if you - in tomorrow's world, if you have a biomarker, you can define a population, you can show that the product works, and there's a clear value versus something else, then I think you know, people are going to be willing to pay for it. And that's as simple as it is.

Thanks Chris. That actually concludes our conference and webcast.