Ladies and gentlemen, welcome to Sanofi 2011 second quarter results conference call. (Operator Instructions) I'll now handover to Mr. Sébastien Martel. Sébastien Martel: Thank you. Hello everyone, and welcome to Sanofi's conference call on our Q2 2011 results. Before we start, I'd like to remind that our slides are available on the website. As always, I must advice you that our presentation today contains forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different. These factors are detailed in our Annual Report on Form 20-F and in the Document de Référence. On Slide 3, you can see the agenda for the day. Basically the presentation will be slighted in four parts. First, Chris Viehbacher, our CEO, will share with you the key highlights for the quarter. Then Hanspeter Spek, President, Global Operations; David Meeker, Chief Operating Officer of Genzyme; Olivier Charmeil, Senior VP Vaccines will provide some color on the Q2 2011 business performance. Dr. Elias Zerhouni, President, Global R&D, will review our upcoming key regulatory filings and will come back to the first Phase III results of Lemtrada. And in conclusion JérômeContamine, our CFO, will comment on the Q2 2011 financial performance. We will then host a Q&A session. And without any further due, I will now hand the call over to Chris.

Thank you, Sebastien. Good morning, good afternoon, everybody. I'll first just give a very warm welcome to Dr. David Meeker, who is joining us for the first time. We thought it would be helpful for some of our investors who haven't been as familiar with the Genzyme portfolio of products to have David as COO of Genzyme to be able to provide some of that detail. I am going to move straight to Slide 5, because I think it really best illustrates what's been going on in the company. As we have been predicting now for several years, obviously there is an impact of generics on the many blockbusters that have driven this company's success for many years. I showed this slide for the first time at the first quarter. This is an update for what it looks like in the second quarter, to remind you the first part of the chart really shows the sales of those nine products that are subject to patent expiry. In Q2 of 2009, the sales of those on the quarterly basis were €2.1 billion. And you can see when we fast forward for two years that those sales have melted to €773 million. And in fact the impact of generics in the second quarter was stronger even than in the first quarter, with an impact of about €800 million of sales lost to generics in Q2 versus $500 million in our first quarter. But of course it also says that at least in terms of sales we're getting a major part of the cliff behind us. And that cliff gets more and more behind us with every quarter that passes. That's not really the story of the company though. The story of the company really has been the other side of the page,…

Thank you, Chris. Good morning. I kindly ask you to move on to Page Number 14, where you'll find certain in-depth analysis of our quarterly sales. You'll see that the sales on a comparable level are at the same level €8.3 billion. We continue to lose to generics €778 million, as we have seen in Christmas part, evidently this is still very significant. Lovenox and Taxotere makes a vast majority of those €778 million, but it is very significantly less than in the previous semesters. The growth platforms we have seen also contribute significantly approximately half to (inaudible). And yes it is the first time then the contribution of Genzyme, which further helps us to compensate a negative forex impact of more than €500 million which largely, but not only of course comes from the U.S. dollar. On Page 15, the traditional focus on our performance in emerging markets. We have to this growth rate as in previous quarters 12.3% equal €2.5 billion. This would be 7% excluding Genzyme anti-Avian flu effect. You see then as the emerging markets have become our largest most important market segment, more important than the U.S. and Western Europe. If you then analyze the emerging markets, inside you'll see that by far the largest contribution, which is growth coming from so called BRIC countries, Brazil, Russia, India and China. In the previous quarters we had a little bit of a question mark during 2010 on our performance on Lantus. And I described that by the third and fourth quarter 2010, what we are doing in order to correct this performance. And I'm happy to report today, that we're back to the two-digit growth already in the first quarter with 13% for Lantus, which we further accelerated now to 14.5%. It's a product that achieved…

Thank you, Hanspeter. So the second quarter for Genzyme was a solid quarter with revenues of €796 million. So in the context of continuing to work our way through the supply challenges. And deal with the distractions that inevitably a company in acquisition has we've been working through the integration part of this. The quarter was up 16% year-on-year and that was driven predominantly by a strong performance in our Personalized Genetic Health business, up 36%. And if you look at the pie chart on the right, you can see that within our group's Enzyme Replacement therapies this growth came predominantly from Cerezyme of 58%. Cerezyme picture was driven predominantly by the increase in supply and the stabilization, increased consistency of our ability to produce, that Chris highlighted earlier. Myozyme and Lumizyme up 42%, this is the products that very much launch days. And that reflects just increase in growth of the product overall. Importantly the balance of this portfolio Synvisc up 17%, again this is a product that's relatively despite being an older product has enormous room to grow given the still relatively low penetration of (inaudible) into the osteoarthritis market up 17%. And Renagel and Renvela, again the main dominant offering, if you will, within the phosphate binder space, in excess of 52% share in the U.S. up 14%. We're on track and continued to make progress, dealing with the consent decree. And as Chris highlighted, have discontinued fill-finish activities. The good news on Fabrazyme is that we have again consistently been able to supply at our current level. And we're working toward being able to move definitively out of the supply constraints, which will require approval of our new plant in Framingham. And finally, of course we were quite encouraged by the initial positive topline results from the first Phase III study, which Elias will review shortly. And now over to Olivier.

Good morning, everyone, good afternoon. So Q2 for us in the south hemisphere the end of the season for flu. The pattern for this year has been a little bit different from the pattern of last year, with more phase coming into the first quarter. So overall this translate for the total vaccine business into growth for the quarter of 3.4% and year-to-date performance at the end of June of 6%. We had a record sale in terms Southern Hemisphere flu with a growth showing more 41% growth. We are very happy with the performance that has been very much driven by our performance in Latin America, in Brazil, where we have taken the benefit of some unlocked potentials that we have been able to save. And of course a very strong performance in our overall markets for flu is in excess of 70%. In the meantime, we continue to defend our position in the U.S. I mean that cost has been showing in the last couple of months a very strong experience. Our market share remains close to 90%. And in the emerging market we continue our roll-out of our axim family, we have just launched in China. Our axim family continued to show strong growth with Pentaxim growing more than 36%. We are very happy also to announce that the licensure process for Hexaxim as just being initiated. Hexaxim which is the six-in-one is very important growth driver for the emerging market. And the process has just started. Regarding flu and looking at the upcoming Northern Hemisphere flu campaign, after Fluzone that was launched last year, we got the licensure for the intradermal form that we will be launching. And we for the time being are very happy after the first shipments that started on July 18th. Now we are very happy with the trade bookings and that's as expected. I now handover to Dr. Elias Zerhouni.

Thank you, Olivier. In terms of research and development, all I can say is that, the organization is extremely busy following as you know the stress testing, that Chris mentioned before, and focusing on delivering on the portfolio. And I'm pleased to report that we're busy in fact filing six new molecular entities in the next nine months. The first one was filed this month is Kynamro, mipomersen which is indicated in homozygous familial hypercholesterolemia and severe heterozygous familial hypercholesterolemia. And has been filed in July this month in the EU and will be filed in the fourth quarter in the U.S. Visamerin/Mulsevo, semuloparin was one of the best highlights of ASCO. And is the first therapy to prevent venous thromboembolism and pulmonary embolism in chemo-treated patients. And we're planning to file that in the third quarter of 2011 in the U.S. and the EU. Aubagio or teriflunomide which is another new therapy for relapsing multiple sclerosis, will be filed in the third quarter of 2011 in the U.S. and first quarter 2012 in the EU. Zaltrap or aflibercept, which is a VEGF-Trap, but has the particularity of being able to trap normally VEGF-A. But B and PIGF and has been successful in second line metastatic colorectal cancer, and will be filed in the third quarter 2011 in the U.S. and the fourth quarter 2011 in the EU. You heard about good results in Lyxumia or lixisenatide and this new molecular entity will be filed for Type-2 diabetes in the fourth quarter of 2011 in the EU. And finally, we've had the CARE-MS I results from Lemtrada alemtuzumab for relapsing multiple sclerosis, which will filed in the first quarter of 2012 in the U.S and the EU. And obviously, this is putting quite a stress on an organization. It's unusual…

(Operator Instructions) We have our first question from Mr. Tim Anderson from Sanford Bernstein.

A question on Genzyme and then one on Multaq. On the missed milestone, the easy interpretation is that your progress in fixing manufacturing is going slower than expected. But if I heard you right, you seem to be saying that it might have just been overly optimistic timeline set by Genzyme and not by Sanofi. Is that correct? And then, just looking at the history of manufacturing issues, the drug companies they tend to drag on longer than companies originally think. And I'm wondering how much you're willing to reassure us that this won't happen and that things like the 1Q 2012 milestone you set out for Fabrazyme will be met? Then on Multaq, can you assure us that Multaq won't be removed from major markets like the U.S. and Western Europe? You have two trials now showing worse outcomes, ANDROMEDA and PALLAS. And only one trial showing better outcomes, which is ATHENA. And then on PALLAS, were the CV events adjudicated?

I'll ask Elias to take the Multaq question. Just I will confirm what you said on the missed milestone, Tim, that's why we built the CVR in. The issue though I would say here is that you talk about biological manufacturing. So in some cases, in a lot of places, and I know this from previous consent decree experience, sometimes hard to get the full capacity going again, because you essentially have an awful lot of duplication of effort between trying to get the manufacturing back again and doing all the things like training and quality. Here, the issue is really around yields. And that's just a question of the art of biological manufacturing. You remember there was a viral contamination; the facility had to be sterilized. So new cell banks were there. Cerezyme was actually up and running to expectations. Fabrazyme, it's really just been a challenge of getting the cell banks back to previous levels of productivity. The real increase in supply will come with the increase in capacity at Framingham in the first quarter. And assuming our validation runs work out well. And I think we will confident in saying that they'd come through. So that's why we are pained to say, the number was not going to be met. We didn't believe the number back in the time we did the CVR. And I think that's been confirmed that doesn't diminish the very significant progress that has been achieved on getting the Allston facility back up and running. So perhaps Elias you could address the Multaq question.

So in the first quarter that you asked, Tim, was whether or not we can be confident that Multaq will not be removed. I think personally that I can never predict the behavior of regulatory agencies. But we are confident that in its current indication Multaq shows all of the evidence that we had accumulated in the ATHENA trial. And specifically in patients with paroxysmal or persistent atrial fibrillation, but remember that we focus on that population patients, early patient's in early atrial fibrillation that have converted to sinus rhythm or were in sinus rhythm at the beginning of the therapy. Whereas the PALLAS trail is completely different, it's a permanent atrial fibrillation population over six month. And these patients, as you know, have a higher incidence of underlying cardiovascular issues. So I don't think the ATHENA trial or the other populations that you mentioned are comparable. So from my standpoint, I think we need to fully evaluate the data. As you asked the question about adjudication, as of last week we had 40% rate of adjudication. Both the EMEA and the FDA wanted to see all the data over the summer, and we're adjudicating. Hopefully we will be fully adjudicated by September. And that will give us a basis to really to come back to you and tell you what we think. Again, I think it's important to understand that the expansion of the indication was really never included in our projections. As you know, we do not do that until we have positive results and are in line for registration. Operator: The next question is from Mr. Vincent Meunier from Exane BNP Paribas.

I have two questions, please. A follow-up on the manufacturing issues at Genzyme. Can you please give us a guideline, any guidance on the volumes you think you will be able to reach for Fabrazyme and Cerezyme? And also if possible, the sales amount corresponding to that volumes for 2011? And the second question is on Eloxatin U.S. Can you please give us an update on the situation regarding the patent litigation?

I mean I think on the, Vincent, in terms of the volumes, the only thing that we can tell you now is in fact, we believe that we can continue to supply Cerezyme patients. All Cerezyme patients are getting a full dose today. And so we believe that there will be consistent manufacturing going forward. And essentially supply and demand are in sync. And we are mostly just trying to get the yields up a little bit, so that we can start to build further stock. Fabrazyme, we said that essentially supply will increase when we have the Framingham facility approved. So at this stage I think we're expecting stable second half production, perhaps some increase. But I think at the moment we're willing to commit to being able to maintain supply for existing patients. And then we can update the forecast once the Framingham facility comes online.

And maybe if the work regarding Cerezyme, are you able right now to build inventories or not?

No, not yet. We have some inventory, but it is still fairly tight. And that's why we need to production level somewhat to be able to really build up stock.

It looks that in the topic there no use on the appeal by Sun, and you saw that there was a nice uptake such in sales in the second quarter.

And do you have any idea of the calendar for that or it's uncertain?

There is a hearing set, but there is no exact date. So it's entirely up to the District Judge, who has re-received the trial. And evidently they have neither knowledge nor influence on setting off the trial.

The timing of U.S. legal decision is notoriously difficult to predict.

The next question is from Michael Leuchten from Barclays Capital.

I had two questions please, number one on your guidance, it looks like you've amended that for Genzyme and Genzyme only despite the fact that your growth platforms are going quite well. Your tax rate is coming down. I was just wondering, do I read caution into that your peers and specifically in the U.K. you've made very cautious comments about the industry outlook, not only this year, but certainly going forward, so any color there would be welcome? And then secondly on the Genzyme synergies, I'm surprised not to see more synergies coming out of the R&D, so I though I would maybe be where most of the overlap between the organizations are. Why isn't there more synergy potential at this point in time?

On the guidance this is potentially our best, as to what the outlook is. There's still enough a lot moving around. We shouldn't forget that we still have that we launched Xyzal and we've had Ambien CR, which we cannot say, but which have an impact on the results. Obviously, if we can do better we will continue to do better. But today I will say that we don't really see anything on the immediate horizon in terms of the U.S. or U.S. pharma outlook. Now clearly the situation in Europe remains challenging. And you've seen some recent moves in Spain for example and across the board reduction in price. So just given were deficits are, I think most of the industry would like to see how that shapes up. But we believe the company's going to go. In terms of synergies and R&D, let Elias take that one.

There are two reasons that I can give you. First of all the perimeter of synergies in R&D is not what was initially in the budget of R&D in Genzyme. For example, the initial R&D budget was $821 million approximately, but some of that was not really R&D, there was product support. And in our approach to R&D expenditures at Sanofi, these would have been more appropriately allocated to different items. So the synergies are really achieved on two-thirds of the preexisting Genzyme budgets. And that's what you see. The second is that we have decided to actually concentrate all of our research activities in Boston, in what we call a Boston Hub. And therefore, if you look at the total plan that concerns the rest of R&D, it didn't make sense to extract more synergies out of the Boston region. Because remember, we have Sanofi Pasteur there, plus oncology. And we think it's a strategic move for R&D to have a much larger footprint in the Boston area, because of the open innovation model that we are adopting. So those are the reasons why you might see a little bit of a discrepant sort of percentage.

One of the things on this is, what we haven't really included in this is the full impact of what Genzyme will do for the overall company. I mean to give you an example, really the acquisition of Genzyme and Merial put us in a much different situation in the U.S. for example. So two years ago, we had a pharma operation in New Jersey and a vaccine operation in Pennsylvania. Now with these five businesses that we have, we've moved to a shared service transaction model, and now moving to a shared support function model. Not only there to help achieve synergies in Genzyme and Merial. But we would expect to see cost savings in the rest of the business, which we actually haven't put in here, because they're not necessarily. Specifically, the results of the integration savings, so some of the savings are coming out. We haven't fully evaluated all of those. I think Elias is going also through an exercise in all of R&D now, and saying, okay, there are some immediate synergies. So in other words what we're trying to do is establish some very clear accountability for some immediate synergy targets that we need to achieve. But there is kind of a second layer, if you like, looking at, okay, now as we look at the broader group with all of these businesses, the further cost savings that we can be making and those aren't really in these numbers.

You have a next question from Luisa Hector from Credit Suisse.

I have a couple of questions on the enzyme business of Genzyme. So firstly on Cerezyme, can you quantify the impact of the Latin American tender in the second quarter? And on Cerezyme, are you seeing switch backs from VPRIV. Can you just give a bit of color on what that split of patients that you're seeing there. And then on Fabrazyme, how confident are you that you can regain share in Fabry's in that ex-U.S. region, given that it surly has had an opportunities there? And then on Eloxatin, was there a stocking effect during the second quarter? And then finally on the tax rate, obviously, you're now guiding to that lower tax rate. But over time should we still expect it to creep up as you lose the benefit of the lower tax from the Plavix, Aprovel royalties?

A lot of interest is (inaudible). So I know there was no stocking effect. In country we found a little bit more stock of the generics and we had expected. So there is no stocking effect on our side at all.

David, you want to take Cerezyme and Fabrazyme?

So I think the first question was on the Brazilian tender that was less than 10% of the overall total. I don't have the exact number here, but to give you a perspective. With regard to switching in the VPRIV Cerezyme markets, these enzyme replacement markets tend to have relatively little switching overall. And I think we're still pretty early in that experience. But I would say for the moment, both companies have supply constraints, which were impacting the overall market. So it's not particularly dynamic from a switching standpoint. So we'll see where that goes. It's quite early. With regard to Fabrazyme, of course that's a more complicated history, when we prior to having these supply limitations back in 2009 in competitive markets. For example in Europe, we had in excess of 70% share with the shortage. We actively worked with Shire to move patients to Replagal product in markets, where Replagal was available, to ensure that all patients in those markets could access at least to the great extent possible, some form of enzyme replacement therapy. So I think how confident are we? We took 70% share in the beginning, based on what we felt was a strong competitive positioning in terms of the value offering of Fabrazyme. I think once we get back to full supply, we'll see how this market shapes out.

Can I just quickly ask with the CVR, and not like the most impairment that you're going to miss this year. How are you actually being controlled for best efforts on that?

Actually, it's all the Genzyme team that has been doing the manufacturing, and in fact with the head of Genzyme manufacturing up until the 30th of June. He has decided to leave the company for personal reasons. And as a result, we've appointed the former Head of Sanofi Pasteur manufacturing, he was previously Head of Global Manufacturing, Sanofi Pasteur. So he stepped across to become Global Head of manufacturing for Genzyme. But essentially where we are, is because we've produced the enzyme in lot, and then we purify it. And given the lead times, we can kind of already see that the enzyme that has to be produced for the second half of the year already exists. And the lots that will be produced in the second half of the year won't be purified in time for the end of the year. So we already know the yields. We already know the lead times. And in fact, actually Henri Termeer has been within the company, up until 30th of June. So I think plenty of people have had oversight and it's all pretty clear. So I don't know David do you want to add to that?

Obviously in terms of the diligence, the Genzyme employee base, I mean the CBR was out there. But the intensity and the pressure to make products, given the patient populations that we serve is extremely high. So again it's hard to quantify that. And if that helps at all understand that the pressure's going to drive here is left to CBR and then just the fact that we've been under-serving these markets. And that's a pretty high motivation.

And given that we could sell anything we could produce. I mean obviously there's a whole lot more interest in producing more and also for the recent David's point of view. Do you want to say about tax rate? Jérôme Contamine: Yes, you're right, Luisa. I mean you still should assume that it will be undertaking the tax rate when our patents and particular on Plavix comes to an end. So we are continuing to optimize as you can see. And we managed a little bit better than what we expected and take advantage of the recent of tax legislations here and there. But I think that you could assume that we should be back to somewhere between 28 and 29 next year or probably going closer to 30, let's say, after we have totally lost paternal on Plavix. Of course, unless there is some other products going forward, which could, I mean better than Plavix, which will come into production. But If I think about the coming two years, I mean this is what I can give you as an overall average guidance.

We have our next question from Mr. Gbola Amusa from UBS.

On Multaq and the Plavix data, just given the counter indications on heart failure. Are you able to say, whether the cardiovascular events are correlated with severity of the heart failure? And then one quick second question, which should be straight forward. In terms of globalizing Genzyme should we continue to assume that Allston and Framingham are the facilities needed to fulfill incremental global capacity?

In terms of the cardiovascular events and correlation with the level of cardiovascular failure, we know already that there is in fact a correlation that is more severe. The cardiovascular failure is more likely you'll have cardiovascular events. We know that from the previous studies. And that's why in the current indication, we do not recommend the use of Multaq for a Class IV congestive heart failure for example. So we know scientifically, there is such a correlation. In the PALLAS study, obviously we had more severe patients, who had permanent atrial fibrillation as opposed to the current indication with non-permanent atrial fibrillation. And by nature you'll have more severe patients in that category. Now in terms data relative to PALLAS study, in terms of fully evaluating the correlation, we're not through that analysis yet. We have not adjudicated every case. We're doing this diligently. And hopefully by September we'll know the most specific terms. That's that answer to your question.

Is there any risk though that the counter indication on heart failure could be moved, and the current indication could be moved to less severe forms of heart failure based on the PALLAS data?

In the current indication, we actually do not recommend. And it is in the label to use it in severe Class III or Class IV. We know that correlation and we see a very good reason to use Multaq in Class I, II or mild-Class III, so it's already in there.

Regarding to global manufacturing supplies, so between Allston and Framingham, we currently are supplying our existing population out of six 2000 liter bioreactors in Allston, with approval of the Framingham plant and the bioreactors will come on sequentially. But we will end up with four additional 2000 liter bioreactors. And that will, as I said, enable us to supply globally, both the Fabry and Gaucher populations. Our Myozyme and Lumizyme patient population has served out of our Geel, Belgium plant, where we have two 4000 liter bioreactors with the third 4000 liter bioreactor scheduled to be approved by the end of this year.

We have a next question from Mr. Graham Parry from Merrill Lynch.

I was just wondering first of all on the guidance uplift, because I just looked at the top-end of the range and if compared to the previous guidance, it's down 5%. The difference really here is the 3% mechanical Genzyme accretion with no synergies. You talked about on the Q1 call that you should theoretically be benefiting from some synergies on the better tax rate. So does that mean you're seeing something in the business, which is worse now than it was when you gave your prior guidance at the beginning of the year? And if not then, is there any potential synergies we should be expecting to accrue through the rest of the year? Second, on the Eloxatin case, if you can just give us a feel for why wouldn't the Eloxatin judge rule the same way in the some cases he did previously? And then thirdly a question on iniparib, just wondering if you're in a position now to confirm whether you need a new Phase III trial for the second third line triple-negative breast cancer indication?

Let me take the first question, Graham. I'm not totally in agreement with your math. We gave an initial guidance, and there was no Genzyme mentioned then, between minus 5 or minus 10. At this time, we have no generic of Taxotere. We have no generic of Xyzal. So clearly to reach the highest range of the guidance, we'll have to assume that there would not be any generic. And we don't know if you remember at the time when would happen since generic of Taxotere. So if I take the Genzyme aside by no way, if I put it back to where we were in February, you would have been able to reach a 5%. So it's a high range of the guidance. So it's not just adding an upper range of the guidance and heading the nice Genzyme on top of that we have more information. And unfortunately I mean is what we said in February, I mean they are now generic of Taxotere. We don't know yet exactly what will happen on Lovenox. So clearly, I mean if there is no generic of Lovenox up to the end of the year, it will help us to be on the higher end of the new guidance. So it has nothing to do with Genzyme or nothing to do with the rest of business going lower than expected. It's clearly how you came back to not only math, but also history of the various times when we announced the settlements.

Perhaps on the Eloxatin, I mean the basic answer of course Mark, is that we cannot speculate on the outcome of our patent trial, especially not in the U.S. In the strategic case I remind you is that we already had lost this case past one-and-a-half years ago, which was shortly against our own odds. And then we had won it again. So of course, I attend to your underlying optimism of why should we lose it, but evidently we can only exclude it.

In terms of iniparib, internally we are focusing on understanding the results that we've had. We have ongoing trials. As you know, we have a Phase III in non-small cell lung cancer. And we are focusing our understanding the mechanism of action, more precisely. And I think we've made progress there for identifying biomarkers that are more predictive of response. And obviously, once that's done, we will make that determination obviously in terms of Phase III. But at this point, I cannot say a 100% that we're going to do that. But I'll tell you, the one thing we know is based on all the results we have and that is a molecule that will continue to hold the task, as we understand it better.

And just a follow-up from that, so do you have a timeline for which you think you'd make a go, no-go decision without indication?

Probably about the end of the year beginning of next year.

We have a next question from Mr. Mark Dainty from Citi.

Just two quick ones. On the Lantus lixisenatide combination, you mentioned in the press release, you're going to start Phase III in 2013, which I think is a bit of a delay. So can you just give us some color as to what's causing that? And then on the global rollout of the non-enzyme replacement products for Genzyme, you mentioned Synvisc, I think this quarter, should we expect a sort of big impact for the rest of this year. Is it going to be more 2012? And would you guys sort of give us any numbers as to what sort of revenue synergies we might see? Thanks.

On the lixi line, the explanation is very straight forward. The FDA changed its stance in terms of how to conduct trials when you do combinations, by insisting that the device used for commercial application be the same device that we used for the Phase III trial. And putting together a device that can accomplish that goal, delayed the program by the appropriate amount of time. That's the only reason that the program is delayed at this time.

I think a few things about the Synvisc to keep in mind. One is the viscosupplementation market does have a significant seasonality. Q2 tends to be by far in the year the strongest quarter, but then we tend to hold then Q3, Q4, with Q1 often being a down quarter. So again, if you look at that product going forward, keep that in mind. Second is, in Genzyme's hand, that product was predominantly a U.S. product. And the vast majority of the revenues came out of the U.S. with relatively little presence outside the U.S. So the advantage is that putting us together with the Sanofi organization is that their global reach will provide, I think a significant opportunity. What will determine the rate of growth in global markets as with any products is reimbursement, and that's something that again will take some time, and certainly a number of countries to work through. So whether it will be a 2012 event that you'll see the big ex-U.S. growth or in subsequent years, again we'll see. But those will be the factors that will dictate sort of the performance of that product going forward.

The next question is from Mr. Mark Clark from Deutsche Bank.

Two questions, firstly for Jerome. You've put out a figure of €0.75 to €1 of accretion from Genzyme in 2013 on announcing the deal. I just wondered whether you have sort of re-run the numbers. And firstly whether you can sort of give us confidence that you're happy with that range still? And whether there is any finessing of that range? And secondly a question to Elias, we've had a lot of data recently at the ADA, et cetera, on potential Lantus competitor degludec. Just wondered if you could give us your perspective on that. And how you expect to compete the Lantus against degludec in future? Jérôme Contamine: Mark, on your first question, I maintain this guidance. And I knew that it was based on exchange rate of dollar against the euro of 1.3. And I think that this is a range, which we can confirm taking into account the ramp-up of the (C&T) as well as the growth profile of the various products of Genzyme.

In terms of the question about Lantus and degludec, I mean clearly when you look at the published data, there are lots of questions that we have about exactly the construct of the head-to-head trial. As a physician, I can tell you, you'll have different rates of hypoglycemia, if you take an insulin at midnight as opposed to dinnertime. And we think that by construct these make some differences appear, not really significant in the relevant category. So I don't think there is no evidence to, in my satisfaction, that Lantus is not actually the best basal insulin at this point. We'll see more data as they are published. We don't have the full data. We do have data ourselves, comparing a dinnertime versus midnight versus other times of the day. So we've published them seven years ago. And we've had over 10 years of experience in that. So we're very confident that Lantus will hold its own.

I mean I'll go a little further. I think when those data were presented at ADA, I can tell you there were a number of physicians in the audience that questioned even some of the ethics behind that study of trying to artificially induce even more hypoglycemia. And I think dosing two products, who are compared at different times is not in my view a fair comparison. And so we'll be able to fill a little bit more data. But quite honestly, I seriously question the ethics behind the way that data being presented.

I'll now go one step further. I think I feel reassured that if you have to do that to prove superiority, there is something superior about our Lantus.

The next question is from Mr. Mark Beards from Goldman Sachs.

Firstly, Jerome, I just want to confirm you gave an SG&A guidance for the year range of 25% to 26%. Secondly, you haven't mentioned that much about why the non-BRIC growth rate was so low, if you could go into that in a bit more detail? And then finally, how stable is the Cerezyme net pricing been since coming back on to the market? Jérôme Contamine: I think it has been said before that there are certain differences between the second quarter 2011 and second quarter 2010, which is a little bit more true for the non-BRIC countries, which has to do with seasonality of cough and cold seasons and other technical effects like distribution in Russia. Now outside BRIC, we see a lesser growth in two major markets. One is Russia, inside BRIC of course and the other one is Turkey, which is for as one of the major outside BRIC emerging markets. In Turkey it has mainly to do with price cuts, which appeared by the end of last year and also at the beginning of this year. So this is what you see, beside I see no substantial differences. Once again the technical effect and so is a specific effect on Turkey.

With regard to the Cerezyme pricing question, obviously pharmaceutical pricing globally is under increased pressure. And we're not immune from that in rear disease world. But that said, we historically have done reasonably well in either being carved out as an exception or having a more moderated impact. And I would say that's where it holds the supply shortage that had no specific impact at all on our pricing. Jérôme Contamine: On the SG&A to sales ratio, what I meant is following. Last year we had an average ratio of 25.2%. Clearly the ratio for the quarter and probably still for the coming two quarters will be effective by just the addition of SG&A expense from Sanofi and SG&A expense from Genzyme. And clearly as long as we are implementing synergies and that you saw from the slide on this specific topic, a large part of the synergy are on support function, specifically G&A. On top of it, it is also on the (inaudible) of SG&A in operations and part of oncology. We're saying that we could, I mean, rapidly over the quarter, so it will come back to a ratio which would be more in line with what we had in 2010, i.e., somewhere between 25% and 26%.

We have our last question from Mr. Damien Conover from Morningstar.

Just a product specific question on Taxotere in the emerging markets. It looks like sales were down about 30% in the quarter. I think, traditionally as we look at some of these products entering the latter parts of their lifecycle in emerging markets, we kind of expect a little bit longer of a tail. Just I was wondering, if there is anything specific going on with Taxotere in the emerging markets?

Now once again, you have seen the affect of Turkey, but besides there is nothing to report. We have a similar situation inside and outside. But once again, we had a price cut in Turkey, which additionally damaged the performance of some products.

All right, so I think it's time to wrap up. In our view a solid quarter obviously a busy quarter. We've been busy integrating not only Genzyme, but also Merial, because Merial is now a wholly-owned company. And I think we've spend a good amount of time thinking about how to integrate both and we now move really over the coming quarters into execution mode. Clearly driving the synergies out of our businesses, making sure that we can now drive a lot of the revenue synergies, which we really don't quantify at the moment. But it's pretty clear on businesses like Renal and in particular Biosurgery that there can be a significant benefit from having Sanofi sales reps behind that. In terms of guidance, I think we've overcome a number of things. And there is an increased guidance, because we are more positive on our outlook, but as always, we continue to drive the businesses as hard as we can. A number of things I think will come back on the 6th of September, as you know, we're doing an investor seminar. We'll be able to deeper dive into each of these different businesses, have a look at some of the medium-term outlook for those businesses. So we'll certainly look forward to seeing all of you there. And let's says, in the meantime we continue to march trough the cliff, getting it further and further behind us. And we are driving our growth platforms. And I think I am personally extremely excited about the opportunities that both Merial and Genzyme present for the business. And also I'll just come back and say, look for a company where everybody thinks there's no pipeline, having six NMEs to file over the next nine months, is something I don't think I've ever seen in my career before. So I think that provides a very positive outlook for where our R&D could go in the future as well. So thanks everybody for listening. And hopefully we'll see many of you on 6th of September. Thank you.

Ladies and gentlemen this concludes the conference call. Thank you all for your participation. You may now disconnect.