Ladies and gentlemen, welcome to the Sanofi 2013 Third Quarter Results Conference Call. I will now hand over to Mr. Sébastien Martel, Head of IR. Sir, please go ahead. Sébastien Martel: Thank you. Hello, everyone, and welcome to our Q3 results meeting. Before we start, I'm obviously very pleased to let you know that, with the recent launch of SANOFI IR, our mobile application for Sanofi's financial communication, you can actually follow today's live audio webcast directly from your iPhone or iPad. The app is, obviously, available already for download on the App Store. So that's it for the 2-second commercial. As always, I must draw your attention to the Safe Harbor statement. I must advise you that the 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. And I'd like to ask you to refer to our Form 20-F on file with the SEC and also our document reference for a description of some of these factors. Our presentation today will be simply divided in 2 parts. First, we will start off with a review of the key highlights for the quarter with our CEO, Chris Viehbacher; and then Jerome Contamine, our CFO, will then provide you details of our financial performance in Q3 2013. As usual, we will then open up the call to take questions. And so without any further ado, let me turn the call over to Chris.

Thank you, Sébastien. Does that mean, with the launch of this app, did I just become chief app, the CEO? So everybody, welcome to our third quarter earnings call. Hopefully, this is the last call where we really talk about the patent cliff. If I turn to Page 6 -- 5, sorry, what you can see is really the evolution of sales over the past 5 quarters. And as you can see, for the first time, we have been able to significantly reduce the erosion of sales due to generic entry for some of the blockbusters that have historically driven Sanofi over the years. The last one, of course, was Eloxatin that went in August of 2012. So in a sense, if you're looking at Q3, you're really looking at 2 months where you've still got a patent cliff on the comparator period. And really, it's from the 1st of September that we, internally at least, talked about new Sanofi emerging from the patent cliff. And so obviously, if we emerge from the patent cliff on the 1st of September, my first question, "What is that -- what is that happened in September?" And we don't want to over-interpret or extrapolate results, but it was, at least internally, satisfying to see that we had sales growth in the month of September of 6.1%. Obviously, giving a monthly sales number is not something we would normally do, but it certainly was the first thing I looked at when we came out of that. Now why that is, of course, you see on the next slide, on Page 6, and you can see on the green bars, for 2012, the impact of the generic erosion in 2012 and the same sales of those genericized products in 2013. I would remind you, all,…

Thank you, Chris. Good morning, good afternoon, everybody. So I'm now on Page 18, so some more detail on the P&L. So I'll start with the sales. I mean, you've seen the last part of the graph already. So maybe a few other comments. So first one is that, as Chris has mentioned, the negative impact of the key products which have been genericized last year has now been reduced, EUR 191 million. There will be still a bit of a gap as a result of Aprovel in Q4, but pretty limited, in the range of EUR 100 million. The column Other is the impact of tail business in Europe, as well as generic competition in Japan, and this is starting also to be somewhat smaller as compared to the previous quarter as we are heading to a situation where we are less faced with the erosion of our sale of the tail business. On Brazil generics, this is the last quarter you will see it. As a matter of fact, as Chris mentioned, we resumed sales in mid-August, so we just benefited from 1.5 months of sales during the quarter. But now that we are back to full supply and basically, back to normal, we expect this to be reestablished. So for our fourth quarter, we should see at least stable sales, a little -- probably slightly higher sales than we had last year. And definitely, sales in this fourth quarter will be at least higher [ph] than the ones we did in the third quarter as in the third quarter it was only for 1.5 months. So growth platforms, I would say, by difference or by subtraction, as Chris would say, have been growing by 6.5% over the quarter. And of course, you see the importance of the…

[Operator Instructions] We have a question from Mr. Richard Vosser from JP Morgan. Richard Vosser - JP Morgan Chase & Co, Research Division: Two, please. The first just on the development we can expect in pediatric vaccines in the U.S. Obviously, you've -- your vaccines have been replaced by others. So how gradual of a recovery should we expect for the pediatric vaccines? And then second question, just on the Animal Health business, of course, with Frontline declining, your margins have come under pressure. So the 30% or so level that we've seen is now more around 26%. So how should we think of this with NexGard coming through next year? Presumably, we should think of a 26% margin going forward. And just on Frontline, of course, you're suggesting that the decline will continue at around probably about 25% going forward for Frontline. That suggests to me that NexGard had to be EUR 100 million or so next year to offset that, maybe slightly less than that. So just if you could give us some ideas of previous launches in the Animal Health space to give us some help there, that would be very useful.

Thanks, Richard. So on pediatric, we started shipping on the 15th of October. But as you rightly point out, there are other competitors out there, which is why actually you never recover the quarter that we lost. You really just get back in there in the marketplace. So I think you're going to see a progressive return in the fourth quarter, with full supply really being available in the first quarter of 2014. On Animal Health, it is certainly true that I think the margin on the business will come down. Frontline is the only billion-dollar brand in the entire Animal Health space and obviously, carries with it pharma-like margins. And so as you decline, you do get a mixed variance, and so I think the level of margins that you were looking at are probably more in line with what's going to go on forward. I'm not so sure I'd agree that we're going to expect the same level of decrease. There's 2 elements. One is generic competition, and that's not necessarily going to go away. I do think that, on that front, we can do a better job of defending it, and I think, we're already seeing some of the benefit of that. It was also a difficult season, at least year-to-date. I mean, the whole -- this is a market that used to grow at double-digit rates and it actually declined this year, so you've had a massive swing on the growth rate in the marketplace, largely because of the weather conditions. So I think next year, we'll see -- we're seeing actually even a better fall. So I think that may not be as dramatic next year. It is true that NexGard has to do well next year. It's very difficult to look at analogs because, in this space, there aren't that many launches that have ever been done. I think our view is, is that this should be a pretty successful product. It won't necessarily be the size of Frontline just because Frontline will still be there. But I think, having a chewable -- and having been a dog owner, I can tell you that putting the drops on the back of the neck, you're not supposed to touch the animal then for a while and you've got kids and everything else, just being able to toss your dog a chewable tablet is actually a whole lot easier to use. So I think -- and this will be the only product in oral form that is approved for both flea and tick. So I think, actually, we'll be able to come back with a very strong offering in that space. But I think as you pointed out, we're probably not going to be quite up at the levels of profitability that we had before. But I'm not so sure that, at this stage, we would want to accept the level of decline in Frontline that you were suggesting.

Our next question is from Mr. Graham Parry from Bank of America Merrill Lynch.

This is on cost of goods. Just looking into 2014 and beyond, you obviously can't offset the FX hit. But should we anticipate that you would see, into 2014, the bulk of the hit that you've seen on COGS this year rolling off from the vaccine and Animal Health hit? Also, could you remind us of the EUR 2 billion cost-savings program that you announced, that's 2015, how much of that was in COGS, how much of that has been realized and how much is yet to be realized? Secondly, on the midterm guidance that you gave out to 2015 of mid-single-digit top line growth, '12 to '15 and faster EPS growth, do you think that still applies? I know you'd said before that you felt that you could make it but there was no buffer. Just wanting to hear whether you still believe that's the case. And then thirdly and finally, on your PCSK9, just wondered if you had any comments related to Pfizer's claims yesterday that its outcomes trial on its new PCSK9 that it started as part of its Phase III program differentiated versus yours and Amgen's because they investigate population of patients not at goal despite being on statin and they look at LDL reduction levels below 70 mg per deciliter.

Okay. Thanks, Graham. Jerome, do you want to take the COGS question?

Yes. So Graham, so -- I mean, if you remember we expected to, I mean, to stabilize and even slightly improve the COGS-to-sales ratio. This year, obviously, it's not the case. I mean, the reason for having too much we mentioned. But we have not yet gone through the budget review so I don't have all the details, and it may take a bit of time to overcome the impact on the vaccine part because as long as we are reviewing production -- I mean this production goes first into inventory before getting into production, that as long as we are not back to full supply and regrettably, you have -- we have some costs incurred in connection with the shortage of supply, which we felt before, this will somewhat impact the 2014 COGS ratio. So -- but on the other hand, we still are continuing to cut costs on the rest of our industrial organization. As an example, the gross margin of Lantus has improved significantly this year and some other products as well. The overall cost savings, which is a EUR 2 billion plan, so where do we stand? If you remember, we had saved EUR 1.2 billion at the end of 2012. We said that for 2013, we would continue to save within the range of EUR 500 million but we would reinvest a large part of it. As a matter of fact, we have saved a bit more and don't have yet the full figure for the year, but definitely outcomes will be somewhat better. Now if I go into 2014 and 2015, the bulk of what remains to be saved out of this plan is precisely on the industrial costs. So today, I can tell you that we will: a, beat the EUR 2 billion savings, that's what we aim to do; and that: b, the large part of the further savings to come in 2014 and 2015 are going to come from the industrial savings. So I won't to give you yet the full figure. This will more for the full year results when we have come through the detail of our budget. But we know already that this will take place as a result of actions that we have taken in the past year. Now I mean, it remains that -- I mean the ratio is highly sensitive to an event, and this has been clearly the case on vaccine. So we should always be aware that this could be -- it's part of the improvement that we are implementing. But I think that as long as things get back to normal, we should see an improvement of the COGS-to-sales ratio next year.

Yes. Graham, I'll just add. I think COGS is probably still one of our biggest cost-savings opportunities. Obviously, a lot has been done. We've acquired a number of businesses, and now we have a much higher ratio of businesses in places like generics and over-the-counter medicines, more in Emerging Markets. And in addition to just site closures, there's an awful a lot of work that has been done on efficiency, lean manufacturing, for example. But there's still plenty to be done. The -- again, when you run a pharma company and you have a couple of products like Plavix in there, it tends to hide a number of other things. And so there's an awful lot of work going on in that, and that's one of the biggest areas of focus for us on COGS because, really, when we look forward, we actually see more investment now slowly in R&D and in product launches as a late-stage pipeline comes to market. So I don't think we want to necessarily be cutting costs in that area. But COGS offers an opportunity. On midterm guidance, I can really see nothing, really, has changed at this point. We'll give an update at the year-end as we always do. On PCSK9, yes, I read the comments overnight from Pfizer. I mean I'm not so sure I would agree with the comments. When I've gone back to our own people, I think all the population set that Pfizer is talking about are actually covered in ours. I mean there is a primary prevention study, which is -- our belief, would be -- this will be in familial hypercholesterolemia population, one where we actually have those patients in there as well. We have a number of high-risk patients. I think between Amgen -- all the studies that Amgen is doing and Sanofi is doing, I'd be surprised if there's too many holes in that between the 2. I mean the interesting thing, I think, you're going to find is that with Pfizer climbing in, you're probably going to have about 60,000 patients on PCSK9. And if you go back to the statin class, I think a lot of those studies really drove quite a big market. So one would never underestimate Pfizer with their experience out of LIPITOR, that's for sure. But equally, for us, the competitor is Amgen because it is we and Amgen who are ahead. And -- but I think, in general, the more studies that are out there will demonstrate the value and importance of this class of medicine and probably make this a more interesting class for all of the participants.

Our next question is from Mark Clark from Deutsche Bank.

Two things. Firstly, on Rare Diseases, I wonder if you could just talk us through the pricing environment. I noticed the comments about austerity measures in Cerezyme in the statement. My understanding had been that there's a small amount of austerity impact in Europe in the class. And that generally speaking, for example, in the U.S., there's a lot of -- there's still freedom on pricing to a fair degree. And second question is on structural change in Emerging Markets. I mean given the change in leadership in LatAm and the slowdown in China, do you think there is a case for reversing some of the huge infrastructure expansion for both yourselves and peers who have been indulging in recent years with huge field forces, et cetera?

The pricing in Rare Diseases, I mean, I would still say -- I mean, we're seeing little bits of pricing pressure in places like Australia and a little bit of pressure in the EU. But I think it's nothing of that significance. I mean you've seen still double-digit growth of our businesses. As we've kind of move from the catch-up population, you've got more of a true underlying growth in Rare Diseases. So nothing that I would call out at this point on that. On the structural changes in Emerging Markets, I don't think so. I mean, our Brazilian pharma business continues to grow at double digits. I think the opportunity in China -- the issue in China, I think, is more temporary. I think you're going to see -- and I haven't seen anybody predict anything less, I think you're going to still see extremely strong growth in the Chinese market. I think, actually, you will probably see the reverse. I think we'll certainly continue to invest and expand into China. I mean, we have 4,000 sales representatives in China. That's about the number of sales reps we have in the United States and considering that the population is so much greater and the number of physicians is so much greater. There are new hospitals going up every day. So I think we'll make sure we're not spending ahead of the opportunity, and we'll certainly see what comes out of the current situation. I think what you will see us doing is what I was saying earlier, that one of the issues of Emerging Markets has been very little granularity of detail. And it affects not only pharma but consumer, Animal Health. If you talk about the vaccines business, for example, with pediatric vaccines, what you really want to…

Our next question is from Mr. Tim Anderson from Stanford Bernstein. Tim Anderson - Sanford C. Bernstein & Co., LLC., Research Division: A couple of questions. You've called out that the patent cliff has largely moved into the background. But as I look ahead, naturally, there will be some future patent expirations, and it's not clear to me when some of these products might go off patent. So I'm hoping you can address 5 different products, Lovenox in Europe, Renagel in the U.S. and then the Genzyme products, Fabrazyme, Cerezyme and Myozyme either U.S. or Europe. And then second question is, there's been continued speculation about L'Oreal considering disposing its stake in Sanofi, and I'm wondering if it's ever a possibility that you would consider being a buyer of that stake. If you think you're at an inflection point in terms of your growth profile and while the valuation is low, it seems like this could fit that definition of being an opportunistic opportunity that you've sometimes referenced in the past regarding share buybacks?

On the patent expiries, so Lovenox, there's no patent in Europe. There are some guidelines about biosimilars, but there isn't one really on the horizon. Remember, the price of Lovenox is already pretty low in Europe. You'd have to do some spending. I mean, biosimilars are not cheap to develop. So I wouldn't exclude it, but we don't really see anything. On the renal care business in the U.S., there is -- there was an agreement actually with a generic company that went to, I think, it was the end of this year and with impacts. But we haven't seen anything as to the actual approval of a deal. Sébastien Martel: September 2014

Sorry, September 2014 was the deal, sorry. So what happens beyond, we don't know. But there is that patent expiry. On the Fabrazyme, Cerezyme, Myozyme, these are all biologics. There is a -- has been a biosimilar under development in South Korea, has been around for a number of years. I don't think you're going to really see much biosimilar activity in most of the key markets. If there is one, it may start to try to eat into some of the sales in Emerging Markets. But again, these are businesses where you have to spend a huge amount of money to develop them. There are only a few patients here, there and everywhere. And if you actually have to go around and sell this to -- if you have a country where there's a tender, and we do have some of that, for instance, Brazil, runs a tender, they might be able to gain in there. But I don't think we really particularly see anything of significant concern on the biosimilars. The marketing plan is really just to continue to find patients. There's a -- we know that there are a whole lot more patients out there, and Genzyme is actually becoming quite adept at actually finding them. And so I think, even if there is one at some point one day, I don't think a patent expiry is what really triggers it because I don't think they're really in a U.S., European situation anyway. So I'm not too concerned about that. On L'Oreal, this is all conditional on what Nestlé does. And the Chairman of Nestlé said all options are on the table. It, of course, leads to speculation. What does L'Oreal do? And that's the second conditionality. Does L'Oreal buy back that stock and do they need to sell our stock? Nothing is going to happen anyway until the shareholder agreement expires in 2014, in -- I think, it's April. I think we've already said, if, if, if all that occurs, then that would be something that we would clearly look at. But there could well be other options for the stake, who knows. But it's obvious that we would want to make sure that we're protecting Sanofi shareholder interest in that.

Our last question is from Mr. Michael Leuchten from Barclays.

Two questions, please. There were 10 discontinuations in Phase I, II announced during the quarter and in your press release. Is that a natural conclusion of these programs? Or have you gone through a reprioritization of the pipeline? And then a quick question for Jerome. I noticed there's a comment in your press release regarding net debt and exceptional funding for pension plans in the U.S. to the tune of $305 million, just wondering -- sorry, EUR 305 million. Just wondering what that was and what that means for your pension liabilities.

So phase -- not really. I mean, I think, we're going to have a very clear policy of "kill early." I mean this is not something our -- this is something our industry likes to talk about, but actually doesn't end up doing enough of. And so we'd rather kill them in an earlier stage. I have to say, none of those projects were of any particular significance to us. So I hadn't actually even heard of a couple of them. So not so sure that has any particular reflection. The one thing I would say is that when you look at our research pipeline, we essentially inherited a situation where -- I mean, one of the things that really stunned me about the research and development situation when I came to Sanofi was -- is that we had virtually nothing in Phase I. I mean, I've seen -- poor pipelines, we've got nothing in Phase III or Phase II, but the bar has not typically been high in this industry to get into Phase I. But we actually had nothing in Phase I. So there are still some assets around that got -- that managed to get into to Phase I and Phase II coming out of that time. Some of them were early-stage business development, and we're a company that didn't do much business development. So some of the early stuff wasn't probably as robust as it should have been. But I think the projects that we're doing now in research, now and over the last 2 years, is really overhauled research. So I think it's just going to take some time for that to get into Phase I, Phase II. But quite honestly, I'm feeling pretty, pretty relaxed because if I look at our Phase III pipeline,…

Yes. So Michael, in fact, I mean, we had the opportunity to fund beyond normal our pension funds in the U.S. This took place in Q2. In fact, this took place the 1st of April this year. Basically, the level of funding of our pension in the U.S. was, before this funding, somewhere around 70% and as we've gone through this funding, up to 85%. Why did we do this funding? There are 2 reasons. The first one is the low interest rates. If you remember, we raised $1 billion in April of this year at a rate of 1.25% coupon, 1.25%. And second, there was an opportunity, as long as there would be penalty for companies underfunding their pension in the U.S., which would -- this October, to be implemented. On the contrary, there was an incentive to do that, if you could do that in the right time. So now the level of funding of our pension in the U.S. is somewhere between 85% or 90%. And of course, we just mentioned that we had impact on the cash flows in there because of this pension plan. Sébastien Martel: Okay. Thanks a lot, Jerome. So we're actually now going to close the call. Just before doing that, I'd like to ask you to put a -- save the date in your calendars for February 6, 2014. This is when we'll report our full year results. With that, on behalf of management, I'd like to thank you for your participation.

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