Ladies and gentlemen, welcome to the Sanofi Second Quarter 2014 Results Conference Call. I will now hand over to Mr. Sébastien Martel, Vice President, Head of Investor Relations. Sir, please go ahead. Sébastien Martel: Thank you and good morning, good afternoon to everyone. Thanks for joining our call today to discuss our financial results for the second quarter and first half 2014. As always, the slides to this call are available on the Investors page of our website at www.sanofi.com. Before we begin, as you can see on Slide 2, I'd like to remind all of you that information presented in this call will contain forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. I refer you to our Form 20-F document on file with the SEC and also on our document reference for a description of these risk factors. On Slide 3, you can see the agenda for the call. With us on the call today are Chris Viehbacher, our Chief Executive Officer; as well as Jérôme Contamine our Executive VP and Chief Financial Officer. First, Chris will discuss key highlights of the second quarter and first half, and then Jérôme will review our financial performance during the period. After that Chris will return and make concluding comments and then we will take your questions. Dr. Elias Zerhouni will also join us for the Q&A session. As you all know, Elias the president of R&D at Sanofi. I will now turn the call over to Chris.

Thank you, Sébastien. Good morning, good afternoon everybody. So I think we’ve got a good set of results here. You all know, of course, really we’ve come out of the patent cliffs since September of 2013 and we’ve seen shabby [ph] growth of the company and the second quarter of this year is no exception. It continues that trend. Net sales up 6.4% on constant exchange rates, obviously helped to a degree by the comparative period where we had the Brazilian situation and we will show you what the impact of that is, and certainly in the press release. That also coupled with some pretty tight expense controls led to business earnings per share up 13.4%. We’ve played an awful lot of attention to cash flow, working capital management. So free cash flow was up actually faster than earnings, so we had an increase of 33% in the first half. That has also allowed us to return €4.8 billion to shareholders, €3.7 billion with the payment of the dividend and we have year to date bought back about €1.1 billion in share buybacks. The growth platforms have the story for the last five years. We started five years ago at about 38% of sales, they are now 76.3% of sales. It clearly doubled as a percentage of our sales partly through the organic growth, partly of course because we lost the old blockbusters. Very good execution in emerging markets. Very pleased to see Merial back to growth. What I think is really interesting now about Sanofi is that we are, I think, becoming an R&D story. Most of you do not see Sanofi as an R&D story and I know we’re going to have to change that. But we will come back and talk to that -- about that a…

Thanks, Jérôme. So I guess just to summarize 75% of our sales are now generated by growth platforms and you’ve got three years of experience where you’ve seen that these growth platforms really growing at high single digits on average. They can be lumpy because of the nature of them but over a long period of time, I think they have proven their value. Our business earnings-per-share has been adjusted from 4% to 7% growth to 6.8% growth, largely on the back of a good performance in the first half which we simply expect to continue despite a more competitive payor environment in the US. Our late stage pipeline as you’ve seen is moving now to launch execution and we would expect actually new medicine launches to further redefine Sanofi as a biopharmaceutical leader, 45% of our sales today are already in biologics, 80% of our pipeline is in biologics and I believe today that we would rank second or third in terms of biggest biologics producer in the industry. So with that I will turn it over to Sébastien for questions. Sébastien Martel: Thank you, Chris. Operator we are now ready to open the call to questions. As always I will ask participants to limit their questions to one or two at a time so that we can allow as many people as possible to participate into our Q&A session. You can always get back into the queue if you have further operations, operator?

(Operator Instructions) Our first question is from Michael Leuchten from Barclays. Michael Leuchten – Barclays: Two questions please, one for Chris, you have mentioned in the press release the increased payor pressure and Jerome mentioned that as well in terms of gross to net conversion in the US. Just wonder whether you could add more color why that is specifically mentioned now and where you see that pressure within your business particularly? And then a question on the ODYSSEY trial given you put the test in the press release yesterday in the long-term trial in the post [ph] analysis, just wondering if Elias could talk to us about how those patients look at baseline maybe their baseline area level, what those severe event rates were post hoc that you're looking at post hoc and whether there's any comment on the different time points where those events occurred say one year versus 24 weeks and 18 months or any color you can add in overall?

I think on the increased payor pressure this is an industry phenomenon. I think I’ve certainly seen notes out from various companies who held the panels on this, this is partly due to the pressure from some new medicine, it’s partly due to some of the pressure that some companies are facing from the ACA. And partly quite honestly just due to our own competitors, you’ve got a number of people out there who are being much more aggressive in contracting to try to gain market share, and I think seeing this in some of areas, largely I think I am trying to seize upon the payer pressure to see whether there's an opportunity to gain share. Clearly Sanofi is not about to yield share on anybody and so I think that's normal, I think as I say you’ve seen it with other companies and it’s just sort of something to keep an eye on. Nonetheless I think this comes back to the diversity of the company, that yes it is there but even though we know it's there we can still I think maintain and probably we slightly increased the outlook for the rest of the year. Elias, do you want to say a few words about the long-term safety study?

Sure, so the long term safety study of about 2341 patients and in terms of what the baseline levels were – as you know we started every patient on statins. So all of them are on statins and their baseline level are no different than the population that would be selected upon this criteria. I can’t be specific about levels because I don’t want to jeopardize publication of rights and presentation at the DAC [ph]. In terms of the points, clearly what’s in the [piece trial] analysis we were looking at the major criteria which are the exact same criteria that you would look at in the cardiovascular cum study which is the study that is ODYSSEY is continuing on 18000 patients, the time points, there were pace test defined analysis where we would say the first analysis would be at 50% patients, having been exposed more than 12 months and 25% 18 months. So the analysis that we are reporting, what we are surveying – less than 0.5 difference in favour of alirocumab, it’s based on this plan interim analysis.

We have a new question from Graham Parry of Bank of America Merrill Lynch.

So firstly on the alirocumab priority review voucher, i.e. some conditionality in your statement of intent to use – phrases like potentially usual plan to use, so is there any risk at all that you might not be able to use it and to what extent, would that voucher purchase the result of any broader discussion with Bio-Marin? And then on pricing, there is a lot of discussion around pricing above GLP1 level for these agents, possibly more towards the TNF agents, the commercial players are seeing that GLP1 is great, it’s been hampered by a premium price level to Lantus, so could you just talk us through any rationale as to why these agents could be priced above GLP 1 analysts? And then finally on additional data we could look at, are there any DSMB interim look on the cardiovascular outcomes trial, or should we expect any pharmaco-economic data at upcoming cardiology meetings?

So on the voucher, let’s say, at the end of the day until you see ink drying on the NBA, I think anything is possible but generally you have to give the agency 3 month notice, now there is two types of about voucher, one is related to the rare pediatric disease, the other is to tropical diseases. Tropical disease one actually requires a longer notice period and that’s why the pediatric voucher is – the rare disease voucher is considered more valuable. This is a request to have an accelerated review. Obviously you back into the normal review cycle then, you can be awarded an accelerated review for any type of product even without a voucher, that doesn't always mean you’re going to get it but at this stage all we can do is say we’ve acquired the voucher and at this stage our intention would be to try to use it for that. In terms of pricing, I don’t want to get into this pricing today but I will say that I do not consider – certainly all our market research does not consider the GLP1 market as a relevant comparator or an analog. So we’re looking at much different levels of efficacy and a much different type of market, in a much different set of treatment alternatives, as well as a much different set of outcomes. So I personally don't really pay much attention to GLP 1 when it comes to alirocumab. But this is where I think we will come back, our teams have done market research now, we obviously know more about this product today than we did even a week ago. And the robustness of the results is something that we will be exploring with physicians and patients and you can – just so you have a first look in Barcelona and then we will try to bring all of that together in November. Elias, do you want to take Graham’s third question on other aspects of the outcomes trial?

Yeah this is a good question, so as you know the long-term cardiovascular outcome study called ODYSSEY outcome is an event driven design. In other words, we are basically dependent upon the event rates, number of events observed that are adjudicated amongst the patients who were treated. Now in terms of those studies there always are a planned interim analyses that are performed during the conduct of the trial by DSMB and to which were blinded. During those times, so the DSMB has total discretion to assess the risk benefit on both sides of the equation, if there are less events or more events in one arm versus another. So we do have planned interim analysis at a certain number of events as agreed upon with the agency at which point the DSMB has discretion to continue or terminate the trial depending on what is observed. That’s pretty much all I can say now.

Just trying to follow up that, have any of those events possible, can you give us any kind of feel for when they would be, and also the question on pharmaco-economic data?

So in terms of timelines 2017, 18 is our timeline. There is plus minus 6 month is possible on those dates. So I can't really predict more than that at this point, it’s recruiting at the rate that we expected to recruit, and the event rate is what we expect. So I would say that we should hold ourselves to those timelines at this point. In terms of pharmaco-economics let me say this -- there are two fundamental questions that affect this year, one, is our PCSK9 inhibitors are capable of increasing the better outcomes that we see with statins and there is a central question which is that statins per se have a solitary effect that others drugs have not proven. I think the results that we reported yesterday in our long-term study with the 2341 long term patient cohort, are the first evidence in my views that in fact that notion is not correct that in fact lowering LDLC is having an additional impact on top of optimal statin therapy. So because of that, that will change the pharmaco-economics to a large extent given – it’s confirmed obviously by the ODYSSEY long term study in terms of the ability for us to lower morbidity, mortality of the disease beyond that of maximum statin treatment. So I think there is the first evidence. So in pharmaco- economics terms now you can see a baseline an and upside that is essentially trending towards the upside given the recent results. In terms of the other positive pharmaco-economics I would I would say that if they are still evolving, we absolutely believe that there will be – as Chris said, a need for addressing unmet high risk cardiovascular patient needs early in – after the launch of this product even before the full cardiovascular outcome study is published, because I don’t think the risk benefit is something that you would want to weight towards the risk in these patients, you would probably want to error on the side of giving the benefit of the doubt to the patient given what we know today.

And just as an add to that, because I agree with everything Elias just said, and this is why I think we need to spend some time with what we have learned. I think there is an assumption out there, that there is statins and everybody's well-controlled and the problem solved but in actual fact it’s pretty astounding when you look at the number of people who despite statin use are nowhere near goal and I think that when you couple that with patients who have other risk factors is one, one cardiovascular – KOL described it’s the gang of four between smoking, between high cholesterol, hypertension and diabetes, when you have those four conditions this is the four controllable elements of cardiovascular disease. And this is really why cardiovascular death is still one of the leading causes of death. So that's why I would say that we don't really look at the GLP 1 which is looking at a broad spectrum of patients and a broad spectrum of treatment. And here you’ve got essentially – I mean LDL-cholesterol is a factor in itself but it is also effectively a biomarker for identifying patient options and I think so you’re going to see a much more targeted approach. And then we don't really do that in the GLP 1 segment. But again this is something where you actually have to spend a fair amount of time, this is a fairly granular analysis, but I think you will probably be surprised that at the numbers also involved. We will talk more about that at another time.

Next question is from Peter Verdult from Citi. Peter Verdult – Citi: I have got two questions, one for Chris, one for either Jerome or Chris. With GO and PCSK9, XGS, pretty big potential launches, if we then go and assume that you do kind of broad label full PCSK9, how should we think about the incremental commercialization efforts of both assets? If we were to just simply assume there is a significant expansion in both diabetes and the primary care sales force, is that the right way of thinking about it or can you help us think about it a bit more intelligently? And then secondly, Jerome or Chris, lots of noise in the market regarding big pharma looking to divest established products, can you just update us as to how much for product this is for you to explore these options for your EP business and if it is on the cards is it technically feasible to sell out vehicles for tax conversion purposes?

Yeah, I can tell you inside company, I think we are pretty busy. We are in pretty much every business we’ve got new product launches either underway or about to get underway, I mean Genzyme and Cerdelga, Lemtrada we only talked about the others here, we got Toujeo, we’re still rolling out lexy lean [ph], PCSK9 now. The interesting thing I think is that clearly Sanofi -- when we talk about this gang of four and you hear the diabetes as one of the four risk factors, obviously we are exploring what kind of synergies we might get them between these two. And I think next year we're already putting more money into the business. Last year we had a big investment in building up our MS platform this year, we had a significant net increase, so you don't necessarily see them in the numbers because we're busy driving savings out of the rest of the business but we put well over €700 million of new investment into the business just because of this burgeoning pipeline. And next year I think we’ve got both continued pipeline investment and commercialization cost, I think it’s too early to tell what impact that will be. I don't think we’re looking at PCSK9 initially as a primary care product. However I think we’re going to be focused to probably more on specialty audiences, so I think the field force expansion will not necessarily be there but you do have two big blockbusters here, even to try to launch. So I think what we've also seen is that we’ve been able to try to manage new investments while squeezing costs out of the rest of the business. Just on the mature products I will let Jerome talk a little bit about some of these. I…

It is something everybody is actively looking at and we can do something that would create value for shareholders. There are whole host of technical issues that I will spare you with on this but if we can create value we will try to do something here.

Next question is from Tim Anderson from Sanford Bernstein.

On your M&A plans, the first question -- you generally continued only do smaller share buybacks and you’ve been pretty consistent in the past saying that you're looking mostly bolt on acquisitions, but when I take those two things together, so if you would have cash are coming on the balance sheet, so my question is really whether it's realistic to expect that you will continue to look primarily bolt-ons for some time, does the window open up here for you to consider larger targets? And second question in keeping with what seems to be Sanofi’s goal which is to be a diversified company, can we expect Sanofi to push in the brand-new area, would it likely just build out existing areas, for example, with something like medical devices or diagnostics, it will be of interest to the company, but would the company be interested in becoming more of a global generics player?

Look, I mean acquisitions are kind of in the DNA of this company, this is the base on which this has been built. And I think by nature we are – we like to hunt - the issue is I think that the that market situation has dramatically changed over the last 3 years, I am particularly happy that we did our acquiring two three years ago than today. The basic problem is that by the time you pay a premium and the premium is often driven by awful lot of cash by some non-healthcare specialty investors now are looking for higher returns. And then if you kind of couple that with the people who were are trying to do inversion deals, who are willing to pay more premium because you get a synergy on the tax side, valuations are pretty robust and by the time you pay the premium and you sort of say well what value am I creating for our shareholders? You’re left saying there isn’t really much left there for us to do that with. I was like to say -- I don't get paid for making someone else's shareholders happy which is pretty easy to do here but it's a lot tougher to find shareholder value for us. But the thing about this is that the wind has changed pretty quickly, so we continue to look, we continue to play this kind of on a half by half basis on the year, we’re back to 10 billion in our net debt target, as we look and we don't find anything to do beyond the bolt ons, then we buyback shares, so we don't want to say that hey, we will never find something to add value and so we prefer to keep some of the…

Vincent Meunier [ph] is on the line. Sir you have the floor.

The first one is a follow-up on alirocumab, and [indiscernible] on the post hoc analysis of the ODYSSEY long term trial, can you please tell us if you think the results of that study can be paths of the label of the product? And then that would give you an advantage before the publication of the ODYSSEY outcomes trial? And the second question is another follow-up on the situation currently in the industry. Is it fair to assume a marked deceleration of Lantus in 2015 because of the flattening price in the US and a growing rebate and assuming that what's happening is an industry event as you said?

Sure, so in terms of the long term study, which involves 2341 patients, one thing I'd like to stress to you all is that we have been extremely careful to design quality over speed in our trials, we have 5000 patients, we didn’t go to 12 weeks, we wanted 24 weeks, we didn’t go to 12 months follow-up, to 18 months follow-up, we have 75, 150, and 300 mg doses, so the quality of the program allows us in fact to submit the data at the time of submission will be in the label obviously, we need the cardiovascular outcomes study, 18,000 patient study to make it in the label but it will certainly I hope be in the clinical section. The impact obviously is that this is the first solid quality evidence of a differential effect on cardiovascular outcomes of alirocumab on top of statin. So I'm pretty confident and hopeful that it will make it to the clinical section, but not in the label itself from the first trial, as it needs to be confirmed by the larger study. Is there going to be an advantage? I think in generic terms there will be a significant advantage, I believe, in having shown some definitive or strong early evidence of better outcomes with PCSK9 and in particular one of the things that we have been very careful in our design is to focus on high risk cardiovascular populations, the ones most in needs of intervention. So my answer is obviously attending to puts this data in our submission for inclusion in the clinical section in the second – yes, on the scientific and medical standpoint, there is clearly an advantage in having demonstrated through this very careful more long-term program that we have done, where we have really explicitly quality over speed I think this would make a significant difference in my opinion and I hope so.

I would just add I think one particular area where we might have some benefit is actually in Europe because I think obviously economic hurdles for new drugs are much higher in Europe and we might've anticipated some payer saying, well that's great, you would do LDL, but we want to see outcomes. I think it might be interesting to see well this wasn’t the primary endpoint by any means and we do need to be prudent about we look at this. Nonetheless, I think it is an important signal and I think just from a medical ethics point of view at that point I think we will certainly get some European payers to potentially look at this differently than they might have otherwise done. The second question was – the Lantus trajectory, so there is a number of factors that go in obviously in 2015, first is does the biosimilar arrive – as you know there's a Markman hearing scheduled for this fall and there is a court hearing, the trial is scheduled currently to take place in September 2015. Unless there's a summary judgment one wouldn't expect a biosimilar until the decision on patent infringement has been taken, which would probably take you out into 2016. And of course obviously with the launch of Toujeo we are going to considerably deprioritize Lantus because we believe Toujeo is a much better product. So you are going to in any case see a decline in Lantus as we ramp up effort behind Toujeo. Difficult to predict on the rest in the market, the whole diabetes space is clearly a very competitive space. Equally I think we have put a lot more focus in our US business on sales force execution and we've actually seen in NRx share gain now over…

I just want to add one little detail that I don't think I made clear – the statement was this was in terms of the long-term study that we also reported on, the statement was made that this was a post hoc analysis. I want to make sure everybody understands that we actually pre-specified that analysis in the plan submitted to the FDA, so it’s not a discretionary post hoc second look, it’s a pre-specified analysis on the maintenance criteria, the same ones we use in the long-term cardiovascular outcome driven study of the 18,000 patients that we are continuing. So I just want to make sure it’s a prespecified analysis which really means that it has a high likelihood of being taken into consideration and hopefully included in the clinical study sections at least of the label.

Next question is from Mark Clark with Deutsche Bank.

Firstly a question on the pipeline product, the CD38 antibody for multiple myeloma, so it’s a shame it doesn’t start with the – because everyone would put a billion in front of it but would you be planning to file on the phase 2 study you’ve started in the way that Genmab potentially with it daratumumab, if not, when will you be in a position to start the phase 3 combination studies? And then second question about Toujeo, just a follow on from previous comments Chris about, de-prioritizing Lantus and you think about a product, clearly when we talk to investors the feedback from many other – from many in the market is they are not convinced Toujeo is a better product. But financial contexts doesn’t determine prescribing, what is your market research coming back from actual prescribing physicians on Toujeo versus Lantus?

So on the CD38 assets, obviously your point is well taken, this is exactly what we’re working towards, we’re hoping to be able to accelerate the plan, we’re already from both optional – and essentially on the results and at this point we’re just accumulating the results. In terms of [indiscernible] we hope to definitely go in phase 2 concurrently and we hope phase 3 in 2015, I can’t tell you exactly when.

Toujeo, Mark, I think we will come back on November 20, the one thing I will say is that there are still number of people in the company who launched Lantus and it seems that the financial community didn't really think much of the prospects of Lantus either. So I think as you say it’s probably pretty good thing that you listen to prescribing these products.

Next question is Steve Scala from Cowen & Co. Steve Scala - Cowen & Co : First, Chris, can you help us create an expectation for the rollout of Toujeo and alirocumab in 2015? The company clearly is excited and optimistic and your experts apparently are as well, should we conclude that payer adoption will be brisk and the rollouts will be very strong, or would you urge us to lean more cautiously on the rollouts? Second question is in the past the company has noted its early efforts in immuno-oncology and how there is improvement opportunity for PD 1 or improvement activity upon PD1 activity, so will this be a topic at your thematic seminar and if so would you care to give us a preview of what you may say at this point?

On rollout I think rather than answering the question because I have to say that on particularly alirocumab this is actually -- we are talking about a paradigm shift in treatment here, just because of the extraordinary level of efficacy, I mean when you are talking to key opinion leaders and nobody really knows what happens when your LDL goes below 70. And so on the fact that we just had these phase 3 results as well as the long-term study we are going back and updating our market research on this, but – and then there is also a whole lot of other questions because there are for instance two doses here, you got a 75 mg and 150 which actually Amgen does not have and you’re going to have two schools of thought here about lower is better faster versus this is a new class of drugs, let’s do what cardiologists have tended to do which is to titrate up, so there are a lot of moving parts in how this is going to take place. So we’re doing a lot of work on that and I really rather give a more detailed answer on November 20 because it's pretty rich. Toujeo I think is a lot simpler, we do think this is a better medicine, we are going to be driving to get a maximum rollout. On alirocumab I just think it's just early days to give you some sense of that. But Toujeo clearly is we want to actually really get behind this next generation instrument. On immune oncology I will let Elias comment a little bit more on this, the only thing I will say is that every expert I have talked to in this – no matter what they think about how immune oncology is going to develop, will always say that we are just really at the beginning here. It’s obviously an area of significant unmet need but this is going to be a major area of research and development for at least next decade and so we’re all looking at position ourselves in this area but nobody should think that the train has left the station on that.

I was going to echo that, and just a second, I would say also that you should know that we have probably one of the largest most active antibody drug conjugate program with four assets and late preclinical and early clinical, which give us a basis to understand in fact key aspects of immune oncology which is the targeting on the cancer cell, in addition to that we have a very active collaboration with Regeneron on checkpoints and our view is that as Chris said, this is not a sprint, this is going to be a marathon, and I think based on our understanding of the science and as I said before really our teams are favouring quality over speed here. We believe that some of the outcomes will be driven by combinations because the immune system is not a one brake one accelerator system but many brakes many accelerators and that depend on the tumors. Clearly we are in the field and we intend to, as Chris said, be part of this marathon is much as anybody else. And we have some unique assets that we will present later on perhaps at the November session if things are mature at this point.

Our next question comes from Philippe Lanone from Natixis.

Could you give a bit more color Merial going forward because Q2 was quite spectacular and even shifting out the NexGard is only a slight decline, so what will be the situation, what should we model for the rest of the year and for 2015? And quick question on Aubagio because it's becoming -- it will become quite a significant drug, and that has an exclusivity through in 2017, should we stop the story here or do you have any possibility to go beyond that especially there is a -- another patent to up until 2031?

So Merial, it did get back to growth, as I said there is at least a part of this related to Frontline and that’s clearly because the weather conditions for the flea and tick season is much better which has had an impact on both NexGard and Frontline. I think the other is that we’ve brought new leadership into Merial last year, we have reprioritized resources and I think they are doing a great job on really getting the Merial rejuvenated and energized, much better advertising, much more of a focus on getting promotion going. Merial management believe that they are going to be able to continue mid single digit growth certainly in the next quarter and the end of the year. Longer-term NexGard is extremely important but clearly we need to expand that and we’re really looking at building upon the Pet franchise. We've had a few setbacks from some of our biologic vaccine production which I think we’re sorting out. So I actually think we should be able to keep the momentum going in Merial. Aubagio, yeah, you are right, I think Aubagio is running at almost €400 million run rate today. My recollection is that while we first have 10 years of data exclusivity in Europe, so that takes us to 2023 and the last I think that takes us out to 2017, September 17, we will also have some method of use patents that goes into 2022 and further patents on formulation as well as process that actually go beyond that.

I mean our teams today are looking at this for the US beyond 2020 because of the additional patents, how much beyond 2022 I think is still yet to be added to the terms.

Our next question is from Steve McGarry from Société Générale. Steve McGarry - Société Générale: Just a quick questions, firstly just given that payer pressure you had, given that it affected in zero play with Lantus, do you still believe that you have scope for price increases now? And secondly on the Regeneron stake, when Sanofi stake was 20% you added the direct general [ph] on board, so what’s the overall strategy for the Regeneron stake, is that to ensure that third party doesn’t acquire your partner, and given that Sanofi increased its stake so far this year, that caused to Regeneron’s all time highs, when you could have allocated capital elsewhere, does that include time sensitivity for Sanofi to get its stake to its target level?

On payers, I think lot of the -- there's the two types of the price increases obviously, there's the whack pricing, the list price changes and then there is a net price changes. Largely the list price changes are a function of competitor activity. To a great extent I think Lantus was seen as being lower-priced to compared to its value, therapeutic value if you compare it to for instance GLP-1 or DPP-4s even and I think we’ve got better price alignment with that, Lantus today, it has a daily treatment cost of around $8, so still less than the GLP1s but one aligned with the DPP4s. Then question is how much of that price increase can you translate to the bottom line and I think that's where there is increasing pressure and also we need to keep volume moving. We need to do also I think continue to work with payers to really show how do we get the better outcomes because the real target is not lower-priced medicines but it's better outcomes for patients at a lower cost. And I think actually doing a better job of partnering with some of our payers could actually help us on that and that’s largely why we moved on this path of integrated care and moving beyond the pill. I think outcomes are going to be much more important in the payer environment and I don't think as a company we could just continue to supply a medicine, I think you have to try to think about what can you combine this with the devices with education, with the program, with information to actually help patients cope with their disease, because in type II diabetes is probably one of the number one cost drivers for the whole healthcare system. We know…

We have question from Alexandra Hauber from UBS.

On R&D, you hinted on potentially on the R&D budgets in the second half, and potentially be on, can you just quantitatively describe what is driving that? I can see we did a new phase 3 programs that should be coming on, but there is on the other side probably at least not increasing costs anymore, PCSK9, dengue, MS is probably coming down, diabetes, looking like is probably just replacing what you are winding down on Toujeo, so is it all in the early stuff that we normally don’t see much – that doesn’t drive R&D budget so much, so if you could just describe the key drivers, what you see the key pressures? Second question for Chris, you said on Lantus, you’re not going to yield share to anybody yet, in the first half at least you have been, not going in terms of marketing, long acting with analog [ph], so question is -- 4% TRx and market grew 7%, why is that? Is that due to disciplined contracting? I am asking because obviously at the end of the day, the issue for Avaya [ph] because it was good while it lasted but the big issue is the sector, when you finally do except to lower price, just wondering whether that could be similar issue here. And then final question, M&A I recall that for the change of acquisition usage, that you had a limit, from the board, and does that limit still exist or do you just need to fulfil all the user criteria that you seek to return for shareholders?

Alexandra, I wish the reality was what you described, I mean if you really look at it, I mean first of all, the long-term study for alirocumab continues although it’s 17-18, 18,000 patient study, so it’s quite a driver. In terms of PCSK9, I don't think you’re going to see a reduction year on year even though we finished all the early – all the phase 3s, we have a couple more ongoing. Second, IL4 is going into its phase 3, IL4 is not just the single molecule, single indication, it's actually a class of indications, so it's going into phase – we’re going to read the phase at the end of this year and it goes to phase 3 in asthma, we have nasal polyposis as well, that are up-and-coming. We’ve launched LixiLan in phase 3 which is ongoing at this point. In addition to that we're looking at the early portfolios you mentioned which I think is very vibrant, we have seven projects there that have again what I call the high quality lower attrition index that we have directed and driven the R&D organization at Sanofi to focus on quality rather than quantity and our attrition rate if you really look at it over the past three four years has been very low. So we believe that's going to be important. In addition to that I think something that perhaps is not well appreciated a significant portion of the R&D budget has to go, once you are successful like in Toujeo for example and submitting a drug, you have to continue to spend behind it for two reasons. One is the regulatory requirements imposed by regulatory agencies are actually quite so significant and increases every time you succeed, so Lemtrada for example, I expect that with the approval hopefully in the US there will be some regulatory requirements. And third, as you well know today payers and payer driven studies are extremely important to build within the R&D budgets. So all in all I don’t see pressure lowering on our budget, in fact the opposite, because of all the needs of both the prelaunch, post launch activities, regulatory activities and the pretty rich portfolio we have today. I can give you more details and outside the point and hopefully in November, that also covered for you.

On Lantus, we’ve got – TRx growth is certainly growing at about – the last two quarters is 4.5 and the first quarter 4.6, we compare that a selected insulin market that grew at 4.1, so we've been out growing that now. That demand out-performed Lantus a little bit in some of that period but we’ve got a 20% market share to our 80% market share. So it's hard given the amplitude of the numbers. Largely what we have been focusing on is field force estimates. I would say that I think when you got 80% market share there is always a risk of not being as energized as one could be and I think a lot of effort has gone into that by our US team. And we’re not -- we don't see anything really in terms of our performance in the marketplace. In terms of pricing this is something that's affecting everybody. But again I think there is an element here of not necessarily getting into price wars but really getting into the battles with payers -- this is the most expensive part of healthcare. We can give all the great medicines that you can but if you don't really have a change in diet or exercise or other lifestyle elements, you’re not necessarily going to get to better outcomes, that’s really again coming back to why we want to get into integrated care is to really to try to have some influence on the overall patient treatment experience – the insulin. On M&A, I am not sure what limit was that you were talking but we've never had a limit. Those consider to be a limit, the only thing that we do as I said accretion is not the only investment criterion which can often be the case in our industry historically. We also look to achieve a return on investment that at least meets and probably exceeds our WAC requirement, cost of capital, and in fact we as management believe that allocation of capital is a core part what management is supposed to do. So for our executive committee, in fact, it can be all of senior management who get equity compensation, 50% of the performance criterion -- all of our equity compensation is – has performance conditions, there is no equity compensation without performance criterion, and half of that is actually return on asset to that calculation. So in other words doing something that is not generating return even if it’s accretive actually would cause us to miss our own equity compensation target. If you actually went back to the Genzyme acquisition, one of the reasons that we held as long as we did was, the acquisition is clearly accretive at a much higher price, but at a much higher price we wouldn’t have been able to meet our return on investment criterion.

We have our last question from Florent Cespedes from Exane BNP Paribas.

Two quick ones, first on dengue vaccine, could you remind us the timing and the ramp up you see for the products and remind us also which are the priority countries? And second question is a quick clarification on – sales are no longer declining but when you said earlier that you expect mid single-digit growth, is it for the division or is it for Frontline?

For Dengue, we would expect in the third quarter the second phase 3 results and on that basis we would be expecting to do a filing in the first quarter of next year. And at that point this will be a question of countries choosing to give this priority access, we would expect the first launch countries to be in Latin America, Mexico, Brazil, Colombia and possibly if I look at Asia, Singapore and Malaysia as the priority countries. We are actually already ramping up production, so the initial production comes out of a pilot plant and we're creating stock, we are currently running validation lots in our new facility, assuming those validation lots are qualified then the validation lots are also available-for-sale. So I think you’ll probably start to see the initial sales possibly as early as the fourth quarter of 2015 and should be going for full-year certainly 2015. On Frontline we’re looking at – around the mid single-digits, roughly around 5% for the whole of Merial, I think it's a strong result that we have got Frontline stabilized but clearly the growth in the flea and tick business will certainly come more from NexGard but given the size of Frontline and the importance of that, it’s important that we maintain the sales of that as well. Sébastien Martel: We would like to conclude the call now, and obviously thank participants for their attention. As we mentioned during the call, there will be an IR thematic call around ESC on alirocumab and we will send shortly the sales data of that. And we will also – I am sure you’ve noted already the date of November 20 for our IR thematic seminar on new medicines, we will also be sending a save the date for that. With that, I wish everybody a good end of day.

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