Ladies and gentlemen, good afternoon. Welcome to the Sanofi Full-Year 2016 Earnings Results Conference Call and Live Webcast. I am Emma, the Chorus Call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. After the presentation, there will be a Q&A session. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. George Grofik, Vice President, Head of Investor Relations at Sanofi. Please go ahead, sir.

Good morning and good afternoon to everyone on the call. Thank you for joining us to review Sanofi's fourth quarter and full-year 2016 results. As usual, you can find the slides of this call on the Investor's page of our website at sanofi.com. Moving to slide 2, I would like to remind you that information presented in this call contains forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. I refer you to our Form 20-F document on file with the SEC and also our document de référence for a description of these risk factors. With that, please advance to slide 3, and let me introduce our speakers on the call today. With me are Olivier Brandicourt, Chief Executive Officer; Jérôme Contamine, Executive Vice President and Chief Financial Officer; as well as Alan Main, Executive Vice President, Consumer Healthcare. Also, joining us today for the Q&A session are Olivier Charmeil, Executive Vice President, General Medicines and Emerging Markets; Peter Guenter, Executive Vice President, Diabetes & Cardiovascular; Karen Linehan, Executive Vice President and General Counsel; David Loew, Executive Vice President, Sanofi Pasteur; David Meeker, Executive Vice President, Sanofi Genzyme; and Elias Zerhouni, President, Global R&D. First, Olivier will discuss the key highlights of the fourth quarter and full-year 2016, then Alan will provide an update on our Consumer Healthcare business following the closing of the asset swap with Boehringer Ingelheim. After that Jérôme will review Sanofi's financial results before we open the call to Q&A. Before we start, I would like to remind you of an important accounting item affecting the fourth quarter. As announced in Q3, 2016 due to the completion of the business swap with Boehringer Ingelheim in 2017, Sanofi will no longer present aggregate figures or report the Animal Health business as an operating segment in Q4 and full-year 2016. Instead the Animal Health business is reported on a separate line for Q4 called "Business net income of Animal Health Business." Sales and business net income on this new reporting basis are available for prior periods on the IR section of the Sanofi website. With that, I'd like to turn the call over to Olivier.

Thank you, George. Good morning, good afternoon to everyone and welcome to our fourth quarter 2016 earnings conference call. Starting with slide number 5, I'm pleased to report that Sanofi delivered a stronger financial performance in 2016 than we had initially expected. For the full-year, we generated sales growth of 1.2% at constant exchange rate and our business EPS grew by 4.1% at CER. Of course, had we included the Animal Health sales in our top line, we would have reported sales of around €36.5 billion. We achieved this growth despite significant headwinds in our U.S. business – Diabetes business and the adverse impact of Venezuela. In the fourth quarter, our business EPS was down slightly due to tax. However, our BOI showed steady growth of 3.7%, demonstrating solid operational progress. Jérôme will provide more detail on the quarter in a few minutes. Our performance during the year reflected a great deal of hard work across the organization, as we realigned our business to reflect our 2020 Strategic Roadmap and we will say more about this later. Turning to slide 6. It is particularly satisfying to see that all five of our Global Business Units delivered growth in the fourth quarter. The highlights as in prior quarters with Sanofi Genzyme, which once again grew in double digits. However, the return to growth of our Consumer Healthcare business is reassuring, ahead of the recently closed asset swap with Boehringer Ingelheim. Alan Main, who heads our Consumer Healthcare GBU, will give an update on this important transaction in a few minutes. Turning to slide 7. We are now looking at sales by franchise and geography in the fourth quarter. You can see that the Specialty Care franchise maintained its strong double-digit growth across both developed and emerging markets. Our Vaccines business also…

Thank you very much, Olivier, and good morning, good afternoon to everybody. It's my privilege to lead the Sanofi's newest Global Business Unit and to talk to you today about our plans in Consumer Healthcare. The deal to acquire Boehringer Ingelheim CHC brands in exchange for Sanofi's Animal Health business closed on the 1st of January. This is a major transaction for us, bringing us incremental revenues of around €1.5 billion, and immediately strengthens our position across key categories and geographies. The addition of BI's iconic brands lift Sanofi into leadership positions in attractive OTC categories, namely the vitamins and mineral supplements market, digestive products, cough and cold, as well as pain medications. It builds additional scale in large OTC markets such as the U.S., Germany and Japan. And overall, it elevates Sanofi into the top three globally in Consumer Healthcare. While it has only been a month since the deal closed, I can confirm that the integration of the BI business is on track. To-date, we have determined that the primary global hubs for the combined business will be Paris and Frankfurt, and we have already made the key decisions around management as well as regional and country leadership. Based on our plans, we remain confident that the transaction will meet Sanofi's financial objectives, including the achievement of around a 30% BOI margin in 2018. Specifically in the current year, you should be aware that the timing of transfer of marketing authorizations will result in a progressive recognition of sales. During this transition period, Sanofi will recognize the profit of products temporarily distributed by BI within other operating income. Jérôme will address the specifics of the CHC accounting in his section in a minute. Now turning to slide 18. I'm pleased to highlight the recent OTC approval of Xyzal…

All right. Thank you, Jérôme. I want to close this presentation by outlining our major objectives for 2017. So, consistent with our 2020 Roadmap we still have work to do to further simplify and reshape the company to launch new products and to sustain innovation. However, I'm optimistic about the company we are building for the future. In the coming years, we will be supported by our current growth engines, businesses, which are Sanofi Genzyme, Vaccines and CHC. On top of this, our strong presence in emerging markets will remain an important driver across the businesses. And as Jérôme highlighted, we are driving efficiencies throughout the organization, which will help us execute on our 2020 Roadmap. This will enable us to sustain our financial performance in the current challenging environment and to drive future growth. In that context, 2017 is particularly exciting year as we launch our brand new immunology franchise with Kevzara and Dupixent. With that, I'd like to hand over to George to start the Q&A.

We'll now open up the call to your questions. And as a reminder, we'd like to ask you to limit your questions to two each.

We will now begin with the question-and-answer session. The first question comes from the line of Tim Race of Deutsche Bank. Please go ahead.

Hi there, Tim. Yes, it's Tim Race here, Deutsche. First off, I'll ask the obligatory M&A question. Starting off, obviously, you look at everything or lots of things that appear. I'd be interested to know your thoughts on M&A going forward. Obviously, Medivation you missed out, potentially missed out on another opportunity to a U.S. peer. Obviously, U.S. there may be tax changes going forward which may favor U.S. companies and their cash balances. Where do you stand do you think looking forward in terms of M&A and ability to compete and outbid other companies or not and generally what is your thought process for M&A and use of cash? And then just maybe a question on Diabetes, generally. Short term, you're using couponing to try and sort of gain, sort of traction or at least maybe set yourself up better for 2018. But in terms of what's the strategic objective there, what do you hope to gain from that and also your long-term thoughts given that some of your sort of insulin products with Hanmi have been changed in terms of deal structure and what's your long-term thoughts behind that? Thank you.

Very good, Tim. Thank you very much. So, I'll answer the M&A question and then Peter, you're ready for Diabetes. So now it is well documented that we tried to acquire Medivation last year and we were unsuccessful in our efforts to do so, but what is the strategy here, what's driving us? We are focused on creating value to shareholders, that's the first thing. And with this in mind, we have a very disciplined approach towards M&A and we're usually considering the following. First and foremost strategic set, and you know it's very much in line with what we said back in November 2015 where we highlighted, the different TAs we wanted eventually to do in organic growth. So, we are centered around Diabetes, Cardiovascular, Vaccine, Rear Disease and emerging markets. That's where we think we have a leadership position, but that can eventually strengthens that position. And the other is to be in a competitive position and we said in MS, oncology, immunology and CHC. Of course CHC, we already did a swap with Boehringer, so that was first initial move there. But again, I insist that all targets we look at have to make strategic sense and fall in this therapeutic areas. So second, of course, is value creation to shareholder and we have been and we will remain financially very disciplined, so we solely look at deals where we strongly believe we can achieve a return on invested capital, which exceed our WACC within three years to five years. So third point is, drivers is EPS accretion, right and we are always looking to enhance Sanofi EPS growth profile, however, that EPS accretion objective is only secondary to value creation. And finally, its pipeline, Sanofi's pipeline has been significantly strengthened over the last few years, but we believe our R&D capabilities could be further enhanced. So that's how I would answer your questions. And we are remaining active in scouting the market with all those criteria in mind. So with that, Peter, do you want to give details on the Diabetes franchise?

Yeah. Sure. So actually there were two questions. And the first one what is the strategic objective of the couponing and then second more on the long-term thoughts on Diabetes. Let me tackle first the question on the couponing. Actually, we have a – the objective of the couponing is, of course, to try to maintain as many people on the drug whether that is Lantus or Toujeo, you know that the program is for both products. And anticipating, of course, potential opportunities in the future. Those two potential opportunities in the future are obviously Soliqua, right, so don't forget that 50% of patients treated today with the basal insulin are not at goal. So by definition, they would qualify for a product like Soliqua. So the more we can reach those patients potentially to Soliqua, the better it will be not only for the patients, but certainly also for us. And then, of course, the second objective is also an exclusion in 2017 by CVS is not – I would say an exclusion ad eternum. So, we obviously will look at all opportunities, so also come back in the future. So these are actually our key goals, I think with the couponing program. Your second question was more on the long-term thoughts. Well, first of all, let me tell you that, the difficult periods that we are going through and we have in front of us, you heard Olivier reinforcing that for 2017, we expect to be below for the year, below the minus 4% to minus 8% range, but at least we have anticipated it and flagged it. But if you think more long-term, I think we have many levers to pull, of course, the market as such is a market that remains dynamic. Number two, we have a couple of products that are in late stage pipeline. Sotagliflozin was mentioned Phase 3. Efpeglenatide the Hanmi asset, will enter into Phase 3 in 2017. Of course we're in the launch Phase of Soliqua, which is definitely an opportunity, you have seen the good results of Toujeo which delivers on the promise. Don't forget that, we have still a very vibrant emerging markets in the diabetes space. And then last but not least, you know that we have our joint venture with Google Life Sciences, Onduo, which is going to try to develop the whole promise of a better integrated care in the field of diabetes, this is a little bit more long-term. But we do believe that there is a very important play, specifically in chronic diseases like diabetes.

All right. Thank you very much, Peter.

Thank you.

So, next question please?

Next question comes from the line of Florent Cespedes of Société Générale. Please go ahead. Florent Cespedes - Société Générale SA (France): Good afternoon, gentlemen. Thank you very much for taking my question. Two quick ones. First on Praluent U.S., what is the plan B if you have to withdraw the product from the market? Does the 2017 group guidance and EPS reflect this risk? And my second question is on China, after the 10% decline in Q4 how confident are you to re-energize this country? And when do you believe the market disruptions will stabilize and the inventory is back to normal? Thank you. Jérôme Contamine - Sanofi: All right. Thank you, Florent. So, on to your first question, at this point, we do not consider officially or detail any plan B. We are very much in that legal strategy, where we're appealing first our stay on the – we're appealing the injunction and the second is we're appealing the key decision here, and we can come back to Karen who is with us this afternoon, if anyone wants any detail. There's a question, however, you ask is very important, is it included or not in our guidance? And I would answer that our guidance encompasses all options related to Praluent. Now, when it comes to China, yes China numbers are not very strong. I'm going to ask Olivier to answer, but I want just to say that we remain very confident in our future growth in China. And you just need to realize that our growth when it comes to pharmaceuticals in China during the quarter was actually double-digit. So, we still have pretty strong position there. So, Olivier do you want to give some details??

Yeah, Florent. So, our sales in China have been decreasing for the quarter. Those sales include our sales of vaccines that have been impacted by the distribution – by the disruption on the distribution market that we think that are now resolved. Those disruptions that itemized at the Shandong case are not specific to Sanofi, but are impacting the whole industry. We feel that now this situation has improved and those difficulties have been resolved. With regard to the pharmaceutical sales, for the full-year, we continue to outgrow the market, double-digit growth. We think that our portfolio continue to be well fit to the Chinese market with the significant presence in chronic disease with the strong sales of Plavix and Lantus that continue. We are happy also to report the strong performance of our Oncology business that after a couple of years of sluggish sale has significantly recovered. So, overall we continue to outgrow the market in China for 2016. For 2017, we expect that we will continue to grow double-digit in 2017 and we will continue to invest. We are really happy with the performance of our primary business unit, which is our approach to the Western provinces, where we feel that we still have room to grow. So, overall, we'll continue to invest in China. And I can tell you that the month of January have confirmed that we're off to a good start. Florent Cespedes - Société Générale SA (France): Thank you very much.

Thank you, Florent.

Next question comes from the line of Tim Anderson of Bernstein. Please go ahead. Timothy Minton Anderson - Sanford C. Bernstein & Co. LLC: Thank you. A couple of questions on Diabetes. Can you outline where you are with Humalog biosimilars in the U.S. and Europe? Is it realistic to think that 2018 is the year that you would likely get approval and launch? And then, probably a little bit longer-term question, but the possibility of substitutable generic insulins which could impact Lantus? I know at least one company in the past, Mylan, has talked about wanting to run those studies. This was probably two years ago. And as a product in the U.S. that is approved under an NDA, seems like that would be a fairly easy thing to do, potentially. So I'm wondering what you're picking up in terms of whether that's a real risk in the future or not?

Peter, do you want to answer both questions?

Yes, I can. So, for Sanofi insulin lispro. So, we have submitted the file in Europe in – actually, sorry, the file was accepted for review by the European Medicines Agency in September 2016. On the U.S., because of competitive reasons, we do not want to share our regulatory strategy. The second piece of your question on substitutability or not. So, as you know, Tim, in our guidance that we gave, we assumed three biosimilars in the period, non-substitutable and actually, that remains our assumption. Now, of course, given the fact that more and more payers take decisions of exclusive coverage at the end of the day, in my personal opinion, whether it's substitutable or not becomes less relevant, because at the end of the day, the payers exclude you and substitute you, de facto, it comes to...

By formulary decisions.

By formulary decisions, yeah. Timothy Minton Anderson - Sanford C. Bernstein & Co. LLC: Thank you.

Okay, Tim. Thank you.

Thank you, Tim. Next please?

Next question comes from the line of Richard Vosser of JPMorgan. Please go ahead.

Hi, thanks for taking my questions. Just on the formulary discussions ahead of the dupilumab launch, perhaps you could give us an update how they're progressing, how you see the situation about payer hurdles, prior authorizations, where you are, where you think the positioning is going to come out? And then just a question on Soliqua, in terms of – or LixiLan – in terms of the access that you've been able to achieve there. How are the PBMs (46:10) looking to enforce the label around insulin family? (46:14) Are they thinking about prior authorizations there, or is it a more free access that they're thinking of, given your pricing strategy? Thanks very much.

Good question, Richard, thank you. David Meeker is on the call. And David, do you want to ask the first access question related to dupilumab? And Peter, you answer the access question on Soliqua. David? David is not – sorry, I thought David was on the call, or maybe there is a technical issue, so...

Can you hear me a little bit or...

I can probably... David?

Okay. Yeah, yeah. Okay.

Did you get the question?

I did. Yeah. Yeah. So, the discussions are going well. I think the key fact for dupilumab and atopic dermatitis is that this is a very severe disease, certainly the targeted population, moderate to severe atopic dermatitis, no good therapies, disease predominantly handled by topical therapies today, there is a use of immunosuppressants off-label in more advanced cases in the U.S. so there are alternatives; but as I said, not approved, and also with significant side effects. So the discussions with payers have been extremely constructive, I'm trying to figure out how to get this product covered in the right place, so get it to the right patients, right time, and we're quite aligned. I think this is a product that will be managed by specialists, and that will be part of the requirement, so a dermatologist or an allergist should be the one prescribing this product. Obviously, patients should, if they can be managed with topical therapies they should do that, and that will likely be one of the requirements, but we do not anticipate that there will be a forced use in the U.S. of off-label agents, certainly oral immunosuppressives, and that's where we are. I think I leave you the fact that they're motivated to get this product to patients in the same way we are.

Thank you, David. Yeah, Peter.

So, Richard, on your question, Soliqua access label enforcement, so perhaps two or three informations in this respect. First of all, we have already – of course, we are discussing with payers very intensively and trying to unlock, in the course of 2017, sorry, the commercial access and then Medicare, of course, more a 2018 gain. I can already announce to you good news is that we have a contract signed with UnitedHealthcare Commercial, which will be activated on July 1, so United is a big commercial player, 15 million lives, so that is very good news. And in terms of, how this would be structured. Of course, you know that the label in U.S. is patients on basal insulin non-controlled, and that is indeed what is going to look like. But that is absolutely confirmed with the label. And so, you could call it, a quite a kind of a soft step at it, but nothing more than that. So, many other discussions ongoing, very good feedback. I think that payers appreciate our pricing strategy. And so, we're pretty optimistic for unlocking further commercial contracts in the next couple of weeks and months.

Thank you very much, Peter.

Thank you, Richard.

Next question, operator?

The next question comes from the line of Seamus Fernandez of Leerink. Please go ahead.

Oh! Great. Thanks for the questions. Can you hear me? Hello. Can you hear me?

Now, yes.

Yeah. Can you hear me, okay? Okay. Great.

Yeah. We do.

Okay. Perfect. All right. Good. So, just three questions; first question...

Seamus, we...

So, the first question is really on – is there a lot of feedback?

Yeah. We cannot hear you. It looks like...

Okay.

...you have blank spots here.

I'll e-mail my questions then to George. Okay. And then he can answer, maybe you guys can just field them later. That's okay.

Okay. Okay. Thank you, Seamus. Next question, operator?

The next question comes from the line of Graham Parry of Bank of America Merrill Lynch. Please go ahead.

Hey. Thank you for taking my questions. So, first one is just a bigger picture, and any thoughts on the new administration, both from the impacts, potentially on drug pricing, but also tax and the particular focus there on the potential for a border tax and the impact that has on your offshore manufactured product? And secondly, could you quantify the benefits that you've got from your co-pay assistance program in terms of retaining patients? What sort of market share do you think it has allowed you to retain, and what sort of operating losses is that going to generate for you in the year? And then thirdly, if you could just talk through thoughts on any read-through from the Fourier data for Repatha, how you might feel that ODYSSEY could be differentiated from that data, and any contracting difficulties for Praluent you might have in 2018, given that that data has now read out positively and your data isn't expected until the end of the year? Thank you.

Thanks, Graham. So, we're going to start with diabetes and explaining the co-pay program we have, then I'll cover President Trump's potential policies and I think Elias, you will have to cover Fourier and the data we've seen so far.

Yes. So hi, Graham. So on the co-pay, let's say retention programs, of course, it's very early days. We only two weeks to three weeks out of the gate in January weekly sales. But I can tell you that it is tracking according to what was planned. Of course, I also told some of you individually that we should be realistic about where we want to see the success of this co-pay program, but – so that's what it is. Financially, it is neutral because, at the end of the day, either you lose a patient and you have zero income, either you keep them on a co-pay program, but of course, given the fact that you're talking about non-covered patients, you basically carry that person or that patient financially. So financially neutral vis-à-vis losing those patients altogether. And then, your third questions on Praluent, actually contracting difficulties in 2018. That was one of your questions. I think it's a bit early to say. I would say that's overall of course, let's say, the validation of anti-PCSK9 therapy, in terms of cardiovascular benefit is good news, I think for all anti-PCSK9 products. Of course, we will see more at the ACC in March, what is the order of magnitude of that cardiovascular benefit and I think we'll take it from there. But I think it's very early to say what all this is going to mean, in terms of commercial situation, market access situation, et cetera.

All right, Graham, on the policy. So, I would start from what we have learnt from the meeting with the trade association in the U.S., recently about a week ago or 10 days ago, where many American companies' CEOs were and attended that discussion with the President. So you have seen probably some of the feedback. They talked about the need for stronger trade agreement to help ensure that other countries are paying their fair share for innovative medicines that was the topic. You've also seen that the President expressed concerns regarding pricing of pharmaceutical. I think one topic was Medicare Part D, not D, but B. They certainly discussed tax reform and other ways to current job creation in the U.S. I think as the President was also supportive of reducing regulation and helping speed, helping the regulatory process to encourage more competition. And somewhere to have less expensive development program and bring those drug faster to the market. I think there was a question, there was a topic related to what you said, which is the border tax potential adjustment and I think mainly – and of course, as a tax reform. So your specific question is on the tax adjustment, on important goods, frankly, it's not the new ID, we know that, there are many, many variation being discussed. However, border adjusted taxes have to comply with WTO agreements as we know and that may actually limit the actual scope we believe. And as you know, human medicines are very often exempt as it is a case for custom duties today. So, that's what I would say. And you don't know, of course, what the other region of the world including the EU would do, if that was put in place by the current administration in the U.S. Now as a non-American company, we would be concerned by that aspect. However, like any other companies operating in the U.S. the tax reform looking at the rate of corporate tax could be an advantage. When it comes to exposure to the U.S., related to that topic, it's important for you to realize that about 37% of Sanofi sales in 2016 were generated in the U.S. However, the part which would be subject to that border tax adjustment, meaning our ex-pharma business accounted in 2016 for about 26% of our group sales. So, we have a much lower exposure than most of our peers. So, that's what I would say to that question. Elias, do you want to talk about four-year and...

Well, I think, Peter said it, I think we're very pleased to see the four years confirming what we've always been expecting and that is that the mechanism of PCSK9, in fact, as we had observed in our long-term safety studies is actually a mechanism that lowers morbidity and mortality, not knowing the specifics of the four-year data that will become apparent March 2017. I can't really evaluate what the impact would be. The one thing I know is that our population is different, actually has a higher need for risk management, and therefore, I think I would reserve my answer to you once we see the specific data.

Thank you, Elias.

Got it. Thank you.

Thank you. Thank you, Graham. Next please?

Next question comes from the line is Luisa Hector of Exane. Please go ahead.

Good afternoon. Thanks for taking my questions. I'm just wondering whether you could give a bit more color around the amendment to the Hanmi relationship, the CGLP in insulin? And I understand that you will receive some cash back from Hanmi, and I just wondered whether that will impact your business EPS for 2017? And a couple of items during the fourth quarter, which you flagged in the press release I wonder if you could quantify. So in SG&A you talked of some one-time costs ahead of the BI asset swap. And in vaccines in Europe, there was a decline in sales, partly supply issues Repevax and partly inventory buyback related to the JV, again just wondering if you can quantify those please? Thank you.

Okay. Couple of questions for you, Jérôme, SG&A related to BI assets. And David you would be ready for vaccine in Europe. And then Elias, EPS – not EPS, Hanmi, and I think you can be reassuring on that one. So Jérôme, SG&A please. Jérôme Contamine - Sanofi: Yeah. Thank you, Luisa for the questions. On the SG&A impact, I mean, we tried to explain what could be the drivers for one quarter. So, our quarterly G&As for the last quarter was €2.6 billion, so, as you can understand, 1% is €26 million. So, you could say that the range of expense I was considering was disclosing what could have driven up the G&A in the fourth quarter of 2016 versus the fourth quarter of 2015. So, I just tried to – I mean a, clearly, I mean we cleared to you, but sometime I warn you that I mean all these payers valuations, more valuations I mean explain the evolution, but we should not take too much consequences on this element. So, I hope that answers your question. You had another one, I believe...

So, do you want to talk about the €196 million payments. Jérôme Contamine - Sanofi: Yeah. So €196 million payments no, I mean it's not going to impact our EPS in 2017, neither the investments of the year. The upfront we paid to Hanmi impacted the EPS in 2016 as you can see from the cash flow table, which is in the appendix. You will see that among the acquisition, licensing, we did in, in 2016, we had investments in the partnership with Hanmi Pharmaceutical of €400 million and the $196 million will be the unwinding part of this €400 million, so neither one nor the other is impacting the EPS in 2016 or 2017.

Thank you very much, Jérôme. David, vaccine?

So, to your question on the decline which has been shown, basically there is double effect. One is coming from the supply problem from Repevax, as you have said, so that impact performance of 2016 in the fourth quarter. And the second piece of the impact was due to the dissolution of the joint venture. When you dissolve the joint venture, the joint venture has a stock at the end of the year and SP-MSD as a company had to sell back this inventory to the mother company to MSD and to Sanofi Pasteur. And so, this is the effect that you're seeing on the performance. This is going to normalize for 2017. Obviously, since now, we operate in every country separate affiliate under Sanofi Pasteur.

Very good. Thank you. Thank you, David. Elias on Hanmi?

Yeah. There were various reasons for reconsidering actually the structure of the partnership and to amend it. One is obviously, in every development program the market changes and you have to evaluate the impact over time. Also in terms of clinical supplies, as we said before that we would have to delay the onset of the Phase 3, for efpeglenatide from the fourth quarter to 2017. In the context, we decided to realign the focus of Sanofi on the efpeglenatide, which is the once-a-week GLP-1 component of the relationship and then ask Hanmi to take the lead on the once-a-week insulin which is their expertise and the testing of the once-a-week combination insulin and GLP-1 for the remainder of the partnership with the potential for us to get back in maybe two years down the line as we evaluate the progress both of the program, as well as of the market. But for now, we will focus on the once-a-week GLP-1 efpeglenatide, which makes more strategic sense for us and evaluate the development path, if you will, of the other components of the partnership, which led them to what you heard from Jérôme about the splitting of the upfront with half of it coming back to us and half of it staying in the partnership to accelerate efpeglenatide.

Thank you very much, Elias. Next please?

Next question comes from the line of Jeffrey Holford of Jefferies. Please go ahead.

Hi, thanks very much for taking my questions. Just two sort of slightly longer-term questions. I mean, Novo Nordisk were referencing the political uncertainty which made them broaden their guidance range the other day. And I'm just wondering how you think about your business over the mid-term related to Medicare and your levels of exposure over the mid-term, just how much visibility or lack of visibility do you think you have there? And then a second question about the mid-term. Obviously, part of the plan was built around successful Praluent and dengue launches, both of these look like they might fall below your original expectations in the mid-term. Have you seen other positive developments within the pipeline or within the business that can help to offset those in the context of the mid-term guidance that you gave during 2018 to 2020 previously? Thank you.

All right. So your question just the first one I think is related to the potential impact with the change in dual eligible have on Sanofi. We have a decreasing exposure to any potential changes to pricing, right, residual eligible patient population. And we estimate that in 2018, for instance, our exposure, if there was a change in policy there would be around €0.5 billion – €500 million to company sales, which would represent only 1% to 2% of our sales base. So that's the question. The second question is related to offset to mid-term guidance. Jérôme, do you want to answer that question? Jérôme Contamine - Sanofi: Jeff, you referred to the guidance that we would return to growth and that from 2018 onwards we would be more in the mid single-digit range when it comes to top line and bottom line. I think, I mean, of course, I mean this is partly driven by what is going to come from the products we just launched recently. It's also going to come from the development of our overall business, I mean we can count, I mean, as an example, I mean, look at vaccine, I mean we posted 8.8% top line growth with basically no sales or very little sales from dengue and the return to full supply of Pentacel is also a favorable dynamic for our vaccine business. I mean Sanofi Genzyme, I mean, continued to post a strong double-digit quarter-after-quarter, CHC which we did not really figure out, when we gave this guidance back in 2015, I mean, we believe, I mean we should be able to deliver growth which will be at least (67:30) the market or let's say mid single-digit. So altogether, I mean the launches is one thing which really count for the 2020 guidance, but that was definitely not the only one. At the size of Sanofi when clearly, I mean, beyond 2020, we feel that this will be a significant contributor. We also discussed about sotagliflozin, we discussed about the CD38 as well which of course, we can't make comment at the end of the guide. So altogether, we don't see more or less planning, significant change versus what we guided for one year ago despite of the environment and clearly working around the subjective. And of course, dupi is a key element and, I mean, under the control of Elias it's clear that the positive evolution of those results on the various indications, I mean would clearly help us to drive growth. Maybe, Elias, you want to...

Yeah, Elias, you should give a little bit details around the lifecycle planning on dupi, because that's a very key component of the answer here.

Yeah. I'd like first to make a comment, on your comment about Praluent. And to me, actually the prospects and the potential of Praluent have increased with the data on the outcome and we expect the same for Praluent, obviously it is our subject to the legal proceedings, but I can tell you I'm very confident that in my view, the patent we're disputing is invalid, and we'll see that obviously and we'll see how that happens. But I think in terms of the pipeline, I mean, this year, we have three launches, Soliqua, you heard about, Kevzara, obviously subject to the – let's say inspections being positive, but I'll remain confident that dupi will launch March 29 of this year of the PDUFA date. What's really important is that dupi is not a single drug for a single indication, it's really a pipeline in itself. We've already expanded the trials around atopic dermatitis to the pediatric population that is the most impacted as well. We're going to focus on severe patients. There is no question we did not want to get into an issue of payer resistance, because of widespread indications. Dupi, we have completed the Phase 3s in asthma and we're going to complete the recruitment and going to submit that at the end of this year. We've started the studies in nasal polyposis. So, I think in the mid-term, in the next two years or three years, you're going to see a huge drive from the three main indications of dupi, sarilumab and/or Kevzara has shown superiority in monotherapy. We think it will also drive growth. I will just point out if you look at last year and this year, the contribution of new products since 2013 has significantly supported the company to the tune of about €3.2 billion in 2016 and we hope that the momentum as Jérôme said will continue around the near-term pipeline. We're happy to talk to you about the mid and early pipeline at some other time.

Okay. Thank you very much.

Thank you very much.

Thank you. Next please?

The next question comes from the line of Keyur Parekh of Goldman Sachs. Please go ahead.

Good afternoon and thank you for taking my questions. The first one is on M&A and Olivier thank you for taking us through the – kind of your thought process. My question perhaps more provocatively is, given asset pricing that you see around you, do you think you can meet those hurdles? And if that is unlikely to be the case then how should we think about second-degree kind of capital allocation priorities from your perspective? Will stock buyback be higher on the list in increasing dividend or will it be the other way around? And then, secondly, on your pipeline asset for the SGLT-2 that you take into Phase 3, your peers now are kind of suggesting that lowering glucose is no longer going to be good enough for a new diabetes product and that you would likely need to have hard outcomes from a CV perspective. Should we think about you doing a CV study for sotagliflozin kind of pre-approval, or should we think of it as post-approval? Thank you.

All right. Thank you, Keyur. Good questions. SGLT-2, are you going to answer the question? Yeah? You want to start with that?

Yeah. I'll address the SGLT-1, SGLT-2 question, obviously you're right. The glucose control is not as much of a challenge than it used to be. Although, remember, 50% of patients still do not get to their control. However, I think in terms of the SGLT-1 and SGLT-2 class, what we believe in is the fact that we have a very significant effect on blood pressure and if you remember, the main driver of cardiovascular morbidity or mortality is actually blood pressures. The strongest indicator for a better outcome. So, we are going to conduct outcome studies and cardiovascular studies in a proper way and time for the launch to have the information available to us, hopefully at launch or right after launch. So fundamentally, the answer to your question is, yes, we do believe that vascular benefit are going to become a major differentiation driver.

To your first question, I don't think we have a different view as of today, because of our experience earlier last year of our capital allocation order, if you want, or priorities. Yes you're right, it is usually very competitive, but as you know ultimately, it's a value to shareholder, is also very much based on synergies and of course, you are in a different situation vis-à-vis those synergies depending of specific target. So, without giving you much more on that one, I think that drives ultimately whether or not you are winning the competition, right. So, with that in mind, I don't think we'll change our capital allocation which all along, at least since I've been here, we've said would be for organic investment, and acquisitions as number two, of course dividend remain very important aspect of our allocation, and then stock repurchase. So, without getting much more in detail, I think that answer your question.

All right. So, thank you. Shall we move to Jo, Jo Walton [Credit Suisse]?

Jo, please go ahead. Jo Walton - Credit Suisse Securities (Europe) Ltd.: Thank you. On Praluent, the PDUFA date for the monthly dose passed in January without a comment from either yourselves or Regeneron. I wonder if you could update us on how you feel that is going? And secondly, could you tell us – give us some help on how we should look at the early launch ramp for your new drugs, particularly dupilumab but also perhaps sarilumab? Would the Cosentyx type of launch be a reasonable one for us to benchmark you against, or how are you thinking about that? We tend to think of this as being a product that is not so much for the Medicare market, a more commercial market should be easier to get an uptake, but of course you are building a market rather than entering an existing market with a better drug. So, I wonder if you could just help us. The consensus expectations seem to be around about €190 million or €200 million in the first year for dupilumab. And I just wonder if you could help us frame that much better?

Okay, Jo. I'm not sure we can give you our forecast for dupilumab for the year, but we're going to try to guide you. So, dupilumab, David has a very clear idea around the comparison you are making with Cosentyx. So, David, do you want to answer the question?

Yeah. No, I think Jo, I think you answered the question yourself in a way. Cosentyx, I think, is certainly one metric. We will be targeting the physician, 7,000 dermatologists in the U.S. who had experience with biologics, specifically in the treatment of psoriasis, and so that is a good entry point. Number one, your comment that this, unlike psoriasis perhaps, which is more organized market at the time of launch. This is a market that needs to be built. Many of these patients are outside the system. They've given up hope to a certain extent, and so a little bit of an unusual way, although the numbers are large. It's not a rare disease population, it has certain elements which are analogous to the rare disease worlds that we live in. That said, the level of awareness here is extremely high. You go to the major dermatologic meetings, the prominence of dupilumab, the therapy, the excitement around the Stage 2 strategy is extremely high, so a high level of awareness. I think within the patient population, early activity, social networks and the like, suggest reasonably strong awareness in the patient community as well. So there may be also factors which are unlike psoriasis, so I'll leave it there. As Olivier said, we're not going to guide you to a more specific number, but it's not an unreasonable benchmark, but there's certainly some distinguishing factors for atopic dermatitis.

Thank you very much, David. On the Praluent 300 milligram monthly dose, I think, Elias...

Yeah. Really quickly, the 300 milligram monthly dose was approved in Europe in November. The FDA asked for additional information, which we provided, and then they consider that a major amendment, so that the PDUFA date was pushed back by three months.

Okay. Thank you, Elias. Jo Walton - Credit Suisse Securities (Europe) Ltd.: Thank you very much.

Thank you, Jo. Next question, please?

The next question comes from the line of David Evans of Kepler Cheuvreux. Please go ahead.

Thanks very much. Yes, two questions. One on your cost lines, second on your Diabetes business. So, first, given your cost structure clearly came in lower in 2016 than you originally planned, can you just talk through exactly where these savings actually came from, especially how did the gross margin in the end come in so much better than you planned? And really, do those trends continue into 2017, or was it very much one-off savings in 2016? Secondly, on your insulin business, I assume there wasn't any stocking or rebate reversals or anything in Q4 for Lantus or Toujeo. But even factoring in a very low Q4 2015 base, it looks like U.S. net price in that case was much less negative than we would have expected. Is there a stabilization of rebates and discounts? Is it fair to assume that negative U.S. net price impacts on that business will be in the single digits in 2017, or is it certain to be in double-digit range? Thanks very much.

Okay. Good. So, Jérôme, the cost line, savings 2016 and versus 2017. And then Peter, Diabetes and U.S. net price during Q4. Jérôme Contamine - Sanofi: Yeah. So thank you for the question and I'll try to answer. So, when it come to the savings. Altogether, as you've seen, we have confirmed that in our saving tracking, we have saved €650 million in 2016, it comes both from gross margin savings, i.e., productivity from our manufacturing networks, more efficiency from our plants, focus on the most productive plants. It comes as well from the savings coming from our structure, trimming down our structure in connection with the new global BU organization that we have put in place. And third, it has started to come from some reallocation and better use of our investment behind where we want to invest. So that would be my first answer. When it comes to the two first categories, they will clearly go into 2017. The savings we've generated into our manufacturing organization, as well as the savings we've generated into our overall infrastructure, will be applicable and be recurring savings in 2017. And this is what drives the amount, the savings we have guided you for in 2017, where we said that we could get up to €1.3 billion savings from €650 million, plus an additional €650 million, which will be actually (1:21:59) annual impact of what we have put in place over the year 2016, but also explain back that we have a plan that we have already launched. So the rest clearly is more around prioritization on allocation of investment, and clearly I mean, when we are saving investments, for instance, we are in products which are getting off pattern or which tend to be require less support, we're reallocating that to new investments. So try to help you understand how we handle that, the outcome clearly has been that both in 2016 and 2017, as we said, we plan to reinvest a significant part of these savings, but not everything and we are going to be very – pay a lot of attention on how we invest the savings behind either the products or the R&D investments we want to develop in 2017. And this what guided us to a – this led to the guidance I gave to you, which is that in 2017 we expect overall OpEx to grow as a same level as 2016 i.e. around 2.5%, 2.6%.

Okay. Well, very good. Thank you. Thank you, Jérôme. Peter?

Yeah. So, you remember that in the Q4 2015 and we also flagged that there was some significant Medicaid back bills, and of course the comparison base Q4 2016 versus Q4 2015 therefore becomes more favorable. So to answer your question, this does not flag any improvement on the contrary on fundamental pricing dynamics in the U.S., it's clear that with the launch of the first follow on biologic of Lantus, it's more the opposite. So relatively good performance in 2016 fourth quarter has two reasons. Number one, the favorable comparison Q4 2015, but obviously also the very good Toujeo performance in the Q4 2016.

Okay. Thank you, Peter.

Okay. Thank you.

All right. I think we – I have to go to the last question, because we're close to the half hour here. So, last question please?

Last question comes from the line of Philippe Lanone of Natixis. Please go ahead.

Good afternoon. Thank you for the question. One for Alan Main on OTC. I wonder whether the BI business had seen the same uptake we have seen in Q4 for the Sanofi business, and also if Russia is continuing to recover in the beginning of the year? So whether you will see already in 2017 for the whole business the kind of growth that Jérôme is mentioning for the future like 4% or 5%? And one small one for Elias on the GLP-1, because it was developed as a weekly and monthly administration. I wondered whether with the shift in timing we still will have some monthly administration in the Phase 3?

Okay. Thank you, Philippe. So Alan?

Yes. Philippe, thanks for the question. On the BI numbers, we don't yet have the full data, we're just in the middle of bringing across the books and records from the BI transaction. During the process, when I was analyzing that, at a top-line level though, the BI business did well in 2016, it was finished around €1.5 billion. So, we believe that they also had a positive fourth quarter. Of course, obviously with the transaction, we have to look at that in a little bit more detail which we're doing at the moment. But I think overall the momentum is positive. Obviously, as Jérôme mentioned, the guidance was more in the mid-term, so that's the 2018 and beyond guidance. 2017 clearly being an integration year, but we do have positive momentum on both the BI portfolios. We had an early start to the cough/cold season in France and Germany, not necessarily yet to consider, therefore a strong season, we have to see how the next couple of months go, but overall it seems to a positive start.

All right. Thank you. Thank you, Alan. Elias?

Yes, very quickly. What I indicated is that we are currently focused on the once-a-week, but not at the exclusion of once-a-month. So, first and foremost, we need to get to once-a-week going and depending on some work that we're doing. Currently, as I've told you, we're focusing on that, and once-a-month may or may not, I cannot answer at this moment, since I don't have some of the data that would be needed. So yes, once-a-week is our focus, once-a-month is still in our sight, but I can't tell you exactly if it will be a Phase 3 or not.

Thank you, Elias.

Okay. With that, it concludes our call. Thank you very much for asking good questions and attending. Thank you everyone.

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