Sanofi (SNY) Q4 2017 Earnings Report, Transcript and Summary

Good afternoon, good morning. Welcome to the Sanofi Q4 and Full Year 2017 Earnings Results Conference Call and Live Web cast. 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. [Operator Instructions]. 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, good afternoon to everyone on the call. Thank you for joining us to review Sanofi's fourth quarter and full year results. As usual, you can find the slides of this call on the Investor's page of our web site 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 today. With me are Olivier Brandicourt, Chief Executive Officer; Elias Zerhouni, President, Global R&D; and Jérôme Contamine, Executive Vice President and Chief Financial Officer. Also joining us for the Q&A session are Olivier Charmeil, Executive Vice President, General Medicines and Emerging Markets; Karen Linehan, Executive Vice President, Legal Affairs and General Counsel; David Loew, Executive Vice President, Sanofi Pasteur; and Alan Main, Executive Vice President, Consumer Healthcare; Stefan Oelrich, Executive Vice President, Diabetes & Cardiovascular; and Bill Sibold, Executive Vice President, Sanofi Genzyme. First, Olivier will discuss the key highlights, then Elias will provide an update on our efforts to sustained innovation. Lastly, Jérôme will review Sanofi's financial results, before we open the call to Q&A. As in the previous three quarters, we will refer to sales growth at both constant exchange rate and constant structure, in order to facilitate comparisons on a like-to-like basis. With that, I'd like to turn the call over to Olivier.

Thank you, George. Good morning, good afternoon to everyone. Welcome to our fourth quarter and full year earnings conference call. On slide 5, before I discuss 2017 performance, I want to take a couple of minutes to step back and review our recent achievements, as we focus on the strategy transformation of Sanofi. In terms of reshaping the portfolio, we just announced the acquisition of Bioverativ and Ablynx, two important new members, which will become part of the Sanofi family soon, subject to completion of these acquisitions. This will strengthen our leadership in rare diseases, especially in rare blood disorders. I will return to this shortly. We also expect to sign definitive agreements for our EU Generics business in the third quarter, and we recently expanded our vaccines GBU through business development. When we think about launchers, we have been candid that several are progressing more slowly than anticipated. On the other hand, we are delighted with the rollout of our new immunology franchise, especially Dupixent, which has exceeded our expectations. In terms of simplification, we have delivered €1.5 billion of savings we promised, and we have gained global rights to fitusiran, further supporting our aim of leadership in rare blood disorders. When it comes to innovation, you have heard about the transformation of our R&D organization on our Sustaining Innovation Day in December. Since then, we have scaled up our investments in cemiplimab and dupilumab to reflect the commercial opportunities. And looking ahead, the acquisitions of Bioverativ and Ablynx will internalize the promising late stage rare disease assets, and a proven discovery engine in the Nanobody platform. Overall, we are pleased with the steps we have taken to reposition and strengthen the company. Turning to the Bioverativ and Ablynx deals, I do want to stress that we have maintained our financial discipline in our approach to M&A. In particular, we expect both deals to deliver returns above our cost of capital within three years, and we expect Bioverativ to be immediately accretive to earnings. So we remain consistent with the guiding criteria you have heard us state over many quarters. Slide 7; in a series of three strategic actions in less than a month, we believe we are well on our way to building leading rare blood disorder franchise. As you know, Bioverativ will bring to Sanofi a readymade, strong franchise in the $10 billion hemophilia market. However, we are looking at this acquisition more broadly as a platform for expansion in rare blood disorders. Ablynx will be an important element of this strategy. In the near term, it will enhance our portfolio, through caplacizumab, which we expect to be approved this year as a first treatment for acquired TTP. When looking further down the line, if we think about adding in fitusiran along with earlier stage assets from Bioverativ, Ablynx and Sanofi, you can see why we think this is a great opportunity to build a sustainable leadership position in rare blood disorders. Slide 8; of course, our interest in Ablynx extends far beyond one rare disease asset. As you heard at our Sustaining Innovation day, we have transformed our approach to R&D, based on a strategic shift towards biologics, multi-targeting and proprietary platforms. Ablynx ticks all three of these boxes, and in particular, it is already a core element of our multi-targeting strategy through our Nanobody partnership in a range of immunoinflammatory diseases. Nanobodies are biologics which combine the specificity of antibodies, with many of the advantages of small molecules. Being able to access this unique technology platform, by bringing it fully in-house, will clearly strengthen our discovery and development efforts. Turning to the financials; on a full year basis, Sanofi delivered 2017 results, which were in line with our guidance, in spite of a challenging fourth quarter. At constant exchange rates and constant structure, our sales grew by 0.5% to €35 billion. At CER, our business EPS was broadly stable at €5.64 despite the €0.10 impact of the Dengvaxia charge. As you know, changes in structure had a distorting effect on our sales growth in 2017. If we adjust for this, then our sales growth in CER and a constant structure, would have been 0.5%, in other words, we delivered stable sales and even achieved slight growth, despite the expected decline in our U.S. diabetes and similar American franchises.. This was clearly helped by the roughly €0.5 billion in incremental new launch sales. Turning to the fourth quarter, here you can see the sales picture across our five GBUs. The highlight was a continued double digit growth in Sanofi Genzyme. Our Vaccines business only grew by about 1%, for reasons that we will discuss later. But as expected, we saw declines in DCV and GEM reflecting losses of exclusivity. Turning to slide 12; we are now looking at sales by franchise and geography in Q4. Our performance in developed markets was similar to the first nine months, with the growth of Sanofi Genzyme and Vaccines being more than offset by the pressures on our diabetes and established product franchises. For emerging markets however, fourth quarter growth of 2% was slower than in previous quarters, mainly as a result of the decline in vaccine sales, and this was in part due to the Dengvaxia label update. For our specialty care franchise on slide 13, sales grew by 16.5% in the quarter and 14.5% for the year. The main drivers were Dupixent which delivered sales of €118 million in the quarter, and double digit growth in our multiple sclerosis franchise. We also saw good progress from Kevzara, our other immunology asset, and a strong quarter in rare disease, which ended the year with fourth quarter growth of 8%. Our MS franchise continued to grow, despite increased U.S. competition, and here, the 11% fourth quarter growth was entirely driven by Aubagio, where as Lemtrada was stable. Before I move on from specialty care, I would like to say a few words about the global rollout of Dupixent. You have seen from the fourth quarter sales, that Dupixent is performing strongly in the U.S., more than 33,000 patients have now been prescribed this groundbreaking medicine, and our goal in 2018 is to strengthen our message in the U.S. with prescriber, but also with consumers through DTC. Outside the U.S., we launched Dupixent in three European countries, including Germany, in 2018, where we launched across the west of Europe, as well as Japan and select emerging markets. So we have a very busy year ahead with Dupixent in atopic dermatitis. Furthermore, we believe we have the best-in-class profile of any biologic in asthma, we filed a BLA and we are now engaged in pre-launch activities with specialists. We are looking forward to bringing this important new treatment option to market in the fourth quarter. Turning to vaccine; fourth quarter sales grew by 1.2%, but went up 8.3% for the year. A number of factors affected the Q4 performance. On the negative side, as we had signaled the phasing of CDC orders of Menactra and the high base for comparison of Pentacel in the U.S. had an adverse impact. Sales for the pediatric combination family were flat, as strong performances in Europe and China were offset by a timing impact for tenders in the emerging markets. Of course, what we did not foresee was the label update for Dengvaxia. This resulted in negative revenues for Dengvaxia in the quarter, which in turn, lowered our overall vaccine sales growth by 2%. Offsetting this impact, we delivered strong performance in flu vaccines, with sales up 21%. This was driven by endemic purchases in the U.S. and by the launch of VaxigripTetra in Europe. With the help of a strong flu performance, our European vaccines business continued its trend of accelerated growth, with sales up 38%. Now, looking to 2018, I want to make you aware that vaccine sales during the first half are expected to be lower than last year. This will be mostly related to a testing issue for Pentaxim in China and the phasing of Menactra orders. Please keep in mind however, that sales in the first half of the year for vaccines are typically lower than the second half, given the seasonality of the flu franchise. On slide 16; sales of our global diabetes franchise declined 16% in the fourth quarter and 11% for the year. This was in line with our expectations and reflected the high base for comparison in the U.S., that we had signaled for the quarter. U.S. diabetes sales declined by 30% in the quarter, which compares with 20% in the first nine months. This more than offset good growth in emerging markets, which now account for nearly a quarter of our global diabetes sales and a slight increase also in Europe. Despite the tough backdrop, we continue to make progress with Toujeo, which achieved full year sales of over €800 million and continued to gain share globally. Now when we look at the early part of 2018, U.S. trends in diabetes are in line with our expectations and consistent with the payor coverage update we provided in November. In particular, we are seeing the expected impact of the loss of some coverage in Medicare Part D since January 1st. Switching to Praluent, quarterly sales exceeded €50 million. Of course, we are eagerly awaiting the top line results from ODYSSEY OUTCOMES, which we expect soon and will present as Late Breaker at ACC, with a slot reserved on March 10. Turning to our CHC business; sales grew by 2.5% in the fourth quarter and 2.1% in the year. We were pleased to see a pickup in growth in the fourth quarter in the U.S. and Europe, following the quarters that were impacted by seasonal factors. Growth in Europe was especially strong, held by a strong cough and cold season. On the other hand, after several quarters of improved performance, our CHC business in emerging markets declined slightly. This was impacted by lower sales in Russia, largely from a change in the distribution agreement with the third party. On my final slide, our emerging markets business remained a key driver, with sales up 6% for the year. As I mentioned earlier, our performance in the fourth quarter was somewhat weaker, due to vaccines. However, China remained a strong double digit growth driver. And with that, I'd like to hand over to Elias.

Well thank you, Olivier. It's a real pleasure to be here and to have the opportunity to update you all on our recent developments and how these developments are helping to build our innovation engine. So first, I'd like to start with Ablynx, if it wasn't very clear on the call, a couple of weeks back, I want to really tell you how much we value the acquisition of Ablynx and how impressed we are by the Nanobody technology and what this will bring to our discovery and development capabilities, as mentioned by Olivier. For those of you who are less familiar, this is a very unique platform, which allows the efficient development of highly specific biologic agents, which can be readily customized to hit two, three or more targets inside a single pathway. And unlike traditional antibodies, they share some of the beneficial characteristics in small molecules, which include the ability to hit tough targets, such as ion channels, and they have the potential also to be delivered by different routes, such as inhaled or topical routes. It's also important to note that this technology is derisked to a large degree, with over 45 programs underway, eight of which are in clinical trials, and more than 2,000 patients and volunteers exposed to treatment. So we were already actually attracted by this platform, to have worked with Ablynx since 2015 in MS, and to have signed a broad Nanobody collaboration in immunoinflammation in 2017. So it's fair to say that we know the technology quite well, and we know what it can bring to Sanofi, and as mentioned by Olivier, it is right in line with the transformed strategy that we have put in place of biologics, proprietary platforms and multi-targeting capabilities in novel molecules. I also want to say a few words about caplacizumab. As you heard from Olivier, we are trying to build a rare hematology disorder franchise, and this slide here shows the results of the recent HERCULES Phase 3 study of caplacizumab in patients with acute Thrombotic Thrombocytopenic Purpura, which is a disease that prevents platelets from being able to do their job and actually aggregates the platelets to the point where you have microthrombi throughout the body with a 20% mortality rate. And it tells you why this is such a promising asset. As you can see, blood platelets in this sick group of patients rapidly return to normal. With caplacizumab and the active group sparring much better than placebo across the range of relevant secondary endpoints. By including recurrence rates, days in the ICU and the hospital and especially requirements for plasma exchange, which is the only effective form of therapy today. We think the data is very compelling, especially set against the high unmet need in this potentially life threatening rare clotting disorder. As a consequence, we are confident, caplacizumab will be the first drug to be approved for aTTP, potentially in Europe in 2018 and in the U.S. next year. As Olivier said, this drug should fit in very nicely along Bioverativ's hemophilia franchise. Speaking of Bioverativ, Olivier already explained how this provides the platform to expand in rare blood disorders. But from the R&D perspective, we believe it has a number of very attractive assets in development as well. In its current field of expertise, Bioverativ is utilizing a promising peptide linker technology known as XTEN to build on its success with Eloctate and Alprolix and further lengthen the time of efficacy of the Eloctate and Alprolix molecules, and therefore reduce the dose frequency, which is a very valuable aspect of therapy in hemophilia. The need here is greatest in hemophilia; A, where extended half-life factors are currently given twice weekly and the aim is to get to once weekly dosing or less. Another particularly interesting asset is Bioverativ 009 which is in Phase 3. Recall that Agglutinin Disease and autoimmune anemia and by modulating the complement cascade, this may be the first treatment for this potentially serious disorder, which is reflected in its FDA breakthrough therapy designation. At earlier stages, Bioverativ has access to novel gene editing technology through its alliance with Sangamo, and this opens the ability and puts it at the forefront of cell therapy for two important genetic disorders; sickle cell anemia and beta thalassaemia. Both are characterized by abnormalities in red blood cell production, and this technology could help restore normal function to these patients. Switching gears now to our programs with Regeneron in oncology and immunology, we recently announced a major scale-up in the combined investment efforts behind our PD-1 cemiplimab and this followed the positive results of the pivotal study in Cutaneous Squamous Cell Carcinoma, and was based on our assessment of the opportunity across a range of tumor types, including non-small cell lung cancer. And in addition, we and Regeneron announced an acceleration of our program with dupilumab, Dupixent in COPD in certain allergic disorders, together with an expression of the program for a complementary IL33 antibody. Each of these investment decisions was based on the strength of the clinical data we are seeing with these assets. On my final slide, I want to signal some important upcoming milestones, in what would be a very busy year for our R&D organization. We are planning over 15 new pivotal Phase 3 studies this year, and so you can see -- you can expect to see a number of important milestones or regulatory submissions, including for our oncology assets, cemiplimab, and our CD38 Isatuximab, as well as Sotagliflozin in Type-1 diabetes, the U.S. timing of caplacizumab. In addition, we plan to submit important label extensions for dupilumab and Praluent and the latter obviously will be based on the ODYSSEY OUTCOMES as mentioned by Olivier. So with that, I'd like to hand it over to Jérôme. Jérôme Contamine: So thank you, Elias, and good morning and good afternoon, everyone. I'm going now to Slide 26; and before discussing the details of the PNL, I would like to highlight and comment on the impact of FX on our reported fourth quarter figures. So in total, currency movements reduced reported sales by 6.1%, or €539 million, on reported business EPS by 6.4%, or €0.08 per share. This clearly resulted also in an overall adverse effect impact on both sales and business EPS for the full year of approximately 2%. Now I move to slide 27, looking at the P&L on a reported basis. Sales in the fourth quarter were €6.7 billion, representing 4.1% CER growth. As in the previous quarters, we faced headwind from the loss of Animal Health contribution. In addition, Dengvaxia label update impacted our business operating income by €158 million in the fourth quarter. Against this, we benefited from a substantial reduction in the Q4 effective tax rate to adjust to a full year rate of 23.5%. These impacts resulted in business net income declining 10.8% at CER in the quarter to €1.3 billion, with business EPS down 8.8% to €1.06, helped by share repurchases. If we add back the €0.10 Dengvaxia charge, business EPS would have been broadly stable. On the subject of tax, when we look to 2018, the impact of tax legislation changes, especially in the U.S., will allow us to lower our expected effective tax rate for the year -- I mean, the year 2018, to around 22%. Now I move to slide 28; here you see our P&L at CER on constant structure in the first quarter. Our gross profit declined at a faster rate than sales, as the benefit of efficiency savings of Specialty Care growth was more than offset by charges associated with Dengvaxia. And the accelerated decline in U.S. Diabetes on sevelamer. At the BOI level, there were some offset from the Regeneron contribution in the associated line, which is now becoming a meaningful driver. Overall though, with continued investment behind immunology launches on priority-only programs, we were unable to achieve the operating leverage we saw in the first nine months. Looking forward, to help you in your modeling for 2018, on the full year basis, on a CER at constant exchange rate, we expect the gross margin to be between 70% and 71% as compared with 70.6% in 2017. Regarding R&D on SG&A, we expect the total i.e., the total operating expenses to grow between 3% and 4%, this includes the acquisitions of Bioverativ and Ablynx, and their impact in 2018 and of course, it was not in the 2017 figure. Also, this increase is mostly driven by R&D expenses increase, which is definitely in line with what Elias has presented before, as well as Olivier, in combination with our internal program plus the contribution of the two acquisitions. On slide 30, I would like to note that in a challenging year, Sanofi met all of its 2017 financial performance objectives. Despite the challenges we faced, we delivered our business EPS guidance for the year, and we met the high end of our initial guidance. I now turn to next slide, our board is proposing an annual dividend of €3.03, which represents a 2% increase of the 24th consecutive year that Sanofi has increased its dividend. Our productive dividend policy remains an important part of our value proposition to shareholders, based on the average share price last month. Proposed dividend implies a 4.2% dividend year. In the past year, including buybacks, we returned €5.5 billion to shareholders, while still maintaining a strong balance sheet. I should also point out, that following the recent acquisition announcements, our credit ratings of AA by Standard and Poors and A1 by Moody's, have both been reaffirmed. On my final two slides, I want to set the scene for the coming year. When we think about our sales performance in 2018, a number of headwinds are likely to impact the first half, despite the expected strong performance on Dupixent. As Olivier mentioned, vaccine sales are likely to decline in the first half, as a result of order phasing and Pentaxim sales, particularly in China. In addition, in the U.S., we are facing generalization of sevelamer, which we didn't have in the first half of last year. In Diabetes, as we noted in the third quarter, we will manage some expected loss of coverage in our Part D business, and a continued decline in average net prices, which will persist throughout the year. As you know, last quarter, we refined our 2015 to 2018 Diabetes sales outlook to -6% to -8%, and we are in the final year of this period. For your modeling consideration, the midpoint of this outlook would imply a decline in 2018 of around 9% at CER. By the second half however, we expect some of these factors to analyze and to be more than offset by positive drivers. Clearly, in addition to Dupixent, the consideration of Bioverativ and the impact of new launches such as Flublok, Kevzara and Admelog will be important. We also await the results of the ODYSSEY OUTCOMES study, which could provide an upside opportunity for Praluent. What this means, we expect the second half bias to our growth during 2018. Now turning to the outlook for the year as a whole; in 2018, we expect to grow business EPS by between 2% and 5% at constant exchange rate. For the reasons I just outlined, we should assume that this growth will be weighted to the second half. In terms of FX, based on December 2017 exchange rates, the impact on business EPS is expected to be -3% to -4%. However, given the volatility we are seeing in the currency markets in general, the FX impact could be closer to -8% in the first quarter at present exchange rates. This impact should of course fade away in the following quarters. I would now like to turn the call back to Olivier.

Well, thank you Jérôme. So to summarize against a challenging backdrop, we worked hard in 2017 to create value by executing on our strategic transformation. We delivered on all of our financial objectives, despite expected and unexpected challenges. We successfully launched a new immunology franchise led by Dupixent. We made good progress with our pipeline and in advancing our research capabilities, as you heard at our R&D day. And finally through our recently announced acquisitions, we will have a strong position in rare blood disorders, which we expect to create long term value for our shareholders. So with that, I'd like to hand over to George to start the Q&A.

Thank you, Olivier. We will now open the call to your questions. And as reminder, we'd like to ask you to limit your questions to two each.

[Operator Instructions]. First question comes from the line of Mr. Meunier with Morgan Stanley. Please go ahead.

Good afternoon. Thank you for taking my question. The first question is on the capital allocation in the context of the recent deals. Do you have any interest in making more biotech acquisitions, or do you prefer now other options like acquiring assets in other areas, like consumer? Or focusing on the integration of these two assets? And can you also make a few comments on the integration of the research units in Belgium and the U.S.? And I have also a question on the 2018 guidance, is it possible for you to give the guidance excluding the Bioverativ and Ablynx deals? Thank you.

Thank you very much, Francois. So capital allocation, you may remember that we had given ourselves a global envelope for inorganic growth of about €20 billion, and that was for old bolt-ons, and we have achieved with these two acquisition, about €13 billion that tells you, that we have still eventually some funding to eventually get new opportunities. I will not make any specific comment on CHC. As you know, CHC is one of our GBUs. We have already done a deal with our swap in 2016, and it remains again, a very important business for us, and we continue to look at potential opportunities, but I won't go beyond that. We have consistently communicated that our priority in term of allocation will be -- and use of our free cash flow would be organic investments, acquisition, as we just described, dividend and stock repurchase. And again, as we have demonstrated over the last several years, we have and Jérôme mentioned it, share buybacks has been very important of our capital allocation strategy, since we have repurchased about €5 billion in the last two years. So that's about capital allocation. Your next question, maybe Elias, you want to talk about situation of R&D from a linked --?

As you know that, we have developed a bit of good expertise in integration, as you have seen with Genzyme. At the current time, obviously, our focus on closing the transaction. So can't comment on all the specifics of the integration, as we are going through it. However, you should note that, we have over 900 employees in Belgium. We have facilities there in manufacturing, so we are really hoping to preserve actually, the effectiveness of these organizations, Bioverativ is located in Boston, in Waltham. So we do, obviously, want to preserve the effectiveness of these organizations as we have in the past. But integration topics will be taken out later in the year.

Okay. And on your question on the guidance, I am going to ask Jérôme to answer. Jérôme Contamine: Yes thank you Olivier, and thank you Francois for your question. So actually, as you understood, I mean, we already gave you the true information, I think. The first is that, Bioverativ, we assume it could be accretive, as early as 2018. The magnitude of this accretion will depend upon the exact timing of the closing of the transaction, as well as our pace of integration and of course, I mean, the details and what we could decide to do or not do, when it comes to Bioverativ, for instance in R&D, Elias described that. So we may revise on what -- the R&D plan here. On Ablynx as well, I mean, this will clearly depend upon the integration of closing timing, which as you know is planned for Q2. I also gave you a few guidelines here in this call, which is A, on the gross margin, where we expect the gross margin to stay between 70% and 71% at constant exchange rate, and this compared to 76% for 2017. Obviously, it includes these acquisitions. Obviously as well, you could say that Ablynx as such will not be a contributor in the gross margin for obvious reasons, or very marginally, we -- when capitalized, is just being launched that I would say, it should not impact very much our figures in 2018. And the last thing I tried to really give guidance on, is on the OpEx line, and I think I said that -- and we said that, although R&D plus SG&A line should go together, with the inclusion of this acquisition could be between 3% and 4%, and it's difficult to be more precise here. And this includes upon the basis where we are, the contribution of the acquisitions. Of course, I mean, as you understood, the bulk of this increase, this could be weighted towards R&D, both in connection with program that Elias has described, including our accelerated investment with our partner, Regeneron, and cemiplimab, as well as for the lifecycle management and development on Dupixent/Dupilumab and on the IL33. And so that's maybe what you should have in mind, of course it includes also, expenses from Ablynx as an example, which clearly will be mainly around the expenses. Last, it's difficult to go into more detail, because as a matter of fact, if I take my tax rate, while I take interest rate charges. I mean, at the end of the day, it's a combination, and this combination results in the guidance that we have given to you.

Okay then. Jérôme, thank you very much. Next question.

Thank you.

The next question comes from the line of Peter Verdult with Citi. Please go ahead.

Good morning. It's Peter Verdult from Citi. Two questions for Olivier or Bill; firstly, on the MS franchise, on Aubagio, can you give any more details as to the settlement with the generic companies? Should we assume that we should see Aubagio generics some way, midway between 30-month stay in 2020 and the first patent expiring in 2026. And then on Lemtrada, do you think that franchise can grow going forward, and is the impact purely [indiscernible] or are you also seeing an impact from Mavenclad in Europe. And I realize that's two questions, I will leave it there. Thank you.

Thank you very much, Peter. It happens that Karen Linehan, our General Counsel is with us. So she will answer the first question on Aubagio, and Bill, you will answer the Lemtrada question. So Karen please?

Hey, good morning and afternoon. Thank you for the question. Please recall that we sued all [indiscernible] and we triggered that 30-month stay, which meant that no generic could enter the market before March of 2020. In the U.S., we have settled all those cases. They have been dismissed and the settlement was favorable relative to the end of the 30-month stay. The matter will be updated in our upcoming 20-F.

Okay. So few weeks to have the final answer, Peter. Lemtrada?

Thanks Peter. It's Bill here. So just a couple of context points here. So the high efficacy segment is now the fastest growing segment in multiple sclerosis. We saw that the global shares now, both 12.3% and in the U.S. it's up to 18.7%. So really very strong growth there. And when you think about the revenue growth for Lemtrada, it's impacted by its unique and durable effect of dosing. And the patient base must be essentially replaced every two years. So think about it, you have five infusions in the first year, in consecutive year. You wait a year, you have three infusions, and then you likely don't have any infusions after that. So we are talking about 53 weeks, where a patient is actually generating revenue if you will, and they benefit from that long term effect. So global sales growth was 13.6%. In Europe 18.5% and the U.S. 7.3% on the year, and you see in Q4 in the U.S., sales were down 10%, and that has a lot to do with that unique dosing regimen that I mentioned. Also, we are coming off a very strong Q4 2016, which was buoyed by a strong Q4 2015. So if you recall in 2015, October 2015, we got a permanent Q-code. In the U.S., we had a lot of first infusions in Q4 2015 and Q4 2016, those second courses, those three additional second course infusions took place. So in 2017, those patients are no longer receiving Lemtrada.

Because you have very good clinical -- over a period of how many? Seven years?

Exactly, as we reported out at [indiscernible] last year, the seven year data, where you have around 50% of patients after six years since their last infusion, not receiving anything. So truly, there is a huge benefit to patients and to the systems from a cost perspective over time, and that's why Lemtrada has been considered such a cost effective medication.

Since we are on MS, why don't you talk about Aubagio performance, Bill?

Yeah. So Aubagio was very strong in 2017, patients grew by over 22% and sales grew 23%. And just some context there, Aubagio is ahead on patient market share, ahead of Tecfidera in 31 countries around the world. In Q4, sales were up almost 14% globally, and they were up about 10% in the U.S., and just context in the U.S., TRxs were up about 2% quarter-to-quarter, so from Q3 to Q4; and we had a negative impact of around 4%, due to an inventory decrease. So adjusted, the U.S. growth would have been around 14% in the U.S.

Right. And globally, Aubagio is up what, 23%?

23%, yes.

Okay. All right. Peter, thank you very much. Next please?

Next question comes from the line of Florent Cespedes with Société Générale. Please go ahead.

Good afternoon gentlemen. Thank you very much for taking my questions. Two product related questions please; first, for Bill, on Dupixent; could you share with us the feedback you have from the prelaunch activity on severe asthma, as this market is more crowded than atopic dermatitis. And my second question for Stefan or Elias on Praluent; will you provide an update on the positioning and potential of the drug, when you will have the data publicly available? And my follow-up question is, do you have the data internally already, and when it will -- if it is the case, do you intend to send a press release or do we have to be patient and wait for the ACC Late-Breaking Session Presentation? Thank you.

So thank you very much Florent. I think I can answer the last one. Unfortunately, I think you will have to be patient, and we have a Late Breaker which is already booked on March 10, and that's where we are gearing towards. So that's the answer to the last one. Then I go to Bill, Dupixent. Do you have any insights, Bill, on asthma prelaunch?

Yeah. So we have been working diligently on the prelaunch for asthma. You mentioned that it is a competitive market. We believe that we have a very differentiated product. We have a consistent effect that we have seen on both exacerbations in lung function. The feedback that we have been getting so far from physicians in feedback sessions that we had, is very favorable towards Dupixent. They believe that it does have a differentiated profile. So through the rest of 2018 or as we get into 2018, expecting to launch in the fourth quarter in the U.S., we will continue to build our infrastructure. Our teams will be in place, and will be ready to go, once have approval. We are optimistic about the profile as I said. It is the only product of its class IL4, IL13, with really demonstrated strong effects on two key measures of efficacy.

Thank you very much Bill. Florent, as you heard us at the initiation of this call, we still have very much commitment behind Praluent. I am going to ask Stefan to talk about patient population and positioning and potentially, utilization criteria with payors. If you can draw the picture for Florent please?

Thank you, Olivier. Hi Florent, Stefan here. So first thing, by the way, we don't have the data, okay. So we will not have the data in hand until very shortly before the Late Breaker. So not only you will have to wait, we are waiting as well on the data. Second thing, on the positioning and the potential; so on positioning, we have been already anticipating, obviously our patient population, in line with the ODYSSEY population. So we are going after high risk patients and after FAH patients for the patient population that we target. And we also anticipate that guidelines, if our trial reads positive as we believe, will fall in that direction, because this would be then the second time, that PCSK9 path number would have proven an outcome benefit, which will be class defining later on for guidelines. In terms of our potential, we believe that following the trials, it will further help to improve utilization management criteria, that maybe further listed. We have seen some progress with this following also the Repatha readout from their trial, all over 2017 of about 10% improvement in terms of utilization management criteria, lowering the rejection rates from about 50% to 40%. So we would anticipate, that as our trial reads out positive as we hope, that that will continue. And then in a second step, if we really redefine that class as we expect, we would anticipate end of 2018, beginning of 2019, changes of guidelines, and that change will open a new opportunity to further maximize the potential of this opportunity.

Thank you very much. Elias, do you want to add anything on ODYSSEY OUTCOMES?

No, no, I just wanted to be clear, that we do not have the data in-house. That was Florent's question, and Stefan addressed it.

Okay, all right.

Thank you very much.

Thank you. Next please? Next question?

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

Thanks for taking my question. So firstly, I was hoping you can give us some more line insights [ph] on R&D expenses going forward. And you'd previously guided to €6 billion of spending by 2020, but that was originally given back in 2015 when you still owned Merial. You haven't bid for Bioverativ or Ablynx and the euro/dollar was 1.10, probably 1.20 to 1.24 now. So could you give us an update on that guidance number? Would it include Bioverativ? Should we be adjusting it for currency? And secondly, your guidance for the year is negative -- for 2018. It's negative 3% to 4% FX headwinds December rates. Now clearly euro/dollar is different to December rates and you've given us a feel for what Q1 would look like at spot, but could you help us understand what you think your FX headwind would be for the remainder of the year at these spot FX rates rather than December? And then finally, on your guidance, you look to be in line with current consensus but you've got a 3% boost from lower tax and, on our estimates, about a 3% boost from the acquisitions that weren't in consensus. So that implies you're operationally about 6% below consensus. So can you help us understand, what operating profit margin growth and margin progression is assumed in your guidance? Thank you.

Thank you very much Graham. Jérôme, question two and three, operationally? Jérôme Contamine: Yeah, so on the effects. So hopefully I got your question. So first of all, as you know, we always guide on existing exchange rates because it's hard to guide on non-existent, honestly. It is why, we have decided to guide on the December exchange rates; and we have been systematic doing that. This is why we guided on the -3% to -4%, which is based on the average exchange rate for December. Now, because clearly there have been whole different activity ongoing, as you know, and the U.S. dollar in particular being weaker, the euro being stronger and a few other changes here, we also guided you for the first quarter. For the first quarter, it is fair to say that, if we assume that these exchange rates we have now, let's say from the beginning of the year to mid-February, then we could expect that the impact for the first quarter, would be around -8% versus last year. Of course, if you look forward, if you look at the low exchange rate, for instance, for the dollar versus the euro, which you have in the first quarter of 2017, on a relative basis the impact will be much lower when you go into the coming quarters. So I hope it clarifies and maybe, if not, you can just get your question back [ph]. On the last question, I think that we really tried to be, again, as precise as possible. I mean, you mentioned R&D and Olivier will comment on that. And we make it clear that we think that -- with what we presented at the Innovation Day, and we mentioned the €6 billion, and on top of that comes the Bioverativ as well as the Ablynx program, it's clear that we are heading to the €6 billion plus quicker than plan. Okay. So I think that's where we are, and we also, to help you even more, I mean, we have tried to model the increase of the overall OpEx line, which, if you recall, it was from €15 billion in 2017, so these OpEx lines should grow by 3% to 4% altogether and mostly, mostly coming from R&D. So I think with that, I think it gives you a view of where the R&D line is heading. On the tax rate, well, you know, today we are at 23.5%. This was the outcome of the full-year 2017. So as you know, I mean, in tax, there is a lot of moving pieces across the world. Of course, the most important is the U.S. But I will not minimize the evolution of the tax rate in France either. So altogether from this 23.5%, I mean, we just guided to 22% for 2018, meaning that we gained something like 1.5%. Now, also you could say, when you look at the P&L, because we are doing this acquisition now, in terms [ph] of the charges, while the costs of that will be limited, would not be exactly the same level as where we are in 2017. So, I mean, it's hard to be more precise and as you know, on top of that, the consensus is maybe not really taking into account all the FX changes, which just happened recently. So it's hard for me to get closer on more precise versus what I have, which is the actual exchange rate on the guidance I'm giving to you today to compare with the consensus, which was based from a previous situation, previous tax rate, previous exchange rate, no interest on acquisitions either. So hopefully it helps you to understand where we are.

And just comment on the R&D line, and that the -- so you are saying €6 billion plus by virtue even Ablynx, and should we make an adjustment down on the €6 billion, given what has happened with FX? Or are you saying in absolute terms, in today's FX, you still think in 2020 it would be north of €6 billion on R&D, because of the acquisitions? Jérôme Contamine: Okay. Can you speak about 2020? Maybe Olivier, you want to --?

Well yeah, I think the target of €6 billion comes, maybe slightly earlier than 2020, maybe including the FX impact, because of what we are getting from Ablynx and Bioverativ, and also, the investment in immuno-oncology. So referring back to today [ph], we spent here on innovation, you have seen the richness of the pipeline we have to execute now. You heard Elias earlier, talking about 15, right, 33 starts and so all of that leaves us to €6 billion, maybe earlier than 2020. Jérôme Contamine: And now, maybe to make a link between your two points; it's fair to say, that with lower exchange rate for the U.S. dollar versus the euro, it will benefit -- in absolute term in Euro on the line. So this is where it starts to be a bit difficult to be exact, but you could say that, if you take a low tax -- a loss or exchange rate for U.S. dollar versus the euro, it may offset, what Olivier is describing low medium term, the investment behind all R&D.

So FX kind of helps us in the long term. Jérôme Contamine: Yeah, it comes with a limit of how you can model it. But it's true, that altogether this would be --

It's a good point. The FX plays a role. Elias, do you want to add anything?

No, no. I think it's important, I mean, the upside of high euro, for me is R&D, because we do a lot of R&D outside of Europe, makes it cheaper for us to do. So we can maintain that line of €6 billion.

That's why I am [indiscernible]. But it's difficult to give him an exact date at which we are going to hit the €6 billion.

No. R&D always has these moments of success or not, and it's very hard to predict. But my sense is that, the high euro has always helped us to maintain our expenses.

All right, Graham Thank you very much. Next please?

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

Good afternoon. Thank you for taking my questions. One on Lantus, you have mentioned a more difficult H1, but what do you factor in your assumptions about the market share evolution with the Tresiba from Novo, which will have an advantage of hypoglycemia from the end of this quarter, possibly as an indication. So it might be, also a more difficult H2 on this basis. Second one on Kevzara, we seem to have some slight hope of accelerated take-off from the Q4 figure at low levels, so any comment on that? Thank you.

Bill, can you start with Kevzara?

Absolutely. So I think the way to think about Kevzara is, well, is in 2017, patients were essentially getting the product through medical exception. So there wasn't a clear path to reimbursement, I will get back to that in a second. We like some of the trends that there are, in the U.S. market, regarding IL6 subcu. So in 2017, IL6 subcutaneous class grew at 20% year-over-year with TRx, and that's outpacing the biologic market, which grew at about 5%. So we think, that bodes very well. Now getting back to the reimbursement, we are expecting that -- through our efforts in 2017 that we expect about 90 million lives to be covered in 2018, having made progress with CDS, Aetna, TriCare and a bunch of regional plans. So we believe that, as you look to this year, where there is a defined way for people to access the product, that that's when we will expect to see the growth coming, because the other market dynamics are strong.

All right. Thank you very much, Bill. Stefan? Lantus market share and Tresiba, with the potential improvement in their label?

We are seeing that Tresiba has worked on separating second generation basal insulin, in terms of the data that they have. At that, they have been able to put together, from first generation basals. And we are pretty much, on a very similar strategy with Toujeo, and for that, we actually look eye to eye, when it comes to that -- with Tresiba. And you can see this also worldwide in our performance between Toujeo and Tresiba. Now, we have recently done some really interesting work on both real world evidence, that we are about to present in the coming weeks at a conference. And then more importantly, even we have done a head-to-head trial, the BRIGHT study against Tresiba, where we informed about the top line results recently, which are going to be shown at the ADA meeting this year, and that we are awaiting publication as well. I could tell you that on the top line, we achieved the primary endpoint against Tresiba, which shows comparable effectiveness in terms of A1C reduction. What we have also investigated in that trial, is the safety profiles and products that we are looking forward to, in the final presentation at the ADA meeting, and we feel quite confident that we as well -- with the data that we are more and more bringing together on Toujeo, we can very successfully separate from those first generation basals. So I feel actually quite positive about our share evolution. We see this worldwide, in terms of how Toujeo is progressing. We see on Toujeo, a very strong growth in Europe, with more than 13% growth. Very strong growth in the JPAC region and the emerging markets, with even more than 50% growth, and in the U.S., we have seen last year, despite some formulary headwinds that were linked to margin overall, we see good volume growth on Toujeo, fourth quarter 50% TRx growth on Toujeo, is a clear sign for that growth going in the right direction here.

Any comment Stefan on the market share of Lantus in general or in the U.S., more specifically?

I think we are in line with what was expected here, and I don't see that change. So we are fully in line with the guidance that was given in both financially as well in prescription, so the observed impact on prescription in January, that we are seeing as fully in line with what was expected. And again, as we see the label, potentially come through for Tresiba, we don't know that yet. So we will have to see if that happens. But if it does, again, we feel confident that we have all the clinical data to counter that, also with Toujeo on our side.

Thank you very much, Stefan. Thank you, Philippe.

Thank you.

Next please?

Next question comes from the line of Jo Walton with Credit Suisse. Please go ahead.

Thank you. Two questions please. On Dupixent, are you seeing any impact of the new plans in the U.S., which appear to be looking to make patients pay their deductible and disallow the co-pay cards for specialty drugs from the manufacturers. If so, how are you looking to counteract that? And secondly on the overall cost savings that you have been making Jérôme, I wonder if you could update us as to what level of cost savings via program you managed to achieve in 2017, what proportion was reinvested and what we have left to come through in 2018? And perhaps with that also, cost savings that are expecting to come through from the consumer business, presumably not all of the cost savings from that BI transaction were gained last year?

All right. Thank you very much Jo. Dupixent, the new emerging plan and the co-pays, I probably think it's too early to understand exactly what's the impact; because they just emerged. But Bill, what have you seen?

That's right. In 2017, there was not any measurable impact. In fact, we only heard about it in a handful of patients. In 2018 though, we know that the major ABMs who own specialty pharmacies, are selling this program to their customers. And as Olivier said, it's hard to quantify at the moment, the impact, because we won't know the patients involved, until we see the co-pay assistant spend during the year, and how that's progressing. So we are working hard to understand it. This is bad for patients, it's limiting access to patients, and you know, we are taking efforts to, as I said, understand, educate on it, and work with these ABMs to explain the negative impact that it's having. So we will -- as the year rolls on, have a little bit greater insight into that.

Yeah, I think frankly it's more than a Dupixent issue.

Yeah. It's all specialty.

So special demand in U.S. issue, which has to be discussed and negotiated with many manufacturers. So Jo, on your question of cost saving, and Jérôme will add; we achieved in fact, approximately €1.5 billion, the cost saving plan we had announced in 2015, and we achieved that in 2017. So we are basically one year ahead of plan. But we are not stopping there, we are working on further streamlining initiatives, and we recently announced the appointment of Dominique Carouge, as Head of Business Transformation. He is going to become a member of the executive committee in February or mid-February, and his role will be in charge of accelerating the transformation of the company. And therefore, we hope after he is fully onboard, to give you an update of what we are planning to do in that space in the next two or three years later this year. In terms of G&A, of course, we expect modest G&A synergies from the recent acquisitions, and that we would gain more visibility of course, in the coming months. And in terms of reinvestment, we have consistently maintained -- any decision will be scaled to -- of course, in terms of the business and the market environment, and you may have heard about the adjustment we have made to our salesforce on DCB into U.S. recently. And then again, the allocation and we discussed R&D, which is a big piece of our allocation. So anyway, anything you want to add Jérôme on cost saving. Jérôme Contamine: Maybe two points here, Jo. So one, I mean, as planned, this €1.5 billion actual cost savings for the most of it, so [indiscernible] 2019 and 2018 as well. And on the question of investments, I think -- reinvestments, I think Olivier gave the answer. Obviously, you got what we said, that we are investing in R&D for a significant -- at least recently, but not a meaningful part. And of course, we invest behind the new launches, Dupixent and Kevzara in particular. Now if you just remember what I guided for, again for SG&A and R&D, yes with our cost margin in 2018, I mean, clearly to get there, and with most of the increase coming from R&D, from acquisitions or from internal R&D, tells us that we are very stringent in how we both save money, but also reinvest. To your question on CHC; I think that maybe Alan, you want to comment where we are and how much we think we can do even more?

Thanks Jérôme. Yes hi Jo, its Alan Main. We don't give specific numbers on cost synergies. But as you know, from the BI transaction, the majority of the synergies came from cost synergies rather than top line. And we are right on track, we delivered against the 2017 objectives. We are on track to deliver completely on 2018 and beyond. And what we have guided, is that we will raise this total business to a BOI of 30% and above. We are again right on track to deliver that.

Okay. Thank you very much Jo. Next please?

Next question comes from the line of Seamus Fernandez with Leerink. Please go ahead.

Thanks for the question. So a couple here that I just want get a little bit of a better sense of. When we think about the opportunity for Praluent and the PCSK9 market going forward, maybe we can get a combined commentary from Olivier, just because of your expertise around the opportunity for Lipitor historically, and how you are seeing this market evolve at this point? And then, Elias, can you just give us a general sense with Praluent of the kind of data you think is necessary to drive this market forward? Or do you simply think that this is more a matter of getting your price right? And then my second question is on dupilumab or Dupixent, when do you really see the earnings inflection that this product and the opportunity for the products is likely to really emerge? As we think about it, we think about it more as kind of a second half 2018, early 2019 opportunity, given how other products have launched in psoriasis? I am just trying to get a better sense of, how you guys are seeing the evolution of update of Dupixent and where perhaps you would hope to see more of an earnings inflection from that product and leverage there? Thank you.

Thank you, Seamus. Elias, do you want to start on the second question?

Yeah sure. Thank you, Seamus, it's a very good question. So when you really look at the data that's needed to advance, first and foremost is outcomes data on the MACE criteria upfront and the net-net reduction in significant MACE events, in particular stroke and MI, confirmed. So that's the first measure that people are going to look at. Are we reducing that to a significant extent in the population that we are dealing with? And there are two populations really in our selection. First is the FH population, the lifelong risk that cannot be mitigated really with statins. And I'll let Olivier comment about the curve of adoption that it leads to. Because those clearly, as they are identified, have no other option than a PCSK9, no matter what we do in terms of outcome. It's the exposure over a lifetime that drives the outcomes in this patient. Now in the other patients, the patients who are having acute event within one year, which is our population, then the rates obviously are higher, the rates of complication. So controlling that rate after the first event in the secondary prevention, is going to be driven by MACE. Ultimately however, the thing that you want to prove to showing the data, is either a trend or a statistically significant reduction in cardiovascular related mortality, related to the CHD mortality. Now this usually, as with Lipitor, took a while to establish, because the follow-up is needed to show within the event rates that you have. So we will see with our data, where the trends are, if we haven't reached significance, where is it that we are likely to see that happen, just like in four years, I think with time, you will see the separation on the curve, I am pretty sure. So maybe I will let Olivier --

Yeah. I don't have much more to add. We continue to be -- and I continue to be absolutely convinced that, Zeus [ph] technologies and Praluent will change medical practice. We have not -- in cardiovascular, cardiology medical practice. We have not seen that yet. We were lacking two convincing studies probably, in order to be able, which is pretty standard in our industry, to be able to make the claim. With ODYSSEY OUTCOMES, we will have a very well defined population. No questions. Our teams are doing a terrific job. But for those who are not controlled by statins, these technologies are absolutely critical, and will save lives. So I think the afterwards, it is exactly what happened with Lipitor at the time, is we are going to see them being part of dialogs; and I think cardiologists and physicians in general are now, very much moved by -- in their prescriptions or inference in their prescription by guidelines, and that's what will happen, I guess here. And that will ultimately bring us to the third step, which is a change by the payor of the utilization management criteria, that will open up automatically, once those two first step would be achieved. So that's how we fit, which is a very similar story to the point you are making, to the Lipitor one, which I had experienced in the past.

And then, if I can add, Olivier, something important, safety. Over the past two years, we have had exposure for 20,000 patients, the safety, the pharmacovigilance is cleared. And I think that's another consideration for any new medication, that cardiologists are sensitive to. So as the time goes by, our safety record is established. All the issues that may have been of concern two years ago, have sort of gone away, both on the physician side of things and the payor side of things. I think personally, the data will be driving what Olivier just talked about, and I don't know, Stefan, if you will add?

Stefan here, maybe just one last comment. We have seen very recently, with other chronic medicines, that -- in the cardiology space, that once guidelines were adapted, that is with the clear inflection point in the uptick, and we won't expect something similar here. So it's the evidence that will guide the use of the product and timing that makes good sense.

And I think, just for the record, the guidelines are generally expected when you have two studies, it's like having two Phase 3s within about six months of the result obligation, which is why we wanted to make sure we were published by the ACC.

Thank you both. Dupixent, Bill?

Yeah. So just in thinking about Dupixent and the growth, we are still at the beginning of Dupixent. We have got, -- I think set a great base in the U.S. We have over 8,500 prescribers and just a little perspective there. Approximately 60% of the prescribers have greater than or equal to two patients prescribed. So there is clearly an opportunity in the U.S. to go much deeper in atopic dermatitis, and we think as physicians get experienced with the product, that that's exactly what they will do. We will be augmenting that with continued education, working at an access level, and as Olivier mentioned, we will be doing increased direct-to-consumer. So we think that that's one of the growth engines. Now also, it's going to be geographic expansion as well. We launched in Germany in December, the Netherlands in January, Denmark in February, we have Canada and Japan, launching shortly, and then 11 additional EU countries in 2018. So just by virtue of the geographic expansion, we are going to see continued growth, and then ultimately at the end of the year, we had asthma. And then you do it all over again, with asthma in all the countries, and then additional indications. So you know, we see that there is going to be steady reason for growth with the product, and we are still very early.

Thank you very much, Bill. Last question please?

Final question comes from the line of Jack Scannell with UBS. Please go ahead.

Hey, thank you very much for taking my question. I've just got a question about a very interesting chart that Bioverativ was showing financial markets shortly before your agreement to acquire them that suggests, in their worldview, by between 2021 and 2022, you have around 50% of Factor VII in their territories, or 50% of short-acting or regular half-life Factor VII having shifted to something else. And Bioverativ having about 25% of patients and then all other extended half-life Factor VIIs and Emicizumab having the remaining 25%. So my question is, is that a sort of future of the world that you share? And secondly, how sensitive was your evaluation of Bioverativ and the economics to those kinds of assumptions?

Okay. So Bioverativ assumptions versus what you have described, Bill?

Yeah look, so I don't have -- Jérôme Contamine: Okay, then let's say, we are here because the transaction is not closed. So we can't make comments. And you will see that 14B9 of Bioverativ will be filed maybe in the coming days. So I would like to warn that there is a limit to what we can say here.

Right. So limit to what extent? Jérôme Contamine: I mean, you can make some comment, or you fear that you are not going to compare what they say, that is what we say; because clearly, it's one of the thing which has come to the -- has led to this agreement that we struck with them, which is the reason that we have been followed by the offer that is still going to be launched now.

Right. So we can probably describe the assumptions that we have made. We have spent a lot of time on evaluating that market. Clearly, the growth is coming from -- and I am sure you know that, coming from short acting and on demand to the long acting and Eloctate and Alprolix in that case, and prophylaxis. We are seeing those two with the penetration they have, becoming standard of care over time. I know that there was a lot of questions related to the products from Roche Hemlibra, and it's role in non-inhibitor. We believe that it's going to be a very important product for hemophilia in patients with inhibitors. We see that being much slower over times, that penetration in the non-inhibitor population. So that's roughly, you know, the development we see in that market, which is growing by 7%, as I mentioned earlier, which is $10 billion market. So we are very-very confident, that with the current Eloctate and Alprolix plus, what you heard from Elias in terms of development and the XTEN technology, which is going to bring that high fly much further, and allow to have utilization every or injection every week or even further, we really think that there is a very bright future for those two assets in hemophilia. So that's what I would say.

Thank you very much.

Thank you. So I think that closes the call. Thank you very much for your questions and talk to you soon. Thank you.

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