Sanofi SA (SNY) 2003 Q2 法說會逐字稿

Good morning, ladies and gentlemen. There was a slight difficulty. As of now that's -- it's back to work. We have disrupted the lives of several of you, preventing you from taking your children back to school. So we'll pay attention to that in the coming years.

And the second things is that as we've decided to do Paris this morning, London this afternoon, it's clear that the Londoners are not with us this morning. That's a service we wish to provide them and allow for Europe-US communications because the US will be getting the feed from London this afternoon So we can have that in the same day. That's progress.

So to discuss this first half of 2003, let's proceed as we usually do. You know the people at the table.

Of course, Marie-Helene Laimay will discuss the accounts for the first half. And then Hanspeter Spek and Girard Le Fur for operations and research will give you an update on company developments.

Let me just begin with a few important points.

It is indeed the case that the first half of 2003 is excellent in terms of sales and profit growth. Without doubt in terms of sales we're one of the industry leaders - the top 20 pharmaceutical companies worldwide. And in terms of EPS growth, we are out in the vanguard of the industry.

Growth rate - 18.6. We'd announced 20% on a like for like because the dollar rate was at 1.10. That brought us back to 16.7, which has now become 18.6 -- So 10% above guidance. That's an important point. We'll discuss the year as a whole in due course.

What's important is that we have seen an acceleration in sales growth during the half. You have here the first half sales and the second half. You can se that in terms of sales there is an acceleration in sales growth. You will also not that the developed of the first half Plavix and Aprovel in the US very weak in the first quarter. This is due to the very low stock levels that we had at the end of the first quarter. But then there's an upturn at the second quarter - 20% develop (ph). Very good results. Hanspeter will discuss those.

The key factor is of course the extraordinary success of Eloxatine on the US market and the confirmation of this product as the fourth blockbuster.

These - this is factual IMS data comparable all the pharmaceutical companies over the first six months of the year, and just to illustrate the mark with the IMS data which of course varies from the total sales of pharmaceutical companies that includes other elements.

The market is at 8.7 for the first six months. And Sanofi-Synthelabo is at 17.4 on the basis of IMS data, and clearly out in front. Amgen is a special case as you well know. You can see that the consolidated sales, it's clear that if we were to take the developed sales, if we were to add the US sales of Plavix and Aprovel as registered during the first half there would be an additional five points here. We would be in the region of 22. So we can say that is truly is an excellent result in terms of sales growth.

Earnings per share. I mentioned that earlier.

Operating - operational profit - 12.8. It doesn't include currency or currency hedging because Some of our competitors include the currency hedging in their operational profits. So the 12.8, had we included the currency hedging in that figure, it would be 15.9 which gives you clear basis for comparison.

Net profit - 14.4.

EPS growth - 18.6 as I mentioned earlier - above our forecasts.

And here again we have Sought to give you all these figures at 2002 exchange rates published data (ph) because all our competitors or almost all our competitors publish in dollars or in strong currencies - I was thinking of sterling - So for purposes of comparison we would have to look at what things would have been had we had 2002 exchange rates.

We can see that the operating profit very high level. Here we haven't (ph) had - for a high level of investment maintained in R&D. And the quarterly 27.5. And EPS growth of 32%. This does better reflect the business than the currency factor.

We're fortunate because for the past four or five years, when the exchange rate was extremely favorable, we were already publishing this chart. And we were telling you back in '99-2000 that our net profit is exceptional in terms of 54%. But there's 6% of currency fluctuation, synergy, consolidation. And every year we publish the same data.

Because when we go from a currency fluctuation of plus 14 to minus 13 during this half, to see that our operations excluding currency fluctuation, synergy, consolidation have a very fine constant because the growth in earnings was no longer what they were when they achieved 54% and 20%.

But when we posted 54%, we were honest enough to explain that there were factors that were included in the '94 (ph) documents that were not linked to business operations.

That's why this line is interesting to comment.

The first half of 2003 - a continued wave of positive news as mentioned in the film -- Eligard, Arixtra. But the program is pursuing - is on schedule, 94% of indications to launch this product at the end of 2004, early 2004.

Eloxatine, new reference (ph) treatment in colorectal cancer. That's the big success of the first half.

And another that we haven't really mentioned is that Uroxatral has achieved US registration and will be launched during the next few months.

Over to Hanspeter to discuss operations. And I'll return to give you my perspective on the end of the year.

Good morning, everyone. So what are the operations results for the first half and what is the outlook?

Six strategic products are driving the performance - performance that is not only above market performance since the year 2000, but a performance that had accelerated further as from the third quarter of 2002 compared to a market which since has lost a sizable portion of its growth in the pharmaceutical markets, especially in the US.

In terms of absolute figures, we've achieved 3.9 billion euros consolidated and 4.9 in developed sales. Both figures are sharply up - 14.4% and 15% respectively, amongst the best in the industry.

US. The first half consolidated demand has grown at 36% in a market that has lost one-third of its dynamics, growing at only 10%. The strong growth in demand between Plavix and (audio gap) and Avapro is due to a reduction in inventories with wholesalers. Sock - inventory levels down 0.6 for Plavix and 0.7 (ph) for Aprovel. And we view this development as over for the future.

To this was can add the new - three new registrations obtained, strengthened US management in the US affiliate.

Europe. Against a difficult climate, our growth has moved up in a market that has remained stable. And you can see the same development as from the second half of 2002.

Now the outlook for Plavix improved still further - obtained the reimbursement in Italy and Portugal as regards the future enlargement of the community, a sensitive issue in terms of pricing policy. We are proactively continuing the integration of these countries in our organization in Europe - countries in which Sanofi-Synthelabo is traditionally very strong.

Other countries. In spite of severe constraints in Asia and Africa, we're pleased to report double-digit consolidated sales growth elsewhere in the rest of the world. We're very happy with the improvement of our situation in Eastern counties with growth rates of 20%, especially from Russia where we have experienced problems in the past which have now been resolved very satisfactorily.

Of the geographical results, let's focus on our flagship products. Without doubt the first half of 2003 was marked by the exceptional performance of Eloxatine in the US. Ten (ph) months after its launch, Eloxatine is showing the swiftest penetration of all oncology products ever launched in this market.

You can see the penetration rates of all these products - common zero from launch.

Globally the sales level is 384 million - very high grow rate - half of which in the US, but also elsewhere. Five or six years ago the product is growth by 43%, which leaves considerable hope for the future in the US of course.

In Europe, Eloxatine has confirmed its lead position in these indications. In the US, Eloxatine is used in three out of four patients - but also only in the approved indications. And future indications remain important potential for the growth of this product in the US.

And now over to Gerard to discuss clinical and regulatory development.

Gerard Le Fur (Via Translator): Good morning. Over the past six months we obtained outstanding results with Eloxatine. But it's also very important for the treatment of colorectal cancer in general. Indeed, very good tolerance of Eloxatine made it possible to start trial in different (ph) treatment of cancer.

We no longer speak of survival, but of potential cure. We do prevent recurrence. And comparing the FOLFOX treatment that is the Eloxatine treatment to the standard (ph) LV5FU (ph) treatment, we note reduction of relative (ph) risk of approximately 23%, which is of course very significant. And the results were obtained earlier than forecast because they were very positive indeed and therefore we could stop the trial.

This indication will be files both in Europe and in the United States for adjuvant treatment by the end of the year or beginning of 2004.

Another significant result has to do with the erenotican (ph) treatment considered as the first line treatment in the United States. The study was sponsored by the National Cancer Institute. And you will note that in terms of survival, the FOLFOX Eloxatine treatment induced reduction of the ratio of approximately 34% versus erenotican (ph) with better tolerance.

We already got the first line treatment positioning in Europe. We filed the FOLFOX treatment first line in the United States for the treatment of colorectal cancer likewise.

We are presently pursuing a very important life-cycle management trial with Eloxatine. In this colorectal cancer, FOLFOX Eloxatine (ph) will be the basis of near-term (ph) or urgent treatment of colorectal cancer. And the emergence of biological paradox (ph) will be done in association with Eloxatine and in cooperation with a genetic rush (ph) including (ph) BMS (ph) or Novartis.

We are presently starting a number of first, second or adjuvant trials in association - in combination with these biological treatments.

For other forms of cancer we are presently in the phase III trial phase for gastric, pancreatic tumors. And this has to do with filing in 2006.

Besides the success of Eloxatine is such that a number of pilot studies on request of several commissions are underway for a number of potential indications. Children are also suffering from these cancers and could benefit from Eloxatine treatment. Therefore we are - we have been starting a pediatric study. And it is important to remind here that in the United States this should mean an additional six-month production (ph).

Finally, as was said, we have a new ready to use formula which should help us to get an easier administration of Eloxatine. And this will be started in 2004.

So as you see we have a number of studies and life-management trials for Eloxatine.

Thank you very much, Gerard.

So the positioning of the product indeed may be considered as quite unique from care to cure as it were, as stressed here. And it is on this basis and on the basis of the development just mentioned that we are forecasting our growth above 1.5 billion sales for that drug.

During the first half, Xatral pursued a very positive performance in all counties where the drug has been launched, with a growth of 20%. Among these markets Xatral got the first positioning in Sweden and France because of its very unique positioning.

In the United States we have a market of approximately 1 billion that's very rapidly growing growth since the launch in 1992.

And the launch of Uroxatral will be done at the end of 2003 - less than six months after FDA filing. Our program is based upon a very high competition with Flumox (ph) which is the leading drug both in terms of targets, urologists, and JPs (ph), in terms of number of contracts, and in terms of cost of treatment.

For 2006 we're expecting 500 million euros sales figure for Xatral all over the world.

So back to Gerard to tell you about the Arixtra development plan.

Gerard Le Fur (Via Translator): As you are aware, we just have a limited indication for Arixtra that is prevention of embolitic (ph) events - approximately nine days of treatment. In the United States we got the long term indication -- that is one month - of treatment. And for Europe we received a positive advise (ph) from CPMP, which means that next fall we'll have the authorization for that indication in Europe.

In July as foreseen, we followed up curative treatment of embolic events. We had presented to you the ARTEMIS (ph) results. So this has to do with the end of the year filing. And we have very positive results for high risk surgery and in medical patients for preventing such events.

For cardiology which is the last part of our development, the phase III trials have indeed started. In Japan where we are studying the prevention of such VTE events, we concluded including all patients very rapidly for abdominal surgery.

We compared the ecopand (ph) to low molecular weight Haprin (ph). You see that there's relative (ph) risk reduction of VTEs approximately 25% to the benefit of Arixtra. And for patients undergoing surgery, the reduction of the operation (ph) is approximately 40% and is to be considered as significant.

Likewise we note a very positive trend for fondaparinux in terms of mortality due to primary (ph) embolism with or without bleeding.

A few words now about the ARTEMIS study concerning medical patients. You see that as against placebo, the odds ratio reduction is 50% for VTEs. Likewise fatal pulmonary embolism mortality is also in favor of fondaparinux.

Back to Hanspeter to continue on Arixtra.

As we get on to the commercial situation of Arixtra, we have to note that we had under - over-estimated the penetration rate of this drug, especially because of still very limited indications. Because of this transient (ph) phenomenon, we have to reduce our objectives to 500 million by 2006-2007.

We have to underline, however, that this correction is mainly of time nature. Concerning the performance of the product, we are quite confident about its clinical power and synthetic nature.

We have the necessary flexibility to adjust depending on the access to market while remaining always competitive with the market leader.

Ambien sales are still going (ph) very strongly with plus 21% and plus 24% in the United States.

Here we also confirm that clinical requirements are not yet completed (ph) with one patient out of four potentially treated - or presently treated. Concerning the future development of the market, it's interesting to analyze the partial development of this segment showing how Ambien made it possible to cure sleeping disorders - replacing Benzodiazepin at the time of launch, and how Ambien succeeded to withstand the competing drugs such as Sonata in 2000.

Contrary to Some perceptions, the performance of Ambien in the United States is indeed constant over the first half. It's even linear (ph) with prescription rate which remains very stable from 2000 and also in terms of total prescriptions, as well as in terms of new prescriptions.

The change in co-payment methods between 2001 and 2003 specifically in line with the major therapeutic classes in the US, you see that co-payment for Ambien increased by 19% since 2001. And as a comparative element, you see this 24% growth for central nervous system drugs.

Another important phenomenon is the fact that the first tier - that is those prescriptions for which co-payment is the highest for the patient is at the same time the strongest contributive element to the growth of Ambien. And this again confirms the real value of this drug as perceived by the patients.

To Gerard.

Gerard Le Fur (Via Translator): We previously showed that Zolpidem modified release as against Ambien was able to induce sleep as rapidly while having a duration of action of two additional hours. And this was explained by a very rapid immediate release of the drug and plus a half life of two hours higher than Ambien.

So the question was what about the wakening period? Even if the product has a longer half life, even if its effect is longer, does this mean that patients would wake correctly?

And we found out that in adults and elderly people that the residual effect next morning - this is eight hours after the administration of Zolpidem MR, we observed in this double-blind trial versus placebo and versus active drugs such as flurazepam, which is another Benzodiazepin, we observed that with a standard dose of 12.5 milligrams, and in elderly patients who are also highly sensitive to standard dose that is the 6.25 milligram dose which is already used for Ambien, this is true for elderly patients.

So the same trial was conducted at the same dose - that is double the therapeutic dose for elderly patients. Response criteria are quite conventional -- the neuro-psychological tests plus scales to assess the quality of sleep.

Of course these results are expressed versus placebo. As expected, flunitrazepam has a various (ph) effect on patient's (ph) memory, motor function and awakening behavior. But in adults at a dose of 12.5 milligrams or in elderly subjects receiving the 6.25 standard dose or the 12.5 dose, no residual effect was observed, which does mean that Zolpidem MR will be the ideal hypnotic drug with a very fast action and a very good awakening performance.

Before giving back the floor to Hanspeter, I would like to add that we will complete inclusion in - of elderly patients. And we have completed the inclusion of adult subjects which means that we will conclude in 2004.

Hanspeter?

To sum up, Ambien is one of the drugs which may benefit the proto-clinical (ph) experience - 9.5 billion treatments to date.

We are preparing an optimizing phase with a modified formula which will become a new reference. And contrary to Some of our future competitors we're perfectly in track as far as our schedule is concerned.

We also note that the Ambien sales will be above 2 million euros in 2006.

The R class has continued its very strong development with acceleration in the United States with approximately one-fourth of the market for hypertension. Aprovel was the third drug launched in this class and it is ranking third presently in this therapeutic class.

For Some time we have emphasized the differentiation of Aprovel because of its very good renal and cardiovascular protective effect. This was recognized in Europe. And Aprovel is attempting to conquest (ph) the first rank.

In the United States we have decided to increase our investments and the growth in terms of developed figures does not reflect the actual performance before (ph) of (ph) stock reduction during the first half. But this should actually be offset at the end of the year.

This commercial growth reflects growth which is perfectly in line with the US market and a growth which is probably above the growth in Europe.

The strength and the tolerance of this therapeutic class are such that these drugs will go beyond the conventional HT indications. We were a leader in the field of diabetes. And with our competitors we are emphasizing the value of these products with high (ph) preserve (ph) trials concerning HT will be perfectly on time in terms of inclusion. By the second quarter 2004, we should have completed including our patients suffering from cardiac impairment with systolic - good systolic function.

And finally it should be noted that the active trial was started. Prevention of stroke - MI or cardiovascular death in patients with atrial fibrillation.

And I have to remind here that it is indicated in association with clopidogrel or warfarin. It's a very important development for a product of this rank (ph).

As part of our continued differentiation product. And extension to Japan makes us confident in regards our objectives of 2 billion - 22 billion euros in 2006.

Plavix - one of the most successful bands of the industry -- worldwide sales of Plavix. The third best launch of the last five years in the US. It is the 14th top selling brand, gain in 10 ranks and with a growth rate of over 40% -- far an away the highest growth rate of leader products.

In this context it seems to be important to stress once again that 50% of medical visits for Plavix in the US are achieved by our own network -- currently 2,200 people in the US for life-cycle management.

Over to Gerard.

Gerard Le Fur (Via Translator): Well, as you know, we have for Plavix a very ambitious life-cycle program including more than 80,000 patients having achieved very find results in cardiology. We're expecting a very important match study in association with aspirin for neurology. We're expecting the results early 2004 for MI with the COMMIT and CLARITY trials. We are on-time there But that's for development in life-cycle management between 2003 and 2005.

In 2006-2007, we have the active trial for Aprovel for atrial fibrillation.

But Something that's very important is the CHARISMA trial where we have over 15,000 patients enrolled over 45 years of age - high risk of adverse (ph) thrombotic (ph) events. This is a trial versus placebo, long-term, double-blind. And the discontinuation will be a function of the number of events. This is crucially important in terms of the future applications for Plavix. And obviously these indications will be as part of CHARISMA because these are high-risk patients in association with aspirin.

Hanspeter?

Well aside from the future results of Plavix, it's the duration of treatment, penetration, and existing indications, and geographic expansion which will drive its growth.

For the first time on this slide you can see what we have obtained in terms of duration of treatment in the US. And by way of an example, in France. And as mentioned earlier, the duration of treatment in France - and this is a good example for Europe - is very different than for the US for - due essentially to the differing health systems in both countries. But you can see that all the sub-indications we have progressed during the past year.

So in summary, we have potential which then allows us to set an objective for 2006 of 6 billion euros developed sales with a possible increase in primary prevention as mentioned by Gerard a moment ago.

In conclusion since its creation, Sanofi-Synthelabo has managed to develop a worldwide commercial presence - very effective especially in the US, with a portfolio of exceptional products means that for the past three years we are amongst the most efficient companies in our industry.

The number of companies with double-digit growth has declined over that period. Sanofi-Synthelabo is progressing amongst the best in class.

Thank you for listening.

Good morning. I'd like to present the results and the company situation for the first half of 2003.

Consolidated sales, to begin as Hanspeter mentioned - our growth the first half is above that of the pharmaceutical industry - 14.4 on a comparable basis.

You can see here that the impact of changes in Group structure has little significance over the period - minus 0.5%. It was very positive in 2002 because of the 100% consolidation of the Lorex (ph) JV.

Conversely, there's a very unfavorable currency impact - 7.8%. And half of this is due to the US dollar versus the euro - minus 3.8 - a drop in the yen of 0.4 - minus 0.4 - and the decline in Latin American currencies - minus 1.7.

Consolidated sales achieved 3.9 billion - 6.1 increase on published data taking into account currency and scope effects.

The gross margin reached 3.153 billion euros, achieving 80.8% of sales in the first of 2003 as of (ph) the first half of 2002. This gross profit is amongst the best in the pharmaceutical industry, achieved thanks to a favorable product mix and improved productivity over the period to offset the negative exchange rate that impacted our US royalties for Plavix and Avapro in the US.

If we compare the first half of 2002 to the first half of 2003, the dollar dropped versus the euro by approximately 23%. This means that at the 2002 the growth level related to sales would be close to 82% -- an improvement on 1.1% over the first half of 2002.

R&D expenses grew by 5.8 to achieve 121, which is 16% of sales. On the 2002 exchange rates, the increase would be 12.9%.

Improvement stems essentially from the major clinical trials for existing products Plavix and Aprovel, and the phase III compounds under development - Zolpidem MR and fondaparinux (ph) as we saw earlier.

The administrative costs amount to 1.4 billion euros. This is essentially due to the exchange. Because at the 2002 exchange rate the growth would be at 5.1%.

Within this basis of administrative costs, the increase in marketing costs at 2002 rates amount to 6.2%, concentrated in the US to sustain Ambien and Eloxatine and to pave the launch of Uroxatral. This growth will increase during the second half of the year because we have achieved the registration of Uroxatral in the US. So the launch will occur during the second half of the year.

And at 2002 exchange rates, stringent management have leveled administrative costs over the period.

Other incomes and expenses, net registrations in operations with our partners - essentially BMS (ph) over the two periods under consideration - represent 63 million euros for the first half of 2003. The decline of this item between the two years is due to a high growth of Plavix and Aprovel in Europe, an increase in the share paid to BMS (ph), and the drop in the dollar which reduces the retrocessions from BMS (ph) in the US.

The development of the earnings on those two products in the US is positive excluding the dollar effect. At 2002 exchange rates, this other income and expenses would have grown by 12.9% between the first half of '02 and the first half of '03.

Operating profit -- 1.391 billion euros, an increase of 12% over the first half. At constant exchange rate, the growth would be over 30%.

The operating profit represents a 35.6% of sales. That's a two-point improvement in spite of unfavorable currency effects.

If we now consider the spread - the geographic spread of the operating profit, you can see that there's a balanced contribution between the US - representing 42% -- and Europe - 49%. Very - two very strong centers even if US developments were slowed during this half by the drop in the dollar, only at 6.2% whereas at 2002 rates that level would be 31.2%. Thanks to that balanced spread in the profit, we have strong growth in our operating profit.

So amortization - goodwill amortization. Little change there over the period. Conversely, the financial income is sharply up - 63 million euros in the first half as against 23 in the first half of 2002. This increase stems from three factors. Two positive factor - an adjustment of 20 million euros adjustment of stock option plans to take account of the drop in the share price, and this mark to market adjustment was a 38 million euros for the first half of 2002.

Impact of hedging policy, plus 53 million euros versus 30 million euros for the first half of 2002 to limit the risk of currency fluctuations.

Lower level of invested cash subsequent to the stock option plans. Lower investment of 3 billion between the first half combined with a lower interest rate has reduced financial income.

If I now look at the tax rates, 53 million euros for the first half. You can see that the tax rate is at 33%. It was at 26% for the first half of 2002, had been impacted by a one-off impact - a release of tax provisions. And there was the Lorex (ph) share that had been retroceded to Pharmacia in 2002.

For the second half of 2002, that had not been marked by those two one-off events, the apparent tax rate was at 32% which is close to what we have today.

This rate should increase slightly in the future because of the growth of our results in the US where the tax rate is slightly higher than for the Group as a whole.

Minority interests - only 2 million euros for the first half of 2003. In the first half of last year it totaled 83 million euros - mainly Pharmacia share of Lorex (ph) profit - between the first of January-April16, 2002, when the 51% bought back from Pharmacia.

The net result amounts to 947 million euros - up 14.4%. And you can see that this marks a new improvement in the profitability of the Group over sales - 1.8 of the net profit over sales.

At 2002, the growth level before exceptionals and goodwill amortization would be 27.5%.

If I now turn to earnings per share before exceptionals and goodwill, 1.34 euro as against 1.13 for the first half of 2002. That's an increase in 18.6. We'd announced growth in EPS close to 20% with a one for one parity. With an average parity of 1.10, and given the sensitivity of our earnings to the dollar-euro increase rats, the expected EPS growth was 16.7. You can see that the achieved EPS growth for the first half is 18.6 - two percentage points or plus 10% in the growth rate.

If I now turn to the cash flow statement. The operating cash flow - 1.114 billion versus 1.087 billion for last year. Change in working capital - 355 million versus 697 million euros for the first half last year. Variation stems from the receivables change and of course the tax audits that were achieved during the year.

Investment capital expenditure - 187 million euros. And 1.026 billion last year because capital expenditure - the acquisition of 51% of Lorex (ph) whereas for the first half only concerns the capital investments.

The remainder concerns the buyback programs authorized by the general assemblies. And this resulted in the first half by the buyback of 13 million shares for a total amount of 189 million euros. And the most important item to be noted in the change in flows (ph), under the buyback shares programs authorized by the AGMs without the shares that are held for stock options plans, 32.3 - that's 4.41% of share capital - for a total amount of 1.749 billion euros.

You will note that in light of the implementation of this share buyback programs, the cash in the charts drops by 790 million euros during the first half of 2003.

Our share capital has remained relatively stable during the first half of 2003. Continued share buyback program results in a - an increase in the number of treasury shares. Those for the stock option represent 6% treasury shares at the end of June 2003. The - there has not been much change in the major shareholdership since the end of 2002.

You will find the detailed P&L accounts as well as the cash flow statement that I've just mentioned.

And you also have the balance sheet end of June - a very strong balance sheet. Net cash of 1.967 including close on 600 million euros for stock option plans, giving - leaving close on 1.4 billion euros available to continued as authorized by the board yesterday share buyback program very actively because we have a new amount of 1 billion euros not included in the indications given here.

Thank you.

Gerard Le Fur (Via Translator): A couple of words on research and development.

We have presently 55 drugs in development. Even more impressive is the fact that we have nine phase III and eight II-B phase drugs, with significant development effort for central nervous system drugs.

Her you have the details of these drugs. It should be noted that over the past 10 months we stopped the development of a drug for the treatment of irritable colon because the drug was not active enough.

Four drugs were selected for pre-clinical development - two in the field of oncology with the first non-peptidic (ph) antagonist of FGF (ph) receptors - one for diabetes and one for psychotropic treatment.

Three phase B (ph) drugs changed phase, one in the field of psychiatry - the 58611 -- and two for AD which are causal (ph) therapies. But I'll talk about those later on.

Let us start with cardiovascular drugs, and first of all Dronedarone. As you are aware, back on the 10th of January 2003, we discontinued this trial because of occurrence problems.

What's happened? In very severely cardiac-impaired patients with ejection fraction below 35%, further observations had to be made. This trial was conducted in Scandinavia in parallel with the DIAMOND trial that had been conducted by Pfizer for the same medications.

You see that we expected a mortality of approximately 10% in blind conditions. When the ANDROMEDA trial was discontinued, there were about 5.4% of events - that is to say, of deaths - meaning 50% less than expected. This is not what we expected. What happened is that we had 24 patients in the Dronedarone group and 10 in the placebo group, hence this very strong imbalance.

Since then we tried to find extra nations to do this trial (ph) in. It should be noted that most of the deaths were due to aggravated cardiac impairment. The trial was conducted to find out whether the drug was of interest in those patients - that is cardiac impaired patients - but also because these patients are highly sensitive to Torsade de Pointe. No Dronedarone patients therefore, were found to present with Torsade de Pointe.

After having reviewed demographic data and comparison data with placebos, we found no explanation. These patients were under multi-therapies. And this an understatement. As an average the patients received at least 10, possibly 20 drugs.

That being said, this potential drug interaction between Dronedarone and these other drugs could not explain this excess in mortality figures. And we found no statistic difference whatsoever - So significant difference between the Dronedarone group and the placebo group.

In such a way that as DSMD stated, a fortuitous explanation cannot be excluded neither today or last winter.

If we take a look at the side effects in still living patients, and in particularly if we look at cardiac events which was precisely what the health authorities asked us to do, we see that we have 35% in both groups. And concerning cardiac events, cardiac arrest or arrhythmic events, we see no significant difference between placebos and Dronedarone patients.

I would like to add contrary to Dronedarone that there is no effect on the thyroidic function, no cutaneous effect, no pulmonary fibrotic event, no effect on the cornea.

With the slight difference which has to do with this excessive death rate in blind conditions, the drug seems to be very well tolerated. Besides we have two indications that is atrial fibrillation. And it's the same committee - the DSMB committee - that actually monitors the two phase III trials including 1,200 patients altogether - the same committee that authorized us to pursue the trial last May. They further renewed their agreement to conduct the trial to the end. So we will have phase III results by the end of next year for atrial fibrillation. So we will look for evidence of activity and tolerance for this drug.

We also have a minor trial concerning cardiac impaired patients with better ejection fraction - 40% as against 30% for the previous trial. But these patients had defibrillator. So the results were compared versus placebo. And you see that 30% of patients on placebo had a segment of their defibrillator with half of them on Dronedarone. Had the drug been pro-arrhythmic, we would have had higher proportion of interventions required on defibrillator. And this further demonstrated that the drug is indeed a very active and very anti-arrhythmic.

We will get the final results by the end of the year. And then we will know for sure whether Dronedarone will be considered as an anti-arrhythmic for the treatment of atrial defibrillation (ph). And in light of the present results we are rather optimistic to-date.

A few words on Idraparinux. We had presented to you our phase III program. So what should be added today has to do with the IVONGOF (ph) trials for thrombo embolic events or pulmonary embolism.

This program has started and Hanspeter will give you the view of the marketing man on Idraparinux

This slide shows that Idraparinux belongs to the same chemical family as Arixtra but concerns a different that is oral anticoagulant drugs representing 1.5 day of treatment per annum.

The mode of administration, SE subcutaneous, is not a disadvantage because of its much better compliance which is to be considered as a key element in this treatment.

Idraparinux presents further benefits -- the absence of drug interaction which is very important for overall drugs clinically (ph) marketed (ph), a good tolerance, and absence of necessity of monitoring which is of course a key element for the administration of anti-vitamin (ph) Ks (ph).

Gerard?

Gerard Le Fur (Via Translator): Let me continue with a few words on tirapazamine for the oncology family.

This concerns phase III trials in non-small cell lung cancers. Unfortunately I'm not in a position to give you results today because the discontinuation of the trial will depend on a number of events. We still don't have an adequate number of events to stop the trial phase III by the end of the year.

We had conducted two phase III trials. One proved to be positive. The other one proved to be negative. We do know that this is a high-risk disease that's rather difficult to demonstrate positive results (ph) in multi-drug therapy. But we have to wait for further results at the end of the year.

That being said, this also concerns the treatment of ENT cancers phase III. We compared the chemoboost that is the control arm - meaning that x-ray therapy is being discontinued. And the patients would receive six (ph) platin (ph) of 5 FU, whereas for tirapazamine, as you know, the drug is much more efficient in hypoxic conditions.

So the number of patients included in limited. We however have a follow-up of about three years. Given the small number of patients included, the results are - the order of significance here, we have relapse-free survival results which is indeed very encouraging.

This is a phase III trial as we said. So it's a three-years' treatment altogether.

We'll come back to these results later one.

A few words about central nervous system where we have a very active development policy. As regards this, beta-3 agonist which is a new mechanism of action for two-day (ph) phases. Let me remind you that we had demonstrated in SSRIs resistant patients, the drug proved to be very efficient.

Most of these patients were hospitalized. And for SSRIs respondents we also demonstrated an activity which was at least identical with a very good tolerance. For phase III trials and in very severely depressed patients, we compared the drug (ph) with SSRIs and placebos to trials with 300 patients both sides of the Atlantic for a potential filing in 2006. As compared with our last review, we started phase III for this drug.

A few words now on AD and on neuro-degenerative diseases in general.

For several years now, both our discovery and clinical development divisions have worked very actively to look for causal explanations. In the Parkinson's disease there's neuro-degenerative of neurons emitted by dopamine. And one has to offset degenerations with eldipa (ph) to increase the rate of dopamine.

There's another approach which involves the cholinergic (ph) drugs in the Alzheimer's disease. These are the cholinergic neurons where the acetopaline (ph) dies. And to dates the drugs that are administered for the treatment of AD are increasing the rate of acetopaline (ph) with promnesic effect. But in both cases they do not prevent neural death.

We're indeed very ambitious with these drugs because we want to get an effect on nueronol (ph) survival. We want to prevent apothesis (ph) such as death of cells, or we want to enhance the growth of neurites to help neurons to better communicate.

Xaliproden has this effect on cholinergic neurons in-vitro because it increases (ph) the excretion (ph) of peptidic neurotrophic neurons in the brain. The action is that of NGF (ph) except that the drug is administered per alson (ph) today. And this induces an improved neuronal repair in-vivo and enhances maintenance of connection. And this means that one prevents mnesic deficit. So it's not a symptomatic treatment. It's a causal treatment.

We've reached phase III for this indication.

The drug was tested for amnio-trophic lateral sclerosis (ph) which is diseases involving those neurons controlling muscular contraction. We had two primary end points for these phase III trial - one where we had a significant in deliver (ph) of Xaliproden involving respiratory confidence, and the other one which was survival.

Why do we want to stress this in Alzheimer's disease and why do we believe that the drug may be active in such conditions?

It's because the drug is more active on cholinergic neurons - much more So than on motor neurons. And today with 2,400 patients with an 18-month treatment - double-blind treatment - most cases in association with existing drugs that is pro-cholinergic and reduction (ph) of astrocytes (ph), once-a-day (ph) administration, we started these phase III trials taking as a primary end point cognitive function and global mnesic deficit, but with measurement of hippocampus (ph) and secondary IM (ph) points which are also considered as rather conventional.

However we note that such a goal is a very ambition and quite risky. But we have three drugs in phase II and phase III in this still with different approaches. But in all these cases the therapies are causal.

SR 57667 has almost the same effect as Xaliproden on cholinergic neurons with possibly a proto-notic (ph) neuroprotective effect in AD patients. But on top of Xaliproden it has the same effect on dopaminergic neurons - increasing the expression of neurotrophic factors. In other words, it has a protective effect vis a vis the dopaminergic neurons, and therefore may have a potential activity in Parkinson's disease.

We've presently started phase II trials both in AD and Parkinson's disease. And even if it's only a phase II trial, we decided to take reference period of 12 months of treatment because it's a long-term treatment and the purpose is to reduce the decrease of cholinergic neurons with endpoints which have to do with cognitive deficit and global deficit using a criteria which are comparable to those used for Xaliproden.

So contrary to Xaliproden, this phase II trial also concerns the Parkinson's disease early phase of development of disease. The duration of treatment will be very long. But this is the price to pay to demonstrate the activity of causal treatment. And the primary assessment will be time to progression to deficit. In other words, for early Parkinson's patients on SR 57667 or placebos, we will see when the treatment will become required.

We also use biological parameters - that is, re-agent (ph) of F-Dopa. And imaging techniques will also be used. Here gain the trial will last for a fairly long time in order to demonstrate a possible effect on these dopaminergic neurons.

The third drug has the same neurotrophic and neuroprotective effect. It another chemical and it's another mechanism of action. It has potential neuroprotective effect. And it So happens that the combined (ph) also had a promnesic effect with stimulation of memory in animals and at the same time a protective effect on cholinergic neurons.

Here again we're starting a phase II trial. The treatment will be shorter because we believe that the promnesic effect will enable us to demonstrate quicker activity as against unique (ph) neuroprotective effect.

Here again, the endpoints are virtually similar.

This was merely to tell you that we're very active in developing new compounds for the treatment of neuro-degenerative diseases. But the incidence is such - virtually plus 6% after 65% (ph), and then 15-20% at the age of 25. So this represents a considerable Social problem.

Pro-generative (ph) drugs contribute Somehow, but for a short period of time unfortunately. And therefore we have decided to invest very strongly for these indications.

Turning now to internal medicine, Rimonabant. We have completed the enrollment of 6,000 patients for obesity. Very Sorry to disappoint you. I can't give you any results for obesity. The FDA guidelines are crystal clear. Two years' follow-up. So we will have results during the course of 2004. I can't give you any today. Everything is on track. We have continuing - complete recruitment. Smoking cessation only one year follow-up. But we completed the four (ph) short-term study and the two phase III's - US and Europe. Recruitment completed. And the long-term program for one year - we expect to complete recruitment for this by the end of the year if all goes well as planned for this product filed in the two potential indications at the end of 2005, early 2005.

Hanspeter, for a word on Rimonabant.

In anticipation of our future releases on Rimonabant, you can see our first assessment of market. With Rimonabant we are moving to two of the most severe factors for public health - obesity and smoking.

The Rimonabant concept is not at all to have a product with a single unilateral approach, but a multiple or global approach. As a consequence that our clinical program underway doesn't just consider weight reduction or smoking cessation, but addresses most of the primary causalities as shown here.

This slide shows the prime - even dramatic - need for such a treatment. Over 10 yeas obesity and diabetes have increased sharply in the US. And government and FDA authorities confirm the epidemic.

It's this vast market that is developing and that is not very visible in the IMS data.

Rimonabant is therefore a new market, as was the case for thrombosis with Plavix over the past five years. More details on development at our next session.

To end, and update on registration status. We have had a considerable flow.

Long-term prevention of VTE and hip fracture patients approved by the FDS in June. But we have CPMP positive opinion in July 2003. We await that indication by the autumn for Europe.

We have also filed Europe and the US Arixtra for VTE treatment and we have shown you the results both for high-risk surgery VTE and in medical patients. Submission planned by the end of the year.

In other words, we have now all the results for the development of the product, as Hanspeter, covering 80% of the market. So this is not a pipe dream (ph). We know that the product is active and well-tolerated in 80% of the market. So as planned - but we now in 2004 potentially we will have at the end of 2004, early 2005, all these - 80% of these clinical indications.

For Eloxatine as planned, first line treatment in the US submitted during the summer. We submitted the second line in Europe in March. And we expect approval by the end of the year. And the end of this year, early next, we will submit the adjuvant colorectal cancer treatment. And early 2004 the ready-to-use - the new Eloxatine formulation.

And Hanspeter and his team will launch Uroxatral by the end of the year because in June we had FDA approval.

So a lot of developments over the past six months. But in the next year - between February 2004 and September 2004, we will have a great many results on a number of our advanced products. We don't - we're not naïve enough to think that everything will be positive. But statistically given the number of items of news that we have, we're more than confident for the future of the company.

Thank you for listening.

So to conclude, or to sum up, keep the same reasoning as last year. Last year we said right, we're on track to reach 2006 objectives. But with our six strategic drugs to go from 5.7 to 12, we have revised upwards a number of things. We have revised downwards the Arixtra targets. The 12 is perhaps Somewhat superceded. But never mind.

We were saying growth rate of strategic drugs 20% on average. We're really on-track there. We're really in the ballpark because the first six months those six strategic products have grown by 32%. So we've reached the 20% mark.

We also said EPS growth amongst the strongest in the industry. There we have well and truly met that target. So we are on-track to reach the 2006 goals.

And then the review of the year. So what have we seen?

We have noted an accelerated sales growth in the second half versus the first half which leads us to revise upwards our sales growth target. We said that it would be of the same order of magnitude of that of 2002. Well, no. Our sales instead of the 12.8 of last year, without doubt revolve around 15%, which still represents a sizable increase at those levels. Given market growth I believe that it is indeed a fine performance.

So acceleration in sales growth.

Let me stress once again the fact that what is important is the way the resource is deployed to achieve these results. We have not decreased or leveled off R&D. We have continued to up the R&D effort. And during the second half we will continue to grow it significantly. We could achieve 17%, of course, of sales growth. That is an even greater ambition.

But we are increasing our R&D effort in the second half of the year because clinical trials continue to make progress and a number of new trials have entered phase IIB and phase III.

Secondly strengthening marketing. We're not reducing the sales forces to achieve results. On the contrary, we're increasing our marketing events during the second half to pave the way for the launch in the US of Uroxatral. And in spite of that, we will increase the Group's profitability. You have seen the net profit related to sales continues to grow in spite of the currency effect.

We said earlier in the year in February that we'd have 20% on a one-for-one. But now 1.10 because that's the average of the first half. That leads to 16.7 if I'm not mistake. And we've achieved 18.6. And we say that over the whole of the year, we will achieve 20% with 1.10 for one. So that is indeed an acceleration of the growth of our earnings per share.

Ad we're increasing those forecasts at 20% for the whole of the year whereas they were about 10% for the first half. So we expect a very good second half where in spite of investments on the drivers for the company's future, we continue to accelerate our earnings.

An international presence reinforced our success in the US. That's clear. That's plain five years ago. The questions about our ability to move into the US. No-one can challenge that today with the sales level achieved that that's a successful presence.

The top six strategic products launched approved in the US by the end of the year. And it's very complicated given the way we record our sales.

When we talk of Plavix in the US or Avapro in the US, even if it's not included in our sales, the sales force with a Sanofi-Synthelabo label on their heads in the US represent half in the launch operations of Plavix accounted for over half the launch and promotional effort of the product.

So Plavix and Avapro in the US is a success - a joint success with BMS (ph). But as much a success for Sanofi-Synthelabo and Sanofi-Synthelabo troops as for BMS (ph). And that will continue in the future.

I won't return to the phase III and phase IIB portfolios.

Zolpidem MR is no longer a product that will represent Zolpidem. It is a move from a defensive to an offensive strategy. And all the more So because the people around us have published a great many things - or rather announced a great many things and don't publish very much, and are falling behind.

So it's - when Gerard said that we will deliver on time and we will launch the next hypnotic on the - launched on the US market, will be Zolpidem MR. That's important. It wasn't quite So obvious a while back.

Rimonabant, a promising approach.

Idraparinux, this has a unique profile in a large unsatisfied market. And it's not the once a week of Arixtra, a product covering different indications. Hanspeter (ph) and Gerard have mentioned that.

And as I say, he's always too modest when he says this, but let me produce - mention Something which all our competitors have, but we haven't seen.

Sanofi-Synthelabo's research in the central nervous system - we're (ph) not on the phase or on the pre-clinical. What in the company's research portfolio in the CNS is in phase IIA, IIB and phase III - essentially phases IIA and B.

This is what the central nervous system is. Huge market. Huge growth potential. A lot of untreated or poorly treated disorders. And this is how the clinical research teams have canvassed - have covered the central nervous system.

Of course we don't have the ambition of succeeding in all of these areas, or targeting each and every sector. But the likelihood - the probability given the originality of the targets is high. And it is for that reason that when we see - when I look at our major competitors, it is now on the central nervous system that people want to work with us.

Let me end with this slide that we also showed you last year. What's new?

Products entering phase III, IIB - 57, 627 (ph). And in the filing dates not much changed except for Dronedarone where we have fallen back by two years.

So the situation 2003 for sales, for earnings is very good. Through 2006, no difficulty with the trend. We're largely ahead of the timeline - 2006 - what if products go public et cetera. And 2006 seems more and more assured. And those are reasons to be optimistic of course.

In conclusion, having given Some good news on 2003, the company must of course continue to remain a master of its own development to keep R&D as a worldwide reference. It's not the amount of money we spend that matters. R&D is a worldwide reference that identified products, that markets products, and is productive.

And that's the ongoing reference to use, which is the level of expenditure is perhaps not sufficient by way of a criteria t to be a global marketing force as Soon as we have products to sell to constitute and effort to market that. Because the recruitment of medical reps, medical visitors when there are new products to launch is relatively easy. You can hire the best people.

So all the pitch about you don't have 10,000 sales reps in the US, it's true. To have sales reps means to have a lot of products to sell. But every time we have a product to sell, we can ramp up our sales force very quickly.

What's important is to have products to feed the sales force. The sales force is easy to build throughout the world.

And lastly of course our goal - our major objective is to deliver an EPS growth amongst the highest in the industry as we go forward. This is the message we wanted to convey to you this morning before opening it up to questions.

Gerard Le Fur (Via Translator): Who would like to put the first question? There are microphones

For CNC Securities (ph). Just to pick on stilnox (ph). There will be a strong increase in competition in the next 18 months. What type of sales force increase do you plan?

And it seems that the insomnia segmentation market is changing. The two competitors in question are developing a segment - chronic insomnia. For the first time clinical trials confirm that with a six-month trial. So what - could Gerard perhaps give us his view on that and how you view market segmentation? Do you plan chronic insomnia trials for Ambien?

Gerard Le Fur (Via Translator): Well, our position on chronic insomnia is that we feel that intermittent treatment - the as-needed treatment - is more appropriate that then chronic treatment on a daily basis. You are an insomniac. We help you on an as-needed basis. And it is not indispensable to have daily treatment. That's our medical view.

So on the sales force front today, we have 2,200 medical reps who promote Ambien in the US - promoted by all our sales reps. And this is well-perceived by the physicians and even is only promoted with samples.

If need be we can increase that sales force without difficulty. But 2,200 is a challenge for the others, and as Mr. Dehecg has said, the others are lagging behind. So I really don't see the need to increase our sales force today for possible launches in 2005 or even later.

Hello. ING. So we've had the question on Zolpidem. I have three other small questions - the first picking up on what you said about the Plavix suit. The discovery process is going to be over in October and the pre-trial will start mid 2004. Does this mean that there will be a final decision on Plavix towards the end of 2004, so a slight delay compared to what was originally expected?

Second question to Gerard Le Fur regarding the clinical data - the esteem (ph) trial on - published yesterday on Xanter (ph). We know that Xanter (ph) was on the AVKs (ph). And then there were the LBB1s (ph). And it's true that we could perhaps relate the esteem (ph) trial to the CURE trial. But for CURE we had the patient with an acute coronary condition (ph). With the ST wave (ph).

Do you think that Xanter (ph) could possible pos e risk for the Plavix momentum? Or Idraparinux for the anti-vitamin (ph) Ks (ph) because Idraparinux sets the anti-vitamin (ph) Ks (ph) that you're targeting?

And then a third question for the financial director on the share buyback program announced this morning. Compared to the previous program, we were expecting an impact of about 3% on the earnings per share - on the expected annual EPS, the possible impact in light of the share buyback launched this morning?

Maybe - shall I start with the Plavix case? I think we've been quite explicit - at least on what is known. The discovery is - will be completed on the 15th of October. The we have a number of developments before ending up with the final record.

The judge will set a number of deadlines for different operations. And all this should end up with a completion of the record that should be reviewed and judged by the end of the second half of 2004.

This has been set by the - in fact discovery. And from there on, the judge will make his decision on the date at which the judgment ought to be rendered. This very much depends on the judge. This solely depends on the judge. We still do not know whether there will be a jury or not.

In certain instances, we noted that the lawyers and judges took time before rendering their final opinions.

So the first step will be the completion of the discovery on the 15th of October. Then we have the whole procedure required before finalizing the record according to the legal advisors' and judge's demands, end of 2004. And then if the judge decides to set a date in September and to deliver his opinion in September, this will be September. Maybe the judge will decide to take more time before giving his final opinion.

And our hope here is to get the opinion of the judge as swiftly as a possible because we are very confident we may expect an opinion rendered at the end of the second half of 2004.

So the situation is indeed in the hands of the judge Alexander Handler Parinux (ph), a gentleman.

Gerard?

Gerard Le Fur (Via Translator): Well first, we're not really eager talking about our competitor's drugs. And this for ethical reasons - it's always difficult to criticize the competitors. However, let me try and draw the following remarks.

To my knowledge, Xanter (ph) still did not receive its authorization. And looking at the trial you refer to, I noted that apparently there were minor safety problems, possibly tolerance problems or hippotic (ph) safety problems.

And to my knowledge there's no comparison versus clopidogrel. Here we're not really worried.

We understood that Xanter (ph) could be positioned versus Xatral (ph). This would be direct competition. So probably Xanter (ph) and hydroparinux (ph) could be - could find their competitors on this anti-vitamin (ph) Ks (ph) market.

Regarding share buybacks, as I told you the board authorized a new 1 billion euros share buyback program.

Given our objective - that is the 2003 EPS growth - the impact has not yet been taken into account. And it would not be significant on the 2003 figures. The relative impact would have an effect on the 2004 results provided (ph) we started now and will be continued into 2004.

The weighted calculation mode means that there won't be any significant impact on 2003. It will start having an effect on 2004.

Other questions? Yes, sir?

I've got three questions. First of all it would be great of you could talk about what the endpoints are going to be for the Ambien MR phase III study?

It would also be great if you could talk about whether you've looked at the residual effects against Zolpidem rather than just the Benzodiazepin you chose in that initial study you've presented results from today.

And secondly, it would be good if you could talk about the differences between the new Xaliproden (ph) formulation and the old Xaliproden (ph) formulation. Are you looking for an improvement in efficacy? Or are you just looking for an easier to use formulation?

You also mentioned in Avapro (ph) and new formulation. Maybe you could share some details about that as well?

Regarding Zolpidem MR, we compared this compound to a positive control that is a Benzodiazepin but also a placebo. So there was no reason whatsoever to compare is with Zolpidem immediately (ph) in other words.

Zolpidem MR either in adults 12.5 milligrams which is the active dose in adults, or in elderly patients at a dose of 6.25 which will be the dose prescribed for elderly patients, and the double-dose that is 12.5 - no difference was found versus placebo. So there was no advantage nor interest to compare it with Ambien immediate release. So the answer is no need.

For Zolpidem flurazepam was found to be positive in all tests, both through VAS and neuro-psychological tests, as expected. Placebo had no effect and no difference with Zolpidem MR.

Concerning the new Xaliproden formula, today we unveiled a new formulae of compounds to be soluted (ph) before administration through pre-natal (ph) route. The new formulae - formula, is a ready-to-use formula. In other words, you have a Xaliproden (ph) flask which will be ready to use. It will be soluted and used immediately.

For Avapro, the developments are of Gallenic (ph) nature. One, means fully masked tablet - totally neutral in terms of taste. And the second development has to do with the size of the tablet. And the tablet is now easier to swallow.

But we have another development with a combo form with the present chlortiazide (ph) compound associated. So these developments are under way. And some are already completed.

Other questions? Sir?

This is a question to Gerard Le Fur concerning the MOSAIC trial on Eloxatine. It would seem that given the neuropathic disorders, some practitioners would still be reluctant to use the given (ph) treatment right away especially because you have no definite survival rates (ph).

Are you confident in these practitioners' opinions?

And for Zolpidem MR, even if you're not aiming as chronic administration, do you think that the duration of treatment will be six months?

Gerard Le Fur (Via Translator): Regarding the MOSAIC trial, let me remind you that we still do not have the final results. However our clinicians for ethical reasons and given that there was a significant difference versus the 5 FU treatment, they decided to report the results about recurrence-free survival earlier than expected. We will get the results in due course.

Let me remind you that we shouldn't have reported on the MOSAIC trials today. We did so because the results are even better than expected. So it is true that the main side effect is neuropathy. But these side effects are not as serious as you seem to indicate. Of course it's the major side effect.

Well to be clear, it's true that if you decide to open up the door of the fridge you might sense some pains in the fingers. But some patients are more sensitive than others. So I might sound very optimistic. But it's true that some side effects might be more serious than others.

Let me remind here that those are patients who suffered a previous colorectal cancer. So this is indeed the major side effect of the drug, which is not that significant, and at least less significant than what you seem to indicate.

There was another question about the duration of treatment. Once again, everything depends on what we mean by six months of treatment. As I stressed, we emphasize the importance of maintaining the sleep performance over certain period of time. We are not in favor of chronic treatment of six months with these compounds. We are of the opinion that therapeutic windows are much more favorable for these patients. So we could also figure out a six-month treatment period, but as needed as to maintain the quality of treatment.

Rena Tristner (ph) from CDHC (ph). Two questions. One additional question on Eloxatine given that you had mentioned trials being conducted in ovary cancers, and this at the previous analyst meeting.

And another question on Plavix primary prevention. Could you tell us a bit more about your views on the primary prevention market? What is the positioning of Plavix as against other compounds, and in particular the Inovax (ph) Lipitor Pfizer combination and other developments in the same field?

So what is your view on this particular market and the positioning of clopidogrel for those indications?

Well, for the second question, if I may give the floor to Hanspeter.

As regards ovarian cancers, it's true that our results are very positive with oxyliplatin (ph). The results that we got for colorectal cancer and for ovarian cancers are such that even if we are to file in 2005-2006 for combinations with gencitovin (ph) for instance, we are approached by many firms to study oxyliplatin (ph) in cancer. This does not mean that we will decide to file for all applications. We will decide on a case-by-case basis based upon our clinical trials.

Concerning your question on primary prevention, I think it's an excellent question indeed. This requires a great deal of vision.

Two options could be followed. The first one, reviewing the specific risks for the patient - thrombotic risks or lipidic risks. And the second approach would involve reviewing a set of fixed associations of Plavix - possibly eipcol (ph) or provocol (ph) which would be considered as another option.

Yes, sir?

Olivier Merlot (ph) from Tradillone (ph). I have question to Gerard Le Fur regarding certain compounds and others to Mr. Spek on marketing.

For Arixtra, I'd like to know why you have decided to reduce the sales potential of Arixtra? Is it due to delayed marketing? Or is it due to difference with your expectations.

So question to Gerard Le Fur on the MOSAIC trial. During the Sanofi-Synthelabo cancer symposium, some observed an important risk of non filing for the drug and suggested that probably the end of the MOSAIC trial would have to be wished for.

Concerning the Rimonabant (ph) trial, I had thought that it was one year, plus one year follow-up. Why don't we have interim results for the firs year of treatment given that according to what you said inclusion was completed in August 2001.

Gerard Le Fur (Via Translator): Before giving the floor to Hanspeter, on Arixtra (ph) are we not (ph) lagging behind regarding the Arixtra life cycle management. We are perfectly on time both for medical patients and for high risk surgical patients.

We filed the DVT (ph) about - last summer. And we will file in 2004 for the rest - that is for the ARTEMIS part.

As regards filing the MOSAIC trial, as we said we are still waiting for additional results. This is why we're waiting for the beginning of 2004 before filing. We started discussing with the health authorities concerning the possibility for filing for a neo-adjunctive (ph) treatment. I don't know what was said during the meeting.

That's said, the answer is that we will file these results the beginning of 2004.

As I said, it's not about survival. It's about potential cure.

Concerning Rimonabant, it's true that it's going to be one year plus one year follow-up.

How could we figure out asking these patients to continue the treatment for an additional year with interim results only? This would be unacceptable from ethical reasons. So it's going to be one year plus an additional year.

We could not report results. And let me add here that the European trial is not complete yet. So for ethical reasons vis a vis our patients and vis a vis the health authorities, it would be inconceivable to report interim results. We deplore it, but that's the fact.

Slow penetration - let me repeat what I said earlier. Number one - and above all - it's limited access which today represents 20% of total market. A second factor added to that is that the entry door is orthopaedic surgery. And that's - is a prime advantage, clinical superiority of 50%.

But of course the sensitivity factor for the patient that is not very high if you put such figures to a cardiologist. Because by definition for a surgeon prevention is not one of his priorities. The number one priority is of course optimum efficacy of his surgery.

Gentlemen?

I'd like to ask you about Stilnox or Zolpidem - maybe not relevant, but I would ask you to answer.

The side effects and the list of outcomes, there wasn't that of dependency. F we look at the type of treatment that you recommend which is a medical treatment based on needs and not a treatment over long period, the question of dependency -- biological dependency -- has been addressed on one answer (ph).

Is there the possibility of dependency - of psycho-sociological dependency - which would be a factor to grow the market for the product?

Jean-Francois Dehecg (Via Translator): Well, in putting the question, you have provided the answer. When someone said that we are more in favor of an as-needed or an as-required treatment, the example of the Benzodiazepines (ph) is that such products have shown a degree of dependency. It's clear that a product such as Zolpidem has demonstrated in the past that there was well-known (ph) a dependency on a daily treatment basis.

Having said that, the best way of avoiding any form of dependency with psychotropic drugs is to have this therapeutic window, this treatment window. That seems to us to be the most appropriate thing.

No further questions? Yes.

During your presentation you mentioned activities in Japan - concerning activities in Japan. You mentioned that you are preparing stand-alone activity there.

Can you elaborate a little bit on what type of stand-alone activities your preparing? And will that mean you will have more independent marketing including using your own MRs there?

Well, stand-alone activities means firstly that we will continue to grow our new products. And let me remind you that most of our new products such as Plavix, Avapro, have not yet been launched in Japan because the Japanese market unfortunately and traditionally is lagging behind.

Secondly we are negotiating the uptake of a number of our products that are sold with our license partners or through joint venture operations.

And in light of negotiations, we plan a stand-alone situation in terms of promotion our own network by the end of 2003, early 2004. And in addition to that, of course we're continuing some of our tie-ups with our partners - FujiSava (ph), Myslee for the launch of Plavix planned early 2004.

Well the idea is being that in Japan to do what we did in the US formerly - to start with a small sales force to prepare and the certification of new products, and when that happens to extend the sales force. So to start fairly rapidly now to have a direct presence in Japan with a sales force, albeit limited, small compared to the market.

Let me just return to the second part of my question that went unanswered - biological dependency which you answers. But then the psych-sociological dependency.

I'd like to know whether the consumption of such products which as you know is particularly important in a country such as ours can have as a cause a certain way in which it is consumed?

I'm a small - a low consumer of pharmaceuticals, so I'm not a good customer for such. So for the time being I don't really need them for serious conditions. But all my conditions are treated with aspirin. I don't consume that much aspiring.

Well it's a fine product. But without referring to the - by your accounts. But whether this psychological dependency is a - seems to you to be a considerable factor to you for a product of that type?

Yes. Potentially it's - in developed countries, quality of life is an important factor - perhaps less so in other countries. But I have no - it's really a matter of priority.

A few cardiovascular or oncology problems, and we can address quality of life. So the answer is yes.

Well it remains to me - it remains for us to thank you for being with us this morning. And see you for the results 2003. Thank you.