Sanofi SA (SNY) 2006 Q4 法說會逐字稿

[Interpreted]. Ladies and gentlemen good morning. Kindly be seated.

Well, I am pleased to open this information meeting, information on the year 2006. Not an easy year for us and an easy year during which what we referred to as major adverse events in the press releases were not in short supply.

What counts is the ability of the Company to react in the face of these major adverse events is -- was indeed considerable. And in spite of those events, and a number of examples that were cited over the year, the Company has continued to increase its earnings.

As the team by my side will describe, there's a major change at the beginning of this year, Gerard Le Fur is now CEO of the Company. It won't be any major change for you. I am sure you know everyone here.

For my part, it was, indeed, a very great pleasure to be able to form a team that will take over the management of this Company, people in whom I have every confidence and great esteem.

Well, for my part, what will remain, I will of course remain in the Company as Chairman of the Board. It is my intention to continue to serve this Company passionately and I shall therefore be available to assist my colleagues with whom we have worked for such a long time.

Before handing over to Gerard Le Fur, I'd just like to say a few words to thank those of you who have accompanied us over the years. If I tell you that this is my 27th year of financial analyst meetings, it gives you an idea of the number of meetings that I have taken part in since the Company was formed back in the earlier 70s, when I founded the company in '73 with Rene Sautier.

I'd like to thank those of you who, for some time now, perhaps not as long as I have, have followed the expansion, this adventure. I have to say that we have together really lived quite extraordinary times and it's far from over.

Gerard, over to you. You can come to the rostrum if you want.

[Interpreted]. Thank you, Jean-Francois. Good morning everybody.

You will obviously appreciate that I can't begin this meeting without telling you, like my colleagues beside me, I have had the opportunity to work for a great man for 20 years in every sense. And it was a great source of happiness and we are all delighted, and I should say even more so to say that we still have a few more years to work for and with Jean-Francois.

Having said that, here is the program for this morning. It will be rather long. Hanspeter, as you know, Executive Vice President, Pharmaceutical Operations, will start off, will discuss the Pharmaceutical market.

And then Wayne Pisano, Senior Vice President of Corporate Commercial Operations of Sanofi Pasteur will discuss Vaccines.

And then Jean-Claude Leroy, our CFO, will present the figures and results.

And then it will be over to the new wave, even if you know them well, because it will a duo between Pierre Chancel, Head of Global Marketing and Marc Cluzel, Head of Research and Development who will give you perhaps a more strategic perspective than previously to demonstrate the extent of cooperation between Marketing and R&D heading the Company in terms of product development.

Without further ado, Hanspeter.

Jean-Francois said that 2006 has been a difficult year. And yes, I can nothing but confirm. If you look to the first of my slides, you see the development of the Pharmaceutical market over the recent years.

And it is evident that this market has changed, at least has changed in terms of growth. This has been a market traditionally a two digits of growth and you see then that as of 2002, but definitely as of 2005. And reconfirmed now in 2006, this market has slimmed down in terms of growth and turned around today 6%. Still a remarkable growth if you compare with other businesses. But nevertheless, on the background of the recent growth, quite a change.

I believe, perhaps even more importantly for our future as an industry, the fact that you can still have growth of 6%, which is about 2 points above the growth of global economy, indicating that there will be continued pressure on prices, on consumption for the pharmaceutical industry. This is probably nothing new.

2006 overall showed diverging trends. And this is specifically true when you look to this picture which shows the development of the various parts of the worldwide market from a geographical angle.

And in the left column you see something which is not really surprising. Yes, evidently the United States still stands for approximately half of the world consumption of pharmaceutical products.

What has really changed is the contribution to growth. And there, if you look to the right, the right bar you will see then that the international section, which means Africa, to a much lesser extent, but definitely South America and especially Asia Pacific has tremendously changed in terms of growth levels, because from both parts of the world in 2006 nearly 30% of growth has come from.

And you see then, that the yes, America lends to a proportional picture of approximately 45% to 47%. And yes, you see that the contribution coming from Europe has shrinked and definitely has shrinked coming from France and Germany. This was one of the major issues we had to address during 2006 because those two markets are our home markets, as you know.

Another angle to portfolios. Yes, it is true that this market has lost in terms of dynamics. But there are still segments, therapeutical segments, portfolio parts which are doing much, much better than average. And you see it here so far those therapies indicated, initiated primarily by specialists. And a leading example, of course, is oncology. We see there was a growth of 21%. But also other fields like diabetes.

Now if you look, it is very simple solution to say yes, we have to reduce our presence in GPs and in the retail segment. It is too simple because if you go to diabetes, and I will give you some results in an instant, you will see that at the same time in very important fields the GP still is increasing its importance because it is more and more, and I say as an example of diabetes, the GP was starting insulin therapy. So yes, it would be easy, but unfortunately it's not possible. We cannot just abandon our presence, our promotional presence with the GPs.

Those four segments, I think it is good to state and pleasant that out of those four segments showing very strong growth, oncology, diabetes and vaccines, we are strongly present in three out of those therapeutical areas.

Now, how did we perform in 2006 in this environment in terms of our sales. First of all, it's obvious the full year finished with a growth of 4%, consisting of 2.5% growth coming from Pharma and a remarkable 23% coming from Vaccines.

Perhaps more importantly, also from a forward-looking perspective, the comeback the Company made in the fourth quarter of 2006 which brought a 6.2% growth for Pharma and a further acceleration of growth up to 30% for Vaccines, which made us finish the fourth quarter with a growth of 8.4%. 8.4% for the total Company.

This comeback has been largely driven by the recovery of our sales, especially in the United States, which is jumping from 3.9% for the full year to 15.6% for the first results of the quarter. And to a lesser extent from international where you see that the growth of international further accelerated to 12.4%.

The strong recovery becomes even more obvious when you analyze our Pharma sales on a quarter-by-quarter basis. So, as the chart shows, we had a very strong two-digit growth until the end of the third quarter 2005, 10.4%.

And then the first of the major controversial events appeared. Allegra, that surprisingly for us generic competition, we lost the sales of three other products in the United States, all over on annual basis, we lost nearly 2b of sales.

Consequently, sales growth dropped to 1.6% in the fourth quarter. Remained more or less on the same level, even got slightly negative in the third quarter. And then you see the comeback for mainly, not only but mainly just for technical reasons because by the first quarter 2006, this [bust-up] effect is over and we have now have now historical base which is correct.

Equally strong the performance in the fourth quarter for the major products, the leading 15 products, our key products, where you see that sales have been growing by 11% for the fourth quarter, as compared to 6.4% for the full year.

On an annual basis, our eight blockbusters are all growing. Five out of them at two-digit growth. Spectacular, I believe, the growth of Ambien and Lantus of above 30%. And you see then again another technical effect when looking to the figures for Plavix in the fourth quarter, which is not at all a reflection of sluggish market growth, it was just expression of the fact that due to the appearance of the generics in the United States, our deliveries took a [inaudible] [split] and naturally had to be reduced, so it is, again, a technical effect.

Evidently we had to react to those difficulties in 2006. And if you look to the upper right side of the chart, you see that those effect very significantly from one part of the world to the other.

And the overall policy has been to address difficulties on a regional basis and not on a global basis for a simple reason. It would have been foolish to cut on a global basis in those parts of the world where we have significant opportunities.

So what we did, we readjusted our structures in those parts of the world where we face difficulties, mainly in the United States, beginning already at the end of 2005. At the beginning of 2006 we made important changes in France and in Germany, also in terms of headcount. And yes, we also readjusted our structure here at our Paris international headquarters.

You see that internally, and I give you just one example, we readjusted and reallocated our promotional assets. And the example you see on the lower right side of the chart is the United States, where we readjusted in taking away resources from Allegra and Ketek and we put them on top of Ambien and on Lantus. And that you have seen before. It was a good decision because it accelerated the growth of those products even further.

Beyond, we have [reasoned] our business model. We have structured our business launch four axes which are also in the center of our central research and development. You'll hear more about it during the morning. So we structured our portfolio further in order to optimize promotion. We leveraged our geographical opportunities. We shaped the market by our health outcome data. And, finally, we did significant efforts to even improve further our access, especially in the United States, but also in Europe.

What did we achieve? In line with the activities of our research we structured around those four clusters, cardiometabolic, CNS, oncology and, for the first time, through the launch of Gardasil, together with Merck, we obtained synergies between Vaccines and Pharmaceuticals. Those key products benefit still, and I believe they continue to benefit, from cross-promotional efforts hospitals, GPs and specialists.

And in those markets where we see growing substitution, which is true for Latin America, which is true to quite some extent also for Europe, France, for example, we reinforced our presence in the pharmacies.

Within cardiometabolism, Clopidogrel shows sustained growth. The molecules, the prescription of the molecules today is growing by approximately 15%. And you see on the chart, right side, a strong recovery of prescription growth when we changed our promotion methods at the end of 2005, where we reinforced our presence in hospitals and since prescription growth has been on a steady very high level. Also [inaudible] of the generics due to the fact that we never reduced our promotional efforts.

We see then on the lower right side that the original Plavix has taken, once again, the lead. I am sure we will discuss this further during the question-and-answer session. But evidently, we are coming back to the market in a strong performance. We see today that the major wholesalers have evidently emptied their stock. What we continue in the presence of generics and observe this is a largely mail order and retail.

Now on Acomplia some words. You see that we have launched Acomplia during the second half, mainly during in the fourth quarter, now in 12 countries. And you have read during the last weeks that the launch in France is imminent. And we prepare for this launch at the beginning of March.

The penetration of the product wherever we have launched it is typical for a cardiovascular product. And I gave you two examples here. It is among the most successful launches of this respective market and therefore in line with our expectations.

We see a certain dynamic in the development of the labeling. And the most encouraging comes from Mexico, where we have a full diabetes indication, which is, of course, what we are aiming for. Following the new data specifically, SERENADE which drives us in this impetus direction which, of course, is in our strategy.

So far the success of the product is perfectly in line with our expectations. And we don't feel at all discouraged by the new reimbursement of the product in Germany. In countries we continue to promote the product with a different [axis] also in Germany. Yes, we have seen a certain slowdown of success in Germany due to the reimbursement, but we remain at a very remarkable high level.

Further positive to note that we are successful in positioning this product amongst medical [inaudible] patients and, as you see, more than 30% of the patients which we reach today and which are under treatment are perfectly in line with our labeling. And we believe that this is another contribution to increase access in the future.

Central nervous system, today's leading product, of course, Ambien and Ambien CR. We have attained a switch rate of 33% from Ambien IR to Ambien CR. And we have made significant progress in terms of access, which makes us confident that by the end of the patent protection of Ambien IR, by the end of April, we will have approximately 40% switch rate which means that Ambien CR, potentially, will be a product selling more than 1b per year, which means the new form will be a blockbuster.

And, as you see on the chart, already today Ambien CR became the leading hypnotic after Ambien IR, taking over the lead from recently launched competitors, which became flattened their performance in terms of market share since quite some while now.

I talked already before that we see the world pharmaceutical market as a much more segmented market today from a regional perspective. And yes, we have attracted in terms of our organization and in terms of allocation of our resources. And what you see on the chart on the right side is the development of headcount and sales force. I can indicate to you that our sales force total number is stable for now more than two years.

But you see that we have made significant reallocations of resources, reducing our sales force headcount, especially in the U.S., in France, in Germany. Europe is more or less stable. And you see a significant increase in the other regions, mainly China, Brazil, Mexico and the other market, Russia, where we have significant growth opportunity and where we continue to leverage also our Base Business.

This Base Business represents about EUR8.5b out of our sales. So it is very, very significant. And, once again, the importance varies from region to region. And yes, it is true, that in Europe in 2006, our Base Business, due to the intervention from the Government, due to price reductions and on reference prices, has been diminished by approximately 4%.

But it is also true that in the rest of the world, this business which represents for the rest of the world more than 40% of total sales, has been growing by more than 4%. And we feel that this is absolutely vital to develop, especially those markets which are extremely sensitive to price, and well-proven therapeutical approaches.

And so we continue to believe in the Base Business and we believe that we do reasonably well.

Some word on health outcome, what have we obtained. You have here some examples which make us also confident for 2007.

As indicated before, Lantus sees important changes. In 2002 only 70% of Lantus treatment has been initiated by GPs. And in 2005 it grew up to 88%. But 87% of acute coronary syndrome treatment has been initiated for Plavix in hospitals, 74% of PAD, peripheral arterial disease, which remains largely un-leveraged as an indication, comes from [office] treatment.

So, once again, a strong confirmation that at least this Company, today, cannot abandon promotions to the GPs because the GP and the office initiation is of vital importance for most of our major products.

Some more data which confirms productivity and importance of our presence with the GPs. And this example, once again, out of the United States. The number of patients prophylactically treated with Lovenox increases -- still increases, and subsequently the rate of pulmonary embolism and DVT decreased.

Nevertheless, those figures for the United States are significantly, still significantly inferior to the rate of heparin innovation, the [upper 10], for example, in Europe.

If you look at the right lower side of the chart, you see that Plavix treatment, the ratio in 2006 further improved and has now reached a level which we have discussed many times during those meetings before, which is the level of Europe, approximately 200 days.

And you see also that we have been successful so that people stay longer on Plavix treatment which, of course, is of vital importance to have an optimum protection coming from Plavix.

There is a lot of discussions today, for good reason, what is the situation in the United States subsequent to the extension of Medicare. And you see here some, what I feel, impressive figures. All our major products, and I can include in this, of course, Plavix, have extremely solid positions. So additional in Managed Care, and you see that we have obtained very, very strong positions within the extension that is to play mainly in 2006.

It is therefore that we believe we have a good basis for 2007. And it is therefore that we have obtained significant progress also in making access in Europe, where we see very similar trends now, in France, in Germany and the United Kingdom, and where we take advantage of our experience from the United States.

Giving you another example, Gardasil has been more or less immediately reimbursed in most of the European countries. Also quite recently here in France. We have obtained reimbursement at very reasonable conditions for Acomplia here in France. And we are practicing our promotion approach for Acomplia in Germany, where we are being reimbursed on the official side and where we are starting to conclude agreements with private insurance companies.

So overall, yes, it is true 2006 has been an extremely difficult year. By the coincidence of controversial effects on our business which happened to an extent we haven't seen before and we hope not to see once again.

The [whole] organization has reacted to those events rapidly and adequately and the result is that this Company continued to grow in terms of sales and in terms of profit, as Jean-Claude will illustrate to you in a couple of minutes. So we feel that we've become stronger out of this year 2006 than we went into, and this gives us a lot of confidence for the ongoing year 2007.

Thank you so much.

So Wayne, if you don't mind, it's up to you to talk about Vaccines.

Good morning. Sanofi Pasteur is the world leader in vaccines. Our revenue in 2006 was EUR2.533b which was a growth rate of 22.7%. Our sales in Europe, through our joint venture with Merck, Sanofi Pasteur MSD, was EUR724m.

Our business is basically consisting of a number of franchises, the largest of which is influenza. Our influenza business is over EUR800m in 2006. The next largest franchise is polio/pertussis/hib, and this is basically the vaccines for infants in the primary series. Sales were over EUR600m there.

Our booster business and pneumo meninge sales were both over EUR300m. Travel endemic was EUR239m and I'll go through each of these franchises in a little more detail to explain what happened in 2006 and what the future looks like in 2007 and beyond.

Let's start with flu. Our flu sales in 2006 were impressive, coming off a very large base, a growth rate of 27.5%, total sales now EUR835m. We produced almost 50% of the worldwide supply for influenza vaccines. And that was 170 million doses from our two facilities here in France and one in the U.S.

We have the leading market share in the U.S. with Fluzone. And we are the number one flu vaccine in Europe with Vaxigrip, also in Mexico and throughout Latin America.

We are the leaders of pre-pandemic vaccine sales, and booked revenues in excess of EUR150m in 2006.

You'll note on the slide that the U.S. sales of Fluzone had a slight decline in 2006. This is a reflection of the fact that our Base Business in 2005 we were basically the sole supplier in the U.S. marketplace. And two competitors basically re-entered the U.S. marketplace in 2006. However, we still maintained a 70% market share.

Looking forward, our focus is really in two areas. One is pre-pandemic preparedness and the other is developing the influenza marketplace globally.

Looking at pre-pandemic preparedness, in the November we received a contract from the U.S. Health Admin Services to provide H5N1 vaccine for delivery in 2007. This contract is worth to the value of U.S.$117.9m and is another in a series of H5N1 contracts we have been supplying throughout the world.

Our focus is basically on increasing immunization rates and increasing capacity. And both of these are critical if we are going to be prepared for a pandemic. We have new facilities under production in the U.S. to produce flu vaccine. That should come online in 2009. And we are on track for the same timeframe to deliver a new filling and pack facility in [Valderoy] which will basically remove any of the current bottlenecks in providing more doses out of that facility.

In 2007 we are filing a mock dossier with the E.U. for H5N1. This is designed to prepare both the manufacturer as well as regulatory authorities to accelerate licensing of a pandemic vaccine when and if a pandemic occurs.

Additionally, we've begun studies using novel adjuvants. Studies began in January of this year and we should have the results sometime later in the year.

We also have a partnership with Crucell, using their PER.C6 cell line. And we began trials in 2006 using the cell culture vaccine. We have also developed an H7N1 candidate, which can avert a potential pandemic strain and this is working with FLUPAN which is working within the E.U. and several academic institutions throughout Europe.

On the influenza side of the business, we expect the market to more than double in the next five years. We see growth potential virtually everywhere in the world. Starting with North America, with supply no longer a constraint within the U.S., the U.S. ACIP is expected to start moving towards universal recommendation in influenza. And the projections are that the U.S. marketplace will exceed 150m doses by 2010.

Similarly, we see similar expansion occurring in Europe as recommendations are moving down in age to the 50 to 64-year-old age group as well as the pediatric population.

In Latin American, immunization rates are still relatively low. And so there is tremendous opportunity to immunize more people in Latin America, and so most of our efforts going forward will be focused on developing this marketplace.

We've established several partnerships at the local level. One is in Mexico with [Bermex]. The other is in Brazil with [Butantan]. And we're going to see collaborations with these two organizations to accelerate the delivery of flu vaccine into those markets.

Probably the greatest potential in the long term, very similar to Pharmaceuticals, is Asia Pacific. These markets are virtually under-developed or not developed for influenza vaccines. If you look at China, for example, there are 1.2b people in China. There are only 20m people immunized today which is less than 2% of the population. Contrast that to Western Europe and North America, where over a third of the population is immunized.

If you look at India, we have 1b people and virtually no-one is immunized today for influenza. So we are developing local manufacturing presence in Asia Pacific that should come on line in the next five years which will allow us to meet this growing opportunity.

Looking at polio/pertussis/hib, sales in 2006 were up 18.5%. And this growth basically came across all the major brand families. In the U.S. we maintained market share despite the fourth consecutive year of a combination competitor. We will be introducing our own combination in 2007, which I'll cover shortly.

For India and Egypt we produced a monovalent OPD. This particular product is used to basically help eradicate polio. And we work in collaboration with the Government and the WHO. This provided growth of over 27% for our polio vaccines. And we see continued expansion of our combination vaccines based upon our acellular and IPV products. And we'll cover that in more detail.

Looking at the combinations going forward, we have two major launches scheduled in 2007. The first is in Mexico with a product that's called Pentaxim. This is a combination of acellular pertussis, IPV and hib.

Mexico is the first country in Latin America to move from OPV to IPV and from wholesale pertussis to acellular. The product was launched last month and is now the standard of care in Mexico. We expect this product to basically be used throughout Latin American and through the Asia Pacific region over the course of the next several years.

In the U.S., Pentacel, another pentavalent vaccine that combines acellular pertussis, IPV and hib. We put it in front of an FDA Advisory Board in January, called [Berpak], and the Advisory Board recommended unanimously for licensure of this product.

The product was developed in our Canadian facility and has been the standard of care in Canada for the last decade, with over 12.5m doses sold. We have a new production facility in Canada that was licensed by the FDA in the fourth quarter of 2006 which will allow us to meet the demand for Pentacel as well as other acellular pertussis combinations Daptacel and Adacel.

Looking at our pneumo/meninge franchise, Menactra was the main driver of the growth in this particular franchise. Sales reached $242m -- euros, and we were up 36% in the U.S. over the previous year. We also experienced very strong growth in Mexico with our pneumococcal vaccine, Pneumo 23, with sales increasing 74%. This particular franchise has tremendous growth potential, and we believe that the meninge marketplace will be over EUR1b in the next several years.

Bacterial meningitis is a disease that is epidemic in Africa and endemic throughout the developed world. It has a rapid onset of action, and basically has a very high morbidity and mortality. One of the challenges of this disease is that it appears to be influenza and by the time the diagnosis is made you see very high morbidity and mortality.

With our supply issues resolved in the middle of 2006, the ACIP in the U.S. has reinstated recommendations and is now calling for all 11- to 12-year-olds, 15-year-olds, and incoming college freshmen to be immunized with Menactra. Menactra has blockbuster potential. And we have a series of events over the next three years which will basically drive it towards the EUR1b sales.

The first is the indication for 2 to 10 years of age. The submission was made to the FDA and we expect licensure sometime in the second half of 2007.

Our toddler vaccine, which will take the product down to the first year of life, entered phase III and was designated a fast-track designation by the FDA.

We launched Menactra in the fourth quarter of 2006 in Canada, and we have a new manufacturing facility that's under development right now in the U.S. The indication for toddlers, combined with a new manufacturing facility, will allow us to expand Menactra licensure throughout Europe and the rest of the world.

In terms of boosters, the booster vaccines consist of products that contain tetanus, diphtheria, pertussis and/or IPV, and are products that are used for adolescents and adults. Growth in 2006 was up 23.4%, with total sales of EUR337m.

We had a very strong uptake of Adacel in the U.S. In its first full year had EUR142m of sales. Decavac, which is the original TB vaccine, still exceeded sales of EUR100m. And we had strong recommendations in Germany for Repevax and Covaxis. And, as you can see, we had solid growth of Repevax, up 45%, driven by Germany.

Going forward, we believe that the booster marketplace will more than double in the next several years, driven by the need to immunize adolescents and adults to protect infants. In adolescents and adults, pertussis is generally a mild to moderate disease. However, for infants, it's a very severe disease, often with very high morbidity and mortality.

Epidemiology has demonstrated that infants contract the disease from parents, siblings and healthcare workers. And there's an increasing need to immunize those people in order to protect the infants who haven't completed their immunization schedule.

In the U.S. the ACIP has put forward recommendations to immunize all adolescents, adults and healthcare workers that come in contact with newborns. And looking at the epidemiology, pertussis tends to have five-year cycles, and we're right now, we're at one of the -- on a rise in pertussis. Cases in 2005 in the U.S. were 26,000. 65% of those cases came from adults who actually transmitted to the newborns.

Recommendation to immunize adolescents and adults basically is gaining momentum in Germany, and we expect this to expand throughout Europe over the next five years.

Looking at our joint venture in Europe, SPMSD, sales are EUR724m, up 5.3%. However when you look at our joint venture we -- our license for Hexavac was suspended in the second half of 2005, and if you remove that, the rest of the vaccine line was up 12% in 2006. Flu vaccine was up 18%, MMR and varicella were up 28%, and our travel endemic vaccines were up 16%.

Probably the biggest event that occurred for us in Europe was the early licensure and launch of Gardasil. And we expect Gardasil to have a major impact on performance of our joint venture in 2007. The product is now available in 13 countries in Europe, foremost being France, Germany, and the United Kingdom. And we expect launches during the course of 2007 to the other countries, including Italy, Greece, Switzerland and Spain.

Our joint venture benefits basically both from the Sanofi Pasteur and Merck product line and pipeline, and you can see we have a series of launches that will be occurring over the next several years that will help drive the growth of the joint venture.

In addition to Gardasil, which already is in launch mode, we have RotaTeq for rotavirus, a flu micro-injection which will basically provide greater protection and immunogenicity for the elderly, ProQuad which is a combination of MMR and varicella, Zostavax which is for shingles, and then Menactra for meningitis.

If you look at the vaccine business over the next five years, we expect it to more than double from EUR9.7b to EUR18b. The growth will be driven by a series of new product introductions as well as increasing immunization rates. As you can see in the chart on the right, the drivers in the next several years will be Menactra, the booster vaccines, Gardasil and RotaTeq, Zostavax, and then around -- at the end of the decade, the introduction of new flu vaccines.

Sanofi Pasteur is in a good position to basically capitalize on this growth. We are and remain the leaders in influenza, meningitis and boosters. We have a strong position in the polio/pertussis/hib. And we will be launching two products in 2007, Pentacel and Pentaxim in Mexico.

The opportunity to increase immunization rates globally is very visible, and the health organizations are driving to increase immunization rates for flu and for the pediatric vaccines. Our pipeline, which we'll touch on shortly, is very promising. And we share in all the key drivers in the growth that's expected in the next five years through our partnership with Merck and the joint venture in Europe.

Looking at our pipeline. Our pipeline is well-balanced. It consists of three types of products. We have new vaccines, like dengue and CMV, or cytomegalovirus. Those two new vaccines have entered phase II in 2007. We also have a number of combination vaccines which basically increase immunization rates and, as you have heard, Pentacel will launch in the U.S. in 2007 and Hexaxim, which is a hexavalent combination that will be available in Latin America and Asia, moved into phase III.

And then we have life-cycle management and line extension type products, Menactra 2 to 10 is an example of that. We're expanding the indication for Menactra. That will -- that licensure in the U.S. will occur in the second half of '07. Additionally our toddler development program entered phase III and it's been designated fast-track. And then the flu micro-injection basically has also entered phase III, and we're looking for licensure in 2009 in Europe.

Finally, if you look at the planned filings throughout the next three years, you can see that we have a series of new products, combinations, and life-cycle management submissions. These submissions, coupled with the need for increased immunization rates, the increased capacity we will have for flu, acellular pertussis and IPV assure Sanofi Pasteur of a solid double-digit growth in 2007 and for the years to come.

Thank you.

[Interpreted]. Good morning. I suggest we look at the financial subjects. We've got the two screens here. I'll be running through the main elements, so, looking at the income statement. I think there'll be one set screen with the information and another screen we'll be using to look at things line by line, in greater depth.

Next one. Thank you. And for the other screen, can you get the beginning comments? Thank you for that.

Now, as Hanspeter was saying earlier, our business activity was fairly buoyant in Q4 2006, plus 8.4%, as you can see there. 4% for the full year. Unfortunately changes in currency, in particular dollar/euro changes in Q4, didn't actually go in the right direction for us since we publish our quarter accounts in euros. And so we can see growth of 5% in Q4, whereas, for the full year, reported basic growth of 3.9%.

If we look at the income statement, a few comments I might make on the top part here. Of course, first of all, royalties, that line. This one is being hit by the low sales for Plavix in the United States, starting August 8. To remind you of some figures, $425m in sales between August 8 and December 31, which is much lower than previous figures. This is something we see under this line here, the royalties.

Now, cost of sales. We see an improvement in Q4 if you compare this with the previous quarter. Sorry, sorry, to correct, if we compare this with Q4 2005. This is inter alia due to the fact that we no longer have a problem comparing with U.S. generification -- generic products Allegra, and others.

So, a positive mix effect, whereas if you do this comparison on an annual basis, cost of sales dropped slightly compared to the previous year. On the other hand, the generics effect in the United States was greater than the positive effect in the product mix. Thank you.

Research and development, as you can see for the full period, R&D expenses are increasing by 9.5%. We knew this year would be a year where there would be a lot of clinical trials. Now, something -- might seem like a slowdown in R&D in Q4, limited growth. But remember, in Q4 2005, that there was a startup in R&D spending, 6.6%. For the full 2005, the growth had been 2%. So I think that puts things into perspective, to some extent.

To talk about selling and general expenses now. I think it's important to observe a reduction in Q4 and for the full year, but a bigger reduction in Q4. As from the end of Q3, beginning of Q4, we took various measures to adapt. This is fully reflected here. Now, of course, these adaptation measures are related to the various countries where we encounter problems, France, Germany, due to the extension measures taken, also the United States, as Hanspeter was alluding to earlier. On the other hand, we developed our positions elsewhere.

But, all in all, this has led to a reduction in spending. And I don't need to add, it is written here, that we have continued -- at the same time we've continued reducing general expenses, overheads. We've continued to contain spending in Q4.

This is quite interesting. If you look at the full period, selling and general expenses went down 2 points, if you make it as a percentage of sales. It's just over 28%, whereas we used to be at around, just over 30% as a percentage of net sales in the previous, in the two previous financial periods.

Other current operating income and expenses. No comments here. But I would mention that this is the line item that includes two important things. Firstly, contribution of [core] Prasco. It's a small company in the United States where we launched the Allegra off-the-shelf generic, inter alia. No change here in Q4 because we've got more and more generics [inaudible] there. Profitability, therefore, of Allegra. I'm not talking about Allegra deals have been changed, have declined.

Now the remainder. Our foreign exchange result slightly negative, ever so slightly negative, but it's still much better than last year.

So I think that this is something fairly remarkable for Q4, as I mentioned earlier. It doesn't compare poorly with the previous period, in particular when it comes to generification. But there is a Plavix impact. But this didn't prevent us from having a growth of 12.5%. 12.5% in current operating income. I think that's really remarkable. This has meant 6.1% for the full year, plus 6.1%, [don't mention] other quarters.

You see the main factors here. Above and beyond the generics, as I mentioned earlier, we continue making efforts in R&D, up 9.5% in R&D spending. It's a complicated exercise, and we nevertheless see growth in our indicators.

When we go down a little bit more below this, as we look at what's below the current operating income, for the quarter there are two negative points, firstly costs. Restructuring costs. These are what we're calling adaptation measures. It's a question of good management, reducing spending.

We began restructuring costs. This has mainly to do with France, Germany, and, to a much lesser extent, the United States. We booked this at the end of the year. It'll start producing positive effects next year.

Now, the second point. You saw Ketek encountered several restrictions on indications, restrictions on indications in the U.S. and in Europe. The latest is dated yesterday in the United States, a further reduction in indications for Ketek. This has meant a big drop in sales for that product. You won't be surprised to hear this. This is why we had to impair some tangible assets which were used to produce Ketek. We also booked this impairment -- the total amount is about EUR214m, and we booked this in Q4.

We can see this for the full year, and let's have a look at this in terms of other operating income and expenses. This is positive. EUR536m other operating income and expenses. Positive figure. These are mainly pre-existing as of September 30 of the year. You remember the main items here. You've got capital gains, which we made in selling Exubera, also a balance from nutrition -- Animal Nutrition business.

Operating income for the full year grows by 7%, around EUR10b in all, almost EUR10b.

If we go down a little bit. Financial income expenses, of course, the cost of debt goes down, the cost of debt is going down thanks to cash flow. We'll come back to that point later. And interest rates on average have tended to go up by about 0.5 percentage point for this period.

This is also where we book capital gains. Last year we had some stakes in Biotec. In Q4, we sold our stake in Rhodia.

One item we need to look at, we need to look at this in both respects, positive and negative, net financial income and expenses.

Now tax rates. If you do the usual -- you look at taxes, you see the 29.1% tax rate. But that's not representative of what we're doing here, because the capital gains for Exubera were not heavily taxed due to the way we engineered the contract and sold to Pfizer. As mentioned, Rhodia capital gain wasn't taxed. We wanted to give you the recurring tax rate, which gives a better indication, I think, particularly in terms of the next fiscal year. So 30.6% effective tax rate.

Equity affiliates, I'll talk about generics again, clopidogrel in the United States. It's unfortunate to keep coming back to this, I'd rather say Merial performed very well this year, and this is the more remarkable, the remaining items under this heading, have to do with our sharing of profits with BMS for [Alopron] and clopidogrel.

Minority interests, same point here, but this is for the territory we managed. Minority interests go up widely because profitability, managing of two products, in our territory, Europe and the rest of the world have been good. Profitability has been good and have gone up.

Now, I think we need to try to summarize this. Net adjusted income. These figures in Q4, negative, in terms of net income and earnings per share.

Earlier I showed you some special, unusual items, restructuring costs as well as asset impairments. That's around EUR400m in all, pre-tax. Off the cuff, let me say that compared to a quarterly net income of EUR1.4b, without [inaudible], we'd have had great growth. It's no excuse. But just a piece of information.

The quarter, I said earlier, was fairly remarkable. We've returned to substantial growth for current income, and we see this on the bottom line. You'd see it more on the bottom line if we didn't have to take those restructuring costs as well as the Ketek impairments.

Full year, EUR7b adjusted net income, up 11%. Earnings per share, this means EUR5.23 and up by 10.3%. Of course this is an improvement in our profitability rate, if you compare this net adjusted income to sales, around 25%. But we won't leave it at that. As usual, we need to look at the specific items which had an impact on these figures, but we have a better understanding of our Company's performance.

We've summarized this for the quarter and for the full year. Three headings. Let me specify, everything's net of taxes.

Interesting, the important thing, and we'll be looking at this now and henceforth, in 2007 as well. We'll be looking at the main items, so that people don't wonder what these special items are all about. We'll list these special items for you.

You can see on the list, capital gains on sale -- we should have started with the restructuring costs, actually, these have all been booked, as I said, earlier in the year. I said EUR176m earlier, pre-tax, that's EUR122m after taxes, plus a capital gains of EUR553m, including EUR100m for Rhodia, under Q4. You've got the list of the main components here.

And then a third item, which is [more sleeping] here, provisions for financial instruments, litigation, tax audits and miscellaneous. Here we need to look at the points in detail here.

The figures seem fairly low for the quarter, EUR25m, and the full year EUR38m, but in reality this covers several things. For instance, if you look at Q4, I would say, on the one hand, the positive element, the favorable outcome of some tax audits, there were some provisions for tax risks. This has meant a write-back of EUR105m, a write-back in provisions of EUR105m.

Earlier I also mentioned some impairments of industrial assets for Ketek. And here you can see this net of taxes, EUR79m impairment of Ketek assets, are the two main items for the quarter.

And then, conventionally, you've got a change in financial instruments, as you see, CSL. This is the Australian company that Aventis Behring was sold to. Unfortunately some traditional provisions for the investment portfolio mark to market. This is the minority stakes that are lifted.

So all this -- are the special items that were negative, EUR168m negative in 2005, EUR469m in 2006, total after tax. Fairly neutral for Q4 2006, which means excluding any directed items, growth in income -- slight growth in income for Q4. Unfortunately slight reduction in earnings per share in Q4, and particularly for the full year.

We talked about this growth earlier. 6.6% in actual terms, approximately EUR6.6b, and 5.9% earnings per share, EUR4.88.

One technical point I'd like to make here. We've shown you -- give selected items, these special items, I've said we'd continue using this layout in the future. When Gerard Le Fur in a few minutes comments on guidance for 2007, he'll be doing this based on the adjusted income, excluding the selected items, these special items.

Cash flow, I think it's fairly easy to conclude that, if you look at full 2006, we can say there's been an improvement in cash flow, reduced net debt by EUR4.1b after having EUR4.3b in 2005.

Another point. EUR7.6b operational cash flow may seem like a big change from 2005, but remember they were asset impairments included in our earnings, which is why there's a slight increase in cash flow.

And we can see the working capital. Not many points on working capital compared to June 30. The situation's a little bit better than June 30, we've used up EUR1b of working capital. I wouldn't say much about working capital requirements for operations.

It mainly had to do with other assets and liabilities, and here we're talking about tax effects actually. You know, the fact that there's a lack of synchronicity. You've got taxes that are booked at one period and paid in another period, for example, tax payment in December, and we have to be careful in calculating these, [inaudible] this year again. Sometimes we have to pay a little bit more in advanced payments to make sure you don't end having to pay a penalty subsequently if you've made a mistake in that advance payment.

So these are the main items that you are seeing here. All of our working requirements, if you look at it on the balance sheet its 11% of sales, which is still something fairly modest.

Now last line, investments going forward of [EUR1m], this includes acquisitions products, including recovery of our rights for Plavix and Rimonabant in Japan. Other industrial investments grow slightly compared to last year, efforts we've made in Vaccines. There is a growth here compared to last year.

Acquisitions, this is mainly Zentiva this year. It was Hoechst minority last year. Asset sales, disposals a little bit of Exubera. This is net of taxes, so there is no confusion. Second element here Rhodia. This is part of the EUR1.2b, mainly [Robacra] last year a stake of 50% in German chemistry.

Share increases, [different] share shifts dividends, this relates to the points I said earlier. And the level of net debt at the end of this fiscal period, which is EUR5.8b. You can see over a two-year period we've reduced debt by EUR8.4b. We had EUR14.2b the previous year. We were at EUR17b after the summer of 2004, during the acquisition. So you can see that we are very much in sync. This is right in line with what we've indicated to you at the beginning of 2004. Gearing has gone down a little over 12% at the end of 2006.

The balance sheet, not many points here. Let me just say since the dollar has gone down the balance sheet is -- the weight is lower, and this is mainly due to the currency effects above and beyond the conventional depreciations. We've communicated for two years now we will have this depreciation for many years to come, these intangibles in our balance sheet. This is basically all I wanted to mention on the balance sheet itself.

To talk about the dividends now, the Board of Directors decided to propose an increase in the dividend for the rest of 2006 up 15%, which is a faster increase than net adjusted earnings, excluding collected items. EPS was [plus 5.9], a faster increase than adjusted earnings per share, plus 10%.

So, what we are doing here is -- and we are pleased to see the improvement in our net debt. We were EUR5.8b at the end of the financial year, and this is in step with what we've said when we began the operations.

Includes payout rate when Group's debt had been cut substantially, well the Board felt that the time had come to propose to shareholders bigger growth in dividend and growth in earnings. So, the payout rate 32 -- it goes from 32% to 33% this year. There you go, thank you very much.

[Interpreted]. The next speaker will be Marc Cluzel, who will be talking to us about the R&D portfolio. He will be joined during his presentation by Pierre Chancel. They will be speaking together. We said that to you earlier.

[Interpreted]. Before I begin I just want to say a few words about the general spread we've been making [inaudible] in. And we have, for today, we realize that we need to knows better, but particularly to better understand our portfolio.

In so far as our Phase IIb and III products have increased by about 25%, we decided to make a rather complete presentation of all our Phase III products, and in particular to put these products into their therapeutic perspectives. Obviously it takes more than one product for a company to be successful, but its -- generally it's the whole vision of a therapeutic category.

Of course, the other side of that is that we have 124-page presentation. So we will be going through the various slides rather quickly.

You will have ample opportunity to ask your questions later on. And maybe I can share that we will be holding an R&D meeting on September 17, this year, a special R&D meeting which will give you an even better opportunity to understand our portfolio and ask all your questions, as well as understanding our philosophy.

Well, first part of the presentation, this is the usual chart we use to present our portfolio. It can be analyzed in various different ways, but the number of molecules is, broadly speaking, stable.

There is an increase from 35 to 46 molecules in Phase II and III -- IIb and III, that is. And would be also be -- in the clinical field we have a total of 17 molecules that's preclinical Phase I. If we take our base medicine -- our Base Business, gives a total of 87.

Also, interesting to bear in mind that the long-term investment has ultimately paid off. We've always felt that the central nervous system was probably an area that we had to develop in, in the pharmaceutical sector. Well we know have 27 products in this sector, with 10 in Phases IIb and III.

Likewise with Oncology, the number of products is up to 18 in all. And, of course, we still are very, very strong in our preferred area, that is the cardiometabolism and thrombosis [access].

I am just going to comment the top of this slide, that is slide 57. 2007 and 2008, and just bearing in mind that in pharmacy we have 12 products that we have planned to submit in '07 and '08. But, for information, we felt that biotinylated and [Idranix] and Idraparinux was one single product. To these 12 we could add the six vaccines, which would give us a total of 18 molecules that can potentially be submitted in '07 or '08.

Here again our work has ultimately paid off, because if you look at the central nervous system we have four potential products here, two in the field of depression, one for Alzheimer's, and another one in the -- another preferred franchise which is sleep.

In Oncology we have S-1 with the VEGF Trap, and Alvocidib. As for the changes in the main portfolio, one product has yet to be for this year put in, but S-1 is in. So, we are getting closer to our goal, and we have a relatively stable number of products.

I am now going to the R&D proper, we are going to do a duo with Pierre on my right, or your left as you prefer.

[Interpreted]. Good morning everybody. What Marc Cluzel and I will be doing is that we are going to talk to you about the challenges, the strategic context and the main thrusts as regards our product strategy.

We are going to focus mainly on three areas, cardiometabolism, central nervous system and oncology. They are the three main areas. Each time we will be telling what the main aspects of our product strategy are.

Now, I will be telling you what we are doing, and because it's our business we will be aim to improve the public health, which obviously has clinical benefits, but also economic benefits, cost-benefit analysis. But we will be looking at the broader picture for each of these pathologies.

We are going to deal with the information that you are probably familiar with. This is the cardiovascular mortality rate over the next 20 years. This is a projection, of course. We are talking about non-communicable diseases, but the main cause now and in 20 years time will be cardiovascular diseases, followed by oncology or cancer.

Secondly, if we look at the global cardiometabolic risk factors, we can normally look at risk factors individually. You have the established risk factors, such as LDL cholesterol, hypertension and diabetes. But there are a number of new risk factors that have emerged. Here you have the overall definition of a cardiometabolic risk, that's the EDA's or the ADA's definition as presented at its last conference in June 2006.

The upshot is that we need to take cardiometabolic patients into account as a whole, from a global point of view. Now, there are connections between these risk factors so there -- there is a known co-existence of risks in patients, but also co-mobility. And, of course, we need to take a new therapeutic approach altogether.

This slide, really what I am driving at is, well, three things. First of all, one I've already mentioned is the co-mobility. This [inaudible] co-exist in patients. Now, without going into details you see the various factors, morbidity factors on the left.

Secondly, because these risks co-exist you don't just add one risk to another. Risk actually increases exponentially the more factors you have. Now, we have a study called Interheart, which shows that the risk actually increases exponentially when there are more than one factors of risk.

Thirdly there is a continuum here, there is a real connection over time between the way the disease develops and the way it's treated. Existence or co-existence of several factors can lead to coronary events, [ADCs], strokes. And, of course, we also then need a secondary management, closer management of risk, post-event management with strategic therapies.

Now before telling you what we do and what we want to do, and the last thing I'd like to say is that the number of patients concerned by global cardiometabolic risk is increasing sharply for two reasons. First of all, if you take obesity or diabetes separately, you could talk about diabetes being the epidemic of the [third] millennium, 150 per 1,000, we expect that 250 or280,000 by 2020 that's really an epidemic.

Here we are working on guidelines. Science is still moving forwards. Guidelines are more and more aggressive, because we see the benefits of that, treating diabetes aggressively. [IV] is low as 7.5 points, now the figures is 5. We now -- it is over 6.5 might be as low as 5 in a few years time.

Likewise with the waist circumference, the definition has increased, like with the high blood pressure and LDL cholesterol. So, the guidelines are more and more restrictive, more and more stringent. So, we are undeniably faced with a public health issue, and we are going to have to treat these patients appropriately.

Now, what about us, what are we doing? Well, we've committed ourselves for two reasons. First of all, we have a portfolio of products for which we are the reference prior to the product. We are the cornerstone of each of these risk factors, be it the level of thrombosis, thrombosis, diabetes. When you take all these factors into account they are all covered with Acomplia.

Now, how to continue with this architectural approach, I would say that Acomplia is really the keystone or cornerstone that enables us to say that we, at Sanofi-Aventis, are best positioned in this global therapeutic management of risk factors.

So, we have our products, of course. But secondly the strategic goal and strategic reality are aligned. If you want to treat patients and manage patients globally well you have to manage them with your products, but with everything else we do.

There is no real mystery here that we use our data, clinical data, primary prevention data, real life data, registers, support through patients, through doctors, partnership programs with the doctors and with carers. But rather than mention everything we do and can do, let me give you two or three examples.

First of all, most of our primary prevention programs in 2007 concern over 40,000 patients. These are as primary prevention trials. As for the registers, look at what happens in real life. You see how these patients develop to see what the impact is on them. We keep registers on our various pathologies. We actually cover 400,000 patients with our registers, which is to reach -- address all the registers that we keep.

And, of course, we have taken a number of initiatives to provide support, back up to patients, doctors in areas such as insulin, to increase early [insulinization]. So support to patients, doctors to nurses, patient support centers, programs, information programs.

And also to [compare] the ideas to ensure that people understand what this disease is all about, how this disease can be treated, how patients' expectations can be managed, and how to teach patients to take their medication properly, not just in the short term but in three, six, nine months time. We also have call centers. We provide information day-to-day information, at the request of patients, but with the help of doctors and medical staff.

So, as you can see, we have taken a large number of initiatives. So this is what we do, this is what we are doing to change things in the cardiometabolic spectrum.

Now, this brings me to diabetes with Lantus. Now, to keep things simple, out of 100 patients in type 2 diabetes patients, out of every 100, 10 -- while diet exercise is part of the treatment I should add that, that's the green column, the first one, but out of 100, 10 are on Lantus.

The top right, which you see is our early insulinization strategy. And we think that patients should be treated earlier. In fact 70% of patients treated with insulin have an average hemoglobin rate of over 8, because this means they are simply getting -- the situation is deteriorating every day. So we've shown that our strategy pays off.

On the bottom right you see that we still have growth potential in substituting patients on pre-mix, which is the long compromise. Pre-mix treatments are treatments that provoke a hypoglycemia if they are too aggressive, and if you want to avoid hypoglycemia, people are not properly controlled. So Pre-mixes are not a satisfactory solution.

You see the potential on the left-hand side, with patients treated with 1, 2, 3 or 4 orals even though the actual number of patients may not be very high. Now does that pay off, does it work? On the left-hand side you have the market share in the U.S. insulin market. You have the market share of Lantus on prescription, of which Lantus is now the top-prescribed insulin drug in the U.S.

Now by meal time, within the left-hand side this is [inaudible] all these rapid insulin's take [more] time. And as we want to feel chuffed about what we've achieved, we look at the absolute value, as the absolute value, or the absolute volume of Lantus described as a straight line rising on the right-hand side. Little yellow color is Januvia in the U.S. This is a product that is beginning, the product that is affected is Byetta, it's not us.

The instantaneous pen we've been talking about the last four years or so, in 2007 we will be gradually launching SoloStar. Launches will be staggered from one country to another. This is a disposable pen, state-of-the-art disposable insulin pen that has significant competitive advantages, advantages over the best-in-class in the pharmaceutical industry at the present moment. So here again we have reasons to be confident.

Now I am not going to go into the details here, but here is a detailed plan. But just let me specify that on the bottom right, Origin prevention of CV events in high risk.

12,000 patients with [inaudible] cells are these Type II diabetes patients, had they been treated from Lantus from the very onset. By comparison with a conventional treatment, and, of course, this has enabled us to show that Lantus from the very start is the better solution.

Atherothrombosis, which is a single disease with a -- that affects a number of parts of the body. You see the number of patients concerned. The aetiology is very impressive, we have the figures for cerebrothrombosis, cardio PAD, peripheral arterial disease. And these different areas can co-exist.

Let me stress just one mortality which is a lower limb region. Now, with one of our programs, called [Reach], we've been able to show that after a year, one in every five patients diagnosed with lower limb affection is hospitalized. On the left hand side you see the reasons for this hospitalization, usually from the co-morbidity. So, it is a public health issue.

Secondly if you look at the right-hand side, you see the number of PAD patients that are not treated. 70% in all. The Basal guidelines date back about six months. This is data taken from the U.S. market, where we have use of Plavix, of course.

Now the development plan here for Plavix, without going into details, here you have it on the chart. But, up until 2007/2008 we will be increasing our penetration of different market segments in 2008 onwards. We will really be focusing on the duration of treatments, because the longer the patients are treated the more better they're protected.

Thrombosis now, the objective is to avoid or manage clots if they're -- this is thrombosis. It's not arterial when in veins, but venal thrombosis, even if it's of different origin, even if it is -- it manifests itself acutely, the consequences are nonetheless the same, it's clotting. And, of course, the danger is probably embolism.

Let me just stress one point here, that's the prophylaxis of pulmonary embolism, we know that we are perfectly capable of defining where the risk patients are, we know how to identify them. Just a few figures here, in 2005 25m [sic -- see presentation] patients were eligible but were not protected, they were not treated. These are medical prophylaxis or surgical prophylaxis.

Now if you look at the patients treated, one in two was treated with nonfractionated heparin. But if we say that we have a public health target, and if we have Lovenox whose superiority over nonfractionated heparin has been proven, well in cardio-vas that's fine. There has been a study that has demonstrated the superiority of Lovenox over these nonfractionated heparins, 40% proven in medical prophylaxes. That is a big improvement in terms of public health.

So, the Lovenox plan here, Acomplia. Well Acomplia. This is a slide that I've shown you several times already. But, of course, the product with its development plan, as the studies are coming on stream, it's keeping its promise. The RIO study 50% direct effect on diabetes, on dyslipidemia.

But then the SERENADE study that Marc will show you, but also the initial studies that demonstrate the benefits in abdominal obesity, obesity that is a consequence of all the physio, pathological effects. So, Acomplia, that is really delivering as we near the results of the life cycle management program that I won't recall today.

Primary prevention, CRESCENDO, great study. 15,000 patients showing the reduction of events in treating patients with Acomplia.

So, over now to Marc who will tell you about SERENADE case.

[Interpreted]. Start off with SERENADE, the results presented in December. Just a quick reminder of some key points.

We can, indeed, consider in looking at this slide that Acomplia is achieved significant reduction. 0.8 reduction in efficacy from base line. The important figures, 1.9% reduction in HbA1c in patients with a score of below 8.5% at baseline. If we take 7% hemoglobin, we achieve the results here. And, of course, the target is no longer 7%, but 6.5%. Remarkable anti-diabetic effect.

But, of course, Acomplia is not just an anti-diabetic. It's far more than that. It is, indeed, a product that can increase HDL. 10% increase. And 16% in triglycerides.

Another major problem faced by type II diabetic patients is weight gain. Thus far few products are capable of lowering weight, [DP34] to a lesser extent. And you can see that in this study there is a reduction of 7 kilos in weight in these patients, with a reduction in waist circumference of 6cm. This does, indeed, confirm the positioning of Acomplia as an agent to treat. It's a multi-factor agent to address several causes of cardiovascular disease. In addition, a major focus, major effect in diabetes.

Another study not yet presented, a Japanese study DRI5747. Why a phase IIb clinical study in Japan? Simply because they don't have the same definition of obesity as Europe and the U.S., so we have a specific study for Japan. Here are the inclusion criteria.

What's interesting to note here is that for the first time we were measuring visceral fat. We've spoken to you a lot about visceral fat and subcutaneous fat. And, of course, weight circumference reduction was linked to visceral fat reduction. We have never demonstrated it. So first the results of the study. It really is quite an impressive. Study after study, exactly the same data, the same lines we have for weight or for waist circumference.

Just a brief scientific point. This is replicated in animals. We can really see that we've affected an important point in the body, so there would be greater fluctuations. So this constancy really does demonstrate the importance of the mechanism of action.

On the fat, well on the left hand side of the page, how by scan, visceral fat is measured. And on the right-hand side two patients, two patients with exactly the same fat area, but one at the top where you can see that is white, far more visceral fat. And the lower chart with far less white in the stomach, far less visceral fat, but far more subcutaneous fat.

And when we look at the efficacy of Acomplia on these end points, well what do we see? Efficacy both in visceral fat and subcutaneous fat area. When we compare at the relative efficacy, we see far greater activity on visceral than on subcutaneous fat. Perhaps the simplest way of illustrating this would be at 10mg, we have a relatively modest reduction in subcutaneous fat where there is a significant reduction in visceral fat.

We also see that at the end of treatment for the 20mg group, percentage of visceral fat as compared to overall fat has declined during the study. So this is, indeed, a confirmation of the beneficial effects of Acomplia on visceral fat. Visceral fat correlated with waist circumference, in turn correlated with an increase in the cardiometabolic risk.

In terms of safety, well, of course, we should have started this development in Japan. Great safety profile you can see here. There are fewer patients that exit the study with adverse effects in the 20mg group than in the placebo group.

What's also interesting, difficult to know whether it's specific to the Japanese population, the absence of nausea in the list of adverse events for depression. This may be a cultural factor in so far as depression is not widely reported in Japan. But for nausea we need to continue development. We currently have studies underway in phase III in Japan. It'd be interesting to see if there really is a different nausea. So that was Acomplia.

Still in diabetes we have a glucose -- a renal glucose inhibitor. Just to describe what we have in diabetes, there are products that inhibit glucose re-absorption and the most attractive products that promote the reentry of glucose and insulin secretion. This is the central portion here, working more on the concept of insulin resistance.

But there's another portion that, thus far, have not been explored which was glucose elimination. Part of the glucose is filtered and then re-absorbed in the kidney through an enzyme. And in the absence of this enzyme there's a loss of glucose in the kidney. Glucosurea in normal -- in healthy patients which would be a loss of 720 kilocalories per day. So we attempted to determine by inhibiting this enzyme to increase the elimination in the animal, in the mouse.

On the left, the glucose. And then HBA1, the glucose impact over the long term. And there's a dose-dependent reduction. And in treating the mice we improve both the blood sugar and HBA1C. And this is also apparent in the right-hand slide where rats had far better tolerance of glucose injections.

In humans, there's a phase I study. The results are reported. Great dose effect on the glucose output in healthy patients, not in diabetics. Additional glucose output in healthy subjects is about 20 -- between 20 and 20% of output. Glucose output of normal is zero, but only because there's the re-absorption.

So what can we expect from this type of product? Certainly not a product to treat the additional cause because it's really the Acomplia-type products that are the most beneficial. Addressing the -- treating the condition, but in association, very interesting products in order to improve blood sugar. Better glycaemic control. Low risk of hypoglycemia. Can also be combined with other anti-diabetics. And that's -- the safety profile is very attractive.

And no weight gain and possible weight loss, in fact. The phase IIb program is underway. The results are expected at the end of the year, with start of phase III next year.

Cholesterol, not as innovative as the previous product, but a great supplement because, with this product, we have an activity that is comparable or better than ezetimib. It can be very useful in association with statins. And phase II is ongoing.

Just here to address two products. GLP1, end of phase IIb. GLP1 and AVE1625, CB1 antagonist for an indication that is tested in IIb. Indication that is not obesity alone, but obesity and dyslipidemia. So that's results during the course of the year. Early phase III next year and likely results.

Thrombosis. Rather complicated because there are different indications in which we can separate. We can have a chart, acute, the post-acute, the weak or the month and long-term, the month or even the year.

And we can also divide the conditions. We have the venous conditions. Either we can have primary prevention. If you've undergone hip surgery, for instance, anticoagulants during your hospitalization stay. Anticoagulation inadequate or you're suffering from cancer and you haven't received any prevention for onset of thrombosis. And so in that case you're treated for venous thrombosis. Knowing the treatment is, of course, far longer than prevention. At the same time this treatment is administered, there's also prevention of relapse. That's for venous.

Let's take now ischemic stroke. Blood clots from the atrium. And this is, of course, prevention of strokes, ischemic strokes, of [anti] vitamin K activity. And then there's the acute coronary syndrome. And here, again, either short [term], the otamixaban, we could have also included Plavix, because Plavix not an anticoagulant, and anti-platelet covers acute, post-acute and long-term in ACS.

As you can see, we have various products in each area, well, no more than two. We have AVE5026 and SR biotinylated idraparinux for venous thrombosis. And in stroke prevention, we have two products in the acute portion of ACS. I'll return to the difference in a moment.

Sorry, this is a rather crowded slide. I'll just run through it quickly at the top. The mechanism of action already described. A biotin hook on the idraparinux compound. The binding hasn't in any way changed the idraparinux. And then avidin, in the event of bleeding, which binds to the biotin. And avidin biotin idraparinux, in a minute, is absorbed in the liver, reducing the risk of bleeding.

We have obtained the possibility of achieving this development of DVT with idraparinux. And we have two studies underway. The first, just to pick up the idraparinux studies in venous thrombosis. We have EQUINOX. EQUINOX which is for patients with DVT. 26 weeks. At the end of the 26-week period we look at these patients, we look at the avidin activity. We have subgroups and we'll inject avidin and determine the anti-10A activity in the other placebo and see what happens. That's for venous thrombosis.

Now, in other patients with pulmonary embolism, different durations of treatment depending on the seriousness of the condition. Investigators can include patients either at 13 or 26 weeks.

In light of the Amadeus study, that are quite interesting to be presented in July in ISTH, we've decided to use, building on the Amadeus experience, we've decided to launch a program in arterial [fibrillation] with idraparinux. That's due to start at the end of this year.

So just briefly the pie chart that's illegible. We forgot to add something. There's a lot of talk about a product, once daily, oral or an injection, subcutaneous injection, is it interesting. Most people answered well, oral treatment once daily is far better. So we're getting the feedback from investigators on Amadeus. Most patients were disappointed no longer to have a once-weekly injection, found it very convenient.

Here's the result of an in-house survey addressing investigators, what mode of administration, once daily oral or subcutaneous injections once weekly, but which really does confirm our patient experience with Amadeus. 41% of physicians would prefer a subcutaneous form once weekly.

No problem with interaction with idraparinux which, in the elderly population, possibly, that's very useful.

Idraparinux biotinylated factor 10 inhibitor of coagulation, a mixed inhibition through the pentasaccharides of factor 10, and at the same time, factor 2 of a semi-heparin of synthetic origin. So this is venous thrombosis possibly for risk benefit because really in the scope of anticoagulation it's not so much the efficacy, but the risk benefit. If there's too much bleeding then you lose the advantage of the treatment.

So this is both in the primary prevention of VT, with a drive study underway. We've recruited half the patients for that. And in the acute coronary syndrome, here we have a duration of action longer than [otamixaban] and greater efficacy than [otamixaban]. So really the severely affected ACS patients and patients who, most times, will undergo a coronary procedure.

SHINE, that's a big one. 1,200 patients. It's a pivotal study. Results expected second half of this year.

Increasingly there is a view that we cannot address anticoagulation with a single product. And it's increasingly beneficial to have a product adapted to each segment. There's one segment that lends itself well to one of our products which is that of VTE, venous thrombolytic events, and cancer.

Relatively frequent, 15% of deaths in cancer patients due to fatal pulmonary embolism. And we know subsequent to a study, and this is on the right-hand side of the slide, that mortality is significantly greater, doubled, in cancer patients with VTE, venous thrombo-embolism, as compared to those who haven't. So in venous thrombo-embolism, obviously the risk is increased with a central catheter. But in this population we have decided to develop [AVE 5026], which is an ultra-low molecular weight heparin which has yielded excellent results in its first clinical trials.

We are about midway through recruitment. 400 patients recruited. And results expected. In order to define the dose, what we're after is, of course the risk benefit. Will we start development where the bleeding happens? And that's in surgery. That's why we have phase IIb in knee or hip prostheses before switching to oncology.

Otamixaban, this is an ideal profile for ACS patients with short-acting direct selective very short half life, suppressing the risk of bleeding. If you stop the product it means that the efficacy is no longer there. And no doubt in moderate intensity coronary events, where the cardiologist wants the patient to come out rapidly after intervention, so otamixaban is ideal for these patients.

The SEPIA study, that's a wide-ranging study in patients who'd undergone PTI. Excellent safety profile. As I was saying, good safety profile with predictable and dose-proportional anticoagulant activity. Phase IIb study initiated. Recruitments underway. That's SEPIA ACS where we are testing various doses of otamixaban. The idea here with the last arm is to replace the use of Heparin.

So as far as thrombosis is concerned, we have already said everything there is to say.

Cardiometabolism. Just a brief word on this. We already talked about the results. But we would like to give you a very comprehensive view of our portfolio. NV1FGF, as you know, FGF increases neovascularization so that there is an advantage where patients are suffering from lower limb arteriopathy, with potential risk of amputation, in providing patients with such drugs.

Just before I go into the study itself, in terms of the cost for Company, this amount has been estimated about $10b.

Let me just finish on this slide. We have completed phase IIb. We will begin recruitment for phase III next quarter.

Just a brief reminder, you have already seen these at the previous analyst meeting, so just the effect on amputations. On the left, all amputations, including toes, for instance. On the right, major amputations, the ones which are the most costly for society as a whole. And these start at the knee level. Very great effectiveness there.

This is the design for the phase III. You can see that there are four injections every two weeks, a 12-month follow-up. This is one of the first, or perhaps the first gene therapy product. It has [multiple] local action. Of course, you know one of the associated risks of gene therapy is cancer onset. And another point is that when you work with gene therapy, it's important to monitor, to follow up the patients for a very long time. Now here we're talking about very high-risk population, so long-term survival is actually not so much of a concern.

Celivarone comes next. Here we have interesting outcomes since we did find activity in phase IIb. The problem is simply that we found the same levels of activity for all dose levels in phase IIb. And we had a similar experience with dronedarone. So that we decided to return to dose ranging with lower doses and had to initiate another IIb phase study which should start up towards the end of the year.

The reason it will only start up at the end of the year is because by then we will have the final formulation. This will enable us to avoid subsequent bio-equivalence studies.

Next we come to Ilepatril. The mechanism of action is one which will be familiar to you, double mechanism, blocking formation of angiotensin II, ANGII from ANGI. And, at the same time, in addition of degradation of ANP, BNP and bradykinin. As you know, the sodium overload is something which can be combated thereby. So for kidney failure, heart failure as well as VT indication, this can be very useful.

The proof of concept, as you will see from the top line here, we had a study of 35[mg] reduction. [Angioedema], this potentially was concerned, so the phase IIb study which is currently underway, we're about halfway through. So far everything is proceeding smoothly. We're keeping our fingers crossed. It's going to be essentially focusing on safety. And as a calibrator, so to speak, we used losartan, both in terms of efficacy and of safety, bearing in mind that the maximum threshold for angioedema during development has been set.

So we will soon know the outcome on that one. 52-week follow-up to cover all our bases in terms of intolerance to the product and make sure that we have a safe product.

There are just two products we haven't mentioned yet in cardiovascular. Dronedarone, recruitment has been completed for that. We will have the outcomes in the first quarter of next year. It's a one-year treatment. And this combined inhibitor, 5-HT1B/5-HT2A for peripheral arterial disease.

And I'll give the floor now to Pierre.

[Interpreted]. Well, thank you. Let's move on now to the central nervous system, and CNS. These are diseases which are under-diagnosed, under-treated. There are a number of reasons to this. We are understanding more and more about these diseases, such as sleep disorders or depression or, indeed, Alzheimer's, for instance. And this is enabling us to work towards better management.

Now, what is really at stake has yet to come. The epidemiology data increased with age, certainly for Alzheimer's or insomnia. And when you project the population data forward with aging populations, well, mechanically, inexorably there is an increase to be foreseen in the disorders or diseases.

If we look first of all then for the three key problems we'll be looking at, depressive disorders, Alzheimer's and insomnia. Starting with depression. You have initially a progression to disorder. We start to treat. There may be an improvement in response, potentially with the relapse. We may need to treat again, potentially other relapses which may occur.

But I think the most important is the figures which you see on the bottom three lines. After a first episode, the risk of a second is 50%. After a second, however, the risk of a third is 70%. And after the third, the risk of a fourth is 90% in terms of relapses into depression. So we're looking at a disease which is insufficiently managed, but too late in the game and not in an adequate fashion, furthermore, so that perhaps part of the solution can come from better management at the early stages.

And when it comes to treatment in terms of depression, the picture is not a very rosy one either. About 50% of patients do not respond appropriately to an adequate treatment. Only about 30% achieve full remission.

In terms of safety and compliance, more than one in three patients stop treatment during the first month, either because of adverse events or because of lack of symptom relief. So there's room for therapeutic improvement there.

If you look at this chart here, you have the treatment algorithm which exists today. They initiate treatment with first-line therapy. If it doesn't work they increase the dose and they add another. The use rather, instead, second-line therapy. And if that doesn't work, they use both products together.

The problem is that we're looking at about 10 to 20% for second and third-line therapy combined. All of the products on the market -- virtually all the drugs on the market have similar mechanisms, so the combinations of drugs, of course, may heighten efficiency but they will also render more acute any adverse effects.

The opportunities on the right for improvement in terms of treatment for depression, improve either efficacy or tolerance, at least the therapeutic index in terms of benefit and safety.

And there is the possibility of combining drugs with different action mechanisms. Saredutant is an inhibitor, whereas amibegron is an antagonist. So you have to separate mechanisms here, which enables, potentially, new approaches to depression management to be envisaged.

Turning to sleep now, as you know, although many people suffer from sleep disorders, it is actually quite complicated to gain a clear understanding of each specific patient case when we start looking at things in greater detail. We have been able to identify three orders, ranges of issues. Induction problems, maintenance problems, maintenance of sleep patterns and poor sleep quality.

We have seen increasingly that sleep fragmentation, build up of sleep dep eventually leads to insulin resistance, to further weight gain and diabetes, so that there is associated morbidity and mortality between such health problems and sleep disorders, which shows us a rather interesting direction for strategic approaches in terms of our two key drugs here, eplivanserin and volinanserin.

Moving to Alzheimer's now, as you know, only the symptomatic treatments are available today. With symptomatic treatment, of course, you are only going to very briefly, fleetingly improve the patient's score in terms of cognitive function. But since the treatment has no effect on the progression of the disease itself, this will only be a passing improvement. We would need to find drugs which would actually affect the disease itself, its progression rather than simply its symptoms. And that is the range of issues around xaliproden.

So Marc is going to tell us now about the results of our study.

[Interpreted]. We're going to be talking about major depressive disorders, MDD, and generalized anxiety disorders, or GAD.

Just a brief point on what the previous speaker was saying which I think is truly probably the key point in this [one], we are likely to see movement towards better treatment of depression. The better treatment we can provide for events and, in particular, for the first event in terms of depression, the lower the risk of relapse will be.

So what we've been trying to do is to work towards a new paradigm whereby we would be able to achieve this. In other words, effective management of the first episode.

There has already been a move in this direction in clinical practice. As you know, we carry out our studies over an eight-week period in many cases. And there are some representative authorities in psychiatry which have been advocating increasingly ensuring that the patient's first depressive episode would be [technical difficulty]. [I'm sure] that would be a lower likelihood of relapse.

As was mentioned by the previous speaker, about 50% of patients do not respond adequately. Let's say 30 to 45%. In some cases they have a partial response. In some cases they are non-responders. The poor response level may have to do with the need for the patient to be treated with different therapeutic classes to achieve improvement.

Then, there are concomitant medical or psychiatric disorders and sometimes there may be a familial predisposition to a poor response, in particular the serotonin transporter gene polymorphisms. So a need, then, for new mechanisms of action. Many patients, as was mentioned also by the previous speaker, will stop because of adverse effects, such as a dry mouth or sexual dysfunction, for instance.

It's always an interesting thing to do, when we are looking at depression or similar CNS problems, to look at how things can tie in with, say, diabetes or cardiometabolism, because in the latter two [concepts], you often have a number of different therapeutic agents which you can use concurrently, whereas when it comes to CNS problems and pathologies, in many cases you just have one therapeutic class that you can use.

So where do we stand currently in terms of depression? We've been working very hard indeed. We have three broad approaches, let's say. First of which is Beta3 agonist, second is in phase III. The second has to do with neurokinins, NK2, with Saredutant in phase III, another product which is in the pre-clinical stage.

Then, aside from this NK2-specific antagonist, we also have another antagonist which is NK3 and NK2 antagonist. Then, there are V1b antagonists and CRF1 antagonists. Working with probably less secondary effects is a promising product among the ones I just mentioned, the one against V1b, which is SSR149415. In other words, as compared with our competitors, we have a pretty impressive arsenal of tools to fight these problems of depression or anxiety.

Now, Saredutant is a product which you are no doubt familiar with, a non-peptide selective antagonist of the human brain NK2 receptors. Administered once a day, we have a very good tolerance profile. I'm afraid I've perhaps approached things in a slightly different order from the way you see them on the screen. I hope you will forgive me for that. Could it be that I'm missing a slide? No. They all seem to be there.

Let's see. So these are the ongoing studies. Just getting my bearings here. Here we go. The results from phase IIb studies of Saredutant are encouraging. Until now, when we looked at depression issues, we tended to exclusively base our assessment on positive changes in the Hamilton scale. But, increasingly, the question is becoming has the patient returned to normal or not?

And in this respect, we have the right-hand part of this slide, the percentage of patients who have a Ham-D total score under eight, in other words the remitters having achieved a degree of normalization.

I'm not sure that we can really define what is normal, but, say you have a Hamilton score under eight, what you then want to do is to try to consolidate to maintain this remission. You don't always have symmetrical proportions between the patients who achieve a total score under eight and the ones who continue to consolidate their remission. So I think perhaps with NK2 antagonists and inhibitors of serotonin or other combined products, we will probably have a solution for that.

[The full] results phase III Saredutant. These findings are mixed. They're good findings, the extent that, as you can see, for the first two studies, the EFC5575 and EFC5573, you have to increase the placebo, which means there are two studies that are statistically significant versus placebo.

One result's less good, EFC5571 and EFC5572. Here, we see crosses with the placebo, which means these two studies are not significantly -- statistically significant versus placebo.

This is fairly standard, because, in most instances, in fact almost all anti-depressive agents, you've got about half these studies that are statistically significant and the other half that are not statistically significant, which is a slight problem to register the product, because in the four studies where the two -- 5571 and 5572, there's another anti-depressive agent, paroxetine, in these two studies, paroxetine was statistically significant versus placebo, whereas for Saredutant it wasn't statistically significant versus placebo.

Nevertheless, when you've made analysis of the four studies, you see high positivity. An interesting thing is not one single study showed that this product was worse than placebo.

Now, when it comes to benefits, we did a scale to measure sexual function, CSFQ total score. Versus placebo, here, paroxetine doesn't show activity, and we thought it made sense not to show the activity versus paroxetine for sexual dysfunction. But you can see, versus placebo, meta-analysis, positive activity versus placebo, so you can imagine the activity versus paroxetine, which does cause sexual function problems.

Another advantage with this product, perfect tolerance. Look at the figure, as you can see, aside a slight dry mouth, Saredutant tolerance profile really is almost always comparable to placebo or even better than placebo.

It's like in oncology, when you're looking for combination treatment, it's important to have products that are tolerated very well since side effects can add up. It's an important criterion. You have to have good tolerance.

So this is really quite impressive, here. Tolerance is identical to placebo and sometimes better than placebo. The program's under way. We're just waiting for some long-term tolerance studies. That's why I was just [inaudible] I expected a slide that didn't come up.

Amibegron. This is a very interesting one, amibegron. This is a highly selective agent of the Beta3 human receptor, which was cloned once when the product was being developed. The effects here are both on anxiety and mood. Very good in animals. Very good effect in animals.

In humans, I'll show you a slide that we've already shown. Specific activity in some areas of the brain which were depressed in bipolar patients. We've also got results in patients that are highly depressed -- highly depressed people that are in hospital for melancholia.

We've also got also absence of problems and no metabolism problems. This is important if you're going to be using two products jointly. You have to make sure that these products don't have negative influences on each other.

Now, action mechanisms. [The effects] for Acomplia with Beta3, we're continuing to discover this as we develop. Now, there's no recapturing of serotonin in the synapse, but we have seen potential activity of serotonin with this product. It's in the frontal area, near the corpus callosum. If you see -- it's an area that's depressed among bipolar patients. Towards the top, in the picture here -- sorry I can't use a pointer here, but you can see, this activates the particular area that's depressed.

Now, we showed you some findings earlier that are really spectacular in a severe group of patients, people who are hospitalized for depression. Among some patients, they were stabilized, became almost normal. This isn't the word I'm looking for, I shouldn't say normalized, but bringing their Ham-D under eight. In some cases of Amibegron versus fluoxetine, we had some remarkable outcomes, statistically significant versus placebo in phase III.

There's a slight -- in all patients, similar to paroxetine, in severe patients a little bit -- slight increase in activity. Another survey was done that is not statistically significant. The difference with saredutant [inaudible] significant here, paroxetine, the comparative element wasn't statistically significant either in phased studies, in managed experience. We get the impression that we're getting a better control of developing [groups] for depression in selecting the right patient centers.

Now, tolerance profile's very good here as well. A little bit less good if you look in terms of NK2. A little bit more nausea and a little bit more headaches. But certainly very different compared to paroxetine. In the very near future, we'll have two results for depression and efficacy. These are two studies that, if they're positive, well, we think we'll file some time 2007, 2008.

Insomnia. On to insomnia. I think it's interesting -- sorry to be giving lessons on sleep and how sleep evolves with age, but on the left-hand axis, you have the time of sleep. On the bottom, horizontally, you have the person's age. So what happens as people age?

Sleep time goes down. We start from the bottom here. Stage one, this is preliminary sleep, pre -- early sleep. [Inaudible] graphics here. Stage one sleep, that's just before sleep, it remains. Stage two also remains pretty much unchanged as we age, but the next two stages, stages three and four, slow wave sleep and REM, go down over time.

And et this is the most important component in sleep for a couple of reasons. First of all, because it's felt that SWS has an impact on memory. Also, the second reason it's important to sleep, it's felt that slow-wave sleep is very restorative. When you're tired, you need time to restore and it's this part of sleep that helps you feel better the next day. The slow-wave sleep helps you recover.

Now, there's a third part, the rapid eye movement, REM, sleep. Now, REM, people wondered what rapid eye movement sleep was important for. It's felt that it has an impact on mood, so REM sleep's important when it comes to mood.

If you're looking at treatment for older patients, to treat insomnia, what are you going to try to do? You want to look for a product that isn't necessarily going to cause sleep, because often they don't have a problem with sleep [latency]. Older patient often don't have problems getting to sleep.

But what you do want to find is a product which will reduce WASO. WASO is wakenings after sleep - the number of times you awaken after falling sleep. So you don't need something to induce sleep. You want to reduce WASO. You don't want to have an impact on REM, REM doesn't change too much with age, but we do want to try to increase stages three and four. By definition, an increase in total amount of sleep will reduce stages one and two.

This is what we've been working on. I won't go through all the results as they were already shown to you by Gerard last year, but eplivanserin, phase IIb, did meet the various criteria.

Now, another point that's very interesting for the time being in insomnia we were just treating people during the night. In other words basically people would have to fall asleep quickly and you would then study them during the night. But now, with the new type of treatment, you work on the quality of sleep. They're not just looking at the nighttime, they're looking at things that take place during the day as well. In other words, you look at the impact a good night's sleep has on a person's daytime activity. The FDA will be validating these scales.

To my knowledge, this was the first time we were able to show a correlation for both products, which just goes to show there's a sound mechanism involved here. We were able to correlate sleep, the product [efficacy] during the night, its impact on sleep, and the quality of people's wakefulness the next day, during the day, and their alertness.

Now, focus on the graphics, this is compulsory. We looked at this on quality of sleep, the patients report on the quality of their sleep. We see the number of awakenings during the night and we also had them report to us on how alert they are the next day.

Now, for the time being, hypnotics were focusing on the nighttime. But with this type of product, we're actually talking about the daytime stage as well. We're looking at the impact during the day.

Then, there's a third stage of this booster [inaudible], and this is what Pierre was showing us. If sleep disorder increases as part of diabetes and morbidity, we have to look in our studies in particular groups, the impact during the night, reducing awakenings in the night. And with the impact on people's wakefulness, alertness and memory as well. And then what takes place in terms of morbidity. This is where volinanserin is positioned.

Alzheimer's. I'll run through this fairly quickly. Just a reminder, xaliproden, three activities here. First of all, we didn't think it was possible, but it's a product that actually makes the neurons grow again using stem cells. It's a product that prevents an attack on neurons, when it's given preventatively. It's also a product which is able to heal or, at least, regenerate neurons after attack.

Two phase III studies have been completed now. We're awaiting the findings in the very near future.

One brief point. The interesting thing here, we're looking at the standard parameter, [metas-cog], cognitive function. We also have a lot of documentation on hippocamp size. A problem with Alzheimer's -- hippocampal volume. One problem is there's no [serogatine] point. The more we work on this pathology, the more we learn about this pathology and the easier it'll become to find new treatments. One of the problems here, it's almost impossible to do a dose effect, which is to treat patients for more than 18 months.

Teriflunomide, now. We're midway through the first phase III study. We have positive results in phase IIb. A second study phase III has just begun. We'll be starting combination studies midway through this year, second part of the year.

Dianicline. Dianicline, to simplify, is like varenicline, you know varenicline, so we can be brief on this. But the interesting thing here, it helps people to stop smoking. Also, it can be used through user therapy. Here rimonabant demonstrated a moderate but effect nonetheless on smoking cessation.

The other advantage with rimonabant, it showed us that by taking -- when you took it, you could avoid weight gain when you stopped smoking. And weight gain is one of the reasons people don't stop smoking, particularly this is the case among working women.

So there is a phase III program underway on dianicline, also a phase I program where we're using -- combining with -- dianicline combined with rimonabant. We think we'll move into phase III quickly and almost market [mono] therapy dianicline and combination therapy dianicline and rimonabant very quickly. It won't be the same administration. The dianicline is active if taken twice daily.

Then two other products -- sorry, there's a mistake, apparently, here. Paliroden, awaiting results for Parkinson's. Rimonabant, Gerard gave you the results last year for obesity, that had shown an identical activity for obesity but less of an efficacy on associated parameters, less on glycemia and HDL, but thought there might be greater activity for CNS.

One of the qualities, plus points of rimonabant is predominant peripheral activity. We are in phase IIB for smoking cessation, [inaudible] phase IIb as you've seen for obesity and related disorders. We've started phase IIa as well since it was a potential CB antagonist for cognitive elements.

In a nutshell, I think we've got an innovative approach for CNS. The central nervous system, it's certainly one of the areas where you have a great need for medicine, for anxiety, depression. We've got Saredutant, Amibegron and more difficult to treat and prevent Alzheimer's. And when it comes to sleep maintenance, we are continuing to explore our franchise here and develop that, extend it and build on our experience here.

27 products for the Central Nervous System, including 19 in clinical development, 10 in phase IIb and III. Pretty reassuring because for a long time about 50% of our R&D efforts remained here. And it's interesting to see now that those R&D efforts are panning out. They can seem unpredictable, but in the long run they usually pan out.

Very quickly, internal medicine. These are much smaller markets. And if you look at all the other products we've talked to you about up until now, we have just [one more to talk about], Icatibant, a bradykinin B2 receptor antagonist. This is effective at relieving pain and side effects of knee osteoarthritis. I'll run through this fairly quickly after which you can come back to this and read through it at your leisure.

What is the potential market for this type of product? We've given you the number of injections here, with corticosteroids making up 80% of the injections, or with hyaluronic acid.

Now the OA, osteoarthritis of the knee is something that's increasing with age. We know that we're seeing more and more of this type of disease among aged -- older patients.

Now the characteristic of Icatibant compared to steroids, first of all. Now this product is quicker acting. The problem with steroids is they tend to take time to become active. Here activity is a lot faster. But, compared to hyaluronic acid, it's quicker acting, but only very short acting. Here we have quick action plus extended action with Icatibant.

Turning to the next slide we've got currently phase IIb studies underway. And the interesting thing is that we've got some IIb studies underway versus steroid. Before beginning phase III, we'll know the positioning of the product, and that is a product we've already talked to you about, the recent [Icatibant] beta antagonist. They are sort of looking for their position right now for treating cirrhotic ascites.

That's a real advantage for the patient. Ascites are debilitating. No dose effect here we can see, but we do have a product effect in terms of the number of paracenteses, 30% reduction in the number of paracenteses. This means hospitalization and risk of infection whenever there's paracentesis. So there's a very small market. Nevertheless this is a very important development. This medication will be a plus for patients.

There you have it, [inaudible]. Yes this is included in the product that are to resubmitted, resubmission for filing in the United States. It should take place in the first half of this year. And the other product we're waiting results here, antagonist receptor NK1, which we'll see somewhere near in the future.

[Interpreted]. Last but not least is the whole area of oncology, cancer. On this first slide is the second most important cause of death in the U.S., 50% of all deaths among woman aged 45 to 54 in European countries. Every country has its healthcare policies. They're all more and more aggressive anti-cancer programs with the messages.

In terms of cancer everything remains to be done. Approvals have been made, we have data, the pharmaceutical firms are bringing out products, but everything remains to be done. Progress has been made year in, year out, study after study, trial after trial.

Here what I've shown you is the survival rate, the five-year survival rate, by type of cancer depending on whether the tumors are local, regional, that is around the first tumor, or just in terms of metastatic. So the survival rates are dramatic, everything remains to be done.

The second thing is already known. When cancer is diagnosed, in 50% of cases the tumors are either regional or distant. Now regional tumors are when surgery is already out of the question. This is chemotherapy and so on. And of course distant tumors are palliative care.

Now here's the number of the patients. These figures combine the U.S., France, Germany, Italy, Spain, the U.K. and Japan, 300,000 patients every year in lung cancer, over -- nearly 200,000 breast cancer and, of course, the new cases are gastric, metastatic gastric cancer of almost 100,000 a year. Treated with Taxotere. But the number of patients treated is approximately more or less two thirds depending on the type of tumor. Well more or less two thirds of the number of patients are actually diagnosed with cancer.

Well what about us at Sanofi-Aventis? We have committed ourselves to cancer for two reasons. First of all we are the second largest Company in oncology in terms of sales. EUR3b, a little bit more. But also because we have two of the top-five selling cancer drugs Taxotere and Eloxatin.

And we have every reason to continue of course. We've committed ourselves to this fight against cancer and also because year after year, product after product -- we are good improving healthcare, but we have yet to be able to cure cancer. But with the current approaches which are palliative, chemotherapy and targeted treatment, well we are involved in treatment.

And in chemotherapy and the new targeted therapies, new approaches such as immunoconjugates, vaccines or others. Now the products in question are S-1, which Marc has already mentioned, so Larotaxel which is a new taxoid with enhanced indications. As for targeted therapy, VEGF Trap and the AVE8062. VGEF Trap inhibits angiogenesis and the AVE8062 does exactly the opposite, it actually reduces vascularization and it also reduces the tumor.

Now just to begin with S-1, which is a new oral 5-FU derivative, this combines Tegafur with two modulators, metabolic modulators, if I can call them that. Now S-1 is a clear improvement on fluoropyrimidine-based therapies. It has been marketed in Japan since 1999 and has been approved in Japan for multiple indications. And, of course, Sanofi-Aventis is leading development worldwide and of course leading sales worldwide, with the exception of Japan and a number of Asian countries. Marc [be] on the floor.

[Interpreted]. Now just to complete, or rather to illustrate what Pierre has already said, it would be difficult to complete what he said, and this is Tegafur which is a pro 5-FU. And what are the advantages of these two agents? First of all Gimeracil blocks one form of deterioration of 5-FU. Bearing in mind that this entails what we call hand-foot syndrome, which is a very handicapping neuropathy. It actually prevents people from [apprehending] objects and gripping objects. And this is one of the reasons that this neurotoxicity is very much a handicap.

The other is Oteracil, sorry, which is not present in the bloodstream which prevents 5-FU being transformed in situ in the digestive tract. Now, in situ activation of 5-FU actually entails digestive toxicity such as diarrhea, stomatitis. Here again we're working on product tolerance.

Now if we reduce the deterioration of the product and if we refocus on the active agent, what we're aiming at in doing so would be to increase the anti-tumoral activity. This would also enable us to improve immunotoxicity which is directly related to the anti-tumoral activity.

You see the figures, [inaudible] suppression, [inaudible] is very, very low. The product is itself in fact very well tolerated. Well this product has been marketed in Japan for a number of years now, has been registered for several indications.

We could have given you a complete demonstration of all the results, all the conclusions. But we've just selected what we feel are the most interesting. This is its activity as an S-1 adjutant. This is for monotherapeutic purposes and not used with [cystatin]. This is for patients who have been operated, and who have theoretically have been cured by the surgical operation, but as you know there is there is also the danger of metastasis.

So the randomized, the stages II and III, depending on the deterioration of the gastric walls and the way they're treated with monotherapy or with surgery alone. And the end point as with most of these adjuvant studies was, of course, survival, bearing in mind that almost always we're looking for five-year survival.

Well, the good news and the good news for [Tayo] as well, [Tayo] is the lab that discovered the molecule, the good news is that the steering committee requested that the study be discontinued after three years in view of the fact that the survival rate was remarkably high and significantly very significant and has recommended that patients operated for gastric stomach surgery should benefit from added treatment with S-1.

On the left-hand side you have the complete survival rate. Ideally it should be cut off after three years, because the number of patients is very different and the same, right, for three-year relapse rate for survival on the right-hand side. In absolute figures the reduction is 10%. So 10% of all the patients on S-1 will out-survive the patients not treated with S-1. Maybe one small step, but it's a big step, and otherwise, very similar to Taxotere, where the improvement was actually 43%. So a very significant improvement.

So as I said this should be taken as a significant step in adjuvant therapy, but it should also be thought of as regards the good tolerance levels. In terms of toxicity, you can see that we expect some degree of neurotoxicity, with a number of -- grade three here on the leukocytes, in particular, leukocytes and hemoglobin. I think the product has already been proven, very low vomiting, diarrhea and very, very low levels of anorexia.

We haven't experienced any hand-and-foot syndrome, which was also evidence of the fact that the hypothesis can be deemed validated as a total neurosuppression of grades one, two, three and four. You've only grades one to four, and the total for grades one to four was [7%] which is a very reasonable level.

Now, as you know, the study lasted three years. At the same time as the adjuvant study, we conducted a number of other studies to determine the advantage of associating S-1 with other products. And as you know, in oncology there are three potential areas in which we can improve.

The first of these is new chemotherapies, but particularly new chemo associations. The second area we can improve in is the cytostatics, and we have the example with the VGEF Trap of [combastatin]. And the third area is by improving the tolerance of other types of treatment in order to increase the doses.

Well, we found that by associating the cisplatin and S-1 was much more efficient than S-1 alone. So we conducted a phase III study, that's cisplatin versus cisplatin plus S-1, and recruitment should be completed by the end of this year with the submission early next year. The primary endpoint is, of course, survival, overall survival.

So what next? We can look at the 5-FUs. It's a bit like Eloxatin, we have a super Eloxatin. That does not mean that we should venture into all markets where cisplatin has been marketed. In some areas cisplatin has worked very well. But obviously we want to work in all 5-FU areas and the areas where [Xyloidin] is to be found, even though this product has characteristics that give us reason to hope that it will be better than Xyloidin.

Perhaps one of the most interesting domains would be a colon and rectal cancer. It has been successful with Eloxatin, but it is really in colon and rectal cancer that we have our greatest hopes. It is interesting to see the penetration rate in Japan, despite the fact that Xyloidin and S-1 started the use at about the same time in treating colon and rectal cancer. Studies to be launched this year.

The taxoids now. Well, Taxotere, which is the world's number-two out of the three products in oncology, is a highly active product. Two little concerns about it, the one is tolerance. The tolerance level is roughly moderate, which prevents it from being used with other anti-cancer adjuvants. The other problem is the problem of tolerance, it's edema and coloring of the nails.

So we tried to improve Taxotere. So another thing about Taxotere is that resistances have appeared. With repetition, repetitive resistance. As we successors to Taxotere, we have worked in two areas -- two directions. First of all on products that reduce resistance to Taxotere, or at least act on patients that resist to Taxotere, patients that can have cerebral activity and obviously with a view to improving tolerance.

And mixed results for Larotaxel. The first study was very, very encouraging. With Taxotere-resistant patients we found that the response rate was 20%. This led us to believe that this product would have the -- would be very good, so we started a study to compare it with monotherapy, Larotaxel versus capecitabine.

We were disappointed to discover that the response rate was very comparable between Larotaxel and capecitabine, which prevented us registering it for the -- the initial indications hoped to register for which was the Taxotere resistance.

These two studies nonetheless confirmed two things for us. First of all, the activity of our product and secondly the high tolerance level. And this good product tolerance meant that we had been able to work on phase III in association with other agents, mainly in metastasized breast cancer.

Here we have an explanation about the relative positioning of Larotaxel and its small brother, as we say, XRP6258. Larotaxel, well the indication was hoped to be a new adjuvant breast cancer. But before embarking on that we decided to conduct a pilot study on the [emergent] breast cancer through exposure. And if this trial proved to be positive as a [neo-adjuvant] we would run a trial on an adjuvant.

In view of the good tolerance level of the product and in view of its tolerance profile, we propose to work on combinations. After an initial treatment on breast cancer we decided to combine with capecitabine and trastuzumab. We decided also to work on new indications. This is cancer of the pancreas and the bladder. As for XRP6258, we are already working on phase III of a study in prostate cancer.

Now we are on cytotoxics up to here, but another area I find -- I personally find very, very interesting which is the cytostatics, but particularly vascular cytostatics. And here again we are well positioned. Broadly speaking, everybody knows the approach on the left-hand side which consists in blocking the VEGF activity, the main product being the [plastine], which has proved its survival possibilities in various cancers, and colon and rectal cancer in particular.

VEGF is necessary to ensure that vessels grow, so if you inhibit VEGF then you prevent the vessels from growing, which prevents tumor growth. That's the left-hand side of the chart.

Now moving to the right-hand side, this is something more recent, something that hasn't really been studied, certainly not to this extent. The first part is preventive medicine. You prevent the vessels growing. On the right hand side you do exactly the opposite. You have a tumor, so what you do is, rather than prevent it growing, then you break the vessels. And by breaking the vessels, you kill the tumor.

Now by killing the tumor there is always a risk. These aren't products that can be used for all sorts of cancers. With cancer of the lung there is a danger of perforation. But for more solid cancers and more solid tumors with less risk of perforation, it's certainly a very interesting indication. But we have clinical conclusions for this type of product.

Interestingly with the killing of tumors, if you take in cancer for instance, most of the resistance cells are essentially found at the heart of the tumor. They're very difficult to access by conventional cytotoxic treatment. But if you kill the tumor by preventing the vessels bringing blood and sugar to the tumor, you have a good chance of killing off these core cells that are the most resistant. So you can then consider a combination, either a sequential combination of the VEGF, which probably inhibits metastasis, and the growth of tumors with a product that kills the tumor.

VEGF Traps. So what's the difference with a VEGF blocker? Broadly speaking when you have a receptor -- the human body was put together with bits and pieces, by adding on bits here and there. But with a given receptor, there is very rarely only one active receptor. So the VEGF, if you want to look at it that way, the VEGF activates, but then you have other factors that can activate it such as [inaudible]. So when you have a VEGF antibody the activity is not complete. There a number of other activators that can, other factors that can activate the receptor.

Now the Trap receptor that was, this was a Sanofi-Aventis discovery by the way, we're working with [inaudible] that block the inhibitor. We take a [inaudible] of the receptor, VEGFR1 VEGFR2. We take these two [inaudible] receptors, associate them and inject that. To do that, all products that can attach themselves to VEGFR1 or R2, it's like a vacuum cleaner, if you like. Take all products capable of attaching themselves to the receptors. In vitro events, the activity is higher to VEGF or VEGF antibodies, these are usually the plastines.

Obviously products that can be active in monotherapy, and as [soon] as proved, this is especially with kidney cancer using in conjunction -- combination therapies.

What about VEGF? First of all, let me tell you and give you a progress report. We virtually, well, we were still working on phase I. We've now finished phase I, we're on phase II and III in monotherapy. And we're working on phase I and II combinations, to determine what the best combinations and the sequencing of the products would be.

We'll see what cancers that have to work on. But in terms of safety -- safety and efficiency, of course, go very much hand in hand. If you decrease the doses in some areas this will increase blood pressure so you can't always associate the two. But in a word, we have an excellent benefit risk ratio with VEGF trial.

So what I'm going to show you here is all single-agent trials, the product on its own. From time to time we have to face up to rumors on the business profile, clinical rumors. We need to put paid to rumors. The rumors of symptomatic ascites was discontinued because of poor toxicity of the product. I can tell you it's the reverse. Excellent product tolerance in the treatment of malignant ascites after ovarian cancer. The program's under way.

And not only, in addition to excellent tolerance, a program underway in the treatment of symptomatic ascites, excellent response. Under treatment all patients thus far have responded to treatment with a mix of complete and partial response [facing] of paracenteses.

And just to keep it simple here, it's also in white, but it's not the same white, it's the visceral fat, you have the liquid on the left-hand side of the page. And both cure under VEGF Trap in single-agent therapies malignant ascites.

Also single-drug therapy in ovarian cancer. Complete response with VEGF Trap. That's the small arrow. You can see that the cancer has diminished over 50%. That's partial response, almost complete response.

And a very, very interesting point, never demonstrated to our knowledge, maybe been done but not published, Avastin has never demonstrated in single-agent therapy efficacy in this broncho-pulmonary cancer. And here you have an example in the single agent therapy for lung cancer.

Here you have both our single-agent development possibilities of registration, be it in symptomatic malignant ascites or ovarian advanced, advanced ovarian cancer and in non-small-cell lung cancer.

And there are further developments that will take a little more time in treating hormone-resistant prostate cancer, for gastric cancer with Taxotere, in non-small-cell lung cancer, and also we had some preliminary responses, excellent associations with FOLFIRI.

So first submissions, a wave of submissions the first planned essentially in 2008. So that was just a recap. It's an interesting product.

[Interpreted]. It's a product that had rather complicated development but thanks to the NAH, we found the right way of administering this product with 43% partial response and so phase II, III underway in chronic lymphocytic leukemia with a submission potential, every likelihood in 2008, ditto for VEGF. The date may vary, but the product will be submitted. It's an excellent product.

Xaliproden, I showed you a first study demonstrating the prevention of neuropathy to increase the dose, better tolerate Eloxatin for patients in adjuvant therapy and to up the product dose for other patients. The phase III is underway. If it's positive, we will file and the first study, this is [mets] cancer here in adjuvant therapy to [in-treat]. If it's better tolerance then patients are treated longer. If they're treated longer, less risk of relapse.

Just a nod because we're presenting vaccines and pharmacy, so just to say that we're working together. We also work elsewhere other than here. But it's really on developing a cancer vaccine. We're working jointly on the melanoma. There are studies about to get underway. And also, colorectal cancer and we -- this is in, of course, short term but we believe that say, five, 10 years down the road, there are some interesting opportunities in immuno-stimulation by other mechanisms. Antigen discovery.

I think I've reviewed all the phase IIB and III products.

Oncology, we're strengthening our leadership position in the field of cytotoxic agents, thanks to S-1 and the new taxoids, to improve this therapeutic approach. And Xaliproden to reduce platinum-based chemotherapy toxicity. And what's new is that we're now moving into cytostatics that you'll hear more about. The 8261, it's an excellent opportunity between an inhibitor of vessel neogenesis and another that destroys [inaudible].

Thank you, for both of us.

[Interpreted] Thank you, Pierre.

[Interpreted]. Well, it was rather long. Forgive us for that. I'll attempt to keep it short.

Since its formation over 34 years ago by Rene Sautier and Jean-Francois Dehecq, this Company does not need to demonstrate its ability to adapt. And I believe that this year, 2006, in a difficult environment, Sanofi-Aventis has clearly demonstrated its ability to adapt. And we owe this to the combined efforts of all our staff and this needs to be commended.

Ability to capitalize both on our Base Business and develop our major products. Let me remind you that Hanspeter showed you that we have eight blockbusters. By that I mean that we have eight products whose sales is topping the EUR1b mark. Four in cardiometabolic, Lovenox, Plavix, Aprovel, Lantus, two in oncology, Taxotere, Eloxatin, and two in CNS, Ambien and Copaxone. I'm not sure that many other companies have eight blockbusters.

Secondly, ability to capitalize on our Base Business. Hanspeter has shown you that both in Europe and in the U.S., we have managed to slow the decline in sales of our Base Business, but in the rest of the world, we have managed to increase by 4% the sales of base business.

When Jean-Francois, at the time of the acquisition of Aventis, said that no products, no small countries, 2006 is directly in line with that statement. We are present in therapeutic areas that are posting high growth, meeting all needs -- medical needs for thrombosis, cardiology, diabetes, oncology and vaccines.

We are convinced that in the years to come, given the very significant increase in healthcare costs, we must offer governments a comprehensive proposal, both innovative medicines, the Pharma approach and vaccines. And let's not forget here a targeted approach of generics manufacturers. Look at what we did with Zentiva in the East and a novel OTC approach in certain products in the rest of the world.

A strong and dynamic presence in geographic areas that are growing strongly. Here again, no small products, no small countries, and we are growing strongly in the BRIC countries. We are growing strongly in these high-growth emerging markets, keeping an eye on our expenditure, where spending is contracting. But where the market is growing we invest heavily and it is linked to this geographic presence that is very important for the company.

Lastly, and I was going to, for historical reasons, there has always been sustained R&D spend targeted on innovative fields and compounds.

On this slide, on the left-hand side, you can see that the top-five therapeutic classes hosting the highest growth rates are, of course, therapeutic classes that are our core business. On the right-hand side, here again, vaccines have posted 10 years of constant growth. And what Wayne showed you earlier, quite remarkable results. Over 22% increase in Sanofi Pasteur clearly illustrates the interest and the importance of having a significant presence in vaccines.

We are focusing on R&D efforts to meet major healthcare needs and there's no need to convince anyone when it comes to underscoring the fact that cardiovascular disease and cancers are responsible for both a significant share of death and disability. But we tend to forget also that mental illness can be a killer illness and induces a high level of disability, and we therefore must expend considerable efforts in this field.

And let's not delude ourselves. We know that it's a very difficult area where the attrition rate is high but it is, indeed, necessary to invest heavily in this field. And let me remind you what Marc showed you. That is, we have a relatively high number of products in the pipeline for mental illness.

We are deploying a significant R&D effort. Sales is only increasing by 4%. We are upping R&D expenses by 9.5% thanks to a stepping up of phase III clinical trials in Pharma. These efforts are even more significant in terms of vaccines, be it to accelerate the clinical trials of these vaccines, but also significant investment in discovery. And the prime take-home message regarding R&D for this meeting is that today we have 46 clinical trials in phase IIB versus only 35 a year ago.

2006, in a particularly difficult climate, once again we have been able to deliver good growth. We have adapted our resources swiftly when it comes to reducing our expenses and invest selectively. Where we needed to invest, we invested heavily.

We've reduced costs in France and Germany in response to tighter healthcare cost containment measures. In both these countries we have reduced costs in the United States in response to the Plavix situation and the generification of a few products whilst continuing to support Ambien and Lantus and preparing for the launch of Acomplia.

As we have told you, we have invested heavily in high-growth countries. This is the case in particular with the BRIC countries, and we've continued to invest heavily in R&D. We therefore maintain our EPS growth. And this is a remarkable achievement in the Pharma industry.

I don't believe that a company that has suffered a generification of four products in the U.S., that suffered the launch at risk of clopidogrel in the United States. When a Pharma company suffers this, at best it is break-even in terms of EPS or even negative. We posted a growth of 10.3% excluding exceptionals, 5.9%.

That clearly is an illustration of this -- the strong adaptability of this company. Of course we are a big Pharma with its clout but, for historical reasons, we have preserved this modularity. We are therefore capable of reacting -- responding rapidly when small problems occur, which is unfortunately, today, the day-to-day business of Pharma industry as a whole.

2007 will be a key year. We've seen that with Lovenox. We have lost the suit for inequitable conduct. We will strongly defend this patent and we will appeal. Secondly, let me remind you that, to my knowledge, and when I say to my knowledge, it's that no company, no agreement, no [NDA] has been delivered by the FDA.

Lovenox is a complex product. Oligosaccharides from a pork intestine, very complicated to replicate at industrial scale and this is not something that is easy to produce. Secondly, let us remind you that Lovenox in the United States is a rather special distribution because it is essentially in hospitals. So, for all these reasons, we remain optimistic on Lovenox.

The Plavix suit, as you know, the hearing started on January 22. Let me remind you that since the launch at-risk of Apotex in August we've made headway in the right direction. We have attained the preliminary injunction that we won the appeal and that in Canada, where we won the suit, we also won the appeal. So, for these reasons, we remain very optimistic regarding events around the Plavix suit.

Rimonabant in the U.S., here again, this is very, very important. You saw that last night we issued a press release because the FDA extended by three months the action date and that we filed the SERENADE study. That is the study that Marc described, in diabetic patients in single-drug therapy.

On Rimonabant, I would like to tell you that it is certainly not a cosmetic lifestyle product. It is not for American big bottoms. It is a product for visceral obesity, and Marc showed you some key results in this Japanese study. By CT scan, for the first time, we were able to measure the effect of this product on visceral fat and you can see that it has selective and principle action on this visceral fat as compared to subcutaneous fat.

And with this effect it clearly demonstrated, is underpinned by a number of theoretical studies, demonstrating that the endocannibinoid system present in visceral fat doesn't work in the same way as the endocannibinoid system present in subcutaneous fat. So there's the theoretical basis for this.

And there's also something that is crucially important. It's the results of the SERENADE study because in severe diabetic patients, HB1C above 8.5%, Rimonabant induces a reduction of this HB1C of the order of 2%, and that can be compared to any anti-diabetic that is already active. And this single-drug therapy follows up the RIO diabetic study where the product demonstrated either in association with metformin and sulfonylurea, great potentialization of the effect on insulin resistance.

I'm telling you all this because for historical reasons we presented Rimonabant, firstly the RIO lipid study and the RIO Europe and U.S. studies as a product that reduces weight and acts on core morbidities, be they lipidic or diabetic in origin. Let's assume that we present today the Rimonabant profile. Well, we could tell you that it's an anti-diabetic product, active in single-drug therapy, notably very active in severe patients, active in association with the oral anti-diabetic products such as metformin and sulfonylurea.

And, in addition, it has a beneficial effect on good cholesterol, increases HDL, reduces triglycerides and, what is the case for very few anti-diabetic products, this product reduces weight. By that I mean that clearly and finally it is certainly not a lifestyle product. And choose the way in which you want to present it, but we are convinced, and that is why we have a life-cycle management that is as [onerous], that these patients with a high cardiometabolic risk need a product as sophisticated as Rimonabant. And the morbid-mortality CRESCENDO study which will run for five years will demonstrate, I hope, the advantage of this cardiovascular prevention of such a mechanism.

[Inaudible] and finally, 2007 is an important year because as you will have understood with Pierre and Marc as a duo of outstanding performers, we'll be seeing a significant flow of phase III results all through the year. And this is what makes us so very optimistic. We're not naive and we do not believe by any means that all of the outcomes will be positive. However, we know that when we get into phase IIB or phase III, that there will inevitably be some successes.

And perhaps I could add, in terms of the historical development of R&D, we have very often been asked to organize an R&D day that would be devoted to R&D. Well we haven't done that yet. But now that we are through with the merger, and the system has been stabilized, as Marc mentioned, in September next, we will be organizing a research and development day at which of course we'll present the results for advanced products.

But we'll also be giving you much more information about the upstream component. And this will provide you with a much better understanding of our strategy. And perhaps in so doing we will be showing the kinds of transparency which I have heard we have sometimes been accused of not showing. And we feel very much committed to transparency so we will be very happy to be doing this.

2007 then will be another year of earnings growth. You know that the Ambien IR will be coming to the end of protection in the United States. This will come about in April. However, Ambien CR will continue to be protected. We have tremendous ambitions for this drug.

It's highly sophisticated. I would suggest trying it, comparing it with Ambien IR. I did so myself and let me tell you that you really do see the difference in terms of the duration of sleep, the way -- how long it takes to fall asleep and the fact that there is no remnant sleepiness effect.

We hope to be able to defend ourselves with ready-to-use forms of other forms of the drug that we have been working on with all of Sanofi-Aventis mobilized to deliver an adjusted EPS growth, as we put it, excluding selected items in the same order of magnitude as 2006 growth, barring major adverse events, including events on Lovenox and Plavix in the United States. We expect to see a growth in our sales on the same lines as in 2006.

And having said all that, we will now be very happy to answer any questions you may have. With a little more light in the room, we'll be able to see the people asking the questions better. That's it.

[Interpreted]. Sebastien Berthon of BNP Paribas. A few questions. First of all about Acomplia. Could you tell me what the main reason is for the supplementary review issued by the FDA.

And secondly, how is the recruitment for the CRESCENDO study going?

When it comes to saredutant what are the next stages? Is it simply going to be developed for anxiety treatment or do you still foresee further studies on depression?

When it comes to the VEGF trap, are you considering clinical head-to-head study against Avastin?

And to end my list of questions for this time, when it comes to [inaudible] is there any chance that we will see the results of the [ATHENA] study before the final results are out?

[Interpreted]. Well Marc, I think you're on this one.

[Interpreted]. Well, when it comes to Acomplia, we decided long since not to make any comments on FDA decisions, but there are two points. A, there will be a three-month extension of the date. And then secondly we always have a permanent rolling-up date. Well, in Europe it's not permanent, either every four months or every six month. But [inaudible] have permanent updates on the safety of the product. In this case, it's the efficacy, which is what we're looking at.

Well, turning to Acomplia results, I think no one has any doubts as to its efficacy. When it comes to tolerance to this drug, in Europe we have seen no particular tolerance signals aside from the elements which were in the initial file. I think that's important to underline. So for the time being, we're simply waiting for registration in the United States. And this will come about sooner or later, hopefully in the course of this year.

Moving on to the second drug you mentioned, cardiologists are somewhat surprised by the excellent tolerance level in terms of CRESCENDO study, because cardiologists aren't always used to working with such good tolerance of drugs. The problem is that when it comes to recruitment, we tried to define the targeted population based on an events ratio, which is a little low, so we're trying to move it up.

Moving on to VEGF trap, there are two possibilities. One is to move into realms like pancreas cancer where Avastin is not active, another where Avastin has not proved successful, for instance, colorectal cancer. And then the third possibility is that to use all other avenues. And we'll be keeping all three avenues open. On the last one that you mentioned but we probably are pretty much within the goalposts in terms of recruitment for this study and hopefully this will remain the case.

I was going to forget saredutant. Depression is a new application that we are presenting a new therapeutic class, which is not always tolerance data, possible associations with amibegron. Also, we are looking at other potential agents used in combination.

Just a brief additional point regarding Acomplia. Of course we do not comment, nor will we ever comment FDA decisions. We would, however, like to point out that in recent times there have been several instances where new application -- authorization demands have been extended by three-month periods. Needless to say, we are extremely optimistic as to obtaining an NDA for Rimonabant. Sir?

Just four questions. Firstly in Japan, before the data at ASH, the benefit [inaudible] maybe more questionable. [Inaudible] a sense of [inaudible] and we [inaudible].

Sorry. Is that better?

And the first question on idraparinux. Both [inaudible] wants to help reduce the longevity of the drug in the body. Then, my question is how you're going to position [inaudible] good future for the normal version of the [inaudible] ASH. First question.

Second question is regarding Plavix. My understanding is that you negotiated process contracts regarding Plavix to maintain some market share during [inaudible] from Apotex. How much price difference did you put in when [inaudible] and where we see price going forward in Plavix [inaudible] ban the drug?

And thirdly on Acomplia. You showed a slide on Acomplia and it's use in hypertension. First type of data you've seen doesn't seem to have any benefit on hypertension clearly through the visceral mode, I can see why that is. The question is, how many patients have sole hypertension that are using Acomplia U.K. and in Germany from the data you showed, as opposed to combination therapy for dyslipidemia?

I'll start with the Plavix question to give my friend some time to see the scientific. You must understand, I cannot give you precise information to which extent either [inaudible] and Bristol-Meyers has been obliged to make concessions concerning commercial conditions. I have to remain vague, but I have to be clear that we will not to back to the previous price system because it has been harmed by the appearance of this [inaudible] generic. But I cannot go more into detail.

So for idraparinux, [inaudible] when presenting the number of products in order to say that idraparinux [inaudible] as one product. So, so far, we still do not know because we developed and have a product to be submitted. With idraparinux, we did [inaudible] did not know that if idraparinux studies are positive, it is likely that we will not get at least only biotinylated idraparinux because we've seen that it is a definite disadvantage. It doesn't solve a number of patent protection.

For the hypertension, there is not clearly a potential with rimonabant. But what is -- we have an effect on weight and it is well known that an increase of weight is increasing the blood pressure. So in fact we have, by effect on weight, an indirect effect on increased blood pressure. But we do not have -- so we are not [inaudible] creating hypotension with rimonabant.

It was an indirect effect and it was interesting also to ask because we have always said that we are [inaudible] cardiovascular risk factor so one which is derivative, the other one which is good cholesterol, or increasing good cholesterol, HDL, which is a direct effect and a third indirect effect which is by the way reducing the weight which will also reduce the increase the increased blood pressure.

It's Graham Parry from Merrill Lynch. First question on your guidance. After a good year in 2006 with good cost reductions, it appears your conservative -- your guidance for 2007 is somewhat conservative. I am just wondering what you are assuming in terms of generic Plavix for that 2007 guidance.

And, secondly, on a reported EPS basis, I was wondering if you could steer us to anymore restructuring charges or write downs that you are aware of that you may have to take in 2007.

And then a question on Acomplia, can you just clarify that the SERENADE data filing is the only reason for the delay at the FDA and that you haven't had to submit any additional safety data along with the SERENADE data?

And then, finally, if you could just confirm [inaudible] perhaps could you just confirm are there any head-to-head studies versus Avastin in Europe for the VGAF Trap phase III program? Thank you.

I can take Acomplia. You know again we are not commenting on the decision. I just can say that it is not because we need to add more safety data [technical difficulty].

I said again, we still do not know if will go head to head versus Avastin or if we will go in [inaudible] is negative or where Avastin was visually active and is more active. So, again, it will depend. So far we have the potential to be [inaudible] active. But that's a question [inaudible].

And actually a follow up on Acomplia. Can you just confirm that you have actually requested a full diabetes treatment label with the SERENADE data?

It is interesting but you know that it is at the end of the process. [inaudible].

One more time, we are sorry, but we will not comment when we are in relationship with the authorities. This is our policy. As you know the FDA doesn't like too much that we comment a lot or what they are currently doing.

And then the question on the guidance.

I believe if I understand your question correctly, you expect the guidance on the sales of Plavix in the United States? Is this --?

It's what assumptions are you making for the penetration of the generic, how many months more inventory are you assuming in your guidance that there is to wash out?

I can only repeat what I tried to say before, that we see as of today is that stock of the generics for the major --three major wholesalers seems to be exhausted. We still see stock which we had in demand for the original from the mail order houses and from the retail.

Coming from this, we believe that will take until the end of the second quarter 2007 that all generic stock will be exhausted in all trade channels at the worst. I have to leave it to you. I think we have not much more information than what I give you.

And the rest, to a certain extent, is guessing. We have indicated from the very first day of [inaudible] as a generic that Apotex has obliged its trade patents to secrecy agreements not with report on their stock. And so we continue to try a little bit in [inaudible, but on the most important side, which means the major wholesalers who have clones, we know that this is a crisis because we have incoming orders in the usual magnitude.

[Interpreted]. Perhaps I could reformulate this in a slightly different way. We, you were saying that if Apotex had delivered enough to satisfy all market need until the end of 2006. now, as it turned out, not all the people concerned were delivered on the same terms. That is why we had some, for instance, the wholesalers come back to us [inaudible] $25m from August 8 to December 31.

Now, if we assume that the starting assumption was not totally absurd, well, could you agree [inaudible] third quarter -- first part of this year. And it's not a matter of no sales in the first quarter and we'll see some sales in the second. Well, you will have a very difficult picture depending on which wholesaler you are looking at. But broadly speaking, I think the key point is our starting assumption was not totally absurd.

So what we would actually be using would be something to the tune of, don't quote me on this, say $425m, which we would otherwise have earned in 2007 based on the normal rhythm of the product and building up increasing speed.

[Interpreted]. This is [inaudible]. I've got a question on restructuring efforts which you began in 2006. We hear a lot about industrial efforts being made among competitors. Could you talk to us about this? What have you been doing since the merger with Aventis? What might we expect in 2007 on these points and also what are you expecting for the cost cutting?

Then a more timely question, Eloxatin. We saw some weak growth in the U.S. for Eloxatin. Should we expect that will change? Will Eloxatin begin to stabilize in terms of its growth in the United States? In Europe, the period 2007 will be somewhat difficult. Thank you.

[Interpreted]. Let me begin with Eloxatin. Eloxatin in the United States. We have to remember two things here. First of all, penetration, the first classic indication, colon cancer. Such great penetration already for that indication, but I don't have much hope to see more than maybe growth of around 5%.

Apart from that, the second element to remember, other indications, including head and neck and gastric. Here we are just at the beginning, therefore, well in our budget between five and 10 for the U.S. where the product is still protected as opposed to its situation in Europe.

To answer on the industrial point, in the last two years, there was double-digit growth. Now it is single-digit. That having been said, and I think if I understood what you are referring to, that having been said, we are absolutely not going to start doing some major industrial restructuring as is the corporation you are alluding to.

No, we are just adapting. In no case are we talking about some major upheaval, no major changes in terms of production and facilities. Yes, Ketek has gone down quite a bit, therefore, we have adapted the Ketek facilities, brought this in line with our requirements. However, we are not beginning any large-scale restructuring of our production facilities.

[Interpreted]. [Philip Brennan], IXIS Securities. Over here. One question first of all on the 12 products for filing in 2007, 2008. Which ones are likely to be filed in 2007? Most of them are for 2008. But which of the 12, in your opinion, potentially may be block busters?

Another question on [terefluinamide]. You talked about a second study. Will that be a European study? Can you tell us what your registration strategy is for that product in the United States?

[Interpreted]. [Terefluinamide]. First study was European, the second one will be the rest of the world, including the United States.

Regarding filings, to be fairly brief. The first wave will be toward the end of the year, CNS. Next year mainly oncology. Idraparinux, 2008, dronedarone 2008, of course. Potential block busters, dronedarone, yes. Idraparinux, yes. Depression will be conservative. The one out of two but the potential [inaudible] can be brought in. At risk, but if it works, yes.

Sleep, insomnia, some examples will be difficult but we could have a block buster, yes. S-1, probably difficult to understand. They're very good results for oncology, rectal cancer. VEGF, we'll see, combined with Avastin. [Egotiban], at the current stage, no. That's basically it, I think, it covers the points.

[Interpreted]. Now this question, idraparinux. Idraparinux, could you compare. The market is full of things. There are oral products by Bayer, BMS, Behring. Don't you think with it's potential because there are a lot of players in the field?

[Interpreted]. Well it's not the market for the time being that's crowded. Its development that's crowded. Products are to be marketed, then we will see how crowded things are. Like I said to you idraparinux has the profile that is somewhat unusual, real advantages. You know there is no drug interaction. You don't need any monitoring. You've got an injection once weekly. I'm not saying we will take over the whole market place but it will pick up a good bit of the marketplace. But hopefully we'll take a bit of the marketplace.

Look at Amadeus to be presented to the FDA in July. Efficacy profile compared to vitamin K is very good so some intracerebral hemorrhaging which caused us shutdown of the study but that has been dealt with. So we do think this product is industry competitive. Don't forget this is an area where we are starting to get experienced which why I say there's crowded development but the market is not crowded. That is something else again.

Go ahead.

[Inaudible]. First of all could you give us an update on the Menactra supply please? How many doses you intend to ship in 2007? And you've always guided that the price would go up significantly in 2008. Will it go up in time for the European launch and so the total for the 2 to 10 indications, and will you have full supply for 2008 and should we look at full capacity more for something like 2009?

And the second question on vaccines, I know the legal recommendation [inaudible] universal access vaccinations. The question is whether the public will embrace it. Can you review the 2006/7 season regards, have all the available doses been shipped and, more importantly, what effect do you get when the markets have all been really administered or are there going to be some returned?

In terms of pharma, it is all very interesting on biotinylated idraparinux that you try to base study [arterial fibrillation]. In any case that would assume that given that you have an antidote. Recruiting should be a lot less difficult if you do another, because of the risk that the patient, elected risk. So how quickly do you think should you actually do a study that starts this year? Do you think you will have data by 2010?

And then a question to [inaudible] on the VEGF Trap. First the business 2008. I assume that must be for the phase II single-arm study so its probably malignant ascites or ovarian cancer. So can we conclude from the fact that you do not yet know [inaudible] Avastin several phase III studies which you've announced, the protocols haven't been finalized yet?

Oh, and then a final question. Given that the top line this year has probably been negatively impacted by the generic Ambien, should we assume the percentage of sales is going to go up this year?

Okay, in terms of Menactra, we delivered 4.2m doses into the market place in 2006. We will have 7m doses available in 2007 which will more than meet the demand out of the U.S. and Canada. This will go up to 8m doses in 2008 and then in the 2009, 2010 timeframe we will have the new facility online which basically removes any constraint whatsoever and allows us then to seek licensure in the E.U. and the international zone.

In terms of the flu marketplace, 2006 was an unusual season, or maybe more typical in the U.S. because of the last four years of supply constraint, but there was delays from the other two competitors, in particular, in delivering vaccine. One was tied into the licensure of a new facility in Canada and that resulted in shipments beginning in October, which was rather late. And the other competitor basically did not ship doses until the beginning of November, which is very late for immunization.

For that reason and, by the way, we delivered 52m doses, almost 50m doses by the end of October. Right now there appear to be excess supply, particularly from one of the competitors who was delivering doses in the December timeframe. That said, the ACIP is I think now is confident with three major manufacturers that they can become more ambitious and aggressive moving toward immunization for healthy adults, and we will be partnering actually with the American Lung Association to drive toward this universal immunization.

Okay, for idraparinux biotinylated, you know you can [inaudible] fact, [inaudible] recruitment. You can play on the simple size because you expect a better effect with idraparinux. That was our original [inaudible] -- that was our original expectation.

You can turn a specific population to increase the event rate and so I think we will play a little bit on [inaudible] of it. I cannot promise that it will be fully -- that we will deliver in 2010 which will be not so far from that.

And VEGF, I pick up the first part, I agree with you that the first indication will be monotherapy. I did not pick up the second part of the question.

Have the protocols been finalized? Should we conclude that if protocols have been finalized for those sides of the phase III studies which you highlighted you are going to start?

We are starting now. They are finalized, yes. We are starting the phase III now.

Okay, so that would be then additional studies where you would go through against Avastin?

Clearly.

Okay, thank you.

And in terms of the last question which was a mix of Ambien and [RD]. So the treatment [inaudible].

Use the microphone please.

So obviously you are not guiding for top-line growth. I'm not asking for one, but we should -- it's probably not huge given that there is some negative impact from generic Ambien. So, given that the top-line growth is probably like lower single digits, should we assume that the R&D ratio as percentage of sales goes up this year?

[Interpreted]. I'm not entirely convinced that digits for R&D, to compare R&D spending on sales, it is important to look at that. This year to my knowledge we increased by 0.8%, 1% more or 1% less, I don't think is a major factor which is why we don't give guidance on that.

[Interpreted]. I have a question. In the press they were saying that you are now preparing to merge with your U.S. partner, BMS. First question, generally, are you considering that type of transaction with a strategic option. Secondly, are you preparing that particular project?

[Interpreted]. To be crystal clear, I have already said this and I will repeat, we do not comment on rumors. I am sorry to disappoint you, sir, but that's always been our policy. Therefore, I don't change one iota on what has been said previously about this.

[inaudible] from Bear Stearns. Just a couple of pipeline questions. The first is actually a point of clarification on rimonabant. This doesn't seem to be included in your metabolic pipeline chart for obesity, although it is in phase IIb for smoking cessation. Is this an oversight or have you actually terminated development in obesity? And if so is this because of any associated -- any association between the mechanism of action acting more centrally than Acomplia?

And then the second question is actually on ABE1625, this presumably is from Aventis' pipeline previously, and can you let us know how you think this can be differentiated from Acomplia?

And final question is on Saredutant. How satisfied are you that the 100mg dose that you that you've chosen to pursue in the Phase III clinical program is the right dose in the majority? Thanks.

Okay. I'll take this one. First Saredutant, I think it is an interesting story. When we started development of CD1 [inaudible] antagonist, we saw that most of the action of the CD1, all the action, in fact, in the beginning was to put the decontrol so acting through the [inaudible]. But to our big surprise, and it's a little bit why Gerard said that we should present the products the other way. We have said with rimonabant that most of the active benefit is relative mild CNS activity, if you consider that metabolic parameters were very, very reproducible.

While the smoking-cessation effect, well it's a bit [inaudible] something like that. We discovered after that with rimonabant and also from some competitors than with Acomplia, we got perhaps the best in terms of base rate effect versus CNS effect and those products were a little bit more potent CNS versus base rate.

And clearly for [cirinabant] we do not get the same metabolic effects with the same weight reduction, and so we decided not to go for a metabolic disorders. Of course, the disadvantage may be an advantage, so we may think that in terms of working this position we should have a better effect with [cirinabant], which has a [inaudible] than for rimonabant, which has a much more prolific.

So, to simplify, for some reason that we do not know, there is some crossing of the potent barrier but it's not striking. So for some reason that we do not know rimonabant is clearly very, very CD1 [inaudible] to make it very simple, when [inaudible] is much more CNS side even [inaudible] the antagonist.

For [AVE1625], what we are doing for -- what we did for [inaudible]. We decided to calibrate all our CD1 with the antagonists in the most workable model and the most conceivable model is the weight-loss model. Because as you have seen [inaudible] so we can calibrate very quickly, except for AVE1625, whether to go only for the obesity.

We went also during the Phase IIb for obesity and limited associated disorders. So after that we see. You that there was specific development for [cirinabant] for AVE1625 in combination. So [inaudible].

And going for Saredutant, so far the profile of Saredutant was much more a [inaudible] profile than a true anti-depressive profile. So we think that the proposal should not be too far, but this is a good question. A little bit ranging in [inaudible].

Thank you.

I can add that pharmacologically speaking, in other words in animals, the active boost in the anxiety model are the same that granted those on depression, it's in animal, exactly the same boost.

Thank you very much.

Hello it's Ben Yeoh at Dresdner Kleinwort. Three questions if I may. I was just wondering on value programs, the statement will be out in the first half of the year. I wondered whether you could give the headline data for that then or will we have to wait for a conference some time this year?

Secondly, I see that Plavix in combination with simvastatin seems to be on track for filing in 2009/2010, I was just wondering if there's any update on that, and what you see the potential population size is for that?

And then lastly, the question I guess I'm trying to get at your cost of goods. I was just wondering how many [inaudible] factories you currently have and whether that will be trending down in the next three years? You're something like at 40 and you think you might be at 30 in two or three years time.

I take the two first. On the value program it is true that we prefer to present data at a medical meeting just because that when we give data at a medical meeting we have sometimes a result and some [inaudible] of the result. I think it's more helpful that just a press release. But we actually can have a small press release and a presentation at the medical meeting.

As for the combi-statins with Plavix there is not too many reasons why it's not working. And as for the size of the market, very difficult to [inaudible] predict what will be the size of the market.

[Interpreted]. On the manufacturing facilities, let me repeat what I tried to say earlier. Unlike one of our competitors who you are no doubt thinking of, we have not planned the slightest plant shutdown. We continue to keep the same manufacturing capability, we will adapt, depending on the units, what we have to produce during the year. But we don't plan to have a major reduction plan of our manufacturing facilities.

[Interpreted]. If there is no call for major restructuring -- manufacturing restructuring can we expect other restructuring in terms of the sales reps or will headcount remain stable in 2007?

Second, are you satisfied with your scope of business or is your business view as strategic today?

[Interpreted]. On restructuring, we have not planned in terms of, as compared to what has already been described, we have no plans for additional structuring for Medical Reps in France given the present climate. Now if, of course, things were to deteriorate in the coming years, as we have done this year, and in the best and most suitable fashion consistent with our corporate culture we would do so, but on the face of it nothing is planned.

[Interpreted]. And given the scope, are you going to, in other words, as a subtext, is there a major acquisition of one of U.S. partners in the U.S. is that the subtext?

[Interpreted]. I believe I've already answered that conversely. If you're referring to disposals, we have not planned the slightest disposal as of today. We will rather seek to develop as best we can our business.

And we've said this and we've attempted to say this, we are firmly of the view today given what's happening in terms of healthcare spending in all countries, we must be must be a global partner with countries to manage, at best, these increased health care products that are inevitable. You all know the population is aging. And so today the number of patients taking medicines is increasing and will increase over time. We will be taking medicines for longer and longer because people will live longer.

On the R&D we intend to beef up in biotech, not necessarily through acquisitions, possibly tie-ups. We'd like certainly to strengthen the balance between traditional pharma and biotech.

-- with Goldman Sachs. Hanspeter, can you talk a little bit about the French and German markets, I know tough markets for us all to assess, but just wondered what the expectations are there maybe for 2007.

And second, Taxotere in the U.S. We're all aware of the dynamics there, but any reason why anything should change through 2007 for that product?

And then finally, one of the pipeline products, 5530, the cholesterol absorption inhibitor, wondering what your thought process is here with regard to strategy? And on the therapy combination with statins, how should we think about that product going forward?

I will start with -- this kind of product is much more interesting in association than by [inaudible] and whether we do some kind of proposition to make. So I will not comment the evolution but to make an association.

Starting on Taxotere, I think there are a number of elements which make [inaudible] for 2007 in the U.S. First of all, if you really closely look, you see a certain acceleration in the marketplace, but you cannot [inaudible] in the second half of 2006 especially in the fourth quarter.

Second we have increased our investment, we have put more people behind the promotion because finally we thought that we are not sufficiently strong.

Third, we have two new indications or new indications have developed in gastric which we started to promote only fourth quarter. And last but not least, we have also changed the overall oncology management in the U.S.

So coming from all of this, I am confident that we will see a certain acceleration of our growth in the U.S. The growth was not so bad. Getting relatively close to 10%. So, yes, I'm a little bit optimistic but nevertheless I think we cannot overlook that the product, in its major indication, which is breast, of course, has a very, very solid for, not to say, perhaps even such as way that it positions. But yes, I hope to see more growth in 2007 than we have seen in 2006.

Now the other part of your question which goes to the environment in Germany and in France, I have to be a little bit less optimistic. We have no future indications for France as of today. But nevertheless, we will continue to suffer from the measures taken in 2006 for a large part of 2007 because they have been initiated largely in the second and in the third quarter 2006.

As you know, there will be elections in the not-so-far future in France. And also, from this background, it is impossible to say more than there is today, nothing reasonable which would further complicate the situation in France.

Now, in Germany, if there's any good news it's the very recent good news of last week where the Germany Government put an interpretation of the law in place which put the previous decisions of the so-called [IK-VIK] institute, which is an institute put them in place in order to make a secondary evaluation of the clinical benefits of otherwise already approved pharmaceuticals.

This new law has abandoned all pending decisions of the IK-VIK and gives a new guidance in the sense that IK-VIK has to incorporate international standards in its evaluations, which is exactly what we have been fighting for. Not only us, also the total industry.

So this we see as a positive trend. But it is so recent that it is lacking really material impact so far. But at least the Government has recognized that the current practice, the previous practice of IK-VIK is not in line with international standards, to say the least. We have to see what comes out of it and we have been touched so far by IK-VIK in two respects.

First we lost [inaudible] of Apidra which at this point of time has been a small product in Germany, but nevertheless we assume Apidra now to be re-evaluated by IK-VIK.

And second, when IK-VIK was in the process of taking really a disastrous evaluation of Plavix, limiting Plavix indication to PAD only, which really highlights the practice of this institute because if you take this literally, it would mean that Plavix, for example, could not be used in [stents], which would be disastrous for the patient.

So we believe and we are convinced that, especially for Plavix, IK-VIK now is obliged to make a new evaluation and we hope very much that this evaluation is in line with treatment guidelines as, for example, the evaluation of Plavix in the U.K. or as in France.

But beyond, as I said in my opening chart, we have continual problems and effects that healthcare is improving faster than total economy. And so we will remain under pressure as an industry and we have to adapt to it.

[Interpreted]. [Merger Market], U.K. Press Agency. With that comment in BMS, could you perhaps tell us a little bit about your ambitions in terms of external growth if you have any for '07 on other continents, possibly smaller companies and, if so, what resources could you devote to that?

Secondly, more theoretical, all these problems with generics, don't they still militate in favor of a tie-up between Pharma firms because you say that everyone is treated in the same way?

[Interpreted]. As Marc said, I believe that Jean-Francois announced it some time back in Lyon, if, indeed, we have a possibility or an opportunity on the side of a biotech company we will do so. And, as yet, we have not specifically identified a company. But this is part of something that might happen.

Second thing that we know is that it is always time consuming. Japan, you know full well that in Japan we have not yet achieved the critical mass. And if you have and if an opportunity arises in Japan, then again we are ready to invest. Having said that, let me repeat that we're used to working with Japan for many years now and we know that things take time, but it remains important objective for us.

As to a tie-up or a merger, the only point of mergers, and I'm not sure but it is because of generics, it's once it creates -- when it creates value, when it creates jobs and work for people. It won't just be a tie-up for the sake of a tie-up. But we're not sure that the size is really something that allows us to, quote unquote, to compensate for the generics for us.

We're put the necessary resources, we're put what it takes. Jean-Claude showed you at what speed we were capable of drawing down our debt, reimbursing our debt, we will have what it takes commensurate with our ambitions if need be, but we have no specific figure to give.

[Max Heron] from ING. Just another quick follow-on on the debt issue. You have paid it down very quickly, a lot of your peers are doing significant share buybacks. My question is do you have any plans in that area? And also what are your attitudes towards keeping the balance sheet geared on an ongoing basis?

And then secondly, just on xaliproden. Obviously coming to the end of the 18-month trial, of which patients have been on for 18 months, much longer than a typical acetyl cholinesterase inhibitor. I was wondering whether there was an open label portion of the study, obviously the effects being seen over a longer period then we typically see with current Alzheimer's drugs. Thanks.

[Interpreted]. On the first part, the share buyback, as I indicated earlier. The focus during 2007 will be on a bigger payout of dividends on the 2006 earnings. What are we talking here? EUR1.75 per share, that's EUR2.4b over the year. So we expect to payout will remain the priority.

Of course, we are reducing our debt, but we started from EUR5.8m at the beginning of the year. And the share buyback isn't a priority 2007. You can never say never. Were the situation to justify it, but it is not on our list our priorities today.

It is true but, of course, we could say maybe we stand out from the other Pharma firms because the vast majority of other Pharma firms have a share buyback policy, so, in total, devoting bigger amounts than we are to all the shareholders. Not everyone is indebted as we were during the acquisition. I don't think we proceeded -- it was unwise, because, as you saw, we reduced the debt. And I would say that our financial charge has been not too high over the years. We benefited from the good rates and we'll see later.

I think if you are going through your booklet, page 115 you will understand why we need to treat, at least for 18 months and perhaps even more. I don't know whether you can put it on the screen.

So because this is automatic treatment, you have an immediate effect and roughly you get in terms of the scope 4 points. The reaches of your [inaudible] is slowly decreasing with time, most of the time you stay above 4 points. So now if you have an agent like xaliproden, which is not improving [100%], but slowing, the disease.

And if you understand, here, look at the slide, so the effect of taking this is like [inaudible]. The first slide, the 115. So even if you take -- if you take the assumptoin that you have 30% of delay, which means with a [inaudible] of 6. points, which is even less now, we would like an effect of 1.5 to 2 points the first year.

But you have to compare this the 2 points to the 4 points that you have [inaudible]. So you need at least 18 months and perhaps more than 18 months in order to show the effect. And I remind you -- I would like to remind you that 30% to slow the disease is a lot. In oncology, most of the time you are in 10% response rate. In cardiovascular, you have most of the time in 20% range. So 30% is quite impressive. So there is not [inaudible]. And 18 months is really the minimum.

[Interpreted]. Could you tell us a little more about your strategy in terms of generics aside from what you already presented at the end of last year.

[Interpreted]. Well, it's quite simple. We are not considering becoming a major generics firm, as [Sandos] is. If, depending on countries and regions, and we have, of course, the example of Zentiva, where we did special share ownership, if then we see geographical opportunities which seem to dovetail with the way we work, it may be that we will move into certain generics. But we certainly do not intend to go into head-on competition with generic firms.

[Interpreted]. Thank you. [Ivan Meu] from Le Monde. More and more major laboratories feel that a substantial proportion of their new drugs and approved drugs will have been acquired through external growth, that's between [60] and 65%. How do you feel about this?

[Interpreted]. Well, if you buy a drug outside, you have to pay royalty fees already from the outset. It's cheaper not to have to do that. On the other hand, research is not always fully predictable. Sometimes the cycle is disrupted, interrupted. Sometimes there's additional research work to be done. So we're very much on the alert for molecules, compounds, which could better needs or so on. I'm thinking of S-1 or VEGF Trap, for that matter.

[Interpreted]. Could you give us a percentage? 15% internal research? What would you say?

[Interpreted]: Well, I think that in pharmacy, in pharmaceuticals, when you start giving exact figures then you quickly get into hot water. We have some good [inaudible] that line up here that are from in-house, and that's a pretty good proportion. But it will probably be hard to maintain.

I'm not sure that there is an adequate level. I think you just have to take in the situation and fill in any gaps, whether we're talking about forms of therapy or molecule timing as the need arises. And I should say that in geographical sense we are very much in a pragmatic world than a dogmatic one, so please don't expect me to give you specific figures.

Just your decision concerning your possible partnership for investment in Japan. Which area are you most interested in, do you have a specific area which you are interested in? And also you interested in biotech companies, possibly acquiring one of them which is lot more active than a few years ago?

And secondly you talked about the importance of BRIC. But you are not still present, I believe, in countries like India or maybe Russia. How are you going to strengthen in these countries?

And thirdly, your R&D spending is 9.5% this year. Considering that you have a number of research -- number of clinical research going on in Phase IIb and III, this growth pace will it continue for next year -- for this year and for the next two or three years? Thank you.

The R&D area where we could become active in Japan, through [inaudible], of course I can only answer to geographically. If you would acquire something, it would be easier in Tokyo or in [Osaka].

Not the area. I was talking about --.

I know. But I meant that you must understand that we are not sitting here to share with you our potential targets. So I have to be a little bit joking on this subject.

On BRIC, I must slightly disagree. We have very strong positions in all relevant [free] countries. So to start with [inaudible]. We are number on in Russia. We are number two in India. We are number two amongst the international companies followed -- dominated only by -- slightly dominated by another European company, GSK, which is number one. And finally in India -- in China we are number two within the international companies once again.

So, of course, those are the positions and we have to take further decisions to develop and to grow them. Big decision, of course, is always should you have a manufacturing plant in Russia which is a long-lasting question inside this Company. And I'm not sure we will come to a conclusion in the very next future. But in terms of presence with our portfolio, in fact, we have the strongest division if I take all BRIC countries together for pharmaceutical industry.

On R&D spend?

[Interpreted]. Perhaps I could answer for Marc on spending. We are not going into specific figures. We were talking about almost 10% increase this year. Perhaps it would be reasonable to say that the rate of increase of that spending will probably be slowed somewhat in 2007 in all likelihood. However, we do not hesitate to put how ever much money is necessary as the need arises. That has always been our policy.

And so we're not talking about some kind of ballpark figure that we would then hold to rather we look at the real need. And I should add, we are increasingly aware of the pressure that will apply to R&D costs. We try to reduce costs wherever we can to cut costs. We've already started to do that.

One of the best ways to cut costs is, of course, this is impossible to do in R&D, but it's not to make risky investments. And if you look at biotech, with the attrition rate is perhaps slightly lower than for pharmaceuticals. That could be one way of reducing R&D costs. So in fact very often the costs are not where you might expect them to be in terms of R&D.

[Interpreted]. [Samuel Cohen] from [DSM Radio]. I was wondering if you have specific base for the [inaudible] French market for Acomplia. And could you tell us what your overall target for sales of Acomplia is?

[Interpreted]: No, of course, we do not have those specifics dates, however it should be quite soon. Is that sufficiently accurate? I'm afraid it's the best I can do.

As for sales we do not have any figure to present you today. We are still talking with the Health Authorities. And, as you can easily imagine, it would be rather embarrassing to be talking about dates or sales figures when you're still negotiating with the French health authorities. Bearing in mind that we do have a marketing authorization for the E.U.

Just one additional point, as you will have seen, the file for the SERENADE application in December for Europe, and that may gradually lead to changes in the target population and the reimbursement time.

[Interpreted]. I have a question about your [diabetes] strategy. You have a strong position in insulin. I was wondering if you intend to be more comprehensive in diabetes terms, I'm thinking in particular of new action drugs. You talked about a [SL2] inhibitors today. I was also wondering if you are interested in having more oral drugs.

[Interpreted]. Well, the one field with regard to the [DPP4] inhibitors, for different reasons, but [GLP1] you will have seen we are in process, GLP2 also. Acomplia, GLP1, -- GLP2, GLP2, Lantus, Apidra. There you have five products which are broadly around the same lines of course. For type 2 diabetes I think will be sub-segmentational. So I'm not going to tell you all about our vision, but you can certainly imagine some segments where the distribution of our product could be highly profitable.

[One Market]. Can you just comment on the dynamics you're seeing here, specifically the competitive changes from a sales and marketing prospective and the responses to that?

And then with regards to the GLP1 market, just how do you see that fitting into the insulin paradigm over time. You have a long acting GLP1, [inaudible] insulin market?

And then, with regards to Plavix in Japan, once the two-week prescription limit is lifted, how quickly should we expect uptake in that market? Thank you.

When you are looking to Acomplia, definitely, at least for your subset of obese patients, at least, overweight patients with diabetes, it is a little bit of [a plus for] development, we should -- we are thinking that it is really the first part of the treatment.

Actually before diabetic, once you are diabetic it is very likely that the first line safe drug is Metformin, so that you can think about combination about Metformin. We are not sure that Metrformin is not efficient enough, you have to go for association, so you can go for association for [inaudible] or for [inaudible] product at the present time. I am not sure, but at the end you have the insulin.

So I think we are going in the market by the two ends, those early phase and the late phase, for Lantus. The problem is trying to advance a little bit insulin or [indication] of the patient. So I think I answered your question correctly.

Just to complete the part on the marketing and the sales force, or the commercial investment, I guess. It's really about market development activities. Let's say five years ago the major investments were focused on specialists and [inaudible]. And now the investments are focused not only on [others], but also are focused on GPs because it's also a market [inaudible] activity.

And this is trend that you see not only in the U.S., but the trend also that you see in Europe and in some other countries. And in this respect we are very well-positioned because we see the choice that we have done from the very beginning.

The real different things in market today is the appearance of [Merck]. So what we see is that, yes, the shelf life has changed but, in fact we did it just last week, once again. If I look to the number of reps promoting any product in this field in the United States, we always had a very, very prominent position. And this has not changed in absolute terms by the appearance of Merck. But yes, Merck is significant player in this field and this has changed share of [inaudible].

[Interpreted]. Mr. Le Fur, you told us earlier, if I understood rightly, about the release of a drug which will be presented, Amadeus in Dijon on June 14. And I was wondering what types of diseases it will target.

[Interpreted]. It must be idraparinux. The Amadeus study starts in early July, and the product is calls idraparinux. It's atrial fibrillation, avoiding cerebral events. Onset of stroke is a context of atrial fibrillation.

I get the feeling no one else has any questions. I'm afraid we've been rather lengthy, once again. We do wish to apologize for this. And thank you very much once again for being here with us today.

Portions of this transcript that are noted "interpreted" were interpreted on the conference call by an Interpreter present on the live call. The interpreter was provided by the Company sponsoring the Event.