Sanofi SA (SNY) 2016 Q4 法說會逐字稿

Ladies and gentlemen, good afternoon. Welcome to the Sanofi full-year 2016 earning results conference call and live webcast. I'm Emma, the chorus call operator.

(Operator Instructions)

The conference must not be recorded for publication or broadcast. At this time it is my pleasure to hand over to Mr. George Grofik, Vice President, Head of Investor Relations at Sanofi. Please go ahead, sir.

Good morning and good afternoon to everyone on the call. Thank you for joining us to review Sanofi's fourth-quarter and full-year 2016 results. As usual, you can find the slides for the call on the investors page of our website at Sanofi.com.

Moving to slide 2 I would like to remind you that information presented in this call contain forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. I refer you to our Form 20-F document on file with the SEC and also our Document de Reference for a description of these risk factors.

With that please advance to slide 3 and let me introduce our speakers on the call today. With me are Olivier Brandicourt, Chief Executive Officer; Jerome Contamine, Executive Vice President and Chief Financial Officer; as well as Alan Main, Executive Vice President, Consumer Healthcare. Also joining us today for the Q&A session are Olivier Charmeil, Executive Vice President, General Medicines & Emerging Markets; Peter Guenter, Executive Vice President, Diabetes and Cardiovascular; Karen Linehan, Executive Vice President and General Counsel; David Loew, Executive Vice President, Sanofi Pasteur; David Meeker, Executive Vice President, Sanofi Genzyme; and Elias Zerhouni, President, global R&D.

First, Olivier will discuss the key highlights for the fourth-quarter and full-year 2016. Then Alan will provide an update on our Consumer Healthcare following the closing of the asset swap with Boehringer Ingelheim. After that Jerome will review Sanofi's financial results before we open the call to Q&A.

Before we start I would like to remind you of an important accounting item affecting the fourth quarter. As announced in Q3 2016, due to the completion of the business swap with Boehringer Ingelheim in 2017, Sanofi will no longer present aggregate figures or report the Animal Health business as an operating segment in Q4 and full-year 2016. Instead, the Animal Health business is reported on a separate line for Q4 called business net income of the Animal Health business. Sales and business net income on this new reporting basis are available for prior periods on the IR section of the Sanofi website.

With that, I'd like to turn the call over to Olivier.

Thank you, George. Good morning, good afternoon to everyone and welcome to our fourth-quarter 2016 earnings conference call.

Starting with slide number 5, I'm pleased to report that Sanofi delivered a stronger financial performance in 2016 than we had initially expected. For the full year we generated sales growth of 1.2% at constant exchange rate and our business EPS grew by 4.1% at CER. Of course, had we included the Animal Health sales in our top line we would have reported sales of around EUR36.5 billion. We achieved this growth despite significant headwinds in our US business diabetes business and the adverse impact of Venezuela.

In the fourth quarter our business EPS was down slightly due to tax. However, our BOI showed steady growth of 3.7%, demonstrating solid operational progress. Jerome will provide more detail on the quarter in a few minutes.

Our performance during the year reflected a great deal of hard work across the organization as we realigned our business to reflect our 2020 strategic roadmap. And we will say more about this later.

Turning to slide 6, it is particularly satisfying to see that all five of our global business units delivered growth in the fourth quarter. The highlight as in prior quarters was Sanofi Genzyme which once again grew in double digits.

However, the return to growth of our Consumer Healthcare business is reassuring ahead of the recently closed asset swap with Boehringer Ingelheim. Alan Main, who heads our Consumer Healthcare GBU, will give an update on this important transaction in a few minutes.

Turning to slide 7, we are now looking at sales by franchise and geography in the fourth quarter. You can see that the Specialty Care franchise maintained its strong double-digit growth across both developed and emerging markets.

Our Vaccines business also showed a solid performance in the period despite early influenza vaccine shipments in the US in the third quarter. And lastly, you will notice the improved performance of our Established Products franchise which is mainly due to the annualized station of Venezuela and the (inaudible) recall.

Now turning to our Specialty Care franchise on slide 8, strong growth continues across both our multiple sclerosis and rare disease franchises. In MS we gained share in the fourth quarter with sales up 37%. The main driver was our oral therapy Aubagio which is now annualizing at close to EUR1.5 billion in sales and reached 8.8% TRx share in the US.

Our high efficacy product Lemtrada also made significant progress with sales up almost 50% and is now annualizing at nearly EUR0.5 billion. In rare diseases we maintained our momentum and our sales grew by around 10%, mainly as a result of new patient accruals.

We are also preparing diligently for the US launches of Dupixent in atopic dermatitis and Kevzara and rheumatoid arthritis. These products will form the basis of our new immunology franchise and I will say more about this franchise later.

Looking at Vaccines on slide 9 we were pleased to show growth of 3.7% in the quarter despite early US flu vaccine shipments in Q3. Growth for the full year was a healthy 8.8%.

Our PPH or pediatric franchise grew 16.5% in the quarter. You have heard about our successful differentiation strategy in flu vaccines and we have a similar story to tell and PPH where we are very excited by the long-term growth dynamics.

Indeed for the full-year 2016, our AcXim family of pediatric combination products grew by nearly 40%, reaching close to EUR700 million in sales. Most of the growth in this franchise has been driven by the improved value proposition of Hexaxim which is our highly innovative hexavalent vaccine.

Regarding flu vaccines, not surprisingly the early shipment in Q3 impacted our fourth-quarter growth. Nevertheless, on a full-year basis we delivered record flu vaccine sales of EUR1.5 billion with 70 million doses shipped in the US. Of these, most doses were high-dose and quadrivalent.

Finally, sales of Dengvaxia continue to be delayed in endemic countries. However, we received additional country approval in 2016 taking us to 14 currently, and we are working diligently with local health authorities to initiate new vaccination programs.

Turning to slide 10, I highlighted earlier the return to growth in our Consumer Healthcare business. While the growth of around 3% is still not as strong as we would like, we are starting to see a recovery in Russia which contributed to the improvement in the fourth quarter. We saw solid performances in developed markets with Europe growing by 9.5% helped by a strong cough and cold season. Following the acquisition of BI CHC assets we are now well-positioned as a top three player in the global consumer healthcare market.

Turning to slide 11, our global diabetes sales grew by 1.9% in the fourth quarter and declined by close to 2% for the full year. The key driver in Q4 was our next-generation basal insulin Toujeo which posted a strong performance with sales up 39% over Q3. You can see from the chart that Toujeo continues to gain share in Europe and Japan and achieved full-year sales of EUR649 million.

To sustain leadership in diabetes we expanded our market portfolio with the US launch last month of our basal insulin GLP-1 combo product called Soliqua. We also plan to roll this product out in Europe during 2017 after receiving EMEA approval in January.

Obviously, while 2016 was better than our minus 4% to minus 8% multiyear guidance, 2017 is highly likely to come in below this range. Of course, this is due to the competitive pressures and price erosion of our glargine franchise in the US that we signaled to you back in 2015.

Turning now to cardiovascular, Praluent continued its gradual uptake in Q4 despite a challenging payer environment. On the US patent litigation, Sanofi and our partner Regeneron believes the District Court's validated judgment and permanent injunction ruling are wrong and we have appealed these rulings. We are confident that the law and facts are on our side.

We have also asked the court of appeals for the Federal Circuit to suspend the injunction during the appeal process. And we await a ruling on whether the injunction will be suspended.

The Court of Appeals for the Federal Circuit has granted an expedited timetable for our appeal. Absent the suspension of the injunction, we will be prohibited from manufacturing, marketing and selling Praluent in the US as of February 21, 2017. In the meantime, it is business as usual and our product remains available to patients.

On slide 12, our overall Emerging Market performance was good, up around 4% taking into account the 10% sales decline in China in Q4. The performance in China reflected the disruption in the local vaccines market and the high basis for comparison in the pharma business primarily due to inventory fluctuations.

However, the underlying performance of our Chinese pharma business remains strong. This is reflected in the available IMS data indicating that Sanofi growth for the combined months of October and November reached almost 12%, in line with total market growth. As a consequence, we remain confident on our prospects in China in 2017.

Overall our Emerging Markets franchise grew by 7% in 2016 excluding Venezuela, which was consistent with the plus 5% to plus 9% growth band we had previously achieved. The other take away from these slides is that we also have a balanced geographical split with about 37% of our sales coming from the US or about 27% in prescription pharma in the US.

Slide 13 highlights our efforts to build a competitive position in immunology. We've made good progress since our last quarterly earnings call in remediating our fill and finish plant and Le Trait and subject to a successful FDA inspection we plan to resubmit our BLA for Kevzara in rheumatoid arthritis this quarter. We were also pleased to receive our first approval for this product recently in Canada.

Most importantly, we are on track to receive an FDA decision for Dupixent, our innovative breakthrough therapy for atopic dermatitis, by the 29th of March. Additionally, we expect to receive the results of our Phase 3 study of dupilumab in adult asthma later this year with a US filing in this indication expected in the fourth quarter.

As you know, we also believe the Th2 pathway targeted by dupilumab may be implicated in other inflammatory diseases. Accordingly, we have initiated Phase 3 studies in nasal polyposis and we plan to start additional lifecycle management studies in pediatrics this year.

We also continue to progress potentially differentiated assets in our pipeline. And on slide 15 we highlight two important recent entrants into Phase 3.

Sotagliflozin is our SGLT1 and 2 inhibitor for diabetes. Its dual inhibition mechanism of action means it may have important clinical characteristics that set it apart from the first-generation marketed products.

For example, it may be particularly effective in renally impaired patients and may have blood pressure profile advantages. We plan an extensive Phase 3 program and have already started studies in monotherapy and in combination with metformin.

In oncology we are very excited about isatuximab as the anti-CD38 mechanism is rapidly becoming a standard of care in multiple myeloma. Isatuximab targets the unique epitope and we believe this may have advantages over the marketed antibody.

To build on the promising Phase 2 data, we recently started a Phase 3 program in relapsed/refractory multiple myeloma in combination with pomalidomide and dexamethasone. And we plan a range of other clinical studies in 2017 including in other cancer types.

Moving to our outlook for 2017 on slide 15, we expect business EPS in 2017 to be stable to minus 3% at CER which is off the EUR5.68 base in 2016. This is consistent with our previous guidance of no meaningful bottom-line growth over the period 2016, 2017 and comes despite the challenging environment in which we are operating. In fact, the high-end of this guidance would exceed our initial expectations.

On top of our CER performance, we currently expect our business EPS to benefit from the 3% to 4% currency tailwind.

With that I would like to turn the call over to Alan Main to provide an update on our new Consumer Healthcare GBU. Alan?

Thank you very much, Olivier. And good morning, good afternoon to everybody. It's my privilege to lead the Sanofi's newest global business unit and to talk to you today about our plans in Consumer Healthcare.

The deal to acquire Boehringer Ingelheim's CHC brands in exchange for Sanofi's Animal Health business closed on January 1. This is a major transaction for us, bringing us incremental revenues of around EUR1.5 billion and immediately strengthens our position across key categories and geographies.

The addition of BI's iconic brands lift Sanofi into leadership positions in attractive OTC categories, namely the vitamins and mineral supplements market, digestive products, cough and cold as well as pain medications. It builds additional scale in large OTC markets such as the US, Germany and Japan and overall elevates Sanofi into the top three globally in consumer healthcare.

While it has only been a month since the deal closed, I can confirm that the integration of the BI business is on track. To date, we have determined that the primary global hubs for the combined business will be Paris and Frankfurt, and we have already made the key decisions around management as well as regional and country leadership. Based on our plans, we remain confident that the transaction will meet Sanofi's financial objectives including the achievement of around 30% BOI margin in 2018.

Specifically in the current year you should be aware that the timing of transfer of marketing authorizations will result in a progressive recognition of sales. During this transition period, Sanofi will recognize the profit of products temporarily distributed by BI within other operating income. Jerome will address the specifics of the CHC accounting in his section in a minute.

Now turning to slide 18, I'm pleased to highlight the recent OTC approval of Xyzal in the US. Sanofi's Consumer Healthcare business has a strong track record of successful Rx to OTC switches in the US including those for Allegra allergy and Nasacort allergy 24HR. And it's a leader in the allergy category in this important market.

The launch of Xyzal will further strengthen Sanofi's OTC portfolio and will give adults and children with seasonal and year-round allergies direct access without a prescription to a treatment option that allergists have trusted for many years. As a result, our US CHC business is on track to surpass EUR1 billion in sales in 2017.

So with that I'd like to turn the call over to Jerome to discuss the financial results.

Thank you, Alan, and good morning and good afternoon to everyone.

I am now turning to slide 20. We are pleased with the progressively improving quarterly sales growth in 2016 which were up 3.4% in the fourth quarter.

Importantly, as it was said already, these sales do not include any contribution from our Animal Health business given the change in reporting. Also, our BOI, our business operating income, grew 3.7%. BOI grew slightly ahead of sales despite important investments we made in our business. On the bottom line, business EPS was down 1.5% in the quarter, mainly due to an exceptionally low tax rate in the fourth quarter of 2015.

Slide 21, looking at the P&L sales were EUR8.9 billion. For 2017, as Alan mentioned, recognition of sales from Boehringer Ingelheim CHC in certain countries will be progressive. Consequently, we expect to recognize more than 85% of BI CHC sales over the first half of 2017 and almost all of sales in the second half. What we don't report as sales will be recognized as profit in other operating income.

Back to the fourth quarter P&L, we again saw gross profit increase faster than sales, up 4.5% to EUR6.2 billion, reflecting cost savings on improved product mix. OpEx increased 4.8% to EUR4 billion, driven by investments in R&D programs and product launches. I will discuss some of the drivers on my next slide.

Other current operating income and expenses, negative EUR78 million in the fourth quarter including an FX loss due to the devaluation of the Egyptian currency, the Egyptian pound, on the positive contribution from Regeneron for the share of the commercial collaboration we have with them. In the previous period this line was positive EUR24 million.

The other [shares] line includes Sanofi profit share from our equity stake in Regeneron and also our share of profit in the Vaccines joint venture with Merck in Europe that ended in January 2017. Beginning in 2017 sales on expenses from Sanofi's independent Vaccines operations in Europe will be recorded in the appropriate line of our P&L. For your modeling consideration, the profit recorded in this line in 2016 from the JV was EUR55 million for the full year.

As expected, the tax rate was higher than the exceptionally low tax rate of 17.4% in the fourth quarter last year. For 2017, we expect the tax rate to be in the range of 24% to 25%.

Largely as a result of a higher tax rate business net income was down 2.9% to EUR1.6 billion. Business EPS of EUR1.25 down 1.5% benefited from our increased share repurchase activity. The average number of shares outstanding was down by approximately EUR22 million -- 22 million shares, sorry.

I move now to slide 22. It shows a continued increase in gross margin with an improvement of 80 basis points in the fourth quarter. This positive trend affects the combination of a favorable product mix on benefits from our improved active productivity.

OpEx growth was lower than initially expected in 2016, up only 2.5%. In the fourth quarter, however, R&D expenses were up 4.7% as we started a number of Phase 3 programs. SG&A was up 4.8% driven by higher launch costs and (inaudible) charges in anticipation of the closing the Consumer Health asset swap.

For the full-year 2016 gross margin was 70.7% including Animal Health. Looking at 2017 we expect gross margin of around 70% at CER due to the impact of increasing diabetes pricing pressure in the US, which should be largely offset by mix on productivity benefits.

As for the G&A, the SG&A, we expect expenses in 2017 to grow mainly driven by investments behind the launches of Kevzara and Dupixent. In parallel, we also expect progressive savings on SG&A in other areas resulting from prioritization and implementation of our new organization.

At the R&D level, we continue to invest in driving our pipeline with the recent initiation of five late-stage programs for isatuximab, PD-1, sotagliflozin, olipudase alfa on the OTA. Overall, we expect overall OpEx in 2017 to grow at a similar rate as in 2016 at CER.

Importantly, the new base to which this growth applies is approximately EUR50.4 billion in 2016 which is adjusted for the Boehringer Ingelheim CHC business on the new structure of the European Vaccines business. For total transparency, the OpEx associated with BI in 2016 were around EUR600 million and represented around 40% of the CHC sales. The incremental OpEx in European Vaccines would have been around EUR100 million in 2016.

Turning to slide 23, the currency effect on sales continued to ease and only had minor negative impact on sales in the quarter a negative 1.9% percentage points on a full-year basis. The currency effect on business EPS in Q4 was largely due to the Egyptian currency devaluation and resulted in an EPS impact of EUR0.04 per share or 3.1 percentage points in Q4. As always, for additional information on ForEx sensitivities to key currencies, please refer to the appendix.

On slide 24 I would like to comment on the phasing of our cost savings program announced in November 2015. We are well on our way to deliver a minimum of EUR1.5 billion savings by the end of 2018. In 2016 we delivered around EUR650 million of savings and are targeting around double that amount in 2017.

These savings are primarily coming from four sources: first, simplification of our organization; second, enhanced manufacturing productivity; third, streamlining of the established products portfolio and focus on the most profitable ones; and, finally, realignment of our sales force. While these savings are largely being reinvested to support future growth, they have also contributing to Sanofi's financial performance as we have seen in our recent margin leverage.

On slide 25, we reiterate our commitment to progressively growing dividends as a core part of Sanofi's value proposition to shareholders. The Board's proposal of EUR2.96 per share for 2016 marks the 23rd consecutive annual dividend increase. The proposed increase implies a dividend yield of 3.9% on the average January 2017 share price.

In addition, on slide 26, we intensified our share buyback activity last year with a significant acceleration in the fourth quarter in anticipation of the closing of the asset swap. As you will remember, we announced a EUR3.5 billion share repurchase program in October which we expect to complete by the end of this year. In addition to our regular buyback activity, this amount includes a portion of the net proceeds for the asset swap needed to offset the dilution from this transaction in the current year.

On my last slide, slide 27, we are pleased to have delivered on our key financial objectives. This achievement is based on the successful execution of our strategic roadmap. Despite changes along the way we were able to match or even exceed our initial objectives as outlined 12 months ago.

With that, I would like to turn the call back to Olivier for his closing remarks.

All right, thank you Jerome. I want to close this presentation by outlining our major objectives for 2017.

So consistent with our 2020 roadmap, we still have work to do to further simplify and reshape the Company, to launch new products and to sustain innovation. However, I'm optimistic about the Company we are building for the future. In the coming years we will be supported by our current growth engines, businesses which are Sanofi Genzyme, Vaccines and CHC.

On top of this our strong presence in emerging markets will remain an important driver across the businesses. As Jerome highlighted, we are driving efficiencies throughout the organization which will help us execute on our 2020 roadmap. This will enable us to sustain our financial performance in the current challenging environment and to drive future growth. In that context 2017 is a particularly exciting year as we launch our brand-new immunology franchise with Kevzara and Dupixent.

With that, I'd like to hand over to George to start the Q&A.

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

(Operator Instructions) Tim Race, Deutsche Bank.

Yes, it's Tim Race here, Deutsche. First off, I'll ask the obligatory M&A question. Starting off, obviously, you look at everything or lots of things that appear.

I'd be interested to know your thoughts on M&A going forward. Obviously, Medivation you missed out, potentially missed out on another opportunity to a US peer. Obviously, US there may be tax changes going forward which may favor US companies and their cash balances. Where do you stand do you think looking forward in terms of M&A and ability to compete and outbid other companies or not and generally what is your thought process for M&A and use of cash?

Then just maybe a question on diabetes generally. Short term you are using couponing to try and gain traction or at least maybe set yourself up better for 2018. But in terms of what's the strategic objective there, what do you hope to gain from that and also your long-term thoughts given that some of your insulin products with Hanmi have been changed in terms of deal structure and what's your long-term thoughts behind that? Thank you.

Very good, Tim. Thank you very much. So I will answer the M&A question and then Peter be ready for diabetes.

So it's well documented that we tried to acquire Medivation last year and were unsuccessful in our efforts to do so. But what is the strategy here or what's driving us? We are focused on creating value to shareholders. That's the first thing.

And with this in mind, we have a very disciplined approach towards M&A and we're usually considering the following. First and foremost, strategic fit, and it's very much in line with what we said back in November 2015 where we highlighted the different TAs we wanted eventually to do in organic growth.

So we are centered around diabetes, cardiovascular, vaccine, rare disease and emerging markets. That's where we think we have a leadership position, but we can eventually, that can eventually strengthen that position.

And the other is to be in a competitive position and we said in MS oncology, immunology and CHC. Of course, CHC we already did our swap with Boehringer, so that was a first initial move there. But, again, I insist that all targets we look at have to make strategic sense and fall in these therapeutic areas.

The second, of course, is value creation to shareholder and we have been and we will remain financially very disciplined. So we solely look at deals where we strongly believe we can achieve a return on invested capital which exceed our WACC within three to five years.

The third point is drivers is EPS accretion. And we are always looking to enhance Sanofi EPS growth profile. However, that EPS accretion objective is only secondary to our value creation.

Finally is pipeline. Sanofi's pipeline has been significantly strengthened over the last few years. But we believe our R&D capabilities could be further enhanced.

So that's how I would answer your questions. And we are remaining active in scouting the market with all those criteria in mind. So with that, Peter, do you want to give details on the diabetes franchise?

Yes, sure. So actually there were two questions. The first on what is the strategic objective of the couponing and then second more on the long-term thoughts on diabetes.

Let me tackle first the question on the couponing. Actually we have the objective of the couponing is, of course, to try to maintain as many people on the drug, whether that is Lantus or Toujeo you know that the program is for both products, anticipating, of course, potential opportunities in the future. Those two potential opportunities in the future are, obviously, Soliqua, so don't forget that 50% of patients treated today with the basal insulin are not at goal.

So by definition they would qualify for a product like Soliqua. So the more we can bridge those patients potentially to Soliqua the better it will be not only for the patients but certainly also for us.

Then, of course, the second objective is also an exclusion in 2017 by CVS is not I would say an exclusion ad eternum. So we, obviously, will look at all opportunities also come back in the future. So these are actually our key goals, I think, with the couponing program.

Your second question was more on the long-term thoughts. Well, first of all, let me tell you that the difficult periods we have we are going through and we have in front of us. You heard Olivier reinforcing that for 2017.

We expect to be below for the year below the minus 4% to minus 8% range, but at least we have anticipated it and flagged it. But if you think more long term I think we have many levers to pull. Of course, the market as such is a market that remains dynamic.

Number two, we have a couple of products that are in late-stage pipeline. Sotagliflozin was mentioned Phase 3. Efpeglenatide, the Hanmi asset, will enter into Phase 3 in 2017.

Of course, we are in the launch phase of Soliqua which is definitely an opportunity. You have seen the good results of Toujeo which delivers on the promise. Don't forget that we have still a very vibrant emerging market diabetes space.

And then last, but not least, you know that we have our joint venture with Google Life Sciences Onduo which is going to try to develop a whole promise of a better integrated care in the field of diabetes. This is a little bit more long term, but we do believe that there is a very important play specifically in chronic diseases like diabetes.

Thank you very much, Peter. So the next question, please.

Florent Cespedes, Societe Generale.

Good afternoon, gentlemen. Thank you very much for taking my question. Two quick ones.

First on Praluent US, what is the plan B if you have to withdraw the product from the market. Does the 2017 group guidance and EPS reflect this risk?

My second question is on China, after the 10% decline in Q4 how confident are you to re-energize this country? And how do you -- when do you believe the market disruptions will stabilize and the inventory is back to normal? Thank you.

All right, thank you Florent. So on your first question, at this point we do not consider officially or detail any plan B. We are very much in that legal strategy where we are appealing, first, our stay, we are appealing the injunction, and the second is we are appealing the key decision here.

And we can come back to that. Karen is with us this afternoon if anyone wants any detail.

The question, however, you ask is very important. Is it included or not in our guidance? I would answer that our guidance encompasses all options related to Praluent.

Now when it comes to China, yes, China numbers are not very strong. I am going to ask Olivier to answer, but I want just to say that we are remaining very confident in our future growth in China. And you just need to realize that our growth when it comes to Pharmaceuticals in China during the quarter was actually double digit.

So we still have a pretty strong position there. So Olivier, do you want to give some details?

Florent, so our sales in China have been decreasing for the quarter. Those sales include our sales of vaccines that have been impacted by the distribution, by the disruption on the distribution market that we've seen that are now resolved. And those disruptions that itemized at the Shandong case are not specific to Sanofi but are impacting the whole industry. We feel that now this situation has improved and those difficulties have been resolved.

With regard to the Pharmaceutical sales, for the full year we continue to outgrow the market double-digit growth. We think that our portfolio continues to be well fit to the Chinese market as we (inaudible) with a significant presence in chronic disease with the strong sales of Plavix and Lantus that continue. We are happy also to report the strong performance of our oncology business that after a couple of years of sluggish sales has significantly recovered.

So overall we continue to outgrow the market in China for 2016. For 2017 we expect that we will continue to grow double-digit in 2017 and we will continue to invest. And we are really happy with the performance of our primary business unit which is our approach into the Western provinces where we feel that we still have room to grow.

So overall we'll continue to invest in China. And I can tell you that the month of January and confirm that we are off to a good start.

Thank you very much.

Tim Anderson, Bernstein.

Thank you. A couple of questions on diabetes.

Can you outline where you are with Humalog biosimilars in the US and Europe? Is it realistic to think that 2018 is the year that you would likely get approval and launch?

And then probably a little bit longer-term question, but the possibility of substitutable generic insulins which could impact Lantus? I know this one company in the past, Mylan, has talked about wanting to run those studies. This was probably two years ago.

And as a product in the US that is approved under an NDA seems like that would be a fairly easy thing to do potentially. So I'm wondering what you are picking up in terms of whether that a real risk in the future or not?

Peter, do you want to answer both questions?

Yes, I can. So for Sanofi insulin lispro, so we have submitted the file in Europe and actually, sorry, the file was accepted for review by the European Medicines Agency in September 2016. On the US because of competitive reasons we do not want to share our regulatory strategy.

The second piece of your question on substitutability or not, so as you know, Tim, in our guidance that we gave, we assumed three biosimilars in the period non-substitutable, and actually that remains our assumption. Now, of course, given the fact that more and more payers take decisions on exclusive coverage at the end of the day in my personal opinion whether it's substitutable or not becomes less relevant because at the end of the day the payers exclude you and substitute you. De facto it comes to --

By formulary decisions.

By formulary decisions. Yes.

Thank you.

Richard Vosser, JPMorgan.

Hi, thanks for taking my question. Just on the formulary discussions ahead of the dupilumab launch, perhaps you could give us an update how they are progressing, how you see the situation about payer hurdles, prior authorizations, where you are, where you think the positioning is going to come out?

And then just a question on Soliqua in terms or LixiLan in terms of the access that you have been able to achieve there. How are the PPMs looking to enforce the label around insulin [familiar]? Are they thinking about prior authorizations there or is it a more free access that they are thinking of given your pricing strategy? Thanks very much.

All right, good question, Richard. Thank you.

David Meeker is on the call and David, do you want to ask the first access question related to dupilumab and Peter you answer the access question on Soliqua. David? Sorry, I thought David was on the call or maybe there is a technical issue.

Can you hear me?

All right. Did you get --

I did, yes. So the discussions are going well. I think the key fact for dupilumab in atopic dermatitis is that this is a very severe disease, certainly the targeted population moderate to severe atopic dermatitis.

No good therapies, disease predominantly handled by topical therapies today. There is use of immunosuppressants off-label in more advanced cases in the US. So there are alternatives, but as I said not approved and also with significant side effects.

So the discussions with payers have been extremely constructive trying to figure out how to get this product covered in the right place, so get it to the right patients, right time and we are quite aligned. I think this is a product that will be managed by specialists and that will be part of the requirement, so a dermatologist or an allergist should be the one prescribing this product.

Obviously, patients should if they can be managed with topical therapies they should do that, and that will likely be one of the requirements. But we do not anticipate that there will be a forced use in the US of off-label agents, certainly oral immunosuppressives, and that's where we are. I think I will leave you with the fact that they are motivated to get this product to patients in the same way we are.

Thank you, David. Peter?

So Richard, on your questions Soliqua access label enforcement, so perhaps two or three informations in this respect. First of all, we have already, of course we are discussing with payers very intensively and trying to unlock in the course of 2017 the commercial access and then Medicare, of course, more a 2018 game.

I can already announce to you good news is that we have a contract signed with United Healthcare commercial, so which will be activated on July 1. So you know United is a big commercial player, 50 million lives. So that is very good news.

And in terms of how this would be structured, of course you know that the label in the US is patients on basal insulin noncontrolled. And that is indeed what is going to look like. But that is absolutely conform with the label, so you could call it a kind of a soft step edit, but nothing more than that.

So many other discussions ongoing. Very good feedback writing that payers appreciate our pricing strategy. And so we are pretty optimistic for unlocking further commercial contracts in the next couple of weeks and months.

Thank you very much, Peter.

Seamus Fernandez, Leerink.

Great, thanks for the question. Hello, can you hear me?

Now, yes.

Okay, great. Perfect. So just a few questions, first question, so the first question is really on -- is there a lot of feedback?

Yes, we cannot hear you. It looks like you have blank spots here.

I will email my questions in to George. And then he can maybe you guys can (multiple speakers) them later. That's okay.

Okay, thank you, Seamus.

Graham Parry, Bank of America Merrill Lynch.

Thank you for taking my questions. So the first one is just a bigger picture, and any thoughts on the new administration, both from the impacts potentially on drug pricing but also tax and the particular focus there on the potential for a border tax and the impact that has on your offshore manufactured product?

Secondly, could you quantify the benefits that you've got from your co-pay assistance program in terms of retaining patients? What sort of market share do you think it has allowed you to retain and what sort of operating losses is that going to generate for you in the year?

Thirdly, if you could just talk through thoughts on any read-through from the Fourier data for Repatha how you might feel that Odyssey could be differentiated from that data and any contracting difficulties for Praluent you might have in 2018 given that that data has now read out positively and your data isn't expected until the end of the year. Thank you.

Thanks. So we are going to start with diabetes and explaining the copay program we have. Then I will cover President Trump potential policies, and I think Elias you will have to cover Fourier and the data we have seen so far.

So hi, Graham. So on the copay let's say retention programs it's very early days. We only two to three weeks out of the gate in January weekly sales.

But I can tell you that it is tracking according to what was planned. Of course, I also told some of you individually that we should be realistic about where we want to see the success of this copay program. But so that's what it is.

Financially it is neutral because at the end of the day either you lose a patient and you have zero income, either you keep them on a copay program. But, of course, given the fact that you are talking about non-covered patients you basically carry that patient financially. So financially neutral vis-a-vis losing those patients altogether.

And then your third question is on Praluent, actually you know contracting difficulties in 2018 that was one of your questions. I think it's a bit early to say. I would say overall, of course, let's say the validation of on anti-PCSK9 therapy in terms of cardiovascular benefit is good news I think for all anti-PCSK9 products.

Of course, we will see more at the ACC in March what is the order of magnitude of that cardiovascular benefit, and I think we will take it from there. But I think it's very early to say what all this is going to mean in terms of commercial situation, market access situation, etc. No I guess not.

All right, Graham, on the policy. So I will start from what we have learned from the meeting with the trade association in the US recently about a week ago or 10 days ago where many American company CEOs were and attended that discussion with the President.

So you have seen probably some of the feedback. They talked about the need for stronger trade agreements to help ensure that other countries are paying their fair share for innovative medicines. That was a topic.

You have also seen that the President expressed concerns regarding pricing of Pharmaceuticals. I think one topic was Medicare Part D -- not D, but B. They certainly discussed tax reform and other ways to encourage job creation in the US.

I think the President was also supportive of reducing regulation and helping speed -- helping the regulatory process to encourage more competition and somewhere to have less expensive development program and bring those drugs faster to the market. I think there was a question, there was a topic related to what you said which is a border tax potential adjustment and I think and, of course, the tax reform.

So your specific question is on the tax adjustment on imported goods. Frankly, it's not a new idea. We know that.

There are many, many variations being discussed. However, border adjusted taxes have to comply with WTO agreements as we know. That may actually limit the actual scope we believe, and as you know human medicines are very often exempt as it is a case for custom duties today.

So that's what I would say. And you don't know, of course, what the other region of the world including the EU would do if that was put in place by the current administration in the US.

Now, as a non-American Company we would be concerned by that aspect. However, like any other companies operating in the US, the tax reform looking at the rate of corporate tax could be an advantage.

When it comes to exposure to the US related to that topic, it's important for you to realize that about 37% of Sanofi sales in 2016 were generated in the US. However, the part which would be subject to that border tax adjustment, meaning our pharma, our ex-pharma business accounts about -- accounted in 2016 for about 26% of our group sales.

So we have much lower exposure than most of our peers. So that's what I would say to that question.

Elias, do you want to talk about Fourier and --

Well, I think Peter said it. I think we are very pleased to see that Fourier is confirming what we've always been expecting, and that is that the mechanism of PCSK9, in fact, as we had observed in our long-term safety studies is actually a mechanism that lowers morbidity and mortality. Not knowing the specifics of the Fourier data that will become apparent March 17 I can't really evaluate what the impact would be.

The one thing I know is that our population is different. Actually has a higher need for risk management and, therefore, I think I would reserve my answer to you once we see the specific data.

Thank you, Elias.

Luisa Hector, Exane.

Good afternoon. Thanks for taking my questions.

I'm just wondering whether you could give a bit more color around the amendment to the Hanmi relationship, the CGLP in insulin? And I understand that you will receive some cash back from Hanmi, and I just wondered whether that will impact your business EPS for 2017?

A couple of items during the fourth quarter which you flagged in the press release I wonder if you could quantify. So in SG&A you talked of some one-time costs ahead of the BI asset swap, and in Vaccines in Europe there was a decline in sales, partly supply issues Repevax and partly inventory buyback related to the JV, again just wondering if you can quantify those please? Thank you.

Okay, a couple of questions for you, Jerome. SG&A related to BI assets.

And, David, you would be ready for vaccine in Europe. And then Elias, EPS -- not EPS, Hanmi, and I think you can be reassuring on that one.

So Jerome, SG&A.

Yes, so thank you for the questions. On the SG&A impact we tried to explain what could be the drivers for one quarter.

So our quarterly G&A for the last quarter was EUR2.6 billion. So as you can understand 1% is EUR26 million. So you could say that the range of expense I was considering was disclosing what could have drive up -- driven up, sorry, the SG&A in the fourth-quarter 2016 versus the first-quarter 2015.

So I just try to A, claim and be clear to you, but at the same time I warn you that all these payers variations, small variations explain the evolution, but you should not take too much consequence of these elements. So I hope that answers your question. You had another one --

So do you want to talk about the EUR196 million payment?

Yes, so the EUR196 million payment, no, it's not going to impact our EPS in 2017. Neither the investment of the upfront we paid to Hanmi impact the EPS in 2016.

As you can see from the cash flow table which is in the appendix you will see that among the acquisition licensings we did in 2016 we had an investment in the partnership with Hanmi Pharmaceuticals of EUR400 million and the EUR196 million will be the unwinding of part of this EUR400 million. So neither one nor the other is impacting the EPS on 2016 or 2017.

Thank you very much, Jerome. David, Vaccines?

Your question on the decline which has been shown, basically there is it's a double effect. One is coming from a supply problem from Repevax as you have stated, so that impacts its performance for 2016 in the fourth quarter. And the second piece of the impact was due to the dissolution of the joint venture.

When you dissolve the joint venture, the joint venture has a stock at the end of the year and SP MSD as a company had to sell back this inventory to the mother companies to MSD and to Sanofi Pasteur. And so this is the effect that you are seeing on the performance. This is going to normalize for 2017, obviously, since now we operate in every country separate affiliate under Sanofi Pasteur.

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

Yes, there were various reasons for the reconsidering actually the structure of the partnership and to amend it. One is, obviously, in a redevelopment program the market changes and you have to evaluate the impact over time. Also in terms of clinical supplies as we said before that we would have to delay the onset of the Phase 3 for efpeglenatide from the fourth-quarter 2017.

In the context we decided to realign the focus of Sanofi on the efpeglenatide which is the once-a-week GLP-1 component of the relationship and then ask Hanmi to take the lead on the once-a-week insulin which is their expertise and the testing of the once-a-week combination insulin and GLP-1 for the remainder of the partnership with the potential for us to get back in a few maybe two years down the line as we evaluate progress both of the program as well as of the market. But for now we will focus on the once-a-week GLP-1 efpeglenatide which makes more strategic sense for us and evaluate the development path, if you will, of the other components of the partnership which led them to what you heard from Jerome about the splitting of the upfront with half of it coming back to us and half of it staying in the partnership to accelerate efpeglenatide.

Thank you very much, Elias.

Jeffrey Holford, Jefferies.

Hi, thanks very much for taking my questions. Just two slightly longer-term questions.

I mean, Novo Nordisk were referencing the political uncertainty which made them broaden their guidance range the other day. And I was just wondering how you think about your business over the midterm related to Medicare and (inaudible) exposure of the midterm just how much visibility or lack of visibility do you think you have there?

And then a second question about the midterm. Obviously, part of the plan was built around successful Praluent and dengue launches, both of these look like they might fall below your original expectations in the midterm. Have you seen other positive developments within the pipeline or within the business that can help to offset those in the context of the midterm guidance that you gave during 2018 to 2020 previously? Thank you.

All right. So your question, Jeff, the first one I think is related to the potential impact with the change in dual eligible have on Sanofi. We have a decreasing exposure to any potential changes to pricing with the dual eligible patient population.

And we estimate that in 2018, for instance, our exposure if there was a change in policy there would be around EUR0.5 billion, EUR500 million to Company sales, which would represent only 1% to 2% of our sales base. So that's the question.

The second question is related to offset to midterm guidance. Jerome, do you want to answer that question?

Jeff, you refer to the guidance that we would return to growth and that from 2018 onwards we would be more in the mid-single-digit range when it comes to top line and bottom line. You know, I think I mean, of course, this is partly driven by what is going to come from the products we just launched recently. It is also going to come from the development of our overall business.

We can count, I mean as an example look at vaccine, we posted 8.8% top-line growth with basically no sales or very little sales from dengue and the return to full supply of Pentacel is also a favorable dynamic for our vaccine business. Sanofi Genzyme continues to post strong double-digit quarter after quarter, CHC which we did not really figure out when we gave this guidance back in 2015 I mean we believe it should be able to deliver growth which will be at least in (inaudible) of the market, so let's say mid-single digit.

So altogether the launch is one thing we should clearly count for the 2020 guidance. But that was definitely not the only one at the size of Sanofi when clearly beyond 2020 we feel that this will be a significant contributor. We also discuss about sotagliflozin, we discuss about the CD38 as well which, of course, may come at the end of the decade.

So altogether we don't see from our last planning significant change versus what we guided for one year ago despite of the environment and really working around this objective. And, of course, dupi is a key element and under the control of Elias it's clear that the positive evolution of both the result on the various indications will clearly help us to drive growth. Maybe Elias you want to (multiple speakers)

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

Yes, I'd like first to make a comment on your comment about Praluent. And to me actually the prospects and the potential of Praluent have increased with the data on the outcome and we expect the same for Praluent.

Obviously, it is all subject to the legal proceedings. But I can tell you I'm very confident that in my view the patent we are disputing is invalid. And we will see that, obviously, and we will see how that happens.

But I think in terms of the pipeline, this year we have three launches. Soliqua you heard about. Kevzara obviously subject to the Le Trait inspections being positive I remain confident that dupi will launch March 29 of this year, the PDUFA date.

What's really important is that dupi is not a single drug for a single indication. It's really a pipeline in itself. We have already expanded the trials around atopic dermatitis to the pediatric population that is the most impacted as well.

We are going to focus on severe patients. There is no question we do not want to get into an issue of payer resistance because of widespread indications. Dupi we have completed the Phase 3s in asthma and we are going to, completed the recruitment and we are going to submit at the end of this year.

We have started the studies in nasal polyposis. So I think in the midterm the next two, three years you are going to see a huge drive from the three main indications of dupi, sarilumab or Kevzara has shown superiority in monotherapy. We think it will also drive growth.

I will just point out if you look between last year and this year the contribution of new products since 2013 has significantly supported the Company to the tune of about EUR3.2 billion in 2016. And we hope that they momentum, as Jerome said, will continue around the near-term pipeline. I will be happy to talk to you about the mid- and early pipeline at some other time.

Keyur Parekh, Goldman Sachs.

Good afternoon and thank you for taking my questions. The first one is on M&A and Olivier thank you for taking us through the your thought process.

My question perhaps more provocatively is given asset pricing that you see around you, do you think you can meet those hurdles? And if that is unlikely to be the case then how should we think about second-degree capital allocation priorities from your perspective? Will stock buyback be higher on the list in increasing dividend or will it be the other way around?

And then, secondly, on your pipeline asset for the SGLT2 that you take into Phase 3, your peers now are suggesting that lowering glucose is no longer going to be good enough for a new diabetes product and that you would likely need to have hard outcomes from a CV perspective. Should we think about you doing a CV study for sotagliflozin preapproval or should we think of it as postapproval? Thank you.

All right, thank you. Good questions. SGLT2 you are going to answer the question, do you want to start with that?

Yes, I will address the SGLT1 and SGLT2 question. Obviously you are right the glucose control is not as much of a challenge as it used to be. Although remember 50% of patients still do not get to their control.

However, I think in terms of the SGLT1/2 class what we believe in is the fact that we have a very significant effect on blood pressure. And if you remember the main driver of cardiovascular morbidity and mortality is actually blood pressure, the strongest indicator for a better outcome.

So we are going to conduct outcome studies and cardiovascular studies in the proper way and time for the launch to have the information available to us hopefully at launch or right after launch. So fundamentally, the answer to your question is yes, we do believe that the vascular benefit are going to become a major differentiation driver.

To your first question I don't think we have a different view as of today because of our experience earlier last year of our capital allocation order if you want or priorities. Yes, you are right, it is usually very competitive. But as you know ultimately the value to shareholder is also very much based on synergies and, of course, you are in a different situation vis-a-vis those synergies depending of specific targets.

So without giving you much more on that one I think that drives ultimately whether or not you are winning the competition. So with that in mind, I don't think we change our capital allocation which all along, at least since I've been here, we've said would be for organic investment and acquisition. That's number two.

Of course, dividends remain very important aspect of our allocation, and then stock repurchase. So without getting much more in detail I think that answers your question.

All right, so thank you. Shall we move to Jo, Jo Walton.

Please go ahead.

Thank you. On Praluent the PDUFA date for the monthly dose passed in January without a comment from either yourselves or Regeneron. I wonder if you could update us on how you feel that is going?

Secondly, could you tell us, give us some help on how we should look at the early launch ramp for your new drugs, particularly dupilumab but also perhaps sarilumab? Would the Cosentyx type of launch be a reasonable one for us to benchmark you against or how are you thinking about that?

We tend to think of this as being a product that is not so much for the Medicare market, a more commercial market should be easier to get an uptake, but of course you are building a market rather than entering an existing market with a better drug. So I wonder if you could just help us the consensus expectation seemed to be around about EUR190 million or EUR200 million in the first year for dupilumab. And I just wonder if you could help us frame that much better.

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

I think you answered the question yourself in a way. Cosentyx I think is certainly one metric. We will be targeting the physicians, 7,000 dermatologists in the US who had experience with biologics, specifically in the treatment of psoriasis. And so that is a good entry point.

Number one, your comment that this unlike psoriasis perhaps which is more organized market at the time of launch. This is a market that needs to be built. Many of these patients are outside the system.

They have given up hope to a certain extent. And so a little bit of an unusual way, although the numbers are large it's not a rare disease population, it has certain elements which are analogous to the rare disease worlds that we live in.

That said, the level of awareness here is extremely high. You go to the major dermatologic meetings, the prominence of dupilumab and the therapy, the excitement around this Th2 strategy is extremely high, so a high level of awareness. I think within the patient population early activity social networks and the like suggest reasonably strong awareness in the patient community, as well.

So there may be also factors which are unlike psoriasis. So I will leave it there. As Olivier said we are not going to guide you to a more specific number, but it's not an unreasonable benchmark but there's certainly some distinguishing factors for atopic dermatitis.

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

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

David Evans, Kepler Cheuvreux.

Thanks very much. Yes, two questions. One on your cost lines, second on the diabetes business.

So, first, given your cost structure clearly came in lower in 2016 than you originally planned, can you just talk through exactly where these savings actually came from, especially how did the gross margin in the end come in so much better than you planned? And really do those trends continue into 2017 or was it very much one-off savings in 2016?

Secondly on your insulin business, I assume there wasn't any stocking or rebate reversals or anything in Q4 for Lantus or Toujeo. But even factoring in a very low Q4 2015 base it looks like US net price in that case was much less a negative than we would have expected.

Is there a stabilization of rebates and discounts? Is it fair to assume that negative US net price impacts on that business will be in the single digits in 2017 or is it certain to be in double-digit range? Thanks very much.

Okay. Good, so Jerome the cost line savings 2016 versus 2017. And then Peter, diabetes and US net price during Q4.

Yes, so thank you for the question and I'll try to answer. So when it comes to the savings, altogether as you've seen we have confirmed that in our saving tracking we have saved EUR650 million in 2016. It comes both from gross margin savings i.e., productivity from our manufacturing networks nor efficiency from our plants focus on the most productive plants.

It comes as well from the savings coming from our structure, I mean trimming down our structure in connection with the new global BU organization that we have put in place. And, third, it has started to come from some reallocation and better use of our investment behind where we want to invest. So that would be my first answer.

When it comes to the two first categories they will clearly go into 2017. They are savings we have generated into our manufacturing organization as well as savings we have generated into our overall infrastructure will be applicable and be regarding savings and 2017.

And this is what drives the amount the savings we have guided you for in 2017 where we said that we could get up to EUR1.3 billion savings from EUR650 million. So an additional EUR650 million which we will be actually impact of what we have put in place over the year 2016, but also [explain] back our plans that we have already launched. So the rest clearly is more around prioritization and allocation of investment.

And clearly I mean when we are saving investments, for instance, we are in products which are getting off-patent or which tend to require less support, we are reallocating that to new investment. So try to help you understand how we handle that. The outcome clearly has been that both in 2016 and 2017 as we said we plan to reinvest a significant part of these savings, but not everything and we are going to be very, pay a lot of attention to how we invest these savings behind either the products or around the investments we want to develop in 2017. And this is what guided us to -- this led to the guidance which I gave you that in 2017 we expect overall OpEx to grow at the same level as 2016 i.e., around 2.5%, 2.6%.

Okay, very good. Thank you, Jerome. Peter?

Yes, so you remember that in the Q4 2015 and we also flagged that, there was some significant Medicaid back bills and, of course, the comparison base Q4 2016 versus Q4 2015, therefore, becomes more favorable. So to answer your question this does not flag any improvement. On the contrary on fundamental pricing dynamics in the US it's clear that with the launch of the first follow-on biologic of Lantus it's more the opposite.

So the relatively good performance in 2016 fourth quarter has two reasons. Number one, the favorable comparison Q4 2015 but, obviously, also the very good Toujeo performance in Q4 2016.

Okay, thank you Peter. All right, I think we have to go to the last question because we are close to the half hour here. So last question, please.

Philippe Lanone, Natixis.

Good afternoon. Thank you for the question. One for Alan Main on OTC.

I wonder whether the BI business had seen the same uptake we have seen in Q4 for the Sanofi business, and also if Russia is continuing to recover in the beginning of the year? So whether you will see already in 2017 for the whole business the kind of growth that Jerome is mentioning for the future like 4% or 5%?

And one a small one for Elias on the SGLT1, because it was developed as a weekly and monthly administration. I wondered whether with the shift in timing we still will have some monthly administration in the Phase 3?

Okay, thank you Philippe. Alan.

Yes thanks for the question. On the BI numbers we don't yet have the full data. We are just in the middle of bringing across the books and records from the BI transaction. We are in the process of analyzing that.

At a top line level, though, the BI business did well in 2016. It was finished around EUR1.5 million. So we believe that they also had a positive fourth quarter.

Of course, obviously, with the transaction we have to look at that in a little bit more detail which we are doing at the moment. But I think overall the momentum is positive. Obviously, as Jerome mentioned the guidance was more in the midterm, so that's the 2018 and beyond guidance. 2017 clearly being an integration year, but we do have a positive momentum on both BI portfolios.

We had an early start to the cough cold season in France and Germany. Not necessarily yet considered a full strong season. We have to see how the next couple of months go, but overall it seems to be a positive start.

All right, thank you, Alan. Elias?

Yes, very quickly what I indicated is that we are currently focused on the once-a-week but not at the exclusion of once-a-month. So, first and foremost, we need to get to once-a-week going and depending on some work that we are doing currently as I told you we are focusing on that.

The once-a-month may or may not, I cannot answer at this moment since I don't have some of the data that would be needed. So yes, once-a-week is our focus. Once-a-month is still in our sight, but I can't tell you exactly if it will be a Phase 3 or not.

Thank you, Elias. Okay, with that it concludes our call.

Thank you very much for asking good questions and attending. Thank you, everyone.

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