Welcome to the Q4 and Full Year 2024 Conference Call for Investors and Analysts. As usual, you can find the slides on sanofi.com. Please turn to Slide number 3. Here we have the usual forward-looking statements. We would like to remind you that information presented in this call contains forward-looking statements, which are subject to substantial risks and uncertainties that may cause actual results to differ materially. We encourage you to read the disclaimer in our slide presentation. In addition, we refer you to our Form 20-F on file with the U.S. SEC and our French registration document for a description of these risk factors. Financials reported are under the new reporting scope that excludes Opella Consumer Health. As usual, we will be making comments on our performance using constant exchange rates and other non-IFRS measures. Numbers used are in million euros and for Q4 2024 unless stated otherwise. Please turn to Slide number 4. First, we have a presentation then we'll take your questions. Because this is a full year results, we have a few more slides, we still have time for lot of questions as we added 15 mins to the call time on top of the usual one hour. For Q&A, we have Brian, Olivier, Thomas to cover the global business and Roy, our General Counsel; and Brendan, Head of Manufacturing and Supply. For the Q&A, you have two options in Zoom, raise your hand or submit your questions using the Q&A function. With this, I'll hand call over to Paul.

Thank you, Thomas. Hello, everyone, on the call. We made significant progress in 2024 towards becoming a focused science-driven biopharma company. Our strategic progress was emphasized by the decision to sell a controlling stake in Opella and further prioritize R&D. On the business, we achieved double-digits sales growth with strong contribution from launches. This included Beyfortus that achieved blockbuster status in its first full year of sales. In R&D, we're pleased with the positive Phase 3 results of fitusiran, rilzabrutinib, and tolebrutinib. They provide the foundation for potential launches this year, underpinning our sustainable growth. We are thrilled by the Phase 2 of duvakitug that is ready to move to Phase 3, pending regulatory feedback. Houman will share more pipeline details later. Looking at Q4 on Slide 6, we reported double-digits sales growth for a third consecutive quarter, supported by our key drivers, vaccines Dupixent and pharma launches. Taking a closer look at the launches on Slide 7, in Q4, Beyfortus sales were as high as those in the first nine months of the year combined. We now have expanded RSV protection to more than 6 million babies around the world. In hemophilia, an increasing number of patients switched to ALTUVIIIO from both factor and non-factor therapies. We're seeing strong patient benefits, and sales reached almost a €0.25 billion in Q4. We are confident in our expectations that ALTUVIIIO will become a blockbuster this year. Moving to Slide 8, Dupixent exceeded the target of €13 billion in sales, driven by the demand for more than 1 million patients globally. In Q4, Dupixent grew by 16% from strong prescription trends in all geographies. In the U.S., Dupixent continued its leadership in New to Brand prescriptions across all indications, in line with the first nine months of the year. U.S. sales growth…

Thank you, Paul, and hello to everyone. Before I begin, just a reminder that our Q4 and full year results reflect our new reporting scope, excluding Opella. In the quarter, net sales increased by 10.3% at constant exchange rates to €10.6 billion marking our third consecutive quarter of double-digits growth. As mentioned earlier by Paul, growth was driven by new product launches as well as Dupixent. Gross margin was 74.3%, down slightly from the previous year, primarily due to the absence of COVID revenues in 2024. Excluding this COVID impact, our gross margin increased by 0.8%. The increase in operating expenses was driven by R&D, reflecting a high activity level in the quarter and brought us in line with our commitments for the full year. Business EPS was €1.31, mainly reflecting a lower gross margin and the increase in R&D and a higher tax rate following the OECD Pillar 2 implementation. Now turning to our full year results. Net sales increased by 11.3% at constant exchange rates to €41.1 billion driven by our new product launches, including Beyfortus that became a blockbuster as well as Dupixent that exceeded our ambition of €13 billion in sales. Gross profit grew by 10.3% at constant exchange rates to €31.1 billion with a gross margin of 75.7%. Our gross margin declined slightly due to the absence of any COVID revenue in 2024 and the remaining impact of the Obadio LOE. R&D expenses increased by 14.6% at constant exchange rates to €7.4 billion, fully in line with our ambition to step-up investments in our pipeline in 2024. SG&A expenses increased by 4.5%, providing an attractive gross leverage benefit. Business EPS increased by 4.1% at constant exchange rates to €7.12 exceeding our full year guidance. We landed our 2024 business EPS more than six percentage points…

Thank you, Francois. 2024 accelerated the transition into a company with increased focus on science with our pipeline starting to deliver meaningful benefits to patients and health care systems and growth opportunities for our company. We presented convincing clinical trial results, a recent medical meeting, including for tolebrutinib in SBMS, for rilzabrutinib in ITP, and fitusiran in hemophilia, the molecules from our pipeline that we are incidentally preparing for launch this year. As we look holistically at r and d productivity, scientific publications and high impact journals underpin our commitment to developing science and bringing new medicines and treatments to patients. We have an increasing trend of high-impact publications, and we now plan to closely track this leading indicator of improved productivity over time. Our pipeline has continued to deliver positive results, including eight positive Phase 3 readouts in 2024. We've initiated 18 mid- to late-stage studies with seven Phase 3s and six new molecular entities moving into the clinic. This increased level of activity is the main driver of R&D spend that Francois covered earlier. On the regulatory side, we've made substantial progress with 21 acceptances of our regulatory submissions, including for the three new molecules for this year. Some of these are benefiting from priority review. We received 14 approvals supporting the ongoing new launch. Please turn to the next slide. We're pleased with a significant process made for progress made for Sarclisa in 2024, including approvals of the IMROZ study in the U.S. and EU last week. During the ASH meeting, data were presented in the frontline treatment option in multiple myeloma, both for patients eligible and ineligible for autologous stem cell transplant. On the left, we have the PFS curve from the HD 7 study where Sarclisa added to a standard frontline combination demonstrated a 43%…

Well, thank you, Houman. Thank you, Francois. We're now called your questions. As a reminder, we'd ask you to limit your questions to one or two each. I've said this every time. I don't know, if everybody hears that part. You'll be notified when your line is open to ask your question at that time. Please make sure you unmute your microphone or option two, submit your question by clicking the Q&A icon at the bottom of the screen. Your question will be read, by our panelists. Now, we'll take the first question, please.

Yes. The first question will be from Luisa Hector from Berenberg. Lusia?

On the buyback, perhaps you could just comment on the rationale for the size, the €5 billion, and how soon you might start the buyback, and then any color on plans for the rest of your proceeds? Essentially, just latest thoughts on M&A targets by development stage, therapy area, size, et cetera. Perhaps then I could move to vaccines. I would like to ask Thomas some questions, maybe on the pneumococcal vaccine, so the Phase 3 entry. Very exciting. Perhaps a bit more color on what you're looking to show in Phase 3 and how you see the competitive landscape because there are others coming forward with vaccines perhaps with higher valency 24, 31, so how you see a 21 valent vaccine fitting in?

Thank you, Louise. I counted eight questions. Okay. So, buyback, sizing, timing, proceeds, over to you, Francois.

Yes. Good morning, Luisa. See, the rationale for the €5 billion actually we wanted to mitigate part of the dilution of Opella. So, I think that we are addressing that with the €5 billion. What we did as well was to listen to you as analysts and to listen to our shareholders as well. And we found that €5 billion was actually the amount that on which there was a consensus as well on your side. The starting point, we expect to start the share buyback in the middle of next week actually or relatively quickly. The rest of the proceeds, it's part of our capital allocation. You saw that, first and foremost, we want to invest in our business, which is what we did in R&D last year, which is what we do as well on a permanent basis in AI, in manufacturing. There will be more coming in, in sales and marketing ahead of quite a few launches coming in. Obviously, we are looking as well very seriously at external growth opportunities, BD and M&A, without any pressure because we have a strong growth outlook ahead of us, because we have a strong pipeline as well. I mean, Houman just covered it a few minutes ago. That being said, we have a strong balance sheet. As you could see, we have a limited amount of debt as at the end of 2024, which gives us a certain number of opportunities. But we don't feel any pressure to go crazy on M&A and BD. We will remain very disciplined, while having the opportunity to complement whatever we have in our pipeline. The main focus will be essentially on our four therapeutic areas, which you know, plus potentially some white spaces, once again, without feeling any pressure and always focused on creating value for shareholders.

Thank you. Thomas, PCV-21, comparative landscape.

Thank you, Louisa. Indeed, Sanofi was very pleased to announce the start of the Phase 3 program for our PCV-21 product. The study is progressing at the plan. In total, we are expecting to include more than 7,000 infants into the overall Phase 3 program. More broadly and in line with your question, as you know very well, first of all, it's exactly at the heart of what we're doing today at Sanofi vaccines. It's reaching either the pediatric for this Phase 3 program or the elderly segments, both segments where we are very well-positioned. So, it fits perfectly with our portfolio. It will be nicely complementary. It's a big space today, but Phase 3 is about 70% of the we move business altogether. Basically, as per the competitiveness of the program, I think I have a couple of things to highlight. First of all, PCV-21 program is going to be the first pediatric vaccines against pneumococcal disease that will enter into a national immunization schedule, the first one with more than 20 valencies. So, I think that, we will position well as a starting point. As you've noticed also from our December announcement, we've announced a refocusing of the alliance with our partner SK, which means that, it's a starting point. It's not an ending point. We'll start with PCV-21. And, of course, our objective is to be competitive all over the marketplace. Therefore, we'll keep going forward with more and more balances. We appreciate, obviously, that other companies are working on other candidates in this space, but we do believe that we are very well-positioned to start a significant entry into that place, and we remain competitive.

Very effective. The first is just over 21 valences. We are adding the pediatric market, which is the biggest segment of all in that. Okay, next question.

Next question is from Graham Parry from BofA. Graeme?

So, firstly, on Dupixent and just the gross to net adjustment in fourth quarter. Can you just clarify that was just a one-off adjustment catch-up for channel mix rebate levels through the whole year of 2025 and just the extent to which that drove the €150 million miss, is that just the majority of that compared to say invoicing days? And then just any comments you've got on how that could progress into 2025? And then secondly on Beyfortus, just given clesrovimab potential for approval this year possible inclusion in the season. Do you -- are you -- what do you see in your guidance for the year on Beyfortus? Is it expected to grow? And then, finally on tolebrutinib, if you could just update us on the indication that you're expecting for tolebrutinib in non-relapsing SPMS. Is it classically defined non-relapsing SPMS you're discussing? Or is there any potential here to get a broader label for progression independent of relapsed activity?

Thank you, Graham. Brian, Dupi goes to outlook to '25.

Yes. Thanks so much Graham for the question. I'll first start off by reiterating what Paul said in his opening remarks. We couldn't be more pleased with Dupixent's full year performance delivering greater than €13 billion. As you guys know, we provided the target of €13 billion for the year, 23% growth this previous year. And again, it's underlying demand driven is what's happening here. So, we have strong TRX growth across indications and across geographies. That's the same actually for Q4. Q4 was really strong performance with double-digits growth in terms of sales and TRXs. It's just exactly as you said. I think you said it in your question. It was really due to Q4 net sales reflects some one-off items in the U.S. There's some true-ups there. Of course, there is a little bit of the fewer business days. There's a little bit of each of the two mixes. But overall, again, really, this doesn't affect volume. We're in a really strong position as far as volume goes. Now having 2024 behind us, it even further reinforces our commitment to our longer-term guidance that we provided. So, feel like we're in a very good shape exiting '24 and entering '25.

And you see the script trends as we started the year, so very encouraging already. Beyfortus guidance, Tom, and competitive set?

Yes. Thanks for the question, Graham. First of all, maybe before we switch on to 2025, a couple of thoughts on 2024. Very happy about the first year of Beyfortus. First full year of sales, we've reached close to €1.7 billion, unprecedented pediatric immunization launch in the history of pediatric immunization. I think that's a good point of our capabilities. Now, it's also a good point of the capability of the product, because you've seen that, not only we are happy about the sales, but most importantly, we are very happy about the impact we have seen on hospitalization in the newborn population. Now, moving forward from 2024 to 2025, we see further growth in 2025. That's very clear when you look at the penetration of the number of countries we can go to. There's more penetration in some markets, and there's a couple of more markets notably in Europe or Asia, where we could grow in the coming year in 2025 and up to 2026. Obviously, we also recognize that there are more competition coming down the road. You've pointed another molecule activity that could come in 2025. We expect this other molecular antibody to come in 2025 in the U.S. As we discussed before, I think first impact would be the fact that, we will talk more about the importance of RSV prevention. It will raise the importance of the awareness of IV disease. That's the first thing. And then, of course, while there would be more competition down the road, we believe that, we have a competitive profile with nirsevimab. We have an extensive amount of real-world evidence. You've seen many countries showing 80% or 90% reduction on hospitalization. And you've seen the very pristine safety on a large scale that is provided with the Beyfortus moving forward. I think that from the real-world evidence from the competitive product profile, but we have also with a significant life compared to the other armament activity, we are well positioned to grow in 2025.

Thank you, Thomas. Houman, tolebrutinib and potential label?

Yes. Thanks for the question, Graham. Tolebrutinib has been submitted in line with our previous guidance last year. We're excited about the date of the tolebrutinib, as you suggested, secondly, progressive MS. And we are equally excited about the readout later in this year for PPMS. This is a demonstration of Sanofi's commitment, unwavering commitment to patients with MS.

Okay. Next question.

Next question is from Seamus Fernandez from Guggenheim. Seamus?

Thanks very much. I'll just, go simple and try to abide by the one question, request. Actually, the question is for Paul and Houman, sort of simultaneously. If you each wouldn't mind offering up the catalyst that you're most excited about in 2025 in particular. I think most investors anticipate, the results of itepekimab most eagerly, but love to just kind of hear your thoughts on maybe your top three, and if perhaps they, might differ slightly, it would be fun to hear that as well. Thanks so much.

Alright. So, the old, which is your favorite child, for me, it's the one that called me most recently. Do you remember maybe Houman you start?

Yes. I'll be very quick. Top three. I think, we're excited about the launch of Dupi in COPD, which my beloved colleague Brian has already talked about, I think bringing, itepekimab alongside that for patients with who are former smokers will be very exciting and reinforcing our position in pulmonary inflammation and immunology. I think it's an exciting time, for amlitelimab as we continue the quickening drumbeat, particularly in disorders like asthma and in hidradenitis suppurativa. Finally, I'm very excited about the ongoing activity around and completely internally generated by specific activity in lucitanib. Those are my three, but it would be remiss of me not to comment on our three launches that are coming up.

I'm excited about all of our Phase 2, programs. Just to give it -- I think the quality of what we're putting in means that we're more confident what comes out. Of course, the normal risks around that. Probably a bit of overlapping with Houman. -- COPD, it was game changer in former smokers. So, I think that is going to be really interesting. I could pick from three or four other things, but on the later stage, I think it's primary progressive MS with tolebrutinib. I think they're all a big deal, and I think we can go a bit deeper into the Phase 2s. But it's exciting year for us. No LOEs, mid high single-digits growth, strong rebrand in EPS, and pipeline catalysts. I mean, that's where we want to go top-line pipeline. Next question?

Yes. Next question from Peter Welford from Jefferies. Peter?

Hi. Thanks for taking my questions. I hope you hear me. And so, I'll ask these two. Firstly, just on Beyfortus. Can you just comment there on two things, both in terms of, you said growth for 2025? Can we expect U.S. growth in within your assumption for 2025? And what's regarding is the actual doses that you shipped at the moment in the U.S. or indeed other markets, have they been used, or are there still doses at the moment that are outstanding, that are presumably likely to be used during the first part of the year as the season continues? And then secondly, I just wonder if you can comment on the potential for lunsekimig? I think our catalyst did push into 2026. Is that does that reflect any changes to the data you're awaiting or any change to the Phase 2? Or, is that purely just a timing from the point of view of recruiting and getting sufficient data on board for the decision in ASPA Phase 3? Thank you.

All right. Peter, thank you. Thomas on Beyfortus, U.S. growth and doses shipped?

Thanks for the question, Peter. We don't provide exact number of doses shipped by provider to each country. But I can still give a bit more color on 2025 versus what I've pointed in 2024. I think what's at the heart of your question for 2024 is, how did we deliver the growth on 2024, and what does that mean or how should you think about 2025? First of all, we had a significant increase in supply in 2024. All the teams have been remarkably working on both sides of the partner to deliver that. That has enabled us to deliver in Q4 2024 enough doses to cover for the 2024 needs and the Q1 2025 needs because, as you know very well, RSV is not true. Therefore, you have babies being born in January, February and some market share. There will be RSV mutation in January, February, and March, and we've shipped those in Q4 2024 for that purpose. So this is what it accounted for. I still believe that when it comes to penetration, there is an opportunity to increase in the U.S. in the coming years. Of course, as always, when it comes with VCR it's year-by-year progressively. There's a lot going on in the U.S. as you know very well. We'll know more in the coming few weeks. But when you look at the profile of the product, we believe that, there is a good space for the product moving forward.

Thank you, Thomas. Houman, lunsekimig?

Yes. So, as I said, thanks for asking the question. We're very proud of lunsekimig combining the potency of TSLP and IL-13, best-in-class, first-in-class, unprecedented molecule with the best FEMA data that's out there. Your specific question was about the implication of the move into in to 27 of that. I just want to take a step back. I think the Sanofi's adopted a new discipline. This is part of our freedom now. We're an organization that is robust in our use of data, and what all we've done, as you can see, by outlining and dimensionalizing our pipeline timing, what we've tried to do is align that beautifully with clinical trials. That's all we're doing. There is no implication for lunsekimig. In fact, our commitment both to moderate-to-severe asthma as well as high-risk asthma, underlines the importance of this potential molecule, to both increase efficacy ceiling and possibly drive durability. So simple answer to your question. We remain super confident.

Thank you. It is really actually quite an exciting product, given a particular high-risk asthma. I mean, really, in asthma 35 years, and I think this is a real incredible opportunity. Okay. Next question.

Next question from Jo Walton from UBS. Joe? Jo?

Thank you. Can you hear me?

Yes.

Excellent. Mike, I have two questions, please. Firstly, can I push you a little bit more on vaccines? Perhaps you can give us some idea of what you think the penetration today in relevant infants is, in the U.S. and what that would be compared to some other sort of early pediatric vaccines, just to give us a sense of what the upside for the market there is? And also, within vaccines, can you tell us a bit more about the proportion of your sales that go to, let's say, adolescents with mandates? Because I think people are fearful that, whilst everyone is going to be allowed the choice to have a vaccine going forwards, perhaps some of the mandates that really pushed people to vaccination may weaken, anything to do with individual choice, and you do tend to see lower vaccination rates. I'd like you to discuss that a little bit in more detail if you could. And could you also just please, tell us a little bit more about, health care reform in the U.S., your assumption of how much more you're going to have to pay for the Part D for those patients who are in catastrophic cover, and whether you see any offsets in terms of increased volume from lower patient co-pays, more adherence, for example, for things like Dupixent in the elderly?

Okay. Thank you. Francois, maybe I'll turn to you on the last part on the assumptions. Some very specific questions, Tom. I'm not sure that you can answer them specifically, but you can certainly share what you think.

Yes. If I cannot answer them specifically this call, that's why we're having quarterly recall. Might be some other quarters on the road. What I mean by that, hi, Joe. And back to your first question on the penetration in U.S. It will be today in January a bit premature because I said before, you have the full data a few weeks after injection, and we know very well that RSV -- are going to go still in January, February and March. So, it's a bit early to say. I would expect that a significant percentage of the U.S. birth cohort has been protected against RSV this year, but which means more than the majority, more than half, if you wish. But it's way too early to be a bit more precise. Wait for a one or two earning calls, and we'll do a bit more. It will give you more idea of further home to pay. But there is, as for any immunization coming into the market, it takes two or three years to pick in terms of RSV. So, I think that's what we should expect for the product, especially in the old category. Now on your second question, which is very different on percentage of adolescence with corresponding to mandated or potentially mandated immunizations in the U.S., I understand where the question is coming from. A bit early there, I would say that, if you want to have an idea, the immunizations you're talking about are some boosters in adolescents and some meningococcal shots in adolescents or mening and boosters. However, if you're looking at the heart of your question, I personally do not believe that, mandatory or not monetary situations will make a big difference into the taxation coverage rates. So. we are not specifically worried for that. Of course, it's something we are monitoring as a field. But when you look at the clear benefits risk of our products moving forward between disease and not disease, those one-time immunizations are very clear in terms of safety and benefits. So again, there are some decisions that will happen in the coming few months or quarters maybe. Let's see. Let's not have too many hypotheses. But whether or not monetary situation are removed, I do not foresee today a major impact on ourselves.

Thank you. Maybe Francois?

Francois speaking, on the Medicare Part D, as I said, we expect a modest impact. It has been fully built in our 2025 guidance on budget, obviously. You talked about the volume elasticity. The reason is very difficult to assess, but we don't expect a significant volume positive volume elasticity out of it. But maybe I'll let Brian complement what I said.

Yes. I think as Francois said, we're a little bit less exposed, versus some of the other organizations as well based upon the nature of our portfolio. Again, more innovative medicines and vaccines, so you tend to have a little bit less exposure there. As well, you see a lot of our business even for Dupixent. We've said 70% of our business really primarily comes from commercial versus, again, in the government channels. But nevertheless, I think, Jo, you hit the nail on the head a little bit. What we haven't seen yet is, will we actually have a little bit of volume improvement based upon the 2000 annual out of pocket cap for patients, which could lead to improved compliance for patients as well. That's really to be determined, but that could be a potential, slight offset if you will. But we we feel like we're in a very good position as we enter into 2025.

Okay. Thank you. Next question.

Next question is from Richard Vosser from JPMorgan. Richard?

Hi. Thanks for taking my questions. Two, please. One on amlitelimab. Just, as we think about the asthma data that's coming up and the 12-week dosing, could you just talk through your level of confidence that, you'll see no detrimental reduction in efficacy there, through the data? And then secondly, question on itepekimab. Obviously, Dupixent in COPD has a broader label. The launch is going, exceptionally well, from the script trends. But what implications does that have for the residual opportunity for itepekimab, in COPD?

Okay. Houman?

Yes. Thanks, Richard. Two quick answers and thank you for both questions. Just categorically, I obviously haven't seen the data, just to be clear, but I don't expect based on the pharmacodynamics of amlitelimab in atopic dermatitis, a condition which is both clinically overlapping and pathophysiologically overlapping. I don't expect any drop-off at week 12. In fact, what we saw with amli is progressive increase throughout the duration of atopic dermatitis over 52 weeks. I'm actually, comfortable that the pharmacodynamic half-life of amli will continue to grow throughout the, course of asthma. We remain studiously awaiting the outcome of the -- asthma result, which should be this half of the year. And then specifically talk about itepekimab. Just to challenge a little bit of the underlying premise of the question, while we were appropriately rewarded with a broad label, the dupilumab with Type 2 inflammation and chronic bronchitis. I think that it's the population of former smokers is a very substantial one, and one that we led the science with both genetically and in terms of characterization of the patients while IL-30 secretion is substantially increased, in bronchial alveolar lavage. Actually, if anything, the opportunity is very substantial in the former smokers, who have significant morbidity and mortality, so you said, with COPD. And we remain steadfast in our view that in a success scenario, which we'll know fairly soon, the combination of products will reach peak sales of more than €5 billion a year. Brian, any further thoughts?

Yes. I'd like to compliment that with, again, like other therapeutic areas or disease states that we've gone in with our immunology portfolio, again, we are the first mover into the marketplace. So, the bio-penetration rate today is, again, just what we're doing with Dupixent and COPD, number one. And so, as we go in there with both of these agents, we're going to be able to continue to grow patients, I think, on those therapies. But just nicely as you said, this is going to open up the population and across the two, we've shown you that 2x2 before in the past. Itepekimab plus Dupixent will open up the opportunity to reach more than 80% of the COPD population. Again, around 2 million patients if you think about it across the G7, if you will. They're both uniquely sit in unique places. They overlap ever so slightly, I think, in the above 300 EOS level in the Type 2 COPD patient population. But I think the compliment of the two really shows that we're going after this disease state from all angles, because there will be different patient populations that will benefit from both drugs.

Brian, just a quick addition before you go back to Paul, which is, I just want to remind everybody that, itepekimab works in the high zinfandel and the low zinfandel population equally in terms of relative risk reduction. And we do have a life cycle management strategy for it to itepekimab with CRS with MP. Our Dupixent story is now being rolled out in conjunction with our extremely-valued partners, Regeneron.

Thank you, Richard, allowing Houman an opportunity to hijack the call. Next question, please.

Next question is from Florent Cespedes from Bernstein Securities. Florent?

Good afternoon. Florent Cespedes from Bernstein. Two question please, on the pipeline. First, on R&D budget, with a long list of Phase 2 products. How will you manage the R&D budget going forward? Good problem to have, but any color would be great. My second question is for Thomas. We see more and more vaccines projects on the pipeline and on the useful tables. I like the Phase 3 and the RSV for toddlers. Could you maybe elaborate a bit even though for 2026 with how you see these, projects nicely, with addition to your existing RSV franchise?

Managing the R&D budget. Francois?

Yes, Florent. Good afternoon. For 2025, we expect a moderate increase in terms of R&D spend and investment. But don't forget that this comes over €900 million plus increase in 2024 over 2023. And don't forget either that obviously as it is a case every year. We have projects being completed and new projects coming in and new clinical trial coming in and out. We are comfortable with the amount that we have for 2025 with a slight increase over 2024, once again €900 million plus increase. For 2026, we have not provided any indication for the time being we are working on it.

Thank you. All right. Thomas?

Thanks for the question, Florent. Indeed, I like the way you frame the question, Florent. We're really looking forward to beating our RSV franchise. The first proof was Beyfortus this that we just talked about at the beginning of the call. As highlighted before, we want to make sure that we complement that with an RSV toddler approach for second season and thereafter, as well as with an LD approach moving forward with respect to combinations. For the RSV toddler candidate, you're talking about, indeed, when Phase 3 2026, readout will be an important one. Why am I particularly excited about this one? Because it re-complements very well what we're doing on Beyfortus. First season, you get your new born protected with Beyfortus. Second season, you want to make sure that you're able to provide what we call complete protection, i.e., we're targeting by eating an infantile product, you go to the mucosal immunity and to prevent not only lower respiratory disease, but also upper respiratory disease, which is why we're going for the international approach. We think it makes a lot of sense. We have a significant burden of disease still in kids one year, two years and three years of age. And we believe that we have a step toward that of any competitor in this area. That's why we're so excited about it.

Thank you, Thomas. Okay. Next question, please.

Next question is from David Risinger from Leerink. David?

Yes. Thanks very much, and congrats on all the strong business momentum. My two questions are, first, what amount of Nuvaxovid sales are factored into 2025 sales guidance? And second, should we expect top line press releases on Phase 2 trial results, or will we need to wait for, you to provide updates on them in conjunction with quarterly results calls? Thank you.

Okay. Thank you. Nuvaxovid, Houman?

Thanks for the question, David. As you know very well, we've announced last year the collaboration with Novavax to make sure that we are really looking forward at building what we believe could be a competitive -- not only competitive, but a winning ticket for flu and COVID-19 combination. We always highlighted a couple of things that I'd like to stress again here today. First of all, the big objective of this alliance is really to get to the right commission vaccines flu and COVID. And we believe this market to be well-served needs to ensure that, there is the right level of safety, efficacy, and making sure that we have thermal stability. Of course, when you have two winning leaders in flu with Fluzone High-Dose and Flublok, that's why we're very happy that we have received the Fast-Track designation for both Phase 1/2 trials, then with Nuvaxovid. Of course, in 2025 in 2026, we're going to start commercializing Nuvaxovid first and foremost, in the U.S. This, in 2025, the first reason is to learn about the COVID-19 market. It will be our first time in the U.S. So, we need to understand, first of all, how is the market behaving beyond COVID-19. And if our hypothesis or the fact that there is room for actually a better tolerable COVID-19 vaccine is indeed confirmed into the marketplace. You know very well that there is a PDUFA date in the U.S. for this product in April. Let's make sure that we first move forward to the PDUFA date to the level we have. And of course, we have not disclosed any sales targets specifically for COVID-19 in 2025 and 2026. But as you know very well, this has been already included with the guidance that has been shared with Francois. Again, it's going to be progressive learning, building on the market, and then relaunching at scale our combination.

Yes. Thanks, Tom. I think you said it about safety. I mean, it'd be interesting to have a non-mRNA COVID opportunity, and if that has a lower burden, we don't know. But from a safety perspective, and that leads to, it being a stronger choice. We'll find out.

It could be what changes the COVID-19 VCR rate, which has been collapsing recently.

I think so. I think we all remember what it was like to get, the safety challenges on route. Houman, over to you. Are you going to do press releases for Phase 2?

Let me start with a very simple comment that, we are very conscious of our materiality, requirements. We will remain great stewards of that. That's the very first point beyond anything else. But speaking specifically about, clinical trials, we're also conscious of the embargo requirements of major, meetings, and we need to be very thoughtful about that. We will absolutely not commit to publishing top line Phase 2 data as they come, except where their material or, as part of a broader story. Please watch the broad story development around R&D and pipeline of Sanofi fee as we go. We're now becoming a science company.

Thank you. Okay. Next question.

Next question is from Peter Verdult from BNP Exane.

It's Peter Verdult from BNP Paribas Exane. Two questions. Houman, just on TL1A, really interesting asset in light of your data in UC and particularly Crohn's and also given the market seems to describe all the value of this class to competing assets. So recent KOL checks point to biomarker-led strategies being keenly sought. So, I'm just seeking confirmation from you and your partner Teva that a biomarker will be deployed in your Phase III program, timings on the Phase III start and whether you're considering going beyond IBD in your clinical development program? And then a very quick one for Francois on Dupixent just simply on profitability dynamics in light of the COPD launch accelerating volumes and the manufacturing changes that you're putting through? The simple question Francois, I'm not asking for numbers, but just will 2025 be a significant sort of gross margin driver for as it relates to Dupixent, or do we need to be a little bit more conservative and wait until 2026? Thank you.

Thank you. The biomarkers question.

Hi, Peter, and congratulations. I should start by saying, the TL1A story. We did a great deal around the TL1A, and we were quiet until the science didn't have to speak for itself. Based on preliminary data, we're very excited about how competitive our molecule is. I don't share necessarily your, KOL calls, feedback that, standard-of-care will require biomarker-based stratification as a obligatory option. But of course, we are active in thinking about how we design our Phase 3 trials to deliver the maximum value to patients. And in terms of life cycle management options, we are working diligently with our, partner, Teva, to establish the best path forward with life cycle management options. More on this space, in February meeting. With that, I'll hand over to, Francois and Brian for the next level of question.

Peter, on the question of gross margin, let me give you a little bit of insight. First of all, if you look at it four, five years ago, we were four to five percentage points lower than our peers in terms of gross margin. We have gone a long way because if you look at it in 2024, we were basically at par with our peers which gives a good illustration of the way we manage our portfolio and we manage some efficiency program as well. In 2025, we expect to see some further progress in our gross margin, which is partly coming from Dupixent but not only. By the way, our growth even in 2024 and this is the case in 2025 and in the coming years, I would say we are not Dupixent dependent just to increase our gross margin. So, it's a combination of factors. But there is a fair contribution from Dupixent, but it's not only Dupixent. I must say, the other new product launches have a fair contribution to it as well.

Thank you. Anything to add? No? Okay, good. Peter will allow a little bit more time in the next call given the length of your new title. Next question, please.

Next question is from Steve Scala from TD Cowen. Steve?

Thank you so much. Also, on TL1A, has the best-in-class profile held up when the data is cut by biologic naive and biologic experienced patients? That's the first question. Secondly, are you highly confident FDA will not ask for additional data such as the PPMS data for approval of tolebrutinib, and is every week monitoring for three months likely to be, what's in the label? Thank you.

Okay. I think it was great to you, Houman.

Yes. I don't want to, undermine the discussion at ECHO later this month in terms of biologically naive and biological experience. Suffice it to say that we warmly invite you to the ECHO meeting to, come and see the breadth of our data, I think you'll be pleasantly surprised. And then very specifically with PBMs and SBMs as you know, we're working closely with the FDA who, encouraged us to submit for SBMs now. As you know, the results of the PBMs result comes out later in the year. You can infer exactly what the dataset requirement will be for SBMs in that regard. Of course, any decision is subject to regulatory final active review. And then with respect to the label and monitoring, I think you'll see that, the FDA will adhere pretty closely to the Phase 3 clinical trial protocol that's been the standard in this kind of space in terms of intensiveness and regularity of the monitoring, and we anticipate that how it will play out in the label. We should be upfront and straightforward in saying that, Sanofi will support any decision by the regulator to provide most thoughtful and safe path for patients to take this disease modifying drug.

Thank you, Houman. Next question, please.

Yes. Next question is from Emmanuel Papadakis from Deutsche Bank. Emmanuel?

Thanks for taking the question. Emmanuel Papadakis with Deutsche Bank. Maybe a question for Francois on the outlook for the operating margin. Just talk a little bit about potential for margin leverage. I know it's presumably we should see revenue growth beyond 2025. We obviously have some financial considerations to take into account in the general co-development lines and royalty lines perhaps. Just your thoughts on whether steady modest margin improvement in the mid-term is a reasonable assumption. And then maybe a question for Houman on one of the handful of interesting Phase 2 data points with you this year. Belinotanfib, the oral TNF. The Phase 1 data last year showed moderate efficacy. You've emphasized the potential as a combination opportunity with biologics. In that setting, we do this right to say it relatively soon. What are you hoping to see in that? And is the plan to take it forward now as a biologic combination Phase 3? Thank you.

Okay, Francois?

Yes, Emmanuel. From the medium-term, I don't want to give a guidance. But directionally, I can help you a bit. Obviously, we expect a strong level of growth in the coming years solid level of growth, let's say. Gross margin should continue to increase as well over the next coming years, as I said earlier. R&D, still early to say because I mean it depends on what readout will be in the coming months. Directionally, G&A, you can expect that, there will be flat-to-declining growth for the G&A part, but the sales and marketing part could increase a little bit because we have a fairly heavy program coming in. You were mentioning one important item, which is the profit sharing with Regeneron and the end of the reimbursement for R&D there, which is coming at the end of '26, beginning of '27. So, this will put a little bit of pressure probably in '27 on BOI. That being said, not in absolute value, I can tell you anyway. Our BOI will increase in absolute value each and every single year, but there is a possibility that, it could be a little bit under pressure as a percentage of sales in '27 from what we can see today. It's still early. Let's not forget that we have other items that are coming in like the [Ambrutra] royalties, which is going to grow significantly in the future as well. So, I think that's directionally that's what I can tell you without once again, I'm not providing you guidance for the medium term in terms of UI.

Thank you. And I think you mentioned what you mentioned, -- That's what I just mentioned. So I think that is an important point to consider. Houman, all TNFR-1?

Yes. Thanks for the question. Firstly, we had pleasing results last year. The data are on track as we always committed to releasing that in the first half of this year and that's exciting. Just to dimensionalize that for you. Yes, of course, there's a logic for it to be used in combination treatment strategy, particularly in the modern era where we have seen the combination, cytokine blockade can both increase the efficacy ceiling or surpass the efficacy ceiling and also provide durability. But I just want to be clear that as well as combination therapies, remember Sanofi is now becoming a premier immunology powerhouse, and we have network effects internally where we can combine our molecules to generate greater value for patients. Just to be clear, in Clark's psoriasis, not only is there optionality for combination therapy, but depending on the results, we'll certainly consider using it as monotherapy, as a pre-biologic small molecule TNFR-1 one signaling inhibitor. I should remind everybody, however, that rheumatoid arthritis, will read out, later in the year, and that's an even more classically TNF-mediated disorder. We're excited to see that in monotherapy and combination therapy, and there are further indications supporting our broad life cycle management strategy in immunology.

Yes. Let me just add on. The RA data will be important in, given the TNF driver. When I think the question was also what are you hoping to see? If safety is right, the combination opportunity is significant, and then we'll see our mono as well. But, we look forward to that. Okay. Next question, please.

Yes. Next question from [Shirley] Chen from Barclays.

Can you hear me?

Perfect. The last moment.

Great. Thank you. Shirley Chang here on behalf of, Emily Fields. Just moving back to -- before this if I can. So, when we're ordering and contracting for before this for the next RSV happen. We're just trying to understand a bit more about, how much of first-mover advantage we still have here for the next season, and how do you consider the pricing of Beyfortus year over year? So, in 2024, we saw a slight price, increase by 5% according to the American Academy of Pediatrics. Would you keep this trend or would you consider the price slightly differently, for the next season due to the potential competition? Another question on broader Vaccine business. Obviously, there's a lot of attention on nominee to adjutants. Are you concerned about, like, vaccine hesitancy as impacting your broader Vaccine business even how widely publicized this is, even there are no changes in policy? Thank you.

Great. Thomas?

Two great questions. Thank you very much, Shirley. First of all, on Beyfortus, maybe a couple of points on your questions on the ordering patterns and RSV. First of all, from an ordering pattern perspective, I think it's very important to be clear that RSV is not flu, so the product is not changing every year. It's not a seasonal product because of that. Even though immunizations are much more focused on some part of the year, it's the same product all year long. You don't have the same fee book effect that you have, for example, in influenza. I think that's an important differentiator to have in mind. Having said that, most specifically for 2025, I think the last thing your question was about the fact that, is there a 1st mover advantage? I would say yes, just because of the product profile. Again, if you look at our product profile, we have an unprecedented body of reward evidence, showing massive reduction of hospitalization for newborns in countries that have used Beyfortus. By the way, not the same drop in hospitalization in countries that have decided to go other ways than with Beyfortus. I think that's that's an important factor to to look at. Now, there will be, maybe specifically for 2025, a little bit of a first-mover advantage just because if you look at the U.S. market, physicians, practitioners have used Beyfortus this year, are comfortable with it, have really appreciated not only the efficacy, but the safety profile, and now that we have full supply, we are able to deliver whenever they want it in 2025. So we're really moving forward with this. On the price point of Beyfortus in 2025, we are seeing the situation as no erosion of price point in 2025. We will hold…

Thank you. Next question?

Yes. Next question from Eric Berrigaud from Stifel. Eric?

Yes. Good afternoon. Thank you. Two questions. First on Sarclisa. Any chance to get a better understanding of what your ambition is with the drug? It's a two-player market where the other guy is having 95% market share. If you're successful in closing the gap, it could be an exceptional opportunity for you. But it was first about data and now you have the data. It was then about formulation. You will soon have formulation. So probably the remaining question is the willingness to invest and support on a commercial side, a relaunch or a stronger launch based on those data. So where are you? What's the market intelligence telling you? Is it too late? Is it becoming too much your market? Are you not having too much time, given patented Blackstone royalties? Anything to help us understand whether it can be a blockbuster for sure, but a multi blockbuster maybe? And the second question, a very short one, given the current dynamics with ALTUVIIIO, is that one your next blockbuster and no later than this year? Thank you.

I'll take the second part. It'll be a blockbuster this year, ALTUVIIIO. Brian, Sarclisa, ambition.

Yes. Thank you so much for the question. I think you framed it really nicely. If you look at that CD-38 marketplace, again, this is a marketplace where they've the physicians like the CD-38 target for multiple myeloma. We estimate that that marketplace could be somewhere in the range of €16 billion by the 2030 timeframe. Now as Houman said, we've had a real strong drumbeat of new information coming out. Of course, really favorable data. I think putting us in the first line therapy, but also the recent data that we've had for the on body device. And I think that's not to be underestimated. The sub-q formulation offers a significant advantage in terms of patient and nurse experience. Utilizing an on body delivery device, we believe this could ease the use and reduce some of the treatment burden along with the strong efficacy and safety that we provided. So, we absolutely do not think it's too late. We absolutely believe, we have all of the elements we need now to compete in the marketplace. We are investing behind this asset as we said before, and we believe it's going to be a multi blockbuster.

Yes. Maybe I'll just add to just, ALTUVIIIO, blockbuster this year. Sarclisa is a potential blockbuster next year in -- with the on body device opportunity for nurse to manage multiple patients simultaneously is still, from a oncology office perspective, still a major advantage because we do have great data. We do have great data. We do have incredible medicine. These things matter in a head-to-head race. Last question, I think.

Last question from Ricardo Benevides from Santander.

Hello, everyone. Thank you for taking my question. Wanted to ask you regarding your outlook on tariffs. The Trump administration has openly stated that, it has been considering placing tariffs on both APIs and pharmaceuticals. Right now, we know that, the tariff outlook is still a bit uncertain, but could you give us some light on how your top-line or operating income could be affected if either 2.5% universal tariffs are implemented or more aggressive 25% tariffs to China are applied? In more qualitative terms, how could you protect yourself against these measures? Potentially increased production activity in the US, try to ration for any potential medicine shortages? Thank you.

Ricardo, Francois speaking. Just a couple of questions. First of all, it's difficult for us to comment on something that is not real today. Very, very difficult to comment. Just be aware of the fact that, we have a significant industrial base in the U.S., which about 25% of what we market from what is coming from the U.S. So, we are a little bit under index versus our commercial presence there. But once again, very difficult to comment on something that is still at the plan for discussion. That's it.

Okay. Thank you very much, Francois. Thank you to everybody for the comments. We've got a busy year, I think, ahead of us. We made significant progress in 2024. We upgraded our EPS guidance twice and exceeded it. We continue to advance to becoming a focused science-driven biopharma company. And as we enter 2025, we provided you guidance today, including mid-to-high single-digits sales growth expectation and a strong rebound in earnings as well as a solid outlook for our pipeline. So, thank you for your interest in Sanofi. With this, we'll now close the call. Thank you.