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Sanofi Sets Out Strategic Roadmap For Long-Term Growth

The following excerpt is from the company's SEC filing.

Sales CAGR(1) between +3% and +4% at CER over 2015-2020

Six major launches expected to generate aggregate peak sales of 12 bn to 14 bn(2)

Business EPS(3) at CER expected to grow faster than sales beginning in 2018

Targeting cost savings of 1.5 bn to be largely reinvested for growth

Increase annual R&D investments up to 6 bn at CER by 2020

Explore strategic options for Merial, European generics business

Strong balance sheet and capital allocation to enhance growth and support progressive dividend

Paris, France - November 6, 2015

- Sanofi will host an Inve stor Relations seminar today (Meet Sanofi Management) at which it will set out its strategic roadmap for the period 2015-2020 and its ambition to become the pre-eminent diversified global healthcare company. Through a process of refocusing and reshaping the organisation and investing in key launches and businesses, Sanofi expects to deliver a sales compound annual growth rate (CAGR) of between +3% and +4%(4) over 2015-2020, with a target of mid-single digit growth(4) in the second half of this period. Sanofi will provide today average expected sales trends for each Global Business Unit (GBU) which support the overall expected Group sales performance over 2015-2020. As a result of investments in launches, headwinds in diabetes and the phasing of cost savings, Sanofi does not expect to show any meaningful bottom line growth over 2016-2017. Beginning in 2018, however Sanofi expects to grow Business EPS faster than sales, reflecting its improved sales mix and the full capture of cost efficiencies.

The pharmaceutical industry is undergoing a transformation unlike anything weve previously seen. Continued consolidation in the sector has created a more competitive environment over the last few years and, at the same time, science has never been more exciting. In this context, I am defining new priorities for Sanofi. The company will remain diversified, but with a portfolio refocused on areas where we can win, and innovation driven to improve lives of millions of people,

said Olivier Brandicourt, M.D., Chief Executive Officer, Sanofi.

Along with a more streamlined and accountable organization, we are taking clear measures to ensure success as we launch a strong set of new medicines across several therapeutic areas. By building on the successes of these products, we are confident that Sanofi will be well-positioned for sustained, long-term growth. Sanofi is also seeking external opportunities to enhance its growth profile.

Sanofis long term strategy rests on four pillars: reshape the portfolio, deliver outstanding launches, sustain innovation in R&D and simplify the organization.

Reshape the portfolio

Sanofis diversified portfolio will be reshaped in three different ways:

Sustain leadership

The company will sustain its leadership in diabetes and cardiovascular, vaccines, rare diseases and emerging markets. In

, Sanofi plans to develop its insulin franchise, which includes Lantus

, Toujeo

and LixiLan, strengthen its pipeline through external opportunities (e.g. in-licensing agreements with Lexicon and Hanmi(5)) and lead the market shift to managing diabetes outcomes. The collaboration with Google Life Sciences is a good example of the latter.

In the

space, Sanofi is excited about the prospects for Praluent

and eagerly awaits the results of the ODYSSEY cardiovascular outcomes trial in 2016-2017 which should help to capture the drugs full potential.

field, the objective is to grow faster than the market through the companys Dengvaxia

, flu, pediatric and boosters vaccines.

Lastly, in

, the company intends to retain its number one position through greater focus on priority countries. In those regions, resource allocation...


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