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Sanofi: Sales Growth of 6.9% Thanks to Genzyme Acquisition and Performance of Growth Platforms

July 28, 2011

PARIS, July 28, 2011 /PRNewswire/ —

(Logo: http://photos.prnewswire.com/prnh/20110616/NY20158LOGO )


                                      Change on
                           Q2 2011        a       Change at
                           -------    Reported     Constant
                                                   exchange
                                        basis      rates(1)
                             euro
      Net sales             8,349m         +0.5%        +6.9%
      Business net           euro
       income(1)            2,150m        -13.2%        -7.0%
      Business EPS(1)    euro 1.64        -13.7%        -7.4%


                                      Change on
                           H1 2011        a       Change at
                           -------    Reported     constant
                                                   exchange
                                        basis        rates
                             euro
      Net sales            16,128m         -0.5%        +1.0%
      Business net           euro
       income(1)            4,320m        -11.9%       -11.5%
      Business EPS(1)    euro 3.30        -12.2%       -11.7%

In order to facilitate an understanding of our operational performance, we comment on our business net income statement. Business net income(1) is a non-GAAP financial measure. The consolidated income statement for H1 2011 is provided in Appendix 7. A reconciliation of business net income to consolidated net income is provided in Appendix 6. Consolidated net income in H1 2011 was euro 2,224 million, compared to euro 3,421 million in H1 2010. Consolidated earnings per share in H1 2011 was euro 1.70 versus euro 2.62 in H1 2010.

Commenting on the Group’s performance in Q2 2011, Sanofi Chief Executive Officer, Christopher A. Viehbacher said, “As expected, the second quarter is the most challenging this year, given the level of generic competition. Against this, growth platforms(2) continue to perform well and strong progress has been achieved in the integration of Genzyme and Merial.”

Q2 2011 Performance

  • Total sales(3) grew 6.9%(4) to euro 8,349 million. Excluding Genzyme, sales were down 4.0% reflecting euro 778 million of sales lost due to generic competition vs. Q2 2010.
  • Growth platforms grew by 9.5% and including Genzyme accounted for 65.2% of total sales.
  • Genzyme sales were euro 796 million, up 16.0%5.
  • Diabetes sales grew 12.4% driven by a strong performance of Lantus® (+14.5%) and Apidra® (+29.5%). Additionally, Lantus® SoloSTAR® now accounts for 46% of Lantus® U.S. sales.
  • Emerging Markets(6) sales reached euro 2,533 million or 30.4% of Group sales, an increase of 7.1% excluding Genzyme and A/H1N1 vaccines.
  • Consumer Health Care sales were euro 644 million (+17.6%), as Allegra® OTC generated sales of euro 63 million in the U.S. The Generics business continued its dynamic growth (+17.6% to euro 434 million).
  • Business EPS(1) was euro 1.64, down 7.4% at CER.
  • As a result of the acquisition of Genzyme, net debt was euro 13.2 billion at the end of Q2 2011.

Outlook

  • Genzyme cost synergies are expected to reach $700 million by end 2013.
  • Kynamro(TM) (mipomersen) was recently filed in the EU and 5 new products filings are expected in the next 9 months.
  • Additional Phase III study results are expected by the end of the year for Lemtrada(TM) (alemtuzumab), Aubagio(TM) (teriflunomide) and Lyxumia® (lixisenatide).
  • The Group expects 2011 business EPS(1) to be 2% to 5% lower than 2010 business EPS(7) at CER, barring major unforeseen adverse events. This guidance does not assume a return of generics of Eloxatin® in the U.S.

(1) See Appendix 10 for definitions of financial indicators; (2) See Appendix 4; (3) Growth in net sales is expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 10 for a definition); (4) Q2 2010 includes consolidated Merial sales (euro 524 million); (5) on a constant structure basis and at constant exchange rates; (6) See definition on page 8; (7) euro 7.06

2011 second quarter and first half sales

Unless otherwise indicated, all sales growth figures in this press release are stated at constant exchange rates(1).

In the second quarter of 2011, Sanofi generated net sales of euro 8,349 million, up 0.5% on a reported basis. Exchange rate movements had a negative effect of 6.4 percentage points, of which more than 70% was due to the weakening of the U.S. dollar versus the Euro. Various currencies from Emerging Markets (notably the Venezuelan Bolivar, Chinese Yuan and the Turkish Lira) also had an unfavorable impact. At constant exchange rates, and including changes in structure (primarily the consolidation of Genzyme from April 1st), net sales increased by 6.9%.

Net sales in the first half of 2011 were euro 16,128 million, a decrease of 0.5% on a reported basis. Exchange rate movements had an unfavorable effect of 1.5 percentage points. The depreciation of the U.S. dollar, and the Venezuelan Bolivar against the Euro was partially offset by the favorable effect of the Japanese Yen and the Australian dollar. At constant exchange rates, and after taking into account changes in structure (primarily the consolidation of Genzyme from April 1st), net sales increased by 1.0%.

Growth Platforms (see Appendix 4)

The Group’s growth platforms grew by 9.5% and including Genzyme accounted for 65.2% of total consolidated sales in the second quarter of 2011, which is up from 54.9% in the second quarter of 2010. In the first half of 2011, the growth platforms and Genzyme comprised 62.3% of total consolidated sales compared with 54.4% for the first half of 2010. Over the period, growth platforms grew by 12.3% excluding A/H1N1 vaccines sales.

Pharmaceuticals

Second-quarter net sales for the Pharmaceuticals business were euro 7,147 million (up 7.7%), which reflects the positive impact (euro 796 million) from the consolidation of Genzyme from April 1st, 2011 as well as generic competition to Lovenox®, Ambien®CR and Taxotere® in the U.S., Plavix® and Taxotere® in the EU and the impact of U.S. healthcare reform and EU austerity measures. First-half 2011 net sales increased 3.3% to euro 13,730 million.

    Flagship Products(8)
    (millions of                         Change at                 Change at
     euros)                 Q2 2011       constant    H1 2011       constant
    ------------            -------      ---------    -------       ---------
                          net sales exchange rates  net sales exchange rates
                          --------- --------------  --------- --------------
    Lantus(R)                   969          +14.5%     1,894          +13.9%
    Apidra(R)                    53          +29.5%       102          +25.3%
    Lovenox(R)                  536          -34.8%     1,119          -30.9%
    Taxotere(R)                 204          -64.5%       586          -49.1%
    Plavix(R)                   510           -2.4%       994           -8.4%
    Aprovel(R)                  343           +3.6%       663           -0.3%
    Eloxatin(R)                 248         +194.7%       436         +185.6%
    Multaq(R)                    68          +89.7%       131         +114.3%
    Jevtana(R)                   48              -         96              -
    Cerezyme(R)                 166        +58.3%*        166        +58.3%*
    Myozyme(R) /
     Lumizyme(R)                 99        +42.0%*         99        +42.0%*
    Renvela(R)/Renagel(R)       137        +14.6%*        137        +14.6%*
     Synvisc(R)/Synvisc
     One(R)                      89       + 17.2%*         89       + 17.2%*
     ------------------         ---       --------        ---       --------

* on a constant structure basis and at constant exchange rates

(1) See Appendix 10 for definitions of financial indicators

(8) See Appendix 2 for a geographical split of consolidated net sales by product

Diabetes

Net sales of the Diabetes division were euro 1,168 million (up 12.4%) and euro 2,281 million (up 11.5%) in the second quarter and first half of 2011, respectively. In the second quarter, Lantus®, the world’s leading diabetes brand, delivered double digit growth (+14.5% to euro 969 million). Over the period, sales of the product grew by 12.4% in the U.S. reflecting additional sustained promotional effort implemented from mid-2010. The contribution from Lantus® SoloSTAR® in the second quarter represented 46.2% of total Lantus® sales in the U.S., an increase of 13.9 percentage points versus the fourth quarter of 2009. The growth of Lantus® was also sustained in Japan (+14.9%). Emerging Markets(9) grew 29.3% given robust performance in Russia (+55.0%), China (+50.6%) and Latin America (+38.0%). In Western Europe, sales in the second quarter of 2011 returned to more dynamic growth (+9.3%). First-half sales of Lantus® reached euro 1,894 million, up 13.9%. BGStar® and iBGStar(TM), the first range of blood glucose monitoring systems (BGMs) co-developed by Sanofi and its partner AgaMatrix, were launched in France and Germany in the second quarter.

Net sales of the rapid-acting insulin analog Apidra® were euro 53 million in the second quarter, up 29.5%. Sales in the U.S. accelerated (+17.6%) driven by a new commercial approach. First-half net sales of Apidra® reached euro 102 million, an increase of 25.3%.

Despite 8.6% growth in Emerging Markets, net sales of Amaryl® decreased 9.5% (to euro 109 million) due to generic competition in Japan. First-half sales of Amaryl® were euro 217 million, down 7.7%.

Oncology

Net sales of Eloxatin® in the second quarter were euro 248 million (up 194.7%), reflecting recovery of U.S. sales (euro 182 million, versus euro 29 million in the second quarter of 2010). First-half sales of the product were euro 436 million, an increase of 185.6%, 25.5% of which (euro 111 million, up 11.0%) was generated outside the U.S. and Western Europe. Since June 30, 2010, following the settlement of the Eloxatin® U.S. patent infringement suits, generic manufacturers remain enjoined by the U.S. District Court for the District of New Jersey from selling their Eloxatin® generic products in the U.S. until August 9, 2012 or the earlier entry of a competing generic product. One generic manufacturer, Sun Pharmaceuticals, sought appellate review of the court’s injunction. Following this appeal, Sun’s case was remanded to the District Court for further consideration and the trial was held before the District Court on April 7, 2011. In the event Sun prevails before the District Court, the generic manufacturers could re-enter the market prior to August 9, 2012.

Second-quarter net sales of Taxotere® declined by 64.5% to euro 204 million reflecting rapid generic erosion in the U.S. (sales down 84.0% to euro 34 million) and in Western Europe (sales down 73.3% to euro 51 million). First-half sales of Taxotere® were euro 586 million, down 49.1%, 44.2% of which (euro 259 million) was generated outside the U.S. and Western Europe.

Jevtana® (cabazitaxel) recorded second-quarter net sales of euro 48 million. Sales in the U.S. reached euro 35 million. Jevtana® was launched in Germany and France in Q2 2011 and generated sales in Western Europe of euro 9 million.

Worldwide presence(1) of Plavix®/Iscover®

The second quarter worldwide presence of Plavix® was euro 1,767 million, up 11.1%, reflecting strong growth in the U.S. (sales were euro 1,215 million, up 16.9% – net sales consolidated by Bristol-Myers Squibb), Japan (+21.7% to euro 162 million), and China (+28.1% to euro 72 million). Sales in Europe were euro 149 million, down 29.8% due to generic competition. The first half worldwide presence of Plavix® reached euro 3,501 million, an increase of 5.9%. Consolidated sales in Japan and China were euro 301 (up 24.6%) and euro 132 million (up 29.5%), respectively.

(9) World excluding the U.S. and Canada, Western Europe, Japan, Australia and New Zealand

(1) See Appendix 10 for definitions of financial indicators

    Worldwide presence of Plavix(R)/Iscover(R): geographic split
    (millions of euros) Q2 2011 Change at  H1 2011 Change at
    ------------------- ------- ---------  ------- ---------
                                 constant           constant
                                 --------           --------
                                 exchange           exchange
                                    rates              rates
                                ---------          ---------
    Europe                  149     -29.8%     302     -35.3%
    United States         1,215     +16.9%   2,415     +12.2%
    Other Countries         403     +16.3%     784     +13.1%
    ---------------         ---     -----      ---     -----
    TOTAL                 1,767     +11.1%   3,501      +5.9%
    -----                 -----     -----    -----      ----

Worldwide presence(1) of Aprovel®/Avapro®/Karvea®/Avalide®

The second quarter worldwide presence of Aprovel® was euro 469 million, down 8.2%, impacted by growing penetration of losartan generics. The performance in “Other Countries” was supported by sales of the active ingredient to our Japanese partners. Consolidated sales of Aprovel® in Emerging Markets grew by 11.6% to euro 95 million in the quarter. The first half worldwide presence of Aprovel® was euro 951 million, a decrease of 8.9%. Consolidated sales in Emerging Markets increased by 11.4% to euro 188 million.

    Worldwide presence of Aprovel(R)/Avapro(R)/Karvea(R): geographic split
    (millions of euros) Q2 2011   Change  H1 2011 Change at
    ------------------- -------   ------  ------- ---------
                                constant           constant
                                --------           --------
                                exchange           exchange
                                   rates              rates
                                 --------         ---------
    Europe                  212    -13.1%     420     -14.4%
    United States            93    -21.1%     209     -17.3%
    Other Countries         164    +10.2%     321      +7.3%
    ---------------         ---    -----      ---      ----
    TOTAL                   469     -8.2%     951      -8.9%
    -----                   ---     ----      ---      ----

Other Pharmaceutical Products

Net sales of Lovenox® reached euro 536 million, down 34.8% in the second quarter, reflecting additional loss of market share against generic competition versus the first quarter of 2011 in the U.S. (U.S. sales were euro 160 million, down 64.7%). Lovenox® delivered sustained performance outside the U.S. as sales increased 9.8% in Western Europe (to euro 212 million) and 9.6% in Emerging Markets (to euro 142 million). First-half sales of Lovenox® were euro 1,119 million, down 30.9%, 65.9% of which (euro 737 million) was generated outside the U.S. (up 7.5%).

Multaq® recorded net sales of euro 68 million in the second quarter, of which euro 47 million was generated in the U.S. and euro 17 million in Western Europe. First-half sales of Multaq® were euro 131 million of which euro 91 million was generated in the U.S. and euro 34 million in Western Europe.

In January 2011, Sanofi issued a Dear Health Care Provider Letter worldwide. The regulatory agencies also issued a Drug Safety Communication on hepatic events reported in patients treated with Multaq®. The revised product information was updated accordingly. Sanofi announced in July that the company has discontinued the PALLAS Phase IIIb trial in patients with permanent Atrial Fibrillation (AF). It was a seeking indication trial. Multaq® (dronedarone) is currently approved in non permanent AF patients. The decision follows recommendations from the study’s Operations Committee and the Data Monitoring Committee which observed a significant increase in cardiovascular events in the dronedarone arm. The decision to terminate the study was not related to any hepatic adverse event. The benefit/risk assessment of Multaq® by the agencies is ongoing.

Net sales of the Ambien® family of products were euro 116 million in the second quarter, down 45.5% due to the generic competition of Ambien®CR in the U.S. (sales decreased by 91.1% to euro 9 million). In Japan, Myslee®, the leading treatment for insomnia on the market, showed 7.7% growth to euro 65 million. First-half sales of the Ambien® family were euro 232 million of which euro 17 million was for Ambien®CR in the U.S. (down 92.1%). Sales of Myslee® in Japan reached euro 129 million, up 10.8%.

Allegra® as a prescription drug recorded euro 119 million of net sales in the second quarter led by the performance in Japan (up 22.8% to euro 88 million) sustained locally by a strong allergy season. Allegra® moved to the OTC market in the U.S. in March 2011 (sales booked in CHC). First-half sales of Allegra® were euro 335 million, 81.8% of which (euro 274 million) was generated in Japan and increased by 34.1%.

Second-quarter net sales of Copaxone® were euro 119 million, down 9.9%, reflecting the end of the co-promotion agreement in certain countries notably the U.K. in the fourth quarter of 2010. First-half sales of the product reached euro 233 million, down 11.8%.

In the arbitration proceeding between Sanofi and Warner Chilcott, an arbitration panel decided on July 14, 2011 that the termination by Warner Chilcott of an ancillary agreement did not give rise to the termination of the Actonel® Alliance. Following this decision, the Alliance remains in force until January 1, 2015.

In July, Sanofi announced the strategic divestiture of its dermatology business, Dermik, to Valeant Pharmaceuticals International for a total cash consideration of U.S. $425 million. The scope of this transaction includes Dermik assets, which consist of an aesthetic and therapeutic business in the United States and Canada, as well as an aesthetic business around the world with sales of U.S. $206 million in 2010. Sanofi decided to divest its dermatology business with the intention of further focusing on its growth platforms. The closing of the transaction is subject to customary conditions, including clearance by certain antitrust authorities.

    Genzyme(10)
                                                Change on a
     (euro million)            Q2 2011             constant
     --------------            -------           -----------
                                        structure basis and
                             net sales                   at
                             --------- --------------------
                                          constant exchange
                                                      rates
                                         ------------------
    Cerezyme(R)                    166                +58.3%
    Myozyme(R) / Lumizyme(R)        99                +42.0%
    Fabrazyme(R)                    30                 +3.5%
    Renagel(R)/Renvela(R)          137                +14.6%
    Synvisc(R)                      89                +17.2%
    Total Genzyme                  796                +16.0%
    -------------                  ---                -----

Second-quarter net sales of Genzyme reached euro 796 million, an increase of 16.0%.

Net sales of Cerezyme® were euro 166 million in the second quarter, an increase of 58.3%. Overall market share in the second quarter remained stable from the first quarter of 2011. The second quarter of 2011 benefited from greater product availability compared to the first quarter of 2011, particularly in Europe and Japan, where production delays affected patient dosing schedules in the first quarter. Cerezyme® sales also benefited from shipment timing in Latin America related to tender processes.

Net sales of Myozyme®/Lumizyme® were euro 99 million, an increase of 42.0%. Growth in the second quarter was driven by continued growth of Lumizyme® in the U.S. and volume growth from patient accruals in Europe.

Net sales of Fabrazyme® in the second quarter were euro 30 million (up 3.5% versus Q2 2010), reflecting continued supply constraints.

Sales of Renvela®/Renagel® were euro 137 million in the second quarter, an increase of 14.6%, driven by U.S. market share growth and the continued European adoption of Renvela® through penetration of the market for chronic kidney disease.

Net sales of Synvisc®/Synvisc One® were euro 89 million up 17.2% supported by recent launch in Japan and growing uptake of Synvisc One®.

(10) sales growth of Genzyme are stated on a constant structure basis and at constant exchange

Consumer Health Care

Sales of the Consumer Health Care (CHC) business increased by 17.6% to euro 644 million in the second quarter reflecting the success of the launch of Allegra® OTC in the U.S. (sales of euro 63 million) by Chattem and the positive impact from acquisitions (mainly BMP Sunstone in China). First-half sales of CHC totaled euro 1,356 million, up 28.1%. First-half sales of Allegra® OTC in the U.S. reached euro 143 million.

Generics

The generics business recorded sales of euro 434 million in the second quarter, an increase of 17.6%, led by sales of authorized generics of Taxotere® (sales of euro 24 million) and Ambien®CR (sales of euro 15 million) in the U.S. and losartan. Sales in Emerging Markets reached euro 279 million, up 13.8% supported by the roll out of Medley products in additional countries in Latin America (+21.7%). In the U.S., sales increased by 85.7% to euro 34 million boosted by recently launched authorized generics. First-half sales of the generics business grew by 17.3% to euro 848 million.

Human Vaccines

Second-quarter consolidated net sales for the Human Vaccines business totaled euro 706 million, an increase of 3.4%, excluding A/H1N1 influenza vaccine sales (or 2.5% including A/H1N1 sales). Growth from 2010 was impacted by the timing of 2010 Southern Hemisphere seasonal influenza sales shipped in Q2 2010. First-half consolidated net sales for the Human Vaccines business were euro 1,308 million, an increase of 6.0% excluding A/H1N1 influenza vaccine sales booked in the first half 2010, or a decline of 20.3% including A/H1N1 vaccines sales.

Seasonal influenza vaccine sales were euro 57 million in the second quarter, down 21.1% due to timing of Southern Hemisphere seasonal influenza sales in the second quarter of 2010. First-half sales were very strong for seasonal influenza vaccine, which recorded sales of euro 158 million, an increase of 41.6% due to strong Southern Hemisphere seasonal sales. In May, Fluzone® Intradermal was approved by the FDA as the first influenza vaccine licensed in the U.S. that uses a novel microinjection system for intradermal delivery.

Second-quarter sales of Polio/Pertussis/Hib vaccines were euro 267 million, up 1.8%. Pentaxim® sales reached euro 65 million, an increase of 36.8% reflecting strong performance in Emerging Markets. In May, Pentaxim® was launched in China which is the first 5-in-1 combination vaccine in this country to immunize against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b. First-half Polio/Pertussis/Hib vaccines sales reached euro 494 million, up 4.1%, including euro 121 million of Pentaxim® sales (+29.7%) and euro 150 million of Pentacel® sales (+5.7%).

Menactra® sales were euro 97 million in second quarter, down 1.4%. Menactra® showed strong resilience despite the introduction of a competitive offering and the declining catch-up cohort in the U.S. adolescent population. Additionally, Menactra® declines were offset slightly by uptake of the ACIP (Advisory Committee on Immunization Practices) recommended booster dose for adolescents in the U.S. In April, the FDA has granted licensure to expand the indication for Menactra® to include a two-dose schedule for infants and children 9 months through 23 months of age. In June, the ACIP recommended that children as young as 9 months old who are at high risk for meningococcal disease should be vaccinated with the quadrivalent meningococcal vaccine. First-half sales of Menactra® were euro 139 million, down 15.9%.

Second-quarter adult boosters net sales increased by 9.8% to euro 110 million, sustained by the performance of Adacel® (sales of euro 68 million, up 7.3%). First-half sales of adult boosters reached euro 206 million, an increase of 15.6%, including euro 131 million of Adacel® sales (+ 21.6%).

Net sales of Travel and other endemic vaccines were euro 90 million in the second quarter, down 7.9% primarily due to lower sales of Hepatitis A and Yellow fever vaccines over the period. First-half sales of Travel and other endemic vaccines reached euro 171 million, down 10.9%, also reflecting lower sales of rabies vaccines in the first quarter.

    Consolidated vaccines sales
    (millions of euros)           Q2 2011 Change at    H1 2011 Change at
    -------------------           ------- ---------    ------- ---------
                                net sales  constant  net sales  constant
                                ---------  --------  ---------  --------
                                           exchange             exchange
                                              rates                rates
                                          ---------            ---------
    Influenza Vaccines
     (incl. Vaxigrip(R) and
     Fluzone(R))                       57     -26.8%       158     -69.9%
              of which seasonal
               vaccines                57     -21.1%       158     +41.6%
              of which pandemic
               vaccines                 0    -100.0%         0      -100%
              -----------------       ---    ------        ---      ----
    Polio/Pertussis/Hib
     Vaccines (incl.
     Pentacel(R) and
     Pentaxim(R))                     267      +1.8%       494      +4.1%
    Meningitis/Pneumonia
     Vaccines (incl.
     Menactra(R))                     121      +0.2%       183     -12.6%
    Adult Booster
     Vaccines (incl.
     Adacel (R))                      110      +9.8%       206     +15.6%
    Travel and Other
     Endemics Vaccines                 90      -7.9%       171     -10.9%
    Other Vaccines                     61     +85.3%        96     +39.9%
    --------------                    ---     -----        ---     -----
    TOTAL                             706      +2.5%     1,308     -20.3%
    -----                             ---      ----      -----     -----

Net sales of Sanofi Pasteur MSD (not consolidated by Sanofi), the joint venture with Merck & Co in Europe, recorded second quarter net sales of euro 170 million, down 7.3% on a reported basis. Gardasil® sales were euro 47 million, down 26.1% on a reported basis. First-half net sales of Sanofi Pasteur MSD were euro 308 million (-14.9% on a reported basis), reflecting a decrease in Gardasil® sales (-26.9% on a reported basis to euro 89 million).

Animal Health

Second-quarter net sales of Merial were euro 496 million, an increase of 1.1%. First-half net sales were euro 1,090 million, an increase of 6.7%, and were driven by the performance of production animal sales.

Sales of the companion animals segment were euro 323 million in the second quarter (down 0.3%), reflecting a 6.8% decrease of Frontline® family sales due to a strong early spring campaign in the U.S. in the first quarter. The Frontline® family of products delivered a good performance in the second quarter in Western Europe and in Emerging Markets with a sales increase of 9.3% (euro 58 million) and 9.5% (euro 23 million), respectively. First-half sales of the companion animal segment were euro 733 million, an increase of 5.2%, reflecting the record performance of the Frontline® family (up 4.7% to euro 459 million).

At the end of June, the U.S. District Court for the Middle District of Georgia found Velcera and Cipla Ltd. in contempt of a previous court order by acting in concert to develop and sell PetArmor(TM) Plus products. Finding that these actions violated Merial’s U.S. patent covering Frontline Plus®, the court barred those two companies from further sales of these products in the U.S. and ordered the seizure of any existing inventory in the U.S. This decision is temporally stayed pending appeal.

In July, Merial launched a new combination parasiticide, Certifect®, in the U.S. which is a new topical flea and tick control product for dogs.

Sales of the production animals segment reached euro 173 million (up 3.7%) in the second quarter, led by the good performance of the Ruminant and Avian segments. First-half sales of this segment were euro 357 million, an increase of 10.0%. In July, Merial launched Zactram® (gamithromycin) for bovine respiratory disease.

Emerging Markets grew by 9.8% in the second-quarter (to euro 129 million) led by the Ruminant segment. First-half sales in Emerging Markets were euro 245 million, up 16.2%, led by the Ruminant segment and Avian segments which was boosted by the success of the vaccine Vaxxitex®.

    Net sales by geographic region
    (millions of euros)             Q2 2011 Change at    H1 2011 Change at
                                  net sales  constant  net sales  constant
                                             exchange             exchange
                                                rates                rates
    United States                     2,416      +3.3%     4,580      +0.3%
    Western Europe*                   2,380      +0.9%     4,631      -6,4%
    Emerging Markets**                2,533     +12.3%     4,919      +4.9%
      of which Eastern Europe and
       Turkey                           687      +4.6%     1,350      +2.0%
      of which Asia                     581     +18.1%     1,152     +13.1%
      of which Latin America            798     +20.3%     1,481      +1.4%
      of which Africa                   238      +7.8%       470      +8.8%
      of which Middle East              204      +6.0%       418      +5.9%
      --------------------              ---      ----        ---      ----
    Rest of the world***              1,020     +18.8%     1,998     +14.4%
    --------------------              -----     -----      -----     -----
      of which Japan                    699     +26.6%     1,368     +20.4%
      --------------                    ---     -----      -----     -----
    TOTAL                             8,349      +6.9%    16,128      +1.0%
    -----                             -----      ----     ------      ----
    * France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium,
    Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden,
    Ireland, Finland, Norway, Iceland, Denmark
    ** World less the U.S. and Canada, Western Europe, Japan, Australia
    and New Zealand
    *** Japan, Canada, Australia and New Zealand

Second quarter net sales in Emerging Markets were euro 2,533 million, an increase of +7.1% excluding Genzyme and A/H1N1 vaccines (+6.9% excluding Genzyme). BRIC countries grew by +14.8% excluding Genzyme and A/H1N1 vaccines. Asia (excluding Pacific region) and Latin America delivered double digit sales growth. Sales in China reached euro 230 million, an increase of 41.4% (+39.0% excluding Genzyme) and were supported by strong performances for Plavix® (+28.1% to euro 67 million) and Lantus® (+50.6%) and the contribution from BMP Sunstone. Sales in Brazil increased by 16.7% to euro 386 million, due to strong performance from generics and the contribution from Genzyme. Sales in Russia were euro 184 million, up 7.7%. Sales in Eastern Europe were euro 687 million, up 4.6% (-1.0% excluding Genzyme) and were impacted by a decrease in sales in Turkey due to generic competition for Taxotere®. First-half sales in Emerging Markets were euro 4,919 million, an increase of 10.5% excluding Genzyme and A/H1N1 vaccines (euro 361 million, primarily in Latin America and Middle East), or an increase of 2.2% excluding Genzyme.

Japan recorded net sales of euro 699 million in the second quarter, an increase of 26.6% (+14.3% excluding Genzyme), sustained by Plavix® (up 21.7% to euro 162 million), Allegra® (22.8% to euro 88 million) and vaccines (+63.9%) and the contribution from Genzyme. First-half sales in Japan were euro 1,368 million, (up 20.4%, or up 14.0 % excluding Genzyme) of which euro 301 million were generated by Plavix® (+24.6%) and euro 274 million by Allegra® (+34.1%), respectively.

Second quarter net sales in the U.S. reached euro 2,416 million, an increase of 3.3%, reflecting the acquisition of Genzyme (sales of euro 379 million). Excluding Genzyme, sales in the U.S. were down 12.9%. This decrease reflected the impact of generics of Taxotere®, Lovenox® and Ambien®CR, which was partially offset by sales of Allegra® OTC, Jevtana® and Multaq® and strong growth of Lantus®. First-half sales in the U.S. were euro 4,580 million (up 0.3 % and down 8.6% excluding Genzyme).

Western Europe achieved second-quarter net sales of euro 2,380 million, an increase of 0.9%. This figure included sales of Genzyme of euro 219 million. Excluding Genzyme, sales in Western Europe were down 9.4%, reflecting generic competition for Taxotere® and Plavix®, as well as the impact of austerity measures. First-half sales in this region were euro 4,631 million (down 6.4% and down 11.5% excluding Genzyme).

R&D update

Since the last R&D update on April 28, significant progress in the portfolio was achieved with positive Phase III data announcements for Lemtrada(TM) (alemtuzumab) in patients with relapsing remitting multiple sclerosis, Zaltrap(TM) (aflibercept) in second line metastatic colorectal cancer, Lyxumia® (lixisenatide) in Type II diabetes and Visamerin(TM) / Mulsevo(TM) (semuloparin) for the prevention of venous thrombo-embolism events in cancer patients initiating a chemotherapy regimen. Several compounds entered Phase I or Phase II and additional partnerships were also signed over the period.

As a result of the number of positive Phase III trial results obtained since the beginning of the year, filings for 6 products are now expected over the next 3 quarters:

  • Kynamro(TM) (mipomersen) – licensed from Isis Pharmaceuticals Inc – U.S. filing for the homozygous familial hypercholesterolemia (hoFH) indication is expected in the fourth quarter of this year. A Marketing Authorisation Application (MAA) for Mipomersen was submitted to the European Medicines Agency in July for the treatment of patients with hoFH and severe heterozygous familial hypercholesterolemia (heFH).
  • Visamerin®/Mulsevo® (semuloparin) in the EU and U.S. in the third quarter of 2011 for the prevention of Venous Thrombo-Embolism events in cancer patients initiating a chemotherapy regimen.
  • Aubagio(TM) (teriflunomide) in the U.S. in Q3 2011 for the treatment of relapsing multiple sclerosis. Filing in the EU is expected in the first quarter of 2012.
  • Zaltrap(TM) (aflibercept) – alliance with Regeneron – in the U.S. in the third quarter and in EU in the fourth quarter of 2011 in second line metastatic colorectal cancer.
  • Lyxumia® (lixisenatide) – licensed from Zealand Pharma – in the EU in the fourth quarter of 2011 for the treatment of type 2 diabetes.
  • Lemtrada(TM) (alemtuzumab(11)) is expected to be filed in the U.S. and EU in the first quarter of 2012 for relapsing remitting multiple sclerosis. The product has been granted fast track designation by the FDA.

At the end of July, the R&D portfolio comprises 65 NME (New Molecular Entities) projects and vaccines in clinical development of which 17 are in Phase III or have been submitted to the health authorities for approval.

Evolution of the late stage portfolio:

In May, Sanofi announced the Phase III results of GetGoal-L of the GetGoal program assessing the efficacy and safety of Lyxumia® (lixisenatide) – licensed from Zealand Pharma -, a once-daily GLP-1 receptor agonist, as an add-on to basal insulin (in association with or without metformin) in patients with Type 2 diabetes. This study achieved its primary efficacy endpoint of significantly reducing HbA1c versus placebo for patients with Type 2 diabetes without significantly increasing their risk of hypoglycemia.

GetGoal-L is one of nine studies in the GetGoal Phase III clinical program, and the second trial to investigate the benefits of lixisenatide 20mg once-daily combined with basal insulin.

In May, at the American Diabetes Association, results of two other Phase III studies from the GetGoal program were presented:

  • GetGoal-X: This study showed that once-daily Lyxumia® demonstrates non-inferior reduction of blood glucose and less hypoglycemia versus exenatide twice daily in Type 2 diabetes patients.
  • GetGoal-L Asia: This study demonstrated that Lyxumia® significantly improves glycemic control in asian patients with Type 2 diabetes insufficiently controlled on basal insulin + or – sulfonylurea.

(11) Genzyme is developing alemtuzumab in Multiple Sclerosis in collaboration with Bayer HealthCare

Thus, four positive Phase III studies of the GetGoal clinical trial program (GetGoal MONO, GetGoal L-ASIA, GetGoal-X and GetGoal-L) have now been released and all met their primary HbA1c endpoint and confirmed the efficacy and safety profile of Lyxumia®, once-daily, in patients with Type 2 diabetes. Most remaining studies of the GetGoal program are expected to be completed by the end 2011. Regarding the development of the combination of lixisenatide / Lantus®, the group expects to be in a position to start Phase III in early 2013 with the device intended for commercial use.

In early June, Sanofi and Regeneron announced that the Phase III VELOUR trial showed that the investigational agent Zaltrap(TM) (aflibercept) significantly improved survival in previously treated metastatic colorectal cancer patients. Results from VELOUR trial were presented at the ESMO World Congress on Gastrointestinal Cancer in June, and demonstrated that the addition of Zaltrap(TM) to the FOLFIRI regimen significantly improved both overall survival and progression-free survival in patients with metastatic colorectal cancer previously treated with oxaliplatin.

In addition to VELOUR, the development program of Zaltrap(TM) includes one Phase III trial and one Phase II trial, both of which are fully enrolled:

  • VENICE: First-line treatment for hormone-refractory metastatic prostate cancer in combination with docetaxel and prednisone (Phase III). In July, Regeneron announced that the VENICE study will continue to completion as planned, with no modifications due to efficacy or to safety concerns. This decision is based on a recent recommendation of an independent Data Monitoring Committee (DMC) following a planned interim analysis.
  • AFFIRM: First-line treatment in metastatic colorectal cancer in combination with FOLFOX regimen (Phase II). Final results are expected during the second half of 2011.

Results of the SAVE-ONCO study which assessed the efficacy and safety of Visamerin®/Mulsevo® (semuloparin) for the prevention of symptomatic deep vein thromboembolism (DVT), non-fatal Pulmonary Embolism (PE) and venous thromboembolism (VTE) – related death in cancer patients initiating a chemotherapy regimen were presented in June in an oral presentation at the Annual Meeting of the American Society of Clinical Oncology (ASCO), and were selected for the Best of ASCO. In this placebo control study, semuloparin significantly reduced the risk of the composite of DVT, non-fatal PE or VTE-related death by 64%, meeting the study primary endpoint. Semuloparin reduced the risk of this type of veinous thromboembolism event without increasing the incidence of major bleeding.

In June, new data for iniparib (BSI-201), an investigational agent, in metastatic triple-negative breast cancer (mTNBC) and recurrent ovarian cancer was presented at the Annual Meeting of the American Society of Clinical Oncology (ASCO):

  • In a pre-planned sub-group analysis of the Phase III randomized, open-label trial investigating the use of gemcitabine and carboplatin with or without iniparib in mTNBC, the subgroup of patients in the 2nd and 3rd line settings exhibited a median PFS (Progression-Free Survival) of 4.2 months in the iniparib arm, compared to 2.9 months in the chemotherapy alone arm (HR=0.67, 95% CI [0.5, 0.92]) and a median OS (Overall Survival) of 10.8 months vs. 8.1 months (HR=0.65, 95% CI [0.46, 0.91]). As previously reported, the study did not reach statistical significance for the co-primary endpoints of OS or PFS.
  • Data from preliminary analysis of two ongoing multi-center, single-arm Phase II trials evaluating gemcitabine and carboplatin in combination with iniparib in recurrent ovarian cancer showed an ORR (Overall Response Rate, complete plus partial responses) of 65% in 40 evaluable platinum-sensitive patients and of 25% in 32 evaluable platinum-resistant patients.

In early July, data from a randomized Phase II study in advanced NSCLC (non-small cell lung cancer) were presented during the World Congress on Lung Cancer. The trial, which evaluated gemcitabine/cisplatin/iniparib vs. gemcitabine/cisplatin in previously untreated patients with stage IV NSCLC, did not meet the primary endpoint of improvement in objective response rate. Mature progression-free survival and overall survival data – secondary endpoints – will be available early 2012. The Phase III trial for patients with squamous NSCLC is ongoing. In addition, activities are being conducted in the biomarker and translational medicine research area.

Additional analyses from Phase III studies of Kynamro(TM) (mipomersen) were presented at the European Atherosclerosis Society (EAS) Congress. Data from two randomized, placebo-controlled Phase III trials in patients with heFH showed that mipomersen reduced Lp(a), LDL-Cholesterol, and other measures of atherogenic lipoproteins when added to existing lipid-lowering therapy. Lp(a) is an independent risk factor for heart disease and cardiovascular events. A presentation also focused on mipomersen’s potential to reduce the necessity for lipid-apheresis by lowering LDL-Cholesterol values below thresholds for apheresis eligibility.

Sanofi and its subsidiary Genzyme announced in July positive top-line results from CARE-MS I, the first of two randomized, Phase III clinical trials comparing the investigational drug Lemtrada(TM) (alemtuzumab) to the approved multiple sclerosis therapy Rebif® in patients with relapsing remitting multiple sclerosis (RRMS). In the CARE-MS I trial, two annual cycles of alemtuzumab treatment resulted in a 55 percent reduction in relapse rate compared to Rebif® over the two years of the study (p<0.0001), hence satisfying the first primary endpoint, and therefore meeting the predefined protocol criteria for declaring the study a success. Statistical significance was not achieved for the second primary endpoint, time to six month sustained accumulation of disability, as compared to Rebif®. At the two year time point, 8 percent of alemtuzumab treated patients had a sustained increase in their Expanded Disability Status Scale (EDSS) score (or worsening) as compared to 11 percent of those who received Rebif® (Hazard Ratio=0.70, p=0.22). The safety profile was consistent with the Phase II clinical trial experience.

A second Phase III clinical trial, CARE-MS II, is currently underway, evaluating alemtuzumab against Rebif® in relapsing-remitting multiple sclerosis patients who have relapsed while on therapy. Top-line results from this trial are expected in the fourth quarter of 2011.

In July, Sanofi and Regeneron announced results from Phase IIb trials in rheumatoid arthritis (RA) and ankylosing spondylitis (AS) with sarilumab (REGN88/SAR153191), a novel, high-affinity, subcutaneously administered, fully-human antibody targeting the interleukin-6 receptor (IL-6R). The Phase IIb MOBILITY trial in rheumatoid arthritis demonstrated at 12 weeks that patients treated with sarilumab in combination with a standard RA treatment, methotrexate, achieved a significant and clinically meaningful improvement in signs and symptoms of moderate-to-severe RA compared to patients treated with methotrexate alone. In the Phase IIb ALIGN trial in ankylosing spondylitis (AS), sarilumab did not demonstrate significant and clinically meaningful improvements in signs and symptoms of active AS compared to placebo in patients who had inadequate response to NSAIDs (nonsteroidal anti-inflammatory drugs).

The Phase III study evaluating the efficacy of Jevtana® (cabazitaxel) in first line prostate cancer started enrolling patients during the quarter.

Evolution of the early stage portfolio:

Four compounds entered Phase I:

  • SAR125844, a Met Kinase inhibitor in oncology;
  • SAR407899, a RHO Kinase inhibitor for diabetic nephropathy;
  • SAR126119, a TAFIa inhibitor for Acute Ischemic Stroke, back up of SAR104772, currently in Phase I.
  • SAR339658/GBR500, a monoclonal antibody to treat Crohn’s Disease and other chronic autoimmune disorders, entered into the portfolio in Phase I with the license agreement signed with Glenmark Pharmaceuticals S.A.

Based on negative Phase IIb data, the development of celivarone has been discontinued for the prevention of shocks and major clinical outcomes in patients with implanted cardiac defibrillator.

Several regulatory milestones were reached during the period for vaccines:

  • In May, the FDA approved the biologics license application for the Fluzone® Intradermal vaccine. Fluzone® Intradermal is indicated for active immunization of adults 18 through 64 years of age against influenza disease caused by influenza virus subtypes A and B contained in the vaccine. Fluzone® Intradermal is the first influenza vaccine licensed in the U.S. that uses a novel microinjection system for intradermal delivery.
  • In July, Sanofi Pasteur started the licensure process of Hexaxim(TM), the only ready to use 6-in-1 vaccine to protect infants against diphtheria, tetanus, pertussis, hepatitis B, poliomyelitis and invasive infections caused by haemophilus influenzae type b. A Common Technical Document (CTD) was submitted to the European Medicine Agency following the “Article 58″ procedure for evaluation of medicinal products intended exclusively for markets outside the European Union.

Several partnerships were also signed:

  • A license agreement with Glenmark Pharmaceuticals S.A. was announced in May for the development and commercialization of GBR500, a novel monoclonal antibody to treat Crohn’s Disease and other chronic autoimmune disorders. GBR500 is an antagonist of the VLA-2 (alpha2-beta1) integrin. GBR500 has completed a Phase I dosing study in the US and has been well tolerated with a good pharmacokinetic profile.
  • An alliance agreement was signed in May with Medicines for Malaria Venture (MMV) to research malaria treatments. The first research project agreement within the framework of the alliance was also announced.
  • A three-year research collaboration agreement was announced in May with Drugs for Neglected Diseases initiative (DNDi) for the research of new treatments for nine neglected tropical diseases, listed by the World Health Organization (WHO) for which new, adapted, and efficient tools are urgently needed to treat patients in endemic countries.
  • A two-year research collaboration with the biopharmaceutical company Audion Therapeutics started in June to develop potential treatments for hearing loss through the optimization of small molecules by using a regenerative medicine approach. Under the terms of the agreement, Sanofi has an option to license technology rights from Audion related to research conducted under the collaboration.
  • A research collaboration with Weill Cornell Medical College was announced in June to identify new anti-infectives that aim to shorten the course of treatment of tuberculosis (TB) and could provide effective therapies against drug-susceptible and drug-resistant strains of TB.
  • An exclusive research collaboration agreement and option for license with Rib-X Pharmaceuticals, Inc. for novel classes of antibiotics resulting from Rib-X’s RX-04 program for the treatment of resistant Gram-positive and resistant Gram-negative pathogens.

Second-quarter financial results

Business Net Income(1)

Second quarter net sales of Sanofi were euro 8,349 million, up 0.5% on a reported basis. At constant exchange rates, sales were up 6.9%, reflecting the acquisition of Genzyme (euro 796 million) and the impact from U.S. health- care reform, EU austerity measures, and the loss of euro 778 million of sales due to generic competition. “Other revenues” were euro 422 million, an increase of 2.4%, reflecting growth of Plavix® in the U.S. partially offset by an unfavorable dollar effect.

Gross profit reached euro 6,183 million, up 1.8% at constant exchange rates or down 5.0% on a reported basis. The ratio of cost of sales to net sales was 31.0%, 4.4 percentage points higher than in Q2 2010, but close to Q1 2011 level (30.4%), mainly due to the impact of generic competition (accounted for 2.5 percentage points) as well as exchange rate impact.

Research and development expenses were euro 1,197 million, an increase of 7.0% (or 12.6% at constant exchange rates). Excluding Genzyme, R&D expenses decreased 1.0% at constant exchange rates. The ratio of R&D expenses to net sales was 14.3%, up 0.8 percentage point versus the second quarter of 2010.

Selling and general expenses reached euro 2,268 million, an increase of 6.7% (or 13.3% at constant exchange rates). Excluding Genzyme, SG&A expenses were stable (+0.1%) at constant exchange rates and included the global roll-out costs of Jevtana® in EU, investment in Allegra® OTC in the U.S. and increased promotional effort on Lantus® in the U.S. The ratio of selling and general expenses to net sales was 27.2%, 1.6 percentage points higher than Q2 2010.

Other current operating income net of expenses showed a net income of euro 7 million versus net income of euro 27 million in the second quarter of 2010 and included euro 23 million of fees related to the acquisition of Genzyme. This line also includes a slight foreign exchange gain attributable to the hedging policy, compared with a loss in Q2 2010.

The share of profits from associates reached euro 278 million, up 12.1% compared to Q2 2010. The share of after-tax profits from the territories managed by BMS under the Plavix® and Avapro® alliance was euro 274 million up 11.3%, driven by the performance of Plavix® in the U.S.

Net income attributable to non-controlling interests was euro 58 million, down 17.1%. The pre-tax profits paid to BMS from territories managed by Sanofi declined by 19.7% to euro 53 million as a result of competition from clopidogrel generics in Europe.

Business operating income was euro 2,945 million, a decrease of 15.2%, or down 9.5% at constant exchange rates.

Net financial expenses were euro 100 million, compared to euro 95 million, reflecting the low funding cost for the acquisition of Genzyme. The average gross debt increased by euro 11.2 billion (to euro 20.5 billion) compared to Q2 2010, and the cost of the debt was reduced by 2.1 percentage point to 2.0% over the same period.

The effective tax rate was 26.5%, compared to 28.1% in Q2 2010. This decrease is due to lower expected full year tax rate, reflecting positive effect from countries with lower tax rate.

Business net income(1) was euro 2,150 million, down 13.2%. At constant exchange rates, business net income was down 7.0%.

Business earnings per share(1) (EPS) was euro 1.64, down 13.7% versus the 2010 second quarter figure. At constant exchange rates, business earnings per share(1) decreased by 7.4%.

(1) See Appendix 10 for definitions of financial indicators, and Appendix 6 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi

First-half 2011 financial results

Business Net Income(1)

First-half net sales of Sanofi were euro 16,128 million, a decrease of 0.5% on a reported basis. At constant exchange rate, sales increased 1.0%, reflecting the consolidation of Genzyme from April 1st and the impact from U.S. health care reform, EU austerity measures, and the loss of euro 1,347 million of sales due to generic competition. “Other revenues” reached euro 835 million, up 3.5%, positive impact from Plavix® growth in the U.S. (+12.2%) was partially offset by an unfavorable U.S. dollar impact.

Gross profit reached euro 12,013 million, a decrease of 4.9% or 3.0% at constant exchange rates. The ratio of cost of sales was 30.7%, 3.6 percentage points higher, mainly due to the impact of generic competition.

Research and development expenses were euro 2,297 million, up 1.4% or 3.2% at constant exchange rates. Excluding Genzyme, R&D expenses were down 3.5% at constant exchange rates reflecting the benefit from reorganization put in place in the recent years. The ratio of R&D expenses to net sales was 14.2%, 0.2 percentage point higher than in H1 2010.

Selling and general expenses reached euro 4,201 million, up 6.0% or 7.9% at constant exchange rates. Excluding Genzyme, SG&A expenses were up 0.8% at constant exchange rates, reflecting launching costs for Jevtana® in EU, and Allegra® in the U.S. on the OTC market and higher promotional effort on Lantus® in the U.S. as well. The ratio of selling and general expenses to net sales was 26.0%, compared to 24.5% in H1 2010.

Other current operating income net of expenses was an income of euro 23 million versus an income of euro 102 million in H1 2010 which included a euro 87million payments in Q1 2010 received from Teva on sales of Copaxone® in North America (theses payments ceased at the end of Q1 2010). This line also includes a slight foreign exchange gain attributable to the hedging policy, compared to a loss in 2010.

The share of profits from associates was euro 570 million, up 16.1% compared to H1 2010, due to a 15.4% rise in the share of after-tax profits from the territories managed by BMS under the Plavix® and Avapro® alliance (euro 548 million).

Net income attributable to non-controlling interests was euro 136 million, down 8.1% due to competition from clopidogrel generics in Europe (profits paid to BMS from territories managed by Sanofi were euro 125 million, down 8.8%).

Business operating income reached euro 5,972 million, a decrease of 12.7%, or 12.4% at constant exchange rates.

Net financial expenses were euro 178 million versus euro 140 million in H1 2010, despite the acquisition of Genzyme. Net financial expenses also included a capital gain of euro 47 million on the sale of the stake in Novexel booked in the first quarter 2010.

First-half effective tax rate was 27.5% compared with 28.2% in H1 2010.

Business net income(1) was euro 4,320 million, a decrease of 11.9%, or 11.5% at constant exchange rates. The ratio of business net income(1) to net sales was 26.8% compared to 30.3% in H1 2010.

Business earnings per share(1) (EPS) was euro 3.30, a decrease of 12.2% over H1 2010 figure of euro 3.76. At constant exchange rates, business earnings per share(1) decreased by 11.7%.

(1) See Appendix 10 for definitions of financial indicators, and Appendix 6 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi

From business net income to consolidated net income (see Appendix 6)

In H1 2011, the main reconciling items between business net income and consolidated net income attributable to equity holders of Sanofi were:

  • A euro 1,701 million amortization charge against intangible assets arising on the application of purchase accounting to acquired companies (primarily Aventis: euro 1,059 million, Genzyme: euro 242 million and Merial euro 165 million) and to acquired intangible assets (licenses/products: euro 94 million). The second quarter amortization charge against intangible assets was euro 965 million (primarily Aventis: euro 523 million, Genzyme euro 242 million and Merial euro 84 million), euro 44 million of which related to acquired intangible assets (licenses/products). This item has no cash impact on the Group.
  • An impairment loss against intangible assets of euro 69 million (including euro 37 million in the second quarter related to several products). This item has no cash impact on the Group.
  • A charge of euro 66 million reflecting an increase in the fair value of contingent considerations related to TargeGen business combination (euro 47 million), and Genzyme including the impact of Bayer contingent consideration (euro 14 million) and the CVR (euro 5 million).
  • A charge of euro 264 million arising from the workdown of inventories of acquired companies remeasured at fair value due to the application of purchase accounting to acquisitions, of which euro 262 million in the second quarter (due to Genzyme). This item has no cash impact on the Group.
  • euro 467 million of restructuring costs (including euro 345 million in the second quarter related to continuing transformation of R&D, Industrial Affairs and Operations in Europe).
  • A non-recurring amortization charge of euro 517 million booked in Q1 2011 due to the change of plan for Merial assets that were previously classified as held for sale or exchange in accordance with IFRS5: this charge corresponds to the depreciation and amortization of Merial assets that would have been recognized for the period from September 18, 2009 to December 31, 2010, had these assets not been classified as held for sale or exchange. This item has no cash impact on the Group.
  • A euro 1,002 million tax effect arising from the items listed above, comprising deferred taxes of euro 559 million generated by amortization charged against intangible assets and by the non recurring amortization charge on Merial assets, euro 78 million by the workdown of inventories of acquired companies and euro 150 million linked to restructuring costs. The second quarter tax effect was euro 492 million, including euro 296 million of deferred taxes generated by amortization charged against intangible assets, euro 78 million by the workdown of inventories of acquired companies and euro 108 million linked to restructuring costs (see Appendix 6).
  • In “Share of profits/losses from associates”, a charge of euro 14 million (of which euro 7 million in Q2 2011), net of tax, mainly relating to the share of amortization of intangible assets. This item has no cash impact on the Group.

Strong cash flow from operating activities in H1 2011 (See Appendices 8 and 9)

Net cash generated by operating activities after changes in working capital and before restructuring costs was euro 4,362 million, a decrease of 11.7% compared to H1 2010. This amount largely provided finance for capital expenditures (euro 768 million), the dividend paid by Sanofi (euro 1,372 million), repurchasing of shares (euro 113 million), and restructuring costs (euro 353 million). The acquisitions and partnerships made during the period (euro 13,999 million) were mainly Genzyme (euro 13,528 million) and BMP Sunstone (euro 363 million) and led to an increase of net debt from euro 1,577 million at December 31, 2010 to euro 13,231 million (debt of euro 19,793 million, net of euro 6,562 million cash and cash equivalents) at the end of the second quarter


                                      ***********************

Limited review procedures on the half-year consolidated financial statements are complete. The limited review opinion is currently issuing”


                                      ***********************

Forward-Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plans” and similar expressions. Although Sanofi’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of such products candidates, the absence of guarantee that the products candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, the Group’s ability to benefit from external growth opportunities as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in Sanofi’s annual report on Form 20-F for the year ended December 31, 2010. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.

Appendices

    List of appendices
    ------------------

    Appendix     2011 second-quarter and 2011 first-half consolidated net
     1:          sales by product
    Appendix     2011 second-quarter and 2011 first-half consolidated net
     2:          sales by geographic region and product
    Appendix
     3:         Consolidated net sales by business segment
    Appendix
     4:         Net sales of Growth Platforms
    Appendix     2011 second-quarter and 2011 first-half business net
     5:          income statement
    Appendix     Reconciliation of business net income to net income
     6:          attributable to equity holders of Sanofi
    Appendix     2011 second-quarter and 2011 first-half consolidated
     7:          income statement
    Appendix
     8:         Change in net debt
    Appendix
     9:         Simplified consolidated balance sheet
    Appendix
     10:        Definitions

    Appendix 1: 2011 second-quarter and first-half consolidated net
    sales by product
    ---------------------------------------------------------------
                                                Change at
    (euro million)                 Q2 2011       constant   Change on a
    --------------                 -------       ---------  -----------
                                                 exchange      reported
                                 net sales          rates         basis
                                 ---------      ---------     ---------
    Lantus(R)                          969          +14.5%         +4.6%
    Apidra(R)                           53          +29.5%        +20.5%
    Insuman(R)                          33           +3.0%          0.0%
    Amaryl(R)                          109           -9.5%        -13.5%
    -------                            ---           ----         -----
         Total Diabetes              1,168          +12.4%         +3.5%
    Lovenox(R)                         536          -34.8%        -38.1%
    Plavix(R)                          510           -2.4%         -5.2%
    Taxotere(R)                        204          -64.5%        -65.9%
    Aprovel(R)                         343           +3.6%         +1.5%
    Eloxatin(R)                        248         +194.7%       +163.8%
    Multaq(R)                           68          +89.7%        +74.4%
    Jevtana(R)                          48              -             -
    --------                           ---            ---           ---
    Stilnox(R)/Ambien(R)/Ambien
     CR(R)/Myslee(R)                   116          -45.5%        -47.3%
    Allegra(R)                         119          -18.2%        -19.6%
    Copaxone(R)                        119           -9.9%         -9.2%
    Tritace(R)                          95           -6.6%        -10.4%
    Depakine(R)                        100           +7.3%         +4.2%
    Xatral(R)                           64           -9.1%        -16.9%
    Actonel(R)                          43          -31.3%        -32.8%
    Nasacort(R)                         31          -39.3%        -44.6%
    Other Products                   1,461           -3.9%         -7.3%
    Consumer Health Care               644          +17.6%        +11.4%
    Generics                           434          +17.6%        +13.9%
    --------                           ---          -----         -----
    Genzyme                            796             ns            ns
    -------                            ---            ---           ---
    Total Pharmaceuticals            7,147           +7.7%         +1.6%
    ---------------------            -----           ----          ----
    Vaccines                           706          +2.5 %         -5.6%
    --------                           ---          -----          ----
    Animal Health                      496           +1.1%         -5.3%
    -------------                      ---           ----          ----
    Total                            8,349           +6.9%         +0.5%
    -----                            -----           ----          ----

    Vaccines
                                              Change at    Change on
    (euro million)               Q2 2011      constant         a
    --------------             net sales       ---------   ---------
                                              exchange     reported
                               ---------        rates         basis
                                             ---------     --------
    Polio/Pertussis/Hib
     Vaccines                         267           +1.8%       -5.0%
    Influenza Vaccines*                57          -26.8%      -30.5%
    Meningitis/Pneumonia
     Vaccines                         121           +0.2%       -9.7%
    Adult Booster Vaccines            110           +9.8%       -1.8%
    Travel and Other Endemics
     Vaccines                          90           -7.9%      -10.9%
    Other Vaccines                     61          +85.3%      +60.5%
    --------------                    ---          -----       -----
    Total Vaccines                    706           +2.5%       -5.6%
    --------------                    ---           ----        ----
    *Seasonal and pandemic influenza Vaccines

    Animal Health
                                             Change at
    (euro million )             Q2 2011       constant   Change on a
    ---------------             -------       ---------  -----------
                                              exchange      reported
                              net sales          rates         basis
                              ---------      ---------      --------
      Frontline(R) and other
       fipronil products            189           -6.8%        -14.1%
      Vaccines                      159           +4.4%         -0.6%
      Avermectin                     93           +9.9%         +2.2%
      Other                          55           +9.4%         +3.8%
     Total                          496           +1.1%         -5.3%
     -----                          ---           ----          ----


                                                Change at
    (euro million)                 H1 2011       constant   Change on a
    --------------                 -------       ---------  -----------
                                                 exchange      reported
                                 net sales          rates         basis
                                 ---------      ---------      --------
    Lantus(R)                        1,894          +13.9%        +10.4%
    Apidra(R)                          102          +25.3%        +22.9%
    Insuman(R)                          64           -4.5%         -4.5%
    Amaryl(R)                          217           -7.7%         -7.3%
    -------                            ---           ----          ----
         Total Diabetes              2,281          +11.5%         +8.6%
    Lovenox(R)                       1,119          -30.9%        -31.6%
    Plavix(R)                          994           -8.4%         -7.4%
    Taxotere(R)                        586          -49.1%        -48.1%
    Aprovel(R)                         663           -0.3%         -0.3%
    Eloxatin(R)                        436         +185.6%       +172.5%
    Multaq(R)                          131         +114.3%       +107.9%
    Jevtana(R)                          96              -             -
    --------                           ---            ---           ---
    Stilnox(R)/Ambien(R)/Ambien
     CR(R)/Myslee(R)                   232          -48.8%        -47.4%
    Allegra(R)                         335           -1.6%         +5.0%
    Copaxone(R)                        233          -11.8%        -11.1%
    Tritace(R)                         194           -7.1%         -8.1%
    Depakine(R)                        196           +6.0%         +6.5%
    Xatral(R)                          129          -13.1%        -15.7%
    Actonel(R)                          91          -28.2%        -26.6%
    Nasacort(R)                         74          -26.9%        -28.8%
    Other Products                   2,940           -3.6%         -3.9%
    Consumer Health Care             1,356          +28.1%        +26.8%
    Generics                           848          +17.3%        +17.1%
    --------                           ---          -----         -----
    Genzyme                            796             ns            ns
    -------                            ---            ---           ---
    Total Pharmaceuticals           13,730           +3.3%         +1.9%
    ---------------------           ------           ----          ----
    Vaccines                         1,308         -20.3 %        -22.7%
    Animal Health                    1,090           +6.7%         +5.1%
    -------------                    -----           ----          ----
    Total                           16,128           +1.0%         -0.5%
    -----                           ------           ----          ----

    Vaccines
                                              Change at    Change on
    (euro million)               H1 2011      constant         a
    --------------             net sales       ---------   ---------
                                              exchange     reported
                               ---------        rates         basis
                                             ---------     --------
    Polio/Pertussis/Hib
     Vaccines                         494           +4.1%       +2.3%
    Influenza Vaccines*               158          -69.9%      -70.3%
    Meningitis/Pneumonia
     Vaccines                         183          -12.6%      -18.3%
    Adult Booster Vaccines            206          +15.6%      +10.8%
    Travel and Other Endemics
     Vaccines                         171          -10.9%      -11.4%
    Other Vaccines                     96          +39.9%      +29.7%
    --------------                    ---          -----       -----
    Total Vaccines                  1,308          -20.3%      -22.7%
    --------------                  -----          -----       -----
    *Seasonal and pandemic influenza Vaccines


    Animal Health
    -------------
                                             Change at
    (euro million)              H1 2011       constant   Change on a
    --------------            net sales     ----------   -----------
                                              exchange      reported
                              ---------          rates         basis
                                              --------     ---------
    Frontline(R) and other
     fipronil products              459           +4.7%         +2.9%
    Vaccines                        325           +9.7%         +8.7%
    Avermectin                      198           +6.4%         +5.3%
    Other                           108           +6.7%         +3.8%
     Total                        1,090           +6.7%         +5.1%
     -----                        -----           ----          ----

    Appendix 2: 2011 second-quarter and first-half consolidated net
    sales by geographic region and product
    ---------------------------------------------------------------

    Second-quarter 2011
    -------------------

    Pharmaceuticals
    Q2 2011 net sales
     (euro million)               Western  Change   United
    -----------------             -------  ------   ------
                                   Europe   at CER  States
                                   ------   ------  ------
    Lantus(R)                         188     +9.3%     566
    Apidra(R)                          20    +25.0%      18
    Amaryl(R)                           9    -18.2%       1
    Insuman(R)                         26     -3.7%       0
    --------                          ---     ----      ---
         Total Diabetes               247     +9.3%     585
    Lovenox(R)                        212     +9.8%     160
    Plavix(R)                         110    -37.0%     53*
    Taxotere(R)                        51    -73.3%      34
    Aprovel(R)                        200     -6.2%     13*
    Eloxatin(R)                        10     -9.1%     182
    Multaq(R)                          17   +157.1%      47
    Jevtana(R)                          9        -       35
     Stilnox(R)/Ambien(R)/Ambien
     CR(R)/Myslee(R)                   13      0.0%      20
    Allegra(R)                          4    -33.3%       0
    Copaxone(R)                       113     -7.4%       0
    Tritace(R)                         44    -10.2%       0
    Depakine(R)                        37      0.0%       0
    Xatral(R)                          16      0.0%      32
    Actonel(R)                         15    -46.4%       0
    Nasacort(R)                         8                16
    ---------                         ---               ---
    Consumer Health Care              157     +1.3%     145
    --------------------              ---     ----      ---
    Generics                          111    +13.4%      34
    --------                          ---    -----      ---
    Others                            614     -8.5%     127
    ------                            ---     ----      ---
    Genzyme                           219               379
    -------                           ---               ---
    Total Pharma                    2,207     +1.0%   1,862
    ------------                    -----     ----    -----


    Q2 2011 net sales
     (euro million)               Change   Emerging  Change
    -----------------             ------   --------  ------
                                   at CER   Markets  at CER
                                   ------   -------  ------
    Lantus(R)                       +12.4%      160    +29.3%
    Apidra(R)                       +17.6%       11    +50.0%
    Amaryl(R)                       -57.0%       57     +8.6%
    Insuman(R)                                    7    +33.3%
    --------                                    ---    -----
         Total Diabetes             +12.5%      235    +24.4%
    Lovenox(R)                      -64.7%      142     +9.6%
    Plavix(R)                        -5.4%      173    +10.6%
    Taxotere(R)                     -84.0%       73    -30.4%
    Aprovel(R)                      +44.4%       95    +11.6%
    Eloxatin(R)                    +613.8%       40    +16.2%
    Multaq(R)                       +74.2%        2        -
    Jevtana(R)                          -         3        -
     Stilnox(R)/Ambien(R)/Ambien
     CR(R)/Myslee(R)                -81.7%       16    -10.5%
    Allegra(R)                          -        26    +16.7%
    Copaxone(R)                         -         0   -100.0%
    Tritace(R)                          -        47      0.0%
    Depakine(R)                         -        59    +13.0%
    Xatral(R)                       -14.0%       16    -11.1%
    Actonel(R)                          -        21    -18.5%
    Nasacort(R)                     -53.8%        6      0.0%
    ---------                       -----       ---      ---
    Consumer Health Care            +73.4%      283    +10.6%
    --------------------            -----       ---    -----
    Generics                        +85.7%      279    +13.8%
    --------                        -----       ---    -----
    Others                          -24.5%      528     +5.6%
    ------                          -----       ---     ----
    Genzyme                                     115
    -------                                     ---
    Total Pharma                     +3.8%    2,159    +14.5
    ------------                     ----     -----    -----


    Q2 2011 net sales
     (euro million)               Rest of  Change
    -----------------             -------  ------
                                     the
                                   World   at CER
                                  ------   ------
    Lantus(R)                          55    +16.7%
    Apidra(R)                           4    +66.7%
    Amaryl(R)                          42    -26,8%
    Insuman(R)                          0
    --------                          ---
         Total Diabetes               101     -4.7%
    Lovenox(R)                         22     +4.8%
    Plavix(R)                         174    +25.9%
    Taxotere(R)                        46    -24.6%
    Aprovel(R)                         35    +43.5%
    Eloxatin(R)                        16    +11.8%
    Multaq(R)                           2
    Jevtana(R)                          1        -
     Stilnox(R)/Ambien(R)/Ambien
     CR(R)/Myslee(R)                   67     +8.1%
    Allegra(R)                         89    +23.6%
    Copaxone(R)                         6      0.0%
    Tritace(R)                          4    -28.6%
    Depakine(R)                         4      0.0%
    Xatral(R)                           0        -
    Actonel(R)                          7    -22.2%
    Nasacort(R)                         1    -50.0%
    ---------                         ---    -----
    Consumer Health Care               59     +3.6%
    --------------------              ---     ----
    Generics                           10    +10.0%
    --------                          ---    -----
    Others                            192     +6.2%
    ------                            ---     ----
    Genzyme                            83
    -------                           ---
    Total Pharma                      919    +19.5%
    ------------                      ---    -----
    *Sales of active ingredient to the American entity managed by BMS
    Vaccines
    Q2 2011 net sales
     (euro million)        Western  Change   United   Change   Emerging
    -----------------      -------  ------   ------   ------   --------
                           Europe    at CER  States    at CER   Markets
                           ------    ------  ------    ------   -------
    Polio/Pertussis/Hib
     Vaccines                    7    -58.8%     109     -8.2%      112
    Influenza Vaccines*          0                 0                 55
    Meningitis/Pneumonia
     Vaccines                    1      0.0%      96     -1.8%       22
    Adult Booster
     Vaccines                   22    +69.2%      78     +1.1%        5
    Travel and Other
     Endemics Vaccines           7    +75.0%      24    +17.4%       48
    Other Vaccines               3    -25.0%      50   +100.0%        3
    --------------             ---    -----      ---   ------       ---
    Total Vaccines              40     +2.6%     357     +5.4%      245
    --------------             ---     ----      ---     ----       ---


    Q2 2011 net sales
     (euro million)        Change   Rest of  Change
    -----------------      ------   -------  ------
                                       the
                           at CER     World  at CER
                           ------    ------  ------
    Polio/Pertussis/Hib
     Vaccines                +12.6%      39    +48.1%
    Influenza Vaccines*      -16.2%       2    -78.6%
    Meningitis/Pneumonia
     Vaccines                +15.0%       2
    Adult Booster
     Vaccines                -28.6%       5    +75.0%
    Travel and Other
     Endemics Vaccines       -21.0%      11    -16.7%
    Other Vaccines           +25.0%       5   +279.5%
    --------------           -----      ---   ------
    Total Vaccines            -3.4%      64    +10.2%
    --------------            ----      ---    -----
    *Seasonal and pandemic influenza Vaccines

    Animal Health
    Q2 2011 net sales
     (euro million)         Western  Change   United   Change   Emerging
    -----------------       -------  ------   ------   ------   --------
                            Europe    at CER  States    at CER   Markets
                            ------    ------  ------    ------   -------
    Frontline(R) and other
     fipronil products           58     +9.3%     101    -13.4%       23
    Vaccines                     42     -4.5%      32    +12.5%       82
    Avermectin                   13      0.0%      47     +3.9%       15
    Other                        20    -13.0%      17     +5.0%        9
    -----                       ---    -----      ---     ----       ---
    Total Animal Health         133      0.0%     197     -4.6%      129
    -------------------         ---      ---      ---     ----       ---


    Q2 2011 net sales
     (euro million)         Change   Rest of  Change
    -----------------       ------   -------  ------
                                        the
                            at CER    World   at CER
                            ------   ------   ------
    Frontline(R) and other
     fipronil products         +9.5%       7    -36.4%
    Vaccines                   +9.0%       3    -33.3%
    Avermectin                +23.1%      18    +28.6%
    Other                       0.0%       9
    -----                       ---      ---
    Total Animal Health        +9.8%      37    +16.1%
    -------------------        ----      ---    -----

    First-half 2011
    ---------------

    Pharmaceuticals
    H1 2011 net sales
     (euro million)               Western  Change   United
    -----------------             -------  ------   ------
                                  Europe   at CER   States
                                  ------   ------   ------
    Lantus(R)                         362     +5.3%   1,129
    Apidra(R)                          39    +21.9%      33
    Amaryl(R)                          17    -22.7%       2
    Insuman(R)                         50     -9.1%       0
    --------                          ---     ----      ---
         Total Diabetes               472     +4.2%   1,164
    Lovenox(R)                        419     +4.5%     382
    Plavix(R)                         219    -42.2%    104*
    Taxotere(R)                       125    -67.2%     202
    Aprovel(R)                        395     -7.3%     23*
    Eloxatin(R)                        24      0.0%     301
    Multaq(R)                          34   +209.1%      91
    Jevtana(R)                         11        -       81
     Stilnox(R)/Ambien(R)/Ambien
     CR(R)/Myslee(R)                   27      0.0%      43
    Allegra(R)                          8    -20.0%       5
    Copaxone(R)                       222     -9.8%       0
    Tritace(R)                         88    -11.1%       0
    Depakine(R)                        72     -2.7%       0
    Xatral(R)                          31    -11.4%      65
    Actonel(R)                         30    -47.4%       0
    Nasacort(R)                        15    -11.8%      45
    ---------                         ---    -----      ---
    Consumer Health Care              343     +3.6%     314
    --------------------              ---     ----      ---
    Generics                          227     +8.2%      66
    --------                          ---     ----      ---
    Others                          1,263     -7.8%     261
    ------                          -----     ----      ---
    Genzyme                           219               379
    -------                           ---               ---
    Total Pharma                    4,244     -6.0%   3,526
    ------------                    -----     ----    -----


    H1 2011 net sales
     (euro million)               Change    Emerging  Change
    -----------------             ------    --------  ------
                                  at CER    Markets   at CER
                                  ------    -------   ------
    Lantus(R)                       +13.5%       296    +24.7%
    Apidra(R)                       +12.9%        21    +37.5%
    Amaryl(R)                       -33.3%       114     +7.2%
    Insuman(R)                                    14    +16.7%
    --------                                     ---    -----
         Total Diabetes              13.3%       445    +19.9%
    Lovenox(R)                      -58.5%       274    +12.7%
    Plavix(R)                        -4.6%       347     +8.3%
    Taxotere(R)                     -54.7%       156    -23.5%
    Aprovel(R)                      +35.3%       188    +11.4%
    Eloxatin(R)                    +773.0%        79    +12.9%
    Multaq(R)                       +88.2%         3        -
    Jevtana(R)                          -          4        -
     Stilnox(R)/Ambien(R)/Ambien
     CR(R)/Myslee(R)                -83.2%        31     -8.8%
    Allegra(R)                      -94.9%        48    +16.7%
    Copaxone(R)                         -          0   -100.0%
    Tritace(R)                          -         95      0.0%
    Depakine(R)                         -        116    +12.6%
    Xatral(R)                       -17.1%        32     -8.6%
    Actonel(R)                          -         42    -12.5%
    Nasacort(R)                     -36.1%        12      0.0%
    ---------                       -----        ---      ---
    Consumer Health Care           +126.0%       584    +19.4%
    --------------------           ------        ---    -----
    Generics                        +73.2%       537    +18.1%
    --------                        -----        ---    -----
    Others                          -18.5%     1,039     +5.7%
    ------                          -----      -----     ----
    Genzyme                                      115
    -------                                      ---
    Total Pharma                     +0.2%     4,147    +13.1%
    ------------                     ----      -----    -----


    H1 2011 net sales
     (euro million)               Rest of  Change
    -----------------             -------  ------
                                     the
                                   World   at CER
                                  ------   ------
    Lantus(R)                         107    +22.9%
    Apidra(R)                           9   +100.0%
    Amaryl(R)                          84    -20.4%
    Insuman(R)                          0
    --------                          ---
         Total Diabetes               200     +1.6%
    Lovenox(R)                         44     +5.0%
    Plavix(R)                         324    +18.1%
    Taxotere(R)                       103    -11.1%
    Aprovel(R)                         57     +6.1%
    Eloxatin(R)                        32     +6.7%
    Multaq(R)                           3   +100.0%
    Jevtana(R)                          0
     Stilnox(R)/Ambien(R)/Ambien
     CR(R)/Myslee(R)                  131   +9.8.%
    Allegra(R)                        274    +34.6%
    Copaxone(R)                        11    +11.1%
    Tritace(R)                         11    -26.7%
    Depakine(R)                         8      0.0%
    Xatral(R)                           1   +100.0%
    Actonel(R)                         19    -10.5%
    Nasacort(R)                         2      0.0%
    ---------                         ---      ---
    Consumer Health Care              115     +8.2%
    --------------------              ---     ----
    Generics                           18    -19.0%
    --------                          ---    -----
    Others                            377     +0.6%
    ------                            ---     ----
    Genzyme                            83
    -------                           ---
    Total Pharma                    1,813    +14.5%
    ------------                    -----    -----
    *Sales of active ingredient to the American entity managed by BMS

    Vaccines
    H1 2011 net sales                  Change              Change
     (euro million)        Western         at  United          at
    -----------------      -------      ------ ------       ------
                            Europe   constant  States    Constant
                            ------   --------  ------    --------
                                     exchange            exchange
                                     --------            --------
                                        rates               rates
                                        -----               -----
    Polio/Pertussis/Hib
     Vaccines                   17      -50.0%     209       -2.7%
    Influenza Vaccines*          0     -100.0%       0     -100.0%
    Meningitis/Pneumonia
     Vaccines                    1      -66.7%     130      -19.2%
    Adult Booster
     Vaccines                   42      +57.7%     142       +8.6%
    Travel and Other
     Endemics Vaccines          11       -8.3%      41      +10.0%
    Other Vaccines               6        0.0%      76      +43.9%
    --------------             ---        ---      ---      -----
    Total Vaccines              77      -41.5%     598       -1.7%
    --------------             ---      -----      ---       ----


    H1 2011 net sales                   Change    Rest of     Change
     (euro million)         Emerging      at        the           at
    -----------------       --------     ------   -------      ------
                            Markets    constant   World     constant
                            -------    --------   -----     --------
                                       exchange             exchange
                                       --------             --------
                                        rates                  rates
                                        -----                  -----
    Polio/Pertussis/Hib
     Vaccines                    215      +18.7%       53      +22.0%
    Influenza Vaccines*          147      -67.2%       11      -28.6%
    Meningitis/Pneumonia
     Vaccines                     47      +20.0%        5      -18.5%
    Adult Booster
     Vaccines                     12      -20.0%       10      +83.3%
    Travel and Other
     Endemics Vaccines            98      -18.3%       21       -9.5%
    Other Vaccines                 8      +14.3%        6      +85.3%
    --------------               ---      -----       ---      -----
    Total Vaccines               527      -35.2%      106      +12.2%
    --------------               ---      -----       ---      -----
    *Seasonal and pandemic influenza Vaccines

    Animal Health
    H1 2011 net sales                   Change              Change
     (euro million)         Western         at  United          at
    -----------------       -------      ------ ------       ------
                             Europe   Constant  States    Constant
                             ------   --------  ------    --------
                                      exchange            exchange
                                      --------            --------
                                         rates               rates
                                         -----               -----
    Frontline(R) and other
     fipronil products          138       +6.2%     255       +4.3%
    Vaccines                     99       +1.0%      60       +8.6%
    Avermectin                   30       +3.4%     106       +0.9%
    Other                        43       -4.4%      35       +5.6%
    -----                       ---       ----      ---       ----
    Total Animal Health         310       +2.6%     456       +4.1%
    -------------------         ---       ----      ---       ----


    H1 2011 net sales                  Change    Rest of     Change
     (euro million)         Emerging      at       the           at
    -----------------       --------    ------   -------      ------
                            Markets   constant   World     Constant
                            -------   --------   -----     --------
                                      exchange             exchange
                                      --------             --------
                                        rates                 rates
                                        -----                 -----
    Frontline(R) and other
     fipronil products            41     +11.1%       25       -8.0%
    Vaccines                     160     +19.4%        6      -33.3%
    Avermectin                    27     +17.4%       35      +23.1%
    Other                         17       0.0%       13     +116.7%
    -----                        ---       ---       ---     ------
    Total Animal Health          245     +16.2%       79      +12.1%
    -------------------          ---     -----       ---      -----

    Appendix 3: Consolidated net sales by business segment
    ------------------------------------------------------
    net sales (euro
     million)          Q2 2011    Q2 2010    H1 2011    H1 2010
    ---------------    -------    -------    -------    -------
    Pharmaceuticals      7,147      7,035     13,730     13,476
    ---------------      -----      -----     ------     ------
    Vaccines               706        748      1,308      1,692
    Merial                 496        524      1,090      1,037
    ------                 ---        ---      -----      -----
    Total                8,349      8,307     16,128     16,205
    -----                -----      -----     ------     ------

    Appendix 4: Net sales of Growth Platforms
    -----------------------------------------
    net sales (euro                         Change at               Change at
     million)                  Q2 2011       constant  H1 2011       constant
    ---------------            -------       --------- -------       ---------
                                       exchange rates          exchange rates
                                       --------------          --------------
    Emerging Markets(1/2)        2,533          +12,3%   4,919           +4,9
       Emerging Markets
        excluding Diabetes,
        Vaccines, CHC, and new
        products                 1,521           +5.0%   2,996           +6,2%
    Diabetes                     1,168          +12.4%   2,281          +11.5%
    Vaccines                       706           +2.5%   1,308          -20.3%
    Consumer Health Care
     (CHC)                         644          +17.6%   1,356          +28,1%
    Animal Health                  496           +1.1%   1,090           +6.7%
    New products(3)                116         +223.1%     227         +271.4%
    ---------------                ---         ------      ---         ------
    Total Growth Platforms       4,651           +9,5%   9,258           +7.0%
    ----------------------       -----           ----    -----           ----
    (1) World excluding the U.S. and Canada, Western Europe, Japan,
    Australia and New Zealand.
    (2) Include Diabetes, Vaccines, and Consumer Health Care sales
    generated in Emerging Markets;
    (3) Multaq(R) and Jevtana(R)

    Appendix 5: Business net income statement
    -----------------------------------------
    Second-quarter 2011            Pharmaceuticals
    -------------------            ---------------
                                                       %
    Millions of euros       Q2 2011     Q2 2010      change
    -----------------       -------     -------     -------
    Net sales                  7,147      7,035        +1.6%
      Other revenues             412        401        +2.7%
      Cost of sales           (2,146)    (1,806)      +18.8%
      As % of net sales       (30.0%)    (25.7%)
      -----------------      -------    -------
    Gross profit               5,413      5,630       (3.9%)
    As % of net sales           75.7%      80.0%
    -----------------           ----       ----
      Research and
       development
       expenses               (1,023)      (950)       +7.7%
                              (14.3%)    (13.5%)
      As % of net sales

      Selling and general
       expenses               (1,969)    (1,808)       +8.9%
                              (27.6%)    (25.7%)
      As % of net sales
      Other current
       operating income/
       expenses                  (20)        67
      Share of profit/
       loss of associates*       276        255
    Net income
     attributable to
     non-controlling
     interests                   (58)       (72)
    ----------------             ---        ---
    Business operating
     income                    2,619      3,122      (16.1%)
    As % of net sales           36.6%      44.4%
    ------------------          ----       ----
      Financial income and
       expenses
      Income tax expense
      Tax rate**
      ----------
    Business net income
    As % of net sales
    -----------------
    Business earnings
     per share*** (in
     euros)


    Second-quarter 2011               Vaccines
    -------------------               --------
                                                     %
    Millions of euros       Q2 2011    Q2 2010    change
    -----------------       -------    -------    -------
    Net sales                     706       748     (5.6%)
      Other revenues                5         7    (28.6%)
      Cost of sales              (282)     (252)    +11.9%
      As % of net sales        (39.9%)   (33.7%)
      -----------------       -------   -------
    Gross profit                  429       503    (14.7%)
    As % of net sales            60.8%     67.2%
    -----------------            ----      ----
      Research and
       development
       expenses                  (139)     (130)     +6.9%
                               (19.7%)   (17.4%)
      As % of net sales

      Selling and general
       expenses                  (137)     (148)    (7.4%)
                               (19.4%)   (19.8%)
      As % of net sales
      Other current
       operating income/
       expenses                    (2)
      Share of profit/
       loss of associates*          2        (7)
    Net income
     attributable to
     non-controlling
     interests                                1
    ----------------                        ---
    Business operating
     income                       153       219    (30.1%)
    As % of net sales            21.7%     29.3%
    ------------------           ----      ----
      Financial income and
       expenses
      Income tax expense
      Tax rate**
      ----------
    Business net income
    As % of net sales
    -----------------
    Business earnings
     per share*** (in
     euros)


    Second-quarter 2011        Animal health(1)              Other
    -------------------        ----------------              -----
                                                    %
    Millions of euros      Q2 2011    Q2 2010    change  Q2 2011  Q2 2010
    -----------------      -------    -------   -------  -------  -------
    Net sales                  496        524     (5.3%)
      Other revenues             5          4     +25.0%
      Cost of sales           (160)      (151)     +6.0%
      As % of net sales     (32.3%)    (28.8%)
      -----------------    -------    -------
    Gross profit               341        377     (9.5%)
    As % of net sales         68.8%      71.9%
    -----------------         ----       ----
      Research and
       development
       expenses                (35)       (39)   (10.3%)
                             (7.1%)     (7.4%)
      As % of net sales

      Selling and general
       expenses               (161)      (167)    (3.6%)      (1)      (2)
                            (32.5%)    (31.9%)
      As % of net sales
      Other current
       operating income/
       expenses                 10          1                 19      (41)
      Share of profit/
       loss of associates*
    Net income
     attributable to
     non-controlling
     interests                              1
    ----------------                      ---
    Business operating
     income                    155        173    (10.4%)      18      (43)
    As % of net sales         31.3%      33.0%
    ------------------        ----       ----
      Financial income and
       expenses
      Income tax expense
      Tax rate**
      ----------
    Business net income
    As % of net sales
    -----------------
    Business earnings
     per share*** (in
     euros)


    Second-quarter 2011              Group Total
    -------------------              -----------
                                                      %
    Millions of euros        Q2 2011  Q2 2010      change
    -----------------        -------  -------     -------
    Net sales                  8,349     8,307       +0.5%
      Other revenues             422       412       +2.4%
      Cost of sales           (2,588)   (2,209)     +17.2%
      As % of net sales       (31.0%)   (26.6%)
      -----------------      -------   -------
    Gross profit               6,183     6,510      (5.0%)
    As % of net sales           74.1%     78.4%
    -----------------           ----      ----
      Research and
       development
       expenses               (1,197)   (1,119)      +7.0%
                              (14.3%)   (13.5%)
      As % of net sales

      Selling and general
       expenses               (2,268)   (2,125)      +6.7%
                              (27.2%)   (25.6%)
      As % of net sales
      Other current
       operating income/
       expenses                    7        27
      Share of profit/
       loss of associates*       278       248
    Net income
     attributable to
     non-controlling
     interests                   (58)      (70)
    ----------------             ---       ---
    Business operating
     income                    2,945     3,471     (15.2%)
    As % of net sales           35.3%     41.8%
    ------------------          ----      ----
      Financial income and
       expenses                 (100)      (95)
      Income tax expense        (695)     (898)
      Tax rate**                26.5%     28.1%
      ----------                ----      ----
    Business net income        2,150     2,478     (13.2%)
    As % of net sales           25.8%     29.8%
    -----------------           ----      ----
    Business earnings
     per share*** (in
     euros)                     1.64      1.90     (13,7%)

    *   Net of tax
    **  Determined on the basis of Business income before tax,
    associates, and non-controlling interests
    *** Based on an average number of shares outstanding of 1,311.6
    million in the second quarter of 2011 and 1,304.3 million in the
    second quarter of 2010
    (1)   In 2010: the results of operations of the Merial business
    previously presented as "held-for-exchange" were reclassified and
    included in income from continuing operations in accordance with
    IFRS5 section 36, following the announcement to maintain Merial and
    Intervet/Schering-Plough as two separate organizations.


        First-half 2011            Pharmaceuticals
        ---------------            ---------------
                                                      %
    Millions of euros       H1 2011   H1 2010       change
    -----------------       -------   -------      -------
    Net sales                 13,730    13,476        +1.9%
      Other revenues             816       786        +3.8%
      Cost of sales           (4,073)   (3,531)      +15.3%
      As % of net sales       (29.7%)   (26.2%)
    Gross profit              10,473    10,731       (2.4%)
    As % of net sales           76.3%     79.6%
    -----------------           ----      ----
      Research and
       development
       expenses               (1,963)   (1,943)       +1.0%
      As % of net sales       (14.3%)   (14.4%)
      Selling and general
       expenses               (3,614)   (3,373)       +7.1%
      As % of net sales       (26.3%)   (25.0%)
      Other current
       operating income/
       expenses                   42       168
      Share of profit/
       loss of associates*       559       491
    Net income
     attributable to
     non-controlling
     interests                  (136)     (150)
    ----------------            ----      ----
    Business operating
     income                    5,361     5,924       (9.5%)
    As % of net sales           39.0%     44.0%
    -----------------           ----      ----
      Financial income and
       expenses
      Income tax expense
      Tax rate**
    Business net income
    As % of net sales
    -----------------
    Business earnings
     per share*** (in
     euros)


        First-half 2011               Vaccines
        ---------------               --------
                                                     %
    Millions of euros       H1 2011    H1 2010    change
    -----------------       -------    -------    -------
    Net sales                   1,308     1,692    (22.7%)
      Other revenues               10        12    (16.7%)
      Cost of sales              (550)     (552)    (0.4%)
      As % of net sales        (42.1%)   (32.6%)
    Gross profit                  768     1,152    (33.3%)
    As % of net sales            58.7%     68.1%
    -----------------            ----      ----
      Research and
       development
       expenses                  (264)     (247)     +6.9%
      As % of net sales        (20.2%)   (14.6%)
      Selling and general
       expenses                  (264)     (284)    (7.0%)
      As % of net sales        (20.2%)   (16.8%)
      Other current
       operating income/
       expenses                    (1)       (2)
      Share of profit/
       loss of associates*         (2)       (8)
    Net income
     attributable to
     non-controlling
     interests                                1
    ----------------                        ---
    Business operating
     income                       237       612    (61.3%)
    As % of net sales            18.1%     36.2%
    ------------------           ----      ----
      Financial income and
       expenses
      Income tax expense
      Tax rate**
    Business net income
    As % of net sales
    -----------------
    Business earnings
     per share*** (in
     euros)


        First-half 2011           Animal health(1)               Other
        ---------------           ----------------               -----
                                                      %
    Millions of euros        H1 2011  H1 2010      change   H1 2011  H1 2010
    -----------------        -------  -------     -------   -------  -------
    Net sales                  1,090     1,037       +5.1%
      Other revenues               9         9
      Cost of sales             (327)     (303)      +7.9%
      As % of net sales       (30.0%)   (29.2%)
    Gross profit                 772       743       +3.9%
    As % of net sales           70.8%     71.6%
    -----------------           ----      ----
      Research and
       development
       expenses                  (70)      (75)     (6.7%)
      As % of net sales        (6.4%)    (7.2%)
      Selling and general
       expenses                 (322)     (306)      +5.2%       (1)      (2)
      As % of net sales       (29.6%)   (29.5%)
      Other current
       operating income/
       expenses                   (7)        6                  (11)     (70)
      Share of profit/
       loss of associates*                                       13        8
    Net income
     attributable to
     non-controlling
     interests                               1
    ----------------                       ---
    Business operating
     income                      373       369       +1.1%        1      (64)
    As % of net sales           34.2%     35.6%
    -----------------           ----      ----
      Financial income and
       expenses
      Income tax expense
      Tax rate**
    Business net income
    As % of net sales
    -----------------
    Business earnings
     per share*** (in
     euros)


        First-half 2011              Group Total
        ---------------              -----------
                                                      %
    Millions of euros        H1 2011  H1 2010      change
    -----------------        -------  -------     -------
    Net sales                 16,128    16,205      (0.5%)
      Other revenues             835       807       +3.5%
      Cost of sales           (4,950)   (4,386)     +12.9%
      As % of net sales       (30.7%)   (27.1%)
    Gross profit              12,013    12,626      (4.9%)
    As % of net sales           74.5%     77.9%
    -----------------           ----      ----
      Research and
       development
       expenses               (2,297)   (2,265)      +1.4%
      As % of net sales       (14.2%)   (14.0%)
      Selling and general
       expenses               (4,201)   (3,965)      +6.0%
      As % of net sales       (26.0%)   (24.5%)
      Other current
       operating income/
       expenses                   23       102
      Share of profit/
       loss of associates*       570       491
    Net income
     attributable to
     non-controlling
     interests                  (136)     (148)
    ----------------            ----      ----
    Business operating
     income                    5,972     6,841     (12.7%)
    As % of net sales           37.0%     42.2%
    ------------------          ----      ----
      Financial income and
       expenses                 (178)     (140)
      Income tax expense      (1,474)   (1,796)
      Tax rate**                27.5%     28.2%
    Business net income        4,320     4,905     (11.9%)
    As % of net sales           26.8%     30.3%
    -----------------           ----      ----
    Business earnings
     per share*** (in
     euros)                     3.30      3.76     (12,2%)
    *   Net of tax
    **  Determined on the basis of Business income before tax,
    associates, and non-controlling interests
    *** Based on an average number of shares outstanding of 1,308.6
    million in the first semester of 2011 and 1,305.8 million in the
    first semester of 2010
    (1) In 2010: the results of operations of the Merial business
    previously presented as "held-for-exchange" were reclassified and
    included in income from continuing operations in accordance with
    IFRS5 section 36, following the announcement to maintain Merial and
    Intervet/Schering-Plough as two separate organizations.

    Appendix 6: Reconciliation of Business net income to Net income
    attributable to equity holders of Sanofi
    ---------------------------------------------------------------
                                                               Q2
    Millions of euros                          Q2 2011    2010(1)   % change
    -----------------                          -------   --------   --------
    Business net income                          2,150      2,478      (13.2%)
    -------------------                          -----      -----     -------
    Amortization of intangible assets(2)          (965)      (954)
    Impairment of intangible assets                (37)      (108)
    Fair value remeasurement of contingent         (20)
    consideration liabilities
    Expenses arising from the impact of
     acquisitions on inventories                  (262)       (72)
    Restructuring costs                           (345)       (23)
    Other gains and losses, and litigation(3)
    Discontinuation of depreciation of PP&E* (IFRS5)           21
    Tax effect of :                                492        377
      Amortization of intangible assets            296        318
      Expenses arising on the workdown of
       acquired inventories                         78         26
      Restructuring costs                          108          7
      Other items                                   10         26
    Other tax items                                            (5)
    Share of items listed above attributable to non-
     controlling interests                                      1
    Restructuring costs of associates and
     joint ventures, and expenses arising
     from the impact of acquisitions on
     associates and joint ventures                  (7)        (8)
    -------------------------------------          ---        ---
    Net income attributable to equity
     holders of sanofi                           1,006      1,707      (41.1%)
    ---------------------------------            -----      -----     -------
    Consolidated earnings per share(4) (in
     euros)                                       0.77       1.31      (41,2%)

    (1) the results of operations of the Merial business previously
     presented as "held-for-exchange" were reclassified and included
     in income from continuing operations in accordance with IFRS5
     section 36, following the announcement to maintain Merial and
     Intervet/Schering-Plough as two separate organizations.

    (2) Of which amortization expense generated by the remeasurement of
     intangible assets as part of business combinations: euro 921
     million in the second quarter of 2011 and euro  900 million in the
     second quarter of 2010.

    (3) In 2011: "Catch up" in respect of 2009 and 2010 depreciation and
     amortization expense on PP&E* and intangible assets of Merial,
     previously classified as "Assets held for sale or exchange" (IFRS5
     section 27).

    (4) Based on an average number of shares outstanding of 1,311.6
     million in the second quarter of 2011 and 1,304.3 in the second
     quarter of 2010.

    * Property, Plant and Equipment.

- See page 15 for comments on the reconciliation of business net income to consolidated net income


                                                              H1
    Millions of euros                         H1 2011    2010(1)   % change
    -----------------                         -------   --------   --------
    Business net income                         4,320      4,905      (11.9%)
    -------------------                         -----      -----     -------
    Amortization of intangible assets(2)       (1,701)    (1,802)
    Impairment of intangible assets               (69)      (108)
    Fair value remeasurement of contingent        (66)
    consideration liabilities
    Expenses arising from the impact of
     acquisitions on inventories                 (264)      (134)
    Restructuring costs                          (467)      (190)
    Other gains and losses, and
     litigation(3)                               (517)
    Discontinuation of depreciation of
     PP&E* (IFRS5)                                            39
    Tax effect of:                              1,002        726
      Amortization of intangible assets           559        600
      Expenses arising on the workdown of
       acquired    inventories                     78         43
      Restructuring costs                         150         63
      Other items                                 215         20
    Other tax items                                           (1)
    Share of items listed above
     attributable to non-controlling
     interests                                                 1
    Restructuring costs of associates and
     joint ventures, and expenses arising
     from the impact of acquisitions on
     associates and joint ventures                (14)       (15)
    -------------------------------------         ---        ---
    Net income attributable to equity
     holders of sanofi                          2,224      3,421      (35.0%)
    ---------------------------------           -----      -----     -------
    Consolidated earnings per share(4) (in
     euros)                                      1.70       2.62      (35.1%)

    (1) the results of operations of the Merial business previously
    presented as "held-for-exchange" were reclassified and included in
    income from continuing operations in accordance with IFRS5 section
    36, following the announcement to maintain Merial and Intervet/
    Schering-Plough as two separate organizations.

    (2) Of which amortization expense generated by the remeasurement of
    intangible assets as part of business combinations: euro 1,607
    million in the first semester of 2011 and euro 1,701 million in the
    first semester of 2010.

    (3) In 2011: "Catch up" in respect of 2009 and 2010 depreciation and
    amortization expense on PP&E* and intangible assets of Merial,
    previously classified as "Assets held for sale or exchange" (IFRS5
    section 27).

    (4) Based on an average number of shares outstanding of 1,308.6
    million in the first semester of 2011 and 1,305.8 in the first
    semester of 2010.

    * Property, Plant and Equipment.

    Appendix 7: Consolidated income statements
    ------------------------------------------
                                                     Q2                 H1
    Millions of euros                 Q2 2011   2010(1)  H1 2011   2010(1)
    -----------------                 -------  --------  -------  --------
    Net sales                           8,349     8,307   16,128    16,205
    -----------------                   -----     -----   ------    ------
      Other revenues                      422       412      835       807
      Cost of sales                    (2,850)   (2,269)  (5,214)   (4,496)
      -------------                    ------    ------   ------    ------
    Gross profit                        5,921     6,450   11,749    12,516
    ------------                        -----     -----   ------    ------
      Research and development
       expenses                        (1,197)   (1,117)  (2,297)   (2,260)
      Selling and general expenses     (2,268)   (2,118)  (4,201)   (3,955)
      Other operating income               73        91      191       243
      Other operating expenses            (66)      (64)    (168)     (141)
      Amortization of intangible
       assets                            (965)     (954)  (1,701)   (1,802)
      Impairment of intangible assets     (37)     (108)     (69)     (108)
      Fair value remeasurement of
       contingent consideration
       liabilities                        (20)               (66)
      Restructuring costs                (345)      (23)    (467)     (190)
      Other gains and losses, and
       litigation                                           (517)
      ---------------------------                           ----
    Operating income                    1,096     2,157    2,454     4,303
    ----------------                    -----     -----    -----     -----
      Financial expenses                 (133)     (111)    (234)     (214)
      Financial income                     33        16       56        74
      ----------------                    ---       ---      ---       ---
    Income before tax and associates
     and joint ventures                   996     2,062    2,276     4,163
    --------------------------------      ---     -----    -----     -----
      Income tax expenses                (203)     (526)    (472)   (1,071)
      Share of profit/loss of
       associates and joint ventures      271       240      556       476
      ------------------------------      ---       ---      ---       ---
    Net income                          1,064     1,776    2,360     3,568
    ----------                          -----     -----    -----     -----
      Net income attributable to non-
       controlling interests               58        69      136       147
      -------------------------------     ---       ---      ---       ---
    Net income attributable to
     equity holders of sanofi           1,006     1,707    2,224     3,421
    --------------------------          -----     -----    -----     -----
    Average number of shares
     outstanding (million)            1,311.6   1,304.3  1,308.6   1,305.8
    ------------------------          -------   -------  -------   -------
    Earnings per share (in euros)        0.77      1.31     1.70      2.62
    -----------------------------        ----      ----     ----      ----

       (1)  the results of operations of the Merial business previously
       presented as "held-for-exchange" were reclassified and included in
       income from continuing operations in accordance with IFRS5 section
       36, following the announcement to maintain Merial and Intervet/
       Schering-Plough as two separate organizations.

    Appendix 8: Change in net debt
    ------------------------------
    Millions of euros                                   H1 2011    H1 2010
    -----------------                                   -------    -------
    Business net income                                   4,320      4,905
    -------------------                                   -----      -----
    Depreciation, amortization and impairment of
     property, plant and equipment and intangible
     assets                                                 555        527
    Net gains and losses on disposals of non-
     current assets, net of tax                             (35)       (81)
    Other non cash items                                    276        436
    --------------------                                    ---        ---
    Operating cash flow before changes in working
     capital (1)                                          5,116      5,787
    ---------------------------------------------         -----      -----
    Changes in working capital (1)                         (754)      (844)
    Acquisitions of property, plant and equipment
     and software                                          (768)      (629)
    ---------------------------------------------          ----       ----
    Free cash flow (1)                                    3,594      4,314
    ------------------                                    -----      -----
    Acquisitions of intangibles, excluding software         (64)      (157)
    Acquisitions of investments, including assumed
     debt(2)                                            (13,935)    (1,789)
    Restructuring costs paid                               (353)      (571)
    Proceeds from disposals of property, plant and
     equipment, intangibles, and other non-current
     assets, net of tax                                      71         75
    Issuance of sanofi shares                                28         11
    Dividends paid to sanofi shareholders                (1,372)    (3,131)
    Acquisition of treasury shares                         (113)      (321)
    Disposals of treasury shares, net of tax                  1         57
    Other items(3)                                          489       (213)
    --------------                                          ---       ----
    Change in net debt                                  (11,654)    (1,725)
    ------------------                                  -------     ------

    (1)  Excluding restructuring costs
    (2)  In 2011: (13,528) M euros related to Genzyme acquisition
    (3)  In 2011: of which foreign exchange effect on net debt +384 M
    euros

    Appendix 9: Simplified consolidated balance sheets
    --------------------------------------------------
                                           LIABILITIES &
    ASSETS           06/30/11   12/31/10    EQUITY         06/30/11   12/31/10
    ------          --------   --------    -------------   --------   --------
    euro million                           euro million
    ------------                           ------------
                       Equity
                        attributable
    Property,           to equity-
     plant and          holders of
     equipment         10,669      8,155    sanofi           52,456     53,097
                       Equity
    Intangible         attributable
     assets            to non-
     (including        controlling
     goodwill)         60,077     44,411   interests            143        191
    Non-current
     financial
     assets,
     investments
     in
     associates,
     and deferred
     tax assets         6,212      5,619   Total equity      52,599     53,288
                                          Long-term debt     13,289      6,695
                       Non-current
                       liabilities
                       related to
                       business
                       combinations
                       and to non-
                       controlling
                       interests          1,390        388
                                           Provisions and
                                            other non-
    Non-current                             current
     assets            76,958     58,185    liabilities       9,704      9,326
                                           Deferred tax
                                            liabilities       6,560      3,808
    Inventories,
     accounts
     receivable
     and other
     current                               Non-current
     assets            16,054     13,578   liabilities       30,943     20,217
                                           Accounts
                                           payable and
    Cash and cash                          other current
     equivalents        6,538      6,465   liabilities        9,078      8,424
                       Current
                        liabilities
                        related to
                        business
                        combinations
                        and  to non-
                        controlling
                        interests           207         98
                       Short-term
                        debt and
                        current
                        portion of
                        long-term
                        debt              6,753      1,565
                                           Current
    Current assets     22,592     20,043    liabilities      16,038     10,087
                       Liabilities
                        related to
    Assets held         assets held
     for sale or        for sale or
     exchange              44      7,036    exchange             14      1,672
    -----------           ---      -----   -----------          ---      -----
                                           Total
                                            LIABILITIES &
    Total ASSETS       99,594     85,264    EQUITY           99,594     85,264
    ------------       ------     ------    -------------    ------     ------

Appendix 10: Definitions

Re-presentation of Merial results

In accordance with IFRS 5.36 and as Merial has ceased to be qualified as held for sale or exchange in Q1/2011, the results of Merial classified as held for sale or exchange in previously-issued financial statements have been reclassified and included in income from continuing operations for all periods presented.

Definitions of non-GAAP financial indicators

Net sales at constant exchange rates

When we refer to changes in our net sales “at constant exchange rates”, this means that we exclude the effect of changes in exchange rates.

We eliminate the effect of exchange rates by recalculating net sales for the relevant period at the exchange rates used for the previous period.

Reconciliation of reported net sales to net sales at constant exchange rates for the second quarter and the first half of 2011


    (millions of euros)                            Q2 2011         H1 2011
    -------------------                            -------         -------
    Net sales                                        8,349          16,128
    Effect of exchange rates                          (528)           (244)
    Net sales at constant exchange rates             8,877          16,372
    ------------------------------------             -----          ------

Net sales on a constant structure basis

We eliminate the effect of changes in structure by restating prior-period net sales as follows:

  • by including sales from the acquired entity or product rights for a portion of the prior period equal to the portion of the current period during which we owned them, based on sales information we receive from the party from whom we make the acquisition;
  • similarly, by excluding sales in the relevant portion of the prior period when we have sold an entity or rights to a product;
  • for a change in consolidation method, by recalculating the prior period on the basis of the method used for the current period.

Worldwide presence of Plavix®/Iscover®, Avapro®/Aprovel®

When we refer to the “worldwide presence” of a product, we mean our consolidated net sales of that product, minus sales of the product to our alliance partners plus non-consolidated sales made through our alliances with Bristol-Myers Squibb on Plavix®/Iscover® (clopidogrel bisulfate) and Aprovel®/Avapro®/Karvea® (irbesartan), based on information provided to us by our alliance partner.

Business net income

Sanofi publishes a key non-GAAP indicator in response to the application of IFRS 8. This indicator “Business net income”, replaced “adjusted net income excluding selected items”.

Business net income is defined as Net income attributable to equity holders of Sanofi excluding:

  • amortization of intangible assets,
  • impairment of intangible assets,
  • fair value remeasurement of contingent consideration liabilities related to business combinations,
  • other impacts associated with acquisitions (including impacts of acquisitions on associates),
  • restructuring costs *,
  • other gains and losses (including gains and losses on disposals of non-current assets*),
  • costs or provisions associated with litigation *,
  • tax effects related to the items listed above as well as effects of major tax disputes,

*Reported in the line items Restructuring costs and Gains and losses on disposals, and litigation, which are defined in Note B.20. to our consolidated financial statements.

Sanofi : www.sanofi.com
Media Relations: (+) 33 1 53 77 46 46 – E-mail : MR@sanofi.com
Investor Relations : (+) 33 1 53 77 45 45 – E-mail : IR@sanofi.com

SOURCE Sanofi


Source: newswire