Sanofi SA

PAR:SAN

Earnings Call Transcript 2017-Q4

[Operator]

Ladies and gentlemen, thank you for standing by. Good afternoon, good morning. Welcome to the Sanofi Q4 and Full Year 2017 Earnings Result Conference Call and Live Webcast. I'm Emma, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.At this time, it's my pleasure to hand over to Mr. George Grofik, Vice President, Head of Investor Relations at Sanofi. Please go ahead, sir.

[George Grofik, Head of Investor Relations]

Good morning and good afternoon to everyone on the call. Thank you for joining us to review Sanofi's fourth quarter and full year results. As usual, you can find the slides of this call on the Investors page of our website at sanofi.com.Moving to Slide 2. I'd like to remind you that information presented in this call contains forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. I refer you to our Form 20-F document on file with the SEC and also our Document de Référence for description of these risk factors.With that, please advance to Slide 3, and let me introduce our speakers today.With me are Olivier Brandicourt, Chief Executive Officer; Elias Zerhouni, President, Global R&D; and Jérôme Contamine, Executive Vice President and Chief Financial Officer. Also joining us for the Q&A session are Olivier Charmeil, Executive Vice President, General Medicines & Emerging Markets; Karen Linehan, Executive Vice President, Legal Affairs and General Counsel; David Loew, Executive Vice President, Sanofi Pasteur; and Alan Main, Executive Vice President, Consumer Healthcare; Stefan Oelrich, Executive Vice President, Diabetes and Cardiovascular; and Bill Sibold, Executive Vice President, Sanofi Genzyme.First, Olivier will discuss the key highlights, then Elias will provide an update on our efforts to sustain innovation. Lastly, Jérôme will review Sanofi's financial results before we open the call up to Q&A.As in the previous 3 quarters, we will refer to the sales growth as -- at both constant exchange rates and constant structure in order to facilitate comparisons on a like-for-like basis.With that, I'd like to turn the call over to Olivier.

[Olivier Brandicourt, Chief Executive Officer and Director]

Thank you, George. Good morning, good afternoon to everyone. Welcome to our fourth quarter and full year earnings conference call.Before -- on Slide 5, before I discuss 2017 performance, I want to take a couple of minutes to step back and review our recent achievements as we focus on the strategic transformation of Sanofi. In terms of reshaping the portfolio, we just announced the acquisition of Bioverativ and Ablynx, 2 important new members, which will become part of the Sanofi family soon, subject to completion of these acquisitions. This will strengthen our leadership in Rare Diseases, especially in rare blood disorders, but we'll return to this shortly. We also expect to sign definitive agreements for our EU Generics business in third quarter. And we've recently expanded our Vaccines GBU through business development.When we think about the launches, we have been candid that several are progressing more slowly than anticipated. On the other hand, we are delighted with the rollout of our new Immunology franchise, especially Dupixent, which has exceeded our expectations.In term of simplification, we have delivered EUR 1.5 billion of savings we promised, and we have gained global rights to fitusiran, further supporting our aim of leadership in rare blood disorders.When it comes to innovation, you've heard about the transformation of our R&D organization on our Sustaining Innovation Day in December. Since then, we have scaled up our investment in cemiplimab and dupilumab to reflect the commercial opportunities. And looking ahead, the acquisitions of Bioverativ and Ablynx will internalize the promising late-stage rare disease asset and a proven discovery engine in the Nanobody platform.Overall, we are pleased with the steps we have taken to reposition and strengthen the company.Turning to the Bioverativ and Ablynx deals. I do want to stress that we have maintained our financial discipline in our approach to M&A. In particular, we expect both deals to deliver returns above our cost of capital within 3 years, and we expect Bioverativ to be immediately accretive to earnings. So we remain consistent with the guiding criteria you have heard us state over many quarters.Slide 7. In a series of 3 strategic actions in less than a month, we believe we are well on our way to building a leading rare blood disorder franchise. As you know, Bioverativ will bring to Sanofi a ready-made, strong franchise in the $10 billion hemophilia market. However, we are looking at this acquisition more broadly as a platform for expansion in rare blood disorders. Ablynx will be an important element of this strategy. In the near term, it will enhance our portfolio through caplacizumab, which we expect to be approved this year as the first treatment for acquired TTP.When looking further down the line, if we think about adding in fitusiran along with earlier-stage assets from Bioverativ, Ablynx and Sanofi, you can see why we think this is a great opportunity to build a sustainable leadership position in rare blood disorders.Slide 8. Of course, our interest in Ablynx extends far beyond 1 rare disease asset. As you've heard at our Sustaining Innovation Day, we have transformed our approach to R&D based on a strategic shift towards biologics, multi-targeting and proprietary platforms. Ablynx ticks all 3 of these boxes, and in particular, it is already a core element of our multi-targeting strategy through our Nanobody partnership in a range of immunoinflammatory diseases. Nanobodies are biologics, which combine the specificity of antibodies with many of the advantages of small molecules. Being able to access this unique technology platform by bringing it fully in-house will clearly strengthen our discovery and development efforts.Turning to the financials. On a full year basis, Sanofi delivered 2017 results, which were in line with our guidance in spite of a challenging fourth quarter. At constant exchange rates and constant structure, our sales grew by 0.5% to EUR 35 billion. At CER, our business EPS was broadly stable at EUR 5.54 despite the EUR 0.10 impact of the Dengvaxia charge.As you know, changes in structure had the distorting effect on our sales growth in 2017. If we adjust for this, then our sales growth in CER and our constant structure would have been 0.5%. In other words, we delivered stable sales and even achieved slight growth despite the expected decline in our U.S. diabetes and cemiplimab franchises. This was clearly helped by the roughly EUR 0.5 billion in incremental new launch sales.Turning to the fourth quarter. Here, you can see the sales picture across our 5 GBUs. The highlight was a continued double-digit growth in Sanofi Genzyme. Our Vaccines business only grew by about 1% for reasons I will discuss later. And as expected, we saw declines in DCV and GEM reflecting losses of exclusivity.Turning to Slide 12. We are now looking at sales by franchise and geography in Q4. Our performance in Developed Markets was similar to the first 9 months, with the growth of Sanofi Genzyme and Vaccines being more than offset by the pressures on our diabetes and established product franchises. For Emerging Markets, however, fourth quarter growth of 2% was slower than in previous quarters, mainly as a result of a decline in vaccine sales, and this was in part due to the Dengvaxia label update.For our Specialty Care franchise on Slide 13, sales grew by 16.5% in the quarter and 14.5% for the year. The main drivers were Dupixent, which delivered sales of EUR 118 million in the quarter and double-digit growth in our Multiple Sclerosis franchise. We also saw good progress from Kevzara, our other immunology asset; and a strong quarter in the rare disease, which ended the year with fourth quarter growth of 8%. Our MS franchise continued to grow despite increased U.S. competition. And here, the 11% fourth quarter growth was entirely driven by Aubagio, whereas Lemtrada was stable.Before I move on from Specialty Care, I would like to say a few words about the global rollout of Dupixent. You have seen from the fourth quarter sales and Dupixent is performing strongly in the U.S., more than 33,000 patients have now been prescribed this groundbreaking medicine, and our goal in '18 is to strengthen our message in the U.S. with prescriber, but also with consumers through DTC.Outside the U.S., we launched Dupixent in 3 European countries, including Germany. In '18, we will launch across the rest of Europe as well as Japan and select Emerging Markets. So we have a very busy year ahead with Dupixent in atopic dermatitis.Furthermore, we believe we have the best-in-class profile of any biologic in asthma. We filed the BLA, and we are now engaged in prelaunch activities with specialists. We are looking forward to bringing this important new treatment option to markets in this fourth quarter.Turning to Vaccine. Fourth quarter sales grew by 1.2%, but were up 8.3% for the year. A number of factors affected the Q4 performance. On the negative side, as we had signaled, the phasing of CDC orders of Menactra and the high base for comparison of Pentacel in the U.S. had an adverse impact.Sales for the pediatric combination family were flat, as strong performances in Europe and China were offset by a timing impact for tenders in the Emerging Markets. Of course, what we did not foresee was a label update for Dengvaxia. This resulted in negative revenues for Dengvaxia in the quarter, which in turn lowered our overall vaccine sales growth by 2%. Offsetting these impacts, we delivered a strong performance in flu vaccines, with sales up 21%. This was driven by pandemic purchases in the U.S. and by the launch of VaxigripTetra in Europe. With the help from the strong flu performance, our European Vaccines business continued its trend of accelerated growth with sales up 38%.Now looking to 2018. I want to make you aware that Vaccine sales during the first half are expected to be lower than last year. This will be mostly related to a testing issue for Pentaxim in China and the phasing of Menactra orders. Please keep in mind, however, that sales in the first half of the year for vaccines are typically lower than the second half given the seasonality of the flu franchise.On Slide 16, sales of our Global Diabetes franchise declined 16% in the fourth quarter and 11% for the year. This was in line with our expectations and reflected the high base for comparison in the U.S. that we had signaled for the quarter. U.S. Diabetes sales declined by 30% in the quarter, which compares with 20% in the first 9 months. This more than offset good growth in Emerging Markets, which now account for nearly 1/4 of our Global Diabetes sales and a slight increase also in Europe.Despite the tough backdrop, we continued to make progress with Toujeo, which achieved full year sales of over EUR 800 million and continued to gain share globally. Now when we look at the early part of '18, U.S. script trends in diabetes are in line with our expectations and consistent with the payer coverage update we provided in November.In particular, we are seeing the expected impact of the loss of some coverage in Medicare Part D since January 1.Switching to Praluent. Quarterly sales exceeded EUR 50 million. Of course, we are eagerly awaiting the top line results from ODYSSEY OUTCOMES, which we expect soon and will present as a late breaker at ACC with a slot reserved on March 10.Turning to our CHC business. Sales grew by 2.5% in the fourth quarter and 2.1% in the year. We were pleased to see a pickup in growth in the fourth quarter in the U.S. and Europe following a couple of quarters that were impacted by seasonal factors. Growth in Europe was especially strong, helped by the strong cough and cold season.On the other hand, after several quarters of improved performance, our CHC business in Emerging Markets declined slightly. This was impacted by lower sales in Russia, largely from a change in the distribution agreement with the third party.On my final slide, our Emerging Markets business remained a key driver, with sales up 6% for the year. As I mentioned earlier, our performance in the fourth quarter was somewhat weaker due to Vaccines. However, China remained a strong double-digit growth driver.And with that, I'd like to hand over to Elias.

[Elias Adam Zerhouni, President of Global Research & Development]

Well, thank you, Olivier. It's a real pleasure to be here and to have the opportunity to update you all on our recent developments and how these developments are helping to build our innovation engine.So first, I'd like to start with Ablynx. And if it wasn't very clear on the call a couple of weeks back, I want to really tell you how much we value the acquisition of Ablynx and how impressed we are by the Nanobody technology and what this will bring to our discovery and development capabilities as mentioned by Olivier.For those of you who are less familiar, this is a very unique platform, which allows the efficient development of highly specific biologic agents, which can be readily customized to hit 2, 3 or more targets inside a single pathway. And unlike traditional antibodies, they share some of the beneficial characteristics of small molecules, which include the ability to hit tough targets such as ion channels. And they have the potential also to be delivered by different routes such as inhaled, oral or topical routes. It's also important to note that this technology is derisk to a large degree with over 45 programs underway, 8 of which are in clinical trials and more than 2,000 patients and volunteers exposed to treatment. So we were already actually attracted by this platform to have worked with Ablynx since 2015 in MS and to have signed a broad Nanobody collaboration in immuno-inflammation in 2017. So it's fair to say that we know the technology quite well, and we know what it can bring to Sanofi. And as mentioned by Olivier, it is right in line with the transform strategy that we've put in place of biologics, proprietary platforms and multi-targeting capabilities in the novel molecules.I also want to say a few words about caplacizumab. As you heard from Olivier, we're trying to build a rare disease -- rare hematology disorder franchise. And this slide here shows the results of the recent HERCULES Phase III study of caplacizumab in patients with acute thrombus -- thrombotic thrombocytopenic purpura, which is a disease that prevents platelets from being able to do their job and actually aggregates the platelets to the point where you have microthrombi throughout the body with a 20% mortality rate, and it tells you why we think this is such a promising asset. As you can see, blood platelets in this sick group of patients rapidly return to normal with caplacizumab and the active group scoring much better than placebo across a range of relevant secondary endpoints, including recurrence rates, days in the ICU and the hospital and especially requirements for plasma exchange, which is the only effective form of therapy today. We think the data is very compelling, especially set against the high unmet need in this potentially life-threatening rare chronic disorder. As a consequence, we are confident caplacizumab will be the first drug to be approved for aTTP potentially in Europe in 2018 and in the U.S. next year. As Olivier said, this drug should fit in very nicely along Bioverativ's hemophilia franchise.Speaking of Bioverativ, Olivier already explained how this provides the platform to expand in rare blood disorders. But from the R&D perspective, we believe it has a number of very attractive assets in development as well. In its current field of expertise, Bioverativ is utilizing a promising peptide linker technology known as XTEN to build on its success with Eloctate and Alprolix and further lengthen the time of efficacy of the Eloctate and Alprolix molecules, and therefore, reduce the dose frequency, which is a very valuable aspect of therapy in hemophilia. The need here is greatest in hemophilia A, where extended half-life factors are currently given twice weekly and the aim is to get to once-weekly dosing or less.Another particularly interesting asset is Bioverativ's 009, which is in Phase III for cold agglutinin disease, an autoimmune anemia. And by modulating the complement cascade, this may be the first treatment for this potentially serious disorder, which is reflected in its FDA breakthrough therapy designation.At earlier stages, Bioverativ has access to novel gene-editing technology through its alliance with Sangamo. And this opens the ability and puts it at the forefront of cell therapy for 2 important genetic disorders, sickle cell anemia and beta thalassemia. Both are characterized by abnormalities in red blood cell production, and this technology could help restore normal function to these patients.Switching gears now to our programs with Regeneron in Oncology and Immunology. We recently announced a major scale-up in the combined investment efforts behind our PD-1 cemiplimab, and this followed the positive results of the pivotal study in cutaneous squamous cell carcinoma and was based on our assessment of the opportunity across a range of tumor types, including non-small cell lung cancer. And in addition, we and Regeneron announced an acceleration of our program with dupilumab, Dupixent, in COPD and certain allergic disorders together with an expansion of the program for a complementary IL-33 antibody. Each of these investment decisions was based on the strength of the clinical data we're seeing with these assets.On my final slide, I want to signal some important upcoming milestones in what will be a very busy year for our R&D organization. We are planning over 15 new pivotal Phase III studies this year. And so you can see -- you can expect to see a number of important milestones or regulatory submissions, including for our Oncology assets, cemiplimab and our CD38 isatuximab as well as sotagliflozin in type 1 diabetes, the U.S. filing of caplacizumab. In addition, we plan to submit important label extensions for dupilumab and Praluent, and the latter obviously will be based on the ODYSSEY OUTCOMES as mentioned by Olivier.So with that, I'd like to hand it over to Jérôme.

[Jérôme Contamine, CFO & Executive VP]

So thank you, Elias, and good morning, and good afternoon, everyone. I'll go now to Slide 26. And before discussing the details of the P&L, I would like to highlight [indiscernible] on the impact of ForEx on the reported fourth quarter figures.So in total, currency movements reduced reported sales when translated in euro by 6.1% or EUR 539 million and reported business EPS by 6.4% or EUR 0.08 per share. This clearly resulted also in an overall adverse FX impact on both sales and business EPS for the full year of approximately 2%.Now I move to Slide 27. Looking at the P&L on a reported basis, sales in the fourth quarter were EUR 6.7 billion, representing 4.1% CER growth. As in the previous quarters, we faced a headwind from the loss of Animal Health contribution. In addition, Dengvaxia label update impacted our business operating income by EUR 158 million in the fourth quarter. Against this, we benefited from a substantial reduction in the Q4 effective tax rate to adjust to a full year rate of 23.5%. These impacts resulted in business net income declining 10.8% at CER in the quarter to EUR 1.3 billion, with business EPS down 8.8% to EUR 1.06 held by share repurchases. If we add back the EUR 0.10 Dengvaxia charge, business EPS would have been broadly stable.On the subject of tax, when we look to 2018, the impact of tax legislation changes, especially in the U.S., will allow us to lower our expected effective tax rate for the year -- I mean, the year 2018 to around 22%.Now I move to Slide 28. Here, you'll see our P&L at CER on [ cost ] structure in the fourth quarter. Our gross profit declined at a faster rate on sales, as a benefit of efficiency savings of Specialty Care growth was more than offset by charges associated with Dengvaxia and the accelerated declines in U.S. Diabetes on sevelamer.At the BOI level, there were some offset from the Regeneron contribution in our associates' plant, which is now becoming a meaningful driver. Overall, though, with continued investment behind Immunology launches and priority R&D programs, we were unable to achieve the operating leverage we saw in the first 9 months.Looking forward, to help you in your modeling for 2018, on the full year basis at CER, at constant exchange rate, we expect the gross margin to be between 70% and 71% as compared with 70.6% in 2017.Regarding R&D and SG&A, we expect the total, i.e., the total operating expenses to grow between 3% and 4%. This includes the acquisitions of Bioverativ and Ablynx and their impact in 2018. And of course, it was not in the 2017 figure. Also this increase is mostly driven by R&D expenses increase, which is definitely in line with what Elias has presented before as well as Olivier in connection with our own internal program plus the contribution of the 2 acquisitions.On Slide 30 (sic) [ 29 ], I would like to note that in a challenging year, Sanofi met all of its 2017 financial performance objectives. Despite the challenges we faced, we delivered our business EPS guidance for the year, and we met the high end of our initial guidance.I'll now turn to the next slide. Our board is proposing an annual dividend of EUR 3.03, so EUR 3.03, which represents a 2% increase. On the 24th consecutive year, the Sanofi has increased its dividend. Our partnership dividend policy remains an important part of our value proposition to shareholders. And based on the average share price last month, the proposed dividend implies a 4.2% dividend yield. In the past year, including buybacks, we returned EUR 5.5 billion to shareholders while still maintaining a strong balance sheet. I should also point out that following the recent acquisition announcements, our credit ratings of AA by Standard & Poor's and A1 by Moody's have been both been reaffirmed.On my final 2 slides, I want to set the scene for the coming year. When we think about our sales performance in 2018, a number of headwinds are likely to impact the first half despite the expected strong performance of Dupixent. As Olivier mentioned, Vaccine sales are likely to decline in the first half as a result of order phasing and Pentaxim sales, in particular of China.In addition, in the U.S., we are facing generization of sevelamer, which we did not have in the first half of last year.In Diabetes, as we noted in the third quarter, we'd managed some expected loss of coverage in our Part D business and a continued decline in average net prices, which will persist throughout the year. As you know, last quarter, we refined our 2015 to 2018 Diabetes sales outlook to minus 6% to minus 8%. And we are in the final year of this period. For your modeling consideration, the midpoint of this outlook would imply a decline in 2018 of around 9% at CER.By the second half, however, we expect some of these factors to annualize and to be more than offset by positive drivers. Clearly, in addition to Dupixent, the consideration of Bioverativ on the impact of new launches such as Flublok, Kevzara and Admelog will be important. We also await the results for the ODYSSEY OUTCOMES study, which could provide an upside opportunity for Praluent. All these means, we expect the second half bias to our growth during 2018.Now turning to the outlook for the year as a whole. In 2018, we expect to grow business EPS by between 2% and 5% at constant exchange rate. For the reasons I just outlined, we should assume that this growth would be weighted to the second half. In terms of FX, based on December 2017 exchange rates, the impact on business EPS is expected to be minus 3% to minus 4%. However, given the volatility we are seeing in the currency markets in January, the FX impact could be closer to minus 8% in the first quarter at present exchange rates. This impact should, of course, fade away in the following quarters.I would now like to turn the call back to Olivier.

[Olivier Brandicourt, Chief Executive Officer and Director]

Well, thank you, Jérôme. So to summarize against the challenging backdrop, we worked hard in 2017 to create value by executing on our strategic transformation. We delivered on all of our financial objectives despite expected and unexpected challenges. We successfully launched the new Immunology franchise led by Dupixent. We made good progress with our pipeline and in advancing our research capabilities as you heard at our R&D Day. And finally, through our recently announced acquisitions, we will have a strong position in rare blood disorders, which we expect to create long-term value for our shareholders.So with that, I'd like to hand over to George to start the Q&A.

[George Grofik, Head of Investor Relations]

Thank you, Olivier. We'll now open up the call for your questions. [Operator Instructions]

[Operator]

[Operator Instructions] First question comes from the line of Mr. Meunier with Morgan Stanley.

[Vincent Meunier, Research Analyst]

The first question is on the capital allocation in the context of the recent deals. Do you have any interest in making more biotech acquisitions? Or do you prefer now other options like acquiring assets in other areas like consumer? Or focusing on the integration of these 2 assets? And can you also make a few comments on the integration of the research units in Belgium and the U.S.? And I have also a question on the 2018 guidance. Is it possible for you to give the guidance excluding the Bioverativ and Ablynx deals?

[Olivier Brandicourt, Chief Executive Officer and Director]

All right. Thank you very much, Vincent. So capital allocation, you may remember that we had given ourselves a global envelope for inorganic growth of about EUR 20 billion, right, and that was for all bolt-ons. And we have achieved, with these 2 acquisition, about EUR 13 billion that tells you that we have still eventually some funding to eventually get new opportunities. I will not make any specific comment on CHC. As you know, CHC is one of our GBUs. We have already done a deal with our swap in 2016, and it remains again a very important business for us, and we continue to look at potential opportunities, but I won't go beyond that. We have consistently communicated that our whole priority in term of allocation would be -- and use of our free cash flow would be organic investment; acquisition, as we just described; dividend; and stock repurchase. And again, as we have demonstrated over the last several years, we have, and Jérôme mentioned it, share buybacks has been a very important overall capital allocation strategy since we have repurchased about 5 billion in the last 2 years. So that's about capital allocation. Your next question maybe, Elias, you want to talk about integration of R&D from Ablynx.

[Elias Adam Zerhouni, President of Global Research & Development]

Sure. Yes. Well, as you know, Vincent, we've developed quite a bit of good expertise in the integration as you've seen with Genzyme. At the current time, obviously, we're focused on closing the transaction, so can't comment on the specifics of the integration as we're going through it. However, you should note that we have over 900 employees in Belgium. We have facilities there in manufacturing, so we are really hoping to preserve actually the effectiveness of these organizations by [indiscernible] that's located in Boston, in Waltham. So we do obviously want to preserve the effectiveness of these organizations as we have in the past, but integration topics will be taken up later in the year.

[Olivier Brandicourt, Chief Executive Officer and Director]

Okay. And on your question on the guidance, I'm going to ask Jérôme to answer.

[Jérôme Contamine, CFO & Executive VP]

Yes. Thank you, Olivier, and thank you, Vincent -- good morning -- for your question. So actually, as you understood, I mean, we already gave you a few information, I think. The first is that Bioverativ, we assume it will be accretive as early as 2018. The magnitude of this accretion will depend upon the exact timing of the closing of the transaction as well as our pace of integration, and of course, -- I mean, the details on the -- what we could decide to do or not do when it comes to Bioverativ, for instance in the R&D. Elias discussed that, so we may revise somewhat the R&D plan here. And Ablynx as well, I mean, this will clearly depend upon the integration closing timing, which as you know, is planned for Q2. I also gave you a few guidelines here in this call, which is, a; on the gross margin where we expect the gross margin to stay between 70% and 71% at constant exchange rate. And this compared to the 70.6% for '17, obviously, this includes these acquisitions. Obviously, as well you could say that Ablynx as such will not be a contributor in the gross margin for obvious reasons. So very marginally if we -- when we capitalize, it's just has been launched, but I would say it should not impact very much our figures in '18. And the last thing I tried to really give guidance on is on the overall OpEx line, and I think I said that -- and we said our overall R&D plus SG&A line should go together with inclusion of these acquisition growth by between 3% and 4%, and it's difficult to be more precise here. And this includes, from the basis where we are, the contribution of the acquisitions. Of course, I mean, as you understood, the bulk of this increase is -- could be weighted towards R&D, both in connection with the program that Elias has discussed, including our accelerated investment with our partner, Regeneron, and the cemiplimab as well as further life cycle management and development on the -- on Dupixent, dupilumab, and on the IL-33. And so that's maybe what you should have in mind. Of course, it includes also expenses from Ablynx as an example, which clearly will be mainly R&D expenses. Last, it's difficult to go into more details because as a matter of fact, we saw a tax -- max tax rate, right, the interest rate charges, I mean, at the end of the day, it's a combination, and this combination results in the guidance that we have given to you.

[Olivier Brandicourt, Chief Executive Officer and Director]

Okay, Vincent. Thank you very much. Next question?

[Operator]

The next question comes from the line of Pete Verdult with Citi.

[Peter Verdult, Director]

It's Pete Verdult here from Citi. Two questions for Olivier or Bill. Firstly, on the MS franchise. On Aubagio, can you give any more details as to the settlement with the generic companies? Should we assume that we should see Aubagio generic some way midway between 30-month stay in 2020 and the first patent expiring in '26? And then on Lemtrada, do you think that franchise can grow going forward? And is the impact purely OCREVUS? Or is -- are you also seeing an impact from MAVENCLAD in Europe? I'm only allowed to ask 2 questions. So I'll leave you there.

[Olivier Brandicourt, Chief Executive Officer and Director]

All right. Thank you very much, Peter. It happens that Karen Linehan, our General Counsel is with us. So she will answer the first question on Aubagio. And Bill, you will answer the Lemtrada question. So Karen, please.

[Karen Linehan, Executive VP of Legal Affairs & General Counsel]

Good morning, and good afternoon, thank you for the question. Please recall that we sued all our anti-filers, and we triggered that 30-month stay which meant that no generic could enter the market before March of 2020. In U.S., we have settled all those cases, they've been dismissed and the settlement was favorable relative to this -- the end of the 30-month stay. The data will be updated in our upcoming 20-F.

[Olivier Brandicourt, Chief Executive Officer and Director]

Okay. So few weeks to have the final answer Peter. Lemtrada?

[William J. Sibold, Executive Vice President]

Thanks, Peter. It's Bill here. So just a couple of context points here. So the high-efficacy segment is now the fastest-growing segment in Multiple Sclerosis. We saw that the global share is now about 12.3%, and in the U.S., it's up to 18.7%. So really very strong growth there. And when you think about the revenue growth for Lemtrada, it's impacted by its unique and durable effect of dosing. And the patient base must be essentially replaced every 2 years. So think about it. You have 5 infusions in the first year in consecutive days. You wait a year, you have 3 infusions, and then you likely don't have any infusions after that. So we're talking about 53 weeks where a patient is actually generating revenue, if you will, and they benefit from that long-term effect. So global sales growth was 13.6% in Europe, 18.5% in the U.S., 7.3% on the year. And you see, in Q4 in the U.S., sales were down 10%, and that has a lot to do with that unique dosing regimen that I mentioned. Also, we're coming off a very strong Q4 2016, which was void by a strong Q4 2015. So if you recall, in 2015, October 2015, we got a permanent Q code in the U.S. We had a lot of first infusions in Q4 2015 and Q4 2016, no second courses. Those 3 additional second course infusions took place. So in 2017, those patients are no longer receiving Lemtrada.

[Olivier Brandicourt, Chief Executive Officer and Director]

Yes. Because you had very good clinical data over a period of how many, 7 years.

[William J. Sibold, Executive Vice President]

Exactly. As we reported out at ACTRIMS last year, the 7-year data, where you have around 50% of patients after 6 years since their last infusion not receiving anything. So truly, there is a huge benefit to patients and to the systems from a cost perspective over time. And that's why Lemtrada's been considered such a cost-effective medication.

[Olivier Brandicourt, Chief Executive Officer and Director]

Since we are on MS, why don't you talk about Aubagio performance, Bill?

[William J. Sibold, Executive Vice President]

Yes. So Aubagio was very strong in 2017. Patients grew by over 22%, and sales grew 23%. And just some context there, Aubagio is ahead on patient market share, ahead of TECFIDERA in 31 countries around the world. In Q4, sales were up almost 14% globally, and they were up about 10% in the U.S. And just a context, in the U.S., TRxs were up about 2% quarter-to-quarter, so from Q3 to Q4. And we had a negative impact of around 4% due to an inventory decrease. So adjusted, the U.S. growth would have been around 14% in the U.S.

[Olivier Brandicourt, Chief Executive Officer and Director]

Right. And globally, Aubagio is up, what, 23%?

[William J. Sibold, Executive Vice President]

23%, yes.

[Olivier Brandicourt, Chief Executive Officer and Director]

Okay. All right. Peter, thank you very much.

[Operator]

Next question comes from the line of Florent Cespedes with Societe Generale.

[Florent Cespedes, Senior Equity Analyst]

2 products-related questions, please. First are for Bill on Dupixent. Could you share with us the feedback you have from the prelaunch activities on severe asthma as this market is more crowded than atopic dermatitis? And my second question for Stefan or Elias on Praluent. Will you provide an update on the positioning and the potential of this drug when you will have the data to declare available? And my follow-up question is, do we have the data internally already? And when it will -- if it is the case, do we intend to send a press release? Or do we have to be patient and wait for the ACC late-breaking session -- presentation?

[Olivier Brandicourt, Chief Executive Officer and Director]

So thank you very much, Florent. I think I can answer the last one. Unfortunately, I think you will have to be patient. And we have a late-breaker, which is already booked on March 10, and that's where we're gearing towards. So that's the answer to the last one. Then I go to Bill, Dupixent. Do you have any insights, Bill, on asthma prelaunch?

[William J. Sibold, Executive Vice President]

Yes. So we've been working diligently on the prelaunch for asthma. You mentioned that it is a competitive market. We believe that we have a very differentiated product. We have a consistent effect that we'd seen on both exacerbations and lung function. The feedback that we've been getting so far from physicians in feedback sessions that we've had is very favorable towards Dupixent. They believe that it does have a differentiated profile. So through the rest of 2018 or as we get into 2018, expecting to launch in the fourth quarter in the U.S., we'll continue to build our infrastructure. Our teams will be in place and will be ready to go once we have approval. We're optimistic about the profile, as I said. It is the only product of its class, IL-4, IL-13, with really demonstrated strong effects on 2 key measures of efficacy.

[Olivier Brandicourt, Chief Executive Officer and Director]

Thank you very much, Bill. Florent, as you heard us at the initiation of this call, we still have very much commitment behind Praluent. So I'm going to ask Stefan to talk about patient population and positioning and potentially utilization criteria with payers. If you can draw the picture for Florent, please?

[Stefan Oelrich]

Yes. Thank you, Olivier. Stefan here. So first thing, by the way, we don't have the data, okay? So we will not have the data in hand until very shortly before the late-breaker. So not only you will have to wait, we're waiting as well for the data. Second thing on the positioning and the potential. So on positioning, we've been already anticipating, obviously, our patient population in line with the ODYSSEY population. So we're going after high-risk patients and after FH patients for the patient population that we target, and we also anticipate that guidelines, if our trial reads positive, as we believe, will fall in that direction because this would be then the second time that PCSK9 pass number would have proven an outcome benefit, which would be class defining later on for guideline. In terms of our potential, we believe that following the trials, we will further -- it will further help to improve utilization management criteria that may be further lifted. We've seen some progress with this following also the Repatha readout from their trial over -- all over 2017 of about 10% improvement in terms of utilization management criteria, lowering the rejection rates from about 50% to 40%. So we would anticipate that as our trial reads out positive as we hope that, that will continue. And then in a second step, if we really redefine that class as we expect, we would anticipate end of 2018, beginning of 2019 a change in the guidelines and that change will open a new opportunity to further maximize the potential of this opportunity.

[Olivier Brandicourt, Chief Executive Officer and Director]

Thank you very much. Elias, do you want to add anything on ODYSSEY OUTCOMES?

[Elias Adam Zerhouni, President of Global Research & Development]

No, no. I just wanted to be clear that we do not have the data in-house. That was Florent's question and Stefan addressed.

[Olivier Brandicourt, Chief Executive Officer and Director]

Okay. All right. Perfect. Thank you very much. Thank you.

[Operator]

The next question comes from the line of Graham Parry with Bank of America Merrill Lynch.

[Graham Glyn Charles Parry]

So firstly, I was hoping you could give us some more line of sights on R&D expenses going forward. And you'd previously guided to EUR 6 billion of spending by 2020, but that was originally given back in 2015 when you still owned Merial. You haven't bid for Bioverativ or Ablynx, and euro-dollar was $1.10, probably $1.20 to $1.24 now. So could you give us an update on that guidance number? Would it include Bioverativ? Should we be adjusting it for currency? And secondly, your guidance for the year is negative -- for 2018 is negative 3% to 4% FX headwind December rates. Now clearly, euro-dollar is different to December rates. And you've given us a feel for what Q1 would look like at spot, but could you help us understand what you think of FX headwind would be for the remainder of the year, if we spot FX rates rather than December? And then finally, on your guidance, you look to be in line with current consensus, but you've got a 3% boost from lower tax, and on our estimates, about a 3% boost from the acquisitions that weren't in consensus. So that implies you're operationally about 6% below consensus. So can you help us understand what operating profit margin, growth and margin progression is assumed in your guidance?

[Olivier Brandicourt, Chief Executive Officer and Director]

All right. Thank you very much, Graham. Jérôme, question 2 and 3, operationally and...

[Jérôme Contamine, CFO & Executive VP]

Yes. So on the FX...

[Olivier Brandicourt, Chief Executive Officer and Director]

FX.

[Jérôme Contamine, CFO & Executive VP]

So maybe I -- hopefully, I got your question. So first of all, as you know, we always guide on existing exchange rates because it's hard to guide on nonexisting, obviously. This is why we have decided to guide on the December exchange rates, and we have been systematic doing that. This is why we guided on the minus 3% to minus 4%, which is based on the average exchange rate for December. Now -- because clearly, there has been all this volatility ongoing, as you know, on the U.S. dollar, particularly being weaker, the U.S. -- the euro being stronger and a few other changes here, we also guided you for the first quarter. For the first quarter, it's fair to say that if we assume that this exchange rates we have now, let's say, up to from the beginning of the year to mid-Jan -- to mid-February, sorry, then we could expect that the impact of the first quarter will be around minus 8% versus last year. Of course, if you look forward, if you look at the low exchange rate, for instance, of the dollar versus the euro, which you have in the first quarter of '17, and then on a relative basis, the impact will be much lower when you go into the coming quarters. So I hope it clarifies, and maybe if it did not, you can just get your question back. On your last question, I think that we really tried to be, again, I mean, as precise as possible. I mean, you mentioned R&D and Olivier will comment on that, and we make it clear that we think that with what presented at the Innovation Day and we mentioned the EUR 6 billion, and on top of that, comes the Bioverativ as well as the Ablynx program, it's clear that we are heading to the EUR 6 billion plus quicker than planned, okay? So I think that's where we are. And also to help you even more, I mean, we have modeled -- we have tried to model the increase of the overall OpEx line, which, if recall you, was around EUR 15 billion in 2017, saying these OpEx lines should grow by 3% to 4% all together and mostly coming from the R&D. So I think with that, I think it gives you a view of where the R&D line is heading.On the tax rate, well, today, we are at 23.5%. This was the outcome of the full year of 2018 -- '17. So as you know, I mean, in tax, there is a lot of moving pieces across the world. Of course, the most important is the U.S., but I will not minimize the evolution of the tax rate in France either. So altogether, from this 23.5%, I mean, we just guided to 22% for 2018, meaning that we gained something at 1.5%. Now also you could say, when I look at the P&L, I mean, because we are doing this acquisition now, and so the charges, while the cost of debt will be limited, would not be exactly the same level of where we are in 2017. So I mean, it's hard to be more precise. And as you know, as -- on top of that, the consensus is maybe not really taking into account all the FX changes, which just happened recently. So it's hard for me to get closer on -- more precise versus what I have with actual exchange rate on the guidelines -- on the guidance I'm giving to you today to compare with a consensus, which was based from previous situation, previous tax rate, previous exchange rate, no [indiscernible] acquisitions either. So hopefully, it helps you to understand where we are.

[Olivier Brandicourt, Chief Executive Officer and Director]

Thank you, Jérôme.

[Graham Glyn Charles Parry]

Just coming on the R&D line and the -- so you're saying EUR 6 billion plus the Bioverativ and Ablynx. But should we make an adjustment down on the EUR 6 billion, given what's happened with FX? And -- or are you saying in absolute terms, in today's FX, you're still thinking 2020 would be north of EUR 6 billion on the R&D because of these -- the acquisitions?

[Jérôme Contamine, CFO & Executive VP]

Okay. You speak about 2020, maybe, Olivier, you want to...

[Olivier Brandicourt, Chief Executive Officer and Director]

Well, I think the target of EUR 6 billion comes maybe slightly earlier than 2020, maybe including the FX impact because of what we are getting from Ablynx and Bioverativ and also the investment in immuno-oncology. So referring back to the day we spent here on innovation, you have seen the richness of the pipeline. We have to prosecute now. You heard Elias earlier about -- talking about 15, all right, Phase III starts. And so all of that leads us to EUR 6 billion maybe earlier than 2020.

[Jérôme Contamine, CFO & Executive VP]

And now maybe to make the link between your 2 points, it's fair to say that with a lower exchange rate for the U.S. dollar versus the euro, it will benefit in absolute term in euro to our R&D line.

[Olivier Brandicourt, Chief Executive Officer and Director]

Sure.

[Jérôme Contamine, CFO & Executive VP]

So it's where it start to be a bit difficult, to be exact, but you could say that if you take a low exchange rate for the U.S. dollar versus the euro, it may offset what Olivier is describing in the long and medium term of the investment behind all our R&D. And in fact...

[Olivier Brandicourt, Chief Executive Officer and Director]

So -- and FX kind of helps us on the long term.

[Jérôme Contamine, CFO & Executive VP]

Yes. And it's kind of a limit of how you can [indiscernible] but it's true that altogether this would be...

[Olivier Brandicourt, Chief Executive Officer and Director]

It's a good point, the FX plays a role.

[Jérôme Contamine, CFO & Executive VP]

Yes.

[Olivier Brandicourt, Chief Executive Officer and Director]

Elias, do you want to add anything?

[Elias Adam Zerhouni, President of Global Research & Development]

No, no. I think it's an important -- I mean, the upside of high euro for me is R&Ds because we do a lot of R&D outside of Europe. That makes it cheaper for us to do, so we can maintain that line of EUR 6 billion.

[Olivier Brandicourt, Chief Executive Officer and Director]

That's Graham's point, but it's difficult to give him an exact date of which we're going to hit the EUR 6 billion.

[Elias Adam Zerhouni, President of Global Research & Development]

It's difficult to give -- R&D always has these moments of success or not, and it's very hard to predict. But my sense is that the high euro has always helped us in maintaining that

[Olivier Brandicourt, Chief Executive Officer and Director]

Yes, of course. All right, Graham, thank you very much.

[Operator]

Next question comes from the line of Philippe Lanone with Natixis.

[Philippe Lanone, Analyst]

One on Lantus. You have mentioned a more difficult H1. But what did you factor in your assumptions about the market share evolution with Tresiba from Novo, which will have an advantage of hypoglycemia from the end of this quarter possibly as an indication? So it might be also a more difficult H2 on this basis. Second one on Kevzara. We seem to have some slight hope of accelerated takeoff from the Q4 figure at low levels. So any comment on that?

[Olivier Brandicourt, Chief Executive Officer and Director]

Bill, can you start with Kevzara?

[William J. Sibold, Executive Vice President]

Absolutely. So look, I think the way to think about Kevzara as well is, in 2017, patients were essentially only getting the product through medical exception. So there wasn't a clear path to reimbursement. I'll get back to that in a second. We like some of the trends that there are in the U.S. market regarding IL-6 subcu. So in 2017, IL-6 subcutaneous class grew at 20% year-over-year with TRx, and that's outpacing the biologic market, which grew at about 5%. So we think that, that bodes very well. Now getting back to the reimbursement. We are expecting that through our efforts this -- in 2017 that we expect about 90 million lives to be covered in 2018 having made progress with CBS, Aetna, TRICARE and a bunch of regional plans. So we believe that as you look to this year where there is a defined way for people to access the product, that that's when we will expect to see the growth coming because the other market dynamics are strong.

[Olivier Brandicourt, Chief Executive Officer and Director]

All right. Thank you very much, Bill. Stefan, Lantus market share and Tresiba with potential improvement in their label.

[Stefan Oelrich]

So what we're seeing is that Tresiba has worked on separating second-generation basal insulins in terms of data that they have. They have been able to put together from first-generation basals. And we're pretty much on a very similar strategy with Toujeo. And for that, we actually look eye-to-eye when it comes to that with Tresiba. And you can see this also worldwide in our performance between Toujeo and Tresiba. Now we have recently done some really interesting work on both real world evidence that we're about to present in the coming weeks at a conference. And then more importantly, even we have done a head-to-head trial, the bright study, again Tresiba, where we informed about the top line results recently, which is going to be shown at the ADA meeting this year and that we're waiting publishing -- publication as well. I can tell you that on the top line, we achieved the primary endpoint against Tresiba, which shows comparable effectiveness in terms of A1c reduction. What we've also investigated in that trial is the safety profile of the product that we're looking forward to the final presentation at the ADA meeting. And we feel quite confident that we, as well with the data that we are more and more bringing together on Toujeo, we can very successfully separate from those first-generation basals. So I feel actually quite positive about our share evolution. You see this worldwide in terms of how Toujeo is progressing. We see on Toujeo a very strong growth in Europe with more than 50% growth, very strong growth in the JPAC region and the Emerging Markets with even more than 50% growth. And then the U.S., we've seen, last year, despite some formulary headwinds that were linked with margin, overall, we've all seen good volume growth on Toujeo fourth quarter. 50% TRx growth on Toujeo is a clear sign for that we're going in the right direction here.

[Olivier Brandicourt, Chief Executive Officer and Director]

All right. Any comment, Stefan, on market share of Lantus in general or into U.S. more specifically?

[Stefan Oelrich]

No, I don't -- I think we're in line with what was expected here, and I don't see that change. So we're fully in line with the guidance that was given in both financially as well as in prescription. So the observed impact on prescriptions in January that we're seeing is fully in line with what was expected. And again, as we see the label potentially come through for Tresiba, we don't know that yet. So we'll have to see if that happens. But if it does, again, we feel confident that we have all the clinical data to counter that also with Toujeo on our side.

[Olivier Brandicourt, Chief Executive Officer and Director]

All right. Thank you very much, Stefan. Thank you, Philippe.

[Operator]

Next question comes from the line of Jo Walton with Crédit Suisse.

[Jo Walton, Managing Director]

Two questions, please. On Dupixent, are you seeing any impact of the new plans in the U.S., which appear to be looking to make patients pay their deductible and disallow the copay cards for specialty drugs from the manufacturers? So -- if so, how are you looking to counteract that? And secondly, on the overall cost savings that you've been making, Jérôme, I wonder if you could update us as to what level of cost savings for your program you managed to achieve in 2017? What proportion was reinvested? And what we have left to come through in 2018? And perhaps with that also, cost savings that you're expecting to come through from the consumer business, presumably not all of the cost savings from that BI transaction were gained last year?

[Olivier Brandicourt, Chief Executive Officer and Director]

All right. Thank you very much, Jo. Dupixent, the new emerging plan and copays. I probably think it's too early to understand exactly what the impact, because that just emerged, right? But Bill, what have you seen?

[William J. Sibold, Executive Vice President]

No. That's right. In 2017, there was not any measurable impact. In fact, we only heard about it in a -- literally a handful of patients. In 2018 though, we know that the major PBMs who owned specialty pharmacies are selling this program to their customers. And as Olivier said, it's hard to quantify at the moment the impact because we won't know that the patient is involved until we see the copay assistance spend during the year and how that's progressing. So we're working hard to understand it. This is bad for patients. It's limiting access to patients, and we are taking efforts to, as I said, understand, educate on it and work with these PBMs to explain the negative impact that it's having. So we'll, as the year rolls on, have a little bit greater insight into that.

[Olivier Brandicourt, Chief Executive Officer and Director]

Yes. I think, frankly, it's more than a Dupixent issue.

[William J. Sibold, Executive Vice President]

Yes, all specialty.

[Olivier Brandicourt, Chief Executive Officer and Director]

It's a specialty medicine U.S. issue, which has to be discussed and negotiated with many manufacturers. So Jo, on your question of costs saving, and Jérôme will add, we achieved, in fact, approximately our EUR 1.5 billion cost-saving plan we had announced in '15, and we achieved that in '17. So we are basically 1 year ahead of plan, but we're not stopping there. We're working on further streamlining initiatives. And we recently announced the appointment of Dominique Carouge as Head of Business Transformation. He's going to become a member of the Executive Committee in February or mid-February, and his role will be in charge of accelerating the transformation of the company. And therefore, we hope after he's fully on board, to give you an update of what we are planning to do in that space in the next 2 or 3 years, later this year, all right? In term of G&A, of course, we expect modest G&A synergies from the recent acquisitions, but we will gain more visibility, of course, in the coming months. And in term of reinvestment, we have consistently maintained any decision will be scaled to, of course, the needs of the business and the market environment. And you may have heard about the adjustment we have made to our salesforce on DCV in the U.S. recently. And then, again, the allocation -- and we discussed R&D, which is a big piece of our allocation. So anyway, anything you want to add, Jérôme, on saving...

[Jérôme Contamine, CFO & Executive VP]

Yes, maybe 2 points here. So one, I mean, as planned, this EUR 1.5 billion of structural cost savings for the most of it, so highly impacting '18 as well. On the question of investments, I think -- reinvestments, I think, Olivier gave the answer. Obviously, you got from what we said that we are investing in R&D for a significant -- at least, recently for not a meaningful part, and, of course, we invest behind the new launches, Dupixent and Kevzara in particular. Now if you just remember what I guided for -- again, for SG&A and R&D as well as cost margin in '18, I mean, this clearly to get there and with the most of the increase coming from R&D, from acquisitions or from internal R&D tells us that we are very stringent on how we both save money but also reinvest. So your question on CHC, I think that maybe Alan, you want to comment where we are and how much we think we can bring in more.

[Alan Main, Executive Vice President of Consumer Healthcare]

So thanks, Jérôme. We don't give specific numbers on cost synergies. But as you know, from BI transaction, the majority of the synergies came from cost synergies rather than top line. And we are right on track. We delivered against 2017 objectives. We're on track to deliver completely on 2018 and beyond. And what we've guided is that we will raise this total business to a BOI of 30% and above. We're again right on track to deliver that.

[Olivier Brandicourt, Chief Executive Officer and Director]

Okay. Thank you very much, Jo.

[Operator]

Next question comes from the line of Seamus Fernandez with Leerink.

[Seamus Christopher Fernandez]

So couple of here that I just want to get a little bit of a better sense of. When we think about the opportunity for Praluent and the PCSK9 market going forward, maybe we can get a combined commentary from Olivier just because of your expertise surrounds the opportunity for LIPITOR historically and how you're seeing this market evolve at this point. And then, Elias, can you just give us a general sense with Praluent of the kind of data you think is necessary to drive this market forward? Or do you simply think that this is more a matter of getting the price right? And then my second question is on dupilumab or Dupixent. When do you really see the earnings inflection that this product and the opportunity for the product is likely to really emerge? As we think about it, we think about it more as kind of a second half '18, early '19 opportunity given how other products have launched in psoriasis. I'm just trying to get a better sense of how you guys are seeing the evolution of uptake of Dupixent? And where perhaps you would hope to see more of an earnings inflection from that product and leverage there?

[Olivier Brandicourt, Chief Executive Officer and Director]

Thank you, Seamus. Elias, do you want to start on [indiscernible]

[Elias Adam Zerhouni, President of Global Research & Development]

Yes, sure. Thank you, Seamus. That's very good question. So when you really look at the data that's needed to advance, first and foremost is OUTCOMES' data on the MACE criteria of France. And the net-net reduction in significant MACE events, in particular, stroke and MI contract. So that's the first measure that people are going to look at. Are we going -- are we reducing that to a significant extent in the population that we're dealing with? And the 2 populations really are selection. First is the FH population, the lifelong risk that cannot be mitigated really with statins. And I'll let Olivier comment about the curve of adoption that it leads to because those clearly, as they are identified, have no other option than a PCSK9. No matter what we do in terms of OUTCOME, it's the exposure over a lifetime that drives the OUTCOME in this patient. Now on the other patients, the patients who have an acute event within 1 year, which is our population, then the rates, obviously, are higher -- the rates of complication. So controlling that rate after a first event and the secondary prevention is going to be driven by MACE. Ultimately, however, the thing that you want to prove to show in the data is either a trend or a statistically significant reduction in cardiovascular-related mortality related to coronary, the CHD mortality. Now this usually, as with LIPITOR, it took a while to establish because the follow-up is needed to show within the event rates that you have. So we'll see with our data where the trends are. If we haven't reached significance, where is it that we are likely to see that happen just like in Fourier. I think with time, you'll see that separation occur, I'm pretty sure. So maybe, I'll let Olivier...

[Olivier Brandicourt, Chief Executive Officer and Director]

Yes, I don't have much more to add. We continue to be -- and I continue to be absolutely convinced that those technologies and Praluent will change medical practice. We have not -- in cardiovascular, cardiology medical practice, we have not seen that yet. We were lacking 2 convincing studies probably in order to be able -- which is pretty standard in our industry to be able to make the claim with ODYSSEY OUTCOME. We will have a very well defined population, all right? No questions. Statins are doing a terrific job. But for those who are not controlled by statins, these technologies are absolutely critical and will save lives. So I think the step afterwards it is exactly what happened with LIPITOR at the time is we're going to see them being part of guidelines. And I think cardiologists and physicians seem -- are very -- now very much moved by -- in their prescriptions, so influencing their prescription by guidelines. And that's what will happen, I guess, here. And that will ultimately bring us to the third step, which is a change by the payer of the utilization management criteria. That will open up automatically when those 2 first step would be achieved. So that's how we see it, which is a very similar story to the point you are making to the LIPITOR one, which I had experienced in the past.

[Elias Adam Zerhouni, President of Global Research & Development]

And if I can add, Olivier, is something important, safety. Over the past 2 years, we have had exposure for tens of thousands of patients. The safety on acquisitions is good, and I think that's another consideration for any new medication that cardiologists are sensitive to. So as the time goes by, our safety record is established and all the issues that may have been a concern 2 years ago have sort of gone away, both from the physician side of things and the payer side of things. So I think personally that the data will be driving what Olivier just talked about. And I don't know, Stefan, if you want to add.

[Stefan Oelrich]

Yes, Stefan here. Maybe just one last comment. We've seen very recently with other product medicines that in the cardiology space that once guidelines were adopted that you would see a clear inflection point and the uptake, and we would expect something similar here. So it's the evidence that will guide use of the product, and I think that makes good sense.

[Elias Adam Zerhouni, President of Global Research & Development]

And I think just for the record, the guidelines are generally expected when you have 2 studies, it's like having 2 Phase IIIs within about 6 months of the result publication, which is why we wanted to make sure we were published by the ACC.

[Olivier Brandicourt, Chief Executive Officer and Director]

Yes. Thank you, both. Dupixent, Bill?

[William J. Sibold, Executive Vice President]

Yes. So just in thinking about Dupixent and the growth, we're still at the beginning of Dupixent. We've got -- I think, set a great base in the U.S. We have over 8,500 prescribers. And just a little perspective there, approximately 60% of the prescribers have greater than or equal to 2 patients prescribed. So there's clearly an opportunity in the U.S. to go much deeper in atopic dermatitis. And we think as physicians get experienced with the product that that's exactly what they'll do. We'll be augmenting that with continued education, working at an access level. And as Olivier mentioned, we'll be doing increased direct-to-consumer. So we think that that's one of the growth engines. Now also, it's going to be geographic expansion as well. We launched in Germany in December, the Netherlands in January, Denmark in February. We have Canada and Japan launching shortly and then 11 additional EU countries in 2018. So just by virtue of the geographic expansion, we're going to see continued growth. And then ultimately, at the end of the year, we add asthma. And then you do it all over again with asthma in all the countries and then additional indication. So we see that there's going to be steady reason for growth with the product, and we are still very early.

[Olivier Brandicourt, Chief Executive Officer and Director]

Thank you very much, Bill. Last question, please.

[Operator]

Final question comes from the line of Jack Scannell with UBS.

[Jack Scannell, Co]

I've just got a question about -- a very interesting chart with Bioverativ was showing financial markets shortly before your agreement to acquire them that suggests in their worldview, by between 2021 and 2022, you have around 50% of Factor VIII in their territories convert -- or fixed set of short-acting or regular half-life Factor VIII having shifted to something else. And Bioverativ having about 25% of patients, so then all other extended half-life Factor VIIIs and emicizumab having the remaining 25%. So my question is, is that a sort of future of the world that you share? And secondly, how sensitive was your evaluation of Bioverativ and the deal economics to those kinds of assumptions?

[Olivier Brandicourt, Chief Executive Officer and Director]

Okay. So Bioverativ assumptions versus what we are -- what you have described. Bill?

[William J. Sibold, Executive Vice President]

Yes. Look, so I don't have [indiscernible]

[Olivier Brandicourt, Chief Executive Officer and Director]

[indiscernible] because of the transaction is not [indiscernible] yes. So we can make comments, and you will see that the 14.B.9 of Bioverativ will be filed maybe in the coming days. So I would like to warn that there is a limit to what we can say here.

[Jérôme Contamine, CFO & Executive VP]

Right. So a limit to what extent? I mean, you can make some comment how you feel but you are not going to compare what they say versus what we say, because clearly it's one of the thing which has come to the -- has led to this agreement. We said we're struck with them, which clearly, I mean, followed by the offer that it's still going to be launched now. So...

[Olivier Brandicourt, Chief Executive Officer and Director]

Right. So we can probably describe the assumptions that we have made. We have spent a lot of time on evaluating that market. Clearly, the growth is coming from -- and I'm sure you know that coming from short acting and on demand to sort of long acting and Eloctate and Alprolix in that case and prophylaxis. We are seeing those 2, with the penetration they have, becoming standard of care over time. I know that there was a lot of questions related to the products from Roche, Hemlibra, and its role in noninhibitor. We believe that it's going to be a very important product for hemophilia patients with inhibitors. We see that being much slower over time, that penetration in the noninhibitor population. So that's roughly the development we see in that market, which is growing by 7%, as I mentioned earlier, which is a $10 billion market. So we're very, very confident that with the current Eloctate and Alprolix, plus what you heard from Elias in term of development and the extent technology, which is going to bring that half-life much further and allow to have utilization every -- injection every week or even further, we really think that there is a very bright future for those 2 assets in hemophilia. So that's what I would say.Thank you. So I think that close the call. Thank you very much for your questions, and talk to you soon. Thank you.

[Operator]

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect.