Sanofi SA

PAR:SAN

Earnings Call Transcript 2020-Q4

[Operator]

This meeting is being recorded. Ladies and gentlemen, thank you for standing by. Welcome to the Sanofi Fourth Quarter 2020 Earnings Call and Virtual Capital Markets Day. We have planned for a 15-minute break between both events. You may remain connected to the Zoom link for all sessions. I would now like to turn the call over to Eva Schaefer-Jansen, Head of Sanofi Investor Relations. Please go ahead, Eva.

[Eva Schaefer-Jansen]

Good morning, good afternoon and good evening to everyone. Thank you for joining us to review Sanofi's 2020 fourth quarter results, followed by a dedicated Q&A session. In about an hour, we will begin our virtual Capital Markets Day presentation and discussion. As usual, you can find the slides to both sessions on the Investors page of our website at sanofi.com. Moving to Slide 2. I would like to remind you that information presented in this call contain forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. I refer you to our Form 20-F document on file with the SEC and also our Document d'Enregistrement Universel for a description of these risk factors. With that, please advance to Slide 3. Our speakers for the earnings portion of the presentation today are Paul Hudson, Chief Executive Officer; the Global Business Unit Heads: Bill Sibold, Thomas Triomphe, Olivier Charmeil and Julie Van Ongevalle; and Jean-Baptiste de Chatillon, Chief Financial Officer. Paul will make some introductory remarks, followed by our GBU heads, who will review the fourth quarter performance of their respective businesses. Jean-Baptiste will provide an overview on the key financials, and we will then open for the dedicated Q4 earnings Q&A session. [Operator Instructions] With that, I'd like to turn the call over to Paul.

[Paul Hudson, CEO & Director]

Well, thank you, Eva, and welcome to everyone, and thank you for joining us today. Apparently a record number of joiners, so obviously creating a lot of interest in the story and how we're doing. So 13 months following the announcement of our Play to Win strategy and in the year of a global pandemic, we're delivering 3.3% sales growth in constant currency, ahead of the 2.8% growth the year before. I'm extremely proud of our achievements. Dupixent has become Sanofi's #1 product in 2020, reaching EUR 3.5 billion in sales and at a growth rate of 74%. Our Influenza vaccine franchise crossed the EUR 2 billion mark, responding to the public health needs with our differentiated flu products. Specialty Care grew strongly during 2020, and despite fewer new patient starts due to the COVID environment. General Medicine sales in 2020 were lower, reflecting the implementation of the VBP in China, though we've made progress on volume, and then further impacted by elective procedure delays, especially during Q2. Our bottom line grew faster than our top line as we continue to identify efficiencies and reallocate spending to our key growth drivers. Across the sector, we saw companies lowering their spending throughout the pandemic. The difference is that we are implementing a disciplined active program of overall cost reduction and reallocation that will remain after COVID. As JB will explain, we have already achieved approximately 85% of our 2022 savings target in just 1 year and feel confident to increase our target overall. This year has proven that we have resilience, yet attractive businesses that set us up well for continued growth. I'm really confident that we will emerge stronger from this continuing crisis. Slide 5. Transitioning now to quarter 4 performance. We delivered a tremendous quarter. Sales grew 4.2%, while business EPS grew 9.8%, which bodes very well for 2021 overall. Key growth drivers were Dupixent 54% up compared to the same quarter last year and our differentiated vaccine business which grew 15% with flu sales up 25% in the quarter. To achieve a nearly double-digit EPS growth, we delivered another quarter of P&L leverage, supported by further efficiencies and reallocating spending to growth drivers. With that, I'm now turning it over to the GBU heads to provide more details on their respective businesses. Let's first start with Dupixent, and Bill, over to you.

[William J. Sibold, Executive Vice President of Sanofi Genzyme]

Thank you, Paul. Starting with Dupixent. Sales reached EUR 3.5 billion for the year, a growth of EUR 1.5 billion over 2019. Strong sales momentum continued into Q4 with sales of EUR 982 million, reflecting outstanding performance, both in the U.S. and ex U.S. across all 3 approved indications. This was all done in the backdrop of the second wave of COVID-19. In the U.S., patient visits continue to be approximately 80% of pre-COVID levels and outside the U.S. local lockdowns prevented many patients from visiting their doctors. Other highlights in the quarter included Dupixent's listing on the China NRDL, just 5 months after launch, 1 year earlier than the initial best case scenario, enlarging the accessible adult population with atopic dermatitis to at least 150,000 as of March, a number almost as large as the roughly 230,000 patients treated with Dupixent worldwide today. The opportunity in China may grow to around 900,000 patients over time for adult AD alone. In Europe, Dupixent is now approved for children 6 to 11 years of age with severe atopic dermatitis. Dupixent is the first and only biologic medicine approved in the pediatric patient population. Based on the continued successful launch execution, we are more than ever before convinced in our greater than EUR 10 billion peak ambition. On Slide 7, I would like to share with you some insights that further exemplify Dupixent's uniqueness. Dupixent, steadily increased sales quarter after quarter in the U.S. during 2020, but that wasn't true for every other dermatology biologics over the past 4 quarters. What set Dupixent apart in 2020 was the commercial execution and its product profile. As we move into 2021, we are even more confident in Dupixent's market leadership, recent top line data readouts from potential future entries in dermatology and respiratory have not changed our confidence in Dupixent's position as the first choice systemic therapy based on its clinical profile, balancing rapid and sustained efficacy with long-term safety. On Slide 8, looking across our Specialty Care franchises, sales grew strongly by 18% in the fourth quarter. Besides Dupixent, oncology sales grew strongly, driven by the newly launched products, Sarclisa and Libtayo. Rare blood disorder growth was higher than prior quarters as sales of Alprolix and Eloctate to our collaboration partner, Sobi, were higher than usual due to a change in the supply agreement. In multiple sclerosis, Aubagio's growth slowed to 4% globally and was flat in the U.S. following the entry of competition. With around EUR 2 billion in annual sales, Aubagio probably reached its peak in 2020. With that, I'll hand it over to Thomas to update you on the Vaccines business.

[Thomas Triomphe]

Thank you, Bill. Q4 2020 delivered a strong quarter of growth in the mid-teens, driven by higher influenza sales. But before we dive further into the franchise performance, I would like to highlight the continuous strong performance across our pediatric combination vaccines portfolio, growing by 20%. Main driver was Hexaxim, our hexavalent pediatric vaccine, especially in the rest of the world earlier, helped by a favorable phasing of our polio vaccine. Importantly, our Meningitis franchise returned to growth in the quarter, driven by catch up in the U.S. following COVID-19-related delays earlier in 2020. Finally, as expected, the pandemic continued to weigh on our travel and adult booster vaccines. For the full year, you have seen that we grew 9% in 2020, the second year in a row of high single-digit growth at the upper hand of our mid- to high single-digit growth outlook announced at Capital Market Day in December 2019. Next slide. Here, you can see focusing on flu vaccines. As already mentioned by Paul earlier, our Flu franchise exceeded the EUR 2 billion mark for the first time ever, an increase of 38% compared to 2019. There are 3 main reasons for that. First, we responded to an increased demand and shipped more than 250 million doses worldwide, up over 20%. Second, we benefited from an acceleration of vaccination rates as a result of the pandemic, especially in Europe. And third, we continue to execute on our strategy to shift our portfolio to differentiated vaccines that offer a higher degree of protection for the most vulnerable people. Differentiated vaccines accounted for nearly half of our global flu sales in 2020, up from around 35% only 4 years ago. Our successful differentiated products in the U.S. Fluzone High Dose and Flublok are now available in Europe under the brand names of Efluelda and Supemtek, respectively. We, therefore, remain confident on the future growth prospect of our Flu franchise. Our differentiated products currently set the standard in terms of efficacy, and they are expected to remain a significant growth driver in the coming years with broader availability outside of the United States of America. Finally, let me use this opportunity to say a few words on the mRNA technology, which seems to work really well on COVID-19 and could also be applicable for flu. Having said that, clinical data in seasonal influenza still have to be generated, and we'll have to surpass the efficacy as well as a strong safety benchmark set by our influenza differentiated vaccines. We are now getting ready to start a Phase I trial of an mRNA flu vaccine this year as part of our collaboration with Translate Bio.Regardless of high dose, recombinant protein, mRNA or a combination of both platforms, we do intend to remain the leading provider of flu vaccines worldwide, protecting people all around the globe. With that, I hand over to Olivier.

[Olivier Charmeil, Executive Vice President of General Medicines]

Thank you, Thomas. As expected, our General Medicine China business returned to growth in the fourth quarter, growing at 4%, with strong volume gains from Plavix and CoAprovel, up 78% for the year. This strong trend confirm our successful VBP building strategy, which delivered as planned. While the usual year-end true-up took place in the U.S. in Q4, we know that globally, the decline in the Diabetes business, so significant moderation compared to previous year. This positive trend that we are seeing in our Diabetes business is mainly driven by the growth of Toujeo in Europe and the rest of the world as well as Soliqua uptake in all geographies. With the launch of Toujeo in China in Q4, we are confident in the outlook of the Diabetes business in our key markets. I will elaborate on this in more detail at the CMD session. In Established Products, we saw strong performance from Lovenox globally, benefiting from its continued inclusion in WHO guidelines for hospitalized COVID patients. Tail products of the EP portfolio in emerging markets faced some headwinds from the COVID environment. Going forward, to improve the growth profile of the EP business, we continue with the portfolio streamlining. And we are making solid progress in driving simplicity and agility, such as our go-to-market digital model. I look forward to sharing with you more on our strategic priorities for the General Medicine portfolio a little bit later today. With that, I hand the call over to Julie.

[Julie Van Ongevalle]

Thank you, Olivier. Similar to Olivier, I look forward to speaking with you again later today to share with you our team's strategic priorities to change the trajectory of our CHC business to grow our top line while continuously improving our bottom line. But let me now very briefly touch base on our fourth quarter performance of the CHC business. Following the annualization of Zantac, the U.S. returned to growth with strong performance from the Allergy, Digestive and Sleep categories. And as a result, I'm happy to share, we're back to gaining share in the U.S. OTC markets since October. I would especially like to highlight the U.S. Allergy category, which grew by 13% in Q4, with strong performance of our brands, Allegra and Xyzal, both benefiting from strong 360 marketing programs, and Xyzal from product placement and a popular chain of U.S. membership-only club. Globally, digestive health brands, Essentiale and Dulcolax, performed well as many consumers adapted to different lifestyles during the pandemic, including a more sedentary lifestyle at home. Outside the U.S., the Cough & Cold category was down 31%, driven by our high penetration in cough in Europe and an overall weak cough and cold season across regions because of social distancing as well as lowering pharmaceutical traffic. With that, I hand it over to our CFO, Jean-Baptiste.

[Jean-Baptiste Chasseloup de Chatillon]

Thank you, Julie. So Paul mentioned in October that we are committed to fully embrace sustainability in our Play to Win strategy, and it's happening, it's happening across the company. As an example, the finance team link the renewal of our EUR 8 billion revolving credit facility with some of our key targets. We had seen many green bonds in the past, but this was -- this one was the first with an ESG revolving credit facility, and you will see over time, many other proof points across the company. On Slide 14, let's turn to financial performance. Company sales increased 4.2% in the fourth quarter, an acceleration versus previous quarters. We delivered another quarter of P&L leverage, driven by further efficiencies. Within the lower R&D spend, we have already a higher spend on the Specialty Care franchise due to the reallocation from diabetes and cardiovascular. This operating expense efficiencies more than offset a decline of 120 basis points in gross margin due to U.S. diabetes product mix of the General Medicines business. Consequently, BOI grew almost 10%, and our BOI margin increased by 60 basis points to 21.9% in the quarter. So we have been able to deliver this margin improvement at the same time as accelerating investments in Dupixent on vaccines on absorbing the Synthorx and Principia R&D spend. On Slide 15, full year 2020 P&L. Well, I would like to draw your attention to the last line on the slide, our BOI margin increased 120 basis points to 27.1%, well on track toward our communicated BOI margin ambition of 30% by 2022. So going forward, you can expect operating expenses to grow again due to investments into our expanding pipeline on future launch activities. At the same time, you can expect to see a gross margin improvement from this low point of 2020. With this in mind, let me give you an update on our progress to accelerate efficiencies. On Slide 16, as you know, we communicated in December 2019, our plan to deliver EUR 2 billion in cost savings by 2022. Of this total, we expected around EUR 500 million to come from reduced spend in deep prioritized businesses, around EUR 1 billion from a range of smart spending initiatives and a further EUR 500 million from operational excellence, including COGS. In 2020, we have achieved around EUR 1.7 billion of savings, almost 85% of our 2022 target. We made progress across all potential sources of savings, especially from deprioritized businesses and operational excellence, where we have surpassed the target. Following these accomplishments, we are increasing our cost savings target by EUR 500 million to EUR 2.5 billion by 2022. These savings will be derived from continued operational excellence, and we plan to reinvest 100% of this extra EUR 500 million of savings to drive the top line and fund the pipeline. On Slide 17, we delivered another year of strong free cash flow growth, mainly driven by Sanofi's solid business performance on smart spending initiatives. Free cash flow increased by more than 70% against full year 2018. So we delivered a strong underlying performance. And as a matter of principle, we do not update our midterm targets, but I guess you will understand that concerning free cash flow, we will maximize it as much as we can. On Slide 18, I want to transition to Sanofi's annual dividend payment, which the company has consistently grown for the last 26 years. As a result of Sanofi's performance in 2020, we announced that the Board has proposed a EUR 0.05 uplift in the dividend to EUR 3.20. A growing dividend remains an important element of our capital allocation policy, the trends behind organic investment on business developments, which are our main priorities. On my final slide, we have set out our full year guidance for 2021 business EPS to grow in the high single digits at constant exchange rates. On ForEx, we see around 5% negative foreign currency impact based on January average exchange rate. Lastly, I want to highlight pushes and pull for 2021. Well, on the upside, we expect strong growth from Dupixent and Vaccines and continued efficiency benefits to be reinvested in growth engines and pipeline. In addition, we will have the annualization of the China VBP impact from Plavix and CoAprovel. Also, Sanofi's tax rate for 2021 is now expected to trend towards 21%. This is our estimate, including the positive impact of the French taxation reform, but our current forecast does not include the potential change in U.S. tax legislation. On the downside, we expect the COVID environment to continue to impact us in H1 with potential gradual normalization in the second half of the year. In addition, we expect adverse impact of foreign currencies, primarily in the first half of the year on continued U.S. diabetes price erosion. So taken together, these factors suggest that our growth will be weighted to the second half. In addition, you should note, but I'm sure you have it in mind, that the first quarter will face a high basis for comparison as Q1 2020 does not fully reflect current market dynamics due to the pandemic. Well, so after 6.8% growth at CER in 2019 and 9.2% in 2020, but we are on track for another year of high single-digit growth. Well, you can look back on past performance, but definitely, this is not the same Sanofi. Let's open the call now to Q&A. Eva?

[Eva Schaefer-Jansen]

We will now open the call to your questions. [Operator Instructions]

[Operator]

And now we will take the first question from Pete Verdult at Citi.

[Peter Verdult, Managing Director]

Yes. Pete Verdult, Citi. Two questions. Maybe kicking off with Thomas first on vaccines. Just could you comment on where vaccination rates ended up this past winter in Europe and the U.S. and although you've given us a split by value, could you just remind us perhaps from a volume perspective, the mix between your differentiated and commodity flu business? And then secondly, for John, on upcoming SERD data. Is the data in-house yet? Can you remind us whether we will see PFS as well as ORR data? And should we be using the PALOMA 3 and MONARCH 2 data as the benchmarks when we assess the SERD data?

[Paul Hudson, CEO & Director]

Okay. Peter, thank you. Thomas, over to you.

[Thomas Triomphe]

Thank you, Peter. First, in regard to the vaccination coverage rate, we don't yet have final numbers because this is still ongoing by every single country in terms of North America or Europe. But it's clear to say that due to the COVID-19 pandemic, we've seen some increase in the VCR. I would expect roughly an increase of the U.S. market by around 14%, 1-4, but again, that's not final numbers. It's with some interim IQVIA data. And in Europe, we've seen only a significant increase on the vaccination coverage rate. Also a few points, but we'll know more by -- in the next couple of months once we have the final numbers. Now when it comes to value and volume split, overall, on the overall Flu business, if I look at 2020, you've seen that roughly, it's a balance between volume and value in terms of the 38% increase in the Flu business. And of course, as mentioned, we're going to increase further the differentiated flu portfolio. We are very happy as we've seen the introduction of Efluelda in Europe. We believe it will be a strong driver of growth in Europe in 2021 and the years after. So I will say that we'll see more and more increase of the differentiated flu in both in volume and in value in next year.

[Paul Hudson, CEO & Director]

Thank you. Thank you, Tom. John Reed, maybe you could update on what data we have in-house and the outlook for sharing data on our SERD.

[John C. Reed]

Absolutely. Thanks, Paul. So we'll be sharing data on the Phase Ib study, which set the stage for the pivotal study in combination with Palbo, that'll be shared at a medical conference middle of this year. In terms of the first Palbo readout that will occur the first half of this year in the second and third-line setting as a monotherapy. That primary endpoint is progression-free survival. Of course, we'll have overall response rates and clinical benefit rates as well as secondary endpoints, but that will be -- the PFS will be the primary endpoint.

[Operator]

The next question is from Wimal Kapadia at Bernstein.

[Wimal Kapadia, Research Analyst]

Wimal Kapadia, Bernstein. So can I just ask on venglustat, please? Clearly, disappointing to see the update on GBA-PD. But given safety continue to be favorable and the biomarker showed consistent and predictable GL1 reductions in both the plasma and cerebrospinal fluid, have your views of success actually changed for the product in ADPKD for the pivotal data in 2022? And then just tied to that, should we still be expecting kidney volume data this year, which may be fileable with FDA depending on the outcomes? And then my second question is, again, back to influenza. Clearly, a strong 4Q and stronger than the third Q, which was above your in previous comments. So can I just ask what drove that stronger than 3Q performance? And then secondly, how should we think about the flu progress in '21? Do you expect patients who took a vaccine this year that typically do not to fall off in '21? Or should the pandemic be in a better position or do you expect incremental demand in '21?

[Paul Hudson, CEO & Director]

Thanks, Wimal. I'll come to venglustat in a moment. I'll make a comment before Thomas, but, maybe, let's just do flu while we have a chance. So Q4 over Q3 and also outlook for '21.

[Thomas Triomphe]

So Q4 versus Q3 it's related to the 3 drivers we've mentioned before. And clearly, COVID-19 has shown an increase of influenza rate in 2020. And therefore, there was an expansion, I will say, of the season and ended the balance between Q4 and Q3. Moving forward, we expect to see Q3 and Q4 roughly 50%-50% balance. Of course, there are many different factors influencing that. For example, what will be the new strains? When they are announced? What's the impact? So as we get more data points, we'll be able to give you some more guidelines on that in the coming quarter. Now when it comes to '21 outlook, what we've observed in the past is a slight decrease in this year [indiscernible]. So there might be a couple of points down next year in terms of overall influenza this year. But what's very, very important and very specific to the Sanofi Pasteur portfolio of influenza vaccines is that it's the growth of our differentiated flu vaccine, which come with a premium in terms of efficacy, but also a premium in terms of pricing. And I think that from a value perspective, we'll be able to be well positioned to deliver on our mid- to high single-digit growth ambition that we have for the GBU and influenza will be a part of that.

[Paul Hudson, CEO & Director]

Thanks, Thomas. And John, will come to you on data stuff, but maybe -- we are going to go through it a little bit more detail later at Capital Markets Day. And I think, Wimal, your summary, if you like, was spot on, at least how I felt when I saw the data that was -- it's one of those sort of paradoxical moments where, although we were disappointed in Parkinson's, for those that are struggling, we increased our confidence outside of that. So maybe I'll let John answer.

[John C. Reed]

Yes. Thanks for the question. Just to get to the question that you asked about the total kidney volume and when we'll have those data? That will be next year. So that's when we'll have that readout. But in terms of the mechanistic hypothesis that we're testing, it is different from the Parkinson's situation in the context of the autosomal dominant polycystic kidney disease, the glycosphingolipid that are being impacted through the modulation of that pathway are acting like signal transaction molecules that affect differentiation of the kidney cells. And so it really is a different mechanistic hypothesis, really an independent hypothesis compared to what we tested in Parkinson's.

[Paul Hudson, CEO & Director]

Okay. John, I think we'll leave it to cover a little bit more later the read across, but I think you got to the number there. Next question.

[Operator]

The next question is from Jo Walton at Crédit Suisse? Jo? Okay. So let's move to Graham Parry at Bank of America Merrill Lynch. Graham?

[Graham Glyn Charles Parry]

Great. Can you hear me?

[Paul Hudson, CEO & Director]

Yes.

[Graham Glyn Charles Parry]

Okay. Perfect. So just going back to vaccines, again, I'm afraid. So could you just help us understand what growth in vaccines has assumed in guidance, and in particular, for flu? I think Thomas, did you say the growth would be a couple of points down on 2020, but you're still expecting to see flu grow off that EUR 2.5 billion base? And what sort of recovery and cadence of recovery you're expecting in Travel, Meningitis and Boosters, presumably that's all sort of second half loaded? Secondly, on Dupixent, obviously, accelerating growth in fourth quarter on prescriptions. Can you just help us understand what's happening on pricing as you go into this year? Has there been any pressure from payers at all? Are you still enjoying pretty good coverage without too much pressure there? And then third question is just on other operating income. That was around EUR 100 million lower or expense, I should say, was lower -- about EUR 100 million lower than consensus. You actually have quite a high Regeneron payaway in there. So just are there some low level one-off gains sitting in there, if you could just help us understand the size of those?

[Paul Hudson, CEO & Director]

Okay. Well, we'll start with Thomas. I would just add that I think we would all believe as much of we love to be back traveling again. The more exotic travel, perhaps we'll be much later in the year and perhaps the beginning of the following year. But Thomas, I'll leave it to you.

[Thomas Triomphe]

Graham, basically, what I was saying is that and it's important to be precise, the overall vaccines GBU growth is expected into the mid- to high single-digit trajectory as we've committed from 2018 to 2025. When I was mentioning minus 2% to 3%, it's on the vaccination coverage rate for the full market, so not about Sanofi Pasteur.When it comes to us, we expect influenza to remain a key growth driver of our overall trajectory next year and the years after. And again, it's about a few factors. You understood the importance of Efluelda, i.e., Fluzone High Dose growth in Europe and still in North America, that's very important. We expect also Flublok growth to keep growing. What's also important for you to know is that we discussed it in the past, but you know that we will keep investing in our capacity. Notably in 2021, we'll have the start of our new U.S. facility for Fluzone antigen, that will start to produce from the year 2021, we've committed in the past. But of course, that's an important driver when it comes to Fluzone High Dose.And the same thing, we had also invested into our Vaxigrip influenza trial -- vaccine, sorry, in France, in order to make sure that we can meet the demand. So that's very important moving forward for flu. In parallel, to sustain the mid- to high single-digit growth of the GBU, the recovery in Meningitis, you've seen in the Q4 that Meningitis was turning positive. And therefore, we expect this to come back in '21, that's an important part of the driver. As mentioned by Paul, I expect [indiscernible] to still be impacted in '21 for the obvious reasons we know, that's more a '22 play in our view. But you've also seen, and I highlight it at the beginning of the call, that our terrific combinations have done well this year, like the previous year. And we think that in emerging markets, they will keep their growth trajectory in '21.

[Paul Hudson, CEO & Director]

Thanks, Thomas. Bill, maybe you want to jump in on Dupi access, quarter 1 and onwards, what you see as the dynamics?

[William J. Sibold, Executive Vice President of Sanofi Genzyme]

Yes. So thanks, Graham. So first of all, we're in a really highly favorable access position. We have greater than 95% of commercial lives having established UM criteria for AD and asthma. And it's -- as we launched the product, we knew a couple of things. We knew that we'd be in multiple indications, and we knew that there would be competition in the future. So we've strategically approached this and we've done very well. Looking ahead to Q1. Q1, you would expect, like in every other Q1, you have kind of a resetting of patients -- of insurance. So your patient assistance programs and so forth have that impact. But we believe we're in a really strong position. Clearly, when you have competition coming in, the more companies there are, you expect some impact on gross to net. But as I said, we started out with a plan knowing exactly how the market was going to unfold, and we think we're in a really favorable position for Q1 and 2021, in general.

[Paul Hudson, CEO & Director]

Thank you. And then JB, OOI.

[Jean-Baptiste Chasseloup de Chatillon]

Yes, Graham. Yes, you spotted perfectly. Effectively, we have an accumulation of small deals. We are very active on the front of divesting some of our molecules in EP portfolio, a bit in consumer health also. That's to execute on our commitment of the Capital Market Day, and we are effectively executing, and it's almost comparing to EUR 100 million -- below EUR 100 million, but quite near on Q4. Cash-wise, it's much more important what we are doing. But as you know, we are pushing down some goodwill accounting-wise when we account for those sales. So it's not very really impacting on BOI, but Q4 was higher.

[Paul Hudson, CEO & Director]

Okay. Thank you. Next question?

[Eva Schaefer-Jansen]

So I have on the chat 2 questions from Florent Cespedes from Societe Generale. The first one is on 2021 R&D news flow. Specifically with regards to BIVV001 and fitusiran, and what the new time lines are? The second one is, could you be more specific and where you intend to redeploy the EUR 500 million additional savings?

[Paul Hudson, CEO & Director]

Okay. Well, then, John, maybe you want to update on BIVV001 and fitusiran for this year? And other more broad question about news flow for this -- for 2021. Yes, John.

[John C. Reed]

Yes. Thanks, Paul. So BIVV001, which is now known as efanesoctocog alfa, we have dosed the last patient is now -- the study is fully enrolled. Last patient has been enrolled. It's a 52-week study. So that we'll be reading out early in the following year. So we're slightly delayed due to COVID, but are still expecting to have a submission in roughly the same time frame that we've disclosed previously. With fitusiran after the voluntary hold to reconsider dose and schedule, the study has now been restarted. 97% of patients remained on study. The investigators and patients were very eager to resume, and we're delighted that we were able to get back on track with that study. We'll be having dialogue throughout the first part of this year with the health authorities in terms of what additional evidence they'll want to see in order to submit the NDA. So we don't yet have an update for you on the timing for the fitusiran final submission.

[Paul Hudson, CEO & Director]

John, broader news flow for 2021?

[John C. Reed]

Well, for 2021, we will have 8 pivotal readouts that will include the amcenestrant in the first half of the year for the monotherapy in the second, third line breast cancer as well as 2 Libtayo readouts. And then in the second half of this year, we'll have 2 Dupixent readouts for spontaneous urticaria -- chronic spontaneous urticaria area as well as for pemphigus nodularis, so 2 more dermatology indications. We'll also have rilzabrutinib pivotal data for pemphigus vulgaris, another dermatology indication. And then we'll have a readout for Sarclisa in the front line of myeloma context for the transplant ineligible population. So expect a rich year of news flow throughout 2021.

[Paul Hudson, CEO & Director]

Thanks, John. Maybe I'll just add, and maybe we'll talk about it a bit later, but the investigator feedback on fitusiran, and everybody was disappointed that we'd be on a voluntary hold, but actually, it's provided us with some much richer insights into the potentials for interval dosing, which while nobody wants to take a short delay, actually, we think the profile may improve. So we'll see what the data sets. But it was -- we wouldn't have found this out, I think, unless we've been on this journey. So -- okay. Next question?

[Eva Schaefer-Jansen]

Yes, another question from the chat from Geoff Porges. What proportion of your volume now is in the U.S. and globally in premium brands? This is for influenza vaccines. So it's a volume question on split U.S. ex U.S. And the second part is, are you underway with a combined flu COVID vaccine? And do you believe COVID will become another repeated new vaccine annually?

[Paul Hudson, CEO & Director]

And Thomas, just before you answer those great questions, I did neglect to throw the question to JB on the reallocation into R&D.

[Jean-Baptiste Chasseloup de Chatillon]

Yes. Thank you. I think it's an important question to read through what happened already in 2020 because it was a very significant swing. It was EUR 0.5 billion savings in 2020 from effectively arbitrage within our portfolio. So it was happening very quickly, and you see it on my slide about savings. That's why in 2020, already, we saw an acceleration of the spend of R&D in Specialty Care. And that's where we are, of course, investing. Efficiencies also have helped accelerating this level of spend in R&D in Specialty Care. So you were asking of the EUR 500 million, the next EUR 500 million, yes, it will come -- a lot of them will come this time from COGS, which will, of course, tie up with the improvement we are expecting on the gross margin. And yes, we are looking at reinvesting them because we are gaining confidence on our top line growth. So we -- it makes us much more confident that we can reinvest it behind our pipeline, which is, of course, more and more promising, we need to invest into it. So you remember that Synthorx, Principia, Kiadis, Kymab, all those companies we have acquired. We will have the annualizing of their costs in 2021. So you can expect to see effectively R&D spend going up, but in a completely different context than before. Instead of being spreaded all over the place, it's really connected to our priorities in Specialty Care on -- in vaccine. Yes. I think -- I hope it gives more color to what we are executing.

[Paul Hudson, CEO & Director]

Thanks JB. Thomas?

[Thomas Triomphe]

So back first to influenza and then I'll talk about COVID-19. So for influenza, again, I think what's important to have in mind is that with the new Fluzone antigen building coming online in 2021, you should expect a growth of both our differentiated vaccines, i.e., Fluzone High Dose, Efluelda and Flublok, Supemtek. I do expect growth on both sides of the pond in North America and in Europe, especially for, again, Efluelda, Fluzone High Dose. You will see that in North America, you will see that in Germany. I expect maybe a significant growth in volume and in value from the differentiated flu. Now what will be the impact on the standard dose flu remains to be seen, that's more linked to the vaccination coverage rate, as we've discussed before. Now when it comes to COVID-19 and influenza, great question. A little bit too early to have a definitive answer. Still many things in terms of ability to do COVID-19 and flu together. You know very well, but flu has a very specific logistics, that it's an annual vaccination. We still need to see what's going to be the need for boosting, by when and how long are the COVID-19 shots duration. So many questions to answer there. But you have noticed that we are very interested. You have noticed that we're starting Phase 1 of mRNA flu vaccine this year, knowing that we are the influenza vaccine leader worldwide and knowing that we have 2 shots on goal with COVID-19. Should there be an opportunity, we'll be just around the corner.

[Paul Hudson, CEO & Director]

Thank you, Thomas. Next question, please?

[Eva Schaefer-Jansen]

The next question is from Jo Walton. Okay. So let's move on to Richard Vosser at JP. Richard?

[Richard Vosser, Senior Analyst]

First question, just on China and the recovery there. Just your thoughts on the sustainability of recovery in China for your products and future price pressure. And then aligned to that, just, JB, you highlighted the increasing confidence in the growing top line. And I note that you're sort of saying General Medicine should be flat out to 25%. So do you feel confident enough to give a target like you give for vaccines and consumer in terms of growth now. It looks like it's all growth going forward, but just your thoughts there?

[Paul Hudson, CEO & Director]

Okay. Thanks, Richard. Jo, we've tried a couple of times, so maybe if you want to submit a question online, if you can, I would try again a little bit later, sorry, in case it's our responsibility. Let's go to China. Olivier Charmeil, maybe you have some views on the outlook.

[Olivier Charmeil, Executive Vice President of General Medicines]

Yes. Thank you. The market has suffered, of course, in 2020, mainly due to COVID and the definite number is not yet known for the decrease of the market, but probably in the range of 10% to 11%. The market is going to bounce back, and we are expecting for 2021 growth that is going to be significant, 6%, 7%, 8%, not to say more. Of course, there has been price pressure with the implementation of VBP in the last 2 years. We see now that, of course, the volume growth continues to be very strong. And on the other hand, we are very happy with our performance, both on Plavix and Aprovel projected implementation of the VBP. So the China market remains a volume market on General Medicine and on Specialty, of course. We continue to see with the registration of Dupixent and the start that chorus in the future, a significant portion of our growth will come from Specialty.

[Paul Hudson, CEO & Director]

Thanks, Olivier. JB, why are you not providing guidance on the future of the business?

[Jean-Baptiste Chasseloup de Chatillon]

Well, Richard, I'm glad you captured my optimism, that's fine, and that's clearly where I am. Now we have, I think, a guidance, which is quite clear for 2022 with this BOI ratio. And yes, we are really committed to deliver on it. And we have a nice set of guidance out there to help you modeling it. But yes, we will deliver on 2022.

[Paul Hudson, CEO & Director]

Maybe just add to that, it's our responsibility as an executive team and the wider organization to toggle that way. And remember, back in Capital Markets Day '19, we said that we wanted to be able to stick to the BOI and deliver. And today, we could. You can just see from the numbers full year '20 with the 120 basis points improvement that we're -- you can see the line to where we're going, and you should expect us to deliver those things, and then we'll anchor from there. Next question, please.

[Eva Schaefer-Jansen]

We will take a final question from Jean-Jacques Le Fur at Bryan Garnier. Jean-Jacques, please go ahead.

[Jean-Jacques Le Fur]

We'll come back on the flu vaccine. And for clarity, could we assume that you will be able to add again about EUR 500 million in sales this year as you did last year? And if yes, how can we see the capacity -- manufacturing capacity if you are successful with the COVID -- your COVID vaccines, which I assume will take some of them for manufacturing? Or is the new U.S. factory enough to deliver the additional flu doses?

[Paul Hudson, CEO & Director]

Thomas?

[Thomas Triomphe]

Thank you. Yes, Jean-Jacques, so we have made sure that we always make sure that we secure the demand of our current vaccines. You know that we are manufacturing and supplying a lot of different vaccines that are critically needed even in COVID-19 pandemic times. And we made sure that our supply capabilities are growing and it's not linked to the COVID-19 vaccines development that we are doing. So we have everything we need to increase this. As I mentioned before, the Fluzone antigen building is already up and running and starting to produce as we speak now for 2021 northern hemisphere, that's very important for us moving forward.

[Paul Hudson, CEO & Director]

Yes. Okay, good. Thank you. Next question, please.

[Jean-Jacques Le Fur]

Sorry, looking at sales. We assume that you may -- you will be able to add again EUR 500 million about?

[Thomas Triomphe]

No. So no, again, the story of influenza is going to be a growth trajectory, which is a question in between growth from differentiated vaccines versus non-differentiated vaccines in a market, but most likely in non-pandemic period compared to pandemic period will be probably lower. So I expect us to perform well in a declining market for flu just for next year, but we're not in the magnitude of EUR 500 million, of course, because we are not in a pandemic situation at all. So you need to look at the continuous growth compared to the average trend of over 5 years, for example.

[Eva Schaefer-Jansen]

Okay. So time is over for the first part. So let's meet in 12 minutes for the Capital Markets Day. Thank you, everyone.