SNY

• **New CEO Initial Strategic Assessment

• New CEO Belen completed a 12-week diagnostic of the business after joining, and has already begun translating conclusions into near-term priorities, with a focus on urgent action to improve mid- and long-term growth.
• Sanofi has core strengths in commercial execution (particularly in the U.S. and Europe), strong employee commitment, and deep therapeutic expertise, but requires more disciplined decision-making, greater accountability, and de-complexification to enable more agile operations. Belen is building a comprehensive enterprise-wide strategy (replacing prior business-unit-only focused planning) and will share full strategic details by the end of 2026.

• **R&D and Pipeline Updates

• Multiple late-stage pipeline programs were discontinued after failing to meet expectations: two Dupixent studies in lichen simplex chronicus, the second Venglistat study in Fabry disease, the Lily Proubarak refractory CIDP study (the IVIG-treated patient phase 3 study remains ongoing), and amlitolumab (which showed sustained response in long-term testing but was deprioritized as part of pipeline strategic review).
• Positive pipeline readouts: Nexviazine met all endpoints in infantile onset Pompe disease; F-doroplin-alpha demonstrated superiority over standard of care in AATD emphysema phase 2 testing. Recent regulatory approvals include Dupixent pediatric chronic spontaneous urticaria (U.S.), Sarclisa subcutaneous/on-body injector (U.S./EU/Japan), and Senriffke for secondary progressive multiple sclerosis (EU).
• R&D transformation priorities: Increased scientific rigor, path-based fact-based decision-making (particularly for phase 2 to phase 3 transitions), clear accountability for decisions at the scientific level, and dynamic capital reallocation away from low-promise assets to higher-potential programs. Sanofi expects approximately one new phase 1 start every two months in 2026.

• **Organizational Changes

• A new streamlined 8-member executive committee (COMEX) will take effect September 1, with a mix of new external hires (R&D head Paolo) and internal promotions to balance fresh perspective and institutional knowledge.
• Thomas Triomphe has been nominated to lead Sanofi's China expansion, with China named a key strategic priority.

• **Business Development and M&A

• Sanofi will intensify disciplined BD and M&A activity to fill mid- and long-term growth gaps, moving beyond the prior focus on only early-stage assets to prioritize late-stage and commercial assets. The company is open to both smaller bolt-on deals and larger transactions, provided opportunities meet strategic fit, scientific quality, and financial return requirements. There is no fixed urgency to close a deal in 2026.
• Core priority areas include rare diseases (leveraging Sanofi's existing market leading position), immunology, and China (both accessing the large local market and in-licensing innovative domestic assets).

• **Regeneron Alliance

• The alliance (which produces Dupixent) is of core strategic importance to Sanofi, and management is focused on rebuilding trust to enable expanded future collaboration. Current discussions cover potential structural improvements to collaboration, adding new assets to the alliance, and evaluating standalone opportunities for immunology assets outside the alliance. The narrow ongoing litigation focuses on an information sharing dispute, and is not the core focus of current collaboration discussions.

• 2026 Full Year Guidance Upgraded: Management upgraded full year 2026 guidance to reflect strong H1 2026 business momentum, now expecting ~10% sales growth at constant exchange rates, with business EPS growing slightly faster than sales.

• H2 2026 is expected to see decelerating sales growth due to tougher year-over-year comparables (including lapping 2025's strong Dupixent new indication growth and the July 2025 consolidation of Evakit), fewer one-off gross margin benefits, and reduced share buyback benefits. Vaccine sales for the full year 2026 are expected to be slightly negative, with most of this decline concentrated in H2.
• Q3 2026 vaccine sales are expected to decline low-to-mid teens, driven by a timing shift in respiratory vaccine distribution versus 2025.
• The 2026 effective tax rate is now expected to be ~21%, reflecting the non-deductibility of certain intangible impairment losses from recent pipeline decisions.

• **2030 Long-Term Ambitions Updated (at constant current exchange rates)

• Dupixent 2030 sales ambition upgraded from prior levels to ~25 billion euros, reflecting continued strong demand and indication expansion.
• New pharmaceutical launch 2030 sales ambition maintained at 10 billion euros; the portfolio is already on track to reach ~5.2-5.3 billion euros in 2026 with 27% year-to-date growth, and is already profitable. Almost all products in this target are already launched, so only limited commercial risk remains.
• Vaccine 2030 sales ambition lowered to 9 billion euros, from 10 billion euros previously. 500 million euros of the reduction stems from less favorable euro-dollar exchange rates versus the 2023 baseline, and 500 million euros reflects weaker-than-expected U.S. vaccine coverage dynamics (especially in respiratory and pediatric segments).
• Combined total 2030 ambitions are up almost 10% on a like-for-like constant currency basis, versus the 2023 original targets.

• 2027 Financial Impact Update: The end of Regeneron Development Balance reimbursement in Q2 2026 will create a 200 million euro BOI gap in 2027, as the 600 million euro year-over-year negative impact from the end of reimbursement will only be partially offset by a 400 million euro year-over-year increase in Amvutra royalty income.

Overall Q2 2026 net sales grew 17.8% to 11.6 billion euros, with 15% growth after adjusting for 2025 Dynavax and Blueprint sales. Below is segment-level performance:

• Immunology (Dupixent): Q2 sales exceeded 5 billion euros for the first time, driven by robust patient demand across all indications and geographies, plus a one-off favorable gross-to-net adjustment in the U.S. Dupixent now treats over 1.5 million patients globally, representing approximately 43% of total Q2 net sales.
• Rare Diseases: Q2 sales reached nearly 1.9 billion euros, growing 24% year-over-year. Growth was led by recent launches IVA Kit and Altuvio, with volume growth across most franchise products, representing approximately 16.4% of total Q2 net sales.
• Vaccines: Q2 sales reached 1.15 billion euros, a 5% decline year-over-year. This decline was driven by a very high 2025 comparable base for influenza vaccine sales (which included 2025 one-offs and a larger southern hemisphere season), offset by 54% sales growth for Befortus (to 108 million euros) and 43% pro forma sales growth for Eplisap B (to 113 million euros). Vaccines represent approximately 9.9% of total Q2 net sales.
• New Pharmaceutical Launches: The combined new launch portfolio grew over 60% in Q2 2026 and now represents 13% of total company sales. Key contributors include Altuvio (hemophilia A), IVA Kit (systemic mastocytosis), Sarclisa (multiple myeloma), EPLISA-B (vaccine), and early rare disease launches Wey Reels and Cufitlia, which are already showing early momentum.

• R&D Productivity Risk: Sanofi has a history of pipeline setbacks and has historically over-promised and under-delivered on pipeline results, which has eroded investor credibility. Prior pipeline failures have been linked to insufficient scientific rigor, unclear accountability for go/no-go decisions (particularly for phase 2 to phase 3 transitions), and over-optimistic target product profile assumptions.

• The R&D transformation will take time to deliver improved productivity, so Sanofi is relying on BD and M&A to fill growth gaps in the near to medium term while internal R&D improvements are implemented.

• Growth Moderation Risk: Dupixent, Sanofi's largest growth driver, is expected to see moderating growth rates in H2 2026 as new indications annualize and comparables become tougher. The one-off gross-to-net benefit seen in Q2 2026 will not repeat in future quarters.

• U.S. vaccine demand and coverage has been weaker than expected, leading to a downward adjustment to long-term vaccine sales ambitions.

• Alliance Uncertainty: The Regeneron alliance requires trust rebuilding and potential structural adjustments, and there is uncertainty around the timing and outcome of ongoing collaboration expansion discussions. A narrow ongoing litigation related to information sharing creates additional near-term uncertainty.

• China Market Risk: Sanofi has lost recent momentum in the China market, and pricing dynamics are significantly different than in Western markets, creating execution risk for the planned expansion.

• The ongoing pipeline strategic review may lead to additional asset discontinuations, which could create near-term uncertainty around the long-term growth trajectory.

Q: What are the key barriers to faster progress expanding the Regeneron alliance, and what are R&D transformation priorities for incoming R&D head Paolo? Will R&D spending grow faster than sales?

A: Management's top priority for the alliance is rebuilding trust, which had eroded in prior years. Discussions are ongoing and productive, but no specific timeline for an agreement is provided. For R&D, the focus is reprioritizing the pipeline to focus on the strongest science, highest unmet need, and highest value opportunities. R&D spending will increase at a moderate level that is slower than sales growth, with future changes tied to BD and M&A activity. Investment decisions are driven by expected growth contribution and returns.

Q: Is Sanofi open to larger M&A deals, what are the priority focus areas, and does resolving the Regeneron litigation impact collaboration timing?

A: Sanofi has historically focused on smaller bolt-on deals, but is now open to larger transactions, provided they meet strategic fit, scientific quality, and financial guardrail requirements. Core priorities include rare diseases and China (both market access and in-licensing Chinese innovation), but opportunities will be considered across high-potential disease areas where Sanofi has existing strength. The narrow litigation focuses on a limited information sharing issue, and does not change the core focus on expanding Dupixent and improving collaboration. R&D spending will grow at a moderate rate slower than sales.

Q: What drove the stronger-than-expected Dupixent Q2 result, and what is the breakdown between volume, price, and other impacts?

A: Q2 Dupixent growth is overwhelmingly volume-led, reflecting strong underlying patient demand and robust penetration across indications. The small positive tailwind from a one-off gross-to-net adjustment (including 340B policy changes) is not recurring, and growth will moderate in H2 2026 as expected. The one-off benefit amounted to a couple hundred million euros in Q2.

Q: Why was the 2030 vaccine sales ambition cut by 1 billion euros, and what drove the downward revision?

A: Half of the 1 billion euro reduction comes from a less favorable euro-dollar exchange rate compared to the 2023 baseline when the original ambition was set. The other half reflects weaker-than-expected U.S. vaccine market dynamics, including lower vaccination coverage rates for pediatric vaccines and slower-than-expected growth in the respiratory (flu/RSV) segment, which has softened following a change in U.S. administration. The core long-term fundamentals for vaccines remain strong.

Q: Is the pipeline review complete, and what is the outlook for key upcoming phase 3 readouts for frexalamab and reliprubart?

A: The pipeline review is ongoing, and additional asset discontinuations are possible — decisions are made based on scientific merit, risk, and potential, with no fixed target number of cuts to make. Frexalamab's phase 3 trial remains on track for 2027 (RMS) and 2028 (SPMS) readouts, with regulators engaged to refine statistical analysis for clinically meaningful endpoints. For reliprubart, the IDMC stopped the refractory CIDP trial (Mobilize) for unlikely success, but the trial in IVIG-refractory patients (Vitalize) was recommended to continue, and remains on track for a 2027 readout.