Sanofi (SNY) Q2 2024 Earnings Call Transcript

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Sanofi (NASDAQ: SNY)
Q2 2024 Earnings Call
Jul 25, 2024 , 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Thomas Kudsk Larsen -- Head of Investor Relations

Hello, everyone. This is Thomas Kudsk Larsen from Sanofi IR team. Welcome to the Q2 2024 conference call for investors and analysts. As usual, you can find the slides on sanofi.com. Please turn to Slide 3.

Here we have the usual forward-looking statements. We would like to remind you that information presented in this call contains forward-looking statements, which are subject to substantial risk and uncertainties that may cause actual results to differ materially. We encourage you to read the disclaimer in our slide presentation. In addition, we refer you to the Form 20-F on file with the U.S.

SEC and our French registration document for a description of these risk factors. As usual, we will be making comments on our performance using constant exchange rates and other non-IFRS measures. Numbers used are in million euros and for Q2 2024 unless stated otherwise. Please turn to Slide 4.

First, we have a presentation, then we take your questions. We have kept the presentation short as other companies report today, and we aim at keeping the call to maximum of one hour. For Q&A, we have Brian, Olivier, Thomas, and Julie to cover the global business unit and Roy, our general counsel. [Operator instructions] And with this, I'll hand you over to Paul.

Paul Hudson -- Chief Executive Officer

Well, Thank you Thomas, so much better when you do the intro. Thank you, and hello to everyone on the call. Our strong business momentum continued in the second quarter. We delivered double-digit sales growth at CER.

We continue to execute on our pharma launches, and we keep advancing our pipeline of new medicines. Our growth was driven by a strong quarter for Dupixent, seven years into its launch and the broad-based performance of our new medicines. Our vaccine sales were stable when excluding the effect of last year's COVID sales. The sales of Opella, the new name of our consumer healthcare business grew by 10%, with the U.S.

wellness brand Qunol is the main driver in the United States. Based on the robust growth we've seen in the first half, we are confident about the stronger outlook for the remainder of the year, and that's why we are upgrading our earnings per share guidance for 2024, and Francois will provide more details in a moment. Turning to Slide 6. Dupixent reached a significant new milestone for the first time.

Sales exceeded the 3 billion euros mark in a single quarter. This new quarterly sales record highlights continued strong volume growth across approved indications, age groups, and, of course, geographies. Dupixent's growth of 29% in the quarter was fueled by its consistent and robust U.S. performance.

Given the timing of July 4 Holy Week, we saw a slightly stronger volume trend at the end of June. The rocket expansion in key markets outside the U.S., such as Japan, China, and Europe further boosted Q2 performance, growing at almost double the pace as the U.S. Looking ahead, we remain excited by the near to midterm growth outlook to Dupixent, which bolstered by a series of upcoming regulatory catalysts inside and outside the U.S. We recently obtained the EU approval for COPD, and we're looking forward to the U.S.

PDUFA decision at the end of September, which is expected to be a significant driver for Dupixent's continued expansion. Overall, we remain on track for our target of around 13 billion euro in 2024, in line with our low-double digit compound annual growth rate goal set from 2023 to 2030. Now on Slide 7, turning to our launches and how we bring innovation to patients. Quarter after quarter, the growth of these new medicines increasingly contributes to our top line growth.

Francois will explain the key contribution of these successful launches to the accelerated business dynamics in a minute. Growth of Nexviazyme due to patients converting from legacy treatments in Pompe franchise remains a key driver. Most eligible patients in the U.S. are now on the new standard of care with Nexviazyme and patients continue to convert outside the U.S.

ALTUVIIIO annualized is launch to the end of March. Growth rates remain very strong with higher sales predominantly in the U.S., where it was driven by patient switches, of which an increasing majority came from medicines other than Eloctate. Other medicines have done well in growth in absolute terms including Sarclisa's fast expansion in Europe and Japan. As expected, Beyfortus sales in Q2 were low due to vaccine seasonality.

Looking ahead to the upcoming RSV season in the Northern Hemisphere, we remain excited by the opportunity for Beyfortus to advance toward all infant protection and reached blockbuster status globally in 2024. As the world leader in flu vaccine, Sanofi has a pivotal role to play in bringing forward innovative solutions against this disease by addressing current challenges and building strategic partnerships. In May, we announced a new partnership to combine Novavax's COVID-19 vaccine with our differentiated flu vaccines with the goal to create a best-in-class combination. This new combination will include our flu vaccines that have proven efficacy in preventing flu infections and its severe consequences such as pneumonia and hospitalizations and of course, has received an ACIP referential recommendation.

We believe our truly differentiated combo vaccine will demonstrate favorable tolerability compared to current COVID-19 mRNA-based combination vaccine candidates, ultimately driving higher vaccine rates. To clarify, we believe that combination vaccines developed by competitors that would compromise tolerability or proven level of efficacy with damaged vaccine confidence and further impact vaccination rates negatively. In addition, Sanofi will commercialize Novavax's COVID-19 vaccine from next year and book the sales. Thanks to our leading commercial capabilities, we hope to be able to further drive broader acceptance of COVID-19 immunization.

Considering the recent public concern about H5N1 avian influenza, we take responsibility in pandemic preparedness with two pivotal programs. Our egg-based protein adjuvanted vaccine is set to begin a study in Q3 in collaboration with BARDA, and our mRNA pandemic flu program will enter clinical studies in the coming months. In summary, our commitment to innovation continues to drive our leadership in the flu vaccine market, ensuring we are prepared to meet current and future challenges. Well, let me conclude by highlighting a separate positive note relating to our ESG commitment.

TIME Magazine recently ranked Sanofi as the world's seventh most sustainable company across industries and first in pharma. This ranking reflects the progress of our integrated ESG strategy. And thanks to our comprehensive carbon transition plan, we are now on track to meet carbon neutrality in 2030, in line with our science-based target initiative commitment. To achieve this target, we focus on key decarbonization levels presented on the slide.

For Scopes 1 and 2, 43% reduction of our activities was already achieved, and we are targeting 55% reduction by 2030. The Scope 3, 10% reduction was so far. We're aiming for 30% across the value chain. With that, I hand over to Francois, our CFO.

Francois Roger -- Chief Financial Officer

Thank you, Paul. Good morning, and good afternoon to all. Let me start with our sales development on Slide 11. We have delivered robust results in the second quarter with 8% reported growth and even 10% at constant exchange rates.

Our growth is broad-based across businesses and geographies and hyperinflationary countries had only a limited contribution to our growth. We are delivering quality growth as you can see on the right-hand side. Our continued portfolio transformation is a key growth driver with strong performance from Dupixent and the ramp-up of our newly launched medicines. Other products also had a significant contribution.

Please turn to Slide 12. Gross profit showed double-digit growth in line with our sales performance. Gross margin was slightly down due to unfavorable currency impact or bad [Inaudible] and COVID-19 revenue last year. At constant exchange rates, our gross margin has slightly increased, mainly driven by improved product mix.

Total operating expenses were up by 5.2% as we invest in marketing and sales to support launches and in R&D. R&D expenses grew double digit when excluding the onetime 200 million euro reimbursement from Sobi related to ALTUVIIIO. We are fully on track with the step-up of our R&D spend by approximately 700 million euros this year, 2024 around 7.4 billion euros. SG&A expenses grew substantially less than sales growth, generating a positive gross leverage impact on margin.

Business operating income grew 8.3% and business EPS growth was up by 4%, driven by higher BOI, partially offset by the higher tax rate of 21% as well as increased finance costs from higher net debt. Please turn to Slide 13. Based on our current performance in the first half of the year on a strong business outlook for the remainder of the year. We upgraded our earnings per share guidance for 2024 to stable at constant exchange rates.

Let me now give you a little more color on some key considerations for the balance of the year. On [Inaudible], we anticipate the first shipments in the Northern Hemisphere that could take place in Q3. Regarding phasing, Q4 sales are likely to be higher than Q3 ones based on regulatory approval of the two additional filling lines expected in September. On flu, we anticipate the phasing with approximately 70% of sales in Q3 and 30% in Q4.

Total sales for flu are expected to decline low-single digits versus last year due to an expected softer vaccination rates. Other items are similar to what we shared with you last quarter. So overall, we are pleased with our Q2 commercial and financial performance, with sales growth of 10%, underlying improvement in gross margin, further cost discipline, and the continued modernization across the company. This positive momentum in Q2 and the positive outlook for the balance of the year leads us to upgrade our guidance.

With that, I hand over to Houman for further positive news on the pipeline.

Houman Ashrafian -- Global Head of Research and Development

Thank you, Francois. Slide 15, we've achieved several milestones this quarter, showing our continuous pipeline progress. Dupixent for the treatment of COPD, was approved last month in the EU, and this is the first time Dupixent has been approved in the EU ahead of the U.S. Further, it is the only biologic medicine approved to treat COPD anywhere.

Now ALTUVIIIO is also approved in the EU under the name Altuvoct. We've received several accepted regulatory submissions, including priority reviews of Dupixent and CRS with MP and adolescents and Sarclisa in newly diagnosed transplant ineligible multiple myeloma with U.S. PDUFA dates in H2. Additionally, fitusiran, our RNA interfering antithrombin for patients suffering from hemophilia A and B, has been submitted in the U.S.

with a likely regulatory decision early next year. In support of our drive to become a tech-powered biopharma company, we formed a recent collaboration with Formation Bio and open AI to accelerate drug development, also supported by the collaboration with Belharra to advance the discovery and drug in immunology targets fitting perfectly with our Nurix research program STAT6, a key target in immunology. Completing our focus on rare diseases, we've recently announced a development and commercialization agreement outside the U.S. with Fulcrum for losmapimod, a MAPK -- a MAP kinase inhibitor and in facioscapulohumeral muscular dystrophy, a genetic neuromuscular disease characterized by progressive muscle weakness.

This medicine is in phase 3 with an expected data readout by the partner at the end of the year. Moving forward with neurology, we have two recently announced -- we have also recently announced our exclusive license rate with with Vigil with one small molecular phase 1, focusing on an area of huge unmet medical need, Alzheimer's disease. These regional activities are helping us to replenish our early stage projects to ensure the sustainability of our line. Next slide, please.

The ATS meeting in May, we presented high-dose phase 2 data from the proof-of-concept withdrawal design study of rilzabrutinib, our advanced oral targeting both type 2 and non-type 2 inflammation in moderate-to-severe asthma. In week 12, treatment with high-dose rilzabrutinib resulted in a 36% relative risk reduction in the loss of asthma control events compared to placebo. This extended a 25% reduction observed in the low-dose cohort. Additionally, we observed a rapid normally significant and clinically meaningful improvement asthma symptoms and quality of life with a well-tolerated safety profile.

These positive results demonstrate the potential of rilzabrutinib as an add-on for uncontrolled asthma patients and are part of a broader set of studies to build on the positive phase 3 data in ITP for the regulatory submission expected later this year. Slide 17. Turning to oncology and the recent ASCO meeting, we presented our important phase 3 data from the IMROZ study in the newly diagnosed myeloma transplant ineligible patients. The primary endpoint is met with a statistically significant reduction of 40% in disease progression or death for patients treated with Sarclisa-VRd versus VRd Lite.

Estimated 63.2% of patients had no PFS event of 60 months versus 45.2% for patients treated with VRd Lite. This frontline use and transplant ineligible patients were formed potentially a third indication of Sarclisa with expected regulatory decision by September '27 in the U.S. Several additional studies are currently ongoing to further extend indications to Sarclisa, including the subcutaneous formulation. Slide 18.

On my last slide, I would like to highlight the exciting upcoming news flow for the next 18 months in support of increased R&D productivity. We plan 12 phase 3 readouts, 13 submissions, nine regulatory decisions, and we look forward to keeping you updated on the progress. Before handing back to Paul, I'd like to extend my sincere thanks to every colleague in the R&D team for the work they do for patients. We've undergone changes over the past month.

We're well on track with the pipeline of new opportunities as we chase the miracles of science to improve people's lives. With this, I hand back over to Paul for Q&A.

Paul Hudson -- Chief Executive Officer

Well, thank you Houman and Francois. We'll now the call to questions. [Operator instructions] Remember, we're seeing many of you again early next week. [Operator instructions] The question will be ready and read by our panelists.

Now I'll take the first question, Thomas?

Questions & Answers:

Operator

Your first question will come from the line of Graham Parry, Bank of America.

Graham Parry -- Analyst

Hey, thanks for taking the questions. So firstly, on Beyfortus, could you just confirm current guidance still only assumes the existing capacity and 1 billion euros of sales with approval of expanded supply being upside to that? And then can you clarify the scale of the expanded capacity. So I think you talked about two lines adding to one. So can we just assume that's sort of tripling? And can we read your phase and comment on Beyfortus more in fourth quarter and third quarter to mean that you might not have the manufacturing approved by the beginning of the season in September? And then secondly, on Opella, just wondered if you could update us to the time lines in which you expect to be able to clarify to the market the root of separation so sale versus spin and perhaps just help us understand the factors that go into the decision between the two at this stage.

Thank you.

Paul Hudson -- Chief Executive Officer

Thank you. I think there was five questions there, Graham, thanks. I don't know what I need to do. But anyway, Thomas, over to you.

Thomas Triomphe -- Executive Vice President, Sanofi Pasteur

Thanks for the question, Graham. So a few elements to answer your questions. First of all, we're confident Beyfortus will be a blockbuster in 2024. That's the guidance that we have provided, and we are fully aligned with that.

You remember the different messages we had provided previously, the fact that in order to increase supply we need, as you pointed out, we have two filling lines. We wanted to make sure that we will bring production at risk with our partner, AstraZeneca. And then we are submitting, of course, the regulatory applications for the regulatory bodies to approve those lines in due time. So we are exactly on track with this plan, i.e., we have done production at risk as expected.

We have done PPQ batches and serverization batches, and we have submitted to the different regulatory body, all the different regulatory applications for those lines. Now it's in the end of the regulatory bodies for the exact timing of the approval, which will enable the overall shipment of the season. But we believe that there's all the reasons to be confident about the accelerating review process of those lines and about the fact that we'll be able to move forward for the supply for the 2024 season. Now in terms of the indication we've provided on the split in quarters between Q3 and Q4, we have pointed out to the fact that we expect, again, within what we know today to have Q4 sales above Q3 sales.

That's because here, while it's a seasonal product, there are some differences with flu, for example, where you have in flu vaccinations earlier of the season and that's it. Here for RSV, there's all the in-season born babies that are born in the month of October, November, December, January, February, and March. And that also accounts for a significant [Inaudible]. Therefore, with information we have today, we believe it's reasonable we expect Q4 sales to be above Q3 sales.

Overall, confidently moving toward the coming our decision and again confirming the guidance, but it will be at least blockbuster sales for us in 2024.

Paul Hudson -- Chief Executive Officer

Thank you. Francois on Opella.

Francois Roger -- Chief Financial Officer

Yes, Graham. On Opella, as far as the timing is concerned, we confirm what we have said before, which means we expect that transaction to take place at the earliest in the fourth quarter of '24 could be potentially in the first quarter of 2025. But I think it would make a big difference. I do confirm as well that we are still in a very competitive process with basically three options.

Two of them are public, either an IPO or a spin, and one of them is more sent to a private party. So the game is still totally open as we speak with one objective, which is value creation for shareholders. Maybe to help you a little bit, the two main items that we are looking at is clearly the valuation the value as of today or whatever we could extract us value in the future as well under different configuration, but it's very essentially value story. We are taking into consideration, obviously, the execution risk, certainty of transaction versus uncertainty.

That's part of what we are looking at. The good news I can share with you is one is that the process is any way between the different options very competitive. So which means that usually when you have a competitive process, you're in a better position to extract value. So we are very positive for what is the quality assets.

Paul Hudson -- Chief Executive Officer

OK. Thank you. Next question.

Operator

Next question comes from the line of Shirley [Inaudible] from Barclays. Shirley?

Paul Hudson -- Chief Executive Officer

Shirley, you might want to --

Unknown speaker -- -- Analyst

Can you hear me OK?

Paul Hudson -- Chief Executive Officer

Yes. We got you.

Unknown speaker -- -- Analyst

Thank you. Shirley [Inaudible] from Barclays, asking questions for Emily Field. We have one question for flu vaccine. Can you please share with us the time line for the COVID-19 and plus flu vaccine on the preparation with Novavax.

In addition, how would you comment on the perspective of flu vaccine over solo flu vaccine? Also noticed you have an mRNA flu vaccine in phase 1. How would this candidate provide potential synergy or other impacts on your current product launch? Thank you.

Paul Hudson -- Chief Executive Officer

Thank you. Thomas?

Thomas Triomphe -- Executive Vice President, Sanofi Pasteur

Thank you very much, Shirley, a few elements in your question. First point, I understood you got questioning on the partnership with Novavax and more specifically about the combination vaccines where we have you understood very well, we really want to make sure that there is no compromise either on safety or efficacy. And we believe that the combination is only worth if you at least as good or better than the best stand-alone products separately. That's exactly what we want to do with the vaccine.

It's a bit too early to talk to you about specific time lines. That's why we have not shared anything about this, but it's probably not crazy to think, but following this partnership, we want to go fast, and we intend to start clinical operations this year in 2024 on this combination vaccine. That's for the combination vaccine. Now you -- I pointed to a couple of elements which are very important.

First of all, you had the questions on our mRNA flu project. And you had a question about is it synergistic or not? A few good points there. On mRNA flu, you've seen in the pipe and appendix, but we are moving our phase 1 mRNA flu from one product to another product, very simply fully in line with what we were discussed at the investor event last year where basically we were showing that the first generation of mRNA flu are not moving the needle. Basically, first generation mRNA flu are generating flu titers, flu antibodies, but the efficacy is not known, and the level of safety is definitely not at level of safety and tolerability of the current standard of care.

So that's why we claimed at that time, but we want to go to the next generation of harmony. And that's exactly why we are doing with this new contract, wanted to go to the next stage of mRNA flu because if you're not improving standard of care, there's no point of moving further develop. And that's why we believe our approach mRNA flu and our approach on combination vaccine is the right one. Of course, you've seen the difference with some others, but there is a big compromise on tolerability and maybe on efficacy.

We don't think it's a winning recipe. Last but not least, you understand that putting all this together, we see a synergistic effect and not a cannibalization effect. We are leaders in today. We will be again leader tomorrow.

Paul Hudson -- Chief Executive Officer

Thank you, Thomas. Next question.

Operator

So your next question comes from the line of Seamus Fernandez, Guggenheim.

Seamus Fernandez -- Analyst

Thanks very much for the question. So I wanted to just drill into expectations for the COPD launch hoping you could just provide us with a little bit of color on the trajectory of growth. We saw very strong growth from Dupixent in so many other launch categories, but this is a uniquely large one. And I just wanted to get some color there.

And then just as a separate question, can you give us your thoughts on the -- where you think the CD40 ligand asset has the most appropriate opportunity outside of multiple sclerosis. Thanks so much.

Paul Hudson -- Chief Executive Officer

OK. Brian, COPD.

Brian Foard -- Global Business Unit Head, Specialty Care

Well, thank you so much for the question, Seamus. We are really excited about the COPD line. Obviously, we just remind everybody that we just received approval in Europe, first ever advanced therapy to be approved in COPD. Third leading cause of dead worldwide.

Really important moment for us in the company and certainly for patients. As it relates to the update, the good news is we're already in this particular physician population day to day basis with asthma. The good news is also this disease state, as we've highlighted, is driven by underlying Type 2 inflammation, and that is also very similar to asthma. So the storyline is still very strong.

The opportunity will be for us to find these patients and make sure that we get them into the treatment centers to make sure that we are able to get them introduced to therapy soon. As we said, we think that most of the growth will hit us in 2025 and we'll begin the launch this year, and most probably in 2025.

Paul Hudson -- Chief Executive Officer

Thank you. Houman, CD40 ligand?

Houman Ashrafian -- Global Head of Research and Development

Yes, thank you for the question. Outside the multiple forms of multiple sclerosis, where this may be relevant confidence around the use of this node, both in Type 1 diabetes and in stroke transplant rejection is the most obvious place where the biology direct us.

Paul Hudson -- Chief Executive Officer

Thank you. Next question.

Operator

The next questions come from the line of Jo Walton with UBS.

Jo Walton -- UBS -- Analyst

Thank you. If I can return briefly to Beyfortus. I think we can work out for ourselves the level of demand in the U.S., and assuming that you have capacity, how you might deal with that. But can you give us a sense of where demand is building outside of the U.S.

Will there be significant new countries that you can supply this year? Or will other major markets really come in next year? So it's really trying to get a sense of the U.S. ex U.S. split. And on fitusiran, which is now a filed asset, could you remind us where you think that's going to fit in the hemophilia space, please?

Paul Hudson -- Chief Executive Officer

[Inaudible] loud and clear. Thomas, over to you on Beyfortus.

Thomas Triomphe -- Executive Vice President, Sanofi Pasteur

On the geographies, thanks for the question, Jo. You remember that last year, we were already focusing on three large countries, namely the U.S., Spain, and France. So those, of course, will remain in balance and really moving forward. In addition to this, we will be opening this year a few countries.

I'm not going to name them also. So I hope nobody will be best if I forget a couple of them. But to tell you the key ones, we expect a few provinces in Italy to launch. We expect Germany, you've seen the sticker recommendation to move forward on vaccination.

We expect other European countries such as Ireland, Belgium, and Portugal, which have also provided some recommendation. So that gives you a bit an example of how we will expand this year on.

Paul Hudson -- Chief Executive Officer

And maybe I'll just add that effort is not the reason for the upgrade in guidance today. So that's a positive overall. I apologize for anybody offended by Thomas' language. Houman, on fitusiran.

Houman Ashrafian -- Global Head of Research and Development

Hi, Jo. Thanks for the comment on fitusiran. Based on the mechanism of action, we believe that fitusiran is applicable to all patients with hemophilia and will likely be used broadly. I'll come back to it in a nanosecond.

The real issue is the major unmet medical need today in hemophilia B, especially with inhibitors. And I suspect that the immediate use of this medication will be in that group, but will certainly extend more broadly. It's important to remind everybody -- this is a highly differentiated therapy but very clear data. The factors that make this an important part of the landscape of the hemophilia treatment is that it's a low-volume treatment with really tolerable profiles of injection six to 12 times a year compared to the manifold number of treatments for further treatment categories.

And importantly, there's no cold chain. And like antibodies, this is very easy to provide worldwide. So in many ways, this is a highly differentiated therapy, and we are optimistic about it out.

Paul Hudson -- Chief Executive Officer

Yes. Thank you. It does have a great profile. We accept that there'll be some tailoring to titrating, not uncommon with this patient population, but it has a really great and compelling profile.

Next question.

Operator

The next question comes from Tim Anderson with Wolfe.

Tim Anderson -- Analyst

Thank you. Just on tolebrutinib, just update on timing and then really what the most likely base case expectations should be? I guess, I'd like to distill it down to a single question, do you think tolebrutinib will be approval in some form or another based on the upcoming readouts? Or could it be a total zero? Thank you.

Houman Ashrafian -- Global Head of Research and Development

Thanks for the question. No update on the timing as we discussed late August, early September this year, consistent with what we've said I'm mindful, of course, of our reporting obligations, and we will be deeply conscious of how we provide a data flow at the top of mind, just in terms of speculating on the outcomes of the trials, of course, I can't do that. But I have to say we're optimistic about the path for those drugs. And I would really point out simply that currently in multiple sclerosis, there's a huge unmet medical need and secondary progressive disease and a phase 2, we had really interesting results.

So going forward, we'll see the results very soon.

Paul Hudson -- Chief Executive Officer

Yes. And I think we know that, the fact that we crossed some blood kindly meaningful way. We'll find out when we get the results, whether that is applicable to the readouts in the studies, and we'll see when that differentiation holds. So we say on leverage all time lines, next question.

Operator

The next questions come from the line of Luisa Hector, Berenberg.

Luisa Hector -- Berenberg Capital Markets -- Analyst

Hi there. Thanks for taking my question. So for Dupixent expansion into more indications. So first of all, with CSU and doctors we speak to, firstly, absolutely love Dupixent.

But they're also confident there is an effect in CSU. So I'm just wondering, how we should think about Study C? Will it be sufficient for approval? What's the profile you're aiming for and how you put that in the context of the broader pipeline, rilzabrutinib, etc.? And then perhaps just a comment on the UC phase 2 when should you have the induction data in-house?

Paul Hudson -- Chief Executive Officer

OK. Thank you, Louisa. Brian, Dupi indication expansion Study C.

Brian Foard -- Global Business Unit Head, Specialty Care

OK. I think is going to talk a little bit about the profile potentially. But just as you said, and I like -- I love what you said, when you talk to patients, how much they love Dupixent and physicians how much they love Dupixent. You're absolutely dermatologists are excited about the potential expansion into CSU.

We need a trial to read out positive, and then we'll file for this. We, by the way, just to let you know, our first launch in CSU is actually in Japan a little bit earlier this year, and it's gone exceptionally well, still early days. But again, I think it further reinforces the profile that we bring to the dermatologist community who are treating multiple of these disease states that we have today. So again, we look forward for the data readout and bringing this to patients all around the world.

Houman Ashrafian -- Global Head of Research and Development

Yes. Luisa, nice to hear your voice and thank you for calling. Study C, like Study A, we have high hopes for efficacy in patients.

Paul Hudson -- Chief Executive Officer

OK. Good. TL1A.

Houman Ashrafian -- Global Head of Research and Development

TL1A. Thanks for the question for that. As you will have seen, as an example of the potency of the collaboration and what we bring to the table in collaborations when Sanofi comes to the table in immunology, we have accelerated the study by three months. We finished early, we overperformed.

We're optimistic about both this disease class and the differentiation of this TL1A, particularly based on its raw horsepower and potency, but also its ability to distinguish between DR3 and the Decoy 3 receptor, which make this a highly unique version of the TL1A molecule4. We anticipate results, I think, has been described in Q4 of this year. And we're using this trial to both guide dosing but also indication. And just to call it out, we've enjoyed the relationship with our partner Teva.

And from this point on the end of this result, we'll pick up the baton on the phase 3.

Paul Hudson -- Chief Executive Officer

Right. Thank you. Next question.

Operator

The next question comes from the line of Florent Cespedes of Bernstein [Inaudible].

Florent Cespedes -- Analyst

Good afternoon. Florent Cespedes of Bernstein. Two quick questions. First, a follow-up on Beyfortus.

If you have the approval of the two manufacturing lines later this year, could you tell us how do you see the capacity for 2025 will be twice the current level you have today? So some color on this front would be great. Second question for Houman. Which are in your most important phase 2 projects that will read out until the end of next year in your portfolio? It would be great to have this comment.

Paul Hudson -- Chief Executive Officer

Thomas, on Beyfortus.

Thomas Triomphe -- Executive Vice President, Sanofi Pasteur

So on Beyfortus, we didn't give any specific number on capacity. But if we have the in lines approved, which we will. I think we will be in a situation in 2025 to correspond to the demand. So I don't see any sub-issues there.

Of course, I understand the short-term focus on supply of very clearly. But of course, you understand also that we need to build the demand over time. The registration is to be followed after by a recommendation body. So in every country, new recommending bodies will look at the file one after another.

And I think we'll see a ramp up from there on. But capacity, we should be good.

Paul Hudson -- Chief Executive Officer

Thank you. And Houman, the question about which is your favorite trial?

Houman Ashrafian -- Global Head of Research and Development

Yes. Thank you. Thank you for the question. I won't pick out my favorite.

I'll try and be brief and thoughtful about this answer, which is, firstly, we've got a number of vaccine trials reading out. I don't want as we go through this to forget those excellent vaccine trials to read out to the the end of next year. In terms of classes, you'll know that we've got an excellent accompaniment to our ITP franchise with [Inaudible] autoimmune hemolytic anemia with rilzabrutinib, that's an extremely exciting result. Luisa kindly referred to our TL1A product.

I think that is going to be exciting for us, both now and with Teva. And then going into next year, the IRAK4 that we've gone in partnership, the oral small molecule TNFR1 signaling inhibitor, which could be transformative. We'll wait with great interest, both safety and efficacy. And finally, and not least, not forgetting our energy franchise, our alpha antitrypsin fusion protein is going to be an impact.

It's going to have an important milestone next year. I haven't missed any out on purpose. I just want to call out that all of our franchises immunology, neuro, rare, and vaccine are firing on full thrust.

Paul Hudson -- Chief Executive Officer

Thank you. Next question.

Operator

Next question. The next question comes from David Risinger, Leerink.

David Risinger -- Analyst

Yes. Thanks very, and congrats on the strong second quarter execution. So I have two questions, please. First, assuming itepekimab generates compelling results in phase 3 next year, could you please characterize the magnitude or multiple of its sales potential in COPD relative to Dupi in COPD? And second, could you also comment, Paul, on China's interest in Beyfortus and whether there's a potential path to launch in China late decade? Thank you.

Paul Hudson -- Chief Executive Officer

OK. Brian?

Brian Foard -- Global Business Unit Head, Specialty Care

OK. So first, thank you so much for the question. In reference to COPD. As we have framed COPD before, there's about 2 million patients across the G7, really to suffer as we talk about this kind of that high unmet need go, if you will.

This particular patient population, we're going to be bringing two therapies, at least to this particular patient population. Dupixent, as we said, which is very soon, itepekimab is next. Itepekimab, as we shared with you before, is largely non-Type 2 will play in Type 2 as well, but all previous smokers. So these two drugs are really going to nicely sit together.

And I think as we've contextualized this before, roughly around 5 billion euro in peak sales across the two assets.

Paul Hudson -- Chief Executive Officer

Thank you very much. Thomas, China Beyfortus.

Thomas Triomphe -- Executive Vice President, Sanofi Pasteur

China Beyfortus, indeed, there is interest in China for Beyfortus. But let me maybe provide some light on this as many MNC vaccines here in this specific case of an immunization, we expect Beyfortus will be private out-of-pocket market, that's very important to have in mind, which means progressive ramp-up. We are starting from a base in China where the disease awareness is close to zero. Will need the next couple of years to build that up.

As you know very well, Beyfortus has been registered in China. So now we are in the phase of actually engaging with medical professionals, defining the pathway moving forward disease awareness and then activating parents for out-of-pocket market.

Paul Hudson -- Chief Executive Officer

Thank you. And we were in China recently with some senior officials, you can see the interest building significantly. So we look forward to opening that opportunity when it presents itself. Next question.

Operator

The next question comes from Gary Steventon with BNP Paribas Exane. Gary?

Gary Steventon -- BNP Paribas Exane -- Analyst

Hi. Can you hear me now?

Paul Hudson -- Chief Executive Officer

Yes. We got you.

Gary Steventon -- BNP Paribas Exane -- Analyst

Perfect. Thank you. First question is just on vaccines. You're reiterating the mid-single-digit growth target and also the Beyfortus blockbuster addition, but there is a more refined low single-digit decline for flu, which is probably a bit weaker.

So the question is on kind of where the other moving parts in vaccines are which still support the mid-single-digit outlook? Is that purely just greater confidence in passing the Beyfortus blockbuster target or setting flu? Or is there something else in the wider portfolio to think about? And then secondly, just on Dupixent. Could you just talk to how the performance of the approved indications is trending and that relative contribution to the unchanged these target for this year and just whether there's any particular pockets of strength or weakness by indication relative to your expectations in that Dupixent number? Thank you.

Paul Hudson -- Chief Executive Officer

Thank you, Gary. I think we've sort of touched on the relative moving parts from flu and Beyfortus and etc. But Tom, any additional color to add?

Thomas Triomphe -- Executive Vice President, Sanofi Pasteur

Yes. So Gary, I don't think there's any magic recipient there. So blockbuster status for Beyfortus low single-digit decline on flu, not driven to our own performance, which we expect will be strong, but not driven by the overall, I would say, market performance in terms of flu vaccination rate. We are at the end getting soon at the end of the prebooking season in North America, and we see a bit in plan with last year, but the vaccination rate is probably on the soft side of things, which is why we've made that perspective.

On the other parts of vaccines, it's well in line with what we said before, some slight growth in our, I would say, classical endemic products or boosters and on the other hand, Dupixent, you know very well that while in the BOA perspective, we're doing well. Vaxelis in the U.S. is not booked in our sales performance. So when the product is doing well in the U.S., it does not come in the side, but more comes in the time line.

I would say, expected for the other parts of the business.

Paul Hudson -- Chief Executive Officer

Thank you. And you saw, but we will likely gain share in the flu market, even at the vaccine coverage rate is low. So the expectation operationally, we're in good shape. Brian, performance of Dupixent in currently approved indication.

Brian Foard -- Global Business Unit Head, Specialty Care

Yes. Thank you so much for the question, Gary. First and foremost, I'd say it's heavily demand-driven right now from a patient standpoint. We're in a great position where we're seeing expansion not only in our core indications that we've been launched in but also in those core indications across geographies everywhere as we've launched into those new occasions around the world.

So I'd say we're really benefiting again, as Paul outlined on the very first slide that it is TRx demand. It is all about new patients on therapy or patients staying on therapy across all of our indications and across all the geographies. And that puts us really in a good position, again, to reconfirm, as Paul said earlier, our guidance on Dupixent of around 13 billion euros for this year and which sets us up nicely for the guidance that we've given of double-digit CAGR -- low double-digit CAGR rate through 2030.

Paul Hudson -- Chief Executive Officer

Thank you. Next question, please.

Operator

The next question is from Simon Baker with Redburn.

Unknown speaker -- -- Analyst

Hello, this is Shirley speaking on behalf of Simon Baker. Just two questions from myself. One was about your appetite for Radiopharma? And if you had any changes in your approach, I would explain the better performance in the older broader portfolio? Thank you.

Paul Hudson -- Chief Executive Officer

OK. I missed the second question.

Unknown speaker -- -- Analyst

Sorry, if you had any -- have there been any changes in your approach that would explain the better performance in your slightly older portfolio?

Paul Hudson -- Chief Executive Officer

OK. Thank you. On radioligand therapy, Houman, if you want to make a quick comment?

Houman Ashrafian -- Global Head of Research and Development

Thank you for the question. The reason this, of course, is radioligand a therapy is had a recruit essence of interest. We remain watchful in this space and are thoughtful about making into truly differentiated therapies but there is nothing that we currently have going on in our portfolio.

Paul Hudson -- Chief Executive Officer

Thank you very much. And just to add to that, that we remain very committed to the core therapeutic areas. We've made trade-offs to stay very focused. So a broad answer to a very specific question, we would have to feel there was something adding to make us want to go outside of what we do because we are really focused on the areas that we want to win and play.

I think, Olivier, I don't know what prompts the question, but I do know that you've been in a radical modernization of the Gen Med business and has seen the the benefits from that. Maybe I want to share a bit of your secret sauce?

Olivier Antoine M. Charmeil -- Global Business Unit Head, General Medicines

Yes. So we are happy with the performance of the old portfolio even if during the quarter, we had some positive momentum on, which is a windfall, which reflects the fact that we had a very low base in 2023 and of course, also to the availability of one of our competitors. But stepping back, I think we pay we benefit from the efforts that we have been doing in bringing more focus. And you know that the focus we have brought it in terms of simplification of our portfolio back four years ago, we had close to 400 product families.

Now we are 100. We are benefiting also from that we are simplifying our geographic footprint and deciding to go to a distributor model. And the last point is really about resource allocation. We have redirected our resources and we take out some resources on the portfolio that can drive growth.

On the -- so strong momentum. We move more and more in digital in order to make sure that we continue to take out some resources and to maximize the value of this business. So overall, a very good trend, very specific situation in the U.S., but we are overall very happy with the performance.

Paul Hudson -- Chief Executive Officer

Yes, I've got to compliment Olivier and the team on this because this reinvention and this modernization, the radical transformation is pretty extraordinary, and we did hold a capital markets a few years ago and talked about our ambition and we declared that we wanted to try and bottom the business out in stock, we're turning to growth in a more efficient way. We're not declaring victory far from it. There's lots of puts and takes. But I would say the indications, early indications are great, so thank you for the question.

OK. Next question.

Operator

The next question comes from Ben Jackson with Jefferies.

Ben Jackson -- Jefferies -- Analyst

Hi. Thanks for the question. So firstly, on contracting for Dupixent for 2025, are you able to give us any color on how the discussions of have been going considering the Part D redesign, but also the potential COPD indication by then? And then does the September approval versus the prior June expectation, have any implications for inclusion and formularies for next year? And then secondly, if I may, we've obviously seen a qualitative readout for a competitor to Beyfortus in the recent days. What gives you retained confidence in the differentiation of the asset and its commercial opportunity beyond perhaps the -- just the compelling real-world data that we've already seen? Thank you.

Paul Hudson -- Chief Executive Officer

OK. Great. Thanks, Ben. Dupi, Brian?

Brian Foard -- Global Business Unit Head, Specialty Care

Thank you so much for the question. So yes, obviously, we don't comment too much on how the negotiations are going with the payers, but we always kind of remind everybody that we've been in this position for quite some time. We've worked very closely with the external stakeholders to share our ambition is to take this into a whole host of diseases driven by underlying Type 2 inflammation. And you can see, obviously, from the results we've generated a very strong track record of the year.

So we find ourselves in a very good position, I think, as we continue the negotiations for next year, and we do it each year. The second part to your question is, I think the best answer to that is, again, we reconfirmed our strong commitment to around 13 billion euro for the year. So again, we are committed to have a strong COPD launch whenever it does come. But agnostic of that, we are committed to 13 billion euro for this year.

Ben Jackson -- Jefferies -- Analyst

And do you choose an answer, but the pay negotiations around COPD for 25 based on a PDUFA in September round than June?

Brian Foard -- Global Business Unit Head, Specialty Care

Yes, it doesn't really necessarily affect it. As long as it's approved within this year, you're already negotiating for these indications within the next year.

Paul Hudson -- Chief Executive Officer

Thank you. Thomas, RSV.

Thomas Triomphe -- Executive Vice President, Sanofi Pasteur

Yes, Ben, indeed, there has been some recent communication from competitive monoclonal antibody against RSV. A couple of points I'd like to say about this. First of all, as you noted out, there was absolutely no data, neither safety, no efficacy. So there's not much to say in details.

What I can tell you though is I can talk about our product and what it's doing well. You've seen that we have a very strong pristine safety profile. And you've seen that we've demonstrated efficacy, not in one trial, not in two trials, but trials after trials in clinical studies and in evidence studies. And I invite you to go back to the last SCIP publication in June, where they were showing that actually the two effectiveness point against hospitalization were 91% and 98% as measured by the network.

So I think that the overall data set that we will have is very significant. Now of course, moving forward with if and when we're going to see some data coming down the road from competitors. I think it's going to be interesting to look at what is the exact safety profile because we're talking about the most fragile population of the universe, maybe also very interesting to see what is the exact efficacy data, especially when it comes to specialization. And of course, we want to look at the duration of protection on these terms, duration of protection, we are very confident about the Beyfortus profile.

Why? Because we have seen from the previous studies from our competitors that the half-life of Beyfortus is significantly higher and longer than the half-life of the coming competitor. So delighted to have some competition if it helps to bring more and more awareness about the importance of infant protection. However, I think that there will be some difference between the products. And I do believe that the fact that we have done the formulation and the design of a product that gives the exact amount of quantity or the exact kit to get the best protection is paramount to the success of Beyfortus.

Paul Hudson -- Chief Executive Officer

Thank you. Next question. Maybe the last question. Two more.

OK.

Operator

The next question comes from Eric Le Berrigaud with Stifel.

Eric Le Berrigaud -- Stifel Financial Corp. -- Analyst

Yes. Thank you. Two short questions. First, on the other revenue line into the P&L.

We've seen less dynamic this quarter, but I don't want to read too much into a quarter. Is there any chance you can guide us toward how we should see other revenues moving toward the end of the year and maybe for the following years? And then second question on Sarclisa. As you're moving closer to the launch of a very significant indication. So far, the drug is only 0.5 billion euros in sales if we analyze where it is, but the MROs indication is probably at least a couple of billion in potential.

Could you maybe share the kind of cost and resources you're putting behind that of the upcoming launch and how you see competition versus data that you have CFIUS data coming later subcu may be ready, but you having one year launch ahead of competition. And so how big could be that opportunity for the drug?

Paul Hudson -- Chief Executive Officer

Thank you for two little questions. Most of it for Francois?

Francois Roger -- Chief Financial Officer

Yes. Eric, thanks for asking the question on other revenues, indeed, you're absolutely right, difficult to read it by the quarter. And we had a weak revenue amount in the second quarter, but it doesn't mean much at the end. I can confirm that we expect for the full year 2024 to be around the same level as what we have experienced, at least as far as disposal is concerned than we had in the previous years, which is about 0.5 billion euro profit as a consequence of disposal.

So some expectation this year in '24 than what we have seen in the past.

Paul Hudson -- Chief Executive Officer

And Houman, maybe you could keep up, please, on Brian finish.

Houman Ashrafian -- Global Head of Research and Development

Yes. Thanks for the question. We're remain bullish on Sarclisa. Obviously, it's proven at skate in transplant ineligible patients.

But we are looking forward to seeing in the very short term, the outcome and transplant eligible patients, which will give Sarclisa the broadest possible indication profile. The second point I'd like to talk about is the fact that the subcutaneous formulation study will come next year, which will provide much more opportunity and potential sales as Sarclisa in multiple combination indications going forward.

Paul Hudson -- Chief Executive Officer

Thank you. Brian, do you want to add to the [Inaudible]?

Brian Foard -- Global Business Unit Head, Specialty Care

Yes, I think well, first, I'll start with the performance. As you saw in the quarter, we saw a really strong performance again. And again, this is really important that sets ourselves up nicely as we expand our indication it sets ourselves up nicely because you talked about there, but actually, the class of CD38 is really the strongest class there. And that class continues to grow, and that's great.

We talk about the pie growing bigger. But then what we've seen is our strong growth is because we continue to do very well and continue to take share in the areas where we've been approved. So as we look to this next expansion to first-line therapy very soon, we're really excited about that, and we're resourcing it appropriately to be able to take share and to be able to continue to grow this great asset for these patients in multiple myeloma. So we're excited.

Paul Hudson -- Chief Executive Officer

All right. Great. Thank you.

Operator

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

Pete Verdult -- Citi -- Analyst

Sorry, jumping from one conference call to the other. Can you hear me?

Paul Hudson -- Chief Executive Officer

Yes.

Pete Verdult -- Citi -- Analyst

Good stuff. One for Houman and one for Paul, please, just end the call. Just a follow-up on tolebrutinib, just given the absence of randomized phase 2 data or SPMS, can you remind us why you are optimistic in this setting? Or is it just that it crosses the blood brain barrier very well and is again the placebo? And then, Paul, for you, maybe I can tempt you to at least swing the bat a little. Consensus had about 865 million euros of earnings in for next year points to a very nice double-digit rebounding growth for stock trading on just 11 times.

Now I realize this is not a guidance call for '25, but hopefully, I can tell you what you can't resist saying something or giving us a sense level of comfort where consensus is. I know big swing factors COPD with Beyfortus, but just wanted to keep a tie view on where expectations sit for next year and the journey of growth for the remainder of the decade? Thank you.

Paul Hudson -- Chief Executive Officer

OK. Well, I don't want to disappoint you as you jump between calls, thinking you could get them to reveal something about '25. So Francois, do you want to start there?

Francois Roger -- Chief Financial Officer

Yes, I can. Pete, as we said, it's not the time to talk about 20 to 25, let's lean 2024 to start with. But as you can see, we are very positive about it. But no, I'm in a position to fully confirm the fact that we have a very positive -- the same positive outlook for '25 that we had before.

And even -- I mean, it gives us the good performance that we had in H1 gives us further comfort on our expectation for 2025. What you can see as well is 2024 is actually the evidence that the rebound is happening earlier than we thought. And just to help you a bit as well in terms of building blocks for 2025, we do expect to have a solid top line growth again. We will have some positive development in terms of gross margin as a consequence of a positive mix we do expect to be around flat in terms of R&D spend and with the tight control of SG&A.

So all of it is really giving us comfort on the outlook that we had provided before for 2025.

Paul Hudson -- Chief Executive Officer

Thank you, Francois. Houman, we'll leave it to you to bring us home on tolebrutinib.

Houman Ashrafian -- Global Head of Research and Development

Yes. Pete, thanks for the question. The answer is pretty straightforward. I will be a little more nuanced in so far as the pathophysiology of [Inaudible] progressive disease is clearly immunological in neurogen existing therapies, albeit not well used, are very focused on the immune response.

And remember, we believe tolebrutinib differentiated not only through blood-brain barrier permeability, but its effect on the profile of kinase as it hits and importantly, the potency on the [Inaudible]. So bottom line is, we believe it's a great drug working on target in an appropriate indication.

Paul Hudson -- Chief Executive Officer

OK. Well, we'll get the data soon enough, and we'll find out. OK. Well, thanks for that.

Last question, Pete. Our strong business momentum continued in the second quarter. We delivered double-digit sales growth at CR. We continue to execute on our pharma launches.

We kept advancing our pipeline of new medicines. We upgraded our 2024 EPS guidance. Thank you for connecting. We know it's a busy day for you.

We've tried to keep it short out of respect. We look forward to connecting with many of you on Monday and Tuesday of next week. OK. Thank you.

Duration: 0 minutes

Call participants:

Thomas Kudsk Larsen -- Head of Investor Relations

Paul Hudson -- Chief Executive Officer

Francois Roger -- Chief Financial Officer

Houman Ashrafian -- Global Head of Research and Development

Graham Parry -- Analyst

Thomas Triomphe -- Executive Vice President, Sanofi Pasteur

Unknown speaker -- -- Analyst

Seamus Fernandez -- Analyst

Brian Foard -- Global Business Unit Head, Specialty Care

Jo Walton -- UBS -- Analyst

Tim Anderson -- Analyst

Luisa Hector -- Berenberg Capital Markets -- Analyst

Florent Cespedes -- Analyst

David Risinger -- Analyst

Gary Steventon -- BNP Paribas Exane -- Analyst

Olivier Antoine M. Charmeil -- Global Business Unit Head, General Medicines

Ben Jackson -- Jefferies -- Analyst

Eric Le Berrigaud -- Stifel Financial Corp. -- Analyst

Pete Verdult -- Citi -- Analyst

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