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Research Tree provides access to ongoing research coverage, media content and regulatory news on Sanofi. We currently have 15 research reports from 1 professional analysts.
Sanofi continued to report a soft operating performance in Q4. While the headwinds in the diabetes space are widely known, the slower growth in the MS portfolio, poor fate of Dengvaxia and some one-offs weighed on the performance. The weak guidance, although masked by the recent two acquisitions, was a clear disappointment for 2018. The acquisition of Bioverativ (reminding us of the reaction ever since Shire acquired Baxalta) has also not gone down well with the market.
Sanofi has grabbed Ablynx from right under Novo Nordisk’s nose. It announced the acquisition of the the Belgian clinical-stage biotech company, Ablynx at €45 per share in cash, reflecting equity value of ~€3.9bn. Novo Nordisk had been pursuing Ablynx and was rebuffed twice for €28 per share in cash and €2.5 per share worth of contingent value rights, valuing the firm at €2.6bn. It was reported to be looking at sweetening the offer further, but has pulled out after this acquisition.
Sanofi is buying the hemophilia specialist, Bioverativ, for ~$11.6bn (~64% premium to Bioverativ’s share price of $64.11 on 19 January) in an all-cash deal. Spun off from Biogen in early 2017, Bioverative generated sales of $840m in nine months of 2017 and consensus estimates peg 2018 sales at $1.4bn. Sanofi’s management expects immediate earnings accretion (5% accretive in FY2019) and expects the ROIC to exceed the cost of capital within three years. Financing for the deal will come from both cash as well as debt.
Q3 wasn’t a strong quarter for Sanofi – its 4.7% CER growth or rather 0.2% decline on constant exchange rate/constant structure (CER/CS) basis was behind our as well as the street’s expectations. Sales reached €9.1bn vs the consensus average estimate of €9.3bn. NB All revenue growth numbers at CER/CS unless mentioned otherwise. The under-performance (vs our estimates) came not only from the higher-than-expected decline in the diabetes business (-10% at CER), but also from the gradually waning established Rx products (-6.5%) and the ongoing slowdown in the consumer health business (+48.5% at CER but merely 1% at CS/CER). The vaccine business (+7.2%), however, was marginally ahead of our expectations. Currency had a negative impact of 4.4% on the group sales. Genzyme’s business grew by 12.5%, with a strong contribution from Dupixent (€75m in the US), 5% growth in oncology, 2.7% growth in rare diseases and 15.7% growth in the Multiple Sclerosis (MS) franchise. However, the MS franchise lagged behind our expectation, perhaps attributable to increased competition by Roche’s Ocrevus. The established Rx business was negatively impacted by a weak Europe (-4.4%), onset of generic competition for Renvela/Renagel in the US and generic competition for Plavix in Japan, offset to some extent by strong emerging markets (+4.4%). In vaccines, Polio/Pertussis/Hib franchise reported the highest growth of 20.7%, while influenza (€951m; +1.8%) was the biggest contributor. Geographically, emerging markets (+7.3%) single-handedly drove sales, while both the US (-3.7%) and Europe (-1.6%) languished. With 20% growth in Q3, China was the biggest contributor to the emerging markets’ growth. Business operating profit grew by 1.7% at CS/CER to €2.9bn. As a reminder, the company-calculated business operating profit excludes impairment, amortisation, restructuring and includes the share of associates and minorities. The business operating margin in pharma business declined by 120bp to 27.4%, while that for the vaccines business improved by 40bp to 51.1%. Business EPS grew by 1.1% at CER to €1.71. Management maintained its guidance of stable business EPS in 2017 and, given that for nine months the business EPS number reflects a CER growth of 2%, it signals weaker Q4.
Sanofi’s Q1 numbers were largely in line with our expectations and incorporate the integration of Boehringer Ingelheim’s consumer health business and the full consolidation of Sanofi’s European vaccine operations (following the termination of the JV with MSD) and the sale of animal health. Sales came in at €8.6bn (+8.6% at CER and +11.1% reported), with the pharma business (excluding consumer health) growing by 2.2% to €3.7bn, consumer health by 42.7% to €1.3bn and vaccines by 22.2% to €784m; the underperformance in the US pharma business was offset by outperformance by the vaccines. NB all sales growth numbers at CER unless specified otherwise. Thanks to the consumer health business this growth in pharma was registered across all geographies – the US (+1.9%), Europe (+8.1%), Emerging markets (+11.3%) and ROW (+13.1%). However, the devil is in the detail. Barring the Genzyme business, the pharma franchise (excluding consumer health) has been growing only in the emerging markets as the developed markets have languished. The US, on the other hand, was the worst performer with its diabetes business (11% of group sales) declining by 11.5% and general medicines (5% of group sales) declining by 7.6%. Profitability came in ahead of our expectation, primarily due to an outperformance by the pharma business. Reported gross margin improvement of 130bp was countered to some extent by higher SG&A and R&D expenses, which are likely to accelerate further on account of the investments behind the recently-launched Dupixent and Kevzara. Reported business income increased by 15% to €2.4bn, with pharma contributing 97% (vs 91% to sales) and vaccines contributing just 3%. Relating this to the annual business earnings outlook of stable to -3% (at CER) indicates a weaker second half.
Sanofi and Amgen, which are already embroiled in a high-stake case, under review with a federal appeals court for their cholesterol drugs, have added one more to the patent battle. This time Amgen’s lawsuit, through its subsidiary Immunex, claims that Sanofi’s eczema drug (Dupixent) infringes upon a patent related to a failed asthma drug of Amgen. California-based Immunex has also reportedly asked the Boston federal court to transfer the case to California.
Not a good start to the new year – Sanofi has lost the final patent infringement case on its cholesterol-lowering drug, Praluent, to Amgen. The US district court has banned Praluent for 12 years for infringing the patents of Amgen’s Repatha. Both Sanofi and partner Regeneron have said they will be appealing against the verdict immediately.
Sanofi exceeded the street’s expectations in Q3, but met ours. Revenue for the quarter came in at €9.7bn (+3% vs Q2: -0.2%, Q1: +0.7%) and for 9M at €27.1bn (+1.2%), including the held-for-sale animal health business. All revenue growth numbers at CER unless mentioned otherwise. The currency impact eased during the quarter to c.1%. Vaccines grew by 14.4% to €1.8bn (vs Q2: €0.79m, Q1: €0.62m), solely driven by an early shipment of flu vaccines in the US (+19.1% vs -2.3% in Q2). Pharma grew 0.5% (vs -1.7% in Q2), as Genzyme (+18.5% vs 19.5% in Q2) and generics (1.3% vs -1.9% in Q2) shouldered other business-level miseries. The patent expiry of blood thinner Plavix (-9.9%) in Japan and the absence of Auvi-Q sales in the US (Sanofi withdrew commercialisation of the drug in 2015 due to dosage issues with the device) hampered Established products’ performance (-7.4% vs -9.7% in Q2) in the developed markets (-12.5%; -10.9% in Q2). Consumer health (-1.2%; -4.3% in Q2), on the other hand, was pulled down by emerging markets (-4.7%; -13% in Q2). Geographically, the main contributor was the US (+7% vs Q2: +1.3%), while Latin America (+8.5% vs -15.1% in Q2) drove growth in the emerging markets (+5.6% vs -0.5% in Q2). The adjusted operating profit came in at €2.57bn (+38%). The company reported business operating profit (which excludes impairments, amortisation, restructuring and includes share of associates and minorities) grew 11.3% to €3.1bn (vs -11.0% in Q2), reflecting a margin of 32.1% (vs 25.8% in Q2). Net profit grew by 9.7% (vs -8.7% in Q2) to €2.3bn. In effect, management nudged up its expectations on cost savings to >€1.5bn by 2018 (from about €1.5bn). The operating expenses for 2016 are expected to grow in low single-digits (vs previous guidance of mid single-digits) and the gross margin to be around 70% (vs previous expectation of above 69% and below 70%). EPS is expected to increase by 3-5% at CER, with a negative FX impact of 4%. The European business has been put on the block with the target of 12-24 months, while a €3.5bn share repurchase programme was initiated for 2017.
Sanofi and Actelion are reported to be involved in advanced merger talks after J&J pulled back earlier this week. Actelion’s two drugs for pulmonary arterial hypertension are Sanofi’s biggest interests. The speculated offer from Sanofi values Actelion at over CHF30bn (€28.4bn). We quickly ran the preliminary numbers on our M&A tool, but believe that a lot would hinge on the money being locked in the Contingent Value Rights (which are reportedly also part of the discussion). We currently do not assume CVR or synergies, but the M&A tool throws up EPS dilution in 2017 and marginal accretion of ~2-3% in 2018.
Not a strong quarter for Sanofi, as it has been pulled down by the weak pharma business and headwinds from Venezuela. Sales came in flat at €8.9bn (all revenue growth numbers in CER unless mentioned otherwise), further cornered by unfavourable forex, to a 4.3% decline in euros. These numbers were slightly behind our estimates. The Pharma business declined by 1.7% (-5.8% in €), Genzyme being the only area to report growth as diabetes fell by 2% (-5.4% in €), established products by 9.7% (13.3% in €), consumer health by 4.3% (-10.1% in €) and generics by 1.9% (-8.8% in €). The Vaccines business grew by 6.3% (+2.6% in €) and the held-for-sale animal health business grew by 9.1% (+4.9% in €). Adjusted operating profit came in at €1.7bn (-13%). The company reported business operating profit (which excludes impairment, amortisation, restructuring and includes share of associates and minority) declining by 11% to €2.3bn. The Pharma business reported a business operating profit of margin of 27.5% (vs 29.3% in Q2 15) and 11.9% for vaccines (vs 15.1% in Q2 15). The outlook was maintained at flat business EPS at CER.
Sanofi reported a weaker than expected Q1 16 performance. The top-line missed our expectations with sales growth of just 0.7% at CER to €8.5bn (all revenue growth numbers at CER unless specified otherwise). The slowdown in the conventional portfolio (diabetes & cardiovascular (-5.8%) and established Rx (-8.2%)) was shouldered just enough by Genzyme (+20.5%), Vaccines (8.2%) and the Animal Health (17.5%). In comparison to our estimates, the out-performance by Genzyme and Animal Health was more than negated by the under-performance by Vaccines and the mature portfolio. Negative impact of 2.6% points of unfavourable forex movements, emanating from volatility in emerging market currencies (offset to some extent by the dollar and Japanese yen weakness), pulled down the euro growth to -1.9%. Profitability was further dented by higher restructuring charges (which we do not consider as one-offs) and higher amortisation of intangibles than expected, despite savings from R&D and selling expenses. The underlying operating income came in at €1.4bn (-19% in €); this excludes amortisation of tangible assets related to the animal health business (since it was not disclosed).
Group sales declined by 1.6% at CER (all revenue growth rates at CER unless specified otherwise) to €9.3bn during the quarter. For the full year, sales grew by 2.2% to €37.1bn. The strong dollar against the euro, more than offsetting the negative impact from the Brazilian real and the Russian rouble, contributed 3.9% to the quarter and 7.5% to the annual sales growth. The worst performing segments included diabetes (-12.3% in Q4 and -6.8% for FY) and the mature portfolio (-10.4% in Q4 and -2.3% for FY). Genzyme (+28.2% in Q4 and 29.5% for FY) and vaccines (+15% in Q4 and 7.3% for FY) continued to shoulder the group-level miseries; vaccine performed particular well sequentially (Q1: -4.6, Q2: 8.6%, Q3: 5.5% and Q4: 15%). Underlying operating profit of €7.8bn for the year was ahead of our estimate of €7.4bn, but higher restructuring (which we do not consider as exceptional) charges and impairment charges (on Synvisc-One, rotavirus vaccine project, Afrezza and Auvi-Q) pulled down the EBIT to €6.3bn (vs our expectation of €6.9bn). Finally, net profit of €4.3bn fell short of our expectation. Geographically, the quarter was the worst for the US with an 8.2% decline (Q1: +1%, Q2: 2.1%, Q3: 2.3%), thanks to the Lantus wash-out and the Auvi-Q recall. Of the emerging markets, Asia drove most of the growth at 16.2% (+13.2% for FY), while LatAm declined by 3.9% (+4% for FY). Japan witnessed a 13.8% decline (-6.6% for FY) during the quarter. Management anticipates a 2016 business EPS (a non-GAAP measure) to be at 2015’s level (at CER).
Sanofi conducted its investors meet on Friday, 6 November, at which the new CEO, Brandicourt, announced the group’s new priority in the wake of a slowdown in its diabetes business. Key highlights of the meeting include: • Profit warning – this was the weakest point of the conference and garnered maximum attention. Due to the weakness in the diabetes business and higher expenses in R&D and product launches, the profit guidance has taken a hit, which is likely to stagnate until 2017; revenue is expected to grow at a CAGR of 3-4% over 2015-20, with a mid single-digit CAGR over 2018-20. • Re-assessing the non-core – the animal health business, Merial, and the European generics business have been put on the block for review. Focus areas include speciality care (multiple sclerosis, oncology, immunology and rare diseases), diabetes & cardiovascular, emerging markets and consumer healthcare. • Cost cuts – a group simplification and investment prioritisation will be implemented to extract cost savings worth €1.5bn by 2018, which will be used towards R&D on biologics and acquisitions. • R&D – a launch of 18 products up to 2020 is lined up, of which Sanofi expects six products to generate sales of €12-14bn by 2025.
The pain in the diabetes business took away all the sheen from Q3, which met our expectations at the top-line but was behind in terms of profitability. Total sales were up 3.4% (all growth at CER unless specified) to €9.6bn, with Genzyme rising by 32.6%, Vaccines by 5.5% and Animal Health by 9.3%, but the diabetes business declining by 6.6%. Operating income was up 2% to €1.9bn The outlook for business EPS for the year was maintained at stable to slightly growing at CER. The key takeaway from the earnings, however, was the update on the diabetes business. For the year, the outlook has been revised downs to 6-7% (from a mid single-digit decline), while for the period 2015-18, it has been downgraded from flat-slightly positive growth to a decline of 4-8%. Half of this decline is attributable to insulin glargine; the rest pertains to Afrezza, Lyxumia and a de-prioritisation of the blood glucose monitoring systems. Management also indicated that the impact of this downgrade on the business operating income will be mitigated by 2018, details of which are likely at the investors meeting on 6 November 2015.
Sanofi reported solid Q2 numbers driven by the same themes as in Q1 – a weak euro and a strong Genzyme. Both sales and business operating income were up 5% yoy at CER to €9.4bn and €2.6bn, respectively. While Pharma sales were up 4%, Vaccines and Animal Health sales grew by 9% and 14%, respectively. The weak euro bumped up sales growth to 16% and business operating income growth to 20% at the reported level. Despite a business EPS growth of 4% at CER, the reiteration of full-year guidance of stable to slight growth indicates a tougher H2 with headwinds from higher launch costs, generic competition to Plavix in Japan, etc., despite a moderation in R&D expenses.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Sanofi. We currently have 15 research reports from 1 professional analysts.
|21May18 19:15||GNW||Sanofi: New England Journal of Medicine publishes two positive Phase 3 trials showing Dupixent® (dupilumab) improved moderate-to-severe asthma|
|16May18 06:00||GNW||Sanofi: Dupixent® (dupilumab) showed positive Phase 3 results in adolescents with inadequately controlled moderate-to-severe atopic dermatitis|
|14May18 07:09||GNW||Sanofi and Ablynx Announce the Successful Results of the Initial Tender Offer Period for Ablynx and Commencement of Squeeze-Out Tender Period|
|14May18 07:00||GNW||Sanofi and Ablynx Announce the Successful Results of the Initial Tender Offer Period for Ablynx and Commencement of Squeeze-Out Tender Period|
|02May18 17:50||GNW||Sanofi: Annual General Shareholders' Meeting of May 2, 2018|
|30Apr18 06:01||GNW||Sanofi: FDA to Conduct Priority Review of Cemiplimab as a Potential Treatment for Advanced Cutaneous Squamous Cell Carcinoma|
|27Apr18 06:30||GNW||Sanofi: First-quarter 2018 Business EPS(1) up 1.4% at CER|
ReNeuron introduced its exosome nanomedicine programme at its recent capital markets day. While being a preclinical programme, it has three significant advantages. First, it gives ReNeuron the potential to expand into new therapeutic indications. Second, it opens up the potential for collaborations in diagnostics and drug delivery. Third, it builds on its wealth of experience and IP and on its CTX cell line on which ReNeuron’s existing products and the exosome platform are built.
Companies: Reneuron Group
A highly statistically significant dose response from the Phase II Grass MATA MPL/PQ Grass trial in Europe enables the company to confidently select a dose to take into a pivotal Phase III trial for US and European registration purposes. This is the first of two material clinical trial readouts this year. The Phase III Birch allergy study is expected in H2 2018, safety data from which might be able to be included as part of the safety package needed by the FDA for Grass MATAMPL. We maintain a target price of 47p and expect to upgrade on positive PQ Birch results. Further upside (33p) exists for the Pollinex Quattro Grass programme in the US.
Companies: Allergy Therapeutics
Ergomed’s new strategy is to become a global leader in pharmacovigilance and orphan drug development services by 2020. This refocusing of the business moves Ergomed away from its reliance on the risk/reward profile of development deals, towards repeatable and sticky contracts across various geographies and therapy areas. This offers a much better, more visible, cashgenerating story. Our headline valuation has been revised to centre on the Services businesses only, giving a fair value of 266-292p. The Development and Haemostatix businesses add a further 120p to that range.
Prior to the financial crisis of 2008/09, it was widely believed in the stock market that certain sectors – most notably utilities, pharmaceuticals, food retailing and tobacco – were far less vulnerable to market downturns.
Companies: OPM ABZA AVO AGY APH ARBB AVCT BNO BUR CMH CLIG COS DNL EVG GTLY GDR INL KOOV MCL MUR NSF OXB NIPT PHP RE/ REDX SCLP SCE SIXH TRX TON VAL
Totally has published its twelve-month results, or second set of interim results, to 31 December 2017 as the Group moves to a new March year end. Thus, the current financial period will be of 15 months duration. This follows the reverse takeover of urgent care provider Vocare in October 2017. The twelve-month results came in slightly better than our forecast which augurs well for the full fifteen-month results which remain unchanged. However, our forecast for net cash has been raised from £4m to £9m which ties in with the higher level of cash enjoyed in the business as at December of £11.3m.
2018 is the year of the Great Exhibition of the North. This summer, Newcastle and Gateshead will play host to a government-sponsored, 80-day marathon of events. Billed as the largest event in England this year, the Great Exhibition will showcase the best of the North East’s art, culture, design and innovation and we expect it to highlight the region’s ongoing success in high-end engineering, technology and life sciences. It may also reflect on the success of the North East’s plcs, the most striking example of which is Sage’s transition from 1980’s start-up to £9bn FTSE100 stalwart. We remain on the look out for the next Sage and expect the region to continue to produce attractive IPO candidates following Ramsdens’ success last year. Overall 2017 was a positive year for the region’s listed companies, one highlight of which was the takeover of Quantum Pharma, an N+1 Singer client, by Clinigen for £150m. We are confident that 2018 will be another successful year. Our top regional picks this year are Hargreaves Services, Zytronic and Applied Graphene Materials.
Companies: AGM BWY GRI GRG HSP IDH KMK NTG RFX UTW VNET ZYT
Following the commercial launch in 2017 of partner Novartis’s CAR-T Kymriah (in r/r paediatric ALL), Oxford BioMedica (OXB) has become one of a handful of regulatory approved gene and cell therapy manufacturers worldwide. This validation of its capabilities was most recently demonstrated in signing the £100m+ collaboration with Bioverativ to develop haemophilia gene therapies. We expect OXB to rapidly expand its manufacturing capacity to enable top-line growth. We have reassessed many of our valuation assumptions and now include the partnerships with Immune Design, Orchard and Bioverativ. Moreover, internal asset, OXB-102, will start a Phase II trial shortly. We value OXB at £513m (15.6p/share).
Companies: Oxford Biomedica
Full-year results were 6-7% ahead of expectations, with adjusted pre-tax losses of £1.85m, some £1.0m lower than 2016, albeit underpinned by one-off payments from Thermo Scientific (£0.58m) and Randox (£0.1m). While the reduction in losses is perhaps not as fast as we had originally expected at the time of its financing in 2016, the changes made to sales & marketing (37% increase in Q1 order book), an unprecedented number of inbound contacts for its service later in 2017/18, the launch of new TMTcalibrator workflows, and sustained TMT® reagents/royalties give us more confidence in 2018 growth, with cashflow breakeven achievable in H2 2019. We introduce a 2019 forecast and retain our 7p share price target.
Companies: Proteome Sciences
Rosenblatt Group -specialist litigation and contentious restructuring law firm established in 1989 based in the City of London. Offer TBC. Due 8 May. Supreme, a leading manufacturer and supplier of branded consumer batteries, a manufacturer and supplier of branded and licensed consumer lighting and a leading manufacturer and supplier of vaping products in the United Kingdom, is looking to join AIM. Offer TBC, expected early May 2018 KRM22, a closed-ended investment company with a particular focus on risk management in capital markets, is looking to join AIM. Offer tbc, expected 30 April 2018 Serinus Energy -international upstream oil and gas exploration and production company. Its principal assets are located in Romania (development phase) and Tunisia (production phase). Raising c.£10m. Offer TBA. Due mid May.
Companies: SAR VIS CORA DUKE TERN INSP REDX FAL COIN
Phase 2 trial ‘STEM’ in metastatic breast cancer: With 18 out of the 60 patients in the trial having been dosed as of December 2017, an interim read-out is expected this quarter followed by final topline results in H2’2018E. A compassionate use programme, which allows patients to stay on the drug post trial end, has already been implemented.
Companies: Evgen Pharma
Consumer Sector Key takeaways from the Consumer reporting season | Harwood Wealth (HW LN) Acquisition of Berkshire-based IFA with £34m AuI | Porta Communications (PTCM LN) Results show progress from reorganisation | Sanderson Group (SND LN) H1 slightly ahead, no change to full year expectations | Sinclair Pharma (SPH LN) FY’17 results in line, US sales team established for Silhouette rollout
Companies: HW/ PTCM SND SPH
Despite the apparent new air of ‘entente cordiale’ between North and South Korea, the world is still a dangerous place. What with alleged Russian state-involvement in the Salisbury nerve agent attacks, Syria’s use of chemical weapons, ISIS’ ongoing war against the West and the increasing threats posed by organised crime.
Companies: Kromek Group
Grifols delivered 7.4% constant currency revenue growth to €1.02bn, with an 11ppt forex headwind (primarily due to a depreciating USD) reducing the reported number to a decline of 3.6%. NB All revenue growth numbers at cc, unless specified otherwise. The core bioscience’s (79% of revenue) growth momentum slowdown from 11.9% (Q1 17) to 5.8%, more in line with the sector growth, to €808m, was primarily impacted by a decline in Factor VIII, while the other protein-types maintained their growth trajectory. The smaller segments, Diagnostics (+4%) and Hospital (+18.1%), continued to chug along well too, benefiting from new products and a better geographic mix. The new Bio supplies (a carve-out from the Raw material division) segment grew 105.8% cc to €26.2m. Geographically, the North American markets (the US and Canada) continued to be the primary growth drivers (6.6% at cc growth), well supported by the EU (+11.1%) and RoW (+7.2%). The investments continue to weigh on profitability, reducing the adjusted EBITDA margin by 130bp to 29.1% (€297.1m vs €322.9m in Q1 17) during the quarter, although a lower effective tax rate (20.2% vs. 27% in Q1 17, due to US tax reform), resulted in earnings growth of 7% to €143.4m (net margin up 140bp to 14%).
The AIM Healthcare index has shown positive returns in all but three out of the past 11 years (2007, 2008 and 2011), growing at a CAGR of 7.6% over the period. This compares with a CAGR of -0.3% for the broader FT AIM All Share, +0.6% for the AIM 100 and +3.5% for its more senior FT All Share Health index. Sector growth and relative performance to the AIM All Share index has accelerated over the past five years; the sector having risen 19.19% CAGR since 1 Jan 2012. This compares with 6.8% growth in the AIM All Share and 6.1% in the FT All Share. This outperformance can be attributed to the increasing success amongst the Healthcare constituents which have progressed their business plans to a point where substantial value has been/is being created and where many companies have successfully scaled their businesses to sustain future growth. We highlight four companies that have different business models but exemplify the opportunities that are increasingly becoming evident within the sector.
Companies: ABZA AKR AGY APH AGL AVCT BVXP COG CTH IHC LID MTFB ODX OPTI NIPT PRM SDI STX SNG TSTL
Tuzistra XR prescriptions (Rx) grew threefold to ~35k in FY16/17 (2nd year on the market) vs ~12k in FY15/16. Investment into addressing the barriers to higher Tuzistra XR prescribing is translating into higher Rx rates, although this has not been matched by revenue growth due to higher inventory stocking in the same period last year. In H217 FDA issued partner Tris with two complete response letters to Vernalis’s CCP-07 and CCP-08 NDAs and we now model launch during the 2018/19 cough cold season. Our updated forecasts reflect this and lower Tuzistra XR revenues due to a slower than anticipated sales trajectory in the near term.