exchange rates below solely for your convenience. We do not represent that euros were, could have been, or could be, converted into U.S. dollars at these rates or at any other rate. For information regarding the effect of currency fluctuations on our results of operations, see "Item“Item 5. Operating and Financial Review and Prospects"Prospects” and "Item“Item 11. Quantitative and Qualitative Disclosures about Market Risk."”

On March  6, 20133, 2016 the European Central Bank Rate was 1.30351.0901 per euro.

B. Capitalization and Indebtedness

N/A

C. Reasons for Offer and Use of Proceeds

N/A

3

Item 3. Key Information

D. Risk Factors

Important factors that could cause actual financial, business, research or operating results to differ materially from expectations are disclosed in this annual report, including without limitation the following risk factors. Investors should carefully consider all the information set forth in the following risk factors before deciding to invest in any of the Company’s securities. In addition to the risks listed below, we may be subject to other material risks that as of the date of this report are not currently known to us or that we deem immaterial at this time.

Risks Relating to Legal and Regulatory Matters

We rely on our patents and other proprietary rights to provide exclusive rights to market certain of our products, and if such patents and other rights were limited or circumvented, our financial results could be materially and adversely affected.

Through patent and other proprietary rights such as data exclusivity or supplementary protection certificates in Europe, for instance, we hold exclusivity rights for a number of ourresearch-based products. However, the protection that we are able to obtain varies in its duration and scope from product to product and country to country andcountry. This protection may not be sufficient to maintain effective product exclusivity because of local variationsdifferences in the patents, differences in national lawlaws or applicable legal systems, developmentor developments in law or jurisprudence, which may give rise to inconsistent judgments when we assert or inconsistent judgments. defend our patents.

Moreover, patent and other proprietary rights do not always provide effective protection for our products. Manufacturers of generic products or biosimilars are increasingly seeking to challenge patent validity or coverage before the patent expire, and manufacturers of biosimilars or interchangeable versions of the products are seeking to have their version of the product approved before the exclusivity period ends. Furthermore, in an infringement suit against a third party, we may not prevail and the decision rendered may not consider that our patent or other proprietary rights are valid, enforceable or infringed. Our competitors may also successfully avoid patents, for example, through design innovation, and we may not hold sufficient evidence of infringement to bring suit.

In certain cases, to terminate or avoid patent litigation, we or our partners may be required to obtain licenses from the holders ofthird-party intellectual property rights that cover aspects of our existing and future products in order to manufacture, use and/or sell them. Any payments under these licenses may reduce our profits from such products and we may not be able to obtain these licenses on favorable terms or at all. Third parties may also request a preliminary injunction in a country from a court of law to prevent us from marketing a product if they consider that we infringe their patent rights in the country. If they obtain a

preliminary or permanent injunction from a court of law or if we fail to obtain a required license for a country where the validthird-party intellectual property right as confirmed by a court of law, exists or are unable to alter the design of our technology to fall outside the scope ofthird-party intellectual property rights, we may be unable to market some of our products in certain countries, which may limit our profitability.

Also, some countries are becoming more likely tomay consider granting a compulsory license to a third party to use patents protecting an innovator's product; India's decision of March 2012 granting a compulsory licenseinnovator’s product, which limits the protection granted to a generic company to a Bayer patent is illustrative of this risk. such products.

We are involved in litigation worldwide to enforce certain of theseour patent rights against generics, and proposed generics and biosimilars of our small molecule and biological pharmaceutical products (see "Item“Item 8. Financial Information —– A. Consolidated Financial Statements and Other Financial Information —– Information on Legal or Arbitration Proceedings"Proceedings” for additional information). Moreover, patent rights are limited in time and do not always provide effective protection for our products: competitors may successfully avoid patents through design innovation, we may not hold sufficient evidence of infringement to bring suit, manufacturers of generic products are also increasingly seeking to challenge patents before they expire, and our infringement claim may not result in a decision that our rights are valid, enforceable or infringed.

Even in cases where we ultimately prevail in ouran infringement claim, legal remedies available for harm caused to us by infringing products may be inadequate to make us whole. A competitor may launch a generic or a biosimilar product "at risk"“at risk” before the initiation or completion of the court proceedings, and the court may decline to grant us a preliminary injunction to halt further "at risk"“at risk” sales and remove the infringing product from the market. Additionally, while we would be entitled to obtain damages in such a case, the amount that we may ultimately be awarded and able to collect may be insufficient to compensate all harm caused to us.

        Further, our A successful assertion ofresult against a competing product for a given patent against one competing productor in a specific country is not necessarily predictive of our future success or failure in asserting the same patent against a secondanother competing product because of such factors as possible differences in the formulations. Also a successful result in one country may not predict successor in another country because of local variations in the patents and patent laws.

        ToWe have increased the extent valid third-party patent rights coverproportion of biological therapeutics in our products, we or our partners may be requiredpipeline relative to obtain licenses from the holders of these patents in order to manufacture, use or sell these products, and payments under these licenses may reduce our profits from thesetraditional small molecule pharmaceutical products. We expect to face increasing competition from biosimilars in the future. With the accelerated regulatory pathways provided in the U.S. and Europe for biosimilar drug approval, biosimilars can be a threat to the exclusivity of any biological therapeutics we sell or may not be able to obtain these licenses on favorable terms,market in the future and can pose the same issues as the small molecule generic threat described hereinabove. Governments may adopt more permissive approval frameworks (for example, shortening the duration of data exclusivity, or at all. If we fail to obtain a required license or are unable to alter the design of our technology to fall outsidenarrowing the scope of new products receiving data exclusivity) which could allow competitors to obtain broader marketing approval for biosimilars including as a third-party patent, we may be unablesubstitutable product, increasing competition for our products (see also “Changes in the laws or regulations that apply to market someus could affect the Group’s business, results of operations and financial condition”). If a biosimilar version of one of our products which may limitwere approved, it could reduce our profitability.sales of that product.

However, with our presence as a manufacturer of generics and anticipated entry into biosimilars, we will utilize patent

Information on the Company —– B. Business Overview —– B.9. Insurance and Risk Coverage"Coverage”). In cases where weself-insure, the legal costs that we would bear for handling such claims and potential indemnifications to be paid to claimants could have a negative impact on our financial condition.

Due to insurance conditions, even when the Group has insurance coverage, recoveries from insurers may not be totally successful. Moreover, the insolvency of a carrieran insurer could negatively affect our ability to achieve the practical recovery of the coveragerecover claims on policies for which we have already paid a premium.

Product liability claims, regardless of their merits or the ultimate success of the Group'sGroup’s defense, are costly, divert managementmanagement’s attention, may harm our reputation and can impact the demand for our products. Substantial product liability claims could materially adversely affect our business, results of operations and financial condition.

Our products and manufacturing facilities are subject to significant government regulations and approvals, which are often costly and could result in adverse consequences to our business if successful,we fail to anticipate the regulations, comply with them and/or maintain the required approvals.

Obtaining marketing authorization is a long and highly regulated process requiring us to present extensive documentation and data to the regulatory authorities. Regulatory processes differ from one authority to another. Either at the time of the filing of the application for a marketing authorization or later during its review, each regulatory authority may impose its own requirements which can evolve over time, including requiring local clinical studies, and may delay or refuse to grant approval, even though a product has already been approved in another country.

Health authorities are increasingly focusing on product safety and on the risk/benefit profile of pharmaceuticals products. In particular, the FDA and the EMA have increased their requirements, particularly in terms of the volume of data needed to demonstrate a product’s efficacy and safety. Even after regulatory approval, marketed products are subject to continual review, risk evaluations or comparative effectiveness studies including post-marketing studies to which we have committed as a condition of approval. In addition, following the implementation of European pharmacovigilance legislation in 2012, the Company and the European Regulatory Agencies (under the supervision of the PRAC (Pharmacovigilance Risk Assessment Committee)) have reinforced their systematic and intensive safety signal detection systems, which may detect safety issues even with mature products that have been on the market for considerable time. This system may result in additional market authorization suspensions or withdrawals. All of these requirements have increased the costs associated with maintaining regulatory approvals and achieving reimbursement for our products.Post-regulatory approval

UK Bribery Act, the OECDAnti-Bribery Convention and otheranti-bribery laws and regulations).

Notwithstanding these efforts, anydeviations may occur and there can be no assurance that we, our officers and/or our directors will not face liability under laws and regulations for actions taken with respect to our business.

Any failure to comply directly or indirectly (including as a result of a business partners'partner’s breach) with lawthe laws and regulations applicable to us could lead to substantial liabilities.liabilities and harm the Group’s reputation. Governments and regulatory authorities around the world have been strengthening enforcement activities in recent years. Sanofi and certain of its subsidiaries are under investigation or could become the subject of additional investigations by various government entities and are defending a number of lawsuits relating to antitrust and/or pricing and marketing practices including,(including, for example, in the United States, class action lawsuits and whistle blower litigation.whistleblower litigation). The Group also faces significant litigation and government investigations or audits, including allegations of securities law violations, corruption, claims related to employment matters, patent and intellectual property disputes, consumer law claims and tax audits. See "Item“Item 8. Financial Information —– A. Consolidated Financial Statements and Other Financial Information —– Information on Legal or Arbitration Proceedings"Proceedings” and Note D.22. to our consolidated financial statements included at Item 18 of this annual report. Responding to such investigations is costly and distracts management'smanagement’s attention from our business.

Unfavorable outcomes in any of these matters, or in similar matters to be faced in the future, could preclude the commercialization of products, harm our reputation, negatively affect the profitability of existing products and subject us to substantial fines (including treble damages), punitive damages, penalties and injunctive or administrative remedies, potentially leading to the imposition of additional regulatory controls or exclusion from government reimbursement programs or markets, and could have a material adverse effect on our business, results of operations or financial conditions.

These risks may encourage the companyus to enter into settlement agreement with governmental authorities including with no admission of wrongdoing. Thoseagreements and those settlements may involve large cashsignificant monetary payments and/or criminal penalties and penalties.may include admissions of wrongdoing. Settlement of healthcare fraud cases in the United States may require companies to enter into a corporate integrity agreement,Corporate Integrity Agreement, which is intended to regulate company behavior for a specified period of years. For instanceexample in December 2012, Sanofi U.S.2015 we entered into a settlementsuch an agreement with the U.S. Attorney's Office, District of Massachusetts, the United States Department of Justice and multiple states to resolve all claims arising out of an

competition from new products of competitors that are perceived as being superior. In 2012,2015, we spent €4,922€5,259 million on research and development, amounting to approximately 14.1%14.2% of our aggregate net sales.

favorable formulary positions with key payers in the U.S. Exclusion of one of our drugs from a productformulary can significantly reduce sales in the MCO patient population.

Also in the United States, the federal health care reform law is increasing the government’s role with respect to price, reimbursement, and coverage levels for healthcare services and products within the large government healthcare sector. This law also dependsimposed cost containment measures and rebates and fees on pharmaceutical companies and current federal budget proposals would impose further restrictions on pricing and reimbursement. In addition, some U.S. states are considering legislation that would influence the marketing and prices of, and access to, drugs. U.S. federal and state officials will likely continue to focus on healthcare reform implementation in the future.

We encounter similar cost containment issues in countries outside the United States. In certain countries, including countries in the European Union, China and Canada, the coverage of prescription drugs, pricing and levels of reimbursement are subject to governmental control. For example, in Europe various authorities are developing the use of tenders for expensive products and are considering joint procurement mechanisms to negotiate lower prices. See also below “– Global economic conditions and the unfavorable financial environment could have negative consequences for our business”.

In addition, if we lose patent protection in patent litigation, we face the risk that government and privatethird-party payers and purchasers of pharmaceutical products may claim damages alleging they haveover-reimbursed a drug. For example, in Australia, our patent on clopidogrel was ultimately held invalid. Following this decision, the Australian Government is seeking damages for its allegedover-reimbursement of clopidogrel drugs due to the preliminary injunction we had obtained against the sale of generic clopidogrel during the course of the litigation.

As a consequence of the growing number of mergers of retail chains and distributors and resulting consolidation of the distribution channel, distributors have increased their capacity to negotiate price and other terms. Due to these cost containment policies and pressure on our abilityprices, our revenues and margins are, and could continue to educate patients and healthcare providers and provide thembe, negatively affected.

We are also unable to predict the availability or amount of reimbursement for our product candidates. Price negotiations in a country may be incompatible with innovative data aboutthe global positioning of our products, which may lead us not to launch the product and its uses. If these education efforts are not effective, then wein that country, resulting in a decrease in initially anticipated sales.

Finally, our operating results may notalso be ableaffected by parallel imports, particularly within the European Union, whereby distributors engage in arbitrage based on national price differences to increase the sales of our newbuy products to the market to realize the full value of our investment in its development.low cost markets for resale in higher cost markets.

A substantial share of the revenue and income of the Group continues to depend on the performance of certain flagship products.

We generate a substantial share of our revenues from the sale of certain key products (see "Item“Item 5. Operating and Financial Review and Prospects —– Results of Operations —– Year ended December 31, 20122015 compared with year ended December 31, 2011 —2014 – Net Sales by Product —– Pharmaceuticals segment"segment”), which represented 42.2% of the Group's consolidated revenues in 2012. Among these products. Lantus^® is Lantus®, whichparticularly important; it was the Group'sGroup’s leading product with revenues of €4,960€6,390 million in 2012,2015, representing 14.2%17.2% of the Group's consolidated revenuesGroup’s aggregate net sales for the year. Lantus®Lantus^® is a flagship product of the Diabetes division,business. Accounting for recent market trends, we announced in October 2015 that we project global diabetes sales over the period from 2015 to 2018 to decline at an average annualized rate of between 4% and 8% at constant exchange rate (CER). Nevertheless our actual sales may differ from these expectations given the numerous underlying assumptions (for example the outlook for insulin glargine sales, and expectations for Lyxumia^® and BGM (Blood Glucose Monitoring)). Furthermore, the launch of new medicines and vaccines in other therapeutic areas and the performance of our other businesses may not be sufficient to reduce the relative contribution of Lantus^® to our overall performance.

Our flagship products benefit from certain intellectual property protections such as patents and exclusivity periods but patent and proprietary rights, even if they are not challenged, are subject to expiration dates. Expiration of effective intellectual property protections for our products typically results in the entry of one or more lower-priced generic competitors, often leading to a rapid and severe decline in revenues on those products (for information on the expected impact of biosimilar entry on the Group's growth platforms.market see “– We may lose market share to competing remedies, biosimilar or generic products.”)

        InFurthermore, in general, if theone or more of our flagship products referred to above were to encounter problems such as loss of patent protection, material product liability litigation, unexpected side effects, recall, regulatory proceedings, publicity affecting doctor or patient confidence, pressure from existing competitive products, changes in labeling, or if a new, more effective treatment were introduced, or if there were a reduction in sales of one or more of our flagship products or in their growth, the adverse impact on our business, results of operations and financial condition could be significant.

We may fail to successfully identify external business opportunities or realize the anticipated benefits from our strategic investments.

        As a complement to our portfolio of products, we pursue a strategy of selective acquisitions, in-licensing and partnerships in order to develop growth opportunities. The implementation of this strategy depends on our ability to identify business development opportunities and execute them at a reasonable cost and under acceptable conditions of financing. Moreover, entering into in-licensing or partnership agreements generally requires the payment of significant "milestones" well before the relevant products are placed on the market without any assurance that such investments will ultimately become profitable in the long term (see Note D.21.1. to the consolidated financial statements included at Item 18 of this annual report).

        Because of the active competition among pharmaceutical groups for such business development activities, there can be no assurance of our success in completing these transactions when such opportunities are identified.

        Once identified, the inability to quickly or efficiently integrate newly acquired activities or businesses; a longer integration than expected; the loss of key employees; or higher than anticipated integration costs, could delay our growth objectives and prevent us from achieving expected synergies.

        Moreover, we may miscalculate the risks associated with newly acquired activities or businesses at the time they are acquired or not have the means to evaluate them properly, including with regards to the potential of research and development pipelines, manufacturing issues, compliance issues, or the outcome of ongoing legal and other proceedings. It may also take a considerable amount of time and be difficult to implement a risk analysis and risk mitigation plan after the acquisition is completed due to lack of historical data. As a result, risk management and the coverage of such risks, particularly through insurance policies, may prove to be insufficient or ill-adapted.