First Half Condensed Consolidated Financial Statements for the six months ended

First Half Condensed Consolidated Financial Statements

for the six months ended

Operating and Financial Review and Recent Developments

I CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS ASSETS

The accompanying notes on pages 7 to 38 are an

integral part of the condensed half-year consolidated financial statements.

CONSOLIDATED BALANCE SHEETS LIABILITIES AND EQUITY

The accompanying notes on pages 7 to 38 are an integral part of the condensed half-year consolidated financial statements.

CONSOLIDATED INCOME STATEMENTS

The accompanying notes on pages 7 to 38 are an integral part of the condensed half-year consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

The accompanying notes on pages 7 to 38 are an integral part of the condensed half-year consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

The accompanying notes on pages 7 to 38 are an integral part of the condensed half-year consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes on pages 7 to 38 re an integral part

of the condensed half-year consolidated financial statements.

NOTES TO THE CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30,

Sanofi is a diversified global healthcare leader engaged in the research, development and marketing of therapeutic solutions focused on patient needs. Sanofi has fundamental strengths in the healthcare field,

operating via six growth platforms: emerging markets, diabetes, human vaccines, consumer health care (CHC), animal health and new products.

At the Annual General Meeting held on May 6, 2011, the shareholders approved a change in our company name from sanofi-aventis to Sanofi .

Sanofi, the parent company of the Group, is a soci t anonyme (a form of limited liability company) incorporated under the

laws of France. The registered office is at 174, avenue de France, 75013 Paris, France.

Sanofi is listed in Paris (Euronext: SAN) and New York (NYSE:

The condensed consolidated financial statements for the half-year ended June 30, 2011 were reviewed by the Sanofi Board of

Directors at the Board meeting on July 27, 2011.

The half-year consolidated financial statements have been prepared and presented in condensed format in accordance with IAS 34 (Interim Financial

Reporting). The accompanying notes therefore relate to significant events and transactions of the period, and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2010.

The consolidated financial statements as of June 30, 2011 have been prepared in compliance with standards and interpretations adopted by the

European Union and with those issued by the IASB. Except for the changes described in Notes A.1.1. and A.1.3., the accounting policies applied as of June 30, 2011 are identical to those described in the notes to the consolidated financial

statements for the year ended December 31, 2010.

IFRSs adopted by the European Union as of June 30, 2011 can be accessed

under the heading IAS/IFRS Standards and Interpretations at:

A.1.1. New standards and amendments applicable in the period

A.1.2. New standards, interpretations and amendments issued in the first half of 2011

In May 2011, the IASB issued five pronouncements designed to improve the principles applied in the preparation of consolidated financial statements

and the disclosure requirements for joint arrangements and for any type of entity in which an interest is held:

Two existing standards IAS 27 (Consolidated and Separate

Financial Statements), and IAS 28 (Investments in Associates) were amended, to bring them into line with the changes introduced by the publication of IFRS 10, IFRS 11 and IFRS 12.

The impact of the amended IAS 19 on the Sanofi financial statements is under review.

None of the pronouncements

issued during the first half of 2011 has to date been adopted by the European Union.

A.1.3. Updating of accounting policies as of

The Group s accounting policies, as described in Note B to the consolidated financial statements for the

year ended December 31, 2010, have been updated as follows:

The accounting treatment required under IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations) is described in Note B.7 to the

consolidated financial statements for the year ended December 31, 2010. In the event of changes to a plan of sale that require an asset no longer to be classified as held for sale, IFRS 5 specifies the following treatment:

The backlog of depreciation, amortization and impairment not recognized while a non-current asset was classified as held for sale

must be reported in the same income statement line item as that used to report (i) impairment losses arising on the classification of assets as held for sale and (ii) gains or losses on the sale of such assets. In the Sanofi consolidated

income statement, these impacts are reported in the line item Other gains and losses, and litigation.

This line item replaces Gains and losses on disposals, and litigation, as defined in Note B.20.2. to the consolidated financial statements for the year ended December 31, 2010.

It includes the impact of material transactions of an unusual nature or amount, which Sanofi believes it necessary to report separately in the

income statement in order to improve the relevance of the financial statements.

The components of the line item Other gains and losses, and

A.2. Use of estimates

The preparation of financial statements requires management to make reasonable estimates and assumptions, based on information available at the date of the review of the financial statements that may affect the

reported amounts of assets, liabilities, revenues and expenses in the financial statements, and disclosures of contingent assets and contingent liabilities. Examples of estimates and assumptions include:

For the purposes of the half-year financial information, and as allowed under IAS 34, Sanofi has determined income tax expense on the basis of an estimate of the

effective tax rate for the full financial year. This rate is applied to Income before tax and associates and joint ventures. The estimated effective tax rate is based on the tax rates that will be applicable to projected pre-tax

profits or losses arising in the various tax jurisdictions in which Sanofi operates.

Actual results could vary from these estimates.

A.3. Seasonal trends

activities are not subject to significant seasonal fluctuations.

B.1. Impact of changes in the scope of consolidation, and change in treatment of Merial

B.1.1. Main changes in the scope of consolidation

The major changes in the scope of consolidation during the first half of 2011 are as follows:

As of June 30, 2011, Genzyme Corporation (Genzyme) is a wholly-owned subsidiary of Sanofi.

shares were previously listed on the NASDAQ market, is a biotechnology group headquartered in Cambridge, Massachusetts (United States). Genzyme s primary areas of focus are rare diseases, renal endocrinology, oncology and biosurgery. In 2010,

Genzyme generated net sales of approximately $4 billion. The group employs nearly 10,000 people and operates in approximately 70 sites.

acquisition will expand Sanofi s reach in biotechnologies; Sanofi intends to make Genzyme its global center of excellence in rare diseases.

Sanofi acquired Genzyme on April 4, 2011, the completion date of the public exchange offer for all of the

outstanding shares of common stock of Genzyme Corporation at a cash price of $74 per share. As part of the acquisition, Sanofi also issued to Genzyme shareholders one contingent value right (CVR) per Genzyme share held.

Each CVR entitles the holder to additional cash payments if milestones relating to Lemtrada (the registered name submitted to health

authorities for the investigational agent alemtuzumab) are met over a specified period, or if specified production levels of

Cerezyme and Fabrazyme are met in 2011. Under the terms of the CVR agreement, the CVRs will expire on the earlier of December 31, 2020, or the attainment of the fourth sales milestone

of Lemtrada . Each milestone and payment may occur once only. The milestones and payments per CVR are summarized below:

Sanofi issued 291 million CVRs (representing a maximum commitment of $4.1 billion), which are listed on the NASDAQ market under the ticker GCVRZ

and have been quoted since April 4, 2011. As of that date, the quoted price per CVR was $2.35. This price was used as the basis for determining the overall fair value of the contingent consideration. In accordance with the revised IFRS 3

(see Note B.3.1. to the consolidated financial statements for the year ended December 31, 2010), contingent consideration is measured at fair value on the acquisition date. Consequently, this contingent consideration is included in the

price paid to acquire Genzyme for the purposes of determining goodwill, and recognized as a liability in the balance sheet line item Liabilities related to business combinations and to non-controlling interests.

The provisional purchase price allocation is analyzed below:

Prior to Sanofi s acquisition of Genzyme, in May 2009, Genzyme acquired the worldwide development and marketing rights to alemtuzumab (under the brand name

LemtradaTM), a molecule currently under development for multiple sclerosis,

from Bayer Schering Pharma A.G. (Bayer). At the same time, Genzyme also acquired rights to the products Campath , Fludara and

Leukine . In exchange, Bayer is entitled to receive the following contingent payments:

This additional contingent purchase consideration

is measured at its fair value as of April 4, 2011, and is recognized as a liability in the balance sheet line item Liabilities related to business combinations and to non-controlling interests. The amount is remeasured at fair

value at each reporting date. The impact of the resulting fair value adjustment is recognized in profit or loss in the line item Fair value remeasurement of liabilities related to contingent consideration, similarly to other contingent

consideration on business combinations (see Note A.1.3.).

The goodwill arising on the acquisition mainly represents the portfolio of future products in