Enviado: 22/1/2004 14:13PARIS, Jan 22 (Reuters) - French drugmaker Sanofi-Synthelabo (Paris:SASY.PA - News) on Thursday reported a slightly better than expected 8.1 percent rise in 2003 sales but the news was overshadowed by renewed rumours it was poised to merge with Aventis (Paris:AVEP.PA - News).
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German newspaper Handelsblatt reported a merger to create a $100 billion French drugs champion could be announced imminently, sending shares in both firms more than four percent higher.
A merged group would vie for No. 2 spot in the world drugs' league table with Britain's GlaxoSmithKline (London:GSK.L - News).
Aventis denied it was in talks while Sanofi declined to comment on Thursday. Both companies said last week they were not in merger negotiations, although Sanofi stated at the time that it would consider any transaction to ensure its mid- and long-term prospects.
Handelsblatt said talks were at an advanced stage and a "merger of equals" to form a company with an 86 billion euro ($107.6 billion) market capitalisation could be announced as early as next week.
With both companies facing threats to patents on top products in 2004, a pooling of drug pipelines and cutting of costs is clearly attractive.
"I think there is a greater than 50 percent chance it will happen at some point because both firms are beginning to look sub-scale versus the likes of Glaxo and Pfizer (NYSE:PFE - News)," said Marc Booty, an industry analyst at Commerzbank in London.
Shares in Sanofi jumped five percent to 63.00 euros by 1020 GMT while Aventis gained 5.2 percent to 56.60, outshining pan-European rivals.
"Beyond the publication of (sales) which were in line with expectations, it's the reported announcement of an Aventis-Sanofi merger which is in the market's focus after rumours last week of a hostile offer (from Sanofi)," CIC Securities analysts said in a note.
U.S. SALES GROWTH
Sanofi said in a statement it made annual sales of 8.048 billion euros, up from 7.448 billion in 2002, with the fourth quarter accounting for sales of 2.108 billion. This was thanks to growing U.S. demand and strong performance by its four best-selling drugs.
Analysts had been expecting annual sales of 8.03 billion euros.
On a comparable basis -- excluding currency effects, acquisitions and disposals -- sales rose 15.6 percent, slightly ahead of the company's target of 15 percent.
It said its performance in the latter half of last year strengthened its earnings expectations for 2003, despite an unfavourable currency environment.
Sanofi has said it expects 2003 earnings per share before exceptional items and goodwill of close to 20 percent, assuming the euro would trade at $1.10 on average.
"The sales figures are very good. The pace of growth is very good," a Paris-based analyst said.
CURRENCY BLUES
Currency effects, chiefly dollar weakness against the euro and fluctuations in Latin American and Asian currencies, knocked 7.2 points off sales over the full year, the company said.
As expected, sales of sleeping pill Ambien slipped 5.5 percent to 1.345 billion euros, with dollar weakness eroding growth as 80 percent of the drug's sales are in the United States. Stripping out currency effects, Ambien sales rose 10 percent, bolstered by sustained U.S. demand.
Sales of blood thinner Plavix, which Sanofi markets with Bristol-Myers (NYSE:BMY - News), rose 34 percent to 1.325 billion euros. The blockbuster drug, which competes with much cheaper aspirin to prevent heart problems, is facing legal challenges from generic drugmakers seeking to maker a cheaper version.
Colon cancer drug Eloxatin, continued to show robust sales growth, rising 112 percent to 824 million euros.
Future sales of Eloxatin are set to benefit as Sanofi earlier this month won U.S. approval for the chemotherapy drug as first-line treatment. Sanofi also met conditions to register Eloxatin throughout Europe for first and second-line treatment.
(Additional reportin by Ben Hirschler in London)
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German newspaper Handelsblatt reported a merger to create a $100 billion French drugs champion could be announced imminently, sending shares in both firms more than four percent higher.
A merged group would vie for No. 2 spot in the world drugs' league table with Britain's GlaxoSmithKline (London:GSK.L - News).
Aventis denied it was in talks while Sanofi declined to comment on Thursday. Both companies said last week they were not in merger negotiations, although Sanofi stated at the time that it would consider any transaction to ensure its mid- and long-term prospects.
Handelsblatt said talks were at an advanced stage and a "merger of equals" to form a company with an 86 billion euro ($107.6 billion) market capitalisation could be announced as early as next week.
With both companies facing threats to patents on top products in 2004, a pooling of drug pipelines and cutting of costs is clearly attractive.
"I think there is a greater than 50 percent chance it will happen at some point because both firms are beginning to look sub-scale versus the likes of Glaxo and Pfizer (NYSE:PFE - News)," said Marc Booty, an industry analyst at Commerzbank in London.
Shares in Sanofi jumped five percent to 63.00 euros by 1020 GMT while Aventis gained 5.2 percent to 56.60, outshining pan-European rivals.
"Beyond the publication of (sales) which were in line with expectations, it's the reported announcement of an Aventis-Sanofi merger which is in the market's focus after rumours last week of a hostile offer (from Sanofi)," CIC Securities analysts said in a note.
U.S. SALES GROWTH
Sanofi said in a statement it made annual sales of 8.048 billion euros, up from 7.448 billion in 2002, with the fourth quarter accounting for sales of 2.108 billion. This was thanks to growing U.S. demand and strong performance by its four best-selling drugs.
Analysts had been expecting annual sales of 8.03 billion euros.
On a comparable basis -- excluding currency effects, acquisitions and disposals -- sales rose 15.6 percent, slightly ahead of the company's target of 15 percent.
It said its performance in the latter half of last year strengthened its earnings expectations for 2003, despite an unfavourable currency environment.
Sanofi has said it expects 2003 earnings per share before exceptional items and goodwill of close to 20 percent, assuming the euro would trade at $1.10 on average.
"The sales figures are very good. The pace of growth is very good," a Paris-based analyst said.
CURRENCY BLUES
Currency effects, chiefly dollar weakness against the euro and fluctuations in Latin American and Asian currencies, knocked 7.2 points off sales over the full year, the company said.
As expected, sales of sleeping pill Ambien slipped 5.5 percent to 1.345 billion euros, with dollar weakness eroding growth as 80 percent of the drug's sales are in the United States. Stripping out currency effects, Ambien sales rose 10 percent, bolstered by sustained U.S. demand.
Sales of blood thinner Plavix, which Sanofi markets with Bristol-Myers (NYSE:BMY - News), rose 34 percent to 1.325 billion euros. The blockbuster drug, which competes with much cheaper aspirin to prevent heart problems, is facing legal challenges from generic drugmakers seeking to maker a cheaper version.
Colon cancer drug Eloxatin, continued to show robust sales growth, rising 112 percent to 824 million euros.
Future sales of Eloxatin are set to benefit as Sanofi earlier this month won U.S. approval for the chemotherapy drug as first-line treatment. Sanofi also met conditions to register Eloxatin throughout Europe for first and second-line treatment.
(Additional reportin by Ben Hirschler in London)