Sanofi bullish before Aventis bid
 |
Sanofi sees its heart arrhythmia treatment, and anti-smoking and obesity drugs as big sellers.
Story Tools
|
PARIS, France (Reuters) -- French drug maker Sanofi-Synthelabo posted a slightly stronger-than-expected rise in 2003 net profit on Monday and offered a bullish view of its pipeline of new drugs as it sought to win support for its hostile takeover bid for rival Aventis.
France's second-largest drug maker said net profit before exceptional items and goodwill amortization rose 17.7 percent to 2.07 billion euros ($2.65 billion), slightly above forecasts for profit of 2.01 billion.
The company also proposed raising its net dividend 21.5 percent to 1.02 euros per share and forecast a rise in 2004 pre-exceptional earnings per share of 15 percent.
"They have slightly beaten our numbers but they are in a bid situation so that's hardly surprising," said a London-based analyst, requesting anonymity.
Fighting to counter accusations that its bid for Aventis was motivated by weaknesses in its own products, Sanofi announced "very positive" Phase III trials for rimonabant, dronedarone and Ambien CR -- major compounds in its drug pipeline.
Phase III is the final stage of the trials process before regulators are asked to approve a new drug.
Sanofi sees both dronedarone, a treatment for heart arrhythmia, and anti-smoking and obesity drug rimonabant as potential blockbusters. Ambien CR is a modified-release version of its Ambien sleeping pill.
Sanofi has argued that a merger with Aventis would give the firms the scale needed to invest in research and fuel the development of leading drugs.
"We have so many positive results in research phases and it means that we don't have enough money to support their development," said Gerard Le Fur, executive vice president of scientific affairs at Sanofi.
Sanofi forecast on Monday that research and development spending at a combined group could rise 15 percent this year, against an eight percent increase for Sanofi alone in 2003.
No plans to raise offer
Sanofi reiterated that it had no plans to raise its stock-and-cash offer for Aventis, currently valued at 46 billion euros. The offer is set to open on Tuesday.
Aventis stepped up its fight to ward off Sanofi's bid when it appealed last Friday against the French market regulator's February 3 ruling that cleared Sanofi's offer.
"We will see the motivation of this appeal and then deal with it but we don't see any reason today why the offer would not close by the second quarter of 2004," said Sanofi Chief Financial Officer Marie-Helene Laimay.
From the start, Aventis has dismissed Sanofi's bid as too low and has said it is exploring other options.
Aventis has argued that Sanofi is bidding because it is vulnerable to a takeover bid itself and says the deal would expose shareholders to major risks because of uncertainty over the patent on Sanofi's top drug, blood thinner Plavix.
Sanofi is still seeking the support of 13.5-percent Aventis holder Kuwait Petroleum Corp. (KPC) and other major Aventis holders.
France's stock market authority, the AMF, gave Sanofi the green light last Thursday to proceed with its bid, clearing the way for Sanofi to send out its formal offer to Aventis shareholders.
Aventis has five working days after this to publish its defense and the AMF will thereafter have three working days to approve it or ask for additional information.
Sanofi said its earnings per share for 2003 rose 21.5 percent to 2.94 euros before exceptionals and goodwill, partly supported by a share buy-back.
The company cited favorable Phase IIb results for saredutant, a treatment for depression, and SR 121463, predicting both would enter Phase III trials in 2004.
It said a decision had been taken to stop development of tirapazamine as a treatment for large-cell lung cancer. The drug remains under development for head and neck cancer.
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
