If a merger did go ahead, the new company would have ethical sales in excess of $24 billion (€19.1bn) and would support a cardiovascular franchise projected to be worth $7.1 billion by the end of 2004.
With forecast year-on-year growth of 6.3 per cent from 2002 to 2008 the combined company will actually decrease Sanofi's forecast percentage growth, which independently is projected to achieve a CAGR of 8.5 per cent over that period. Aventis is expected to record year-on-year growth of 5.3 per cent, in line with the current industry average.
However, a merger would give Sanofi the increased size to help it to compete with the likes of Pfizer and GlaxoSmithKline, both of which were formed through a merger and acquisition growth model. Indeed, the combination of Sanofi's promising pipeline and Aventis's experience in the development and marketing of blockbuster drugs would create a large European based pharma to rival GlaxoSmithKline.
Both Aventis and Sanofi have concerns regarding the future sales of blockbuster drugs due to generic challenges in the US. Aventis's leading drug Lovenox (enoxaparin) has a challenge against its 2012 patent, while Sanofi is also facing a legal battle over its second highest selling drug, Plavix (clopidogrel).
A merger would help lessen the impact of either legal battle being lost, although the new company would still operate with a high generic risk. Datamonitor estimates that just under a third of the combined entity's sales in 2008 could be at risk to generic competition, based on the expiry of the first US patent.
A merger of Sanofi and Aventis would be a good match, according to the analysts, who note that the final company will operate in seven therapy areas. The key franchises would be cardiovascular, oncology, central nervous system, diabetes and respiratory, which would all generate sales of over $2.5 billion in 2004. Infectious diseases and vaccines would be a secondary focus coming almost entirely from Aventis.
At $1.7 billion, the merged company's cardiovascular franchise would be the fourth-largest in the industry, behind Pfizer, Merck & Co and Bristol-Myers Squibb. Datamonitor estimates that Sanofi/Aventis combined sales could reach $9.9 billion in 2008, but only if the patent challenges on Lovenox and Plavix are unsuccessful.
One of the largest pull factors for the merger of Sanofi and Aventis will be the size and depth of the combined oncology portfolio. The combined franchise will grow from $2.7 billion in 2003 to nearly $5.7 billion in 2008. By then, it will be the fourth largest player behind Roche, Novartis and B-MS, before taking into account the additional revenue the new company can drive by bundling their complimentary portfolio of products. The key drugs are Aventis' Taxotere (docetaxel) and Sanofi's Eloxatin (oxaliplatin), with Aventis's pipeline drug Genasense (oblimersen sodium) also forecast to drive growth.
Finally, the fact that both companies are European, with headquarters in France and Germany will help ease the integration of the merged companies with similar working cultures. Furthermore, their location will allow for considerable cost synergies and post merger rationalisation, concludes Datamonitor.
"A merger of Sanofi and Aventis would not relieve all the problems of the two existing companies [as] the resulting company would still be reliant on mature drugs to drive sales," said Lamble.
However, the combination of Sanofi's strong and deep pipeline and Aventis' sales and marketing power, as well as its presence in the US market, would produce a new pharmaceutical giant with the potential to challenge GSK and Merck for the second position in the market behind Pfizer, she added.
Meanwhile, a report in French newspaper Les Echos suggests that thousands of jobs would go if the takeover by Sanofi goes ahead. The paper did not name its source, but said Aventis had suggested 10,000-12,000 jobs could go around the world.