Filed by Sanofi-Aventis
Pursuant to Rule 165 and Rule 425(a) under the United
States Securities Act of 1933, as amended
Subject Company: Aventis
Commission File No. 001-10378
Date: October 22, 2004
On October 22, 2004, Sanofi-Aventis first made available on its website the
replay of its Third Quarter Sales Conference Call, first given on October 21,
2004. A transcript of that conference call is set forth below.
In connection with the proposed merger of Aventis with and into
sanofi-aventis, sanofi-aventis has filed a post-effective amendment to its
registration statement on Form F-4 (File no. 333-112314), which includes a
preliminary prospectus relating to the merger, and will file additional
documents with the SEC. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT,
INCLUDING ANY PRELIMINARY PROSPECTUS OR DEFINITIVE PROSPECTUS (WHEN AVAILABLE)
RELATING TO THE MERGER, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC,
INCLUDING ALL AMENDMENTS AND SUPPLEMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Free copies of the registration statement, as well as other
relevant documents filed with the SEC, may be obtained at the SEC's web site at
www.sec.gov. At the appropriate time, sanofi-aventis will provide investors with
information on how to obtain any merger-related documents for free from
sanofi-aventis or from its duly appointed agents.
* * * *
Conference Call sanofi-aventis
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Conference Call: Third Quarter 2004 Sales
First Nine Months 2004 Sales
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I. Introduction 2
II. Third Quarter Overview 2
III. Business Update 4
IV. Integration Update 5
V. Discussion 6
Paris, 21 October 2004 1
Conference Call sanofi-aventis
I. INTRODUCTION
SANJAY GUPTA
Hello everyone and welcome. I would like to begin, since this is the first
conference call for sanofi-aventis, by introducing the new investors team at
sanofi-aventis. I'm Sanjay GUPTA, the new IRO. In my team in Paris, are Arnaud
Delephine, and in New York it's Felix Lancher. Many of us know you and you know
us. We hope to have the opportunity to see all of you in the coming months. I
would like to remind you that the slides for today's call are available on our
website: sanofi-aventis.com. This call is also being webcasted.
To comment on our performance we have with us today, Hanspeter SPEK, Executive
Vice President of Pharmaceutical Operations; Mr. LEROY, the CFO; and Laurence
DEBROUX, Deputy CFO. We will begin with some introductory comments by
Jean-Claude, followed by a business update by Hanspeter, and an update on
integration by Jean-Claude again. We will take questions later in the limit of
the time available. Jean-Claude?
II. THIRD QUARTER OVERVIEW
JEAN-CLAUDE LEROY
Good afternoon, everybody. Before I begin, I will give you some technical
comments because I feel that with this new sanofi-aventis venture, we need to
give some comments on the technical matters. Let me just give you a few words
about the business the way I see it. We're here to comment on rather solid third
quarter sales numbers, generally in line with the first half. I would say that
this is evidence of the momentum that has been kept during the beginning of the
integration process. I guess that is very important to us in the company, as
well as it is to you as investors, to see that this company is going on doing
well, whatever the events are.
To finish on that general comment, I will just add that when I compare with the
information that has been released by our competitors it seems to be like it
points out so far that we are in a rather good position at the sales level.
Now, I will go back to follow up the slide presentation and to give you some of
this technical information I was talking about.
So the first information, the date of the first consolidation of Aventis into
sanofi-aventis will be 30 September 2004. What does that mean? I will talk about
sales but we will see later what it means for results. First, as you have seen
we've released also the consolidated sanofi-aventis sales. As a matter of fact,
since we're consolidating Aventis as of 30 October, it does mean that the
sanofi-aventis consolidated numbers do represent the ex-, the old, the
ex-Sanofi-Synthelabo and only that. So, we thought it would not be meaningful
for the new Group and give a good view of the performance. So, we decided that
we would release also the pro forma sales on a comparable basis, and this is the
next slide which is on the pro forma combined sales. I know it's a bit technical
but we did actually do this together to define what we do mean, what is under
this.
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The pro forma combined sales is to measure the sales performance of
sanofi-aventis, we start including the former sales of Sanofi-Synthelabo for one
part and Aventis from the other part. But not that, only that. That reduced by
the sales of products which have been sold at the request of the competition
authorities - I'm talking about Arixtra(R), Fraxiparine(R), Campto(R). In each
sequence whatever it is - third quarter 2004, nine months 2004, the comparable
with 2003, third quarter, nine months - these are the corresponding figures of
sales for these products have been taken out of the comparison. Again, just to
point out when I was referring to the consolidated sales of sanofi-aventis in
which you have understood that Arixtra(R) and Fraxiparine(R) are included in
this nine months performance. Arixtra(R) and Fraxiparine(R) up to the end of
August because the divestment occurred at the end of August. So, what is
important is that we try to give you through that pro forma combined sales a
good comparison to the sales performance of the Group. In addition, as you can
see, the Aventis Behring has been taken out.
So, that being said, we decided also that the old concept of Sanofi-Synthelabo
was to be kept for the new sanofi-aventis Group but we had to define what was
the content of that. We took one definition which is to say that we would like
to report on the economic performance of, obviously, the pro forma combined
sales plus the sales of the products which belong to sanofi-aventis. That means
that as for the ex-perimeter of Sanofi-Synthelabo, we will include the worldwide
sales of these products which are in partnership with Bristol Myers Squib. I
mean obviously Plavix(R) and Avapro(R), and the Myslee(R), the Japanese part of
the sales which are made through the JV with Fujisawa. That does mean that other
sales of very interesting products such as Actonel(R), for example, will not be
reported this way just because of the fact that this is not a sanofi-aventis
product. This is the reason for the different classification.
Now, before giving the opportunity to Hanspeter to comment on the performance of
sales on the third quarter and nine months, it's just to give you a few figures
to help you explain on that chart showing the pro forma combined sales. You see
we've split the third quarter and the nine months. As you see, we've made the
segmentation obvious: pharmaceutical activities and vaccines. This is going to
be our primary segmentation for reporting purposes from now on. In addition to
that, these figures are shown on a comparable basis. What do we mean by
comparable basis in that instance? We do mean several things. First, obviously,
this does not include the currency impact. As you see in the press release for
the first quarter sales, on a global basis - I mean pharma plus vaccines - we
have a negative 4% impact on the third quarter when we do show a 4.6% negative
impact for nine months.
Now, some of you have read some reports already on this and are wondering what
it means as far as the perimeter is concerned. As I said before, all of the
products that have been sold for anti-trust authorities are excluded totally
from any period in this comparison. In addition to that, you will remember that
there were some products - and mainly Admacord and Endolatryl - which were sold
by Aventis during the first part of the 2004 year. Now, obviously they are
excluded from the comparison. If I were to give you the impact of these products
which have been sold, I would give you the following kind of information. As far
as the third quarter is concerned, this would be reported as a 1.3% increase in
sales, as well as it would show up as a 1.2% negative impact on a nine months
basis. So, in turn, you've seen that we have not used as reported concept of
these pro forma combined sales. This is because so far we thought it would be
too much figures, but if some of you would like to make reporting of that on
this concept, I would tell you that on the third quarter we would show up a 5.4
increase in sales on a so-called reported basis. This would tell you that as of
the end of September, nine months now, we would show 4.7. But now, this is
something that is going to be more important when at the end of the year we
describe and comment about the result.
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As far as the sales are concerned, I guess that the comparable basis is the most
appropriate way of reporting on our sales. A quarter of 10.7, nine months +10.5.
I guess this is what we have to comment now in more detail with Hanspeter.
III. BUSINESS UPDATE
HANSPETER SPEK
Good morning, good afternoon. If you look at the first chart which is on page 8,
I hope you will agree that it is a very, very nice picture to look to. So, it's
15 leading products of the new Group, which represent approximately 62% of
overall sales. Out of the 15 products, 13 products show a high two digit growth
rate, and there are only two products which are suffering. First of all,
Allegra(R), which is suffering from a weak season in Japan and from the well
known issues in the US market. Second, of course, Tritace(R), which is suffering
from an out of patents situation in Europe. There it is mainly the United
Kingdom and Germany where we have significant losses in value sales. But I think
it is worth mentioning that through a very pro-active price policy we have
managed to stabilise our value sales. In Germany, for example, it's close to 60%
because we pro-actively lowered our prices.
So on the fast growing major products, what to say? More in detail, Lovenox(R)
is doing extremely well, even stronger in the US. We of course hope to benefit
in the mid and near future from the circumstances coming from the
non-registration of the AstraZeneca product, which we have been watching very
closely. We have then Plavix(R). Perhaps on first glance it's a little bit,
slightly lower growth rate in the quarter, which is to my understanding to the
largest extent possible a technical effect. We have a little decrease of stock
in the United States. We had an artefact in the base of the third quarter in
Germany, where we had anticipated buying by launching a new peptide, which was
[inaudible]. But if we look to the prescription rates we see no significant
changes in trends, and we estimate a very strong fourth quarter, especially
coming from the US.
The Taxotere(R) performance is varying. We have a much stronger growth outside
the US. In the US, we are still suffering from the unfavourable reimbursement
situation between Taxotere(R) and Taxol(R). We are entirely confident that this
situation will change because the American citizen is going to change by the end
of this year or very early in 2005. So we consider that especially on the
American market, 2004 will be a year of transition and we expect very, very
strong growth. Also in the US, as from 2005, very much of course supported from
the new indications the product has recently obtained in the US, but also
outside.
In the end, the trend is totally stable and unchanged. We have a prescription
rate as of before, fluctuating month by month between 12% and 14%. And what you
see is of course in addition to the given price increases. Eloxatine(R): nearly
55% growth; continued strong growth in the US but also growth of approximately
35% outside the US, which shows that this product continues to grow nearly eight
years after its first launch, which has been done in France in point of fact.
I think it's worth mentioning that the smaller products like,let's say,
Depakine(R) a very old product but a gold standard in the therapy of epilepsy,
for example, is growing at nearly 11%. So overall, for those products a growth
rate of 18.5% on a nine months basis, and you see it's exactly the same growth
rate of 18.5% for the third quarter, which is for us a very confirming
indication that the trend of the businesses of the two businesses in stand alone
is not at all suffering from the ongoing
Paris, 21 October 2004 4
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integration, which of course has been an important issue for us to watch and we
feel very much confirmed that we are not only putting not the business at risk
but we also believe that this very, very positive growth is even further
enhancing our ongoing integration because our people get a very positive
stimulation from it.
If you look then at page 9, you see that the Unites States continue to be the
growth driver. You see again that we had a very good third quarter, where the
growth even accelerated to 18.3% as compared to 16.0% for the year to date
figure. You see further that our performance in Europe is nearly on the same
level: 5.5 as compared to 6.5. Last but not least, the rest of the world is
nearly 9% as compared to 11%. We have a little bit of a seasonal dip but, once
again, the fourth quarter has started very, very promising.
So overall you see then that the third quarter has been growing by 10.7% as
compared to 10.5% on a year to date basis. I think it's important to correlate
this with the overall pharmaceutical market is growing slightly below 7%. So we
feel that the new Group before it has been really finally integrated has a very,
very good and promising base to realise one of our major objectives for 2005,
which of course will be to continue to grow significantly above the market
average.
IV. INTEGRATION UPDATE
JEAN-CLAUDE LEROY
OK, thank you Hanspeter. Going on now on the company, how we put it in shape for
that full integration in 2005. Just a reminder - I know that all of you are
pretty aware of all of these events. If you take that, then you remember that we
took the keys of Aventis - sorry for saying that so directly but that's exactly
the reality - sometime around 20 August. When you see how the organisation has
been put in place inside the company by appointing all the people who are to
lead the rest of the company. Hundreds of people have been nominated, or will be
in the very next days, in all the countries and regional organisations, as well
as the central, scientific, industrial and so on. We are very close to having
the new organisation which is set up for leading the new company in these days.
That was what we wanted to do. We are in the process of doing it for having this
Company in good shape for doing business on a new basis as of the beginning of
the year.
Now, in addition to that, we have had some interesting events to comment on, in
the integration process because this is part of it, as you've seen. There was an
existing agreement on Actonel(R) with Procter & Gamble, and we have the
opportunity to negotiate or further negotiate this agreement in order to secure,
to keep, the co-management of this product around the world with Procter &
Gamble. That has been negotiated to reinforce the product sustainability, the
flexibility around R&D and so on. We are very pleased to have the opportunity of
this reinforced collaboration of this very interesting product, which all of you
know has been doing over $1 billion in sales, over the last 12 months rolling
over. We are continuing the collaboration on Alvesco(R) with Altana, and there
is FDA action which is scheduled after the 23rd.
As far as Exubera(R) is concerned, we said that we are considering our action.
Where are we? I remember there is a change in control clause attached to that
collaboration. Now, in the fact you may have seen that we are, I would say, in a
small disagreement. We've said that this operation of buying Aventis has not
triggered the clause. They have said in Pfizer to the contrary. So there is an
issue and we are waiting our actions. Well, that is just to tell you that we are
reviewing everything
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and beginning the discussion with Pfizer. I cannot give you any more conclusions
just because of the fact there is no difference today with the situation which
existed at the time of the operations. So more news to come in the future but so
far there is no more news to be given.
As well as in the integration process to finish with, I mean this is only a
general information and I know that you would like to know more about that. We
are reviewing all of the molecules, the portfolio, as well as the commercial
organisation, ongoing on other collaborations. More news to come on that, I
guess as we said, at the very beginning of next year, but be sure that we are on
it.
We said that we would try to simplify our legal chart in order to be able to
accelerate the restructuring of the Group. That's what we've been doing. You've
seen that the merger between the two companies - Aventis and sanofi-aventis -
has been approved by both the Supervisory Board of Aventis and the Board of
Directors of sanofi-aventis. This project is going to be submitted to the AGM,
which is going to be held before the end of the year. So, at the end of the year
we will be in good shape on that. I would add that we are also Hoescht German
side of the operation with the same goal.
What are the next events, I guess this is also of interest: what are the
forthcoming events before the end of the year on a product basis, and there are
several information which you know. The first one, as I already said, the
Alvesco(R) action date at the FDA. Beginning of November the ten month action
date for Eloxatine(R) adjuvant indication. Acomplia(R) presentation at the
American Heart Association at New Orleans of the results of the study RIO North
America, an important event for our company. I know that a lot of people would
like to know more about the Plavix(R) patent situation. The only event which
everybody knows, because this is very official, is the date of the pre-trial
order of Plavix(R) on 8 December. As you know, we know no more about this. It's
not difficult to say that the trial might come some time at the beginning of
2005 but we don't know more for the time being.
Communication on our figures. We will have the next sales call probably before
the end of January 2005, on a full year 2005 figures, again consolidated, pro
forma with comparisons. And obviously, as you all expect, in very early March
and we will release not only the 2004 results, but the business review, the R&D
portfolio review, which we promised we would do, obviously an acquisition
synergies update, and guidance for the year 2005. So I know that I'm not giving
you more information in that respect today but we are gearing up everything in
order to be able to deliver to you all this information at this date at the very
beginning of next year.
SANJAY GUPTA
Thank you Jean-Claude. OK, are we ready for questions now?
V. DISCUSSION
ANDY COLSON, REDBURN PARTNERS
First of all, congratulations on the integration and your first set of numbers.
I've got a quick question on Rimonabant. I know there's been some uncertainty of
whether the RIO North American study will be reporting one or two year data.
Given that we're only a couple of weeks
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away is there any clarity on what's going to be presented yet, or are we just
going to have to wait and see?
SANJAY GUPTA
I think your second guess is the right one: just wait and see. We will be
presenting results on 9 November; it's not so far away. The company does not
want to tell you now; we have all the data at hand and we are evaluating at what
we can present. So I give you rendezvous on 9 November.
MORGAN STANLEY
Four quick questions if I may. First, to Hanspeter: could you just give us some
sense of how the much larger portfolio you now have at your disposal given the
acquisition translates into benefits when dealing with the Managed Care
authorities both in terms of getting drugs on formerin and also reimbursement.
Secondly, could you tell us in which line rebates are given, whether it's in the
revenue line or elsewhere? Thirdly, inventory and pricing in the portfolio both
generally and for the outlying individual products. Finally, I see the pre-trial
order is set for 8 December. Is there any risk to that date in itself, or is it
for sure that we're going to find out the schedule on the 8th?
HANSPETER SPEK
On the first, Managed Care, it's difficult to say. We are just starting to try
to build up a common Managed Care policy between Aventis and Sanofi-Synthelabo,
and of course this also has to be coordinated with what Bristol Myers is
practising on the two joint venture products: Plavix(R) and Avapro(R). So, I
cannot give you very precise estimates and figures on it, but I can give you a
gut feeling. I think that there will be a certain trend of, yes, the Sanofi
portfolio will get a broader access to Managed Care. But on the other side, this
will have a price. So, frankly, what I expect is nothing in terms of negative or
positive synergies, including on sales in the US, for being a much larger Group.
I think we have all reason to indicate that there is continuing pressure on US
prices. So we will try to manage this to the best and, as I said, for the time
being, I do not expect anything out of it.
JEAN-CLAUDE LEROY
As far as the rebates are concerned, I can confirm to you that the rebates are
taken out of the sales that are imported. In other words, sales that are
imported are net sales out of rebate.
Hanspeter SPEK
We have no price changes in the ongoing quarter, on the Sanofi-Synthelabo side
first of all. Consequently, I mean I can give you all the stocks, product by
product, but believe me there is no significant changes. All of the stock of
Sanofi turns between 0.5 and 0.6. This is exactly the same for the stock for
Aventis products, where the stock varies between 0.3 (which currently is the
stock of Lantus(R)) and higher stock I see would be Anzemet(R) with 0.6. Sales
data are relatively stable. The average stock in Aventis today is 0.5, it has
been in August 0.5, and it is today 0.5, and in
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December 03 for example, it has been 0.4. So it is fair to say that the stock
levels today on both sides are more than reasonable, approximately half of
[inaudible].
SANJAY GUPTA
On the Plavix(R) trial, experience has taught us that dates that are scheduled
are not cast in stone. So I would think that it's always possible for the dates
to slip. We don't know anything more about it; it's what's there in the judge's
orders. If the judge gets some other priority he can change those dates. So,
that's the best indication we have but it's not 100% and it depends upon events,
on the judge's calendar.
ERIC LEGARDE, REAMENS
First question on Actonel(R). Could you tell us if, beyond what you said
already, there is now with Procter & Gamble a less favourable split in profits
for you? Second, on Exubera(R), if the judge is to rule in Pfizer's favour, what
does it mean? What Pfizer wants? Do they want to regain full rights or do they
want to change the agreement? If you can be more precise. Thirdly, out of this
quarter and for the nine months as well could you tell us how much represents
the OTC business to be sold to Procter & Gamble, and also the generic business,
as you more and more speak about this Winthrop activity. Fourthly, just to give
us some insight about the quality and feedback you get from the launch of
Ketek(R) in the US. The 41 million may seem pretty low. The final question, to
get an update on the flu vaccine situation in the US. What we may expect for the
fourth quarter? And also perhaps the kind of sense you may have from the US to
see higher number of competitors, perhaps, for the next season.
HANSPETER SPEK
I may start with Actonel(R). You see the spirit of the agreement we made remains
wholly unchanged. The spirit of the agreement has meant that there was a small
partner, Procter & Gamble, entering into an agreement with a relatively large
partner, Aventis, to develop this market. It was foreseen that Procter & Gamble
would get more and more actions within this deal. This spirit has been perfectly
maintained, and what Procter will increase in terms of gains should be balanced
off by the overall very strong increase in sales of this product. Now, that is
the intention; how it comes is very difficult to predict today because it
depends how the product penetrates individual markets. You know that in certain
markets sanofi-aventis will have the product exclusively; in other markets it
will be sharing the product; and in other markets the product will be launching
by Procter solely. So I think I cannot go much further. Believe me, the spirit
of the agreement is exactly maintained: there is a rising share of Procter &
Gamble in this deal but this should be very well traded off by the fact that the
product has a very, very bright future for the years to come.
On the generic business, well the generic business today - according to the very
precise definition of generic, which means products being sold under the
international non-proprietary name and being promoted through [inaudible] - our
business is small; it's about 300 million. Nevertheless, it is profitable. It is
of course not as profitable as the prescription business but it has very
significant two digit profitability. In terms of strategy, I would say an axis
which is two-fold. First of all, we have today a blockbuster product, which will
most likely lose all of the patents by age during the
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next 10 to 15 years, and we have today a policy in this respect which is that we
will no more give away volumes for those products. Which means that we'll have a
very pro-active stand in terms of price policy for many reasons: to keep our
patients on the medication, to keep our factories full, and to continue to well
absorb overhead costs, and to avoid too much volatility in our performance. The
second aspect in terms of generic policy is we feel that the N(degree)1 company
in Europe and the N(degree)3 company in the world has to make a strategic offer
to health care providers which is not unilaterally based on high priced,
innovative products but we feel we need also to have an opportunity for
bargaining, for making proposals on the other side, which is the low price side
of generics. There are more and more health care providers and governments who
expect to get proposals from international pharmaceutical companies, and we are
ready to fill our role also in this respect.
Now, in terms of perspectives, it's clear that this business even if it will one
day reach its critical size - which we estimate at approximately 1 billion - it
will still remain a marginal business in respect of the overall size of the
company, and the impact on the multiples will consequently remain insignificant
JEAN-CLAUDE LEROY
In relation to Exubera(R), the question if I well remember is what Pfizer wants.
Well, I could say I don't know what Pfizer wants. The only thing which is a fact
is that Pfizer has designated a banker for valuating the products. So even
though we're not in agreement in the change in control clause, we've done also
the same for valuation purposes. And I just can remind you what might be the
consequences at the end of the day after the valuation has been done is that
Pfizer decides to buy back the product from sanofi-aventis, or they ask
sanofi-aventis to buy back the product, or they decide to stay in the existing
alliance. It is their decision. Whatever is done, one way or the other, it would
be done on a market value basis. For the rest I don't know more about their
intentions.
There was a question about the part of the OTC business. The value, just to
remind you, the figures for 2003 on a yearly basis, the sales were (euro)53
million. That's what we're talking about.
HANSPETER SPEK
On the OTC business, let's be clear about this. What is supposed to be acquired
by Procter & Gamble is not our OTC business. It is our dental business, and it
has nothing to do with our pharmaceutical OTC business, which of course will be
maintained also because OTC is an important strategic option.
Now on Ketek(R), it is very early to make any statements because the product has
been just promoted actively since two months. So, what we hear from Managed
Care, for example, is extremely positive - amazingly positive even. You can see
that we have very good access. I can give you one other precise figure which is
that in September we have sales of 120 000 scripts, which amounts to a market
share of approximately 2.3%. This means doubling the market share from August,
where it has been only 1.2%. So, the figures or course are ridiculously small
but the trends are very promising. Of course, we know that the real battle will
come up in the upcoming season of respiratory and pulmonary infections. So, we
will really know by the end of the first quarter where we stand.
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JEAN-CLAUDE LEROY
There was a last question about flu vaccines. I guess that this refers to what
you learned yesterday that the companies sanofi-aventis and Aventis Pasteur will
be capable of delivering an additional 2.5 million doses in the US.
Unfortunately, we will not be capable of delivering globally more in the year,
just because the process of manufacturing takes some time. We cannot just
replace the lack of production which is induced by the situation with Chiron. We
will do everything which we can do, the maximum, but unfortunately we will have
reached the top with the last information which was given to the market
yesterday.
LEHMANN BROS
A few product related questions please. Firstly, could you update us on the
Lovenox(R) motion for summary judgement. Any time line for a decision there?
Secondly, on Alvesco(R), you talk about an action date. I think most of us are
assuming that respiratory products take longer than 12 months. Do you believe
that we could actually see some action at this point or is it much more likely
that this is going to be rolled over for a little longer? Could you give us the
US sales of Xatral(R) please? You talk very confidently about a rebound in
growth for Taxotere(R) when the reimbursement comes in. Are you confident that
the prescriptions for taxines in total are still rising at the 20% rate that
they were rising before, i.e. the increased use of Taxol(R) which will swing
back? Or is there actually a shift away from the taxines to other products such
as Alimta(R). A final question on Ambien(R). Could you just tell us how you are
getting ready? Are you putting more effort behind this product in anticipation
of competition early next year?
HANSPETER SPEK
Let me start with the Ambien(R) question, the answer is yes. We will take
advantage of a united strike force of sanofi-aventis, 7 600 reps in the US, as
of 1 January, in anticipation of the upcoming launch or launches. But we would
have done this even without those launches because we feel that there is a
direct relation between promotion and sales of Ambien(R), and we know the
potential of the product by far has not been leveraged. On Taxotere(R) and
Taxol(R), what we expect for 2005 is a high two digit growth for Taxotere(R). It
is driven by the continued growth inside the existing indications. If you look
to the growth which is evidence for Taxol(R), you see a high two digit growth
figure, which means that Taxol(R) could benefit from the current reimbursement
situation but also from an increased use of course. But our expectation for 2005
is of course also driven by additional sales coming from the newly obtained
indication in prostate cancer.
LEHMANN BROS
Is high two digit more than 20 then?
HANSPETER SPEK
I would say it starts at least with a 20. We are in the early phase of the
budget so I cannot give you a precise figure but, yes, I definitely expect
something. If the reimbursement situation changes we
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have to get back to our 20% growth, which is also the growth we see outside,
where we don't have this artefact of the American current reimbursement system.
JEAN-CLAUDE LEROY
Alvesco(R): we are speculating. We have an action based on what we say. We of
course also see it may take longer, but of course we hope we get a clear cut
action answer but this cannot be excluded that there is a request for additional
data, as is always the case. Of course, this is field of indication as you
correctly sate where very often additional questions are being asked related to
dose or applications and so forth because those products are a little difficult
perhaps in terms of development.
PHILIPPE
The Lovenox(R) summary judgement. You know that it is not unusual for motions of
summary judgement to be filed in such law suits. So now, we have not heard
anything back from the judge, who is going to decide if he want to have a
hearing or if he want to consider on the brief alone. So, we have not heard
anything back from him. We expect to hear something maybe by the end of the year
or the beginning of next year.
HANSPETER SPEK
US sales of Xatral(R): once again we are still not content with developments,
which are much slower than anticipated. We have sold in the fourth quarter
between 4 and 5 million, which is about half of what we had expected. So the
good news are, nevertheless, that we see in less than, let's say, four weeks a
very, very nice - even sharp increase - in prescriptions. We are on a weekly
basis now at 18% of prescriptions coming from neurologists for the market. Which
means we have 18% and Flomax(R) has 82%. I always said that if it was 20% it
could start to become interesting. But once again, frankly, we are disappointed
but nevertheless we do everything to repair the situation.
MARK PERMA, ING FINANCIAL MARKETS
One follow up on Exubera(R). You talked about early discussions on the value of
the project. I wondered whether you could tell us if you believe that Pfizer is
overvaluing it or undervaluing it form your perspective?
JEAN-CLAUDE LEROY
I said that each company has designated a banker to valuate the products. We are
not yet discussing the value; we are still in the process of valuing, which is
one step behind. So, I cannot answer your question with any more precision. To
tell you the truth, at the end of the day, I don't know what Pfizer's position
will be. We'll know that later on.
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ING FINANCIAL MARKETS
I don't understand how you can be in disagreement and not know what the
disagreement is about.
JEAN-CLAUDE LEROY
The disagreement is something different. Pfizer decided that the operation we
made with Aventis triggered a change in ownership in the contract so that we
were in the situation where they might decide whether to buy or they had us
buying the product or status quo. We said that this event is not triggering.
That's the reason we're in disagreement, and not the next. Each party has
decided to have a banker designated. And at that time, that's where we are.
ING FINANCIAL MARKETS
So you have no idea whether they would like to get Exubera(R) full rights or
whether they would like to sell you the full rights?
JEAN-CLAUDE LEROY
No idea at all at that stage.
IXIS SECURITIES
Good afternoon. A couple of quick questions. First, a number of your competitors
are now communicating, will communicate next week, on their IFRS accounting.
Will we have some presentation on the impact of these new norms at the meeting
in March 2005 or will you publish your accounts according to that? Second
question, on Exubera(R), on the papers filed by Aventis during the take-over
period they mentioned there was a 45 day period for valuing the company, then 15
days for deciding. Would that apply here? Is there some sort of an action date
on that? Lastly, on the growth of Sanofi-Synthelabo, it's up 17% in the Q3,
which is a bit down on the first half. It doesn't seem to come from the top
products. Is that some weakness in old Sanofi tail products?
HANSPETER SPEK
[Inaudible.] I said 17% against a market which is below 7%, and compared with
the previous performance which has been I think 18. I think it's really sad to
say it's an artefact. It's an artefact on top because we are so strongly driving
our base that 17% in the third quarter are probably enough to come forth in 18%
in the first quarter. So, now we say there is absolutely nothing and perhaps to
anticipate a question which may come up concerning the year end sales, we have
announced nearly one year ago that we expect that our sales in 2004 would be on
the level of our sales in 2003. And I can just confirm you that more than ever
we are convinced this will come in exactly as predicted at the end of last year,
at the very beginning of this year. So, so far, on sales.
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FROM THE PANEL
On Exubera(R), maybe to precise that the timing that was provided by Aventis at
the time once the clause is triggered. Here we are discussing about whether this
clause has been triggered or not. Once it is triggered, then you have some
timing to plan. But we really not as far as that because we are discussing on
the very principles of the triggering of the clause. The reason why we
designated a banker is that we wanted to protect our rights and enter about a
value discussion that might not be at the end of the day anything more than
discussion between partners. But it's still happening, so both companies are
providing a valuation. But I would say we are outside of the scope of the clause
as of today because there is no agreement that the clause has been triggered
effectively.
JEAN-CLAUDE LEROY
Back to IFRS. I could say it's a bit early but obviously there is a beginning of
an answer that I can give. It is obvious for us that the opening valuation, for
example, we're going to have to do that from an IFRS perspective. So in a way,
we will deliver - I'm sorry for that - several sets of figures. It's going to be
too many figures but in the meantime it may help to understand the performance
of the Group. I just say that, for comparable purpose pro formas, we will
certainly try to deliver under IFRS. For the rest - the consolidated - if we
were to give the set of figures under French rules, we would have to give some
flavour of the reconciliation with IFRS. So, one way or the other there will be
IFRS on here at the end of the year.
MERRILL LYNCH
Good afternoon, I've got four questions, please. The first is on Lovenox(R), and
the subpoena you've received. If you could give us a little bit more feeling on
the meaning of that subpoena and what the next steps are. Secondly, on
Exubera(R), relating to the change of ownership clauses. As I understand it, the
manufacturing plant of the insulin here is actually co-owned by Pfizer and
sanofi-aventis. I'm wondering if any clauses also apply to the plant or would
that remain partly in your hands regardless and therefore you would still, in
the event that Pfizer acquired the product, keep the manufacturing supply there?
On Ketek(R), you talked about good forms of coverage in the United States. I was
wondering if you could just put a number to that. Finally, on the flu vaccine,
you talked about 2.5 million for this year. I was just wondering if upsizing
your production for next year's flu market might be an option.
HANSPETER SPEK
I start then with Ketek(R). We have about 70% of the segment here, which we
really find - keeping in your minds once again that we are two months on the
market - is an excellent result, and [inaudible] has done a very good job. The
Exubera(R) plant, you are right. That's a plant. It's a specific dedicated plant
within the industrial park of Aventis in Frankfurt. Our interpretation of the
situation is, if Exubera(R) would go to Pfizer, the plant would go with it.
Paris, 21 October 2004 13
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JEAN-CLAUDE LEROY
Regarding Lovenox(R), we received on 1 October a subpoena by the US Attorney's
Office in Chicago, that's right, concerning certain marketing practices relating
to Lovenox(R) from the beginning of 99 to [inaudible]. We are in the process of
responding to the subpoena, providing all the information which has been
required.
FROM THE PANEL
Regarding the flu vaccine production capacity, we said last year during the
vaccine day that our production capacity has been increased to 165 million of
dose on a world wide basis. You know that [inaudible] manufactures in Europe and
the US. We will produce next year according to this full capacity. This is being
discussed and this will depend obviously about our estimation for the demand for
the next year season.
REUTERS
A very basic question. I was just wondering if you could give us any sort of
guidance for the fourth quarter. I know you've said in the past that guidance is
unlikely until maybe February. But I was just wondering if there were any
general comments as to how you think the fourth quarter might turn out?
JEAN-CLAUDE LEROY
Again, we've said, I'm sorry I'm going to repeat, that we're not going to give
any precise estimates on the fourth quarter nor on the year. Except, as I said,
unless there is a big problem the trends do not change that much from a quarter
to the other. I would just like to say that even though we said - and we're
going to do it - that we will deliver, provide next year figures and results on
a quarterly basis. Again, we're going to give the yearly guidance at the
beginning of the year but we don't intend to give guidance on a quarterly basis.
REUTERS
Would it be fair to say you're optimistic about the future despite all these
concerns over law suits and all the rest of it?
JEAN-CLAUDE LEROY
Yes, we are optimistic, definitely.
REUTERS
Just to reiterate then, you don't think the trends will change much from one
quarter to the next?
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JEAN-CLAUDE LEROY
You know that better than us in the pharmaceutical business.
HANSPETER SPEK
If I may add, I'm in charge from an operational point of view. I think you will
agree that a certain part of what you see in terms of sales and what you hear in
terms of the integration confirms that - I allow me to say - we relatively well
controlled and managed the situation. So if you take that one fact and you take
on the other side what has been announced previously by both companies, I think
it is fair to say that there is no indication to expect, on the operational
level, any bad surprises until the end of the year.
MICHAEL ECHOP, COMMERZBANK
Just two brief questions. I just wanted to check to make sure that I understand
the basis of the pro forma net sales you've presented. I understand that you've
excluded Arixtra(R) and Fraxiparine(R) from the end of August 2004. What about
the other divestments mandated by the anti-trust issues? I know in the F-4 you
recently filed the pro formas included those products. I just want to see
whether the pro formas you presented today include or exclude the EU mandated
disposals. Second, Exubera(R): I understand there's this debate going on between
yourselves and Pfizer about control. What would be your preference for an
outcome there?
JEAN-CLAUDE LEROY
I will begin by the most difficult one, which is the pro formas. I guess that I
have to give some explanation. I said that in the consolidated figures, which
are only represented in the ex-Sanofi-Synthelabo figures, Arixtra(R) and
Fraxiparine(R) are consolidated up to the divestment, which are cut at the end
of August. As far as the pro formas, this is exactly to the contrary.
Arixtra(R), Fraxiparine(R), as well as Campto(R) from the Aventis side, have
been excluded from the whole sequences which have presented. They have been sold
at the beginning of 2003, so that they do not appear in 2003 or 2004, so they
don't belong to the comparison. As for the rest of the products, which we are in
the process of divesting, because of the demand of Brussels, their divestment
has not yet occurred. I mean by that, that we have not yet signed agreements. We
are on the verge of signing agreements but we have not signed agreements. As
soon as we have signed agreements for disposing of these products, we will treat
them exactly the same way we've treated Arixtra(R), Fraxiparine(R) and Campto(R)
for they will disappear from the sequence. Now just reminding everybody that
we've all in all - apart from the three main products - we're only talking of
products which total roughly (euro)50 million of yearly sales. So it's not going
to make any difference even on a reported basis, in any case, as compared to the
(euro)25 billion of pro forma sales.
HANSPETER SPEK
I disagree with Jean-Claude that he has the difficult question. The other
question you raised about what our company would like is, for many reasons, much
more difficult to answer. Nevertheless, I want to try. From a marketing
standpoint, I have just a couple of weeks looking to this product, so
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this has reservations. It is quite fascinating to imagine that we could offer to
a patient being obliged to have an injection or several injections every day a
totally different way of administration, which most likely is more convenient.
That is for the charming side of the product. If you go more into details,
especially into the economics, it is clear that the market access for this
product - especially to the European markets here - is much more questionable.
Because I am , frankly, totally incapable of answering that question today: to
which extent the European health care systems are ready to pay for a different
application form a more or less significantly higher price. To answer, we need
much more data and much more discussions also with Pfizer in order to really
evaluate the potential of this product, especially outside the US. So, in short,
as always, there are positives, there are less positives, and we are at the
beginning to evaluate and will need to discuss this further with Pfizer.
DEUTSCHE BANK
Four quick questions. Quickly on Exubera(R), whether you can give us any idea on
the timing of the court decision as to whether change control has been
exercised. Secondly, since we have you Jean-Claude, whether you can make any
comment on what level of options are now outstanding as regards the old Aventis
business. The potential options charge from counting the stock options was
pretty high in the Aventis business, and I'm wondering if you can give us any
feel as to where that might be at the present time. You mentioned that
Eloxatine(R) has been on the market for eight years in France. I just wondered
whether you could give us an idea how long it's been on the market in other
major European territories so we can have some idea when its exclusivity around
Europe comes to an end? Finally, historically Aventis did have a tendency to
sell some of its tail products, and it booked significant profits as a result. I
wonder if you'd give us any idea whether you can comment at all on that old
policy in your view, and as a consequence whether we should assume such profits
will no longer continue? Thank you.
HANSPETER SPEK
Eloxatine(R) is relatively an easy one. The French market has more or less an
exclusivity within Europe for two or three years and then we started launching
in the other major markets. But then it took another, I would say, three or four
years to launch in the latest market, which have been then the United Kingdom
and Italy was one also of the later markets. So to sum it up, in the latest
European markets, the product is only available since approximately three years.
JEAN-CLAUDE LEROY
Too early to answer your question on the stock options. We will comply with IFRS
policy when it comes to book that. So more information to come on the impact
when we deliver the yearly set of accounts.
DEUTSCHE BANK
Can I ask whether most of the options were rolled over that the Aventis
personnel had previously?
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JEAN-CLAUDE LEROY
Yes, definitely. The merger we launched will exactly keep the rights of the
stock option holders with a consideration which is exactly in the ratio of
exchange. So, no change at all. As far as the tail products portfolio
divestiture policy. I guess we've been clear since the launch of the offer on
Aventis, and we've not changed our minds in that. We do not consider that it is
a way to have a bottom line by selling products just to match through capital
gain what is the expectation of the market. Now, I'm not saying at all, that a
tail product, a small product, that to be divested because they would be much
better in other areas. We will not do it. We are just saying that it is not a
policy of sanofi-aventis to sell the portfolio and to make the bottom line. So,
no change in the policy since 26 January, and that's what we're going to do in
the future.
DEUTSCHE BANK
OK, so it would be fair to regard profits made on those products as exceptional
historically?
JEAN-CLAUDE LEROY
Exactly. Now, on Exubera(R), we've said about everything that we're capable of
saying today. Again, we've told you a lot which in turn got to nothing at news.
Compared to the situation three months ago, we'll give more news to the market
when we can but it's too early to say more. We don't know more at the time
being.
DEUTSCHE BANK
The hearing has been heard, and a verdict is waiting to be delivered. Any idea
when that verdict may be delivered from the court?
JEAN-CLAUDE LEROY
Not at all; no idea at all.
JEROME BERTON, NATEXIS
Most of my questions have been answered. I wanted to know, regarding the
decision from BMS to cut part of its sales force to promote Avapro(R) and
Provaco, I was wondering whether you had some plans to fill the gap, to
reallocate part of your sales force or renegotiate the agreement with them.
Secondly, could you just confirm that, apparently the integration is going quite
well and is on track, would you confirm that you still expect some 10% of
synergies in 2004?
HANSPETER SPEK
On BMS, yes, we don't have any plans but we are having active conversations with
Bristol Myers Squibb. There is no underlying agreement that both products still
have enormous potential in the US and outside. There is a total agreement on
both sides that the investment in both products
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should not be, may not be, reduced in the country. Consequently, we are today
actively evaluating, together with Bristol Myers Squibb, how to cope with the
new situation which highlighted as you said Bristol Myers Squibb's reduction of
headcount in the US. On the other side, Sanofi has through sanofi-aventis new
and more opportunities than before. So far, those conversations go the same
constructive way as they went in the previous past when we had similar issues
between the two partners. Consequently, we are confident that by the end of the
year, we will have adequate decisions in place, from the promotional angle but
of course also from the subsequent financial and economic angles, which have to
take into account what each side is able and ready to contribute.
NATEXIS
If I understand well, the investment from both parties could not be reduced
according to the agreement but you're in discussions on the consideration. Is
that right?
HANSPETER SPEK
I did not mention the agreement. I said there is a common understanding that the
investment should not be decreased because it would be a mistake in front of the
opportunity. So there is a total agreement that the investment in both products
should not only be maintained but should also be accelerated. This could be
matched with the given situation as you quoted it correctly of Bristol Myers
Squibb. So we have just to sit together and find ways how we realise the
necessary investment and how we split consequently the subsequent incremental
results.
JEAN-CLAUDE LEROY
As to the synergies, you were asking the question, will we deliver? I could also
answer for Hanspeter and for Gerard Le Fur, and for the rest of the central
function. We are definitely taking some decisions, some of which are also
official, I mean outside, information of where we're going to put the
headquarters in several important countries. We are also, as you may imagine,
reviewing the portfolio and trying to do things in the R&D area. We are
definitely doing things in the outside experts and operations area. So, yes, I
can confirm that we are in the process of delivering the kind of synergies we
have been addressing the market with.
HANSPETER SPEK
Just to add to this, we have already today in most European markets, former
Aventis sales people promoting Aprovel(R) and Plavix(R), and former Sanofi
people promoting former Aventis products such as Ketek(R), and we have exactly
the same agreements already in place, which means that the people are already
actively visiting the doctors in the US. So we have fixed a number of
[inaudible] which gives already in 2004 some additional incremental sales. I can
confirm what Jean-Claude said, I come out of our first meeting with regional
people on the future structure, and coming from some of those meetings, I can
confirm that in terms of structure we will fully deliver what we have announced
since the mid of the year.
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Conference Call sanofi-aventis
NATEXIS
Just a follow up question. Just to come back again on Exubera(R), you said that
you don't have any precise idea about the timing of the decision coming from the
judge. It could take some weeks, some months. Could we have a final answer by
the end of this year? What is you assumption?
HANSPETER SPEK
Frankly, we have none. I can add that it is not one judge; it is several judges
because there is a litigation in Europe and another one in the US. So, there is
no more precise answer possible.
SANJAY GUPTA
We are coming to the end of the time period. Can we take one last question
please? You will have the opportunity to approach Investor Relations and we'll
be happy to answer your questions in the days and weeks ahead.
NIKEI
You have mentioned during your presentation when you explained about Allegra(R)
you talked about something not going very good in Japan. What's the problem
there with Allegra(R)? Also, in Japan, as you know, there were big operation by
Aventis, and small operation by Sanofi. How did you straighten that up?
Everything is now organised and straightened up so that everyone works in the
corporate way?
HANSPETER SPEK
To answer the Allegra(R) question, we really have to go into biology. I had to
learn that there's a strong two year seasonality for antihistamine products in
Japan because every second year, there's a special tree which is widely spread
over Japan - it's a cedar kind of tree - produces pollen. This has a dramatic
impact on rhinitis. The next year will be 2005, and has not been 2004. So if you
analyse, you see that Allegra(R) in fact even was gaining market share within a
shrinking market in 2004. But for this given situation we are very, very
confident for 2005 to come back with two digit growth.
NIKEI
So it's a natural phenomenon: it just goes up and down, and that's the worst
turn and then it will improve?
HANSPETER SPEK
Yes, absolutely. There is another underlying effect which is independent from
this biological pollen situation, which is the very, very positive trend the
product has in dermatology in Japan.
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NIKEI
And for the organisational issues?
HANSPETER SPEK
The organisational issues are, frankly, minor issues in Japan. You know that
Sanofi has a very small unit of slightly more than 100 people, which is mainly
managing the existing agreement, and the rest is clinical development. Those
people are already in the process of being actively integrated into the
structure of Aventis Japan. They are in the process of moving out of the current
building. So, we don't see there major synergies but of course the real
synergies are to come. You may know that we are in a very final stage of getting
chlopidogrel approved in Japan. It will not be marketed as a license. We have a
joint venture agreement in which sanofi-aventis will play an important role. And
of course we have significant expectations in this respect.
SANJAY GUPTA
I think that that's about it. Thank you very much for your interest in
sanofi-aventis. Thank you.
IMPORTANT INFORMATION
---------------------
In connection with the proposed merger of Aventis with and into sanofi-aventis,
sanofi-aventis has filed a post-effective amendment to its registration
statement on Form F-4 (File no. 333-112314), which will includes a preliminary
prospectus relating to the merger, and will file additional documents with the
SEC. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT, INCLUDING ANY
PRELIMINARY PROSPECTUS OR DEFINITIVE PROSPECTUS (WHEN AVAILABLE) RELATING TO THE
MERGER, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING ALL
AMENDMENTS AND SUPPLEMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Free copies of the registration statement, as well as other relevant documents
filed with the SEC, may be obtained at the SEC's web site at www.sec.gov. At the
appropriate time, sanofi-aventis will provide investors with information on how
to obtain any merger-related documents for free from sanofi-aventis or from its
duly appointed agents.
As agreed with the Autorite des marches financiers (AMF), a draft of the French
prospectus relating to the merger (Document E), which has not yet been approved
by the AMF, has been made available, free of charge, at the sanofi-aventis
website, www.sanofi-aventis.com, from the time that the documentation filed with
----------------------
the SEC has been available on the website of the SEC. INVESTORS SHOULD BE AWARE
THAT THE FRENCH DOCUMENT WHICH WILL BE AVAILABLE ON THE SANOFI-AVENTIS WEBSITE
IS ONLY A DRAFT OF THE FRENCH PROSPECTUS (DOCUMENT E) AND THAT IT REMAINS
SUBJECT TO CHANGE, IN PARTICULAR IN RESPONSE TO COMMENTS FROM THE AMF.
THEREFORE, IT IS STRONGLY RECOMMENDED THAT INVESTORS READ THE DEFINITIVE VERSION
OF THE FRENCH PROSPECTUS (DOCUMENT E) WHICH WILL BE AVAILABLE ON-LINE ON THE
WEBSITES OF THE AMF AND OF SANOFI-AVENTIS AFTER IT HAS BEEN APPROVED BY THE AMF.
Paris, 21 October 2004 20