Aventis Deal Changes Field in Europe

GlaxoSmithKline was one of the names bandied about by analysts as a potential suitor for Aventis. GlaxoSmithKline's ADRs were up 10.8% for the 12 months ended April 22; AstraZeneca's shares made consistent gains during the period, rising 34.7%.

Looking to the future, U.S. analysts offer no clear consensus on these big European drug companies. None is as loved as Pfizer. But none is as unpopular as Bristol-Myers Squibb.

Of four U.S. analysts following Aventis, three recommend holding the stock and one recommends buying it even though the company has beaten Wall Street earnings-per-share estimates for three consecutive quarters, according to Thomson First Call.

GlaxoSmithKline earns a split decision ? three buys, four holds, one sell.

AstraZeneca gets six buys, three holds and three sells despite its strong share price gain in the last 12 months.

Novartis appears to have fared best among the giant European drug companies despite its shares' paltry past performance. Five U.S. analysts have buy recommendations; five have hold recommendations. Among U.S. analysts, Sanofi-Synthelabo has one buy rating and one hold rating.

And for those of you keeping score on Thursday, the Thomson First Call consensus for GlaxoSmithKline's first quarter predicts earnings of $2 billion, or 69 cents a share, on revenue of $9.43 billion. Key issues include the degree of damage caused by generic competition against the antidepressants Paxil and Wellbutrin SR as well as the sales progress of the asthma drug Advair.

The prediction for AstraZeneca is earnings of $894.6 million, or 53 cents a share, on revenue of $5.16 billion. One item of big news will be how well Crestor has performed in the competitive cholesterol-fighter category known as statin drugs. Crestor entered the U.S. market in September. Another key revenue test will be whether Nexium, for acid reflux disease, can grow against competition from branded and generic products.

As for Aventis, the consensus calls for earnings of 89 cents a share; but quarterly sales and net earnings predictions were not available. Non-merger news will focus on how brand name and over-the-counter competition affects the allergy drug Allegra and how U.S. insurance reimbursement affects sales of the cancer drug Taxotere as it competes against lower-priced generic versions of Taxol.