Updated from 10:08 a.m. EDT

The Swiss drug giant Novartis ( NVS) Thursday reported solid financial growth in the first-quarter and said it is willing to talk about buying or merging with the French drug company Aventis ( AVE), which has been fighting a takeover bid from another European rival.

For 2004's first quarter, Novartis earned $1.29 billion on revenue of $6.64 billion compared to net income of $1.06 billion on sales of $5.72 billion.

The Swiss drugmaker's decision to signal its willingness to enter the takeover battle comes as Aventis tries to fend off a hostile takeover by another French drug giant Sanofi-Synthelabo ( SNY).

Sanofi-Synthelabo made a bid for Aventis in January, which was immediately rejected and which triggered speculation among domestic and foreign analysts about which international pharmaceutical company would try to become a 'white knight' to Aventis.

Novartis said Thursday that its board has accepted an offer by Aventis' board "to negotiate conditions for a potential business combination." Novartis added that "no assurances can be given that an agreement can be reached.".

Meanwhile, Novartis said first-quarter net income grew 22% over the same period last year and that sales advanced 16% when measured in U.S. dollars.

Novartis' first-quarter results slightly edged the consensus view of Wall Street analysts, who had predicted a profit of $1.32 billion and sales of $6.46 billion, according to Thomson First Call.

"Barring unforeseen events, we anticipate delivering record full year operating and net income," said Daniel Vasella, chairman and CEO, in a prepared statement. "Based on our excellent research pipeline and broad, young product portfolio, we expect to outpace the market in sales growth and continue to gain market share."

Measured in U.S. dollars, the strongest performing products worldwide during the quarter Included the blood pressure drug Diovan (revenue up 30%); another blood pressure medication, Lotrel (up 21%); Lamisil for fungal nail infections (up 26%); Elidel, for treating eczema (up 70%); Zelnorm/Zelmac, a treatment for irritable bowel syndrome (up 240%); and Gleevec/Glivec, for treating certain cancers (up 51%).

Novartis shares were recently down $1.01, or 2.31%, to $42.80.

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