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Sanofi – ‘20FR12B’ on 6/25/02

On:  Tuesday, 6/25/02, at 3:21pm ET   ·   Accession #:  1021231-2-143   ·   File #:  1-31368

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 6/25/02  Sanofi                            20FR12B                8:2.2M                                   St Ives Burrups/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 20FR12B     Registration of Securities of a Foreign Private     HTML   1.96M 
                          Issuer                                                 
 2: EX-1.1      Underwriting Agreement                              HTML    162K 
 3: EX-2.1      Plan of Acquisition, Reorganization, Arrangement,   HTML     70K 
                          Liquidation or Succession                              
 4: EX-2.2      Plan of Acquisition, Reorganization, Arrangement,   HTML     90K 
                          Liquidation or Succession                              
 5: EX-10.1     Material Contract                                   HTML      7K 
 6: EX-10.2     Material Contract                                   HTML      7K 
 7: EX-10.3     Material Contract                                   HTML      6K 
 8: EX-10.4     Material Contract                                   HTML      6K 

As filed with the Securities and Exchange Commission on June 25, 2002

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 20-F

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:

Sanofi-Synthélabo
(exact name of registrant as specified in its charter)

(translation of registrant’s name into English)

France
(jurisdiction of incorporation)

174, avenue de France, 75013 Paris, France
(address of principal executive offices)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None

The number of outstanding shares of each of the issuer’s classes of capital or
common stock as of May 31, 2002 was:
ordinary shares 732,111,314

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes         No

Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17         Item 18

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PART I

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     Senior Management
     As of the date of this registration statement, the names and responsibilities of our senior officers are as follows:

     Prior to the merger, Sanofi’s independent statutory auditors were Cailliau Dedouit et Associés, with offices at 19, rue Clément Marot, 75008, Paris, France and Ernst & Young Audit, with offices at Tour Ernst & Young, Faubourg de l’Arche, 92037 Paris La Défense Cedex, France; and Synthélabo’s independent statutory auditors were Mr. Michel Jouan, a member of Befec-Price Waterhouse, with offices at 11, rue Margueritte, 75017 Paris, France and Mr. Patrice de Maistre, with offices at 2, rue de Francqueville, 75116 Paris, France.

Item 2.      Offer Statistics and Expected Timetable
     Not applicable.

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Item 3.     Key Information
A.     Selected Financial Data
Introduction
     Our company is the result of the 1999 merger of two French companies, Sanofi and Synthélabo. While we have prepared consolidated financial statements for 2000 and 2001 and a consolidated balance sheet as of December 31, 1999, we did not prepare a consolidated statement of income or statement of cash flows for 1999, the year of the merger. Instead, each of Sanofi and Synthélabo prepared consolidated statements of income and cash flows for the first half of 1999, and we prepared consolidated statements of income and cash flows for the second half of 1999. We have presented those statements of income and cash flows in this registration statement under Item 18 ‘‘Financial Statements,’’ but they do not provide information that is comparable to the information in our 2000 and 2001 statements of income and cash flows.

     We have also prepared a pro forma income statement for the year ended December 31, 1999, based on the assumption that the merger of Sanofi and Synthélabo occurred on January 1, 1999 and that the sale of Sanofi’s beauty division occurred on December 31, 1998. The pro forma income statement data was prepared under French accounting rules applicable to pro forma financial information, and not in accordance with the regulations of the Securities and Exchange Commission applicable to pro forma financial statements. As a result, we have not included a pro forma income statement in this registration statement. We have nonetheless included certain data from the pro forma information in this registration statement in order to reflect trends in our business during the period from 1999 to 2001.

     Our consolidated financial statements and those of our predecessor companies have been prepared in accordance with French generally accepted accounting principles, or French GAAP, and applicable French laws, which differ in certain significant respects from generally accepted accounting principles in the United States, or U.S. GAAP. These differences include, among other things:

     We have reconciled our net income and shareholders’ equity to U.S. GAAP. You should read Note F to our consolidated financial statements, which sets out the details of the reconciliation.

     Unless otherwise indicated, U.S. dollar amounts in this registration statement are translated using the December 31, 2001 Noon Buying Rate of $1.00 = €1.123.

Selected Financial Data
     The selected financial data set forth below have been derived from:

     The data derived from our pro forma statement of income are presented for illustration only, and do not necessarily reflect the actual results that would have been realized had Sanofi and Synthélabo operated on a combined basis for all of 1999. Due to the merger, the selected financial data for Sanofi and Synthélabo, as well as

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our selected financial data for the second half of 1999, are not comparable to our selected financial data for 2000 and 2001.

     The first table below presents selected financial data for our company for the second half of 1999, and all of 2000 and 2001, as well as selected pro forma financial data for 1999. The second table presents selected financial data for Sanofi and Synthélabo for 1997, 1998 and the first half of 1999.

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Unaudited Combined and Pro Forma Financial Data for 1999
     The following table sets forth selected financial data that was used to derive our unaudited combined and pro forma income statement information for the year ended December 31, 1999. The combined income statement data represents the sum of each line item appearing in the audited consolidated income statements of each of Sanofi and Synthélabo for the first half of 1999, and in our audited consolidated income statement for the second half of 1999. The pro forma adjustments are applied to the amounts in our combined income statement to derive our pro forma income statement, in each case for 1999. We have separated the pro forma adjustments into three categories: those relating to the impact of the disposition of Sanofi’s beauty division, those relating to the impact of our write-off of goodwill in connection with the merger, and other (principally the impact of changes in classifications as a result of harmonization of our accounting presentation). All of the financial statements from which the data set forth below are derived were prepared in French GAAP.

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DIVIDENDS

     We paid annual dividends for the years ended December 31, 1999 and 2000, and our annual general shareholders meeting approved a dividend for the year ended December 31, 2001. Sanofi paid annual dividends for the years ended December 31, 1997 and 1998. We expect that we will continue to pay regular dividends based on our financial condition and results of operations.

     The following table sets forth information with respect to the dividends paid by Sanofi in respect of the years 1997 and 1998 and by our company in respect of the years 1999, 2000 and 2001.

     The declaration, amount and payment of any future dividends will be determined by majority vote of the holders of our shares at an ordinary general meeting, following the recommendation of our board of directors. Any declaration will depend on our results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by our shareholders. Accordingly, we cannot assure you that we will pay dividends in the future on a continuous and regular basis. Under French law, we are required to pay dividends approved by an ordinary general meeting of shareholders within nine months following the meeting where they are approved. The shares registered hereby are eligible for all dividends (if any) declared and approved.

     In France, dividends are paid out of after-tax income. However, French residents are entitled to a tax credit, known as the avoir fiscal, in respect of dividends they receive from French companies. Individuals are entitled to an avoir fiscal equal to 50% of the dividend. The avoir fiscal applicable to corporate investors generally is equal to 15% of the dividend. Dividends paid to non-residents normally are subject to a 25% French withholding tax and are not eligible for the benefit of the avoir fiscal. However, non-resident holders that are entitled to and comply with the procedures for claiming benefits under an applicable tax treaty may be subject to a reduced rate of withholding tax, and may be entitled to benefit from a refund of the avoir fiscal. See Item 10 “Additional Information — Taxation.” The information in the table above represents the net dividend paid, without regard to the avoir fiscal.

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     EXCHANGE RATE INFORMATION AND THE EUROPEAN MONETARY SYSTEM

The European Monetary System
     The rate of exchange for the French franc against the euro was fixed on December 31, 1998 at €1.00 = FF 6.55957. Although the introduction of the euro has eliminated exchange rate risks between the French franc and the currencies of the member states of the European Monetary Union, or EMU, there can be no assurance as to the relative strength of the euro against non-EMU currencies. We discuss the extent to which our financial results are subject to currency fluctuations in Item 5 “Operating and Financial Review and Prospects.”

Exchange Rates
     The following table sets forth, for the periods and dates indicated, certain information concerning the exchange rates for the French franc from 1997 through 1998, expressed in French francs per U.S. dollar, and for the euro from 1999 through June 24, 2002, expressed in U.S. dollar per euro. The information concerning the U.S. dollar exchange rate is based on the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the “Noon Buying Rate”). We provide the exchange rates below solely for your convenience. We do not represent that French francs or euro were, could have been, or could be, converted into U.S. dollars at these rates or at any other rate. The Federal Reserve Bank of New York has ceased publishing the Noon Buying Rates for French francs and other constituent currencies of the euro.

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     The following table sets forth our consolidated capitalization under French GAAP as at March 31, 2002.

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D.     Risk Factors

Risks Relating to Our Company
     We may not be able to expand our presence profitably in the United States, a market that is a key to our growth strategy, and where we are investing substantial resources.
     We may not achieve our growth strategy if we do not profitably expand our presence in the United States, the world’s largest pharmaceuticals market. We have identified the United States, which accounted for 17.1% of our pharmaceutical sales in 2001, as a potential major source of future growth and plan to expand significantly our direct presence in the United States in the coming years. For example, we have agreed to pay between $400 and $500 million between 2001 and 2004 for a 49.9% share of the promotional efforts and profitability, from October 1, 2001, of our alliance with Bristol-Myers Squibb that markets Aprovel® (under the name Avapro®) in the United States. In April 2002, we purchased Pharmacia’s interest in the joint venture that sold Stilnox® (under the name Ambien®) and Kerlone® in the United States. We face a number of potential obstacles to profitable growth in the United States, including:

     We depend on third parties for the marketing of some of our products outside Europe. These third parties may act in ways that could harm our business.
     We commercialize some of our products outside Europe in collaboration with other pharmaceutical companies. We currently have major collaborative arrangements with Bristol-Myers Squibb for the marketing of Plavix® and Aprovel® and with Organon, a subsidiary of Akzo Nobel, for the marketing of Arixtra®. We also have alliances with several Japanese companies for the marketing of our products in Japan. See Item 4 “Information on the Company — Business Overview — Marketing and Distribution.” When we commercialize our products through collaboration arrangements, we are subject to the risks that certain decisions, such as the establishment of budgets and promotion strategies, are subject to the control of our collaboration partners, and that deadlocks may adversely affect the activities conducted through the collaboration arrangements. For example, our alliances with Bristol-Myers Squibb are subject to the operational management of Bristol-Myers Squibb in some countries, including the United States. We cannot be certain that our partners will perform their obligations as expected. In addition, our partners might pursue their own existing or alternative technologies or product candidates in preference to those being developed or marketed in collaboration with us.

     We depend on third parties for the manufacturing of the active ingredients for some of our products, including Stilnox®, one of our three leading products.
     By subcontracting the manufacture of the active ingredients for some of our products to third parties, we expose ourselves to the risk of a supply interruption in the event that our suppliers experience financial difficulties or are unable to manufacture a sufficient supply of our products. Although our general policy is to manufacture the active ingredients for our products ourselves, we subcontract the manufacture of some of our active ingredients to third parties. The manufacture of the active ingredient for Stilnox®, which is one of our three leading products, is currently subcontracted to Dynamit Nobel, which purchased the factory that manufactures these active ingredients from us in February 2001. See Item 4 “Information on the Company — Business Overview — Production and Raw Materials” for a description of this outsourcing arrangement. Although we have not experienced any problems in the past, if disruptions were to arise from problems with our manufacturers, this would impact our ability to sell our

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products in the quantities demanded by the market, and could damage our reputation and relationships with our customers. Even though we try to have backup sources of supply whenever possible, including by manufacturing backup supplies of our principle active ingredients at a second or third facility, we cannot be certain they will be sufficient if our principal sources become unavailable.

     Our collaborations with third parties expose us to risks that they will assert intellectual property rights on our inventions or fail to keep our unpatented technology confidential.
     We occasionally provide information and materials to research collaborators in academic institutions or other public or private entities, or request them to conduct tests to investigate certain materials. In both cases we enter into appropriate confidentiality agreements with such entities. However, those entities might assert intellectual property rights with regard to the results of the tests conducted by their collaborators, and might not grant licenses to us regarding their intellectual property rights on acceptable terms.

     We also rely upon unpatented proprietary technology, processes, know-how and data that we regard as trade secrets and protect them in part by entering into confidentiality agreements with our employees, consultants and certain contractors. We cannot be sure that these agreements or other trade secret protection will provide meaningful protection, or if they are breached, that we will have adequate remedies. You should read Item 4 “Information on the Company — Business Overview — Patents and Intellectual Property Rights” for more information about our patents and licenses.

     We have two principal shareholders who continue to maintain a significant degree of influence.
     Our two principal shareholders, L’Oréal and TotalFinaElf, owned 19.5% and 26.0% of our share capital, respectively, as of May 31, 2002. Our bylaws provide that our fully paid up shares that have been held in registered form for at least two years under the name of the same shareholder acquire double voting rights. As a result, as of May 31, 2002, L’Oréal and TotalFinaElf held shares representing 26.9% and 35.8%, respectively, of our voting rights, and are in a position to exert significant influence in the election of our directors and officers and other corporate actions that require shareholder approval. Our board of directors consists of 12 people, and includes 3 representatives from L’Oréal and 4 from TotalFinaElf. The ownership of a large percentage of our capital and voting rights by our two principal shareholders, who are also members of our board of directors, may have the effect of delaying, deferring or preventing a change in our control and may discourage bids for our shares.

     Fluctuations in currency exchange rates could adversely affect our financial condition and results of operations.
     Because we sell our products in numerous countries, our results of operations and financial condition could be adversely affected by fluctuations in currency exchange rates. We are particularly sensitive to movements in exchange rates between the euro and the U.S. dollar. In 2001, approximately 17.1% of our consolidated pharmaceutical sales were realized in the United States. While we incur expenses in those currencies, the impact of these expenses does not fully offset the impact of currency exchange rates on our revenues. As a result, currency exchange rate movements can have a considerable impact on our earnings. When deemed appropriate, we enter into transactions to hedge our exposure to foreign exchange risks. These efforts, when undertaken, may fail to offset the effect of adverse currency exchange rate fluctuations on our results of operations. For more information concerning our exchange rate exposure, see Item 11 “Quantitative and Qualitative Disclosures About Market Risk.”

Risks Relating to Our Industry
     We invest substantial sums in research and development in order to remain competitive, and we may not recover these sums if our products are unsuccessful in clinical trials or fail to receive regulatory approval.

     We need to invest heavily in research and development to remain competitive.
     To be successful in the highly competitive pharmaceutical industry, we must commit substantial resources each year to research and development in order to develop new products. Even if our research and development efforts are fruitful, our competitors may develop more effective products or a greater number of successful new products. In 2001, we spent €1,031 million on research and development, amounting to approximately 15.9% of our consolidated net sales. Our ongoing investments in new product launches and research and development for future products could produce higher costs without a proportionate increase in revenues.

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     The research and development process is lengthy and carries a substantial risk of product failure.
     The research and development process typically takes from 10 to 15 years from discovery to commercial product launch. This process is conducted in various stages, and during each stage there is a substantial risk that we will not achieve our goals and will have to abandon a product in which we have invested substantial amounts. For example, in order to develop a commercially viable product, we must demonstrate, through extensive pre-clinical and human clinical trials, that the compounds are safe and effective for use in humans. There is also no assurance that favorable results obtained in pre-clinical trials will be confirmed by later clinical trials, or that the clinical trials will establish sufficient safety and efficacy data necessary for regulatory approval. As of January 31, 2002, we had 48 compounds in pre-clinical and clinical development in our four targeted therapeutic areas, of which 20 were in phase II or phase III clinical trials. For additional information regarding clinical trials and the definition of the phases of clinical trials, see Item 4 “Information on the Company — Business Overview — Research and Development.” There can be no guarantee that any of these compounds will be proven safe or effective, or that they will produce commercially successful products.

     After completing the research and development process, we must invest substantial additional resources seeking to obtain government approval in multiple jurisdictions, with no guarantee that approval will be obtained.
     We must obtain and maintain regulatory approval for our pharmaceutical products from the European Union, United States and other regulatory authorities before the product may be sold in its markets. The submission of an application to a regulatory authority does not guarantee that it will grant a license to market the product. Each authority may impose its own requirements, including requiring local clinical studies, and delay or refuse to grant approval, even though a product has already been approved in another country. For example, in March 2000, our application for United States approval to market oxaliplatin (a cancer drug marketed under the name Eloxatine® in more than 50 countries, including in Europe) was denied in part because the application was based on studies conducted under European standards, rather than U.S. standards. We are currently subjecting this product to a second set of tests in order to permit us to resubmit the application.

     In our principal markets, the approval process for a new product is complex and lengthy. The time taken to obtain approval varies by country but typically takes from six months to two years from the date of application. Moreover, if regulatory approval of a product is granted, the approval may entail limitations on the indicated uses for which it may be marketed. A marketed product is also subject to continual review even after regulatory approval. Later discovery of previously unknown problems or failure to comply with the applicable regulatory requirements may result in marketing restrictions or withdrawal of the product, as well as possible legal sanctions. In addition, we are subject to strict government controls on the manufacture, labeling, distribution and marketing of our products. All of these factors can increase our costs of developing new products and the risk that we will not succeed in selling them successfully.

     If we are unable to protect our proprietary rights, we may not compete effectively or operate profitably.
     It is important for our success that we be able effectively to obtain, maintain and enforce our patents and other proprietary rights. Patent law relating to the scope of claims in the pharmaceutical field in which we operate is a continually evolving field of law and can be subject to some uncertainty. Accordingly, we cannot be sure that:

     We currently have over 9,000 patents and patent applications world-wide, and we license approximately 30 additional patents. We cannot guarantee the validity or enforceability of our patents, and third parties may challenge the validity or enforceability of our patents. We cannot be sure how much protection, if any, will be given to our

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patents if we attempt to enforce them and they are challenged in court or in other proceedings. In addition, the cost of litigation to uphold the validity of patents can be substantial.

     Earlier this year, two pharmaceutical companies, Apotex and Dr. Reddy’s Laboratories, each filed an Abbreviated New Drug Application, or ANDA, with the U.S. Food and Drug Administration, or FDA, seeking to market a generic form of Plavix® in the United States and challenging the U.S. patents relating to Plavix®. For additional information regarding ANDAs, see Item 4 “Information on the Company — Business Overview —Regulation.” We have filed suit against Apotex and against Dr. Reddy’s Laboratories for infringement of our patent rights. See Item 8 “Financial Information — Legal Proceedings.” Under U.S. law, the FDA will not be able to approve the ANDAs filed by Apotex or Dr. Reddy’s Laboratories until the earlier of May 17, 2005 or the issuance of a court decision that is adverse to the Plavix® patents. The Plavix® patents are material to our company’s business, and if we were unsuccessful in asserting them or they were deemed invalid, any resulting introduction of a generic prescription version of Plavix® in the U.S. would reduce the price that we receive for this product and the volume of the product that we would be able to sell.

     In recent years, governments faced with national crises have used pressure to obtain substantial concessions from pharmaceutical companies. The following are a few examples:

     While we support the efforts of national governments to combat major health care crises, if those efforts come at the expense of effective patent protection, the ability of our company and other pharmaceutical manufacturers to recover amounts spent on research and development will be adversely affected. In such event, we and other manufacturers might curtail our research and development expenditures, and as a result might not develop as many new products.

     Our patents may be infringed, or we may infringe the patents of others.
     Our competitors may infringe our patents or successfully avoid them through design innovation. To prevent infringement, we may file infringement claims, which are expensive and time consuming. Policing unauthorized use of our intellectual property is difficult, and we may not be able to prevent misappropriation of our proprietary rights.

     In addition, as the pharmaceutical industry expands and more patents are issued, the risk increases that our operations and use of technologies may infringe on the patents of others. Because patent applications are generally not published until 18 months after the date of priority applications (or even in some cases until the patents are issued) we cannot be sure that others were not the first to invent products, or to file applications for inventions covered by our pending patent applications. Furthermore, in the United States, patents can be awarded based on the date of invention, which may result in the awarding of a patent to a party who was not first to file. If we are not able to patent our technology, we may have to obtain appropriate licenses under third party patents, cease certain activities or dispose of alternative technology.

     Product liability claims could adversely affect our business and results of operations.
     Product liability is a significant commercial risk for us, and could become a more significant risk as we expand in the United States (where product liability claims can be particularly costly). Substantial damage awards have been made in certain jurisdictions against pharmaceutical companies based upon claims for injuries allegedly caused by

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the use of their products. In addition, some pharmaceutical companies have recently withdrawn products from the market in the wake of significant product liability claims. Although we are not currently involved in any significant product liability cases claiming damages as a result of the use of our products, it is possible that such cases will be brought in the future. We maintain insurance to cover this risk, but we cannot be certain that our insurance will be sufficient to cover all potential liabilities.

     We face uncertainties over pricing of pharmaceutical products.
     The commercial success of our products depends in part on the extent to which private health insurers, health maintenance organizations and government health care programs reimburse the cost of our products to patients. Pharmaceutical products prices have come under considerable pressure in recent years as a result of factors such as:

     Price pressure is considerable in our two largest markets, France and the United States, which represented 22.3% and 17.1%, respectively, of our consolidated net pharmaceutical sales in 2001 (the United States also accounted for 41.0% of our 2001 operating profit excluding unallocated costs). Health care costs have been the subject of particularly intense debate in the United States, where pharmaceutical prices are higher than in many other countries in the world. Changes in the French or U.S. pricing environments could have a significant impact on our revenues and operating profits. See Item 4 “Information on the Company — Business Overview — Pricing” for a description of the French and U.S. pricing regulatory systems.

     Risks from the handling of hazardous materials could harm our operating results.
     Our operations are subject to the operating risks associated with pharmaceutical manufacturing, including the chemical manufacturing of the active ingredients in our products, which activities comprise the related storage and transportation of raw materials, products and wastes. These hazards include, among other things:

     These operating risks can cause personal injury, property damage and environmental contamination, and may result in the shutdown of affected facilities and the imposition of civil or criminal penalties. The occurrence of any of these events may significantly reduce the productivity and profitability of a particular manufacturing facility and harm our operating results.

     Although we maintain property, business interruption and casualty insurance that we believe is in accordance with customary industry practices, we cannot assure you that this insurance will be adequate to cover fully all potential hazards incident to our business. For more detailed information on environmental issues, see Item 4, “Information on the Company — Business Overview — Health, Safety and Environment.”

     Environmental liabilities and compliance costs may have a significant negative effect on our operating results.
     The environmental laws of various jurisdictions impose actual and potential obligations on our company to remediate contaminated sites. These obligations may relate to sites:

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     These environmental remediation obligations could significantly reduce our operating results. In particular, our accruals for these obligations may be insufficient if the assumptions underlying these accruals prove incorrect or if we are held responsible for additional, currently undiscovered contamination. See Item 4, “Information on the Company — Business Overview — Health, Safety and Environment” and “ — Regulation.”

     Furthermore, we are or may become involved in claims, lawsuits and administrative proceedings relating to environmental matters. An adverse outcome in any of these might have a significant negative impact on our operating results. Stricter environmental, safety and health laws and enforcement policies could result in substantial costs and liabilities to our company and could subject our handling, manufacture, use, reuse or disposal of substances or pollutants to more rigorous scrutiny than is currently the case. Consequently, compliance with these laws could result in significant capital expenditures as well as other costs and liabilities, thereby harming our business and operating results.

Risks Relating to an Investment in our Shares or ADSs
     Our shares and our ADSs have never been publicly traded in the United States, and an active U.S. trading market for our ADSs may not develop.
     There has not been a public market for our shares or our ADSs in the United States prior to the effectiveness of this registration. While our shares are listed on the Premier Marché of Euronext Paris, and our ADSs have been approved for listing on the New York Stock Exchange, we cannot predict the extent to which a trading market in the United States will develop or how liquid that market might become. For more information about the trading history of our shares and the Premier Marché see Item 9 “The Offer and Listing — Trading Markets.”

     Foreign exchange fluctuations may adversely affect the U.S. dollar value of our ADSs and dividends (if any).
     As a holder of ADSs, you may face some exchange rate risk. Our ADSs will trade in U.S. dollars and our shares will trade in euro. The value of the ADSs and our shares could fluctuate as the exchange rates between these currencies fluctuate. If and when we do pay dividends, they would be denominated in euro. Fluctuations in the exchange rate between the euro and the U.S. dollar will affect the U.S. dollar amounts received by owners of ADSs upon conversion by the depositary of cash dividends, if any. Moreover, these fluctuations may affect the U.S. dollar price of the ADSs on the New York Stock Exchange, whether or not we pay dividends in addition to the amounts, if any, that you would receive upon our liquidation or upon the sale of assets, merger, tender offer or similar transactions denominated in euro or any other foreign currency other than U.S. dollars.

     If you hold ADSs rather than shares it may be difficult for you to exercise some of your rights as a shareholder.
     As a holder of ADSs, it may be more difficult for you to exercise your rights as a shareholder than it would be if you directly held shares. For example, if we offer new shares and you have the right to subscribe for a portion of them, the depositary is allowed, in its own discretion, to sell for your benefit that right to subscribe for new shares instead of making it available to you. Also, to exercise your voting rights, ADS holders must instruct the depositary how to vote their shares. Because of this extra procedural step involving the depositary, the process for exercising voting rights will take longer for you, as a holder of ADSs, than for holders of shares. ADSs for which the depositary does not receive timely voting instructions will not be voted at any meeting. For a detailed description of your rights as a holder of ADSs, you should read Item 12 “Description of Securities other than Equity Securities — Description of American Depositary Shares.”

     Sales of our shares that will be eligible for sale in the near future may cause the market price of our shares or ADSs to decline.
     At May 31, 2002, we had 732,111,314 shares outstanding, approximately 45.6% of which are held by our two largest shareholders, TotalFinaElf and L’Oréal. Of the shares held by these shareholders on May 31, 2002, 49,033,539 shares are available for sale in the public market, and the remainder will become available for sale in the public market on December 1, 2004 when the shareholders agreement between those shareholders expires. Sales of a substantial number of our shares, or a perception that such sales may occur, could adversely affect the market price for our shares and ADSs. See Item 10 “Additional Information — Share Capital — Shares Eligible for Future Sale” for a more detailed description of the eligibility of our shares for future sale.

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     Because all of our directors and officers reside outside of the United States and a substantial portion of our assets are located in France, you may have difficulty enforcing certain rights.
     All of our directors and officers reside outside the United States and a substantial portion of our assets is located in France. As a result, it may be difficult for you to effect service of process within the United States on such persons and to enforce against them, either inside or outside the United States, judgments obtained against them in U.S. courts, or to enforce in U.S. courts, judgments obtained against them in courts in jurisdictions outside the United States, in any action based on civil liabilities under the U.S. federal securities laws. Additionally, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in France. For additional information see Item 10 “Additional Information — Memorandum and Articles of Association — Enforceability of Civil Liabilities.”

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FORWARD-LOOKING STATEMENTS

     This registration statement contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the Securities and Exchange Commission on Forms 20-F and 6-K, in our annual report to shareholders, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Examples of such forward-looking statements include:

     Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

     Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such factors, some of which are discussed under Item 3 “Key Information — Risk Factors” beginning on page 13, include but are not limited to:

     We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those in forward-looking statements.

     Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update them in light of new information or future developments.

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Item 4. Information on the Company

Introduction
     We are an international pharmaceutical group engaged in the research, development, manufacture and marketing of pharmaceutical products for sale principally in the prescription market. In 2001, our consolidated net sales were €6,488 million ($5,777 million), our operating profit was €2,106 million ($1,875 million) and our net income was €1,585 million ($1,411 million). On the basis of 2001 sales, we are the second largest pharmaceutical group in France, the seventh largest pharmaceutical group in Europe and among the twenty largest pharmaceutical groups in the world (IMS data).

In our prescription pharmaceuticals business, we specialize in four therapeutic areas:

     Our three leading products are Aprovel® , Plavix® and Stilnox®, which together accounted for 30.2% of our total net pharmaceutical sales, or €1,914 million, in 2001.

     We have a strong commitment to research and development. In our 14 research centers, we employ over 6,000 employees devoted to research and development. At January 31, 2002 we had 48 compounds in development in the four therapeutic areas, 20 of which were in phase II or phase III clinical trials. Our product pipeline includes Arixtra®, a synthetic anti-thrombotic that we believe has the potential to become our fourth lead product. Arixtra® was launched in February 2002 in the United States and is currently planned for launch in the second and third quarters of 2002 in Europe.

     Our registered office is located at 174, avenue de France, 75013 Paris, France. Our telephone number is +33 (0)1 53 77 44 00.

    Our company is the result of the 1999 merger of Sanofi and Synthélabo, two major French pharmaceutical companies. Since the merger, we have combined the resources of the two companies to expand our global presence, particularly in the United States, and to increase our focus on research and development for products with strong future potential.

     Sanofi was founded in 1973 by Elf Aquitaine, a French oil company, when it took control of the Labaz Group (a pharmaceutical company) for diversification purposes. Sanofi launched its first major product on the market, Ticlid®, in 1978. At the time of the merger in 1999, Sanofi was the second largest pharmaceutical group in France in terms of sales. A majority of its share capital was owned by Elf Aquitaine, which has since become part of TotalFinaElf. Sanofi made a significant venture into the United States market in 1994, when it acquired the prescription pharmaceuticals business of Sterling Winthrop, an affiliate of Eastman Kodak and launched its first major product on the U.S. market, Aprovel®, in 1997, followed by Plavix® in 1998.

     Synthélabo was founded in 1970 through the merger of two French pharmaceutical laboratories, Laboratoires Dausse (founded in 1834) and Laboratoires Robert & Carrière (founded in 1899). In 1973, L’Oréal acquired the majority of its share capital and in 1988, Synthélabo launched two major products on the French market: Stilnox® and Xatral®. At the time of the merger, Synthélabo was the third largest pharmaceutical group in France in terms of

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sales. A majority of its share capital was still owned by the French cosmetics group L’Oréal. In 1993, Synthélabo launched Stilnox® in the United States under the brand name Ambien®. By 1994 Stilnox® had become the leading insomnia prescription medication world-wide according to IMS data.

     Sanofi and Synthélabo agreed to merge at the end of 1998, and the merger became effective in the second quarter of 1999. Following the merger, TotalFinaElf and L’Oréal were the largest shareholders of the new group, although neither held a majority of the share capital. The two principal shareholders entered into a shareholders agreement that lasts until 2004. The terms of the shareholders agreement are described under Item 7 “Major Shareholders and Related Party Transactions — Major Shareholders.”

     Part of our strategy following the merger was to concentrate on our core prescription pharmaceuticals business. To implement this strategy, we divested non-core businesses, including:

     For a description of our principal capital expenditures and divestitures since 1999, our expectations as to future capital expenditures and divestitures and the impact of the merger and these divestitures on our results of operations and financial condition, see Item 5 “Operating and Financial Review and Prospects.” We currently have no material capital expenditures or divestitures in progress.

B.  Business Overview

Strategy
     We believe we have the potential to grow profitably by taking advantage of our focused portfolio of current and potential drugs centered around four targeted therapeutic areas. The key elements of our strategy to achieve these goals are to:

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Principal Products
     Our principal products are prescription pharmaceuticals, which we group into four main therapeutic categories: Cardiovascular/Thrombosis, Central Nervous System, Internal Medicine and Oncology. The following table outlines our consolidated net sales by major product area for the year ended December 31, 2001.

Consolidated Sales by Major Product Area

     A number of our products, including our three lead products, are sold in certain countries through alliances that we have entered into with other pharmaceutical companies, or through licensees. Our consolidated revenues only reflect a portion of the total revenues realized by the alliances and licensees. In some cases, our revenue shares from the alliances are based on formulas that make our consolidated revenues grow at a different rate than the

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overall growth in sales of the products. In this registration statement, we present both our consolidated revenues from products sold through alliances, and “developed sales,” which represent the overall sales of these products, including sales by our alliance partners and licensees. We believe that developed sales are a useful measurement tool because they demonstrate trends in the overall sales of our products in the market, without regard to the formulas under which our revenue shares are determined.

     A drug can be referred to either by its international non-proprietary name, or INN, or by its brand name, which is normally exclusive to the company that markets it. In most cases, our brand names, which may vary from country to country, are protected by trademark registrations. In the description that follows, our products are generally referred to by the brand names that we use in France.

Prescription Pharmaceuticals
     Our portfolio of prescription pharmaceuticals includes a range of innovative products with strong market positions in our four targeted therapeutic areas. According to IMS data, we are a leader in the treatment of cardiovascular disease and thrombosis based on total consolidated sales with our blood pressure medication Aprovel® (irbesartan) and our anti-atherothrombotic agent Plavix® (clopidogrel). In the area of central nervous system disorders, according to IMS data, we are the leader based on total consolidated net sales of our product Stilnox® (zolpidem), the treatment of choice for sleep disorders.

     In our prescription pharmaceuticals business, we specialize in four therapeutic areas: Cardiovascular/Thrombosis, Central Nervous System, Internal Medicine and Oncology. On an industry-wide basis, these four therapeutic areas account for more than half of world-wide pharmaceuticals sales, according to IMS data. Certain of our products are sold both by us and, in selected markets, by our alliance partners and licensees, giving these products a broad, world-wide market presence. For a discussion of these arrangements, see Item 4 “Information on the Company — Business Overview — Marketing and Distribution — Alliances.” The following table outlines our best-selling prescription pharmaceuticals based on consolidated net sales for the year ended December 31, 2001. In some countries, our products have only been approved (or approval has only been sought) for a portion of the areas of use indicated in the table.

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Principal Prescription Pharmaceuticals

     Our three lead products are sold directly by us and through alliances. The figures above reflect only sales included in our consolidated net sales. In 2001, total world-wide developed sales of Plavix®, Aprovel® and Stilnox® were €2,033 million, €924 million and €1,215 million, respectively.

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Cardiovascular/Thrombosis
     The Cardiovascular/Thrombosis market as a whole is the largest therapeutic area in the world-wide pharmaceutical market. According to IMS data, in the cardiovascular market, we rank second in the European market and third in the U.S. market for angiotensin II receptor antagonists with Aprovel® in terms of annual sales. We are number four in the European market for calcium antagonists with Tildiem® and are the leader in the European and U.S. markets for anti-arrhythmics with Cordarone® (IMS data). In Thrombosis, we rank first in the European, U.S. and Japanese markets for anti-platelet agents with Ticlid® and/or Plavix® and we are number two in the European market for heparins with Fraxiparine® according to IMS data.

     Cardiovascular. Our main products for the treatment of cardiovascular disease are:

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     Thrombosis. Thrombosis occurs when a thrombus, or blood clot, forms inside a blood vessel. Left unchecked, a thrombus within a blood vessel can eventually grow large enough to block the blood vessel, preventing blood and oxygen from reaching the organ being supplied. Our principal products for the treatment of thrombosis are:

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Central Nervous System
     In the Central Nervous System market, according to IMS data, we rank first in the European and U.S. markets for hypnotics with Stilnox® and are number three in Europe in the market for anti-epileptics, with drugs including Depakine®. In the market for neuroleptics, we rank third in Europe and second in Japan with drugs such as Dogmatil® and Solian® (IMS data). Key products in this therapeutic area include:

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     In addition to these products, we also market products for the treatment of anxiety, and agitation and aggressiveness.

Internal Medicine
     Our principal fields in this therapeutic area are urology, gastroenterology, respiratory disease, and the musculoskeletal system. Our leading product in this field is Xatral® (alfuzosin).

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    Our main products in gastroenterology are Primpéran® (metoclopramide), a leading treatment for nausea and vomiting, Ercefuryl® (nifuroxazide), an intestinal antiseptic with a broad anti-bacterial spectrum and Inipomp® (pantoprazole), a potent inhibitor of gastric acid secretion. We also market Mizollen® (mizolastine) and Virlix® (cetirizine), for the treatment of allergic reactions, and Myolastan® (tetrazepam), a muscle relaxant.

Oncology
     Oncology is a new therapeutic area for our company, and one in which we expect to concentrate significant efforts in the future. Our first product in this therapeutic area is Eloxatine®.

Generics
     We also manufacture and market a variety of generics in France, Germany and the United Kingdom. These products cover various therapeutic classes, and are typically sold under their international non-proprietary names, or INNs, however in some cases they have a specific brand name. For example, we market Dialgirex®, a generic product used for aches and pains, in France and Monoflam®, an anti-inflammatory, in Germany.

New Products
     We recently launched two new products, Arixtra®, which we believe has the potential to become our fourth lead product, and Fasturtec®. The principal characteristics of these products are described below.

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     We often enter into collaborative research and development arrangements with other pharmaceutical or biotechnology companies under which we fund research expenses in exchange for a right to use and market the products upon regulatory approval. Some of our collaboration agreements include those with Organon, Mitsubishi-Pharma Corp., Cephalon and IDM.

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     We have entered into collaborative agreements for data-base sharing in the field of genomics with Human Genome Sciences and Genset as well as agreements with research centers specialized in combinatorial chemistry, high throughput screening and structural analysis and proteomics. In the field of functional genomics, we have entered into joint projects with Genfit, Genoway and Lifespan. We also have a joint project with CEREP for compound screening, as well as capabilities in bioinformatics.

     We employ over 6,000 personnel in research and development and have 14 research facilities in 7 countries. At January 31, 2002, we had 48 compounds in our research and development pipeline, of which 20 were in phase II or III clinical trials.

     We focus our research and development efforts on our four targeted therapeutic areas. The composition of our research and development pipeline by therapeutic area as of January 31, 2002 is outlined in the table below.

     The research and development process historically takes from 10 to 15 years from discovery to initial product launch and is conducted in various stages. During the “pre-clinical” stage, research scientists perform pharmacology and toxicology studies in various animals. Before testing in humans, an application for the compound must be filed with and approved by the requisite regulatory authorities. Testing in humans is performed in different clinical phases to demonstrate the safety and efficacy of a new compound:

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     Together, phases II(b) and III typically take from three to five years to complete. Thereafter, an application containing all data for the proposed drug is sent to regulatory authorities for approval, which may take an additional six months to two years or longer. There are two types of further clinical trials: one called phase IIIb, where new indications are sought; and one called phase IV trials, which are generally carried out after product launch to continue to monitor the efficacy and safety of a new drug.

     The table below sets out, in summary form, our current principal projects in phase IIb or phase III clinical trials, together with the current projected filing dates for each product if phase III trials are successful. No assurance can be given that the products discussed below will complete the development process, that they will be filed for approval on the planned timetable or that they will ultimately receive the required governmental approvals necessary for commercial launch.

     Cardiovascular/Thrombosis
     We currently have two principal products in phase IIIb, phase III or phase IIb clinical trials in the field of Cardiovascular/Thrombosis.