Franco-German drugmaker Sanofi-Aventis and the USA’s Bristol-Myers Squibb may be on the verge of announcing a merger, according to reports coming out of France.

Specifically, the French financial newsletter La Lettre de l'Expansion has cited an unsourced report and claimed that an initial pre-merger agreement may have been signed last week. If this were the case, the deal would create the largest pharmaceutical company in the world, worth some $175 billion, though for the moment Sanofi and B-MS remain tight-lipped about the prospect.

A permanent link-up between the two firms is not difficult to imagine given that the firms have a long-standing marketing alliance in place, notably for the blockbuster blood-thinner Plavix (clopidogrel). A key trial on the validity of one of the compound’s patents, where Sanofi and B-MS are up against generic firm Apotex, began last week in the USA and if the two partners prevail, observers believe this could be the spur to make their relationship more permanent still.

B-MS has been considered as a takeover target ever since the departure of chief executive Peter Dolan who left last September after the fallout of Apotex being able to flood the market with copycat versions of Plavix last summer and although its financials at the moment are not overly impressive, its late-stage pipeline seems to be, notably through three cancer drugs ixabepilone, vinflunine and ipilimumab. Sanofi would like to expand its presence in the USA and a deal with its existing partner there clearly has some merit.