Half-year financial report 2009

HALF-YEAR FINANCIAL

REPORT 2009

T a b l e of C o n t e n t s

Free Translation of the French Language Original I − Condensed half-year consolidated financial statements 2

CONSOLIDATED BALANCE SHEETS – ASSETS 2 CONSOLIDATED BALANCE SHEETS – LIABILITIES & EQUITY 3 CONSOLIDATED INCOME STATEMENTS 4 CONSOLIDATED STATEMENTS OF RECOGNIZED INCOME AND EXPENSE 5 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 6 CONSOLIDATED STATEMENTS OF CASH FLOWS 7 NOTES TO THE CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS – SIX MONTHS ENDED JUNE 30, 2009 8 A. BASIS OF PREPARATION OF THE HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS AND ACCOUNTING POLICIES 8 B. SIGNIFICANT ITEMS DURING THE FIRST HALF OF 2009 9 C. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE (JUNE 30, 2009) 30 II − Half-year management report 31

A. SIGNIFICANT EVENTS OF THE FIRST HALF OF 2009 31 B. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE (JUNE 30, 2009) 37 C. CONSOLIDATED FINANCIAL STATEMENTS FOR THE FIRST HALF OF 2009 38 D. PRINCIPAL RISKS AND UNCERTAINTIES 57 E. OUTLOOK 58 F. APPENDIX – DEFINITION OF FINANCIAL INDICATORS 60 III − Statutory Auditors’ review report on the 2009 half-year financial information 61

IV − Responsibility statement of the certifying officer - Half-year financial report 62

The condensed half-year consolidated financial statements have been subject to a review by the statutory auditors in accordance with professional standards applicable in France.

2 2009 Half-Year Financial Report sanofi-aventis

I − Condensed half-year consolidated financial statements

CONSOLIDATED BALANCE SHEETS – ASSETS

(€ million) Note June 30, 2009

December 31, 2008

Property, plant and equipment B.2. 7,559 6,961

Goodwill B.3. 29,471 28,163

Intangible assets B.3. - B.4. 15,130 15,260

Investments in associates B.5. 2,142 2,459

Financial assets – non-current B.6. 884 821

Deferred tax assets B.11. 3,047 2,920

Non-current assets 58,233 56,584

Assets held for sale 33 −

Inventories 4,271 3,590

Accounts receivable 5,869 5,303

Other current assets 1,949 1,881

Financial assets – current 189 403

Cash and cash equivalents B.8. 6,214 4,226

Current assets 18,525 15,403

TOTAL ASSETS 76,758 71,987

The accompanying notes on pages 8 to 30 are an integral part of the condensed half-year consolidated financial statements.

2009 Half-Year Financial Report sanofi-aventis 3

CONSOLIDATED BALANCE SHEETS – LIABILITIES & EQUITY

(€ million) Note June 30,

2009 December 31,

2008

Equity attributable to equity holders of the Company 44,621 44,866

Minority interests 163 205

Total equity B.7. 44,784 45,071

Long-term debt B.8. 6,983 4,173

Provisions and other non-current liabilities B.10. 8,658 7,730

Deferred tax liabilities B.11. 5,546 5,668

Non-current liabilities 21,187 17,571

Liabilities related to assets held for sale 6 −

Accounts payable 2,733 2,791

Other current liabilities 5,112 4,721

Short-term debt and current portion of long-term debt B.8. 2,936 1,833

Current liabilities 10,787 9,345

TOTAL LIABILITIES & EQUITY 76,758 71,987



CONSOLIDATED INCOME STATEMENTS

(€ million) Note

6 months to June 30,

2009


2008

12 months to December 31,

2008 Net sales 14,545 13,626 27,568

Other revenues 703 570 1,249

Cost of sales (3,619) (3,615) (7,337)

Gross profit 11,629 10,581 21,480

Research and development expenses (2,260) (2,180) (4,575)

Selling and general expenses (3,627) (3,572) (7,168)

Other operating income 450 316 556

Other operating expenses (170) (138) (353)

Amortization of intangibles (1,805) (1,709) (3,483)

Operating income before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation

4,217 3,298 6,457

Restructuring costs B.14. (907) (207) (585)

Impairment of property, plant and equipment and intangibles B.4. (28) (126) (1,554)

Gains and losses on disposals, and litigation − − 76

Operating income 3,282 2,965 4,394

Financial expenses B.15. (151) (160) (335)

Financial income B.15. 37 110 103

Income before tax and associates 3,168 2,915 4,162

Income tax expense B.16. (795) (771) (682)

Share of profit/loss of associates 496 411 812

Net income 2,869 2,555 4,292

Net income attributable to minority interests 232 220 441

Net income attributable to equity holders of the Company

2,637 2,335 3,851

Average number of shares outstanding (million) B.7.4. 1,305.5 1,313.7 1,309.3

Average number of shares outstanding after dilution (million) B.7.4. 1,306.5 1,315.8 1,310.9 - Basic earnings per share (in euros) 2.02 1.78 2.94

- Diluted earnings per share (in euros) 2.02 1.77 2.94



CONSOLIDATED STATEMENTS OF RECOGNIZED INCOME AND EXPENSE

(€ million)


2009


2008


2008

Net income for the period 2,869 2,555 4,292

Income/(expense) recognized directly in equity:

Available-for-sale financial assets 16 (142) (132)

Cash flow hedges (140) 4 104

Revaluation reserve 130 − −

Actuarial gains and (losses) (69) 130 (829)

Currency translation differences (167) (1,654) 948

Tax effect on income and expense recognized directly in equity (1) 50 (24) 132

Total income/(expense) recognized directly in equity (180) (1,686) 223

Total recognized income/(expense) for the period 2,689 869 4,515 Attributable to equity holders of the Company 2,457 662 4,090

Attributable to minority interests 232 207 425

(1) See Note B.7.5.



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(1) See Note B.7.5. (2) Adjustment to accumulated results prior to the acquisition of control over Zentiva, in particular the impairment loss recognized in

2007 against the equity-accounted interest in Zentiva (see Note B.5.).


(€ million) Share capital

Additionalpaid-in

capital and retainedearnings

Treasuryshares

Stockoptions

and othershare-based

payments

Otheritems

recognizeddirectly in

equity(1)

Attributable to equity holders

of the Company

Attributableto minority

interestsTotal

equity Balance at January 1, 2008 2,732 47,162 (2,275) 1,468 (4,545) 44,542 177 44,719

Income/(expense) recognized directly in equity − 87 − − (1,760) (1,673) (13) (1,686)

Net income for the period − 2,335 − − − 2,335 220 2,555

Total recognized income/(expense) for the period − 2,422 − − (1,760) 662 207 869

Dividend paid out of 2007 earnings (€2.07 per share) − (2,702) − − − (2,702) − (2,702)

Payment of dividends and equivalents to minority shareholders − − − − − − (265) (265)

Share repurchase program − − (1,225) − − (1,225) − (1,225)Reduction in share capital (103) (2,843) 2,946 − − − − −

Share-based payment: Exercise of stock options 1 10 − − − 11 − 11 Proceeds from sale of treasury shares on

exercise of stock options − − 4 − − 4 − 4

Value of services obtained from employees − − − 64 − 64 − 64

Tax effect of exercise of stock options − − − (12) − (12) − (12)Other movements − 7 − − − 7 − 7

Balance at June 30, 2008 2,630 44,056 (550) 1,520 (6,305) 41,351 119 41,470

Income/(expense) recognized directly in equity − (780) − − 2,692 1,912 (3) 1,909


Total recognized income/(expense) for the period − 736 − − 2,692 3,428 218 3,646


Share repurchase program − − (2) − − (2) − (2)Share-based payment: Exercise of stock options 1 27 − − − 28 − 28


Balance at December 31, 2008 2,631 44,819 (552) 1,581 (3,613) 44,866 205 45,071

Income/(expense) recognized directly in equity − 63 − − (243) (180) − (180)


Total recognized income/(expense) for the period − 2,700 − − (243) 2,457 232 2,689

Dividend paid out of 2008 earnings (€2.20 per share) − (2,872) − − − (2,872) − (2,872)


Increase in share capital 1 − − − 1 − 1 Share-based payment: Proceeds from sale of treasury shares on

exercise of stock options − − 1 − − 1 − 1


Zentiva step acquisition − 102(2) − − − 102 39 141

Balance at June 30, 2009 2,631 44,750 (551) 1,647 (3,856) 44,621 163 44,784


CONSOLIDATED STATEMENTS OF CASH FLOWS

(€ million) Note


2009


2008


2008 Net income attributable to equity holders of the Company 2,637 2,335 3,851 Minority interests, excluding BMS (1) 13 8 19 Share of undistributed earnings of associates 19 (55) 19 Depreciation, amortization and impairment of property, plant and equipment and intangible assets 2,271 2,275 5,985 Gains and losses on disposals of non-current assets, net of tax (2) (13) (33) (45)Net change in deferred taxes (587) (361) (1,473)Net change in provisions 574 114 56 Cost of employee benefits (stock options & other share-based payments) 66 64 125 Impact of the workdown of acquired inventories remeasured at fair value 19 − − Unrealized (gains) and losses 366(5) (415)(5) (13)Operating cash flow before changes in working capital 5,365 3,932 8,524 (Increase)/decrease in inventories (441) (71) (84)(Increase)/decrease in accounts receivable (357) (391) (309)Increase/(decrease) in accounts payable (237) (149) (28)Net change in other current assets, financial assets (current) and other current liabilities 48 (79) 420 Net cash provided by operating activities (3) 4,378 3,242 8,523 Acquisitions of property, plant and equipment and intangibles B.2. - B.3. (824) (796) (1,606)Acquisitions of investments in consolidated undertakings, net of cash acquired B.1. (1,825) − (661)

Acquisitions of available-for-sale financial assets (3) (2) (6)Proceeds from disposals of property, plant and equipment, intangibles and other non-current assets, net of tax (4) 28 102 123 Net change in loans and other non-current financial assets (13) 4 (4)Net cash used in investing activities (2,637) (692) (2,154)Issuance of sanofi-aventis shares 2 17 51 Dividends paid: • to sanofi-aventis shareholders (2,872) (2,702) (2,702)• to minority shareholders, excluding BMS (1) (5) (4) (6)Additional long-term borrowings B.8.1. 3,202 586 765 Repayments of long-term borrowings (34) (18) (1,253)Net change in short-term borrowings (66) 55 557 Acquisitions of treasury shares − (1,225) (1,227)Disposals of treasury shares, net of tax 1 4 6 Net cash provided by/(used in) financing activities 228 (3,287) (3,809)Impact of exchange rates on cash and cash equivalents 19 (28) (45)Net change in cash and cash equivalents 1,988 (765) 2,515 Cash and cash equivalents, beginning of period 4,226 1,711 1,711 Cash and cash equivalents, end of period B.8. 6,214 946 4,226

(1) Alliance agreements with Bristol-Myers Squibb (BMS), see Note C.1. to the consolidated financial statements for the year ended December 31, 2008.

(2) Including available-for-sale financial assets. (3) Including:

Income tax paid (1,374) (1,214) (2,317) Interest paid (109) (121) (317) Interest received 58 60 132 Dividends received 3 3 5

(4) Property, plant and equipment, intangible assets, investments in consolidated subsidiaries and participating interests. (5) Arising primarily on the translation of U.S. dollar surplus cash from American subsidiaries transferred to the sanofi-aventis

parent company, see Note B.9.2.



NOTES TO THE CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS – SIX MONTHS ENDED JUNE 30, 2009

INTRODUCTION

The sanofi-aventis Group (sanofi-aventis and its subsidiaries) is a leading player in the world pharmaceuticals industry, engaged in the development, manufacture and marketing of healthcare products in seven major therapeutic fields: thrombosis, cardiovascular, metabolic disorders, oncology, central nervous system, internal medicine and vaccines.

Its international R&D effort provides a platform for the Group to develop leadership positions in its markets.

Sanofi-aventis, the parent company, is a société anonyme (a form of limited liability company) incorporated under the laws of France. The registered office is at 174, avenue de France, 75013 Paris, France.

Sanofi-aventis is listed in Paris (Euronext: SAN) and New York (NYSE: SNY).

The half-year consolidated financial statements for the six months ended June 30, 2009 were reviewed by the sanofi-aventis Board of Directors at the Board meeting held on July 28, 2009.

A. BASIS OF PREPARATION OF THE HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS AND ACCOUNTING POLICIES

A.1. Basis of preparation of the half-year consolidated financial statements and accounting policies

The half-year consolidated financial statements have been prepared and presented in condensed format in accordance with IAS 34 (Interim Financial Reporting). The accompanying notes therefore relate to significant items for the period, and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2008.

The consolidated financial statements as of June 30, 2009, have been prepared in compliance with standards and interpretations adopted by the European Union and with those issued by the IASB. Except as described below, the accounting policies applied as of June 30, 2009 are consistent with those described in the notes to consolidated financial statements for the year ended December 31, 2008.

Segment information for the six months ended June 30, 2009 is reported in accordance with IFRS 8 (Operating Segments). IFRS 8 requires segment information to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. Segment information is provided in note B.17. The changes made by sanofi-aventis to its operating segments have had no effect on the allocation of goodwill for the purpose of impairment testing.

Standards, amendments and interpretations mandatorily applicable from January 1, 2009 and issued in 2008 or earlier are described in note B.28. to the consolidated financial statements for the year ended December 31, 2008, and have not had a material impact on the consolidated half-year financial information for the six months ended June 30, 2009.

International Financial Reporting Standards as adopted by the European Union as at June 30, 2009 are available under the heading IASs/IFRSs, SICs and IFRICs adopted by the Commission on the following website: http://ec.europa.eu/internal_market/accounting/ias/index_en.htm

http://ec.europa.eu/internal_market/accounting/ias/index_en.htm�


The financial statements for the year to December 31, 2009, and the comparative information presented therein, will be prepared in compliance with standards and interpretations applicable at that date. The information contained in this half-year report relating to the periods ended December 31, 2008 and June 30, 2009 may therefore be subject to change if new or amended standards and interpretations are issued by the IASB and adopted by the European Union.

A.2. Use of estimates

The preparation of financial statements requires management to make reasonable estimates and assumptions, based on information available at the date of preparation of the financial statements, that may affect the reported amounts of assets, liabilities, revenues and expenses in the financial statements, and disclosures of contingent assets and contingent liabilities.

Examples of estimates and assumptions include:

amounts deducted from sales for projected sales returns, chargeback incentives, rebates and price reductions;

the extent of impairment of accounts receivable and of provisions for product claims;

impairment of property, plant and equipment, goodwill, intangible assets and investments in associates;

the valuation of goodwill and the valuation and useful life of acquired intangible assets;

the amount of post-employment benefit obligations;

the amount of provisions for restructuring, litigation, tax risks and environmental risks;

share-based payment expenses, including awards of stock options and restricted shares;

the fair values of financial assets and derivative financial instruments.

For the purposes of the half-year financial information, and as allowed under IAS 34, sanofi-aventis has determined income tax expense on the basis of an estimate of the effective tax rate for the full financial year. This rate is applied to Income before tax and associates. The estimated effective tax rate is based on the tax rates that will be applicable to projected pre-tax profits or losses arising in the various tax jurisdictions in which sanofi-aventis operates.

Actual amounts could vary from these estimates.

A.3. Seasonal trends

The operations of sanofi-aventis are not subject to significant seasonal fluctuations.

B. SIGNIFICANT ITEMS DURING THE FIRST HALF OF 2009

B.1. Changes in the scope of consolidation

The main changes in the scope of consolidation during the first half of 2009 were as follows:

▪ On March 11, 2009, sanofi-aventis successfully closed its offer for Zentiva N.V. (Zentiva). As of June 30, 2009, sanofi-aventis held about 99.1% of Zentiva’s share capital through its subsidiary sanofi-aventis Europe. The purchase price was €1,199 million, including acquisition costs. Prior to this acquisition, sanofi-aventis had owned 24.9% of Zentiva, which was accounted for as an associate using the equity method (see Note B.5.). The Zentiva group reported sales of CZK 18,378 million (€735 million) in 2008.


▪ On March 31, 2009, sanofi-aventis took 100% control of Laboratorios Kendrick (Kendrick) through its subsidiary sanofi-aventis Mexico. Kendrick is one of the leading manufacturers of generics in Mexico, with sales of approximately €26 million in 2008 and an estimated market share of 15% (IMS MAT January 2009).

▪ On April 27, 2009, sanofi-aventis acquired 100% of the shares of Medley, Brazil’s third largest pharmaceutical company and no.1 generics company, with sales of around €153 million in 2008 (more than two-thirds of which were in generics) and a 5.7% market share (IMS MAT February 2009). The purchase price, on the basis of a €500 million enterprise value, was €340 million including acquisition costs. The potential consequences of this acquisition are currently under examination by the competition department of the Brazilian Ministry of Justice (CADE); this examination, and the accompanying transitory measures, relate to only a limited part of Medley’s activities.

▪ On April 27, 2009, sanofi-aventis took 100% control of BiPar Sciences, Inc. (BiPar), an American biopharmaceutical company developing novel tumorselective approaches for the treatment of different types of cancers. BiPar is the leading company in the emerging field of DNA (DeoxyriboNucleic Acid) repair using Poly ADP-Ribose Polymerase (PARP) inhibitors. The pivotal Phase III trial for BSI-201, BiPar’s lead product candidate in metastatic triple negative breast cancer, started in July 2009. The purchase price is contingent on the achievement (regarded as probable) of milestones related to the development of BSI-201, and could reach $500 million.

B.2. Property, plant and equipment

Acquisitions of property, plant and equipment totaled €595 million in the first half of 2009. Of this amount, €389 million related to investments in the Pharmaceuticals segment, primarily in industrial facilities (€194 million) and plant and installations at research sites (€152 million). The remaining €206 million related to acquisitions made in the Vaccines segment.


B.3. Intangible assets and goodwill

Movements in intangible assets and goodwill during the first half of 2009 are shown below:

(€ million) Acquired

Aventis R&D

Other acquired

R&D(1)

Rights to marketed

Aventis products

Products, trademarks

and other rights(1) Software

Total intangible

assets

Gross value at January 1, 2009 2,453 557 30,319 1,761 585 35,675

Changes in scope of consolidation − 628 − 1,031 9 1,668

Acquisitions and other increases − 64 − 54 17 135

Disposals and other decreases − (35) − − - (35)

Translation differences (29) (35) (297) 47 1 (313)Transfers (5) (1) 5 1 − −

Gross value at June 30, 2009 2,419 1,178 30,027 2,894 612 37,130 Accumulated amortization and impairment at January 1, 2009 (1,484) (46) (17,399) (998) (488) (20,415)

Amortization expense − (16) (1,660) (129) (24) (1,829)

Impairment losses, net of reversals − (20) (8) − − (28)

Disposals and other decreases − 35 − − − 35 Translation differences 18 1 207 12 (1) 237

Accumulated amortization and impairment at June 30, 2009 (1,466) (46) (18,860) (1,115) (513) (22,000)

Carrying amount at January 1, 2009 969 511 12,920 763 97 15,260

Carrying amount at June 30, 2009 953 1,132 11,167 1,779 99 15,130

(1) Excluding amounts arising under the Aventis purchase price allocation.

The provisional Zentiva purchase price allocation resulted in the recognition of intangible assets totaling €908 million, represented mainly by the value of marketed products and the Zentiva trademark. Goodwill amounted to €976 million.

The provisional Medley purchase price allocation resulted in the recognition of intangible assets totaling €168 million. Goodwill amounted to €372 million.

In the provisional BiPar purchase price allocation, a value of €545 million was attributed to BSI-201, the principal product currently under development.

Acquisitions of intangible assets other than software during the first half of 2009 amounted to €118 million.

Goodwill breaks down as follows:

(€ million) Grossvalue

Accumulated amortization

and impairment Carryingamount

Balances at January 1, 2009 28,188 (25) 28,163

Changes in scope of consolidation 1,443 − 1,443

Disposals and other decreases (2) − (2)

Translation differences (134) 1 (133)

Balances at June 30, 2009 29,495 (24) 29,471


B.4. Impairment of property, plant and equipment, goodwill and intangibles

As of June 30, 2009, the results of impairment tests conducted in accordance with IAS 36 (Impairment of Assets) led to the recognition of impairment losses totaling €28 million on the rights to TroVax® and the product Di-Antalvic®.

B.5. Investments in associates

Associates consist of companies over which sanofi-aventis exercises significant influence, and joint ventures. Sanofi-aventis accounts for joint ventures using the equity method (i.e. as associates), in accordance with the allowed alternative treatment specified in IAS 31 (Financial Reporting of Interests in Joint Ventures).

Investments in associates break down as follows:

(€ million) % interest June 30,

2009 December 31,

2008

Sanofi Pasteur MSD 50.0 392 427 Merial 50.0 1,228 1,203 InfraServ Höchst 31.2 91 96 Zentiva (1) 24.9 − 332 Entities and companies managed by Bristol-Myers Squibb (2) 49.9 220 196 Financière des Laboratoires de Cosmétologie Yves Rocher 39.1 121 119 Other investments in associates − 90 86 Total 2,142 2,459

(1) Ownership interest held as of December 31, 2008; Zentiva was fully consolidated as of June 30, 2009 (see Note B.1.). The carrying amount of the investment as of December 31, 2008 is net of an impairment loss of €102 million recognized in 2007.

(2) Under the terms of the agreements with Bristol-Myers Squibb (BMS) (see Note C.1. to the 2008 full-year consolidated financial statements), the Group’s share of the net assets of entities and companies majority-owned by BMS is recorded in Investments in associates.

Transactions with associates

The financial statements include commercial transactions between the Group and certain of its associates that qualify as related parties. The principal transactions of this nature are summarized below:

(€ million)

6 months toJune 30,

2009


2008

12 months toDecember 31,

2008

Sales 225 204 432 Royalties (1) 588 469 1,014 Purchases 116 145 254

(1) This item mainly relates to transactions with entities managed by BMS.

B.6. Financial assets – non-current

The main items included in Financial assets – non-current are:

(€ million) June 30,

2009 December 31,

2008

Available-for-sale financial assets(1) 503 491 Pre-funded pension obligations 1 1 Long-term loans, advances and receivables (2) 282 186 Assets recognized under the fair value option 67 72 Derivative instruments 31 71 Total 884 821

(1) Includes 14.8 million shares representing 19% of the capital of Regeneron Pharmaceuticals, valued at €188 million on the basis of the quoted stock market price as of June 30, 2009 (versus €195 million as of December 31, 2008).

(2) Increase mainly due to the indemnity (recognized as a receivable) covering liabilities assumed as part of the Medley acquisition.


B.7. Equity

B.7.1. Share capital

The share capital of €2,631,116,430 consists of 1,315,558,215 shares with a par value of €2.

Treasury shares are deducted from shareholders’ equity. Gains and losses on disposals of treasury shares are taken directly to equity and are not recognized in net income for the period.

Treasury shares held by sanofi-aventis are as follows:

Number of shares (million)

%

June 30, 2009 10.0 0.76% December 31, 2008 10.0 0.76% June 30, 2008 9.9 0.76% January 1, 2008 37.7 2.76%

A total of 32,752 sanofi-aventis shares were issued under stock subscription option plans during the first half of 2009.

B.7.2. Restricted share plan

The Board of Directors, meeting on March 2, 2009, decided to award a restricted share plan comprising 1,194,064 shares, of which 604,004 will vest after a four-year service period and 590,060 will vest after a two-year service period but will be non-transferable for a further two-year lock-up period (these shares include 65,000 that are also subject to performance conditions).

In compliance with IFRS 2 (Share-Based Payment), sanofi-aventis has measured the fair value of this plan by reference to the fair value of the equity instruments awarded, representing the fair value of the services rendered during the period.

The plan was measured as of the date of grant. The fair value of each share awarded is equal to the listed market price of the share as of that date (€41.10), adjusted for dividends expected during the vesting period.

On this basis, the fair value of the restricted share plan is €37 million.

This amount is being recognized as an expense over the vesting period, with the matching entry recorded directly in equity.

An expense of €4 million was recognized for this plan in the six months ended June 30, 2009.

The number of restricted shares outstanding as of June 30, 2009 was 1,187,614.

B.7.3. Stock option plans

On March 2, 2009, the Board of Directors granted 7,736,480 stock subscription options at an exercise price of €45.09. The vesting period is four years and the plan expires on March 2, 2019.


The following assumptions were used in determining the fair value of this plan:

• dividend yield: 5.72%;

• life of the plan: 6 years;

• volatility of sanofi-aventis shares, computed on a historical basis: 27.06%;

• risk-free interest rate: 2.84%.

On this basis, the fair value of one option is €4.95.

The fair value of the stock option plan awarded in 2009 is €34 million.

This amount is recognized as an expense over the vesting period, with the matching entry recognized directly in equity.

An expense of €3 million was recognized for this plan in the six months ended June 30, 2009.

The total expense recognized for stock option plans in the six months ended June 30, 2009 was €62 million, compared with €64 million in the six months ended June 30, 2008.

The table below provides summary information about options outstanding and exercisable as of June 30, 2009:

Outstanding Exercisable

Range of exercise prices per share Number of

options

Average residual life

(years)

Weighted average exercise price per share (€)

Number of options

Weighted average

exercise price per share (€)

From €1.00 to €10.00 per share 43,870 5.69 7.19 43,870 7.19

From €10.00 to €20.00 per share 68,394 7.46 14.87 68,394 14.87

From €20.00 to €30.00 per share 30,520 8.99 28.38 30,520 28.38

From €30.00 to €40.00 per share 334,820 9.75 38.08 334,820 38.08

From €40.00 to €50.00 per share 16,506,422 6.36 43.09 8,813,792 41.34

From €50.00 to €60.00 per share 11,931,148 3.08 52.48 11,931,148 52.48

From €60.00 to €70.00 per share 40,209,788 5.28 66.03 17,542,973 67.92

From €70.00 to €80.00 per share 23,311,791 4.44 70.80 23,311,791 70.80

Total 92,436,753 62,077,308

of which stock purchase options 8,038,940

of which stock subscription options 84,397,813

B.7.4. Number of shares used to compute diluted earnings per share

The number of shares used to compute diluted earnings per share is obtained by adding stock options and restricted shares with potentially dilutive effect to the average number of shares outstanding.

(million) June 30,

2009 June 30,

2008 December 31,

2008 Average number of shares outstanding 1,305.5 1,313.7 1,309.3 Adjustment for options with potentially dilutive effect 0.7 2.1 1.6 Adjustment for restricted shares with potentially dilutive effect 0.3 − − Average number of shares used to compute diluted earnings per share 1,306.5 1,315.8 1,310.9

As of June 30, 2009, a total of 83.4 million stock options were excluded from the calculation of diluted earnings per share because they did not have a potentially dilutive effect, compared with 76.2 million as of December 31, 2008 and 74.1 million as of June 30, 2008.


B.7.5. Income and expense recognized directly in equity

Changes in income and expense recognized directly in equity are as follows:

(€ million)


2009


2008


2008 Balance, beginning of period (4,436) (4,659) (4,659)

Available-for-sale financial assets:

• Change in fair value 16 (1) (142) (132)

• Tax effect (7) 20 33

Cash flow hedges:

• Change in fair value (140) (2) 4 104

• Tax effect 49 (1) (37)

Revaluation reserve (3):

• Fair value remeasurement 130 − −

• Tax effect (24) − −

Actuarial gains/(losses):

• Asset ceiling - − 2

• Actuarial gains/(losses) excluding associates and joint ventures (see Note B.10.1.)

(70) 132 (824)

• Actuarial gains/(losses) of associates and joint ventures 1 (2) (7)

• Deferred taxes on actuarial gains and losses 26 (43) 136

Cumulative translation differences:

• Cumulative translation difference on foreign subsidiaries (149) (1,654) 948

• Hedges of net investments in foreign operations (18) − −

• Tax effect 6 − −

Balance, end of period (4,616) (6,345) (4,436)

Attributable to equity holders of the Company (4,599) (6,331) (4,419)

Attributable to minority interests (17) (14) (17)

(1) Includes matching entries for changes recognized in the income statement of €(1) million. (2) Includes matching entries for changes recognized in the income statement of €(123) million in operating income and €(4) million in

financial income/expense. (3) Fair value remeasurement of Zentiva’s identifiable net assets as of the date on which control was obtained, corresponding to the

24.9% ownership interest held by sanofi-aventis before it obtained control (see Note B.5.).

B.8. Debt, cash and cash equivalents

The table below shows changes in the Group’s financial position:


2009 December 31,

2008 Long-term debt, at amortized cost 6,983 4,173 Short-term debt and current portion of long-term debt 2,936 1,833

Total debt 9,919 6,006

Cash and cash equivalents (6,214) (4,226)

Debt, net of cash and cash equivalents 3,705 1,780

Trends in the gearing ratio are shown below:


2009 December 31,

2008 Debt, net of cash and cash equivalents 3,705 1,780 Total equity 44,784 45,071

Gearing ratio 8.3% 3.9%


B.8.1. Net debt at value on redemption

A reconciliation of carrying amount to value on redemption is shown below:

(€ million)

Carrying amount: June 30,

2009 Amortized

cost

Adjustment to debt

measured at fair value

Value on redemption:

June 30, 2009

Value onredemption:

December 31,2008

Long-term debt 6,983 17 (38) 6,962 4,123

Short-term debt and current portion of long-term debt 2,936 − (26) 2,910 1,815

Total debt 9,919 17 (64) 9,872 5,938

Cash and cash equivalents (6,214) − − (6,214) (4,226)

Debt, net of cash and cash equivalents 3,705 17 (64) 3,658 1,712

Debt, net of cash and cash equivalents by type, at value on redemption is detailed as follows:

June 30, 2009 December 31, 2008

(€ million) non-current current Total non-current current Total Bond issues 5,217 891 6,108 2,418 488 2,906 Credit facility drawdowns 1,000 3 1,003 1,000 34 1,034 Other bank borrowings 710 683 1,393 670 262 932 Commercial paper − 707 707 − 717 717 Finance lease obligations 21 4 25 21 4 25 Other borrowings 14 266 280 14 11 25 Bank credit balances − 356 356 − 299 299

Total debt 6,962 2,910 9,872 4,123 1,815 5,938

Cash and cash equivalents − (6,214) (6,214) − (4,226) (4,226)

Debt, net of cash and cash equivalents 6,962 (3,304) 3,658 4,123 (2,411) 1,712

Undrawn confirmed credit facilities not used to back French and U.S. commercial paper programs were €10.6 billion as of June 30, 2009 and €10.8 billion as of December 31, 2008.

Main financing and debt reduction transactions during the period

The following refinancing transactions took place during the first half of 2009:

• €1.5 billion fixed-rate bond issue (interest: 3.5% p.a.), maturing May 17, 2013; • €1.5 billion fixed-rate bond issue (interest: 4.5% p.a.), maturing May 18, 2016; • CHF 250 million fixed-rate bond issue (interest: 3.25% p.a.), fungible with the CHF 275 million

bond issue maturing December 2012, which is increased to CHF 525 million (€344 million).

In addition, the increase in net debt during the first half of 2009 reflects the first-time consolidation of acquired entities, in particular Zentiva.

The financing in place as of June 30, 2009 at sanofi-aventis parent company level (where the bulk of the Group’s financing is centralized) is not subject to covenants regarding financial ratios, or to any clause linking credit spreads or fees to the sanofi-aventis credit rating.


B.8.2. Market value of debt, net of cash and cash equivalents

The market value of debt, net of cash and cash equivalents (excluding derivative instruments) as of June 30, 2009 was €3,754 million (€1,779 million as of December 31, 2008), compared with a value on redemption of €3,658 million (€1,712 million as of December 31, 2008).

B.9. Derivative financial instruments

B.9.1. Currency derivatives used to manage operational risk exposures

The table below shows operational currency hedging instruments in place as of June 30, 2009, with the notional amount translated into euros at the relevant closing exchange rate.

June 30, 2009 Of which derivatives designated

as cash flow hedges

Of which derivatives not eligible for hedge

accounting

(€ million) Notionalamount

Fairvalue

Notionalamount

Fairvalue

Of which recognized

in equity Notional amount

Fairvalue

Forward currency sales 2,044 52 473 4 4 1,571 48 • of which U.S. dollar 1,419 52 355 4 3 1,064 49 • of which Japanese yen 161 2 81 − − 80 2

Forward currency purchases 281 1 94 − − 187 1 • of which U.S. dollar 94 − 94 − − − − • of which Hungarian forint 93 4 − − − 93 4

Put options purchased 468 23 53 3 5 415 20 • of which U.S. dollar 336 18 53 3 5 283 15

Call options written 833 19 − − − 833 19 • of which U.S. dollar 593 14 − − − 593 14

Put options written 71 (10) − − − 71 (10)• of which U.S. dollar 71 (10) − − − 71 (10)

Call options purchased 141 − − − − 141 − • of which U.S. dollar 141 − − − − 141 −

Total 3,838 85 620 7 9 3,218 78

As of June 30, 2009, none of these instruments had an expiry date after December 31, 2009.

These positions hedge:

• Material foreign-currency cash flows arising after the balance sheet date in relation to transactions carried out during the six months to June 30, 2009 and recognized in the consolidated balance sheet as of that date. Gains and losses on these hedging instruments (forward contracts and options) have been and will continue to be calculated and recognized in parallel with the recognition of gains and losses on the hedged items.

• Forecast foreign-currency cash flows relating to commercial transactions to be carried out in the second half of 2009. As regards the U.S. dollar, this portfolio (forward contracts and options) would cover approximately 20% of the forecast net cash flows in that currency during the second half of 2009, subject to the knock-out level ($1.62 to the euro) not being reached on knock-out options that were in the money as of June 30, 2009.


B.9.2. Currency and interest rate derivatives used to manage financial risk exposure

Some of the Group’s financing activities, such as U.S. commercial paper issues and the cash pooling arrangements for foreign subsidiaries outside the euro zone, expose certain entities, especially the sanofi-aventis parent company, to financial foreign exchange risk (i.e. the risk of changes in the value of loans and borrowings denominated in a currency other than the functional currency of the lender or borrower).

The net foreign exchange exposure for each currency and entity is hedged by firm financial instruments, usually currency swaps. The table below shows instruments of this type held as of June 30, 2009:

June 30, 2009 (€ million)

Notionalamount Fair value Expiry

Forward currency purchases 8,472 (466)

• of which U.S. dollar (1) 7,288 (460) 2009

• of which Pound sterling 296 1 2009

• of which Swiss franc 205 (2) 2009

Forward currency sales 2,155 9

• of which U.S. dollar 976 6 2009

• of which Japanese yen 853 5 2009

• of which Hungarian forint 115 2 2009

Total 10,627 (457)

(1) Includes €6,333 million used to hedge U.S. dollar intragroup deposits placed with the sanofi-aventis parent company, and €248 million forward purchases against the Brazilian real (hedging a $350 million local borrowing).

To limit risk and optimize the cost of its short-term and medium-term debt, sanofi-aventis uses derivative instruments that alter the structure of its debt. The table below shows the most significant instruments of this type in place at June 30, 2009:

Notional amounts by expiry dateas of June 30, 2009

Of which derivatives designated as fair

value hedges

Of which derivatives designated as

cash flow hedges

(€ million) 2009 2010 2012 2013 2015 TotalFair

valueNotionalAmount

Fairvalue

Notional Amount

Fair Value

Of which recognized

in equity

Interest rate swap. pay € 3.69% / Receive € floating (1) − 1,000 − − − 1,000 (29) − − 1,000 (29) (25)

Cross-currency Swaps

- pay € floating (1) / receive GBP 5.50% − 299 − − − 299 (54) 299 (54) − − −

- pay € floating (1) / receive JPY 0.22% 116 − − − − 116 25 116 25 − − −

- pay € floating (1) / receive JPY floating (2) − − − 92 − 92 19 − − − − −

- pay € floating (3) / receive CHF 2.75% − 122 − − − 122 11 122 11 − − −

- pay € floating (1) / receive CHF 3.26% − − 167 − − 167 1 167 1 − − −

- pay € 4.89% / receive CHF 3.26% − − 180 − − 180 (4) − − 180 (4) (2)

- pay € 4.87% / receive CHF 3.38% − − − − 244 244 11 − − 244 11 (5)

Total 116 1,421 347 92 244 2,220 (20) 704 (17) 1,424 (22) (32)

(1) Floating: benchmark rate 3-month Euribor (2) Floating: benchmark rate 3-month Libor JPY (3) Floating: benchmark rate 6-month Euribor


B.10. Provisions and other non-current liabilities

(€ million)

Provisions for pensions and

other long-term

benefits Restructuring

provisions Other

provisions

Other non-current

liabilities Total Balance at January 1, 2009 4,068 366 3,084 212 7,730

Changes in scope of consolidation 9 − 220 9 238

Increase in provisions and liabilities 216 644(3) 257 76 1,193

Reversals of utilized provisions (309) (13) (48) − (370)

Reversals of unutilized provisions (8) − (73)(4) − (81)

Transfers (1) − (80) (35) (81) (196)

Impact of discounting − 2 18 − 20

Translation differences 41 − 5 (4) 42

Unrealized gains/losses − − − 12 12

Actuarial gains and losses on defined-benefit plans (2) 70 − − − 70

Balance at June 30, 2009 4,087 919 3,428 224 8,658 (1) This line includes in particular transfers between current and non-current provisions. (2) See Note B.10.1. (3) See Note B.14. (4) These reversals mainly relate to settlements of disputes during the period where the outcome was more favorable than originally

expected.

B.10.1. Provisions for pensions and other long-term benefits

Sanofi-aventis applies the option allowed by the amendment to IAS 19, under which all actuarial gains and losses under defined-benefit plans are recognized in the balance sheet with the matching entry recorded as a component of equity. Under this method, sanofi-aventis reviews the relevant assumptions (in particular discount rates and the fair value of plan assets) at each balance sheet date.

For disclosures about the sensitivity of pension and other long-term employee benefit obligations, and the assumptions used as of December 31, 2008, refer to Note D.18.1. to the consolidated financial statements for the year ended December 31, 2008.

As of June 30, 2009, the principal assumptions used for the euro zone, the United States and the United Kingdom were reviewed to take into account changes during the six-month period.

Actuarial gains and losses on pensions and other post-employment benefits (pre-tax amounts) recognized with a matching entry in equity break down as follows:

(€ million)


2009


2008


2008

Actuarial gains/(losses) on plan assets 67 (507) (1,360)

Actuarial gains/(losses) on benefit obligations (137) 639 536

Decrease/(increase) in provisions (70) 132 (824)


B.11. Net deferred tax position

The net deferred tax position breaks down as follows:


2009 December 31,

2008

Deferred tax on:

• Consolidation adjustments (intragroup margin on inventory) 866 845

• Provision for pensions and other employee benefits 1,091 1,070

• Remeasurement of intangible assets(1) (4,640) (4,805)

• Recognition of property, plant and equipment at fair value (70) (65)

• Tax cost of distributions made from reserves (679) (769)

• Stock options 2 6

• Tax losses available for carry-forward 103 171

• Other non deductible provisions and other items 828 799

Net deferred tax liability (2,499) (2,748)

(1) Mainly associated with the acquisition of Aventis in 2004.

B.12. Commitments

The main collaboration agreements in the Pharmaceuticals segment signed during the first half of 2009 are described below:

On May 14, 2009, sanofi-aventis and Kyowa Hakko Kirin Co., Ltd announced the signature of a collaboration and licensing agreement under which sanofi-aventis obtained the worldwide rights to an anti-LIGHT fully human monoclonal antibody. This anti-LIGHT antibody is presently at preclinical stage, and is expected to be first in class in the treatment of ulcerative colitis and Crohn’s disease. Under the terms of the agreement, sanofi-aventis will have exclusive rights to develop the product worldwide, except in Japan and Asian countries where the two parties will co-develop the product. In addition, each party has an option to co-promote the product in the territory of the other party. Kyowa Hakko Kirin will receive an upfront payment plus milestone payments, the total amount of which could reach $315 million. Kyowa Hakko Kirin will also be entitled to receive royalties and milestone payments linked to sales performance.

On May 28, 2009, sanofi-aventis and Exelixis, Inc. announced a global license agreement for the XL147 and XL765 molecules, and an exclusive collaboration for the discovery of inhibitors of phosphoinositide-3 kinase (PI3K) for the management of malignant tumors. Under the terms of the agreements, sanofi-aventis will pay Exelixis an upfront cash payment plus development and regulatory milestone payments that could reach over $1 billion in aggregate for existing and future programs under the two agreements. In addition, Exelixis will be entitled to receive royalties on sales of marketed products and milestone payments linked to the sales performance of those products.

In June 2009, sanofi-aventis announced its intention to donate to the World Health Organization (WHO) up to 10% of its output of influenza vaccine, or 100 million doses, to help developing countries deal with the influenza pandemic. This donation is a response by sanofi-aventis to the 2009 influenza pandemic caused by the emergence of the new A(H1N1) influenza strain, and includes a previous commitment made by sanofi-aventis in 2008 in the context of the A(H5N1) pandemic threat.


B.13. Legal and arbitral proceedings

Sanofi-aventis and its subsidiaries and affiliates may be involved in litigation, arbitration or other legal proceedings. These proceedings typically are related to product liability claims, proceedings relating to intellectual property rights (particularly claims by generic product manufacturers seeking to limit the patent protection of sanofi-aventis products), compliance and trade practices, and claims under warranties or indemnification arrangements relating to business divestitures.

The matters discussed below constitute the most significant developments since publication of the disclosures concerning legal proceedings in the Company’s financial statements for the year ended December 31, 2008.

a) Products

• Sanofi Pasteur Hepatitis B Vaccine Litigation

On July 9, 2009, the Cour de Cassation (the French Supreme Court) upheld a decision of the Court of Appeal of Lyon sentencing Sanofi Pasteur MSD SNC to pay damages of €120,000 to a plaintiff whose multiple sclerosis syndrome appeared shortly after her vaccination against Hepatitis B.

• Sanofi Pasteur Inc. Thimerosal Litigation

On February 12, 2009, the U.S. Court of Federal Claims announced decisions in the first three test cases which were the subject of hearings completed in 2007. In each decision it was held that the petitioners failed to establish that their claimed injuries were caused in any way by thimerosal-containing vaccines and the MMR vaccine, and no compensation was awarded to any of them under the National Vaccine Injury Compensation Program (VICP). The claimants have asked for review of the decisions by the Claims Court, and thereafter may seek appellate review in the U.S. Court of Appeals for the Federal Circuit.

• Other Blood Products Litigation

In 2009, the Group and other defendants started negotiating a final settlement with the plaintiffs in the U.S. The amount to be paid to the plaintiffs by the Group, if the settlement is finalized, will be fully covered by the existing reserves.

• Plavix® Product litigation

Claims filed with the U.S. District Court of New Jersey has been tolled pending U.S. Supreme Court decision in the case Wyeth vs. Levine. Following the decision in this case in March 2009, 23 amended complaints have now been filed reactivating these cases. The tolling agreement remains in effect for additional potential plaintiffs. Motion to dismiss partially the complaints were filed by the defendant.

b) Patents

• Actonel® Patent Litigation

In May 2009, the U.S. Court of Appeals for the Federal Circuit ruled in favor of Procter & Gamble and confirmed the validity of the ‘122 patent.

In March 2009, P&G and Roche brought suit in the U.S. District Court of Delaware in response to Apotex application to market a generic version of the 150 mg Actonel® tablets.


• Lovenox® Patent Litigation

United States: On April 27, 2009, the U.S. Supreme Court denied sanofi-aventis’ petition for a writ of certiorari following a decision by a U.S. court (upheld on appeal in May 2008) to the effect that sanofi-aventis patent is unenforceable. In the first semester 2009, the U.S. District Court for the Central District of California dismissed Amphastar’s antitrust counterclaims in the Lovenox® patent litigation.

Europe: On April 2, 2009, the German Federal Patent Court revoked the German Patent (DE 41 21 115) on the active ingredient covering Clexane® following the oppositions filed by the companies Hexal, Ratiopharm, Chemi and Opocrin. Sanofi-aventis is not aware of any enoxaparin biosimilars having been submitted for the German market.

• Ramipril® Patent Litigation

In the patent infringement actions against Apotex and Novopharm, the Federal Court of Canada ruled on June 29, 2009 that the asserted patent was invalid.

• Eloxatin® Patent Litigation

In June 2009, the U.S. District Court for the District of New Jersey granted a summary judgment motion in favor of certain generic manufacturers. The District Court held that the generic oxaliplatin products that would be introduced by these generic challengers would not infringe the ‘874 patent. On June 30, 2009, judgment was entered by the District Court in favor of the generic challengers. Sanofi-aventis appealed the District Court’s decision, and in July 2009 the Appellate Court issued an order temporarily staying the district court's judgment. The Appellate Court has declined to hear an emergency motion filed by the defendants to request that the Appellate Court clarify whether it intended the Stay Order to enjoin the FDA from granting final approval to the defendants or to operate as an injunction against the defendants marketing their versions of oxaliplatin during the pendency of the appeal. As of the date of this report, the FDA has not granted final approval to any of the generic manufacturers.

• SoloSTAR® Patent Litigation

On February 11, 2009 the German Patent and Trademark Office cancelled at the request of sanofi-aventis Novo Nordisk’s German Utility Model DE 200 23 819. The same Utility Model was already at issue in the infringement suit filed by Novo Nordisk regarding the SoloSTAR® disposable insulin pen that had been dismissed on May 20, 2008 by the Court of Mannheim.

c) Government Investigations, Competition Law and Regulatory Claims

• Government Investigations — Pricing and Marketing Practices

Private Label. In May 2009, sanofi-aventis U.S. entered into a civil settlement with the U.S. Department of Justice and the U.S. Attorney’s Office for the District of Massachusetts to resolve a Medicaid “best price” investigation involving one of its predecessor companies, Aventis Pharmaceuticals Inc. (API). The settlement ended an investigation into whether sales by API of certain products to a managed care organization for resale under that organization’s private label should have been included in the “best price” calculations used to compute Medicaid rebates for API products. The settlement called for payment of $95.5 million (plus interest) which includes payment of approximately $55.5 million to resolve all federal claims and the establishment of an “opt-in” fund of approximately $40 million for states desiring to resolve Medicaid rebate claims relating to the same conduct. The total amount of the settlement was fully covered by existing reserves.


• Civil Suits – Pricing and Marketing Practices AWP Public Entity Suits. In May 2009, sanofi-aventis U.S. entered into a group settlement (with six other pharmaceutical companies) to resolve claims for alleged AWP-based drug overcharges brought by the State of Alabama against Aventis Pharmaceuticals Inc. and Sanofi-Synthelabo, Inc., predecessor companies to sanofi-aventis. The settlement grows out of a lawsuit brought by the Office of the Attorney General prior to the formation of sanofi-aventis and covers all AWP-based claims against sanofi-aventis and all of its predecessors, subsidiaries and other corporate affiliates involving the State’s Medicaid program. The settlement with the State of Alabama involves confidential contributions by the companies, including sanofi-aventis, to a group settlement of $89 million.

§ 340B Suits. The §340B litigation, pending in a U.S. District Court in California, is between Plaintiffs County of Santa Clara and County of Santa Cruz and Defendants Aventis Pharmaceuticals Inc. and fourteen other pharmaceutical companies. Plaintiffs allege that the Defendants had overcharged Public Health Service entities for their pharmaceutical products in breach of pharmaceutical pricing agreements between Defendants and the Secretary of Health and Human Services. In May 2009, the Court denied Plaintiffs’ motion for class certification without prejudice.

d) Other litigation and arbitration

• Zimulti® (rimonabant) class action

In March 2009, hearings were held before the U.S. District Court for the Southern District of New York in respect of a motion to dismiss the putative securities class action law suit previously brought against sanofi-aventis. The plaintiffs in the suit purport to represent a class of persons who relied on allegedly misleading or inaccurate statements made by or on behalf of the Company regarding the drug candidate Zimulti® (rimonabant) prior to its failure to obtain FDA approval in 2007.


B.14. Restructuring costs

Under IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), restructuring provisions are recognized if the Group has a detailed, formal restructuring plan at the balance sheet date and has announced its intention to implement this plan to those affected by it. The restructuring costs recognized in the first half of 2009 relate mainly to measures announced by sanofi-aventis in June 2009, intended to improve innovation by transforming Research & Development operations in France and to streamline the Group’s organizational structures by adapting central functions. These costs consist mainly of employee-related charges, arising from early retirement benefits and termination benefits under the voluntary redundancy plans announced.

They also reflect, though to a lesser extent, ongoing measures to adjust the French sales force plus the ongoing adaptation of industrial facilities in France.

B.15. Financial income and expenses

The main components of financial income and expenses are as follows:

(€ million)

6 months toJune 30,

2009


2008


2008

Cost of debt (1) (145) (148) (315)

Interest income 58 60 132

Cost of debt, net of cash and cash equivalents (87) (88) (183)

Foreign exchange gains/(losses) (non-operating) (24) 10 (74)

Unwinding of discount (2) (20) (18) (37)

Net gains/(losses) on disposals of financial assets − 38 41

Impairment losses on financial assets, net of reversals − (5) (8)

Other items 17 13 29

Net financial income/(expenses) (114) (50) (232)

comprising: Financial expenses (151) (160) (335)

Financial income 37 110 103

(1) Of which income/expenses on interest rate derivatives used to hedge debt: €(1) million for the six months to June 30, 2009, €2 million for the six months to June 30, 2008 and €(2) million for the year ended December 31, 2008.

(2) Mainly environmental provisions.

B.16. Income tax expense

The difference between the effective tax rate and the standard corporate income tax rate applicable in France is explained as follows:

(as a percentage)

6 months toJune 30,

2009(1)


2008 (1)


2008

Standard tax rate applicable in France 34 34 34

Impact of reduced-rate income tax on royalties in France (8) (8) (12)

Impact of tax borne by BMS for the territory managed by sanofi-aventis (3) (3) (4)

Other 2 3 (2)

Effective tax rate 25 26 16

(1) Rate calculated on the basis of the estimated full-year effective tax rate (see Note A.2.).


B.17. Segment information

In compliance with IFRS 8 (Operating Segments), the segment information reported by sanofi-aventis is prepared on the basis of internal management data provided to the Chief Executive Officer, the principal operating decision-maker within the Group. The performance of operating segments is monitored individually for internal reporting purposes, using identical performance measures. The published data derived from the Group’s internal reporting systems are prepared in accordance with IFRSs as applied by sanofi-aventis in the preparation of its consolidated financial statements.

The Group has reviewed its operating segments in 2009, and reports a Pharmaceuticals segment and a Human Vaccines (Vaccines) segment. All the Group’s other activities are combined in a separate segment, “Other”. These segments reflect the internal organizational structure, and the operating segments the Group evaluates performance and allocates resources.

The Pharmaceuticals segment includes all activities involving research, development, production and sale of drugs. The pharmaceuticals portfolio includes flagship products from the six major therapeutic fields, plus a broad range of prescription drugs, over-the-counter (OTC) drugs and generic drugs. This segment also includes all associates and joint ventures involved in activities related to pharmaceuticals, in particular the entities majority owned by BMS.

The Human Vaccines segment is wholly dedicated to vaccines and includes research, development, production and sale of vaccines. This segment also includes the Sanofi Pasteur MSD joint venture.

The “Other” segment consists of all those activities that do not constitute reportable segments under IFRS 8, and includes in particular the Group’s interest in Yves Rocher, the Animal Health business (Merial), and the effect of retained obligations of divested activities.

Inter-segment transactions are not material.

Segment profit

The measure of segment profit used by sanofi-aventis is “Business operating income”. This measure, adopted in compliance with IFRS 8, is also the measure used internally to evaluate the performance of operating managers and to allocate resources.

“Business operating income” is equivalent to “Operating income before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation” as defined in note B.20. to the consolidated financial statements for the year ended December 31, 2008, modified as follows:

amortization of intangible assets is reversed out;

the share of profits and losses of associates and net income attributable to minority interests are added;

other impacts associated with acquisitions (primarily, the workdown of acquired inventories remeasured at fair value at the acquisition date, and the impacts of purchase accounting on associates) are reversed out.


The table below shows ”business operating income” and “business net income” by segment: 6 months to June 30, 2009

(€ million) Pharmaceuticals Vaccines Other Total

Net sales 13,206 1,339 − 14,545 Other revenues 688 15 − 703 Cost of sales (3,104) (496) − (3,600) Research and development expenses (2,039) (221) − (2,260) Selling and general expenses (3,351) (275) (1) (3,627) Other operating income and expenses 183 (2) 99 280 Share of profit/loss of associates 389 14 136 539 Net income attributable to minority interests (232) − − (232) Business operating income 5,740 374 234 6,348 Financial income and expenses (114) Income tax expense (1,718) Business net income 4,516

6 months to June 30, 2008


Net sales 12,421 1,205 − 13,626 Other revenues 552 18 − 570 Cost of sales (3,152) (463) − (3,615) Research and development expenses (1,993) (187) − (2,180) Selling and general expenses (3,334) (243) 5 (3,572) Other operating income and expenses 126 (1) 53 178 Share of profit/loss of associates 321 5 125 451 Net income attributable to minority interests (220) − − (220) Business operating income 4,721 334 183 5,238 Financial income and expenses (88) Income tax expense (1,456) Business net income 3,694

12 months to December 31, 2008


Net Sales 24,707 2,861 − 27,568 Other revenues 1,208 41 − 1,249 Cost of sales (6,231) (1,104) − (7,335) Research and development expenses (4,150) (425) − (4,575) Selling and general expenses (6,662) (520) 14 (7,168) Other operating income and expenses 297 1 (95) 203 Share of profit/loss of associates 671 28 191 890 Net income attributable to minority interests (441) − − (441) Business operating income 9,399 882 110 10,391 Financial income and expenses (270) Income tax expense (2,807) Business net income 7,314

“Business net income” is determined by deducting net financial expense and the relevant income tax expense from “Business operating income”.

“Business net income” is equivalent to “Net income attributable to equity holders of the Company” before amortization and impairment of intangible assets, other impacts arising from the consequences of acquisitions, major restructuring, significant gains and losses on disposals of non-current assets, and costs or provisions associated with major litigation.


A reconciliation of “Business net income” to “Net income attributable to equity holders of the Company” is provided below:

(€ million)

6 monthsto June 30,

2009


2008

12 monthsto December 31,

2008

Business net income 4,516 3,694 7,314 Expenses arising on the workdown of acquired inventories (2) (19) − (2) Amortization of intangible assets (1,805) (1,709) (3,483) Impairment of intangible assets (28) (126) (1,554) Restructuring costs (907) (207) (585) Other items (1) − 38 335 Tax effect on the items listed above 923 685 1,904 Expenses arising from impact of acquisitions on associates (3) (43) (40) (78) Net income attributable to equity holders of the Company 2,637 2,335 3,851

(1) Other items comprise:

Gain on sale of Millennium shares − 38 38 Reversal of provisions for major litigation − − 76 Net charge to/(reversal of) provisions for tax exposures − − 221

(2) Expenses arising from the impacts of acquisitions on inventories: workdown of inventories remeasured at fair value at the acquisition date.

(3) Expenses arising from the impacts of acquisitions on associates: workdown of acquired inventories, amortization and impairment of intangible assets, and impairment of goodwill.

Other segment information

The tables below show information by operating segment on the carrying amount of investments in associates and joint ventures accounted for by the equity method, and on acquisitions of property, plant and equipment and intangible assets.

The principal entities accounted for by the equity method allocated to each operating segment are, for the Pharmaceuticals segment, the entities majority owned by BMS (see Note C.1. to the consolidated financial statements for the year ended December 31, 2008), Handock, Infraserv, and Zentiva (for 2008 only); for the Vaccines segment, Sanofi Pasteur MSD; and for the “Other” segment, Merial and Yves Rocher.

Acquisitions of property, plant and equipment and intangible assets represent acquisitions paid for during the period, and exclude assets acquired under finance leases. June 30, 2009 (€ million) Pharmaceuticals Vaccines Other Total Investments in associates and joint ventures accounted for by the equity method 397 396 1,349 2,142 Acquisitions of property, plant and equipment 478 221 - 699 Acquisitions of intangible assets 119 6 - 125

June 30, 2008 (€ million) Pharmaceuticals Vaccines Other Total Investments in associates and joint ventures accounted for by the equity method 713(1) 443 1,285 2,441 Acquisitions of property, plant and equipment 426 172 - 598 Acquisitions of intangible assets 186 12 - 198

(1) Includes Zentiva as of this date.

December 31, 2008 (€ million) Pharmaceuticals Vaccines Other Total Investments in associates and joint ventures accounted for by the equity method 706(1) 431 1,322 2,459 Acquisitions of property, plant and equipment 967 375 - 1,342 Acquisitions of intangible assets 225 39 - 264

(1) Includes Zentiva as of this date.


Information by geographic region

The geographical information on net sales provided below is based on the geographic location of the customer.

In accordance with IFRS 8, the non-current assets reported below exclude financial instruments, deferred tax assets, and pre-funded pension obligations.

June 30, 2009

(€ million) Total Europe United States Other

CountriesNet sales 14,545 6,027 (1) 4,733 3,785Non-current assets: - property, plant and equipment 7,559 5,660 1,051 848- intangible assets 15,130 4,925 6,923 3,282- goodwill 29,471 13,386 11,033 5,052

(1) of which France: €1,655 million.

June 30, 2008


CountriesNet sales 13,626 6,132(1) 4,149 3,345Non current assets: - property, plant and equipment 6,548 5,008 840 700- intangible assets 16,832 5,684 7,425 3,723- goodwill 26,439 12,430 9,686 4,323


December 31, 2008


CountriesNet sales 27,568 12,096(1) 8,609 6,863Non current assets: - property, plant and equipment 6,961 5,174 1,042 745- intangible assets 15,260 4,573 7,225 3,462- goodwill 28,163 12,414 11,190 4,559


As described in Note D.5. to the annual consolidated financial statements, France is not a cash-generating unit. Consequently, information about non-current assets is provided for Europe.


Net sales by product

Net sales of sanofi-aventis comprise net sales generated by the Pharmaceuticals segment and net sales generated by the Vaccines segment. The table below shows net sales of the seven flagship products and of the other major products of the Pharmaceuticals segment:

Net sales of the principal vaccine types sold by the Vaccines segment are shown below:

(1) Seasonal and pandemic influenza vaccines.

Split of net sales

In the first half of 2009, the Group’s three largest customers accounted for approximately 8.3%, 7.9% and 7.5% of gross sales, respectively.

(€ million)

6 monthsto June 30,

2009


2008


2008

Lovenox® 1,542 1,354 2,738

Lantus® 1,539 1,133 2,450

Plavix® 1,389 1,323 2,609

Taxotere® 1,118 987 2,033

Eloxatine® 697 666 1,345

Aprovel®/ CoAprovel® 620 600 1,202

Apidra® 66 43 98

Flagship Products 6,971 6,106 12,475

Stilnox®/ Ambien®/ Myslee® 447 398 822

Allegra® 438 364 666

Copaxone® 231 420 622

Tritace® 221 263 491

Amaryl® 207 183 379

Depakine® 165 159 322

Xatral® 153 162 319

Actonel® 137 162 330

Nasacort® 120 130 240

Other products 3,099 3,315 6,484

OTC 640 587 1,203

Generics 377 172 354

Total Pharmaceuticals 13,206 12,421 24,707

(€ million)

6 monthsto June 30,

2009


2008


2008

Pediatric and Polio Vaccines 495 355 768

Meningitis/Pneumonia Vaccines 259 225 472

Adult & Adolescent Booster Vaccines 202 200 399

Travel & Other Endemics Vaccines 165 157 309

Influenza Vaccines (1) 120 200 736

Other Vaccines 98 68 177

Total Vaccines 1,339 1,205 2,861


C. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE (JUNE 30, 2009)

On July 27, 2009, sanofi-aventis announced the acquisition of Merieux Alliance’s French subsidiary ShanH, which owns a majority stake in vaccine company Shantha Biotechnics (Shantha). Shantha, based in Hyderabad (India), develops, manufactures and markets several important vaccines. The transaction values Shantha at €550 million. For the current fiscal year, sales of Shantha are expected to be around $90 miilion.


II − Half-year management report A. SIGNIFICANT EVENTS OF THE FIRST HALF OF 2009

A.1. Pharmaceuticals

A.1.1. Filings for marketing approval with the U.S. and European authorities and new product launches

▪ On July 2, 2009 the U.S. Food and Drug Administration (FDA) approved Multaq® (dronedarone 400 mg Tablets), the first antiarrythmic to be approved in the United States with a clinical benefit in reducing cardiovascular hospitalization in patients with atrial fibrillation or atrial flutter. Multaq® was launched in this country on July 28. The submission for approval of Multaq® in the European Union is currently being reviewed.

▪ In February 2009 the FDA approved Apidra® SoloSTAR®

(insulin glulisine [rDNA origin] injection), a pre-filled disposable pen containing the rapid-acting insulin analog Apidra®, which is indicated to improve glycemic control in adults and children (4 years and older) with type 1 diabetes or adults with type 2 diabetes.

A.1.2. Publication of clinical trial results and changes in our Research and Development portfolio The first half of 2009 included publication in February 2009 of the findings from the international ATHENA study. These findings showed that Multaq® (dronedarone), in addition to standard therapy, significantly reduced the risk of first cardiovascular hospitalization or death by 24 % in patients with atrial fibrillation or atrial flutter or a recent history of these conditions. The trial, which involved 4,628 patients with 2,300 receiving Multaq®, showed a significant decrease in the risk of cardiovascular death of 29 % in patients with atrial fibrillation. Multaq® significantly decreased the risk of arrhythmic death (by 45 %) and there were numerically fewer deaths (16 %) from any cause in the dronedarone group compared to placebo; first cardiovascular hospitalization was reduced by 26 % in the dronedarone group. In March 2009, the findings from a Phase III investigational study (ACTIVE-A), which included 7,554 patients, were presented during the Scientific Session of the American College of Cardiology. These findings demonstrated that, for patients with atrial fibrillation who were at increased risk of stroke and could not take an oral anticoagulant medication, taking Plavix® (clopidogrel bisulfate) in addition to aspirin significantly reduced major vascular events by 11% over aspirin alone, at a median of 3.6 years of follow-up (6.8 % vs. 7.6 % per year, p=0.01). The greatest benefit was seen in the reduction of stroke, by 28 % (2.4 % vs. 3.3 % per year, p<0.001), which is the primary goal of physicians treating patients with atrial fibrillation.

In May 2009, sanofi-aventis and its fully owned subsidiary, BiPar Sciences (see section A.1.4., “Acquisitions, investments and alliances”), announced results from a randomized Phase II clinical trial of BSI-201, a poly ADP-ribose polymerase inhibitor, in combination with gemcitabine and carboplatin (GC) chemotherapy, in patients with metastatic triple-negative breast cancer. The primary study endpoint was the rate of clinical benefit, defined as complete or partial response or stable disease of at least 6 months. Secondary study endpoints included progression-free survival, overall survival and safety. Approximately 62 % of patients receiving BSI-201 in combination with GC showed clinical benefit, compared with 21 % in the group receiving chemotherapy alone (p= 0.0002). Tumor response (complete or partial response) was observed in 48 % of patients who received BSI-201 combined with chemotherapy, whereas patients receiving chemotherapy alone showed a response rate of 16 %. Women who received BSI-201 had a median progression-free survival of 6.9 months and overall survival of 9.2 months compared with 3.3 and 5.7 months, respectively, for women who received chemotherapy alone. The hazard ratios for progression free survival and overall survival were 0.342 (p< 0.0001) and 0.348 (p=0.0005), respectively.


In June 2009, four analyses of patient registries based on retrospective follow-up of diabetes sufferers were published online by the Diabetologia journal. These analyses clearly show that no definitive conclusions can be drawn regarding a possible causal relationship between Lantus® and an increase in the risk of cancer, as the authors of the study point out. Clinical studies, which represent the gold standard of evidence, do not indicate an association between insulin glargine and cancer. Patient safety being the primary concern of sanofi-aventis, the company commissioned a board of international specialists in endocrinology, oncology and epidemiology to assess these analyses of registries. On July 15, this board issued an expert statement which concluded that the four studies had significant methodological limitations and shortcomings, and provided inconsistent and inconclusive results. This official statement from fourteen international experts follows recent comments on this issue made by healthcare authorities around the world, such as the European Medicines Agency (EMEA) and the FDA, and by patient associations and scientific bodies like the American Diabetes Association (ADA), the American Association of Clinical Endocrinologists (AACE) and the International Diabetes Federation (IDF), cautioning against any misinterpretation of or over-reaction to these data. On July 23, 2009, the Committee for Medicinal Products for Human Use (CHMP) of the EMEA has re-confirmed their initial assessment of Lantus®, based on an in-depth review of existing evidence and of the recent publications of registry analyses in Diabetologia. All four registry analyses were found to have significant methodological limitations and to provide inconsistent and inconclusive results regarding a potential link between Lantus® use and an increased risk of cancer. The CHMP concluded that the available data does not provide a cause for concern and that changes to the prescribing advice for Lantus® are therefore not necessary. Sanofi-aventis will implement a set of actions to develop further research in this area in line with the request of CHMP. These actions take into account the recommendations recently made by an independent team of interdisciplinary medical experts on this subject. Since publication of the Diabetologia registry analyses, there have been no significative changes in prescription trends of Lantus thus far.

During the first half of 2009, initiatives continued to transform our Research and Development operations, with a view to continuing to refocus on innovation, gaining flexibility, and reorienting some of the existing resources to external collaborations. A complete, in-depth review of our portfolio was completed during the first half of 2009. The main changes in the portfolio were:

Some projects were discontinued. In Phase III, saredutant was discontinued on the basis of results from the study in association with escitalopram in depression; AVE5530 was halted in hypercholesterolemia due to insufficient efficacy, and the rights to TroVax® were returned to Oxford BioMedica plc; and we decided to stop development of xaliprodene following a study that did not reach its primary end point. In Phase II, we halted development of AVE0657 in sleep apnea, SSR180575 in diabetic polyneuropathy, AVE1642 (an anti-IGF 1 in oncology), and AVE1625 (a CB1 inhibitor in schizophrenia). We also halted six projects that were in Phase I.

Six new candidates entered Phase I: SAR 110894, an H3 receptor antagonist, developed for Alzheimer’s disease; an anti-NGF monoclonal antibody developed in partnership with Regeneron, for the treatment of pain; SAR 548304, a biliary acid reabsorption inhibitor, developed for hypercholesterolemia; SAR 153192, an anti-DLL4 monoclonal antibody, developed for cancer; and XL147 (an orally-administered PI3K inhibitor) and XL765 (an orally-administered double PI3K and target mTOR inhibitor), both developed for cancer by the biotechnology company Exelixis (see section A.1.4., “Acquisitions, investments and alliances”).

SAR 407899, a rho-kinase inhibitor, entered Phase II for the treatment of erectile dysfunction.

BSI-201, a PARP inhibitor developed by BiPar Sciences, entered Phase III in July (see section B., “Events subsequent to the balance sheet date (June 30, 2009)”).


A.1.3. Defense of our products

We continue to defend our rights vigorously whenever our products are under threat.

Plavix® in Europe

▪ On May 29, 2009, the Committee for Medicinal Products for Human Use (CHMP) issued a press release informing that positive opinions had been adopted recommending approval of applications for marketing authorization of clopidogrel filed through the centralized procedure in the European Union. Some of these applications are for formulations of clopidogrel with a different salt (e.g. besylate) from that used in Plavix® (clopidogrel hydrogen sulphate). When applications for generics are filed under the EMEA centralized procedure, the scientific opinion issued by the CHMP is followed by a “decision-making process” at European Commission level. This process generally lasts two-and-a-half to three months. On completion of the centralized procedure, the Commission issues a decision that is binding in all European Union countries. In some countries, additional time is required for pricing and reimbursement.

We intend to defend our legitimate intellectual and industrial property rights in respect of any product containing clopidogrel. In this respect, in a limited number of instances in Europe, the Group has brought infringement action against certain generic manufacturers based on national patents.

Lovenox®/Clexane® in Europe

▪ In April 2009 a German court revoked the German patent related to the Clexane® active ingredient, in proceedings instigated by several generics companies. However, in March 2009 the CHMP of the EMEA had adopted a guideline on pre-clinical and clinical development of biosimilars of low molecular weight heparins. This means that in Europe, a potential product candidate claiming to be biologically similar to Lovenox® must show therapeutic equivalence in terms of efficacy and safety in at least one adequately powered, randomized, double-blind, parallel group clinical trial.

Eloxatin® in the United States

▪ In June 2009, the U.S. District Court for the District of New Jersey granted a summary judgment motion in favor of certain generic manufacturers. Sanofi-aventis appealed the District Court’s decision, and in July 2009 the Appellate Court issued an order temporarily staying the district court's judgment. The Appellate Court has declined to hear an emergency motion filed by the defendants to request that the Appellate Court clarify whether it intended the Stay Order to enjoin the FDA from granting final approval to the defendants or to operate as an injunction against the defendants marketing their versions of oxaliplatin during the pendency of the appeal. As of the date of this report, the FDA has not granted final approval to any of the generic manufacturer.

A.1.4. Acquisitions, investments and alliances

During the first half of 2009 we concluded a number of acquisitions and alliance agreements. The main transactions were as follows:

▪ On March 11, 2009, we successfully closed our offer for Zentiva N.V. (Zentiva). Following settlement of this public offer, we held about 99.1 % of Zentiva’s share capital as of June 30, 2009 through our subsidiary sanofi-aventis Europe. The purchase price was €1,199 million, including acquisition costs. A squeeze-out procedure of the remaining minority shareholders is under way, in accordance with the applicable provisions of Dutch law. The Zentiva group reported sales of CZK 18,378 million (€735 million) in 2008.

▪ On March 31, 2009, we took 100 % control of Laboratorios Kendrick (Kendrick) through our subsidiary sanofi-aventis Mexico. Kendrick is one of the leading manufacturers of generics in Mexico, with sales of approximately €26 million and an estimated market share of 15 % (IMS MAT January 2009).


▪ On April 21, 2009, we announced the investment of $90 million to extend our manufacturing facility in the Beijing Economic and Technological Development Area, and to build pre-filled injection production lines for Lantus® SoloSTAR® with a potential capacity of up to 50 million units. We also announced a new partnership with the Chinese Diabetes Society to initiate a diabetes genotyping project involving more than 46,000 diabetic and non-diabetic patients.

▪ On April 27, 2009, we acquired 100 % of the shares of Medley, Brazil’s third largest pharmaceutical company and no.1 generics company, with sales of around €153 million in 2008 (more than two-thirds of which were in generics) and a 5.7 % market share (IMS MAT February 2009). The purchase price, on the basis of a €500 million enterprise value, was €340 million including acquisition costs. The potential consequences of this acquisition are currently under examination by the competition department of the Brazilian Ministry of Justice (CADE); this examination, and the accompanying transitory measures, relate to only a limited part of Medley’s activities.

▪ On April 27, 2009, we took 100 % control of BiPar Sciences, Inc. (BiPar), an American biopharmaceutical company developing novel tumorselective approaches for the treatment of different types of cancers. BiPar is the leading company in the emerging field of DNA (DeoxyriboNucleic Acid) repair using Poly ADP-Ribose Polymerase (PARP) inhibitors. The pivotal Phase III trial for BSI-201, BiPar’s lead product candidate in metastatic triple negative breast cancer, started in July 2009 (see section B., “Events subsequent to the balance sheet date ( June 30, 2009)”). The purchase price is contingent on the achievement (regarded as probable) of milestones related to the development of BSI-201, and could reach $500 million.

▪ On May 5, 2009, we officially launched the Biolaunch project at our Vitry-sur-Seine (France) pharmaceuticals production site. This investment of nearly €200 million will create our first biotechnology platform, producing monoclonal antibodies from 2012 onward.

▪ On May 14, 2009, we announced the signature of a collaboration and licensing agreement under which we obtain the worldwide rights to the anti-LIGHT fully human monoclonal antibody developed by Kyowa Hakko Kirin Co., Ltd (Kyowa Hakko Kirin). This anti-LIGHT antibody is presently at preclinical stage. It is expected to be first in class in the treatment of ulcerative colitis and Crohn’s disease. Development could also be pursued in further indications such as rheumatoid arthritis. Under the terms of the agreement, sanofi-aventis will have exclusive rights to develop the product worldwide, except in Japan and Asian countries where the two parties will co-develop the product. Kyowa Hakko Kirin retains the rights to market the product in Japan and in Asia, while sanofi-aventis has exclusive rights to market the product in the rest of the world. In addition, each party has an option to co-promote the product in the territory of the other party. Kyowa Hakko Kirin will receive an upfront payment plus milestone payments, the total amount of which could reach $315 million. Kyowa Hakko Kirin will also be entitled to receive royalties and milestone payments linked to sales performance.

▪ On May 28, 2009, we announced a global license agreement in oncology with the biotechnology company Exelixis, Inc. (Exelixis) for the XL147 and XL765 molecules, and an exclusive collaboration for the discovery of inhibitors of phosphoinositide-3 kinase (PI3K) for the management of malignant tumors. Under the license agreement, sanofi-aventis will have an exclusive worldwide license to XL147, an oral PI3K inhibitor, and XL765, an oral dual inhibitor of PI3K and mTOR (mammalian target of rapamycin); both are currently in Phase I clinical trials. Sanofi-aventis will have sole responsibility for all clinical, regulatory, manufacturing and commercial activities. Exelixis will participate in ongoing and future clinical trials. Under the exclusive discovery collaboration, sanofi-aventis and Exelixis will combine research efforts to establish several preclinical programs related to isoform-selective inhibitors of PI3K. Sanofi-aventis will have sole responsibility for all subsequent clinical, regulatory, manufacturing and commercial activities for the products that result from the collaboration. However, Exelixis may be responsible for conducting certain clinical trials. Under the terms of the agreements, sanofi-aventis will pay Exelixis an upfront cash payment plus development and regulatory milestone payments that could reach over $1 billion in aggregate for existing and future programmes under the two agreements. In addition, Exelixis will be entitled to receive royalties on sales of marketed products and milestone payments linked to the sales performance of those products.


▪ On June 8, 2009, we announced the purchase of the Diabel manufacturing facility in Frankfurt (Germany), one of the largest state-of-the-art insulin manufacturing facilities in the world, from Pfizer for €30 million.

A.2. Human vaccines (Vaccines)

A.2.1. Filings for marketing approval of new vaccines

▪ In February 2009 the European Commission granted marketing authorization for the first intradermal microinjection influenza vaccine. This new vaccine for seasonal influenza will be marketed as Intanza® or IDflu®.

▪ In March 2009 the Australian Therapeutic Goods Administration (TGA) granted marketing authorization for Emerflu®, a pandemic influenza vaccine for human use.

A.2.2. Investments and alliances ▪ In March 2009, we announced the signature of an agreement with the Mexican authorities to build a €100 million influenza vaccine manufacturing facility in Mexico. Under the terms of the agreement, our Vaccines division sanofi pasteur will manufacture influenza vaccine in collaboration with Birmex, a Mexican state-owned vaccine manufacturer. ▪ In May 2009, the FDA licensed sanofi pasteur’s new influenza vaccine manufacturing facility in Swiftwater, Pennsylvania (United States). This $150 million investment will increase our annual manufacturing capacity to approximately 150 million doses of trivalent seasonal influenza vaccine in the United States.

▪ In the same month, we began construction of a new sanofi pasteur vaccine manufacturing facility in Neuville-sur-Saône (France), representing an investment of €350 million. This facility, which is expected to be operational in 2013, will have a capacity of 100 million doses of the novel vaccine against dengue fever currently under development.

A.2.3. Other vaccines activities

▪ In May 2009, sanofi pasteur, our Vaccines division, announced that it had received the first of a series of orders from the U.S. Department of Health and Human Services to begin production of a vaccine against the new A(H1N1) influenza virus. A second order was placed in July 2009.

▪ In June 2009, we announced our intention to donate to the World Health Organization (WHO) up to 10% of our output of influenza vaccine, or 100 million doses, to help developing countries deal with the influenza pandemic. This donation is our response to the 2009 influenza pandemic caused by the emergence of the new A(H1N1) influenza strain, and includes our previous commitment made in 2008 in the context of the A(H5N1) pandemic threat.

▪ As part of the transformation of our Research & Development effort, we decided during the first half of 2009 to discontinue development of the melanoma vaccine then in Phase II and to halt the UnifiveTM pentavalent project (DTP-HepB-Hib) in the intercontinental zone, reallocating our resources instead to the Hexaxim® hexavalent vaccine (DTP-HepB-Polio-Hib).


A.3. Other significant events

▪ The Combined General Meeting of sanofi-aventis shareholders was held on April 17, 2009. All the resolutions were adopted, and a net dividend of €2.20 per share was approved, representing a 6.3% increase over the previous year. The dividend was paid April 28, 2009. The meeting also approved the appointment of Christopher A. Viehbacher as a Director.

▪ On May 6, 2009, sanofi-aventis successfully completed the placement of a 4-year euro note issue and a 7-year euro note issue, amounting to a combined total of €3 billion.

▪ Since the start of the year, we have been engaged in a wide-ranging transformation program designed to meet the challenges facing the pharmaceutical industry, make us a global, diversified healthcare leader, and deliver sustainable growth. Our transformation program has made particularly good progress in the year to date, across each of the three key themes:

- Increasing innovation in R&D: Our new R&D model aims to foster greater creativity and innovation, while remaining focused on patient needs. Streamlined organizational structures will make our R&D more flexible and entrepreneurial. The model will also promote a new culture open to external collaboration (see section A.1.4., “Acquisitions, Investments and Alliances”).

- Exploring external growth opportunities: In July, our Vaccines business in emerging markets received a significant boost with the acquisition of Shantha Biotechnics in India. Completion of this acquisition is scheduled for the third quarter of 2009 (see section B., “Events subsequent to the balance sheet date (June 30, 2009)”). This acquisition follows on from those of Zentiva, Kendrick, Medley and BiPar Sciences (see section A.1.4., “Acquisitions, investments and alliances”).

- Adapting our structures to meet the challenges of the future: Implementation of this program is intended to improve the efficiency of our operations, with a target of €2 billion of recurring pre-tax cost savings in 2013 (1) relative to 2008. These savings will be achieved across all Group functions.

Our target is to at least match our 2008 level of net sales in 2013, before significant acquisitions. We expect our growth drivers (vaccines, diabetes, emerging markets, OTC/OTx, Japan, new launches) to more than offset the impact on net sales of future patent expiries, and to deliver more sustainable growth with a reduced risk profile from 2013 onward.

The €2bn cost savings target and the contribution from our existing growth drivers are intended to offset the impact of generic competition and to generate a comparable level of net income in 2013 to that achieved in 2008. In addition, our healthy financial position should give significant potential for creating value through external growth opportunities that offer a return on investment greater than our cost of capital.

(1) Before the impact of inflation or any significant change in the Group’s activities, and at constant exchange rate.


B. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE (JUNE 30, 2009)

▪ On July 6, 2009, we announced the results of a 5-year study of the effect of Lantus® versus NPH insulin on progression of retinopathy in patients with type 2 diabetes. These results demonstrated that the two treatments showed similar effects on the progress of retinopathy and similar overall safety. There was no observable difference in terms of serious adverse events, in particular cancer.

▪ On July 16, 2009, our Vaccines division, sanofi pasteur, announced that it had received an order from the French Ministry of Health to produce a vaccine against the new A(H1N1) influenza virus.

▪ On July 17, 2009, we announced the initiation of a pivotal Phase III trial evaluating BSI-201 in combination with chemotherapy in patients with metastatic triple-negative breast cancer. The co-primary objectives of this study are to assess improvement in progression-free survival and overall survival.

▪ On July 27, 2009, we announced the acquisition of Mérieux Alliance’s French subsidiary ShanH, which owns a majority stake in vaccine company Shantha Biotechnics (Shantha). Shantha is a biotechnology company based in Hyderabad (India), which develops, manufactures and markets several important vaccines. The transaction values Shantha at €550 million. For the current fiscal year, sales of Shantha are expected to be around $90 million.


C. CONSOLIDATED FINANCIAL STATEMENTS FOR THE FIRST HALF OF 2009

C.1. Consolidated results of operations for the first half of 2009

Consolidated income statements for the six months to June 30, 2009 and June 30, 2008

(€ million) 6 months to

June 30, 2009 as %

of net sales 6 months to

June 30, 2008 as %

of net sales

Net sales 14,545 100.0 % 13,626 100.0 %

Other revenues 703 4.8 % 570 4.2 %

Cost of sales (3,619) (24.8 %) (3,615) (26.5 %)

Gross profit 11,629 80.0 % 10,581 77.7 %

Research and development expenses (2,260) (15.5 %) (2,180) (16.0 %)

Selling and general expenses (3,627) (24.9 %) (3,572) (26.2 %)

Other operating income 450 3.1 % 316 2.3 %

Other operating expenses (170) (1.2 %) (138) (1.0 %)

Amortization of intangibles (1,805) (12.5 %) (1,709) (12.6 %)

Operating income before restructuring, impairment of property, plant & equipment and intangibles, gains and losses on disposals, and litigation 4,217 29.0 % 3,298 24.2 %

Restructuring costs (907) (6.2 %) (207) (1.5 %)

Impairment of property, plant & equipment and intangibles (28) (0.2 %) (126) (0.9 %)

Gains and losses on disposals, and litigation − − − −

Operating income 3,282 22.6 % 2,965 21.8 %

Financial expenses (151) (1.0 %) (160) (1.2 %)

Financial income 37 0.2 % 110 0.8 %

Income before tax and associates 3,168 21.8 % 2,915 21.4 %

Income tax expense (795) (5.5 %) (771) (5.6 %)

Share of profit/loss of associates 496 3.4 % 411 3.0 %

Net income 2,869 19.7 % 2,555 18.8 %

Net income attributable to minority interests 232 1.6 % 220 1.7 %

Net income attributable to equity holders of the Company 2,637 18.1 % 2,335 17.1 %


C.2. Business net income (1) for the first half of 2009

The first-time application of IFRS 8 has led sanofi-aventis to adjust the way in which it discloses information about its operating segments so as to reflect as closely as possible its organizational structure and internal management.

The segments now reported by sanofi-aventis comprise a Pharmaceuticals segment and a Human Vaccines (Vaccines) segment. All other activities are combined in a separate segment, “Other”. These segments reflect our internal organizational structure, and reflect the operating segments we use to monitor performance and allocate resources. The “Other” segment was previously reported as part of the “Pharmaceuticals” segment.

Segment information is prepared on the basis of internal management data provided to the Chief Executive Officer.

The Pharmaceuticals segment includes all activities involving research, development, production and sale of drugs. Our pharmaceuticals portfolio includes flagship products from our six major therapeutic fields, plus a broad range of prescription drugs, over-the-counter (OTC) drugs and generic drugs. This segment also includes all associates and joint ventures involved in activities related to pharmaceuticals, in particular the joint ventures with Bristol Myers Squibb (BMS). The Human Vaccines segment is wholly dedicated to vaccines and includes research, development, production and sale of vaccines. This segment also includes the Sanofi Pasteur MSD joint venture. The “Other” segment consists of all those activities that do not constitute reportable segments under the criteria specified in IFRS 8, and includes in particular our associate Yves Rocher, the Animal Health business (Merial), and the effect of retained obligations of divested activities.

“Business operating income” is equivalent to “Operating income before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation” as defined in note B.20. to the consolidated financial statements for the year ended December 31, 2008, modified as follows: • amortization of intangible assets is reversed out; • the share of profits and losses of associates and net income attributable to minority interests

are added; • other impacts associated with acquisitions (primarily, the workdown of acquired inventories

remeasured at fair value at the acquisition date, and the impacts of purchase accounting on associates) are reversed out.

This measure of segment profit adopted in compliance with IFRS 8 is also the measure used internally to evaluate the performance of operating managers and to allocate resources.

We believe that investors’ understanding of our operational performance is enhanced by reporting “business net income” (1). This measure is determined by deducting net financial expenses and the relevant income tax expense from “business operating income”.


“Business net income” for the first half of 2009 was €4,516 million, an increase of 22.3% relative to the first half of 2008 (€3,694 million), or a 12.8% growth at constant exchange rates.

(1) See definition in section F.


We also report “business EPS”, a non-GAAP financial measure that we define as “business net income” divided by the weighted average number of shares outstanding.

“Business EPS” for the first half of 2009 was €3.46, an increase of 23.1% relative to the 2008 first-half figure of €2.81, based on an average number of shares outstanding of 1,305.5 million for the first half of 2009 and of 1,313.7 million for the first half of 2008.

2009 first-half “business net income”


Net sales 13,206 1,339 14,545 Other revenues 688 15 703 Cost of sales (3,104) (496) (3,600) Research and development expenses (2,039) (221) (2,260) Selling and general expenses (3,351) (275) (1) (3,627) Other operating income and expenses 183 (2) 99 280 Share of profit/loss of associates 389 14 136 539 Net income attributable to minority interests (232) − − (232)

Business operating income 5,740 374 234 6,348 Financial income and expenses (114) Income tax expense (1,718) Business net income 4,516

2008 first-half “business net income”


Net sales 12,421 1,205 13,626 Other revenues 552 18 570 Cost of sales (3,152) (463) (3,615) Research and development expenses (1,993) (187) (2,180) Selling and general expenses (3,334) (243) 5 (3,572) Other operating income and expenses 126 (1) 53 178 Share of profit / loss of associates 321 5 125 451 Net income attributable to minority interests (220) − − (220)


2008 full-year “business net income”


Net sales 24,707 2,861 27,568 Other revenues 1,208 41 1,249 Cost of sales (6,231) (1,104) (7,,335) Research and development expenses (4,150) (425) (4,575) Selling and general expenses (6,662) (520) 14 (7,168) Other operating income and expenses 297 1 (95) 203 Share of profit / loss of associates 671 28 191 890 Net income attributable to minority interests (441) − − (441)



A reconciliation of “Business net income” to “Net income attributable to equity holders of the Company” is provided below:


2009


2008


2008

Business net income 4,516 3,694 7,314

Expenses arising on the workdown of acquired inventories (2) (19) − (2)

Amortization of intangible assets (1,805) (1,709) (3,483)

Impairment of intangible assets (28) (126) (1,554)

Restructuring costs (907) (207) (585)

Other items (1) − 38 335

Tax effect on the items listed above 923 685 1,904

Expenses arising from the impacts of acquisitions on associates (3) (43) (40) (78)

Net income attributable to equity holders of the Company 2,637 2,335 3,851

(1) Other items comprise:

Gain on sale of Millennium shares − 38 38

Reversal of provisions for major litigations − − 76

Net charge to/(reversal of) provisions for tax exposures − − 221

(2) Expenses arising from the impacts of acquisitions on inventories: workdown of inventories remeasured at fair value at the acquisition date

(3) Expenses arising from the impacts of acquisitions on associates: workdown of acquired inventories, amortization and impairment of intangibles assets, and impairment of goodwill.


Pharmaceuticals segment “business operating income” for the six months to June 30, 2009 and the six months to June 30, 2008

(€ million)


2009

as %of netsales

6 months toJune 30,

2008

as % of net sales

Change (%)

Net sales 13,206 100.0 % 12,421 100.0 % +6.3 %

Other revenues 688 5.2 % 552 4.4 % +24.6 %

Cost of sales (3,104) (23.5 %) (3,152) (25.3 %) -1.5 %

Gross profit 10,790 81.7 % 9,821 79.1 % +9.9 %

Research and development expenses (2,039) (15.4 %) (1,993) (16.0 %) +2.3 %

Selling and general expenses (3,351) (25.3 %) (3,334) (26.9 %) +0.5 %

Other operating income and expenses 183 1.4 % 126 1.0 % +45.2 %

Share of profit/loss of associates 389 2.9 % 321 2.6 % +21.2 %

Net income attributable to minority interests (232) (1.8 %) (220) (1.8 %) +5.5 %

Business operating income 5,740 43.5 % 4,721 38.0 % +21.6 %

Vaccines segment “business operating income” for the six months to June 30, 2009 and the six months to June 30, 2008

(€ million)


2009

as %of netsales


2008

as % of net sales

Change (%)

Net sales 1,339 100.0 % 1,205 100.0 % +11.1 %

Other revenues 15 1.1 % 18 1.5 % -16.7 %

Cost of sales (496) (37.0 %) (463) (38.4 %) +7.1 %

Gross profit 858 64.1 % 760 63.1 % +12.9 %

Research and development expenses (221) (16.5 %) (187) (15.5 %) +18.2 %

Selling and general expenses (275) (20.6 %) (243) (20.2 %) +13.2 %

Other operating income and expenses (2) (0.1 %) (1) (0.1 %) +100.0 %

Share of profit/loss of associates 14 1.0 % 5 0.4 % +180.0 %

Net income attributable to minority interests − − − −

Business operating income 374 27.9 % 334 27.7 % +12.0 %


C.3. Analysis of consolidated results for the first half of 2009

C.3.1. Net sales

Sanofi-aventis generated consolidated net sales of €14,545 million in the first half of 2009, 6.7% higher than in the first half of 2008. Exchange rate movements, primarily the appreciation of the U.S. dollar against the euro, had a favorable effect of 3.6 points. At constant exchange rates (1) and after taking account of changes in structure (in particular the consolidation of Zentiva in the second quarter, and the end of commercialization of Copaxone® by sanofi-aventis in North America effective April 1, 2008), net sales rose by 3.1%. Excluding changes in structure and at constant exchange rates, first-half net sales growth was 3.6%.

Reconciliation of 2009 first-half reported net sales to sales at constant exchange rates


(€ million)

6 months toJune 30,

2009

Reported net sales for the first half of 2009 14,545

Effect of exchange rates (498)

Net sales at constant exchange rates for the first half of 2009 14,047


C.3.1.1. Net sales by business segment

a) Pharmaceuticals

Net sales for the Pharmaceuticals business in the first half of 2009 totaled €13,206 million, an increase of 3.0% at constant exchange rates and of 6.3% on a reported basis.

Net sales of our flagship products rose by 9.1% at constant exchange rates to €6,971 million, representing 52.8% of Pharmaceuticals net sales, versus 49.2% in the first half of 2008.

Net sales of our other products fell by 7.3% at constant exchange rates to €3,099 million, against €3,315 million in the first half of 2008.

The OTC business reported net sales growth of 3.0% (on a constant structure basis and at constant exchange rates) to €640 million, reflecting a good organic performance. The OTC figures also include the effects of the first-time consolidation of Symbion Consumer (from September 1, 2008) and of the OTC activities of Zentiva.

The Generics business reported first-half sales of €377 million, up 8.8% (on a constant structure basis and at constant exchange rates). In the second quarter of 2009, the Generics business was boosted by the first-time consolidation of Zentiva and Kendrick (from April 1) and Medley (from May 1).

(€ million)

Product Indication

6 months toJune 30,

2009

6 months toJune 30,

2008

Change on a reported

basis

Change on a constant structure

basis and at constant

exchange rates

Change at constant

exchange rates

Lovenox® Thrombosis 1,542 1,354 +13.9% +6.9% +6.9%

Lantus® Diabetes 1,539 1,133 +35.8% +26.6% +26.6%

Plavix® Atherothrombosis 1,389 1,323 +5.0% +4.2% +4.2%

Taxotere® Breast cancer, lung cancer, prostate cancer 1,118 987 +13.3% +9.5% +9.5%

Eloxatin® Colorectal cancer 697 666 +4.7% -5.7% -5.7%

Aprovel®/CoAprovel® Hypertension 620 600 +3.3% +5.0% +5.0%

Apidra® Diabetes 66 43 +53.5% +48.8% +48.8%

Flagship products 6,971 6,106 +14.2% +9.1% +9.1%

Stilnox®/Ambien®/Myslee® Insomnia 447 398 +12.3% -1.5% -1.5%

Allegra® Allergic rhinitis 438 364 +20.3% +1.1% +1.1%

Copaxone® Multiple sclerosis 231 420 -45.0% +23.0% -44.0%

Tritace® Hypertension 221 263 -16.0% -12.5% -12.5%

Amaryl® Diabetes 207 183 +13.1% +2.7% +2.7%

Depakine® Epilepsy 165 159 +3.8% +8.8% +8.8%

Xatral® Benign prostatic hyperplasia 153 162 -5.6% -10.5% -10.5%

Actonel® Osteoporosis, Paget’s disease 137 162 -15.4% -4.0% -11.7%

Nasacort® Allergic rhinitis 120 130 -7.7% -15.4% -15.4%

Other products 3,099 3,315 -6.5% -4.6% -7.3%

OTC 640 587 +9.0% +3.0% +16.2%

Generics 377 172 +119.2% +8.8% +129.7%

Total Pharmaceuticals 13,206 12,421 +6.3% +3.6% +3.0%


Net sales of Lantus®, the world’s leading insulin brand, rose by 26.6% (at constant exchange rates) in the first half of 2009 to €1,539 million, driven largely by the SoloSTAR® injection pen. Growth was strong across all three geographic regions at 29.5% in the United States, 14.7% in Europe and 43.2% in the Other Countries region (all at constant exchange rates).

Net sales of the rapid-acting insulin analog Apidra® were €66 million, an increase of 48.8% (at constant exchange rates), the product’s performance having been boosted by the launch of Apidra® SoloSTAR® in the United States.

Lovenox®, the leading low molecular weight heparin on the market, reported first-half net sales up 6.9% (at constant exchange rates) at €1,542 million, thanks to good performances in Europe (up 13.3% at constant exchange rates, at €443 million) and the Other Countries region (up 17.4% at constant exchange rates, at €162 million). No biosimilar of Lovenox® has been approved in the United States to date.

Taxotere® posted first-half growth of 9.5% at constant exchange rates to €1,118 million, driven by its use in adjuvant breast cancer treatment and in prostate cancer. Growth was good across all three geographic regions at 9.4% in Europe, 6.3% in the United States and 15.6% in the Other Countries region (all at constant exchange rates). In Japan, the product made further advances, with net sales reaching €65 million (up 14.2% at constant exchange rates), boosted in particular by the prostate cancer indication approved in the second half of 2008.

Eloxatin®, the leading cytotoxic agent in the colorectal cancer market as an adjuvant and as a first line treatment in the metastatic phase, achieved first-half growth of 6.5% in the United States to €548 million (at constant exchange rates). Total net sales of the product were down 5.7% at constant exchange rates, affected by ongoing competition from generics in Europe.

First-half net sales of the hypnotic Stilnox®/Ambien®/Myslee® fell by 1.5% at constant exchange rates. In the United States, net sales of Ambien CR® were up 1.1% (at constant exchange rates) at €257 million. In Japan, net sales of Myslee®, the leading hypnotic on the market, totaled €93 million, an increase of 20.3% (at constant exchange rates).

Despite another good performance in Japan, first-half net sales of Allegra® were flat at €438 million.

The end of commercialization of Copaxone® by sanofi-aventis in North America effective April 1, 2008 led to a 44% decline in first-half net sales of this product (at constant exchange rates).


Geographical split of 2009 first-half net sales of the main pharmaceutical products

(€ million) Europe

Change at constant

exchange rates

UnitedStates

Change at constant

exchange rates

Other countries

Change at constant

exchange rates

Lovenox® 443 +13.3% 937 +1.9% 162 +17.4%

Lantus® 379 +14.7% 971 +29.5% 189 +43.2%

Plavix® 846 -1.1% 113* +14.1% 430 +15.0%

Taxotere® 470 +9.4% 425 +6.3% 223 +15.6%

Eloxatin® 57 -52.4% 548 +6.5% 92 -2.2%

Aprovel®/CoAprovel® 460 +4.2% − − 160 +7.4%

Apidra® 32 +43.5% 28 +41.2% 6 +133.3%

Allegra® 15 -20.0% 184 -9.1% 239 +14.2%

Stilnox®/Ambien®/Myslee® 38 0.0% 289 -6.7% 120 +13.5%

Copaxone® 224 +23.2% − - 7 -72.0%

Tritace® 156 -7.3% − − 65 -23.5%

Amaryl® 42 -10.2% 5 +33.3% 160 +6.9%

Depakine® 103 +4.7% − − 62 +17.3%

Xatral® 49 -33.3% 74 +20.4% 30 -9.1%

Actonel® 86 -17.0% − − 51 -1.8%

Nasacort® 21 -4.3% 86 -21.1% 13 +8.3%

* Sales of active ingredient to the U.S. joint-venture managed by BMS.


b) Human Vaccines (Vaccines)

The Vaccines segment generated net sales of €1,339 million in the first half of 2009, up 11.1% on a reported basis and 3.7% at constant exchange rates. Excluding the impact of shipments to the U.S. Department of Health and Human Services under H5N1 influenza vaccine contracts, net sales growth was 13.7% (at constant exchange rates).

Polio/Pertussis/Hib Vaccines achieved 31.3% growth in net sales to €495 million, reflecting the success of Pentacel® (the first 5-in-1 pediatric combination vaccine against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b licensed in the United States).

Net sales of Influenza Vaccines fell by 41.0% (at constant exchange rates) to €120 million. These figures include the shipment of a batch of H5N1 vaccine to the U.S. Department of Health and Human Services during the second quarter worth $32.5 million, a much lower level than the €192.5 million of shipments recorded in the second quarter of 2008. In addition, we have received a number of orders to produce a vaccine against the new A(H1N1) influenza virus, including two orders from the U.S. Department of Health and Human Services and a contract from the French Ministry of Health.

Meningitis/Pneumonia Vaccines reported net sales of €259 million, a rise of 2.7% at constant exchange rates, thanks largely to good growth for vaccines against pneumococcal infections. Net sales of Menactra® (quadrivalent meningococcal meningitis vaccine) fell by 5.6% at constant exchange rates, due to the reduced potential for catch-up vaccination campaigns for adolescents.

In the first half of 2009, net sales of Adult Booster Vaccines were down 8.5% (at constant exchange rates) at €202 million. Over the same period, Adacel® (adult and adolescent tetanus/ diphtheria/pertussis booster vaccine) recorded net sales of €126 million, down 11.1% at constant exchange rates.

(€ million)

6 months toJune 30,

2009

6 months toJune 30,

2008

Change on a

reported basis

Change at constant

exchange rates

Polio/Pertussis/Hib Vaccines (including Pentacel®, Pentaxim®) 495 355 +39.4% +31.3%

Meningitis/Pneumonia Vaccines (including Menactra®) 259 225 +15.1% +2.7%

Adult Booster Vaccines (including Adacel®) 202 200 +1.0% -8.5%

Travel & Other Endemics Vaccines 165 157 5.1% +2.5%

Influenza Vaccines* (including Vaxigrip® and Fluzone®) 120 200 -40.0% -41.0%**

Other Vaccines 98 68 +44.1% +33.8%

Total Human Vaccines 1,339 1,205 +11.1% +3.7%

* Seasonal and pandemic influenza vaccines ** Growth of 27.4% excluding H5N1 vaccines

Sales at Sanofi Pasteur MSD (not consolidated by sanofi-aventis), the joint venture with Merck & Co in Europe, fell by 11.8% on a reported basis in the first half to €487 million. Net sales of Gardasil®, a vaccine that prevents papillomavirus infections, totaled €229 million. This represents a year-on-year fall of 26.5%, due to extensive catch-up campaigns in the prior year.


Geographical split of 2009 first-half net sales of the Vaccines segment

* Seasonal and pandemic influenza vaccines

(€ million)) Europe

Change atconstant

exchangerates

UnitedStates

Change at constant

exchange rates

Othercountries

Change atconstant

exchangerates

Polio/Pertussis/Hib Vaccines (including Pentacel®, Pentaxim®) 80 -9.7% 258 +68.7% 157 +21.9%

Influenza Vaccines* (including Vaxigrip® et Fluzone®) 37 -76.2% 84 +23.9%

Meningitis/Pneumonia Vaccines (including Menactra®) 5 0.0% 205 -5.8% 49 +56.7%

Adult Booster Vaccines (including Adacel®) 30 +40.9% 156 -16.6% 16 +6.7%

Travel & Other Endemics Vaccines 15 -6.3% 40 -12.5% 110 +9.9%

Others Vaccines 31 +200.0% 58 0.0% 9 +42.9%


C.3.1.2. Net sales by geographic region

(€ million)

6 months toJune 30,

2009

6 months toJune 30,

2008

Change on a reported

basis

Change at constant

exchange rates

Europe 6,027 6,132 -1.7% +1.8%

United States 4,733 4,149 +14.1% -0.1%

Other countries 3,785 3,345 +13.2% +9.4%

Total 14,545 13,626 +6.7% +3.1%

Net sales in Europe rose by 1.8% at constant exchange rates, with the adverse effect of ongoing competition from generics of Eloxatin® outweighed by a strong performance in Eastern Europe (up 27.0% at constant exchange rates), which has included Zentiva since April 1, 2009.

In the United States, the end of commercialization of Copaxone® by sanofi-aventis with effect from April 1, 2008 left net sales flat, despite good performances by Lantus® (29.5% growth at constant exchange rates), Taxotere® (6.3% growth) and Eloxatin® (6.5% growth). Excluding H5N1 contracts, net sales were up 2.4% at constant exchange rates.

In the Other Countries region, net sales rose by 9.4% (at constant exchange rates), driven largely by the Vaccines business and by dynamic growth in Japan. Net sales for the Vaccines business were up 21.6% at constant exchange rates, at €425 million. The Asia-Pacific region reported 15.5% growth at constant exchange rates, with China performing particularly well (35.1% growth, to €259 million). In Japan, net sales reached €952 million, up 10.2% at constant exchange rates, bolstered by the success of Plavix®, Myslee® and Allegra®.

C.3.1.3. Worldwide presence of Plavix® and Aprovel®

Two of our leading products — Plavix® and Aprovel® — were discovered by sanofi-aventis and jointly developed with Bristol-Myers Squibb (BMS) under an alliance agreement. These products are sold by sanofi-aventis and/or BMS under the terms of this agreement (1).

Worldwide sales of these two products are an important indicator of the global market presence of sanofi-aventis products, and we believe this information facilitates a financial statement user’s understanding and analysis of our consolidated income statement, particularly in terms of understanding our overall profitability in relation to consolidated revenues, and also facilitates a user’s ability to understand and assess the effectiveness of our research and development efforts. Disclosing sales made by BMS of these two products enables users to have a clearer understanding of trends in different lines of our income statement, in particular the lines “Other revenues”, where royalties received on those sales are booked; “Share of profit/loss of associates”, where our share of profit/loss of entities included in the BMS Alliance and under BMS operational management is recorded; and “Net income attributable to minority interests”, where the BMS share of profit/loss of entities included in the BMS Alliance and under our operational management is recorded.

(1) See note C.1. to the consolidated financial statements for the year ended December 31,2008, included in our Annual Report on Form 20-F for 2008, page F-31 and F-32; this document is available on the sanofi-aventis.com website.


Worldwide sales of Plavix® and Aprovel® for the six months ended June 30, 2009 and June 30, 2008, split by geographic region, on a reported basis

(€ million) June 30, 2009 June 30, 2008

- sanofi-aventis(2) BMS(3) Total sanofi-aventis(2) BMS(3) Total

Change on areported

basis

Plavix®/Iscover® (1)

Europe 801 88 889 820 110 930 -4.4%

United States − 2,037 2,037 − 1,552 1,552 +31.3%

Other Countries 434 122 556 343 116 459 +21.1%

Total 1,235 2,247 3,482 1,163 1,778 2,941 +18.4%

(€ million) June 30, 2009 June 30, 2008

- sanofi-aventis(5) BMS(3) Total sanofi-aventis(5) BMS(3) Total

Change on areported

basis

Aprovel®/Avapro®/Karvea®(4)

Europe 410 88 498 411 89 500 -0.4%

United States − 267 267 − 236 236 +13.1%

Other Countries 159 91 250 147 88 235 +6.4%

Total 569 446 1,015 558 413 971 +4.5%

(1) Plavix® is marketed under the trademarks Plavix® and Iscover®. (2) Net sales of Plavix® consolidated by sanofi-aventis, excluding sales to BMS (€159 million in the six months to June 30, 2009, and

€163 million in the six months to June 30, 2008). (3) Translated into euros by sanofi-aventis using the method described in Note B.2 to our consolidated financial statements, included in

our Annual Report on Form 20-F for 2008, page F-11; this document is available on the sanofi-aventis.com website. (4) Aprovel® is marketed under the trademarks Aprovel®, Avapro® and Karvea®. (5) Net sales of Aprovel® consolidated by sanofi-aventis, excluding sales to BMS (€51 million in the six months to June 30, 2009 and

€41 million in the six months to June 30, 2008).

Evolution of worldwide sales of Plavix® and Aprovel® for the six months ended June 30, 2009 and June 30, 2008, split by geographic region, at constant exchange rates

(€ million)

June 30, 2009

reported

June 30, 2008

reported

Change at constant

exchange rates

Plavix®/Iscover®

Europe 889 930 -1.5%

United States 2,037 1,552 +14.6%

Other Countries 556 459 +12.2%

Total 3,482 2,941 +9.1%

Aprovel®/Avapro®/Karvea®

Europe 498 500 +1.8%

United States 267 236 -1.3%

Other Countries 250 235 +5.1%

Total 1,015 971 +1.9%

In the United States, sales of Plavix®/Iscover® (consolidated by BMS) in the first half of 2009 rose by a robust 14.6% at constant exchange rates, to €2,037 million. In Europe, sales of Plavix® fell by 1.5% at constant exchange rates to €889 million, due to competition from clopidogrel besylate in the monotherapy segment in Germany. In Japan, the success of Plavix® continued, with sales reaching €155 million, a rise of 73% at constant exchange rates.


In what is still a highly competitive environment, especially in the United States, first-half worldwide sales of Aprovel®/Avapro®/Karvea® were €1,015 million, up 1.9% at constant exchange rates against a 2008 first-half comparative boosted by sales of active ingredient to our Japanese partners.

C.3.2. Other revenues

Other revenues, which mainly comprise royalty income under licensing agreements contracted in connection with ongoing operations, amounted to €703 million, an increase of 23.3% relative to the €570 million recorded in the first half of 2008.

License revenues under the worldwide alliance with Bristol-Myers Squibb (BMS) on Plavix® and Aprovel® totaled €578 million in the first half of 2009, versus €458 million in the first half of 2008. These revenues were boosted by an increase in sales of Plavix® in the United States (up 14.6% at constant exchange rates in the first half of 2009) and by favorable trends in the exchange rate of the U.S. dollar against the euro.

C.3.3. Gross profit

Gross profit for the six months ended June 30, 2009 was €11,629 million (80.0% of net sales), versus €10,581 million for the comparable period of 2008 (77.7% of net sales), representing year-on-year growth of 9.9%.

The gross margin ratio of the Pharmaceuticals segment improved by 2.6 points, reflecting higher royalty revenues (+0.8 of a point) and a better ratio of cost of sales to net sales (+1.8 points). This situation is mainly due to:

- the favorable effect on net sales and other revenues of movements in the exchange rates of various currencies against the euro, which (because our cost of sales is largely incurred in the euro zone) largely feeds through into gross profit;

- the effect of the end of commercialization of Copaxone® by sanofi-aventis in North America with effect from April 1, 2008;

- a favorable product mix.

The gross margin ratio for the Vaccines segment improved by 1.0 point, despite a drop in royalty revenues (-0.4 of a point). The 1.4-point improvement in the ratio of cost of sales to net sales was mainly due to the appreciation of foreign currencies against the euro.

Consolidated gross profit was also impacted by the expense arising from the workdown during the first half of 2009 of inventories remeasured at fair value on completion of acquisitions, mainly those of Zentiva and Medley (€19 million, or 0.1 of a point).

C.3.4. Research and development expenses

Research and development expenses totaled €2,260 million, versus €2,180 million in the first half of 2008, an increase of 3.7% (or 0.2% at constant exchange rates).

In the Pharmaceuticals segment, these expenses include €54 million of provisions relating to the discontinuation of certain projects following completion of the portfolio review in the first quarter of 2009.

Research and development expenses in the Vaccines segment rose by €34 million, or 18.2% (14% at constant exchange rates), due in particular to the first-time consolidation of Acambis effective October 1, 2008.


C.3.5. Selling and general expenses

Selling and general expenses amounted to €3,627 million, versus €3,572 million in the first half of 2008, a rise of 1.5% (but down 2.0% at constant exchange rates). They represented 24.9% of net sales, compared with 26.2% in the first half of 2008, mainly as a result of savings in marketing expenses (in particular, due to Teva having taken over commercialization of Copaxone® in North America in April 2008) and cost savings in Europe. The 2009 first-half figure includes the expenses of the companies consolidated for the first time during the period.

In the Vaccines segment, selling and general expenses rose by 13.2% (or by 5.9% at constant exchange rates). This increase was mainly due to the promotional campaigns for Adacel® and Menactra®, and to the first-time consolidation of Acambis effective October 1, 2008.

C.3.6. Other operating income and expenses

Other operating income amounted to €450 million in the first half of 2009 (versus €316 million in the first half of 2008). Other operating expenses amounted to €170 million (versus €138 million in the first half of 2008).

The balance of other operating income and expenses represented net income of €280 million in the first half of 2009, compared with net income of €178 million in the comparable period of 2008. The €102 million increase was mainly due to Teva having taken over commercialization of Copaxone® in North America effective April 1, 2008. We are entitled to receive a 25% royalty of North American sales of Copaxone® over a two-year period, and recognize this royalty income in “Other operating income”.

C.3.7. Amortization of intangibles

Amortization of intangible assets amounted to €1,805 million in the first half of 2009, against €1,709 million in the first half of 2008. This increase was mainly due to trends in the exchange rate of the U.S. dollar against the euro.

This item mainly relates to intangible assets remeasured at fair value on the acquisition of Aventis (€1,671 million in the first half of 2009, versus €1,626 million in the first half of 2008).

C.3.8. Operating income before restructuring, impairment of property, plant & equipment and intangibles, gains and losses on disposals, and litigation

This indicator amounted to €4,217 million in the first half of 2009, compared with €3,298 million in the first half of 2008.

C.3.9. Restructuring costs Restructuring costs were €907 million in the first half of 2009, versus €207 million in the first half of 2008. The 2009 first-half charge relates mainly to measures announced by sanofi-aventis in June 2009, intended to improve innovation by transforming Research & Development operations and to streamline the Group’s organizational structures by adapting central support functions. These costs consist mainly of employee-related charges, arising from early retirement benefits and termination benefits under the voluntary redundancy plans announced. The 2009 first-half charge also reflects, though to a lesser extent, ongoing measures to adjust the French sales force plus the ongoing adaptation – begun in 2008 – of industrial facilities in France.

In the first half of 2008, restructuring costs related primarily to the adaptation of industrial facilities in France and to measures taken in response to the changing economic environment in various European countries, principally France and Spain.


C.3.10. Impairment of property, plant & equipment and intangibles

The impairment loss of €28 million recognized in the first half of 2009 reflects the decision (taken in April) to discontinue development of TroVax® and the withdrawal from the market of our product Di-Antalvic® following a decision by the European Medicines Agency (EMEA). Di-Antalvic® was originally recognized as an asset on the acquisition of Aventis in 2004.

The impairment loss of €126 million recognized in the first half of 2008 reflected the results of impairment tests conducted further to the discontinuation of research projects. The principal assets involved were the oral anti-cancer agent S-1 (termination of the agreement with Taiho Pharmaceutical for the development and commercialization of this product) and the anti-hypertensive Ilepatril® (recognized as an asset on the acquisition of Aventis in 2004).

C.3.11. Gains and losses on disposal and litigation

Sanofi-aventis did not make any major disposals in the first half of either 2009 or 2008.

C.3.12. Operating income

Operating income for the first half of 2009 was €3,282 million, against €2,965 million for the comparable period of 2008.

C.3.13. Financial income and expenses

Net financial expenses for the first half of 2009 were €114 million, a €64 million increase relative to the 2008 first-half figure of €50 million.

Financial expenses directly attributable to net debt (short-term debt plus long-term debt, minus cash and cash equivalents) were €87 million, compared with €88 million in the first half of 2008.

In the first half of 2008, sanofi-aventis tendered its shares in Millennium Pharmaceuticals, Inc (Millennium) to the public tender offer for Millennium by Takeda Pharmaceuticals Company Ltd. This transaction generated a gain of €38 million in the first half of 2008.

A net foreign exchange loss of €24 million was recognized in the first half of 2009, compared with a net foreign exchange gain of €10 million in the first half of 2008.

C.3.14. Income before tax and associates

Income before tax and associates for the first half of 2009 was €3,168 million, compared with €2,915 million for the first half of 2008.

C.3.15. Income tax expense

Income tax expense amounted to €795 million in the first half of 2009, versus €771 million in the first half of 2008.

The effective tax rate was 25%, compared with 26% for the first half of 2008: the difference relative to the standard corporate income tax rate applicable in France (34%) was mainly due to the impact of reduced-rate income tax on royalties in France.


C.3.16. Share of profit/loss of associates

The net share of profits from associates in the six months to June 30, 2009 was €496 million, against €411 million in the comparable period of 2008. This item mainly includes the sanofi-aventis share of after-tax profits from territories managed by BMS under the Plavix® and Avapro® alliance, which rose by 35.4% to €394 million (versus €291 million in the first half of 2008). The increase in this profit share was directly attributable to growth in sales of Plavix® in the United States (up 14.6% at constant exchange rates) and to the appreciation of the U.S. dollar against the euro (16.5%). The share of after-tax profits from Merial was up 15%, driven by a good operational performance and the appreciation of the U.S. dollar against the euro.

C.3.17 Net income

Net income (before minority interests) for the six months to June 30, 2009 was €2,869 million, versus €2,555 million for the comparable period of 2008.

C.3.18. Net income attributable to minority interests

Net income attributable to minority interests came to €232 million for the first half of 2009, against €220 million for the first half of 2008. This line mainly comprises the share of pre-tax profits paid to BMS from territories managed by sanofi-aventis (€219 million, versus €212 million for the first half of 2008).

C.3.19. Net income attributable to equity holders of the Company

Net income attributable to equity holders of the Company amounted to €2,637 million for the first half of 2009, compared with €2,335 million for the first half of 2008.

Earnings per share (EPS) was €2.02, versus €1.78 for the first half of 2008, based on an average number of shares outstanding of 1,305.5 million for the first half of 2009 and 1,313.7 million for the first half of 2008.

C.3.20. Business net income (1)

Business net income for the first half of 2009 was €4,516 million, an increase of 22.3% (12.8% at constant exchange rates) relative to the 2008 first-half figure of €3,694 million.



C.4. Consolidated statement of cash flows

Net cash provided by operating activities in the first half of 2009 amounted to €4,378 million, compared with €3,242 million in the first half of 2008.

Operating cash flow before changes in working capital for the period was €5,365 million, against €3,932 million for the first half of 2008, reflecting our strong first-half operating performance and the favorable impact of foreign exchange gains on the conversion of surplus U.S. dollar cash during the first half of 2009.

Working capital requirements rose by €987 million in the period, compared with a €690 million increase in the first half of 2008, mainly as a result of a €441 million increase in inventories during the first half of 2009.

Net cash used in investing activities amounted to €2,637 million in the first half of 2009, versus €692 million in the first half of 2008.

Acquisitions of property, plant and equipment and intangible assets totaled €824 million (versus €796 million in the first half of 2008), and mainly comprised investments in industrial and research facilities plus payments for intangible rights (€108 million), mainly on the buyout of product rights in the United States.

Acquisitions of investments in consolidated undertakings in the first half of 2009 totaled €1,825 million, the main acquisitions being Zentiva, Medley, Kendrick and BiPar. Inclusive of acquired debt, these acquisitions were valued at an aggregate total of €2,582 million. No major acquisitions were recorded in the first half of 2008.

After-tax proceeds from disposals (€28 million) mainly related to disposals of intangible assets and non-current financial assets. In the first half of 2008, proceeds from disposals amounted to €102 million, mainly arising on the May 2008 sale of the shares in Millennium.

Financing activities generated a net cash inflow of €228 million in the first half of 2009, against a net outflow of €3,287 million in the first half of 2008. The 2009 net inflow mainly reflects the €3,202 million of cash raised from additional borrowings, primarily in the form of bond issues (versus €586 million in the first half of 2008), net of the dividend payout of €2,872 million (versus €2,702 million in the first half of 2008). The 2008 first-half figure also included a €1,225 million cash outflow on the acquisition of 23.8 million of the Company’s own shares under sanofi-aventis share repurchase programs.

After the impact of exchange rates, the net change in cash and cash equivalents during the first half of 2009 was an increase of €1,988 million, compared with a decrease of €765 million in the first half of 2008.

Debt, net of cash and cash equivalents was €3,705 million (8.3% of total equity) as of June 30, 2009, versus €1,780 million as of December 31, 2008 (3.9% of total equity).


C.5. Consolidated balance sheet

As of June 30, 2009, total assets stood at €76,758 million, €4,771 million higher than the figure as of December 31, 2008 (€71,987 million). The increase was mainly due to acquisitions during the period (€4,154 million) and a rise in cash and cash equivalents (€1,988 million), partly offset by amortization of intangible assets (€1,829 million, mainly on acquired Aventis assets).

Debt, net of cash and cash equivalents stood at €3.7 billion as of June 30, 2009, compared with €1.8 billion as of December 31, 2008. We define debt, net of cash and cash equivalents as short-term debt plus long-term debt, minus cash and cash equivalents.

The gearing ration (debt, net of cash and cash equivalents, as a proportion of total equity) rose from 3.9% to 8.3%. For an analysis of our debt as of June 30, 2009 and December 31, 2008 by type, maturity, interest rate and currency, see note B.8 to our condensed half-year consolidated financial statements.

The financing in place as of June 30, 2009 at sanofi-aventis parent company level is not subject to covenants regarding financial ratios, or to any clause linking credit spreads or fees to our credit rating.

Other key movements in balance sheet items are summarized below.

Total equity was €44,784 million as of June 30, 2009, versus €45,071 million as of December 31, 2008. The net reduction in equity reflects the following factors:

- reductions: the dividend distributed to shareholders in respect of the 2008 financial year (€2,872 million), and the net change in cumulative translation difference due to the appreciation of the euro against other currencies (€147 million, primarily on the U.S. dollar);

- increases: net income attributable to equity holders of the company for the first half of 2009 (€2,637 million).

Goodwill and intangible assets increased by €1,178 million, due mainly to:

- increases: the impact of acquisitions of companies during the first half of 2009 (€1,443 million of goodwill, and €1,668 million of intangible assets);

- reductions: amortization charged during the period (€1,829 million).

Provisions and other non-current liabilities increased by €928 million, due in particular to new provisions for restructuring (€644 million) and to the impact of first-time consolidation of the companies acquired during the first half of 2009 (primarily Zentiva and Medley).

Net deferred tax liabilities (€2,499 million) fell by €249 million, due largely to reversals of deferred tax liabilities associated with the amortization and impairment of intangible assets (€165 million) and to the tax cost of distributions made from reserves (€90 million).

As of June 30, 2009, sanofi-aventis held 10 million of its own shares (representing 0.76% of the share capital), recognized as a deduction from equity.


D. PRINCIPAL RISKS AND UNCERTAINTIES

The risk factors to which sanofi-aventis is exposed are described in our Annual Report on Form 20-F for the year ended December 31, 2008, filed with the U.S. Securities Exchange Commission on March 4, 2009. These risks may materialize not only during the next six-month period, but also during subsequent periods. For an update on certain risks, refer to section A, “Significant events of the first half of 2009”, in particular page 32 of our half-year management report, and to section A.1.3., “Defense of our products”, on page 33 of our half-year management report.


E. OUTLOOK

Based on our 2009 first-half results and on the future prospects for our business, we expect 2009 full-year growth in adjusted earnings per share (1) excluding selected items to be in the region of 10% at constant exchange rates, barring major adverse events. “Adjusted earnings per share excluding selected items” is calculated using “adjusted net income excluding selected items”, which is equivalent to “business net income” (2) minus amortization expense not associated with intangible assets recognized in business combinations using the purchase method, net of tax.

We define “adjusted earnings per share excluding selected items” as “adjusted net income excluding selected items” divided by the weighted average number of shares outstanding.

We expect trends in our business earnings per share at constant exchange rates to be the same as trends in our adjusted earnings per share excluding selected items.

“Business net income (2)” for the year ended December 31, 2008 was €7,314 million. Business earnings per share for the year ended December 31, 2008 was €5.59.

This guidance has been prepared using accounting methods consistent with those used in the preparation of our historical financial information. It draws upon assumptions defined by sanofi-aventis and its subsidiaries, in particular regarding the following factors:

• trends in exchange rates and interest rates;

• growth in the national markets in which we operate;

• healthcare reimbursement policies, pricing reforms, and other governmental measures affecting the pharmaceutical industry;

• developments in the competitive environment, in terms of innovative products and the introduction of generics;

• respect by others for our intellectual property rights;

• progress on our research and development programs;

• the impact of our operating cost control policy, and trends in our operating costs;

• the average number of shares outstanding.

Some of the information, assumptions and estimates concerned are derived from or based, in whole or in part, on judgments and decisions made by sanofi-aventis management that may be liable to change or adjustment in future.

(1) See pages 72 of our Annual Report on Form 20-F for 2008, which is available on the sanofi-aventis.com website. (2) See definition in section F.


Forward-Looking Statements

This report contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include financial projections and product development projections, and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future events, operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plans” and similar expressions. Although sanofi-aventis management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of sanofi-aventis, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

These risks and uncertainties include those discussed or identified in this report and those discussed or identified in the public filings with the SEC and the AMF made by sanofi-aventis, including those listed under “Risk Factors” (1) and “Cautionary Statement Regarding Forward-Looking Statements” in the sanofi-aventis Annual Report on Form 20-F for the year ended December 31, 2008 filed with the SEC. An update on litigation is provided in Note B.13 to the half-year consolidated financial information as of June 30, 2009.

Other than as required by applicable law, sanofi-aventis does not undertake any obligation to update or revise any forward-looking information or statements.

(1) See pages 3 to 12 of our Annual Report on Form 20-F for 2008, which is available on the sanofi-aventis.com website.


F. APPENDIX – DEFINITION OF FINANCIAL INDICATORS

F.1. Net sales on a constant structure basis and at constant exchange rates

F.1.1. Net sales at constant exchange rates When we refer to changes in our net sales “at constant exchange rates”, this means that we exclude the effect of changes in exchange rates.

We eliminate the effect of exchange rates by recalculating net sales for the relevant period at the exchange rates used for the previous period.

Reconciliation of 2009 first-half reported net sales to sales at constant exchange rates

F.1.2. Net sales on a constant structure basis

We eliminate the effect of changes in structure by restating prior-period net sales as follows:

• by including sales from the acquired entity or product rights for a portion of the prior period equal to the portion of the current period during which we owned them, based on sales information we receive from the party from whom we make the acquisition;

• similarly, by excluding sales in the relevant portion of the prior period when we have sold an entity or rights to a product;

• for a change in consolidation method, by recalculating the prior period on the basis of the method used for the current period.

F.2. Business net income

“Business net income”, adopted in compliance with IFRS 8, is the measure we use internally to evaluate the performance of our operating managers and to allocate resources.

“Business operating income” is equivalent to “Operating income before restructuring, impairment of property, plant and equipment and intangibles, gains and losses on disposals, and litigation” as defined in note B.20. to the consolidated financial statements for the year ended December 31, 2008, modified as follows: • amortization of intangible assets is reversed out; • the share of profits and losses of associates and net income attributable to minority interests

are added; • other impacts associated with acquisitions (primarily, the workdown of acquired inventories

remeasured at fair value at the acquisition date, and the impacts of purchase accounting on associates) are reversed out.

“Business net income” is determined by deducting net financial expense and the relevant income tax expense from “business operating income”.


We also report “business earnings per share” (“business EPS”), a non-GAAP financial measure that we define as business net income divided by the weighted average number of shares outstanding.

(€ million) 6 months to

June 30, 2009

Reported net sales for the first half of 2009 14,545

Effect of exchange rates (498)

Net sales at constant exchange rates for the first half of 2009 14,047


III − Statutory Auditors’ review report on the 2009 half-year financial information Period from January 1 to June 30, 2009

This is a free translation into English of the Statutory Auditor’s review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

To the Shareholders,

In compliance with the assignment entrusted to us by your Shareholders' annual general meetings and in accordance with the requirements of article L.451-1-2 III of the French monetary and financial code (code monétaire et financier), we hereby report to you on:

- the review of the accompanying condensed half-year consolidated financial statements of sanofi-aventis, for the period from January 1 to June 30, 2009;

- the verification of the information contained in the half-year management report.

These condensed half-year consolidated financial statements are the responsibility of the board of directors. Our role is to express a conclusion on these financial statements based on our review.

I. Conclusion on the financial statements

We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that the financial statements, taken as a whole, are free from material misstatements, as we would not become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that these condensed half year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 – the standard of IFRSs as adopted by the European Union applicable to interim financial information.

Without qualifying our conclusion, we draw your attention to the note A.1. to the condensed half-year consolidated financial statements relating to the implementation by sanofi-aventis of new IFRS standards and interpretations from 1st January 2009, in particularly IFRS 8 "Operating segments".

II. Specific verification

We have also verified the information given in the half-year management report on the condensed half-year consolidated financial statements subject to our review.

We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements.

Neuilly-sur-Seine and Paris-La Défense, July 29, 2009

The Statutory Auditors

French original signed by

PricewaterhouseCoopers Audit Ernst & Young Audit

Catherine Pariset Philippe Vogt Christian Chiarasini Jacques Pierres


IV − Responsibility statement of the certifying officer - Half-year financial report “I hereby certify that, to the best of my knowledge, the condensed half-year consolidated financial statements have been prepared in accordance with the applicable accounting standards and present fairly the assets, the liabilities, the financial position and the profit of the Company and the entities included in the scope of consolidation, and that the half-year management report in page 31 provides an accurate overview of the significant events of the first six months of the financial year with their impact on the half-year consolidated financial statements, together with the major transactions with related parties and a description of the main risks and uncertainties for the remaining six months of the financial year.”

Paris, July 29, 2009

Christopher A. Viehbacher Chief Executive Officer

Sanofi -aventis

174, avenue de France

75 013 Paris – France

Tel. : +33 (0)1 53 77 40 00

www.sanofi -aventis.com

Half-year financial report 2009

Documents

Transcript of Half-year financial report 2009