Hopes for a smart acquisition and a new heart drug overshadowed forecast-beating results from Sanofi-Aventis and AstraZeneca on Thursday, underscoring pressure on both companies to reinvent themselves.

Sanofi is preparing a formal bid of up to $18.7 billion for U.S. biotech group Genzyme, although Chief Executive Chris Viehbacher declined to comment on upcoming deals, pledging instead to stay disciplined on the takeover front.

We are obviously opportunistic, the group has financial muscle, he told reporters.

Sources familiar with the situation said the board of Sanofi met on Wednesday and authorized management to make a formal offer of up to $70 per share for Genzyme.

Buying Genzyme would be Viehbacher's boldest move since the former GlaxoSmithKline executive, a dual German-Canadian national, became the first non-Frenchman to head Sanofi in December 2008.

Genzyme will not fix all Sanofi's problems but its portfolio of high-price and high-margin drugs for rare diseases would go some way to plug a gap in the drugmaker's sales line as top sellers like the bloodthinners Lovenox and Plavix go generic.

AstraZeneca faces a similar cliff of patent expiries, exposing its business to severe generic erosion, but the Anglo-Swedish group already made its play for a U.S. biotech in 2007 by acquiring MedImmune.

Now it is hoping to reinvigorate its business the traditional way, by getting new medicines through the pipeline.

It had major victory on that front on Wednesday night when a U.S. advisory panel voted 7-1 in favor of its new heart drug Brilinta -- a rival to Plavix -- which analysts believe will sell more than a billion dollars a year.

TOUGH TIMES AHEAD

Sanofi and AstraZeneca both reported strong results for the second quarter on Thursday, but times are going to get tougher as losses to generics grow and European government austerity measures squeeze drug prices.

Both companies have a similar scale of problems in terms of generics and are desperately looking for ways to grow, said Ambrian Partners analyst Paul Diggle.

For both of them, these might be the best set of quarterly figures they report for quite some time.

Sanofi's quarterly earnings beat expectations thanks to tightened spending plus higher sales in diabetes, emerging markets and consumer health. Earnings per share climbed 8 percent to 1.90 euros versus expectations of 1.78 euros.

AstraZeneca's EPS rose 9 percent to $1.79 versus forecasts of $1.53, allowing the group to raise its full-year outlook by 30 cents a share and double its 2010 share buyback programme to $2 billion.

AstraZeneca shares were 5 percent higher by 1035 GMT, while Sanofi was down 0.2 percent as the European drugs sector advanced 0.7 percent.

PRESSURE ON BAYER DRUGS

Elsewhere in the European drug industry, Bayer's earnings fell short of market expectations because of generic competition for the German group's two best-selling drugs, which overshadowed a rebound at its plastics unit.

The inventor of Aspirin and synthetic rubber is now pinning its hope on potential blockbuster Xarelto, an experimental blood thinner for stroke prevention.

German rival Merck KGaA, however, beat quarterly earnings expectations and raised its 2010 outlook on strong demand for its liquid crystal chemicals for flat screens.

(Editing by Andrew Callus)