TheStreet.com's Jim Cramer says it looks like the patent worries aren't so dire after all.

Now that we see that health care reform is not going to bring price caps or socialization of medicine, we are beginning to see some real expansion in the drug stocks, including Merck (MRK) (Cramer's Take), Bristol-Myers (BMY) (Cramer's Take) and Lilly (LLY) (Cramer's Take). But there is one drug stock that is continually met with skepticism -- Sanofi Aventis (SNY) (Cramer's Take), the French vaccine and pharmaceutical maker run by Christian Viehbacher. The resistance is obvious, as his biggest two drugs are coming off patent very soon, and his hope is that by 2013 the company might again reach 2008 levels.

Sounds like there's no reason to buy this one. Sounds like its 4% dividend isn't safe.

Sanofi-Aventis (NYSE: SNY - option chain) shares are rising today after health insurer Unitedhealth Group (NYSE: UNH) announced that it would fully cover swine flu vaccinations, even for members that do not have immunizations typically covered. As one of the drugmakers that is producing a swine flu vaccine, SNY stands to benefit. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on SNY.

SNY opened this morning at $33.69. So far today the stock has hit a low of $33.63 and a high of $34.17. As of 11:45, SNY is trading at $33.89 up $1.02 (3.1%). The chart for SNY looks neutral and S&P gives SNY a neutral 3 STARS (out of 5) hold ranking.

Analyst upgrades:

• Jefferies upgraded Buffalo Wild Wings (NASDAQ: BWLD) to Buy from Hold on valuation with the stock down 65% in two months as they believe the company has a "best-in-class fundamental story." The firm lowered its target to $25 from $30.
• Morgan Stanley upgraded Sanofi-Aventis (NYSE: SNY) to Overweight from Equal Weight on valuation and believes near-term cost reductions could provide a positive catalyst.
• Citigroup upgraded New York Times (NYSE: NYT) to Hold from Sell and lowered its target to $5.50 from $7 on valuation and believes the dividend cut will boost the company's liquidity.
• Pantry (NASDAQL PTRY) was upgraded to Outperform from Market Perform at Friedman Billings.
• LECG Corp (NASDAQ: XPRT) was raised to Buy from Neutral at UBS.
• Thomson Reuters (NYSE: TRI) was upgraded at RBC Capital to Outperform from Sector Perform.

Analyst downgrades:

• Jefferies downgraded Suntech (NYSE: STP) to Hold from Buy and lowered its target to $6 from $25 as they believe concerns about a convert refinancing in February 2010 will continue to weigh on the stock.
• Credit Suisse cut Ericsson (NASDAQ: ERIC) to Underperform from Outperform due to expectations for a decline in wireless infrastructure spending.
• ING downgraded shares of Rio Tinto (NYSE: RTP) to Hold from Buy as they believe it will be challenging for the company to execute asset sales planned at reducing debt in the current environment.

Sanofi-Aventis (NYSE: SNY - option chain) shares are soaring higher today after the company announced that its CEO Gerard Le Fur will be replaced by Chris Viehbacher, head of GlaxoSmithKline's (NYSE: GSK) North American pharmaceutical operations. If you think that the stock won't fall by too much in the coming months as the CEO gets a honeymoon period, then now could be a good time to look at a bullish hedged trade on SNY.

SNY opened this morning at $35.59. So far today the stock has hit a low of $35.28 and a high of $35.84. As of 11:55, SNY is trading at $35.52, up $1.99 (5.9%). The chart for SNY looks bullish and S&P gives SNY a positive 4 STARS (out of 5) buy ranking.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $32.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 19.0% return in just three and a half months as long as SNY is above $32.50 at December expiration. Sanofi would have to fall by more than 8% before we would start to lose money. Learn more about this type of trade here.

MOST NOTEWORTHY: SuccessFactors, Taleo and Penn National were today's noteworthy initiations:

• Oppenheimer initiated SuccessFactors Inc (NASDAQ: SFSF) with an Outperform rating and $15 target. The firm believes the company's double-digit revenue growth will continue as its differentiated HCM solutions gain broad-based adoption. Deutsche Bank believes the company has a strong opportunity to build a highly profitable business as it broadens its footprint, and started shares with a Buy rating and $15 target.
• Deutsche Bank also reinstated coverage of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $35 target. The firm believes the Vurv acquisition will create significant accretion in 2009 and that investors should take advantage of the recent share weakness.
• Oppenheimer assumed coverage of Penn National Gaming Inc (NASDAQ: PENN) with an Outperform rating and believes the termination of Penn's acquisition by Fortress Investment and Centerbridge will be catalysts for the stock, as they think it provides the company with financial flexibility. In addition, the firm believes Penn's management team has historically made prudent capital decisions.

OTHER INITIATIONS:

• Petrobras Brasileiro SA (NYSE: PBR) was initiated with a Buy rating and $92 target at Goldman.
• Cowen resumed coverage of LeMaitre Vascular Inc (NASDAQ: LMAT) with an Outperform rating.
• Sanofi-Aventis SA (NYSE: SNY) was started at ING with a Hold rating.

Shares of French drug maker Sanofi-Aventis (NYSE: SNY) have been tumbling more than 5% in morning trading on news that a Swiss drug maker said it expects to receive approval to sell a generic version of Sanofi's anti-clotting agent Plavix.

History is repeating itself. After facing generic competition in the United States to its second-biggest product in 2006, Sanofi-Aventis is now dealing with a similar threat in Europe. Competition concerns came after Switzerland's Schweizerhall Holding AG announced it would launch a copy of the Plavix blood thinner that could be bought for a lower price. Schweizerhall said it expects German regulators to approve its generic version of Plavix, called clopidogrel.

Sanofi-Aventis's fears about generic competition are justified as the company had to fight against a similar situation less than a year ago. Back in 2006, Bristol-Myers Squibb Co. (NYSE: BMY), which develops the product with Sanofi, saw a big plunge in its sales after Canadian generics company Apotex Inc. launched a cut-price copy of the drug.

MAJOR PAPERS:

• Once thought to be extremely safe, action rate securities have proved difficult to sell in this credit crisis. Tech companies are big holders of them and are taking charges left and right, including MetroPCS Communications Inc (NYSE: PCS), Palm Inc (NASDAQ: PALM) and Earthlink Inc (NASDAQ: ELNK), according to the Wall Street Journal.
• Electronic Arts Inc (NASDAQ: ERTS) is again urging Take-Two Interactive Software Inc (NASDAQ: TTWO) to negotiate after it recommended that its stockholders not sell any of its shares to EA and help its $2B takeover bid, the Financial Times reported.

OTHER PAPERS:

• NYSE Euronext Inc (NYSE: NYX) will look to increase its stakes in India's National Stock Exchange and the country's Multi Commodity Exchange, the Business Standard reported, once foreign ownership rules are eased. NYSE Euronext also intends to partner with the two Indian exchanges in order to help them develop their business.

WEB SITES:

• Business Week reported that Brian Marckx of Zacks Investment Research said Bristol Myers Squibb Company (NYSE: BMY) may be an attractive takeover candidate for a larger pharma such as Pfizer Inc (NYSE: PFE) or France's Sanofi-Aventis SA (NYSE: SNY), both of which have been partners with Bristol on some of its products.

• Halliburton Company (NYSE: HAL) to report Q3 earnings; conference call at 10am
• Apple Inc (NASDAQ: AAPL) to report Q3 earnings; conference call at 5pm
• Texas Instruments Incorporated (NYSE: TXN) to report Q3 earnings; conference call at 5:30pm

• Lockheed Martin Corporation (NYSE: LMT) to report Q3 earnings; conference call at 11am
• Amazon.com Inc (NASDAQ: AMZN) to report Q3 earnings; conference call at 5pm

• Merrill Lynch & Co Inc (NYSE: MER) to report Q3 earnings; conference call at 10am
• The Boeing Company (NYSE: BA) to report Q3 earnings; conference call at 10:30am

• XM Satellite Radio Holdings Inc (NASDAQ: XMSR) to report Q3 earnings; conference call at 10am
• Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT) to report Q3 earnings; conference call at 10:30am

• Countrywide Financial Corporation (NYSE: CFC) to report Q3 earnings; conference call at 12pm
• PDUFA date for Adams Respiratory Therapeutics Inc's (NASDAQ: ARXT) Guaifenesin, a prescription cough treatment
• PDUFA date for Sanofi-Aventis SA's (NYSE: SNY) Taxotere for induction therapy of locally advanced head and neck cancer prior to chemoradiotherapy and surgery

MOST NOTEWORTHY: Sanofi-Aventis, Lifecell, Mylan Labs, Panera Bread and Norsk Hydro were today's noteworthy upgrades:

• Societe Generale upgraded shares of Sanofi-Aventis (NYSE: SNY) to Buy from Hold as they believe pipeline maturation over the next 12 months can drive the stock higher.
  
• Piper upgraded shares of Lifecell (NASDAQ: LIFC) to Outperform from Market Perform after their recent survey indicated that AlloDerm remains the leading biologic hernia mesh on the market and competition is making little headway.
  
• JP Morgan upgraded Mylan Labs (NYSE: MYL), Panera Bread (NASDAQ: PNRA) and Norsk Hydro (NYSE: NHY) to Overweight from Neutral. The firm upgraded Mylan based on its position in the global generics market and above-average growth; Panera was upgraded on valuation, as they believe the recent operating risk is now behind the company; Norsk Hydro was upgraded, as they believe the value of the company's aluminum assets are higher than the current share price suggests.

OTHER UPGRADES:

• HSBC upgraded Ride Aid (NYSE: RAD) to Neutral from Underweight.
  
• UBS upgraded Standard Pacific (NYSE: SPF) and Ciena (NASDAQ: CIEN) to Neutral from Sell and Sherwin-Williams (NYSE: SHW) to Buy from Neutral.
  
• Goldman added Cytec Industries (NYSE: CYT) to its Conviction Buy List.

MOST NOTEWORTHY: European pharmaceuticals, Microsoft, Salesforce.com, Taleo and McAfee were today's noteworthy initiations:

• UBS resumed coverage of Novartis AG (NYSE: NVS) with a Buy rating and AstraZeneca (NYSE: AZN), Roche Holding (OTC: RHHBY), Sanofi-Aventis (NYSE: SNY) and GlaxoSmithKline (NYSE: GSK) with Neutral ratings.
  
• Deutsche Bank believes new product leverage can bring upside to consensus operating margin expectations at Microsoft Corporation (NASDAQ: MSFT) and they view shares as attractively valued given its growth profile. The firm started shares with a Buy rating and $33 target.
• Keybanc initiated shares of Salesforce.com (NYSE: CRM) with a Hold rating and sees slowing growth rates for revenue and net subscriber additions throughout the remainder of FY08 and beyond and thinks investor expectations are too high.
• Keybanc also started shares of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $27 target, as it is well-positioned to gain market share in the Human Capital Management space.
• Thomas Weisel believes McAfee Inc (NYSE: MFE) will benefit from PC market growth, enhanced awareness of the company's brand, and its renewed focus on product development for the midmarket corporate segment, and started shares with a Market Weight rating and $37 target.

OTHER INITIATIONS:

• Lululemon Athletica (NASDAQ: LULU) was started at William Blair with an Outperform rating and at UBS with a Neutral rating and $37 target.
• Merrill Lynch initiated shares of Zoltek Companies Inc (NASDAQ: ZOLT) with a Buy rating and $50 target.
• Bear Stearns started shares of Capital Product Partners (NASDAQ: CPLP) with a Peer Perform rating.
• Oppenheimer initiated shares of BFC Financial (NYSE: BFF) with a Buy rating and $3.50 target.

Next week's highlights include Covansys' shareholders meeting, where the Computer Sciences Corp acquistion will be discussed.


Monday June 25

• Target Corporation (NYSE: TGT) to hold mid-June sales call at 4:30pm.

Tuesday June 26

• PDUFA date for Sanofi-Aventis SA's (NYSE: SNY) Acomplia for weight loss.
• Nike Inc (NYSE: NKE) to report Q4 earnings; conference call at 5pm.
• Oracle Corporation (NASDAQ: ORCL) to report Q4 earnings; conference call at 5pm.

Wednesday June 27

• Covansys Corporation (NASDAQ: CVNS) to hold a special shareholder meeting at 9am in Detroit on the acquisition by Computer Sciences Corporation (NYSE: CSC).
• Sierra Health Services Inc (NYSE: SIE) to hold special shareholder meeting at 4pm in Las Vegas on proposed acquisition by UnitedHealth Group Incorporated (NYSE: UNH).
• Bed Bath & Beyond Inc (NASDAQ: BBBY) to report Q1 earnings; conference call at 5pm.

Thursday June 28

• Palm Inc (NASDAQ: PALM) to report Q4 earnings; conference call at 4:30pm.
• Research in Motion Limited (NASDAQ: RIMM) to report Q1 earnings; conference call at 5pm.

Friday June 29

• Finish Line Inc (NASDAQ: FINL) to report Q1 earnings; conference call at 8:30am.

A press release [PDF] out this morning confirmed positive Phase III results of Novo Nordisk's (NYSE: NVO) potential blockbuster drug, Liraglutide, which is an analogue of the naturally-occurring hormone GLP-1 in development by Novo for the treatment of type 2 diabetes. The clinical results of the first of five late-stage studies showed that Liraglutide provided significantly better glucose control and led to significantly more weight loss than patients who used Sanofi-Aventis SA's (NYSE: SNY) Lantus.

Novo CEO Lars Rebien Sorensen said the company is looking to apply for regulatory approval of the drug in the U.S. and Europe in the middle of next year, and hopes to receive approval by mid-2009.

This data is excellent news for Novo, who has been trying to gain market share against competitors for some time in the attractive U.S. diabetes market. Unfortunately, the data is also a negative for rivals Amylin Pharmaceuticals Inc (NASDAQ: AMLN), Eli Lilly and Company (NYSE: LLY) and Pfizer Inc (NYSE: PFE), who all have diabetes drugs on the market - Byetta and the inhalable insulin Exubera, respectively.

Shares of Novo were up nearly 4.5% this morning on the Liraglutide data, which some analysts called "a positive surprise."

Gilead Sciences Inc. (NASDAQ: GILD) opened at $81.24. So far today the stock has hit a low of $80.48 and a high of $82.17. As of 10:45, GILD is trading at 81.85, up 1.21 (1.5%).

The stock made a strong push in early spring to reach the low 80's and a one year high of 84.47 in May. The US Government has recently been ramping up efforts to fight against any future potential flu pandemic, including awarding multi-million dollar contracts to Sanofi-Aventis (NYSE: SNY) and MedImmune (NASDAQ: MEDI) to increase their capacity to produce flu vaccines. GILD, maker of Tamiflu, could stand to benefit from such efforts as well. Recent technical indicators for GILD have been bullish but deteriorating, while S&P gives the stock a 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $70 range. GILD hasn't been below $70 since January and has shown support around $78 recently. This trade could be risky if the FDA finds trouble with one of GILD's drugs, but even if that happens, this position could be protected by the support around $70 combined with its 200 day moving average, which is currently at $71 and rising.

Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls a position in GILD or MEDI. He does control a bullish hedged position in SNY.

Bristol Myers Squibb Co. (NYSE: BMY) opened at $29.21. So far today the stock has hit a low of $29.21 and a high of $29.96. As of 10:35, BMY is trading at $29.93, up $0.19 (0.6%).

The stock has been climbing gently over the past 10 months, reaching a one-year high of $30.55 earlier this month. Jim Cramer believes that this stock could really shoot up because struggling rival Sanofi-Aventis (NYSE: SNY) may be forced to buy BMY to make numbers. People are talking about a bid in the range of $33, but Cramer expects something closer to $40. Recent technical indicators for BMY have been bullish but deteriorating, while S&P gives the stock a 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $25 range. BMY hasn't been below $25 since December and has shown support around $28 recently. This trade could be risky if the FDA find trouble with one of BMY's drugs, but even if that happens, this position could find support around its 200 day moving average, which is currently at $27 and rising.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY. He does control a bullish hedged position on SNY.

The highlight of the week, where all eyes will be focused (at least in the tech world), is the Apple Worldwide Developers Conference, which is all week long.

Monday June 11

• Apple Inc (NASDAQ: AAPL) Worldwide Developers Conference to be held from June 11 through June 15.
• Texas Instruments Incorporated (NYSE: TXN) mid-quarter update conference call to be held at 5pm.
• Medivation Inc (NASDAQ: MDVN) to discuss Phase II study results for Dimebon for Alzheimer's.

Tuesday June 12

• Lehman Brothers Holdings Inc (NYSE: LEH) to report Q2 earnings; conference call at 10am.

Wednesday June 13

• FDA Endocrinologic and Metabolic Drugs Advisory Committee Meeting on Sanofi-Aventis's (NYSE: SNY) Acomplia at 8am.

Thursday June 14

• The Goldman Sachs Group Inc (NYSE: GS) to report Q2 earnings; conference call at 11am.
• Adobe Systems Incorporated (NASDAQ: ADBE) to report Q2 earnings.
• Telkonet Inc (AMEX: TKO) to hold conference call at 11am to provide business update.

Friday June 15

• PDUFA date for Encysive Pharmaceuticals Inc's (NASDAQ: ENCY) Thelin for Pulmonary Arterial Hypertension (PAH).