Court Halts Sales of Generic Plavix

After several missteps, Bristol-Myers Squibb and Sanofi-Aventis have won the latest chapter in what is shaping up to be an epic legal battle over the blood thinner Plavix. A U.S. district court has granted the companies' request for a preliminary injunction ordering Canadian generic drug firm Apotex to stop selling a generic version of Plavix (clopidogrel bisulfate). The presiding judge, however, stopped short of recalling product that had already been shipped to distributors and wholesalers, causing BMS to lower its earnings estimates for 2006.

The ruling bars Apotex from selling clopidogrel until patent litigation among the three companies is settled. As part of the injunction, BMS and Sanofi must post a $400 million bond to ensure Apotex will be compensated should it win the patent trial, which is scheduled to begin on Jan. 22, 2007.

BMS and Sanofi were caught off guard when Apotex launched clopidogrel on Aug. 8, five years ahead of schedule. The move was facilitated by loopholes in a pact among the three companies to settle patent litigation over the drug (C&EN, Aug. 21, page 12).

BMS says it has yet to get a handle on just how much generic product was shipped in the weeks leading up to the injunction, but it assumes that distributors and wholesalers have received enough of the Apotex drug to supply the U.S. market through the end of the year. As such, BMS has lowered its earnings estimate for 2006 to $0.95 per share, from earlier guidance of between $1.15 and $1.25 per share.

Even before the Plavix debacle, BMS had been facing a rough year—the patent expiry in April on the cholesterol-lowering drug Pravachol has been a major drain on sales and profits. Despite the setbacks for two key products, analysts believe the company is poised for a far healthier 2007. The ruling is a good sign that BMS and Sanofi "have a strong probability of prevailing in their patent defense," says Banc of America Securities analyst Christopher T. Schott. Furthermore, he points out that between recently launched drugs and a strong late-stage oncology pipeline, BMS could soon have one of the freshest portfolios in the industry.