Bristol Goes Back to Drawing Board
Bristol-Myers Squibb (BMY) saw its shares sag Monday as a legal setback for the anticoagulant Plavix, the company's biggest drug, disheartened investors.
After the markets closed Friday, state attorneys general rejected a deal that Bristol-Myers and Plavix's developer, Sanofi-Aventis (SNY), had made with a Canadian generic-drug maker, Apotex. The agreement would have halted patent litigation and protected Plavix against generic competition until mid-2011.
When the companies announced the decision, they didn't say what their next step would be, but they did express uncertainty about the future of the anticoagulant.
At this time, it isn't possible "to assess the outcome of the Plavix litigation, including the Apotex matter, or the timing of potential generic competition for Plavix," they said. "[We] intend to vigorously pursue enforcement of their patent rights in Plavix."Many analysts expect Bristol-Myers and Sanofi-Aventis to reactivate their patent infringement suit against Apotex. The drug had the sixth-highest sales of any U.S. drug last year, according to IMS Health, which tracks pharmaceutical trends. Last year, Plavix contributed $3.8 billion, or 20%, of Bristol-Myers' revenue. For Sanofi-Aventis, it produced $2.45 billion in sales, or 7.4% of the total. Sanofi-Aventis ranks eighth in U.S. drug sales, and Bristol-Myers is 10th, according to IMS. Shares of Bristol-Myers were off 35 cents, or 1.4%, to $24.12. Sanofi-Aventis, which licenses the U.S. Plavix rights to Bristol-Myers, was up 65 cents, or 1.4%, to $47.93.
Legal WranglingThe Plavix problem accelerated in January when Apotex received permission from the Food and Drug Administration to begin selling generic Plavix. The brand-name drug companies previously had sued Apotex, claiming patent infringement, but they reached a settlement in March. They suspended their lawsuit, which was scheduled for trial in June, contingent on the deal being approved by the states and the Federal Trade Commission.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV