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(BMY) - Get Bristol-Myers Squibb Company Report

took a step toward thwarting competition for its Plavix blood thinner Tuesday, cutting a deal that will prevent a Canadian company from selling a generic version of the drug in the U.S. for five years.

The Candian company, Apotex, which had threatened to start selling a generic version of Plavix in the U.S. this year, agreed not to drop that plan in return for a royalty-bearing license that would take effect in September 2011. Plavix is one of the biggest-best selling drugs in the world, producing $2.45 billion of sales for Sanofi-Aventis and $3.82 billion for Bristol-Myers last year.

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The settlement is complicated by the fact that Bristol-Myers and Sanofi-Aventis are also trying to block another company,

Dr. Reddy's Laboratories

(RDY) - Get Dr. Reddy's Laboratories Ltd. Report

, from marketing a generic version. In addition, the partners are seeking an extension of their marketing exclusivity under an FDA provision governing drugs that help children. If the companies failed to prevail in either effort, Apotex's license could kick in earlier.

Shares of Bristol-Myers rose $1.64, or 7.2%, to $24.47 in after-hours trading.