Global Insight Perspective | |
Significance | Sanofi-Aventis and Bristol-Myers Squibb have seen the validity and enforceability of their U.S. patent on blood-thinner Plavix upheld in court. |
Implications | The ruling means that Canadian company Apotex will be prohibited from selling its copy version of Plavix in the United States until the patent expires in November 2011. Apotex intends to appeal against the ruling, but its chances of success remain slim. |
Outlook | The main risk factor preventing Sanofi-Aventis from acquiring BMS is now gone. However, Sanofi's lower share price following the Acomplia safety scare could make it difficult to pursue a large takeover just yet, and the company could face competition from other interested parties. |
A U.S. court judge has upheld the patent protection from blood-thinner Plavix (clopidogrel bisulfate), ensuring data exclusivity for its producer Sanofi-Aventis (France) and U.S. co-marketer Bristol-Myers Squibb until November 2011. The ruling, made by Judge Sidney Stein of the U.S. District Court for the Southern District of New York, also found that a generic version of Plavix made by Canadian company Apotex infringed on the patent, and Apotex has now been ordered to refrain from marketing the product in the United States until Plavix's patent has expired.
Last year, in response to a long-standing generic challenge from Apotex, Sanofi-Aventis and BMS attempted to make a deal with Apotex that would see the Canadian firm rewarded financially in order to postpone the U.S. launch of its generic Plavix until the months leading up to the patent expiry. This deal was later refused anti-trust clearance from state attorneys general, and was then subject to an federal investigation, to which BMS ended up pleading guilty last month (see United States: 11 May 2007: BMS Pleads Guilty, Ending U.S. Department of Justice Criminal Investigation). Following the collapse of the deal, Apotex managed to sell its generic Plavix in the United States for several months before an injunction blocked further sales until patent litigation had concluded. These few months of generic competition were enough to dent Plavix turnover severely, as well as total 2006 growth at BMS, which bore the brunt of the damage.
Apotex has pledged to appeal against the latest ruling, with CEO Barry Sherman saying that "We are unwavering in our belief that the [Plavix] patent will ultimately be held invalid". However, according to the Wall Street Journal, the chances of Apotex's appeal being upheld are slim, given that it already lost its appeal against the injunction brought against it by Sanofi-Aventis and BMS last year (see United States: 11 December 2006: Temporary Relief for Sanofi-Aventis and BMS as U.S. Court Upholds Plavix Injunction Against Apotex).
Outlook and Implications
The courtroom victory for brand-name Plavix now raises serious questions about the future of both BMS and Sanofi-Aventis. The ruling is unquestionably good news for both firms, which should now be able to look forward to several more years of U.S. patent exclusivity on Plavix until it comes to the end of its patented life in late 2011. For BMS, however, the good news on Plavix also removes the main element of risk that has—until now—prevented other pharmaceutical companies from pursuing their acquisition ambitions. BMS boasts several promising pipeline candidates and is a veteran of the U.S. pharmaceutical market, making it an attractive takeover candidate for several interested companies. Key among these has been Sanofi-Aventis, in many ways the obvious choice of buyer, given the existing drug-marketing collaboration between the two firms. Bid negotiations by Sanofi-Aventis were reported to be under way earlier this year, but were then shelved amid the uncertainty over the outcome of the Plavix litigation trial (see France: 10 April 2007: Merger Talks Between Sanofi-Aventis and BMS Put on Back Burner as Plavix Issue Rumbles On).
The news last week that Sanofi-Aventis's weight-loss drug Acomplia (rimonabant) was not recommended for approval in the United States by an FDA advisory committee was a crushing blow for the French pharma heavyweight, and left its future in the U.S. market unclear (see France: 14 June 2007: FDA Advisory Committee Fails to Recommend Acomplia for U.S. Marketing Approval). A takeover of BMS would, therefore, act as an alternative way of ensuring continued long-term growth in the United States. Yet obstacles remain. Following the news of a likely FDA rejection of Acomplia on safety grounds, Sanofi-Aventis's share price on the Paris stock exchange plummeted. While it began to creep back up after the success of the Plavix patent trial, it is still nowhere near the level it was at the start of June. Such a loss in market capital would make it difficult for Sanofi-Aventis to finance a costly acquisition of BMS, which has seen the value of its own shares bounce back up in the wake of the litigation outcome. A Sanofi-Aventis bid for BMS might also face competition from other potentially interested parties such as AstraZeneca (U.K.) and Pfizer (U.S.), which are both development partners for BMS pipeline compounds. However, under the leadership of Chairman Jean-François Dehecq—who is known to support the idea of a merger—a move by Sanofi-Aventis to acquire BMS cannot be ruled out.