The Bottom Line in the Plavix Case

February 21, 2007

Pharmaceutical Executive

Volume 0, Issue 0

Patent challenge has hurt Sanofi-Aventis, Bristol-Myers Squibb, which are considering their next move.

The numbers in the earnings reports of Sanofi-Aventis and Bristol-Myers Squibb say it all. A closely watched trial to defend their co-marketed blood thinner Plavix has come to a close, but the companies' financial woes are far from over--and neither firm is putting all their chips on a favorable ruling to save the blockbuster.

Arguments in the patent challenge case wrapped up last week in New York, with a decision due in a month or two. The companies are trying to protect their top performer from Canadian generics maker Apotex, which wants to launch its own copycat version. The three firms have been locked in a bitter struggle, including a reverse-payment deal gone awry and Apotex's short-lived "at risk" launch of clopidogrel.

"The stakes for the parties in the case are enormous, financially and in every other way," said Tom Dewey, a partner at law firm Dewey Pegno and Kramarsky, which is not involved in the case. "It's one of the highest-profile challenges to be litigated to judgment."

BMS, the smaller company, was hit harder. It reported a loss of more than 9 percent in its prescription drug business last year, and 22 percent for the fourth quarter. To drive home the point: When Plavix was excluded from the equation, sales of its other growth drivers actually grew 35 percent last quarter.

Sanofi-Aventis reported growth of just 2.5 percent in its 2006 prescription drug business. It kicked off its pipeline presentation hailing its vaccines division, which grew a more promising 22.7 percent.

In total, Plavix had sales of $2.7 billion last year, down from $3.2 billion in 2005. But the companies apparently have no intention of waving the white flag for Plavix. For starters, sales have been rebounding since a court order swept the generic version from the market. In addition, all blood thinners got a boost when FDA recommended their prolonged use for patients with drug-eluting stents.

The companies also have a plan B to extend its patent life, if and when the worst happens: the launch of a high-loading dose of Plavix as well as additional indications for patients with atrial fibrillation and peripheral artery disease, both of which are risk factors for blood clots, plus pediatric approval. Plavix is also being tested as a combination pill with anti-hypertensive drug irbesartan (currently marketed as BMS' Avapro) and with cholesterol-cutter simvastatin (the generic version of Merck's Zocor).

Nevertheless, the public unraveling of their reverse-payment agreement is likely to put other branded drug makers on notice. In addition, the Federal Trade Commission, which is petitioning the Senate Judiciary Committee for legislative action against these deals, recently filed anti-trust charges against Barr Laboratories--in what could be a test case for the rest of the industry. Barr and Warner Chilcott signed a pay-for-delay deal in 2003 around oral contraceptive Ovcon 35.

"There may be ways to thread the needle, but generally speaking a lot more of these [patent challenge] cases will be litigated to judgment," Dewey said.