Shares of drug makers Bristol-Myers Squibb and Paris-based Sanofi-Aventis rose Tuesday after a federal judge ruled privately-held Canadian drug maker Apotex failed to prove that the patent for Bristol and Sanofi's blood thinner Plavix is invalid.
Shares of Bristol-Myers and Sanofi-Aventis rose on the news.
Judge Sidney Stein of the U.S. District Court for the Southern District of New York said damages will be calculated at a future proceeding, seeing that Apotex flooded the market with a generic version of Plavix in August only to be stopped by the judge a few weeks later. The judge, however, did not require a recall of the product, resulting in a drop in branded Plavix sales.
Stein also permanently barred Apotex from any activity that infringes the patent, effectively prohibiting generic Plavix sales. In his ruling, the judge said Sanofi-Aventis "has shown that it is likely to suffer irreparable price erosion, loss of goodwill, and a negative impact on the amount of research devoted to developing other medical uses for Plavix."
Representatives at Apotex were not available for immediate comment. Bristol-Myers and Sanofi-Aventis booked Plavix sales of more than $3.5 billion worldwide in 2006, down from more than $5 billion the previous year.
The ruling follows a recent guilty plea and a $1 million fine from Bristol-Myers to settle a Department of Justice probe. Bristol-Myers admitted to two counts of making false statements to the Federal Trade Commission over a botched settlement with Apotex over Plavix, before Apotex launched the drug.
Last year, Bristol-Myers and Sanofi-Aventis had originally agreed to pay Apotex a minimum of $40 million to keep its Food and Drug Administration-approved version of Plavix off the market until 2011, when the patent expires. The agreement soured when state attorneys general refused to sign off on it.