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Generic May Challenge Sanofi, Bristol's Plavix In Europe May, 2008

Sanofi-Aventis SA and Bristol-Myers Squibb Co. are facing possible generic competition in Europe to challenge the world's second biggest-selling drug, Plavix, less than a year after they beat back generic competition in the U.S.

Schweizerhall Holding AG, a small Swiss generics firm, said in a statement Friday that it expects imminent regulatory approval from regulators in Germany and Luxembourg for a generic version of Plavix, and that it expects to begin selling the anti-clotting drug with one or two large partners in the second quarter. The company said it is applying for marketing approval in other European countries, as well.

Sanofi shares fell 5.8% on the news to 47.50 euros ($73.14) in Paris. In 4 p.m. New York Stock Exchange composite trading, Bristol-Myers shares were down 4.7% to $21.71. Schweizerhall's shares rose 6.8% to 190 Swiss francs in Zurich.

Sanofi said in a statement that it is evaluating its legal options and "will vigorously defend" its intellectual property rights. Sanofi and Bristol-Myers sell Plavix jointly world-wide and divide the profits, a Sanofi spokesman said. Bristol-Myers books the U.S. sales and Sanofi books the European sales.

The European market for Plavix is about 2 billion euros ($3 billion), Schweizerhall said. Plavix had world-wide sales last year of $7.3 billion, making it the second largest selling drug, behind Pfizer Inc.'s cholesterol pill Lipitor, according to IMS Health.

One of the partners helping Schweizerhall to sell generic Plavix, should it win regulatory approval, will be Sandoz, the generics arm of Novartis AG, Novartis said. Germany's closely held generics company, Ratiopharm, also said Friday that it plans to sell generic Plavix in Europe. One possibility would be as a partner to Schweizerhall, though Ratiopharm did not specify this or respond to a request for comment.

In a research note, Deutsche Bank analysts said the patents protecting Plavix in Europe don't expire until 2012 and 2019. Schweizerhall Chairman Luzi von Bidder said in a telephone interview that the company plans to sell a version of Plavix that does not violate Sanofi's patents. He declined to explain how it wouldn't violate the patent or to comment further.

Deutsche Bank said Schweizerhall has probably tried to get around the patents by formulating a different chemical salt of Plavix, or a version that is chemically slightly different from the original. In Europe, unlike in the U.S., doctors can treat different chemical salts of the same drug as interchangeable, Morgan Stanley said in a research note Friday.

Plavix sales in the U.S. plummeted in 2006 when Canadian generics company Apotex Inc. started selling a low-cost copy of the drug. In June 2007, a U.S. court barred Apotex from selling further copies until Plavix's U.S. patent expires in 2011. After that, sales of the branded version recovered.

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