ANALYSTS EXPECT APOTEX TO LOSE PLAVIX PATENT CHALLENGE
A federal judge's decision to block further sales of Apotex's generic version of blockbuster blood-thinner Plavix makes it unlikely that the company will successfully challenge the patent at trial, Wall Street observers say.
However, the judge did not order Apotex to recall any of the generic Plavix it has already sold, which could cut brand Plavix revenues by nearly half a billion dollars compared to last year.
Bristol-Myers Squibb (BMS) -- which distributes Plavix (clopidogrel bisulfate) in the U.S. for sanofi-aventis -- also had to post a $400 million bond to compensate Apotex in the event that BMS loses the suit. Plavix generated $1.8 billion during the first six months of 2006, according to BMS.
A trial on the patent has been set for Jan. 22, sanofi-aventis and BMS said in a statement.
Judge Sidney Stein of the U.S. District Court for the Southern District of New York found Apotex's evidence "insufficiently persuasive to establish a likelihood of proving invalidity at trial." He also found that sanofi-aventis "clearly established a likelihood of success on the merits," and that Apotex "failed to raise a 'substantial question' as to the enforceability" of Plavix's patent based on inequitable conduct -- all of which tilt the scales in BMS' favor, Merrill Lynch analyst David Risinger said in a Sept. 1 note.
But the amount of generic Plavix in the inventory channel is now an issue. Apotex may have flooded the market with more than a year's worth of generic Plavix, Risinger said. The nation's three largest pharmacy benefit managers -- one of which, Medco, accounts for a full quarter of Plavix's U.S. market -- started distributing Apotex's product only a few days after it launched.
It is also doubtful that Apotex will successfully appeal the injunction, imposed Aug. 31, that prevents it from selling more generic Plavix until the trial is resolved, analyst Albert Rauch of A.G. Edwards & Sons said in a Sept. 1 research note. Still, with all the generic product on the market, Rauch projects brand Plavix will only generate $2.8 billion this year, down from $3.2 billion in 2005.