Plavix Patent Upheld; Bristol-Myers Shares Rise on Renewed Buyout Chatter

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Includes: BMY, SNY
by: Judith Levy

Shares of Bristol-Myers Squibb hit a five-year high of $32.07 before closing up 4.2% at $31.58 Tuesday on renewed speculation the company will be taken over now that a federal court has blocked a generic copycat of Plavix, sanofi's blockbuster blood-clot medication. Bristol-Myers co-markets Plavix with sanofi. Plavix, the third-best-selling drug in the world, brought in $6.1 billion in sales last year, behind Pfizer's Lipitor and GlaxoSmithKline's Advair. It is Bristol-Myers's biggest seller. Plavix revenue sank 53% in Q4, however, after Canadian drug manufacturer Apotex flooded the market with over $1 billion worth of a generic version. Apotex claimed the Plavix patent was invalid or unenforceable, an argument rejected by Judge Sidney Stein of Federal District Court. Stein further ruled that sanofi is entitled to a permanent injunction barring Apotex from future infringement of the patent, which will expire in 2011. Stein will schedule a hearing to determine damages owed by Apotex. BMY 20 June 2007 SNY 20 June 2007Now that the Plavix patent is secure, Bristol-Myers, which has an attractive lineup of products in the pipeline, is a more tempting takeover target. Sanofi, AstraZeneca and Pfizer have all been mentioned as potential suitors. A UBS analyst said in a note bids could go as high as $37/share. The company has a $62 billion market cap, however, making it an expensive purchase even without a premium to its current price.

Sources: Bloomberg, New York Times, Wall Street Journal, CNN.com, Business Week, Forbes, Reuters
Commentary: Pharma News: Bristol-Myers, Sanofi Gain Temporary Halt to Generic PlavixSanofi Board Split Over Bristol Myers Merger -- London TimesBristol-Myers, Sanofi Ink Pre-Merger Deal, Newsletter Claims
Stocks/ETFs to watch: Bristol Myers Squibb Co. (NYSE:BMY), sanofi-aventis [ADR] (NYSE:SNY). Competitors: Eli Lilly & Co. (NYSE:LLY), Merck & Co. Inc. (NYSE:MRK), Pfizer Inc. (NYSE:PFE), Novartis AG (NVX), GlaxoSmithKline plc [ADR] (NYSE:GSK). ETFs: iShares Dow Jones US Pharmaceuticals (NYSEARCA:IHE), Pharmaceutical HOLDRs (NYSEARCA:PPH), SPDR Pharmaceuticals (NYSEARCA:XPH), iShares KLD Select Social Index (NYSEARCA:KLD)

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