Sanofi-Aventis (SNY) plunges on Plavix threat in Europe
Posted by: in Companies Competitive StrategyFiled under: Bad news, Products and services, Launches, Consumer experience, Competitive strategy, Bristol-Myers Squibb (BMY)
Shares of French drug maker Sanofi-Aventis (NYSE: SNY) have been tumbling more than 5% in morning trading on news that a Swiss drug maker said it expects to receive approval to sell a generic version of Sanofi’s anti-clotting agent Plavix.
History is repeating itself. After facing generic competition in the United States to its second-biggest product in 2006, Sanofi-Aventis is now dealing with a similar threat in Europe. Competition concerns came after Switzerland’s Schweizerhall Holding AG announced it would launch a copy of the Plavix blood thinner that could be purchased for a lower price. Schweizerhall said it expects German regulators to approve its generic version of Plavix, called clopidogrel.
Sanofi-Aventis’s fears about generic competition are justified as the company had to fight against a similar situation less than a year ago. Back in 2006, Bristol-Myers Squibb Co. (NYSE: BMY), which develops the product with Sanofi, saw a big plunge in its sales after Canadian generics company Apotex Inc. launched a cut-price copy of the drug.
Commenting on the news, analysts at Merrill Lynch expressed their worries about the company’s earnings per share, which may be hurt by generic competition to the Plavix drug in Europe. In addition, they believe that Schweizerhall will launch the drug despite valid patents in Europe.
Sanofi responded to the threat of a possible generic competitor in Europe by promising to “vigorously defend intellectual property rights, including patent protection, in Germany.” An unnamed analyst also stated that German authorities will be closely watched for any indication that clopidrogel infringes Sanofi’s patent.
Eliza Popescu is a financial writer for the on the internet investment advisory service Investor’s Observer.
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