Aug. 19 (Bloomberg) -- Bristol-Myers Squibb Co. won a judge’s preliminary approval of a $125 million settlement of a shareholder lawsuit claiming the drugmaker hid information about its effort to settle a patent lawsuit with Apotex Inc.

The case against New York-based Bristol-Myers, filed in 2007, settled in principle in May. U.S. District Judge Paul Crotty in Manhattan yesterday granted preliminary approval of the deal and scheduled a Dec. 8 hearing to further consider it.

According to the complaint, Bristol-Myers entered into a settlement in 2006 that allowed Apotex, based in Weston, Ontario, to make a generic version of Plavix. The investors claim Bristol-Myers didn’t disclose that, as part of the settlement, it agreed to relinquish certain legal rights and had entered a “secret” oral side agreement with Apotex.

“The court hereby preliminarily approves the settlement as being fair, reasonable, and adequate to the class” of investors who sued, Crotty wrote in an order. The parties will settle the case for $125 million, according to court papers.

Salvatore Graziano, a lawyer for the Ontario Teachers’ Pension Plan Board, the lead plaintiff for the investors in the group lawsuit, declined to comment. Bristol-Myers spokeswoman Laura Hortas said in a statement the company is “pleased to have reached this settlement.”

Plavix, whose chemical name is clopidogrel bisulfate, is the world’s second-best-selling medicine, behind Pfizer Inc.’s Lipitor. It generated combined 2008 sales of about $9.5 billion for Bristol-Myers and Paris-based Sanofi-Aventis SA, which sells the drug outside the U.S.

Patent Case

The patent case stemmed from a botched effort by Bristol- Myers to keep Apotex from selling a copy of the medicine until just months before a patent expires in November 2011.

Bristol-Myers was willing to promise not to undercut Apotex sales if Apotex would agree to delay entry into the market. When regulators objected, it simply omitted that provision from the official agreement while keeping the pledge to Apotex.

Apotex told regulators about the change, and the agreement was rejected. That allowed closely held Apotex to flood the market during a three-week period in August 2006. Bristol-Myers lost an estimated $1.75 billion in Plavix sales and fired its chief executive officer, Peter Dolan.

The patent dispute later went to trial and Bristol-Myers won the case. It’s trying to recoup some lost profits from Apotex, although the agreement limits the amount it can collect.

Both Bristol-Myers and the former executive who negotiated the deal on behalf of the drugmaker later pleaded guilty to criminal charges.

The securities case is In re Bristol Myers Squibb Co. Securities Litigation, 07-cv-5867, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net, and

Last Updated: August 19, 2009 00:01 EDT