Bristol-Myers Returns Sanofi Drug Rights as Patents Expire

Bristol-Myers Squibb Co. (BMY) agreed to return rights for the blood thinner Plavix and the hypertension medicine Avapro to its French partner Sanofi now that the drugs are losing patent protection.

Bristol-Myers will retain rights to Plavix in the U.S. and Puerto Rico, the companies said in a joint e-mailed statement. The two partners also resolved all disputes about their marketing alliance, they said.

Both drugmakers have bought companies and products to replace Plavix, which at its 2011 peak sold $7.09 billion a year. New York-based Bristol-Myers reported a 60 percent sales drop for the medicine in the second quarter after U.S. patent protection lapsed in May. Generic competition to Plavix and Avapro wiped out 331 million euros ($427 million) from Sanofi (SAN)’s profit that quarter.

The expiring patents meant there was “a strong rationale to simplify the structure” of the alliance, Eric Le Berrigaud, an analyst at Bryan, Garnier & Co. in Paris, said in a note to clients. “We see an opportunity for Sanofi to operate with more freedom and an easier coordination in several emerging markets.”

Bristol-Myers will get royalties on Sanofi’s sales of branded and unbranded Plavix and Avapro through 2018 as well as a terminal payment of $200 million in December of that year. The Plavix agreement for the U.S. and Puerto Rico will follow the terms of the existing accord between the two companies and expire in December 2019.

Bristol-Meyers fell 1.2 percent to $33.55 at the close of New York trading. Paris-based Sanofi rose less than 1 percent to 68.07 euros.

Disputes Over

“This revised agreement simplifies operations and supports Bristol-Myers Squibb’s ability to focus on delivering our promising, innovation-driven R&D portfolio,” Chief Executive Officer Lamberto Andreotti said in the statement.

Bristol-Myers agreed to buy Amylin Pharmaceuticals Inc. for $5.3 billion in June, adding the diabetes drugs Bydureon and Byetta. Sanofi yesterday agreed to buy Genfar, a Colombian drugmaker that operates throughout Latin America.

The new agreement takes effect Jan. 1. The resolution of disputes includes “various commitments” from each party and a one-time payment of $80 million by Bristol-Myers related to a disruption last year in the U.S. supply of Avapro, also known as Avalide.

To contact the reporter on this story: Marthe Fourcade in Paris at mfourcade@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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