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Bristol-Myers Squibb Still Plagued By Loss of Sales From the Product Plavix

By Stephanie Saul

Bristol-Myers Squibb said Thursday that it lost up to $600 million in sales of its top-selling product, Plavix, because of a Canadian rival during the third quarter, accounting for part of a 65 percent decline in earnings.

The missteps by Bristol-Myers earlier this year in negotiating a proposed patent settlement enabled the Canadian company, Apotex, to flood the market in August with a cheaper generic version of Plavix, a blood thinner.

Bristol-Myers also disclosed Thursday that one of the federal investigations into its handling of the Plavix matter, a review by Christopher J. Christie, the U.S. attorney in Newark, N.J., had expanded to an examination of whether Bristol-Myers violated securities laws.

The Plavix debacle largely accounted for the company’s overall lower sales for the quarter of $4.15 billion, down from $4.76 billion a year earlier. It was also partly responsible for sharply lower earnings of $338 million, or 17 cents a share, compared with $964 million, or 49 cents a share in the third quarter last year.

The 2005 earnings had included a significant one-time gain from the sale of the company’s consumer medicines business.

The lower sales and revenues by Bristol came during an earnings season in which drug companies were generally posting improved results. GlaxoSmithKline said Thursday that its earnings for the quarter were up 15 percent.

Despite the bad news for Bristol, the company gave a slightly brighter outlook for the year than it had issued in late summer, just after the generic Plavix flooded pharmacy shelves.

The company Thursday raised its earning projections to at least 97 cents a share this year, rather than the 95 cents it had previously predicted. That is partly because some orders for Plavix are still coming in.

And yet, during a telephone conference with investment analysts on Thursday, Andrew Bonfield, Bristol’s chief financial officer, said that there was enough generic Plavix in supply chains to last into early next year and possibly into the second quarter of 2007. That means Bristol-Myers could still be dealing with the inexpensive competition when a trial starts in Manhattan on Jan. 22 to decide whether its Plavix patent is valid.

The outcome of that trial would determine whether Apotex has the right to ship additional supplies of the generic product. Currently, between 70 percent and 75 percent of the prescriptions for Plavix are being filled by the generic supplies that Apotex shipped to the United States before Bristol-Myers obtained an injunction to block further shipments.

The company’s fumbled plan to settle its dispute led to the generic firm’s shipments and the dismissal of Bristol-Myers chief executive, Peter R. Dolan, in September. The company is now led by an interim chief, the former Guidant chairman James M. Cornelius.

Cornelius, speaking about the company’s future during a conference call with analysts, played down continuing speculation that Bristol-Myers was a takeover candidate.