Judge to weigh alleged Plavix generic side deals
NEW YORK (Reuters) - A federal judge said on Thursday Apotex Inc. would be allowed at a hearing on Friday to lodge allegations that Bristol-Myers Squibb Co. <BMY.N> made illegal secret side deals to block a generic form of Bristol's top-selling drug.
Apotex, a privately held Canadian company, on August 8 launched its cheaper generic far sooner than analysts had expected, threatening to badly hurt sales of the U.S. company's $4-billion-a-year branded anti-clotting drug, Plavix.
Bristol-Myers, which sells Plavix in the United States for Sanofi-Aventis <SASY.PA>, on Monday asked the Manhattan federal judge for a preliminary injunction to stop continued sales of the generic and to recall supplies already in the marketplace. A hearing on the request is slated to begin on Friday.
Judge Sidney Stein of the U.S. District Court for the Southern District in Manhattan said Apotex will be allowed to present its side-deal allegations at the hearing. But he said one of his main considerations in weighing the preliminary injunction is whether the generic infringes the Plavix patent.
Robert Silver, an attorney for Apotex, on Thursday alleged that Bristol-Myers had made "oral side agreements" with Apotex to block its generic that were never disclosed to the Federal Trade Commission, and which were therefore illegal.
"After trying to hide things from the FTC and enforcement of their patent, they should not be permitted to come to court now and enforce their patent with unclean hands," Silver said in a telephone conference call with Stein, which was arranged to set ground rules for the Friday hearing.
Bristol-Myers attorney Evan Chesler, who was also on the call, attacked the "absolutely untrue" suggestion that there was a side agreement or that there were side agreements that were not disclosed to the U.S. government.
"That is a purely transparent, obvious attempt to inject into this patent lawsuit a sideshow, a circus," Chesler said on the call.
Judge Stein said his other primary goal at the hearing will be to weigh the hardships posed by the generic to Bristol-Myers and Sanofi-Aventis against the public interest.
Apotex is believed to have shipped huge amounts of its product after a highly publicized settlement between it and the two larger drugmakers, which was under review by the FTC, collapsed late last month.
Under the proposed settlement, Apotex would have delayed its launch for years in exchange for undisclosed compensation from Bristol-Myers and Sanofi-Aventis, which still claim the generic infringes a Plavix patent.
The Department of Justice began a criminal antitrust investigation of the settlement, including a raid on the office files of Bristol-Myers Chief Executive Peter Dolan, only days before the settlement fell through.
Bristol attorney Chesler alleged last week that Apotex sparked the U.S. criminal probe of his client -- and thereby scuttled the settlement -- by providing false information to the federal government.
Bristol-Myers' board of directors on Thursday issued a statement saying an ongoing investigation by the company's outside counsel "has not found any evidence of unlawful conduct by Bristol-Myers employees."
"The board welcomes a full and broad inquiry by the Department of Justice to determine if unlawful or criminal conduct was committed by any of the parties negotiating the Plavix litigation settlement," the board said.
Apotex Chief Executive Barry Sherman in recent interviews has said Bristol-Myers and Sanofi-Aventis foolishly agreed to conditions that allowed his company to launch its generic, even though their settlement was ultimately doomed by its failure to win the required backing of state attorneys general.
Amid claims by some investors that Bristol-Myers was outmaneuvered by Apotex, the board said in its statement it was "well aware of investor concerns" and "believes the company is executing the appropriate initiatives to protect the best interests of the company and its shareholders."
