French-based Sanofi-Aventis, the world’s third-largest pharmaceuticals group, has been forced to slash its full year profits forecasts after a Canadian rival flooded the American market with a cheap generic version of its blood-thinner treatment Plavix.
It is estimated that the Apotex group of companies, which only launched the rival drug three weeks ago, managed to sell almost $1 billion worth of the 75mg tablets before an American district court imposed an injunction late last night.
The success of its rival prompted Sanofi-Aventis to cut its guidance on earnings growth for the full year from 12 per cent to just 2 per cent.
Dresdner Kleinwort previously predicted that Sanofi-Aventis would generate operating profits of more than €9.4 billion this year but said they would be revising their figures in the light of Sanofi’s warning.
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Sanofi-Aventis cautioned that it was too early to be precise about the level of sales, and the impact on profits.
However, it conceded: “Nevertheless, based on information circulating on the market, it is possible that prior to the imposition of the injuction Apotex had already sold sufficient quantities in the United States to satisfy all market demand through the end of 2006.”
Shares in Sanofi-Aventis, listed on the Euronext exchange, rose 1.5 per cent to €71.1 as investors welcomed the judge’s decision to award the injunction.
The ban means Apotex can no longer sell its clopidogrel bisulfate treatment, although it was spared a product recall or any restrictions on reselling products already with distributors.
When Apotex launched its drug in defiance of question marks over its legality, it quoted research by IMS Health, a US pharmaceuticals specialist, claiming that the market in the US was worth about $3.77 billion in the 12 months to the end of June.
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Matching last year’s market would have seen Apotex notch up sales of $943 million.
Analysts at Dresdner Kleinwort in London reckon that between six and 12 months of stock flooded on to the market over the period.
Apotex sells its version of the treatment for about $124 for a bottle of 30 pills, compared with $148 for Sanofi’s Plavix.
Apotex is appealing against the injunction. In the meantime, the companies involved have been told by the court to post a $400 million bond in case the court rules in Apotex’s favour.