Apotex To Retain About $300 Million From Its At-Risk Launch of Generic Plavix

A judge sets damages at 50% of Apotex's net sales of generic clopidogrel plus prejudgment interest of $107.9 million.

Apotex's at-risk launch of its generic version of Sanofi-Aventis' blood thinner Plavix (clopidogrel) was worth the gamble. While a judge ruled that Apotex must pay $442.2 million in damages - half of the net sales its product rang up during a three-week period on the market - plus $107.9 million in prejudgment interest, the company still will have made a substantial sum.

U.S. District Judge Sidney Stein of the Southern District of New York issued an Oct. 19 order awarding damages. The case was unique among at-risk launches since the amount of damages was limited by a 2006 settlement agreement between Sanofi and Apotex.

The agreement specified that if the litigation resulted in a judgment that the patent was not invalid or unenforceable then damages would be 50% of Apotex's net sales of clopidogrel products if Sanofi had not launched an authorized generic and 40% of Apotex's net sales if Sanofi had launched an authorized generic.

Apotex had contended that it was liable for only 40% of net sales because Sanofi launched an authorized generic but the court said "the fact that Sanofi lowered its price for branded Plavix in order to compete with generics does not constitute the launch of an authorized generic."

Plavix, which is co-marketed by Sanofi and Bristol-Myers Squibb, generated $6.1 billion in 2009.

"Sanofi-Aventis and Bristol-Myers Squibb are pleased with United States District Court decision to grant $442,209,362 in damages plus costs and interest," Bristol said in a statement.

Apotex launched its generic Plavix at-risk and marketed the drug for a three-week period in August 2006 before the district court preliminarily enjoined it from doing so. In 2007, the court found that Sanofi's patent on clopidogrel was valid and enforceable and the U.S. Court of Appeals for the Federal Circuit affirmed the ruling the following year. The Supreme Court denied Apotex's petition for certiorari in November 2009.

Parties Dispute Prejudgment Interest

Apotex had sought to delay a final ruling on damages by seeking a second reexamination of the clopidogrel patent by the Patent and Trademark Office. In March, Judge Stein denied Apotex's request to stay the action noting that the patent office had conducted one reexamination and found that all claims were patentable (Also see "Sanofi Set To Seek $442 Million From Apotex For Plavix Infringement" - Pink Sheet, 16 Apr, 2010.).

In the proceedings on damages, the parties disagreed on the amount of prejudgment interest that should be awarded. Sanofi argued that it should be set at the average annual prime rate for each year (or partial year) from August 2006 to the present, compounding daily. Apotex said further discovery was needed on such issues as Sanofi's sales reports and whether Sanofi borrowed money at the prime rate during the infringement period, and suggested the U.S. Treasury-bill rate might be more appropriate.

"Years of litigation have only confirmed Apotex's liability to Sanofi," the court stated. "Apotex has had the use of money Sanofi was entitled to since the patent infringement occurred, and Sanofi deserves complete compensation."

The court also ruled that Sanofi was entitled to post-judgment interest, the amount of which is yet to be determined.

While Sanofi and Bristol are recovering a portion of the revenue they lost to Apotex, the Plavix dispute has been costly for Bristol. Under the settlement with Apotex, Bristol paid Apotex to delay the entry of generic clopidogrel and allegedly made oral side agreements that were not included in written documents submitted to the government. Bristol pled guilty to criminal charges on two counts of providing false statements to a government agency and agreed to pay a maximum fine of $1 million (Also see "Bristol Pleads Guilty To Criminal Charges To Settle DoJ Investigation Over Plavix" - Pink Sheet, 10 May, 2007.).

-Brenda Sandburg ([email protected])