NEW YORK (Reuters) - A U.S. judge ruled in favor of shareholders suing Bristol-Myers Squibb about its disclosures while settling patent litigation with Canadian generic drug maker Apotex Inc over the blood-thinner Plavix.
Manhattan federal court Judge Paul Crotty wrote that the shareholders had “plausibly alleged that Bristol Myers’ silence with regard to the details of the Apotex settlement made its public statements misleading or false.”
Bristol-Myers said in an emailed statement on Wednesday that its efforts to settle with Apotex “were at all times full, fair and accurate” and that the company “intends to vigorously defend itself as this litigation proceeds.”
The drugmaker announced a settlement with Apotex in March 2006 but did not disclose that it had agreed to limitations on damages and other provisions, according to the two pension funds that brought the class action.
The judge’s ruling said the Ontario Teachers Pension Plan Board and the Minneapolis Firefighters’ Relief Association “have adequately alleged that a reasonable investor would have considered the undisclosed information material in making investment decisions.”
Plavix is jointly manufactured by Bristol-Myers and French pharmaceutical company Sanofi-Avantis to treat and prevent heart attack, stroke, arterial disease, acute coronary syndrome and other heart conditions.
Bristol-Myers and Sanofi sued Apotex for patent infringement in March 2002 but a statutory stay of the Canadian company’s application with the U.S. Food and Drug Administration to make a generic form expired in 2005, prompting Apotex to immediately begin making Plavix.
State regulators rejected the settlement the following year and in 2007 Bristol-Myers pleaded guilty on two counts of making false statements to the Federal Trade Commission and agreed to pay a $1 million fine.
In the ruling dated August 19 and made available on Wednesday, Judge Crotty rejected Bristol-Myers’ motion to dismiss the class action case and gave the parties 10 days to contact the court to schedule a pretrial conference.
The judge separately rejected a lawsuit against Bristol-Myers’ board of directors over their actions while the company was trying to reach settlement with Apotex.
Reporting by Grant McCool, editing by Richard Chang