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Fitch removes BMS negative ratings watch

Fitch Ratings has affirmed Bristol-Myers Squibb's (BMS) ratings and removed them from its Rating Watch Negative.

Fitch Ratings has affirmed Bristol-Myers Squibb's (BMS) ratings and removed them from its Rating Watch Negative.

The company's ratings were originally placed on Rating Watch Negative on 8 August 2006.

The rating outlook is now "Stable" and was applied to approximately USD 7.4bn of outstanding debt.

The rating change reflected the mitigation of significant uncertainty surrounding intellectual property protection of BMS' lead product, the platelet antiaggregant Plavix (clopidogrel), in cooperation with BMS' joint venture partner, sanofi-aventis.

In Q2 FY07, both companies successfully defended the clopidogrel composition-of-matter patent in the US against generic manufacturer Apotex's legal challenge to invalidate the patent.

Apotex has launched an appeal in the courts, but until a ruling, the US patent for clopidogrel remains valid until November 2011. Also, the supply in the pharmaceutical distribution channel of the generic Plavix product launched 'at-risk' by Apotex in August 2006 has been virtually exhausted.

According to Fitch, the negative effect on brand name revenues from the generic launch diminished to between USD 250m and USD 350m in 2007 from a total of approximately USD 1.2bn to USD 1.4bn in 2006.

Plavix is BMS' top-selling drug as it emerges from a wave of patent losses that ended with the patent expiration of Pravachol (pravastatin) in the US in April 2006. Fitch says that the revenue decline of 2006 to reverse this year was halted by growth of Bristol-Myers five leading drug products, Plavix, Abilify, Avapro/Avalide, Reyataz and Sustiva.

Sustained sales growth through the intermediate-term is supported by limited exposure to pharmaceutical patent expirations during the 2007 to 2010 timeframe.

6th August 2007

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