Shares in Bristol-Myers Squibb continued to decline on Friday as expectation grew that a generic form of its big-selling antithrombotic Plavix could be on the market in the USA later this year.

The catalyst for the decline appeared to be a statement by Medco Health Systems chief executive David Snow, who said in a conference call that he expects generic Plavix (clopidogrel) to be launched in the USA in 2006. B-MS sales lost 4% to close at $22.75 ahead of the weekend, as investors were spooked by the comments, coming from the head of one of the largest pharmacy benefit management companies in the USA.

Plavix sales in the USA are currently running at around $2.7 billion a year, and the impact on B-MS of an early generic entry would be significant. In the second quarter of 2006 alone, Plavix broke the $1 billion barrier, bringing $1.1 billion into B-MS' coffers.

To lose the world's second biggest drug ahead of patent expiry would be a bitter blow for B-MS which has just turned the corner of one tumultuous period in its history with patent losses for a number of top drugs, including its once top-seller Pravachol (pravastatin), pegging back sales and earnings. Last month the company said it was back on track and looking forward to a period of sustained growth from 2007 onwards.

Shares in B-MS have already been in the doldrums after the US Department of Justice ruled that a deal with Canadian generics firm Apotex aimed at keeping copycat versions of Plavix off the US market was unlawful.

Earlier this year, B-MS and Sanofi-Aventis joined forces with Apotex to prevent the launch of a generic in return for an undisclosed sum – estimated to be in the region of $40 million. Since that deal was stymied, B-MS has suggested it may resume patent infringement litigation against Apotex.

A Reuters report cited Morgan Stanley analyst Jami Rubin as saying that the Medco report is credible, particularly as the PBM has raised its financial guidance for the year, in part because of the possible upside from a generic Plavix launch.