Shares of French drug maker Sanofi-Aventis (NYSE: SNY) have been tumbling more than 5% in morning trading on news that a Swiss drug maker said it expects to receive approval to sell a generic version of Sanofi's anti-clotting agent Plavix.

History is repeating itself. After facing generic competition in the United States to its second-biggest product in 2006, Sanofi-Aventis is now dealing with a similar threat in Europe. Competition concerns came after Switzerland's Schweizerhall Holding AG announced it would launch a copy of the Plavix blood thinner that could be bought for a lower price. Schweizerhall said it expects German regulators to approve its generic version of Plavix, called clopidogrel.

Sanofi-Aventis's fears about generic competition are justified as the company had to fight against a similar situation less than a year ago. Back in 2006, Bristol-Myers Squibb Co. (NYSE: BMY), which develops the product with Sanofi, saw a big plunge in its sales after Canadian generics company Apotex Inc. launched a cut-price copy of the drug.

Bristol-Myers Squibb (NYSE: BMY)'s blood thinner Plavix is the second-largest selling drug in the world. It brought in over $3.4 billion in sales during the first nine months of this year. Eli Lilly (NYSE: LLY), however, believes it has a better treatment [subscription required]. According to The Wall Street Journal, its "new drug, known as prasugrel, is intended to treat patients on the verge of a heart attack." The new treatment can stop the build-up of platelets in the blood within thirty minutes

Lilly has a number of drugs going "off patent" in the next seven years. If these are not replaced, 50% of the company's revenue is at risk. It is not clear how long it will take the FDA to approve the drug, if it ever will.

The Journal writes that "in the head-to-head study, 9.9% of patients on prasugrel suffered either a heart attack, stroke or death from a cardiovascular cause, compared with 12.1% of those given Plavix. That is a 19% reduction in risk favoring prasugrel."

With new drugs, though, there is always a catch. Prasugrel is 32% more likely than Plavix to cause major bleeding.

Now the politics of drug approval will kick in. Experts for Bristol-Myers will say the new treatment is too dangerous and that Plavix is as close to perfect as a blood thinner can be. Lilly will claim that it can adjust the dose to cut down on bleeding and will get a legion of doctors to attest to that.

In the end, the patient can bleed to death or have a heart attack. Does it matter how he died?

Douglas A. McIntyre is an editor at 247wallst.com.

The earnings crunch continues to roll along, and here are a some highlights of this past week's earnings coverage from BloggingStocks:

• Aetna Inc. (NYSE: AET) beat expectations and raised its full-year guidance.
• Amazon.com Inc. (NASDAQ: AMZN) beat estimates by a penny and offered a poor outlook.
• American Express Co. (NYSE: AXP) delivered a positive surprise, with profits up 10%.
• Amgen Inc. (NASDAQ: AMGN) beat estimates, but revenue was flat.
• Anheuser-Busch Cos. (NYSE: BUD) beat expectations on strength of international sales and partner brands.
• Apple Inc. (NASDAQ: AAPL) blew past expectations. See our conference call live blog.
• Avery Dennison Corp.'s (NYSE: AVY) net sales up, EPS down, both due to the Paxar acquisition.
• Baidu.com Inc. (NASDAQ: BIDU) beat expectations, but wariness about its growth potential lingers.
• Boeing Co. (NYSE: BA) beat expectations but lowered its guidance.
• Bristol-Myers Squibb (NYSE: BMY) beat expectations on the strength of Plavix sales.
• CNH Global's (NYSE: CNH) profit nearly doubled, beating estimates by 15%.
• Coach Inc. (NYSE: COH) beat estimates by a penny, but offered a conservative outlook for the holidays.
• Comcast Corp. (NASDAQ: CMCSA) met EPS expectations but cut its cash flow forecast.
• Countrywide Financial Corp. (NYSE: CFC) reported a $1.2 billion loss, but predicts a profit in the next quarter.

Bristol-Myers Squibb (NYSE: BMY) announced today that third-quarter earnings were solidly higher, resulting in an increased target for overall 2007 earnings. In the latest reporting period, the drug manufacturer posted net income of $858 million, or 43 cents per share, up from a year-ago profit of $338 million (17 cents per share). Excluding items, the company banked 38 cents per share, or a penny better than Wall Street's expectations.

Revenue was higher during the period as well, up 22% to $5.05 billion, edging out analysts' consensus view of $5.02 billion.

Helping the company achieve these robust profits was BMY's blood-thinning medication Plavix, which saw sales double to $1.25 billion. The company is continuing a legal battle with Apotex over a generic version of Plavix, which hit shelves last August but has been pulled amid a patent dispute. The Plavix patent is scheduled to expire in 2011. Generic competition had negative repercussions for cholesterol drug Pravachol, which saw sales drop 55% in the third quarter as a result.

If The Wall Street Journal posted a breaking news story yesterday ahead of the official announcement, as Sarah Gilbert pointed out late last night, then it must have been true. And so it is. Bristol-Myers Squibb's board of directors has fired its chief executive officer Peter Dolan, effective immediately.

Not only has Dolan failed in his attempt to hold off cut-rate generics for Plavix, Bristol-Myers' top seller drug (among his other missteps over the years), but according to new information, a federal monitor also urged the company to fire the CEO and the General Counsel, Richard Willard (also to be dismissed).

With Apotex launching its generic Plavix earlier than expected, shareholders have intensified their pressure for a management change as Plavix contributes about 30% to Bristol's profits. But the calls to oust Dolan could be heard even before as analysts and investors found his performance lacking -- especially with the accounting scandal to inflate revenue that happened under his watch and the overpaying on drug deals. All left investors unhappy.

James Cornelius, formerly head of medical device maker Guidant Corp., was named by the board as the interim CEO. Cornelius is also a former chief financial officer for Eli Lilly.

Once the rumors of the possible management change started, Bristol-Myers shares have gained more than 1.5% after losing ground for quite some time during Dolan's years as CEO. Yesterday, Prudential even upgraded Bristol-Myers shares from underweight to overweight ahead of today's announcement. Analysts clearly believe the management change could win back investors' confidence.

Bristol-Myers Squibb (BMY) is expecting a competitor to produce a generic version of their popular drug Plavix, and is putting out the word it will vigorously defend its patent rights in the United States and abroad, they said in their quarterly filing with the SEC.

Shares fell $1.56, or 6.9%, to $21.21 in premarket activity after the comments were made. This follows a rough couple weeks for BMY as shares have dropped over 12% since the launching of a investigation in alleged anti-trust activity around this same drug. [The shares have remained at about $20.20 most of the day.]