Losing patent protection and facing generic competition can be disastrous to sales and earnings if a pharmaceutical company doesn't have a way to drive revenue growth. That's why big pharmas will often do anything legally possible to protect patents and stave off generic competition. Bristol-Myers Squibb (NYSE:BMY) this year faced the prospect of generic competition for Plavix, its top-selling blood thinner drug, but stopped the generic sales, at least temporarily, as a case drags through court.

Unfortunately for Bristol-Myers, the few months that generics flooded the market had a deleterious effect on Plavix sales, and the company used this as an excuse for its bad third quarter. So let's see if Plavix really was responsible for the mediocre quarter.

Bristol-Myers blamed generic Plavix for losing $525 million to $600 million in revenue, a 13% drop in total revenue year over year to $4.2 billion. There were also the decreased earnings, down to $340 million, or $0.17 per share, compared with the $960 million it earned in the year-ago quarter.

Even if Plavix had not faced generic competition, revenues for the quarter would have been flat at best compared with the $4.8 billion Bristol-Myers reported in 2005's third quarter. This is because the company's other top- selling products of 2005 aren't exactly growing sales rapidly, either:

Q3 Sales (In Millions)

Year-Over-Year Growth

Pravachol

$192

(64)%

Avapro

$277

10%

Abilify

$313

20%

Enfamil

$246

7%



Bristol-Myers raised its full-year guidance for earnings per share under generally accepted accounting principles to $0.97 to $1.02, but this would still be down about one-third from the $1.52 a share the company earned for 2005.

Considering the decreased sales from Plavix, this level of earnings is understandable, but it doesn't necessarily make Bristol-Myers a more enticing investment, especially with what's happening in its senior ranks and the fact that the Plavix patent might be declared null and void.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.