By Ben Hirschler

LONDON (Reuters) - French drugmaker Sanofi-Aventis <SASY.PA>, which briefly encountered generic competition to its second-biggest product Plavix in the United States in 2006 and 2007, now faces a similar threat in Europe.

Schweizerhall <SWHN.S>, a Swiss generic drug company, said on Friday it was close to winning approval for a generic version of the blood-thinning drug in Germany and Luxembourg. It hopes to launch the cut-price generic medicine before the end of June.

The news sent shares in Sanofi, the world's third-largest drugmaker by sales, down 5.9 percent to 47.50 euros by 8:20 a.m. EDT, making them the biggest blue-chip loser in Europe, with trading volume well above the stock's average.

Schweizerhall shares jumped 8.5 percent to 193 Swiss francs.

"Obviously, generic competition would be a most unwelcome development," said Mike Ward, a pharmaceuticals analyst at Nomura Code Securities.

Sanofi's blockbuster medicine is protected by patents until 2013. But Schweizerhall said it was close to launching a generic version despite this.

"We're not releasing any details on our patent strategy but what I can tell you is we are not infringing any of Sanofi's patents," Schweizerhall Chairman Luzi von Bidder told Reuters.

The Basel-based company expects approval shortly from German regulators for its version of clopidogrel, as Plavix is known generically, and it plans to launch the drug throughout the European Union in cooperation with marketing partners.

"A first license agreement with a major generics company has been concluded, and the signing of a contract with another generics provider is imminent. We expect first sales in the current quarter," it said in a statement.

Generic clopidogrel could also win marketing authorization in Luxembourg in the second quarter of 2008, it added.

Deutsche Bank analyst Michael Leuchten said Schweizerhall may have got around the patent issue by developing a different chemical salt of clopidogrel, which would mean its product was not exactly the same as Plavix.

Von Bidder declined to confirm or deny this.

Sanofi said in a statement it was evaluating its legal and regulatory options but would vigorously defend its intellectual property rights, including patent protection, in Germany.

The new generic drug was developed by Cimex, a specialty generics business of Schweizerhall.

$3 BILLION MARKET

Schweizerhall said the European market for clopidogrel was about 2 billion euros ($3.09 billion), of which Germany -- Europe's biggest drugs market -- accounted for 18 percent.

Losing some of that business to generics could lop up to 4 percent off Sanofi's earnings per share, according to Morgan Stanley analysts. But the impact may well be less if Sanofi wins an injunction or there are regulatory delays in other European countries.

Still, the threat will likely keep Sanofi stock trading at depressed multiples. The shares fetch just 8.7 times forecast 2009 earnings, against 10.9 times for GlaxoSmithKline <GSK.L> and 12.3 times for Novartis <NOVN.VX>, reflecting doubts about Sanofi's existing medicines and recent pipeline setbacks.

Bristol-Myers Squibb <BMY.N> also markets clopidogrel in Germany under the brand name Iscover.

Plavix, which is sold in the United States in partnership with Bristol-Myers, suffered a dramatic sales decline after Apotex launched a generic form of the medicine in August 2006.

Although a New York federal judge blocked the sale of the generic weeks later, the huge supplies already on the market undermined sales of Plavix through early 2007.

(Additional reporting by Astrid Wendlandt in Paris; Editing by Will Waterman and Quentin Bryar)