Sanofi-Aventis has called off talks with Bristol-Myers Squibb over a deal to create the world’s biggest pharmaceuticals group because of disagreements over price and legal disputes around its top-selling drug, The Times has learnt.

An acquisition would have created a drugs giant with a market value of $175 billion (£89.4 billion) and revenue of $56 billion, outstripping Pfizer, the market leader.

However, it is understood that Sanofi was not comfortable with the valuation of Bristol-Myers with a share price of about $28.

The shares traded at about $24 as recently as the beginning of the month but have shot up on merger speculation.

In addition,the merger talks were further complicated by the start of a key court case over Sanofi’s top-selling drug, Plavix, which Bristol-Myers jointly markets and sells in the US.

The news comes after it emerged that Tamar Howson, the senior executive in charge of mergers and acquisitions at Bristol-Myers Squibb, has left the company.

Peter Dolan, the chief executive at the New York-based pharmaceuticals group, was ousted after an ill-fated patent deal with Apotex, a Canadian company that had produced a cheap generic rival to Plavix, Sanofi’s blockbuster bloodthinning treatment.

Bristol Myers has retained the investment bank Lehman Brothers to work alongside its existing bankers, Citigroup and Morgan Stanley, to advise it on its strategic options, but the sources said that no sale process was under way at present.

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