Indivior PLC (LON:INDV) has been in need of a shot in the arm of late, and it seems it might have got the fix it needs from the US district court of New Jersey over the weekend.
The stock has been under pressure ever since Indian giant Dr Reddy’s decided, somewhat to the surprise of the market, to go ahead and launch its generic version of Suboxone – Indivior’s blockbuster opiate addiction treatment – last month.
READ: Indivior wins preliminary injunction
Indivior is adamant that Dr Reddy’s copycat infringes on one of its patents – ‘305 if you’re interested – and has taken its claims to judges in the US who are currently deciding on whether it does or not.
To stop its rival from selling its version of Suboxone while that case is going on, Indivior sought and has been granted a preliminary injunction.
Given that US investment bank Jefferies reckons a formal outcome won’t be announced until around the middle of 2020, this means Indivior has helped to shore up sales of its star asset for the next couple of years.
Bodes well for patent trial
But there are other positives to take from today’s news, claims Jefferies.
Firstly, for the court to reach the decision it has, it must have determined that Dr Reddy’s “likely infringed on Indivior’s IP”.
While the patent authorities will delve into much greater detail, Jefferies says the granting of the injunction “underlines the strength” of the FTSE 250 company’s intellectual property and bodes well for the ongoing patent case.
Might encourage Alvogen agreement
Dr Reddy’s isn’t the only one looking to launch a cut-price competitor to Suboxone either.
US giant Alvogen could be in a position to get its drug out in the market within a year, while Mylan could follow suit a year later (along with Dr Reddy’s if it wins the patent case).
“The recent preliminary injunction makes a settlement with Alvogen more likely, while the court specifically determined that it is likely that DRRD infringes the ‘305 patent, which could mean DRRD is enjoined from launching until 2022,” said Jefferies’ note to clients.
Delaying Dr Reddy’s arrival into the market will take the pressure of Sublocade, a new injectable version of Suboxone that Indivior is pinning its hopes on.
Despite initial problems getting doctors to prescribe it, Jefferies still think the injection will generate peak sales of US$2bn a year.
Indivior shares are up 25% on Monday morning to 363.3p.