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Indivior slumps as US court lifts injunction stopping rival from selling Suboxone copycat

Published: 10:45 21 Nov 2018 GMT

suboxone drug
A final patent hearing is due to take place towards the end of this year or early in 2019

Indivior PLC (LON:INDV) shares have slumped once again after the US Court of Appeals decided to lift a preliminary injunction which had been stopping a rival drugmaker from selling its generic version of Suboxone – Indivior’s blockbuster opioid addiction treatment.

Analysts said they were surprised by the decision, which opens the door for Indian generics giant Dr Reddy’s to start selling its copycat drug again, albeit on an ‘at-risk basis’, meaning it can do so while litigation is still ongoing.

READ: Indivior's profits tumble as Suboxone copycat eats into market share

The injunction had prevented Dr Reddy’s from supplying its rival product to doctors and clinics while a US court decides whether or not it breaches any of Indivior’s patents. That case is still ongoing, with a final hearing expected to take place later this year or in early 2019.

Indivior is keeping its much-reduced net revenue and net income guidance in place for the time being, until it knows for sure when Dr Reddy’s will re-start sales.

“Should generic buprenorphine/naloxone sublingual film enter the market in 2018, the result would most likely be a rapid and material loss of market share for Suboxone,” read a gloomy Indivior statement.

“A material loss in market share in the US would have a significant adverse impact on the company's revenues, profitability and cash flows.”

More generics on the way

Mid-tier Canadian investment bank RBC Capital expects Dr Reddy’s will indeed launch ‘at risk’ later this year, although it thinks that might be the least of the company’s worries.

“We assume a launch of DR's generic before year-end, with follow-on launches from Mylan, Parr and Alvogen (once approved) but also the authorised generic from Sando,” analysts said in a note to clients.

Indivior knew it was in a spot of trouble with Suboxone so it developed Sublocade, a once-monthly injection which it hoped doctors would switch to, easing some of the pressure.

RBC analysts recognise the need for Sublocade to pick up some of the slack, which they expect it will further down the line, although they are more cautious near-term.

Given the likely sharp decline in Suboxone revenues and doubts over Sublocade’s ability to fill the void, RBC downgraded the stock to ‘perform’ (from ‘outperform’) and slashed its price target to 130p (from 350p).

Indivior shares fell 12.4% to 96.3p on Wednesday morning. Less than six months ago they were worth almost 500p.

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