Indivior’s shares bruised as a key rival steps up efforts to launch copycat drug
It has been a whirlwind week for addiction specialist Indivior (INDV) as it continues to fight rivals who are trying to launch generic versions of its Suboxone opioid addiction treatment despite its patent not expiring until 2024.
Opioid addiction is a huge problem in the US with president Donald Trump claiming it is a ‘national emergency’. In 2016, over 42,000 people died of opioid overdoses with 40% of these deaths involving a prescription opioid.
Following approval of its Buprenorphine and Naloxone Sublingual Film on 15 June by the US Food and Drug Administration (FDA), Dr Reddy’s Laboratories decided to pursue an ‘at risk’ launch for its generic version of Suboxone. This term describes a situation when a company puts a product on the market before resolving outstanding patent lawsuits against it.
Shares in Indivior toppled nearly 27% to 360.5p on Dr. Reddy’s news as the launch of a generic rival could potentially lead to a rapid and material loss of market share for Suboxone in the US in a matter of months.
It subsequently obtained a court order which temporarily blocked Dr Reddy’s from launching its product with a preliminary injection hearing pencilled in for 28 June.
In September 2017, the US District Court for the District of Delaware decided the composite of Dr Reddy’s drug did not infringe Indivior’s patents, but the latter decided to appeal.
Indivior is still in litigation with Teva Pharmaceuticals and Actavis over their generic versions. It has already reached settlements with Par Pharmaceutical, Endo, IntelGenx and Mylan over patent litigation.
SUBLOCADE’S $1BN PEAK POTENTIAL
Despite the deluge of litigation that Indivior has pursued to protect its Suboxone patent and try to prevent its rivals from stealing market share, its shares were fairly strong earlier this year thanks in part to the approval of its Sublocade injectable drug, also known as RBP-6000, last December.
Sublocade, which can only be administered by healthcare professionals, is expected to be the largest revenue generating product for Indivior with peak sales potential of $1bn according to stockbroker Numis.
The drug launched in March and is forecast to be a ‘far greater value driver’ for Indivior according to Jefferies analyst James Vane-Tempest.
He says physicians are anticipated to move significantly more patients on to the drug than the market expects.
Numis analyst Paul Cuddon thinks Indivior’s recent share price weakness is a buying opportunity. He flags clarity on generic launches, cost cutting plans and the Sublocade ramp-up as key catalysts. (LMJ)