July 16, 2018 / 9:25 AM / in a month

Indivior's shares soar 33 percent after U.S. court blocks sale of rival generic

(Reuters) - Indivior Plc’s shares jumped more than 33 percent on Monday after a U.S. court blocked a rival from selling a cheaper copycat of the British drugmaker’s bestselling opioid addiction treatment.

The preliminary injunction on Friday came days after Indivior issued a profit warning that hammered its stock as the company said the drug, Suboxone Film, was rapidly losing market share in the United States.

A U.S. district court determined that Dr.Reddy’s Laboratories likely infringed on Indivior’s patent and blocked the Indian pharmaceutical company from re-launching its drug until the patent litigation is over.

Shares in Indivior topped the UK mid-cap index, gaining back most of the near 1 billion pounds in market value the stock lost last week. Dr.Reddy’s shares fell more than 9 percent on India’s National Stock Exchange.

Brokerage Jefferies said it expects an outcome for the patent litigation in mid-2020, or in about 4-6 months if Dr. Reddy’s appeals the decision.

“We expect this will be a huge boost to sentiment and underlines the strength in Indivior’s IP (intellectual property) in our view.”

Dr.Reddy’s and U.S. drugmaker Mylan received approval last month from the Food and Drug Administration (FDA) to launch generic versions of Suboxone, and Indivior won a temporary restraining order blocking Dr. Reddy’s from selling its Suboxone copy.

However, the copycat’s launch hit Suboxone’s market share, which dropped by two-and-a-half percentage points to 52 percent, Indivior said last week.

Suboxone Film generates 80 percent of Indivior’s revenue and helps drug users beat their addiction to heroin and is dissolved under the tongue.

Generic rivals in tablet form are already in the U.S. market, which is grappling with an opioid addiction epidemic that killed 33,000 people in 2015.

Indivior said in June it would consider a potential launch of its own generic product if Dr. Reddy’s launched a copycat version.

The company’s contingency plans would also focus on optimizing the launch of Sublocade, a once-a-month injectable drug to suppress opioid craving, launched in the United States in February.

However, Indivior cut its revenue expectations from Sublocade last week, saying it was experiencing “some friction” in the new distribution and reimbursement model for the drug, making doctors less willing to prescribe the new drug at higher price levels.

Reporting by Sangameswaran S and Arathy S Nair in Bengaluru; Editing by Amrutha Gayathri

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