Addiction treatment specialist Indivior (INDV) has pulled its earnings guidance for the year to 31 December 2018 following a sneaky launch from rival Dr Reddy's Laboratories.

Investors may not receive any full year guidance clarification until November, triggering a 31.1% sell-off to 260.3p.

The company warns net sales of its opioid addiction therapy Suboxone are expected to be $75m lower amid heavy discounts to try and preserve its market share.

SNAEAK LAUNCH HITS SALES

Dr Reddy’s sneakily launched a generic version of the drug, buprenorphine and naloxone sublingual film, in the US last month before a temporary restraining order was imposed.

Despite the launch being blocked within a few days, some damage has already been inflicted.

Indivior says it observed a recent accelerated market share loss for Suboxone of 2.5% to 52%.

And this could be higher than expected depending on how much product Dr Reddy’s was able to ship out before being blocked.

In a bid to drive sales, Indivior has cut the price of Suboxone, further impacting the profitability of its most price sensitive channel Managed Medicaid.

SUBLOCADE’S FAILURE TO LAUNCH

In a further bout of bad news, the company warns net sales of its latest drug Sublocade, which has blockbuster potential, will be $50m lower than expectations at a range of $25m to $50m.

Physicians are apparently reluctant to prescribe the drug at higher levels due to ‘friction in the new distribution and reimbursement model.’

AJ Bell investment director Russ Mould says: 'This battle is likely to keep going for some time and it will increase pressure on the management team to improve cost cutting plans and raise awareness of its Sublocade injectable drug to suppress opioid craving. This may be an important source of future revenue for the business.

'Unfortunately it has also had to downgrade guidance for this year's sales of Sublocade due to various issues. Effectively this means its contingency plan to cushion earnings in case of Suboxone disappointment hasn't worked out as planned. If plan A and plan B have failed, the big question is therefore what is plan C?'


Issue Date: 11 Jul 2018