Shares in opioid addiction specialist Indivior (INDV) have hit at an all-time low at 95p as the fallout from a failed injunction against rival Dr Reddy’s Laboratories unravels.
Indivior had previously secured an injunction which prevented Dr Reddy’s from selling or importing a generic version of its buprenorphine/naloxone sublingual film product Suboxone.
The injunction was lifted late on Tuesday, wiping off approximately half of Indivior’s market value in one fell swoop, with the shares shedding a further 13.3% today.
Investors following the story on Shares should not be surprised as we revealed Indivior’s caution on sales guidance and Dr Reddy’s approval of its generic product earlier this year.
UP TO 80% OF INDIVIOR’S MARKET SHARE AT RISK
Dr Reddy’s needs a court mandate in order to officially launch its product in the US without potentially getting hit by damages, as it currently remains in litigation with Indivior.
An IMS Institute Report implies a US generic product launch could result in the defender (in this case Indivior) losing up to 80% of its market share, in only a few months.
For Indivior, the rival product could wreak havoc not only on its US market share, but also have a ‘significant adverse impact’ on its sales, profitability and cash flow.
WHY SALES GUIDANCE IS UNCHANGED
Despite the bad news, Indivior is sticking to its sales guidance of between $990m to $1.02bn and income of $230m to $255m unless there is certainty of Dr Reddy’s launching this year.
Indivior says it will try and stop Dr Reddy’s attempts to launch its product via an appeal, and by opposing attempts for a mandate to officially allow its rival to safely launch.
Indivior says a contingency plan is in the works, but no details have been revealed.
The company was spun out of Reckitt Benckiser (RB.) in December 2014 where it started trading at 120p. The stock nearly hit 500p in June this year before collapsing upon the threat from Dr Reddy’s.
