LONDON — Shares in UK-listed drug maker Indivior are tanking on Friday morning after the company warned that the loss of a court case in the US could have a "significant adverse impact" on revenues.
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Shares in drug maker Indivior tanked almost 40% after it lost a heroin treatment copyright case
Rivals could now be free to make a generic version of its flagship drug Suboxone Film, which accounts for 80% of revenues.
Indivior, which specializes in drugs to help treat addiction, challenged rivals in US court, saying that their heroin addiction treatments infringed upon patents in Indivior's drug Suboxone Film, its flagship drug which it makes the lion's share of its money from.
However, Indivior has lost the case, meaning rivals are free to make and sell similar drugs to Suboxone in the US. This could be devastating for Indivior — Suboxone Film currently has a 61% market share in the US and accounts for 80% of Indivior's revenues.
"Industry analogs suggest that a launch in the US of a generic product that can be directly substituted by a pharmacist for the branded product without consultation with the patient would result in the branded incumbent (in this case, Suboxone® Film) losing up to 80% of its market share within a matter of months," Indivior warns.
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The company's share price has tanked by almost 40% as a result: Jefferies analyst James Vane-Tempest, who covers Indivior, says in a note on Friday morning: "Pending appeal, which we estimate can take 12-18 months, Suboxone Film could face generic competition by early 2019."
However, Vane-Tempest says that Indivior, which was spun out of consumer goods giant Reckitt Benckiser in 2014, has a strong balance sheet and could change its business model in the year and a half window that the appeals process will likely grant.
Still, Neil Wilson, a senior analyst at ETX Capital, says FTSE 250-listed Indivior is now "facing a mammoth struggle."
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