UK drugs company, spun out of Reckitt Benckiser in 2014, will appeal against ruling that could pave way for generic rivals

The drugs group Indivior has seen more than £1bn wiped off its stock market value after it lost a US patent ruling that could pave the way for the launch of rivals to its Suboxone Film heroin substitute.

The company, spun out of Reckitt Benckiser in 2014, said it would appeal against the Delaware court decision that the generic drug maker Dr Reddy’s had not infringed its patents. Indivior’s shares plunged 38% to 255p after news of the ruling.

The chief executive, Shaun Thaxter, said: “Today’s news is disappointing … given the belief that the company has in its intellectual property for Suboxone Film … We remain confident in Indivior’s long-term outlook and vision.”

Electroceuticals: the 'bonkers' gamble that could pay off for GlaxoSmithKline Read more

The company said it was not possible to quantify precisely what effect the launch of a generic competitor would have on its revenues but admitted such a move “could potentially result in a rapid and material loss of market share for Suboxone Film in the US”.

The average market share of Suboxone Film in the US was 6% in 2016, it said, and it accounted for 80% of Indivior’s total revenues last year.



Indivior said if pharmacies could substitute Suboxone Film with a generic rival without direct consultation with the patient it could lead to the firm’s treatment losing up to 80% of its market share “within a matter of months”.



Indivior said in June it had won a US patent battle against Actavis and Par Pharmaceutical over Suboxone Film.



James Vane-Tempest, an analyst at Jefferies, said: “Although today’s update is disappointing, in our view the situation is not as bad as this scenario would suggest given: 1) the appeals process can take 12-18 months; 2) Indivior has a strong balance sheet; 3) if the [rival treatment] launches in the first quarter of 2018, there is potentially a year to convert stable patients on to the new formulation, thus reducing the market opportunity of the film generic if the timings are as per our base case; and 4) the scenario doesn’t consider any change in Indivior’s business model – given Indivior’s fixed and sizeable cost base there is the potential for significant savings if needs be to weather any profitability impact.”

Nick Keher at RBC Europe said there were still several possible outcomes following the ruling. He said: “The one positive from this news is that Indivior’s patents were upheld, and Dr Reddy’s was found to not be infringing on said patents. This could potentially help offset any future generic challenges, as [they] must also show to not be infringing. This could limit the number of competitors and hence the market share loss of Subuxone Film.”

Indivior is the latest victim of a summer of discontent which has seen sharp share price falls in the likes of Dixons Carphone, WPP, Carillion and Provident Financial as investors punished disappointing updates. With markets still within sight of their record levels and company valuations so high, any company falling short of expectations has tended to suffer an immediate sell-off of its shares.