(Reuters) - Indivior Plc (INDV.L) cut its expectations for revenue from injectable opioid addiction drug Sublocade on Wednesday and said it had “substantially underestimated” the delay in getting the drug to patients although it remained confident of its potential.
Shares in the British drugmaker, which have almost halved in value this year, fell 16 percent after it said Sublocade would generate net revenue of $8-10 million in the full year 2018, down from an earlier estimate of $25-50 million.
The company has been fighting the introduction of a cheaper copycat of its film-based blockbuster opioid addiction Suboxone by India’s Dr. Reddy’s Laboratories (REDY.NS), while also hoping to head off competition from Teva Pharmaceuticals (TEVA.TA).
In July it scrapped its overall earnings guidance and said it was experiencing “some friction” in the distribution and reimbursement model for Sublocade, which made doctors less willing to prescribe the new drug. It said it was working to reduce the time it was taking to get the drug to patients.
“Sublocade net revenue development continues to be impacted by previously highlighted inefficiencies associated with the prior authorization process across payors”, the company said in its latest statement.
The company now expects group net revenue of $990 million to $1.02 billion and adjusted net income of $230-$255 million for the year.
In February, it had forecast 2018 net revenue of between $1.13 billion and $1.17 billion and adjusted net profit of $280 million to $320 million.
Despite the gloomier near-term forecast, Indivior reiterated its confidence in the long-term financial potential of Sublocade, adding that it still expects the drug to achieve peak net revenue of more than $1 billion.
“We are now making required adjustments...but acknowledge that our growth near-term may be impacted by changes in U.S. market conditions for Suboxone Film and slower-than-expected uptake of Sublocade,” Chief Executive Shaun Thaxter said.
The company announced additional cost saving measures that are expected to generate pre-tax savings of between $80 to $100 million.
It more than doubled its pre-tax savings target for 2018 to $55 million from its prior target of $25 million. It expects savings in 2019 to be between $25 to $45 million.
Reporting by Sangameswaran S and Shashwat Awasthi in Bengaluru; Editing by Elaine Hardcastle