Indivior shares dive after Dr Reddy's gets FDA approval for generic

(Reuters) - Britain’s Indivior fell by more than 20 percent on Friday after the U.S Food and Drug Administration (FDA) approved the first generic versions of Suboxone Film, an opioid addiction treatment that generates 80 percent of its revenue.

Shares in Indivior, which was spun out from Reckitt Benckiser in 2014, were down 22.7 percent at 0925 GMT and the biggest loser on the FTSE midcap index.

India’s Dr Reddy’s Laboratories received FDA approval for a copy-cat version of the treatment, which has been rapidly losing market share due to competition from generics.

Mylan NV also received approval to market the substitute drug.

Dr Reddy’s said it would launch its therapeutic equivalent of Suboxone, which is a composition of buprenorphine and naloxone, at risk, with an approved risk evaluation and mitigation strategy (REMS) program.

One analyst said the at-risk sudden launch was a surprise and could threaten Indivior’s 2018 guidance.

A spokesman for Indivior said the company was preparing to release a statement.

Indivior could seek an injunction to try to halt a launch of the generics or launch its own authorized generic, analysts at Jefferies said in a note.

“If Indivior was to prevail in any of its on-going legal challenges then Dr. Reddy’s would be liable for damages,” Jefferies said, estimating that Indivior’s 2018 earnings per share could be hit by as much as 50 percent if Dr. Reddy’s has sufficient inventory and launches by July 1.

Reporting by Justin George Varghese in Bengaluru; editing by Jason Neely