Reckitt Benckiser hurt as rivals steal heroin march

 

Shares in Reckitt Benckiser took a tumble yesterday on news that its competitors will be able to make heroin-dependency drugs to compete with the consumer goods group.

Reckitt had been trying to slow down competitors' plans to make rival drugs after it lost US patent protection for its heroin-dependency treatment drug Suboxone in 2009. But yesterday investors reacted to news that the US Food and Drug Administration had rejected Reckitt's petition to force rivals to take more precautions with the drugs packaging.

Reckitt's shares took a hit and ended 135p lower at 4,381p. Not only has Reckitt lost its plea, but two generic drug makers have been given the go-ahead to enter the Suboxone tablet market with drugs that contain its key buprenorphine ingredient.

The Dettol-to-Durex maker introduced a film-strip version of Suboxone that is less likely to be taken accidentally by children. It will stop producing Suboxone in tablet form next month. It had hoped packaging for the opiate substitute would become regulated to make it more expensive for rivals to produce.

But the FDA decided that data presented by Reckitt did not necessitate the regulation that the company had suggested, which had included educational campaigns and child-resistant packaging.

Reckitt had previously pointed out that there is evidence of a rise in abuse of the medicine by children, who are able to open packets of drugs in tablet form.

It said yesterday it was "disappointed" by the FDA's decision. But it added that it will "continue to work with the FDA on safety enhancements", and remains "committed to maintaining its own high level standards for safety, including the use of child resistant, unit-dose packaging". Jefferies' Alex Howson said the entry of rivals into the market has been "a well-flagged risk for Reckitt" but some investors had forgotten these risks – until yesterday.

About 90 per cent of Suboxone tablet business and 70 per cent of the film business could be lost to generics, and Jefferies estimates 2013 Suboxone profits could reduce by 17 per cent to £382m.

However, analysts think the share sell-off in the Slough-based company has been overdone.

Deutsche Bank's Harold Thompson thinks Reckitt's repeated communication to "expect the worst on generic entry" means the profit impact on the group could be more measured than the investors think. Mr Thompson points out that more than 95 per cent of Reckitt's group profits are not related to US Suboxone tablets.

Analysts expect the group's household goods division, which includes brands such as Clearasil, Cillit Bang and Strepsils, will perform well this year.

Mr Thompson said he thinks the shares are still worth buying while Mr Howson added: "There will soon be "an attractive entry point [for the shares], given that the core business has seen substantial improvement of late."

He thinks "a major positive catalyst" would be the sale of the pharmaceuticals business altogether, as the market would "reward the improved visibility".

News
Alan Bennett has criticised the “repellent” reality shows which dominate our screens
tvBut he does like Stewart Lee
Life and Style
The Google Doodle celebrating the start of the first day of autumn, 2014.
tech
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Sport
David Moyes and Louis van Gaal
football
PROMOTED VIDEO
News
i100
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
News
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Life and Style
food + drink
News
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
News
A cabin crew member photographed the devastation after one flight
news
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits