Shares in UK pharmaceuticals firm Indivior plunged 25 per cent after a court ruled that rivals could sell generic versions of its heroin addiction treatment, Suboxone film.
The ruling by a US appeals court could pave the way for cheaper versions of the life-saving medication designed to treat an opioid epidemic that claimed 49,000 lives in America in 2017.
Indivior and other drug companies have faced accusations of profiteering from expensive, patent-protected addiction medications when effective generic treatments are available.
From 11 February, India’s Dr Reddy’s Pharmaceuticals and Alvogen will now be free to sell their own versions of Suboxone film, which Invidior claims is easier for addicts to take than the tablet form of the drug.
Suboxone accounts for around 80 per cent of Indivior’s revenue and the company predicts it could lose 80 per cent of its market share as a result of the decision.
Indivior said it would contest the ruling but its shares fell to as low as low as 84.4p, wiping £131m off the company's valuation.
“While we ultimately believe in the strength of our patent portfolio, we acknowledge that the Company faces major disruption in the immediate future from a potential material and rapid loss of market share by our Suboxone film product to generic ... competition,” chief executive Shaun Thaxter said.
In August, the US Justice Department joined several whistleblower lawsuits against Indivior and fellow British pharma firm Reckitt Benckiser alleging that the drugmakers improperly marketed Suboxone and the related medicine Subutex. Indivior was spun out of Reckitt Benckiser in 2014.
One 2013 lawsuit, unsealed last year, alleged that the companies made misleading claims to US regulators to obtain approval for film version of Suboxone.
The Food and Drug Administration had granted Reckitt a period of marketing exclusivity for the tablet form of Suboxone. As this came to an end, Reckitt sought approval for its patent-protected dissolvable strip version of the drug, which it claimed was safer and less susceptible to abuse.
But the lawsuit alleges that the film version could in fact be abused more easily and posed an increased risk to children who could accidentally put it in their mouths.
Indivior said it had set aside $438m (£335m) to cover legal costs while Reckitt has reserved £303m.
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