Indivior Plunges After Losing Ruling Over Suboxone Film Generic

(Bloomberg) -- Indivior Plc dropped the most since it became public in 2014 after losing an appeals court ruling that opens the door for Dr. Reddy’s Laboratories Ltd. to begin sales of a generic version of the opioid treatment Suboxone Film in the U.S.

A trial judge was wrong to say that Indivior was likely to win its patent-infringement case, the U.S. Court of Appeals for the Federal Circuit ruled on Tuesday. The appeals court set aside an order that blocked Dr. Reddy’s and remanded the case to the trial court for further proceedings.

Dr. Reddy’s had received regulatory approval to sell a generic version of the drug before it was shut down by a federal judge who said it had to wait for a final decision in a patent-infringement case. The appeals court, in a 2-1 ruling, said the patent, issued in April and due to expire in 2022, isn’t that different from another Indivior patent that was found not to be infringed in a separate case.

Indivior fell 45 percent to 113.95 pence in London trading of 8.5 million shares, almost three times the three-month daily average. The stock has lost 72 percent of its value this year.

The company said it’s disappointed that the Federal Circuit vacated the court ban and would “continue to vigorously pursue ongoing infringement cases” against Dr. Reddy’s.

“The company is in the process of interpreting the ruling in its entirety and will issue a statement on its implications once this review has been completed,” Indivior said in a regulatory filing.

Indivior reported $768 million in sales during the first nine months of the year with the bulk of that coming from Suboxone. The company also is working to promote a new opioid addiction treatment called Sublocade.

Suboxone Film, absorbed by being placed under the tongue or inside the cheek, treats addiction to opioids including heroin and prescription painkillers. The drug combines buprenorphine, which tricks the brain into thinking it’s still getting the drug, with naloxone, a medicine used to reverse the effects of an overdose.

In its annual report, Indivior, based in Slough, England, said it was "at risk of potential significant loss of market share" in the U.S. if Dr. Reddy’s entered the market. Almost 875,000 people in the U.S. received Suboxone last year, the company said.

The earlier non-infringement finding is on appeal. In her dissent from Tuesday’s ruling, Circuit Judge Pauline Newman said the order blocking Dr. Reddy’s was meant to preserve the status quo until a trial could be held. While Dr. Reddy’s could be compensated with money should it ultimately win, “Indivior could not recover its reputation and market share,” Newman said.

Should Dr. Reddy’s enter the market and then lose the case, it could be ordered to reimburse Indivior for up to three times the amount of profits the British drugmaker loses. Indivior said Nov. 1 that it lost between $12 million and $18 million for the brief period Dr. Reddy’s was on the market in July.

The case is Indivior Inc. v. Dr. Reddy’s Laboratories S.A., 18-2167, U.S. Court of Appeals for the Federal Circuit (Washington).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Laurie Asséo, Justin Blum

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