In a latest development, the US Supreme Court has refused to stay a lower court's order that allowed the sale of generic versions of opioid addiction treatment drug Suboxone film, effectively ending a 7 month wait for Dr Reddy's Laboratories which is seeking to relaunch its product in the US market.
As the innovator Indivior's existing product commands $1 billion in annual sales in the US, the potential revenue upside from the sale of generic Suboxone is expected to be substantial for Dr Reddy's when it resumes sales, despite competition from other generic versions in the coming days.
"The revenue upside from g-Suboxone would be around 15 per cent of EPS for Dr Reddy's at a conservative estimate despite the presence of 2-3 generics and one authorised generic to be sold in the market ," HDFC Securities analyst Amey Chalke said.
The company had to withdraw g-Suboxone just days after it was launched in July, 2018 following a local US court's injunction orders against the sale of the product in the midst of an ongoing patent infringement litigation between the Dr Reddy's and Indivior. However, in November, the Court of Appeals for the Federal Circuit set aside the preliminary injunction. Indivior's appeal against this order went to US Chief Justice John Roberts because he was the justice assigned to handle emergency matters from the Federal Circuit, according to a Bloomberg report.
Indivior said that it had lost $12-$18 million during the few days when Dr Reddy's product was in the market. Earlier, analysts predicted that the company was going to earn as much as $100 million in the first year from the sale of g-Suboxone in the US market.
The much needed breakthrough in the ongoing court battle came for Dr Reddy's just a few days after its Duvvada formulations plant in Visakhapatnam was cleared by the US Food and Drug Administration(US FDA) , ending more than three years of import restrictions arising out of a Warning Letter issued in November 2015.
Analysts hope that these two developments would help Dr Reddy's in regaining a growth momentum in its US revenues. According to Chalke, once the company starts exports from the Duvvada oncology formulations facility, its base business would also rise in the US market.
Apart from making attempts to block the entry of generics, Indivior has been fighting a patent protection battle since 2017 to extend the exclusivity of its product, which contributed to almost 98 per cent of its US revenues last year. With the entry of generic products, the price and market share of innovator's drug is expected to fall steeply.