Shares of Dr. Reddy’s Lab
have surged 3% over favourable news flow today.
Company announced that it has launched gPlaquenil (Hydroxychloroquine Sulfate Tablets USP, 200 mg) in the US market. Plaquenil is manufactured by Concordia International Corp and is indicated to prevent or treat malaria infections caused by mosquito bites. As per IMS Health Plaquenil (brand+generic) had sales of $215mn in the US market for the 12-month period ending May 2018. USFDA has also approved generic versions of Lupin, IPCA, Sabdoz, Teva, Cadila etc on Plaquenil.
While Plaquenil approval has a positive impact on the share price of Dr. Reddy’s, a much bigger news came from UK on gSuboxone.
Yesterday, shares of UK based pharma company, Indivior, tanked 32% as company warned its shareholders that it will not be able to meet its full year revenue guidance. The company said that it expects to see material impact ($25-50mn) on its full year revenue due to the launch of gSuboxone by Dr. Reddy’s lab.
Dr. Reddy’s launched
gSuboxone last month however, it had to temporarily halt the rollout
of the drug as per the US court order. While the litigation outcome is expected in this week, Indivior’s guidance suggest that it expects gSuboxone to impact its full year revenue in CY18. Form this, we can infer that company is likely to lose the patent infringement case on Suboxone with Dr. Reddy’s.
There is also some hope that Indivior may lose the litigation. In March 2018, Indivior has already lost a patent litigation when United States District Court (Delaware) ruled that Alvogen, another company seeking to make copycat Suboxone, did not infringe
three patents ('514, '150, and '497) held by Indivior PLC. Dr. Reddy’s suit is likely to follow this court verdict.
As we expect a favourable outcome for Dr. Reddy’s in the US courts, Indivior’s guidance also suggest that a generic Suboxone rollout in the US markets is very much certain in 2018. Assuming the same, shares of Dr. Reddy’s have surged 3% today.