The blue-chip bank is “conservatively” modelling for generic competition to Suboxone at the end of this year, although it thinks rivals are “unlikely” to launch a copycat with patent claims and counter-claims hanging over the drug.
Earlier this year, regulators ruled that US drugmaker Alvogen was clear to launch its version as it didn’t infringe on any of the three patents put forward by Indivior.
FTSE 250-listed Indivior, keen to protect its star asset, appealed the ruling, claiming that Alvogen’s under-the-tongue film infringed some of its other patents as well.
If the company is able to achieve a similar result with Alvogen and other generic drugmakers such as Teva, Actavis and Dr Reddy’s – it is pursuing lawsuits against all of them as well – that would add 109p to Indivior’s share price, according to Citi analyst Nick Nieland.
With pressure on Suboxone, Indivior launched an injectable opioid treatment called Sublocade earlier this year which it hopes will offset any lost revenues from its older product.
“The success of Sublocade roll out is key to the company’s future,” wrote Nieland in a note to clients.
“[The] valuation is highly sensitive to peak sales assumption for this product (upwards of US$1bn), launched in February 2018.”
For now though, the analyst has downgraded the stock to ‘neutral’ with a price target of 500p, stating that the recent strong run in the shares, coupled with the fact that initial sales of Sublocade won’t be known for a little while, makes Indivior unattractive at this moment in time.
Indivior shares were broadly flat at 457.3p in late-morning trading on Tuesday.