Shares in FTSE 250 drugmaker Indivior plunged almost 40 per cent after it said it is gearing up to appeal a US court ruling that said a proposed generic version of its key opioid addiction treatment does not infringe on any of its patents.
Indivior's shares fell 38 per cent to 257.6p on the news as a generic version of its drug could result in a rapid loss of its market share in the US.
Dr Reddy's, an Indian-based pharmaceuticals company, has proposed a generic version of Indivior's Suboxone Film treatment, and with this ruling the firm can now take its product to market so long as it is approved by the US Food and Drug Administration (FDA).
The court ruling also opens the door for two pharmaceutical firms that had previously been blocked from working on generic alternatives to Indivior's treatment, Watson and Par, to pursue appeals.
Indivior said it will "vigorously" defend its intellectual property, but it added a generic alternative launch could result in a loss of up to 80 per cent of the firm's market share in the US within a matter of months.
"Although it is not possible to quantify precisely the financial impact that the launch of generic alternatives to Suboxone Film would have on the company's revenues...the company believes that it could potentially result in a rapid and material loss of market share for Suboxone Film in the US, an effect that could occur within months of a successful launch of a generic film alternative into the US market," Indivior said in a statement.
A material loss in market share in the US would have a significant adverse impact on the company's revenues, profitability and cash flows.
Shaun Thaxter, chief executive of Indivior, said the news was disappointing.
"We remain confident in Indivior's long-term outlook and vision. Our confidence is based on our market leading position in the addiction disease space forged over the past 20 years," he said.