Buying Opportunity1 Sep 2017 13:10
"The one positive from this news is that Indivior's patents were upheld, and Dr Reddy's was found to not be infringing on said patents. This could potentially help offset any future generic challenges, as must also show to not be infringing. This could limit the number of competitors and hence the market share loss of Subuxone Film."
RBC's model suggested a range of 350p-422p was possible for Indivior's shares, with the upper end suggesting its RBP6000 subcutaneous long-acting monthly depot injection of buprenorphine could receive regulatory approval by the end of November even if Dr Reddy's launches and Indivior loses 20% market share per year from 2018.
The note, written before trading in London began and the shares lost almost 40% to 251.2p, RBC said a big fall in the shares could present an opportunity for investors.
The 350p price would assume 20% annual revenue loss of Subuxone film starting in the second half of 2018, which assumes Dr Reddy's launches post FDA approval and at risk and would equate to a price/earnings ratio of 17.7, 22.6 and 28.2 based on the 2018, 2019 and 2020 forecasts and noting that Indivior would be sat on $1bn of cash by end-2019.