MUMBAI (NewsRise) -- Dr. Reddy's Laboratories' imminent entry as the first Indian drug maker into the $1.9 billion U.S. market for opioid de-addiction is likely to bolster its efforts to turn around in the world's biggest pharmaceutical market.
On Friday, the company said the U.S. Food and Drug Administration has given it the final approval to launch the generic Buprenorphine and Naloxone Sublingual Film. The medicines are currently sold under the brand Suboxone by the U.S. unit of London-listed drug maker Indivior, which has already sued Dr. Reddy's and several other drug makers for patent violations.
Last year, Indivior's U.S. unit filed lawsuits against Dr. Reddy's, Allergan's Actavis Laboratories, Endo International's Par Pharmaceutical, Alvogen Pharma US, Teva Pharmaceutical Industries, and Mylan, alleging that these companies infringed a patent that relates to an oral film containing buprenorphine and naloxone, the key constituents of Suboxone.
"With opioid addiction becoming increasingly prevalent in America, the full approval and launch of our generic equivalent of Suboxone could not have come at a more critical time to help patients," Alok Sonig, Dr. Reddy's chief executive for developed markets, said in a statement.
The Suboxone brand had U.S. sales of about $1.86 billion for the most recent twelve months that ended in April, according to IMS Health. Suboxone is one of the 15 new drugs Dr. Reddy's plans to launch in the U.S. this fiscal year.
The company has been grappling with shrinking sales in the U.S. amid falling drug prices, as the nation's regulator expedited its approval rate for generics, paving the way for increased competition from new players. A rising number of retail pharmacies in the U.S. are joining hands to gain leverage in buying generic drugs in bulk, pushing prices down further.
In the fiscal year ended in March, Dr. Reddy's revenue grew barely 1% to $2.2 billion, as sales in North America shrank. It is also reeling under a warning letter the FDA issued in 2015 on three of its manufacturing plants for violation of quality standards.
In May, the company said the launch of Suboxone depended on the patent litigation. Most analysts warn that the launch of the drug will be fraught with risks, including likely injunctions from courts as the patents granted to Indivior is valid until 2023.
According to Nomura, there are seven patents under litigation. A U.S. court has pronounced a favorable verdict for Dr. Reddy's for four of the patents, while Indivior has already challenged some of these district court decisions in the appeals court.
Nomura warned that a delay in launch by Dr. Reddy's will adversely impact the value of the opportunity for the company.
"It could allow other competing filers to gain approval and launch. Further, a delay could result in market share loss of Suboxone film to a newly launched once-a-month injection Suboclade."
Shares of Dr. Reddy's rose 3.7% in Mumbai trading, while the benchmark S&P BSE Sensex added 0.1%.
--Dhanya Ann Thoppil