Dr Reddy’s Labs is an integrated pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - pharmaceutical services and active ingredients, global generics and proprietary products - it offers a portfolio of products and services including APls, custom pharmaceutical services, generics, biosimilars and differentiated formulations.
The company’s major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr Reddy's operates in markets across the globe. Its major markets include - the US, India, Russia and CIS countries, and Europe. At the CMP of Rs 2,351 per share (face value: Rs 5 per share), the company is valued at a P/E of 40 times FY18 EPS. Investors can consider this company with a 3 year horizon. Its earnings performance is dependent upon timely approvals of products in its pipeline.
The company recently announced that it has received an approval from the USFDA and is launching Buprenorphine and Naloxone Sublingual Film, a therapeutic equivalent generic version of Suboxone. Buprenorphine and naloxone are used to treat adults with opioid addiction. “Buprenorphine helps suppress withdrawal symptoms caused by discontinuation of opioid drugs, and naloxone reverses and blocks the effect of opioids. This combination of medications is used as part of a complete treatment programme including prescription monitoring, counselling and psychosocial support.
The Suboxone brand had US sales of about $1.86 billion for the 12 months ending April, according to IMS Health.
Dr Reddy's said it is launching generic Suboxone at risk, implying that it is launching the product even as the patent granted to the innovator is valid until 2023.
Indivior has sued Dr Reddy's for infringement of its patents and litigation is still on. The company is confident that after the recent court verdict going against Indivior for delayed assertion of new patents and two of the three patents being just an extension of old patents. It also faces the risk of Indivior getting an injunction.
In the worst case scenario, if Dr Reddy's loses the patent litigation, it may have to forfeit sales made on the drug. The company bought Suboxone Film’s ANDA from Teva Pharmaceuticals for $70 million in June 2016 with seven generic filers. Mylan too received an approval from USFDA to launch generic Suboxone. It's not immediately known whether Mylan will launch it immediately or wait till 2023. Mylan had reached an out of court settlement with Indivior on Suboxone.
Alvogen, Endo, Par Pharmaceuticals and Actavis are also in the race for USFDA approval, some of them have settled patent infringement cases with Indivior to launch an authorised generic.
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