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Dr. Reddy's/Mylan Get FDA Nod for First Generic of Suboxone

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Dr. Reddy’s Laboratories Ltd. (RDY - Free Report)  and Mylan announced that the FDA has approved the first generic version of a Suboxone (Buprenorphine and Naloxone Sublingual Film) under-the-tongue film for the treatment of opioid addiction. Both the companies will sell the generic version of the drug. Per the FDA, the approval was aimed at making the treatment available to more people.

Buprenorphine and naloxone are used to treat adults with opioid dependence/addiction. Buprenorphine helps to suppress withdrawal symptoms caused by discontinuation of opioid drugs, and naloxone reverses and blocks the effect of opioids.

The Suboxone brand had U.S. sales of approximately $1.86 billion MAT for the most recent twelve months ending in April 2018 according to IMS Health.

Shares of Dr. Reddy have decreased 12% year to date compared with the industry’s growth of 2.4%.

Last month, Indivior PLC entered into a settlement agreement with Par Pharmaceutical Inc., Par Pharmaceutical Companies Inc., Endo International PLC (collectively, “Par”) and IntelGenx Technologies Corp., resolving patent litigation related to Suboxone Sublingual Film.

The litigation was pending in the U.S. District Court for the District of Delaware and resulted from Par’s submission of an Abbreviated New Drug Application (ANDA) to the FDA seeking approval to market generic versions of Suboxone Film. The settlement permitted Par to begin selling a generic version of Suboxone Film on Jan 1, 2023, or earlier under certain circumstances.

We note that, Dr. Reddy’s enjoys a strong position in the generics market. As of Mar 31, 2018, Dr. Reddy has 110 generic filings (107 abbreviated New Drug Applications (ANDAs) and three new drug applications) that are pending for the FDA approval.

 

Zacks Rank and Stocks to Consider

Dr. Reddy’shas a Zacks Rank #3 (Hold).

Some better-ranked stocks from the same space are Illumina, Inc. (ILMN - Free Report) ) and Aeglea BioTherapeutics, Inc. . While Illumina sports a Zacks Rank #1 (Strong Buy), Aeglea carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina’s earnings per share estimates have moved up from $4.60 to $4.86 for 2018 and from $5.34 to $5.60 for 2019 over the past 30 days. The company delivered a positive earnings surprise in all the trailing four quarters with an average beat of 23.17%. The stock has rallied 32.8% so far this year.

Aeglea’s loss per share estimates have narrowed from $1.93 to $1.67 for 2018 and from $3.86 to $3.57 for 2019 over the past 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 19.32%. The stock has rallied 92.2% so far this year.

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