Sept. 25 (Bloomberg) -- Reckitt Benckiser Group Plc said it will cease production of the Suboxone opioid-dependency drug in tablet form within six months as it weans patients onto a version that’s less likely to be taken accidentally by children.
The decision was taken to reduce “pediatric exposure” to the tablet after a U.S. Poison Control Centers study found higher rates of accidental use compared with a film-strip version of the drug, according to a statement today from Slough, England-based Reckitt Benckiser, whose pharmaceutical unit is facing increasing threats from generic and branded competition.
Ending the supply of Suboxone tablets -- not mentioned in a July presentation by the head of the company’s pharmaceutical unit -- may mean that a generic Suboxone tablet is imminent, said Pablo Zuanic, an analyst at Liberum Capital. A generic entry would eliminate as much as 90 percent of tablet revenue and about 20 percent of film-strip sales, the company has said.
“We see this as a desperate move that may in the end destroy value and also reduce whatever the potential market value may be of RB Pharma in the eyes of any potential suitors,” Zuanic said in a note published today.
Reckitt Benckiser fell 0.8 percent to 3,609 pence in London trading, paring this year’s gain to 13 percent.
Explaining the decision, Reckitt Benckiser said the film-strip’s single-dose packaging is “believed to be” more child resistant than the tablets, which come in bottles of 30.
‘Sensible and Logical’
Suboxone tablets debuted in 2003 and lost U.S. patent protection in 2009. The film-strip version of the medication that dissolves under the tongue was introduced in 2010 and has captured a 56 percent volume share in the U.S., up from 48 percent at the end of 2011, the maker of Nurofen painkillers said in July. The company provides discounts on co-payments to encourage patients to switch to the film, which means film profit margins are about 10 percent narrower, it said.
“Reckitt’s move looks sensible and logical given that pediatric exposure has been an issue with the tablets,” Martin Deboo, an analyst at Investec, said in an e-mail. “However, the move to withdraw the tablet is not unhelpful to Reckitt’s broader commercial objective of migrating its user base onto the film variant, which is less vulnerable to generic entrants.”
‘A Genuine Win-Win?’
Should the U.S. Food and Drug Administration take a “negative or cynical view” of Reckitt Benckiser’s motivation, its relationship with the company “might sour” and the regulator might hasten the introduction of generic tablets, according to Andrew Wood, an analyst at Sanford C. Bernstein.
“Was RB making this move to benefit patients, or benefit itself, or was it a genuine win-win?” Wood wrote today.
An FDA spokeswoman didn’t return a call placed before normal business hours.
According to Liberum’s Zuanic, the decision to end tablet sales may be a signal that a film in development by U.S. startup BioDelivery Sciences International Inc. that’s expected to hit the market in 2014 will be a “relevant competitor.” BDSI’s film could garner $300 million in annual revenue, Chief Executive Officer Mark A. Sirgo said this year.
Reckitt Benckiser’s pharmaceutical business should increase sales by 12 percent to 862 million pounds ($1.4 billion) this year, analysts at Bernstein estimate, representing 9 percent of total revenue. The unit delivers more than one-fifth of operating profit and could fetch as much as 6 billion pounds if sold, Bernstein said. That valuation was based on the assumption that a generic tablet enters the market in January.
Suboxone “won’t be derailed” by generics, Shaun Thaxter, CEO of RB Pharma, said in the July investor presentation, adding that he expects as many as three generic tablets to come on the market. Teva Pharmaceuticals Industries Ltd., the world’s biggest generics maker, said in 2011 it might introduce a Suboxone copy, only to back off later in the year.
Thaxter also said in July that preliminary results of an analysis of accidental use by children found “very compelling clinical data” supporting the film as less prone to unintended pediatric abuse. The drug combines buprenorphine, a painkiller derived from the opium poppy that shares some of its properties, with naloxone, a chemical that blunts withdrawal symptoms.
Reckitt Benckiser said it issued a Citizen Petition asking that the U.S. Food and Drug Administration require manufacturers of buprenorphine-containing products to implement safeguards involving educational campaigns and child resistant packaging.
The 380,000 patients taking Suboxone in the U.S. today represent just 20 percent of the opioid-addicted population and the company has started a television ad campaign to raise awareness of opioid addiction as well as sales, Thaxter said.
RB Pharma is also developing an injectable Suboxone, as well as a drug for those addicted to cocaine.
Earlier this year, Reckitt Benckiser was sued by British health authorities over sales of the heartburn drug Gaviscon that were targeted by U.K. antitrust regulators. The company was fined 10.2 million pounds by the U.K. Office of Fair Trading in 2010 over its handling of the product.
The OFT said last year Reckitt had halted supplies of Gaviscon to the National Health Service to block sales of a generic version. The move ensured doctors prescribed a new Gaviscon product which was still protected by a patent.
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