Reckitt Benckiser Faces Generic Threats After FDA Rejection
Feb. 25 (Bloomberg) -- Reckitt Benckiser Group Plc faces competition in pharmaceuticals for the first time after the U.S. Food and Drug Administration approved two generic variants of its Suboxone heroin-dependency drug, thwarting the company’s attempts to keep rivals away from its most profitable business.
The company said today that two manufacturers have FDA approval to produce generic Suboxone tablets in the U.S. Competition could arrive within a month, according to Alex Howson, an analyst at Jefferies International in London.
Reckitt Benckiser shares fell as much as 4.4 percent, also hurt by the FDA’s rejection in a Feb. 22 letter of the company’s September petition asking that makers of similar medicines implement more safeguards. The FDA also asked the Federal Trade Commission to look into claims by generic drug makers of anti- competitive business practices on Reckitt Benckiser’s part.
The shadow of competition to Suboxone has hung over the Slough, England-based company since it lost U.S. patent protection in 2009. The pharmaceuticals unit generated 21 percent of profit last year, and analysts today reduced their 2013 profit estimates by as much as 4 percent.
“The market has been waiting for this news since October 2009, when Suboxone’s orphan drug status lapsed,” Deutsche Bank AG analyst Harold Thompson said in a note today. “The tougher and longer-term impact will be to know how current film users react, with cash payers the most open to switch.”
Reckitt Benckiser, which said it was “disappointed” by the rejection of its petition, has said generics would eliminate as much as 90 percent of tablet sales and up to 20 percent of the newer film-strip version, which dissolves under the tongue and has captured a 64 percent volume share in the U.S.
One of the generics will come from Bridgewater, New Jersey- based Amneal Pharmaceuticals LLC, which said in a statement today that is has received FDA approval for a generic version of Suboxone tablets, to be available in March. The other will be made by Actavis Inc. (ACT) of Parsippany, New Jersey, which said in a statement it intends to begin shipping its product immediately.
Reckitt Benckiser said it’s sticking with its decision to stop producing Suboxone in tablet form next month as it weans patients onto the film-strip version, which it unveiled in 2010.
The shares were down 3.7 percent at 4,350 pence at 1:30 p.m., the second-biggest drop in the U.K. FTSE 100 Index. The earlier 4.4 percent decline was the most since May 2012.
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