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Dr Reddy's Laboratories stock closes 9.85% lower on US court order over Suboxone drug

The Dr Reddy's stock fell up to 10.61% or 246 points to 2,071.50 level. The stock closed 9.85% or 228 points lower at 2089.15 on the BSE.

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Dr Reddy's Laboratories stock closes 9.85% lower on US court order over Suboxone drug

The Dr Reddy's Laboratories stock fell in trade today after a US court granted preliminary injuction blocking the Hyderabad-based firm from selling cut-price versions (buprenorphine and naloxone) of the British drugmaker Indivior's best-selling opioid addiction treatment in the US. The ruling comes days after Indivior scrapped its full-year guidance citing an "accelerated" loss in US market share to the cheaper version of Suboxone launched by Dr Reddy's.

The Dr Reddy's stock fell up to 10.61% or 246 points to 2,071.50 level on the BSE.

At 12:41 pm, the stock fell 9.04% or 209.45 points to 2108 compared to its previous close of 2317.45 on the BSE.

Its market capitalisation fell to Rs 34,990 crore.

The stock closed 9.85% or 228 points lower at 2089.15 on the BSE.

Dr Reddy's and US-based Mylan received approval from the Food and Drug Administration (FDA) in June to sell versions of Indivior's bestselling opioid addiction treatment, which followed an immediate generic launch by the Indian firm in June.

The order was related to further sales and commercialisation of its Buprenorphine and Naloxone sublingual film in the US. It is the generic version of Indivior UK's Suboxone sublingual film. The product is indicated for treatment of opioid dependence.

"The company disagrees with the court's decision, and will vigorously appeal it," Dr Reddy's said in a BSE filing.

The company intends to appeal the decision made by the US District Court of New Jersey in a preliminary injunction hearing with respect to further sales and commercialisation of its product in the US, it added.

The Hyderabad-based firm had announced the receipt of approval by one of its wholly owned subsidiaries from the US Food and Drug Administration (USFDA) on June 15, 2018, Dr Reddy's said.

The stock has fallen 21.60% during the last one year. The stock has lost 12.18% since the beginning of this year.

The stock has been losing for the last two days and is down over 10% during the period.

The stock opened at a loss of 3.37% today.

17 of 40 brokerages rate the stock "buy" or higher, 13 "hold" and 10 "underperform" or "sell", according to Reuters.

Morgan Stanley on Dr Reddy's

The brokerage is overweight on the stock with a target price of Rs 3,465. Commercialization is now delayed and depends on the Appeals Court decision.  The decision is contrary to our expectation of sales resumption in ensuing weeks.

Jefferies on Dr Reddy's

Jefferies has an underperform rating on the stock with a target price of Rs 1,850. The brokerage said injunction is a surprise as Indivior had to show that prima-facie it can prevail in patent hearing.

Prabhudas Lilladher on Dr Reddy's

Prabhudas Lilladher on June 26, 2018 gave a reduce recommendation on the stock when its price stood at 2290 level.

The brokerage gave a target price of Rs 1766 for the next one year.

Edelweiss on Dr Reddy's

Edelweiss gave a buy call on June 28, 2018 with a target of 3,350 when its price stood at Rs 2274.   The recommendation is applicable for 52 weeks.

Indiabulls on Dr Reddy's

Indiabulls Venture gave a buy recommendation at price of 2318 with a price target of 2730 for 52 weeks on July 4, 2018. The price of the stock when the recommendation was made stood at 2274.50.

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