Shares in the British FTSE 100 pharmaceuticals giant Shire yesterday plunged 11 per cent after regulators gave their backing to a generic rival of one of its best-selling drugs.
US regulators backed a cheaper, copycat version of Shire's hyperactivity medicine, Adderall XR, made by US generics firm Watson Pharmaceuticals.
The move, which came almost two years earlier than they had expected surprised analysts and according to one, the business could be expected this business to shrink precipitously.
Although Shire has come out with newer medicines for attention deficit hyperactivity disorder (ADHD), including Vyvanse and Intuniv which saw growing sales in the US, Adderall had racked up $533 million in sales last year, up 48 per cent on $342 million.
According to some analysts, investors could expect Shire "to be hit by potentially severe downgrades", but said that would depend on several "important imponderables", including the timing and pricing of the generic rival's launch by Watson.
Shire said, it still expected to "deliver good full-year 2012 earnings growth", adding it would remain a big player in the ADHD market.