Indivior plc (lon:indv)
Indivior – Correctly Priced Or Oversold?

Indivior dropped from 414p to 253p at the start of business on the 1st of September and has recovered to 300p by the 8th.

This sounds great, it is a 20% profit but I don't get why anyone was buying!

Sometimes it is easy to see the market over reacting and it is reasonable to take a view based on that.

Indivior has enjoyed a protected status in the market in the US with a product called Suboxone a very profitable anti opiate addiction treatment.

There is a competitor, Activis, with a generic version, for generic read much cheaper, which is currently banned from production on the basis of possible patent violation, these patents have been found not to be applicable.

Apparently the competing product is not yet approved but it is expected to be, otherwise why bother?

Assuming approval Indivor's own analysis is that 80% of their income comes from Suboxone and they are likely to lose 80% of their sales to the competitor's product.

It seems very risky to be buying shares on the hope of a bounce when the reason for the drop is not a bad management decision but a legal decision that may effectively wipe out most of a business’s revenue.

Of course it is possible that many people understand the case better than I do, but I can't imagie that many smaller investors have been following Indivior and are able to make such a quick decision on the subject.

I look at today's big losers and see them as a possible buy, but I have seen so many go on to be even bigger losers that I try and understand why they are likely to recover.

I can't see beyond the many possible futures for Indivior especially as the 400p share price may easily have been a blip due to good results. So we are looking at a possible 30% return over a complete wipe out.