Shire Shares Plunge after Watson's Low-Cost Adderall XR Drug Approved by Regulators

Shire shares plunged the most in nearly four years Monday after the pharmaceuticals firm lost a battle with US regulators that sees a rival allowed to produce a cheaper copy of its hyperactivity drug Adderall XR.

The two current authorised generic forms of Adderall XR are both provided by Shire, but Watson Pharmaceuticals has been approved to supply its own low-cost version which will bring competition and pricing pressure.

"While recognizing that there will be multiple dynamics affecting the overall market following the approval of the Actavis generic, Shire continues to believe that it will deliver good, full year 2012 earnings growth," a Shire statement said.

Shire plc shares were down 10.22 percent on the day to 1,765 at 08:51am BST and the worst performer on the benchmark FTSE 100.

Adderall XR is used to treat attention deficit hyperactivity disorder (ADHD). As well as Adderall XR, Shire also has newer ADHD-fighters Vyvanse and Intuniv on the market, both of which are growing in US market share.

Watson was taken to court by Shire back in April after the latter accused the former of infringing its patent on Adderall XR.

Back in its first quarter results, Shire reported a 20 percent increase in earnings per share because of the growing number of doctors prescribing Vyvanse and Intuniv.

Shire was given a boost when US regulators approved the use of Vyvanse in adults and adolescents as well as children, who it had been permission to give the drug in 2007.

Sales of Vyvanse increased 29 percent to $260m (£167.1), while Intuniv brought in $68.5m in the first quarter. Adderall XR sales were $111.4m.

The company is based in Dublin, but has offices in Basingstoke.