* 40 pct drop wipes out gains for year
* Court ruling threatens major revenue source
* Dr Reddys welcomes ruling (Adds Dr Reddy's comment, further reaction)
Sept 1 (Reuters) - Shares in London-listed Indivior plunged 40 percent after the drugmaker said a U.S. court ruling could clear the way for a generic rival to its treatment for opioid addiction that generates 80 percent of its revenues.
Indivior said the Delaware District Court ruling meant it would not be able to rely on patents to prevent Indian firm Dr.Reddy's from making and marketing a generic alternative to Suboxone Film unless the judgment is reversed on appeal.
Suboxone Film had an average market share in the United States of 61 percent in 2016, Indivior said in a statement, and the treatment accounted for 80 percent of its total revenues last year.
Shares in Indivior were down 37.5 percent at 260.6 pence at 1000 GMT, after the ruling on patents for the Suboxone treatment delivered by dissolvable film placed under the tongue rather than by tablet. The fall meant the share price gains over the year were wiped out.
Indivior, spun off from Reckitt Benckiser in 2014, said it could not quantify the precise financial impact of generic alternatives to Suboxone Film on revenues but said it "could potentially result in a rapid and material loss of market share for Suboxone Film in the U.S."
Indivior said that if pharmacies could substitute Suboxone Film with a generic rival without direct consultation with the patient it could lead to the treatment losing up to 80 percent of its market share "within a matter of months."
Dr. Reddy's, whose shares gained 9 percent, bought the abbreviated new drug application (ANDA) for a generic rival treatment from Teva Pharmaceutical Industries in June 2016 for $70 million.
THREAT TO FORECASTS
Dr Reddy's welcomed the verdict.
"The judgment reiterates our commitment to providing affordable and innovative medicines that address the unmet and under-met needs of patients around the world," it said.
The company gave no further details of the timing of a possible rival treatment.
"Dr Reddy's still needs to obtain FDA approval. So even in the best case, launch by Dr. Reddy's is at least a year away," said Anubhav Aggarwal, an analyst with Credit Suisse.
Sales of Suboxone Film were higher in the first half of 2017 on the same period a year ago, but market share fell slightly to 59 percent from 61 percent. Generic rivals in tablet form are already on the market.
In September, 35 U.S. states and the District of Columbia filed a lawsuit against Indivior alleging that it tried to keep generic versions of a drug off the market.
The lawsuit by the states alleged that Indivior took steps to get patients to switch to the oral strip version of Suboxone.
Indivior said in its statement on Friday it would "continue vigorously defending its intellectual property."
Indivior did not make any immediate changes to its full-year forecasts, but said the risk to the guidance related to the launch of a generic suboxone film has increased.
The company raised its full-year revenue forecast by about 4 percent in July to a range of $1.09 billion to $1.12 billion.
"Guidance provided at 1H assumed no generic film launch; hence there is increased risk around the guidance and we expect the company to update the market if there is any change in the visibility on the timing of a potential generic launch," said James Vane-Tempest an analyst with Jefferies.
(Reporting by Justin George Varghese in Bengaluru; Editing by Edmund Blair and Keith Weir)