UPDATE 2-Imprimis Pharma to take on Allergan's Restasis with cheaper product

(Adds Allergan statement)

Oct 19 (Reuters) - Shares of Imprimis Pharmaceuticals Inc sky-rocketed as much as 91 percent on Thursday, after the company said it would launch a cheaper alternative to Allergan Plc's controversial dry eye drug, Restasis, by next month.

San Diego-based Imprimis' therapy will cost 99 cents for a month's supply, with refills starting at $79 a month and the company will start selling prescriptions on Nov. 1, Imprimis' Chief Executive Mark Baum told Reuters.

Allergan recently stirred controversy after striking a deal with the Native American Saint Regis Mohawk tribe that would shield certain patents on Restasis.

However, a U.S. judge on Monday invalidated the patents on Allergan's Restasis on grounds that they cover ideas that are obvious and analysts now expect generic competition for the drug as soon as next year.

Imprimis, which makes compounded medications for costly prescription drugs, on Thursday said it would offer a customizable topical formulation of cyclosporine an off-patent chemical used in Restasis.

"Cyclosporine is off-patent, (it) happens to be inexpensive and we buy it from FDA-registered manufacturers," Baum said.

This is not the first time Imprimis has aimed to cut into margins for drugmakers that produce costly drugs.

The company makes a $1 copycat of Turing Pharmaceuticals' anti-infective drug Daraprim, whose price was raised to $750 per pill from $13.50.

"Our objective when we launch a product like this is to take at least 10 percent market share," Baum said, adding that he does not expect Restasis generics to reach the market in the next year or two.

Allergan said in a statement that it fully recognizes the value and legitimacy of traditional and legal compounding efforts.

If successful in bringing forward a product, Imprimis' compounded cyclosporine-based formulation will have not been tested in controlled trials, FDA reviewed or approved, Allergan said in a statement.

Shares of Imprimis, which had a market cap of $29.3 million at the close of trade on Wednesday, closed up 28.77 percent at $1.88. (Reporting by Manas Mishra and Divya Grover in Bengaluru; Editing by Bernard Orr and Shounak Dasgupta)