Investors in pharmaceuticals businesses are a nervous bunch as Bruce Cozadd and his team at Dublin-based Jazz Pharmaceuticals discovered this week.

Despite publishing figures showing a near doubling of revenue following its acquisition of rival Eusa last year, and announcing plans for a $200 million share buyback, the shares slid 10 per cent.

The catalyst was concern over possible generic competition for Xyrem, the company's leading product.

Xyrem is used to reduce excessive daytime sleepiness in patients with narcolepsy and to reduce attacks of a related condition, cataplexy, which weakens or paralyses muscles without warning.

But apparently, the FDA is in discussions that could clear the way for the introduction of some generic competition.

Understandably, the company was distinctly coy about the issue on a conference call with analysts, expressing guarded confidence in its position.

But clearly, it is sufficiently worried to raise it in the first place.

That’s hardly surprising when you consider that Xyrem delivered sales of $117.5 million in the past quarter alone, up 60 per cent year on year and accounting for around 60 per cent of Jazz’s $196 million revenue.

Share price volatility will not cheer Seamus Mulligan and other Irish executives of the former Azur Pharma, which was acquired in a $500 million all-stock deal that saw Jazz move to Dublin at the start of last year. Mulligan sold some shares in a rights issue at $58 in March but is still a substantial holder of the stock which is now treading closer to the $56 mark.