Federal charges pummel shares of British opioid manufacturer
It's a long article and I only posted parts of it. Worth a read imo. I've bolded some of the interesting mentions in the article:
Indivior Plc lost nearly three-quarters of its stock market value on Wednesday and former parent Reckitt Benckiser also fell after the U.S. Justice Department accused the British drugmaker of illegally boosting prescriptions for its blockbuster opioid addiction treatment Suboxone.
An indictment filed in federal court in Abingdon, Va., alleged Indivior made billions of dollars by deceiving doctors and health care benefit programs into believing the film version of Suboxone was safer and less susceptible to abuse than similar drugs.
The indictment charged Indivior and its subsidiary Indivior Inc. with conspiracy, health care fraud, mail fraud and wire fraud. The U.S. government said it would seek to have it forfeit at least $3 billion.
Reckitt Benckiser wasn’t charged, but the indictment said the illegal behavior began before it spun off Indivior in 2014. It refers to Indivior’s owner until then as “Company A.”
The indictment alleges, for example, that executives of “Company A” made or approved false statements that the film version was safer to have around children than the discontinued tablet version, “even though they knew the primary reason for the discontinuance was to delay FDA approval of generic Suboxone.”
Reckitt, owner of Durex condoms and Lysol cleaners, responded in a brief statement on Wednesday, saying: “This indictment is not against RB Group Plc or any other group company and we currently have no additional or new information in respect of this matter, apart from what has been publicly issued by the Department of Justice and Indivior Plc.”
This also comes at a bad time for Reckitt, which was just starting to regain investor confidence after a series of one-off problems including a safety scandal in South Korea, a failed product launch, a cyber attack and a manufacturing glitch.
Its chief executive Rakesh Kapoor, who oversaw several acquisitions and divestitures with the aim of turning Reckitt into a global consumer health care company, will retire this year, even though a major undertaking — splitting Reckitt into two business units — is unfinished.
The spin-off, and the 2017 sale of Reckitt’s food unit, let Reckitt focus on expanding its consumer health business, which targets aging populations and those interested in health and wellness in the West and rising incomes in developing markets.
In addition to concern about Reckitt’s liability, investors on Wednesday worried about a possible spillover effect on Reckitt’s infant formula business.
The company had previously flagged implications including “potential criminal indictment of the group or employees, with reputational impact, distraction and potential debarment which could theoretically extend” to its infant formula business.
The business, which sells Enfamil formula, derives a portion of its sales from government contracts in the U.S. supplying a program to support low-income parents.
However, Reckitt said on Wednesday any risk to the infant formula business was theoretical and seen as “highly unlikely and only a remote possibility.” ($1 = 0.7640 pounds)
These companies are into a lot of the subjects we've covered here.
https://www.stltoday.com/news/national/crime-and-courts/u-s-indicts-indivior-over-suboxone-opioid-treatment-marketing/article_990da67d-3234-5d89-adf5-f3cfefb53b3f.html