Indivior’s market value plunged by a fifth after its former owner kicked off a £1.1billion legal battle against the opioid maker.
Reckitt Benckiser filed the lawsuit in London’s Commercial Court earlier this month, Indivior told the stock market yesterday. Though it added it has not yet been served.
Reckitt’s move could restart a crisis that has rocked Indivior for years over how the company marketed its best-selling opioid addiction treatment, Suboxone.
Legal battle: Reckitt Benckiser filed a lawsuit against opioid maker Indivior in London’s Commercial Court earlier this month
US government prosecutors spent years accusing Indivior of fraudulently marketing the blockbuster drug and making misleading safety claims to win endorsement from doctors.
Indivior has been fined hundreds of millions of pounds and last month its former boss Shaun Thaxter was sentenced to six months in a US jail.
That, supposedly, was the close of a scandal linked to an opioid epidemic that has claimed hundreds of thousands of lives.
But consumer goods giant Reckitt – which owns Nurofen, Cillit Bang and Dettol – was also targeted by prosecutors and had to cough up its own £1.1billion bill in 2019.
Stock Watch -Benchmark Holdings
A slump in prawn sales during the pandemic knocked sales at the largest division of aquaculture group Benchmark Holdings.
Annual turnover in Benchmark’s advanced nutrition business fell by a fifth to £59million as people around the world have eaten out less frequently this year.
Revenues across AIM-listed Benchmark fell 15 per cent to £106million in the year to September.
Benchmark shares fell 5.3 per cent, or 3p, to 54p, but are up 25 per cent so far this year.
Indivior was Reckitt’s pharmaceuticals arm before being spun out as a listed company in 2014.
Neither Reckitt nor Indivior have given much away so far. But Reckitt’s legal battle is thought to hinge around an agreement made during the de-merger that meant it would not have to accept liability for claims against Indivior, before and after it was separated.
News that the Suboxone saga is far from over sent Indivior shareholders fleeing for the exit.
During trading, shares fell by more than 40 per cent, but closed 19.8 per cent, or 24.65p, to 99.75p – wiping £180million off the company’s value in the process.
Reckitt shares fell 1.3 per cent, or 86p, to 6516p.
It was a lacklustre end to the week for the wider market, with the FTSE 100 rising 0.1 per cent, or 4.65 points, to 6367.58, lagging behind and the FTSE 250 up by 0.3 per cent, or 66.37, to 19462.71.
The Footsie lagged behind European peers – but global stocks on MSCI’s index of developed and emerging markets were on track for their best month on record following positive Covid vaccine updates and Joe Biden’s presidential election win.
JP Morgan analysts yesterday said the ‘hat-trick’ of breakthroughs makes it even more likely that one of the worst-hit industries during the pandemic will bounce back over the next few years.
Budget airlines should be ‘back to normal’ by 2023, the investment bank said as it raised the target prices on a string of companies.
It bumped Easyjet (up 0.2 per cent, or 2.2p, to 838.8p) to 875p from 600p and re-evaluated its target price for Wizz Air (down 0.6 per cent, or 28p, to 4542p) to 585p from 395p.
Ryanair (up 0.4 per cent, or six cents, to €15.47) was raised to €18.50 from €13.
Contractor Capita received a damp response from investors after confirming it is in talks with private equity group Montagu to sell its Education Software Solutions arm.
Thought to be worth around £500million, the division helps schools do everything from recording student attendance and managing lunch payments to keeping in touch with parents.
Shares fell 0.7 per cent, or 0.3p, to 44.6p, despite making progress with the sale, which it has been talking about for several months.
Daily Mirror and Daily Express publisher Reach said it was performing better than expected and that digital revenues for the five months to November 22 were up by 16.2 per cent.
Reach was one of the All-Share index’s top risers in early trading – but it gave up gains throughout the day and closed down 9.1 per cent, or 14p, to 140p.