Indivior shares tumble over threat of mammoth £2.3bn fine in US
The drug firm is facing 28 charges related to fraud.
Shares in Indivior crashed on Wednesday after the drug company said it was facing a fine of up to 3 billion US dollars (£2.3 billion), leading analysts to suggest it could bankrupt the firm.
Indivior said a grand jury in the Western District of Virginia issued an indictment of 28 charges against the firm related to fraud.
The felonies, issued in connection with a federal criminal investigation initiated by the US Department of Justice in 2013, detail a host of allegations including conspiracy to commit mail, wire and healthcare fraud.
According to the indictment, Indivior “obtained billions of dollars in revenue from Suboxone Film prescriptions by deceiving healthcare providers and healthcare benefit programmes into believing that Suboxone Film was safer, less divertible, and less abusable than other opioid-addiction treatment drugs”.
Suboxone, an opioid addiction treatment, accounts for around 80% of Indivior’s revenue.
Analysts at Jefferies said they do not believe Indivior has the resources to pay such a fine, “hence we believe it would require either a major rights issue or could lead the company to bankruptcy”.
Shares tumbled more than 72% to 28.9p as investors fled from the stock.
The fallout also threatens to engulf Reckitt Benckiser, which owned Indivior until 2014.
The FTSE 100 giant said in a statement: “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.”
Reckitt has set aside 400 million US dollars (£313 million) to cater for any knock-on effects.
Shares in Reckitt were down nearly 7% at 5,977p.