- The former parent company Reckitt Benckiser filed a £1 billion opioid lawsuit against Indivior
The legal claim is related to the marketing of his drug Suboxon Film by smaller companies
The internal share price plummeted about 40% to 85 pence on Friday before recovering to 100 pence
The Indivior (LON: INDV) share price plummeted on Friday after it became known that former parent company Reckitt Benckiser had filed a £1 billion opioid lawsuit against Indivior worth more than Indivior’s total market value.
Suboxon drama continues
The lawsuit relates to the marketing of the drug suboxone film by smaller companies that became involved in the opioid crisis in the United States last year when a number of companies were accused of implementing an aggressive sales strategy that led to addiction and death.
The U.S. Department of Justice filed a lawsuit against Indivior claiming that Suboxon film was safer than similar drugs. In the indictment, the DoJ said Indivior had referred patients to doctors whom the company knew would recklessly prescribe the drug.
The company “strongly believes that the lawsuit is unfounded and that it has good reason to defend itself against the suit if served,” Indivior said.
Reckitt had not admitted misconduct last year, but it had agreed to pay a fine of $1.4 billion (£1.1 billion) to resolve the case, while Indivior said in 2018 it had “pleaded guilty on one count of having made a false statement regarding health issues in 2012.
It said at the time that it intended to “make payments to federal and state authorities totalling $600 million over a seven-year period.
Reckitt’s latest move against Indivior is expected to be a procedural step, as the consumer goods company is required to file a lawsuit within six years of the split. It is also assumed that Reckitt will have to file a formal lawsuit within four months and that settlement discussions are still ongoing.
Technical Analysis: Stock Crash
The internal share price fell by about 40% to 85 pence on Friday before recovering to 100 pence, which means that the market capitalisation of the pharmaceutical company is now around £735 million.
Daily chart of the Indivior share (TradingView)
The stock’s attempt to recover on Monday failed as sellers rejected attempts to close the day above the 110p mark. This level, along with the 100 DMA mark at 115p, forms a key resistance block that should limit any attempts to move higher.
Indivior’s shares plummeted when it became known that its former parent company, Reckitt Benckiser, had filed a £1 billion lawsuit over the marketing of its drug Suboxone Film.