Indivior share price crashes 70 per cent after allegations of fraudulent drug marketing scheme
Shares in FTSE 250-listed drug company Indivior crashed 70 per cent this morning after it was hit with a US indictment containing 28 felony counts last night.
Its shares were down 70 per cent at 31p this morning.
Reckitt Benckiser, its former parent company, saw its shares slide six per cent to 6,014p.
Read more: Indivior launches generic version of own drug to beat copycats
Indivior has been accused of engaging in a fraudulent marketing scheme to boost prescriptions of its Suboxone Film product that is used to treat opioid addiction.
A federal grand jury in Virginia issued the indictment yesterday in connection with the federal criminal investigation initiated by the US Department of Justice in December 2013.
The indictment contains 28 felony counts including one count of conspiracy to commit mail, wire and health care fraud; one count of health care fraud; four counts of mail fraud; and twenty-two counts of wire fraud.
In a statement to the stock market this morning, the company said the allegations are “based on actions that occurred almost exclusively prior to Indivior becoming an independent company in its demerger from Reckitt Benckiser Group at the end of 2014.”
Read more: Indivior boosts profits but warns of US market uncertainty for key drugs
It said it believes the allegations are “unsupported by the facts and the law” and said “key allegations have been contradicted by the US government's scientific agencies, the Food and Drug Administration and the Centers for Disease Control.”
Indivior warned that an adverse judgment in the case could "have a material adverse effect on the company and its financial position and outlook".
The company's share price has taken a hammering over the last year as it struggles to maintain the primacy of its Suboxone Film drug in the key US market.
A year ago its shares were trading above 400p, but increased competition from generic drug makers entering the market and a series of court room defeats in its attempts to keep them out, has led to a damaging share price slide.
Reckitt Benckiser issued a statement to the stock exchange, which said: "This indictment is not against RB Group or any other group company."
The company said that in its annual report it had recognised a provision of $400m (£313m).