- A federal grand jury indicted Indivior for the marketing practices surrounding Suboxone Film, an opioid addiction treatment that the company claimed was safer and harder to abuse. The government wants a $3 billion settlement and forfeiture of all assets to repay health insurance programs for misuse of the product.
- Indivior's London-listed shares plummeted 66% Wednesday, as analysts questioned whether it could stay in business. The company says the charges against it are false, arguing it engaged in extensive education campaigns about dosing limits and monitored physicians to detect those it suspected of overprescribing.
- The criminal indictment came in the wake of numerous civil lawsuits from state attorneys general against Purdue Pharma, the maker of the opioid OxyContin.
Treating pain with addictive opioid-based medications has led to a drug crisis throughout the country. Many of the treatments for addiction are opioids themselves, making it challenging to prevent their abuse. Indivior has been caught up in wide-ranging efforts to clamp down on misuse, drawing an indictment from a grand jury convened in the U.S. District Court for Western Virginia after failing to reach a settlement with the federal government.
The indictment charges that Indivior promoted its Suboxone Film, a formulation of the opioid buprenorphine and naloxone designed to absorb under the tongue, as a safer form of the opioid than the Suboxone tablet that had preceded it. The tablet lost patent protection in 2009, while the film was introduced in 2007.
Suboxone Film was marketed as having a lower risk of exposure to children and less likely to be diverted to addicts for abuse, which the government claims is fraudulent because Indivior lacked scientific evidence.
Furthermore, the grand jury indictment claims that Indivior ran an internet and telephone service that referred patients to physicians who were prescribing to more patients than the limits permitted under the Controlled Substances Act, and at higher doses than allowed.
Slough, United Kingdom-based Indivior, which was spun out from Reckitt Benckiser in 2014, said the U.S. Centers for Disease Control and the Food and Drug Administration have confirmed that the unit-dose packaging reduces children's risk. CDC has reported that emergency room admissions of children under 6 due to accidental ingestion of buprenorophine and naloxone declined 65% after Suboxone Film was launched, Indivior said.
Moreover, Indivior claimed it effectively monitored physician prescribing patterns and even reported some it believed were prescribing inappropriately.
The $3 billion and asset forfeitures sought by government prosecutors would almost certainly put Indivior out of business. The company had a total of $1.5 billion in assets at the end of 2018, including $924 million in cash.
Stifel analyst Max Herrmann set a price target of 0.10 pounds, or $0.13, following the news, which "reflects some optionality in case of a favorable outcome from legal proceedings." Since the indictment, Indivior shares dropped from about 1.06 pounds to 0.30 pounds.