13th Feb 2020 09:56
(Alliance News) - Litigation-laden pharmaceuticals firm Indivior PLC cautioned future legal costs could have a "material impact" on the company as it announced profit fell by more than a third in 2019.
Shares in the company were 19% lower at 40.01 pence each in London on Thursday morning.
Indivior's net revenue was 22% lower at USD785 million in 2019. Pretax profit slipped 35% to USD180 million, Indivior added.
This was despite costs falling. Selling, general & administrative expenses was 16% lower year-on-year at USD414 million, meanwhile research & development costs fell 42% to USD53 million.
For 2020, the company expects net revenue in the range of USD525 million and USD585 million, which could again represent a year-on-year fall of as much as a third.
The company also warned it anticipates to swing to a net loss between USD20 million and USD50 million. In 2019, the company's net profit fell 15% to USD134 million.
Turning to litigation, the company in April 2019 said a grand jury in the Western District of Virginia has issued an indictment of 28 felony counts against the company related to fraud.
The felonies, issued in connection with a federal criminal investigation initiated by the US Department of Justice in 2013, include one count of conspiracy to commit mail, wire and health care fraud; one count of health care fraud; four counts of mail fraud; and 22 counts of wire fraud.
Indivior could face USD3 billion in fines related to the matters.
Indivior said on Thursday: "It is not possible to predict with any certainty the potential impact of this litigation or to quantify the ultimate cost of a verdict or resolution, but it could have a material impact on the group."
Elsewhere, the company is also involved in a spate of other legal matters.
It said it has "fully cooperated" with a civil investigation related to "the group's marketing and promotion of Suboxone products and its interactions with a non-profit third-party organisation". Suboxone is an opioid addiction treatment.
In 2019, Indivior learned it also faces matters with state regulators in Illinois and Indiana, again related to the company's sales and marketing activity.
Chief Executive Shaun Thaxter said: "2019 was a challenging year for Indivior but I am proud that it brought out the very best in our people as we focused our efforts on improving the lives of patients suffering from addiction and its co-occurring disorders.
"Although we are optimistic about delivering on our strategic priorities in 2020, we of course recognise the legal uncertainties we face. We are proactively working to manage these risks while our teams remain focused on leveraging the strategic and operational accomplishments of the past year to further our leadership position in addiction science and diversification into behavioural health."
By Eric Cunha; [email protected]
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