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Indivior shares fall after £1bn claim from former parent Reckitt Benckiser

UKRAINE - 2019/03/10:  In this photo illustration, the Indivior PLC company logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
UKRAINE - 2019/03/10: In this photo illustration, the Indivior PLC company logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)

Shares in pharmaceutical firm Indivior (INDV.L) tumbled on Friday after it revealed that former parent Reckitt Benckiser (RB.L) filed a £1bn ($1.3bn) claim against the drugmaker at the Commercial Court in London.

The claim related to an indemnity contained in the demerger agreement Indivior entered into after it was spun off from consumer goods giant, Reckitt in 2014, the company said.

Indivior said it does not have any further details at this time, adding it will assess the background and merits to the case with its advisers.

"The claim has not been served on [Indivior] and the company does not have any further details at this time. The company will assess with its advisors the background and merits to the case and will provide an update in due course," the company said.

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Indivior shares plummeted about 40% to 80p at lunchtime in London on Friday. Reckitt dropped 1.6% to 6,493p.

Indivior has been dogged by lawsuits over its opioid dependency treatment Suboxone ever since the Reckitt demerger. Graph: Yahoo Finance
Shares of Indivior, which makes opioid addiction treatment Suboxone, were down more than 40% lunchtime in London. Graph: Yahoo Finance

British Indivior has been dogged by lawsuits over its opioid dependency treatment Suboxone ever since the Reckitt demerger — battling multiple legal actions over how the drug was marketed.

The group has also been fighting off generic competitors claiming its patent has run out.

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In October, former chief executive Shaun Thaxter was sentenced to six months in prison in the US. The company also agreed to pay $600m to the US Department of Justice, the Federal Trade Commission (FTC) and various state attorneys general as part of a settlement over the way its star drug was marketed.

Thaxter “failed to prevent efforts to build profits through misleading safety claims, which led to millions of dollars in ill-gotten gains for Indivior,” US Attorney Daniel P Bubar said.

Meanwhile, in 2019 Reckitt agreed to pay around $1.4bn to the US authorities in an effort to draw a line under the issue. That settlement related to a Department of Justice investigation which accused Indivior of illegally boosting prescriptions of Suboxone.

An indictment claimed Indivior marketed Suboxone as safer and less abusable than other treatments, deceiving healthcare providers and allowing the firm to rake in billions of dollars in extra sales.

It was also accused of pushing patients towards doctors who Indivior knew were prescribing opioids “at high rates and in a clinically unwarranted manner.” At the time, Reckitt denied the allegations but said it had settled the claims to avoid further litigation and uncertainty.

Yahoo Finance has reached out to Reckitt for comment.

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