(Reuters) - Indivior (INDV.L) reported a steep fall in quarterly profit on Thursday, as the British drugmaker spent heavily on promoting its latest opioid addiction treatment and incurred higher costs related a U.S. investigation into its best-selling drug.
The company, spun-off from Reckitt Benckiser (RB.L) in 2014, faces a $3 billion fine under criminal charges pressed by the United States for illegally marketing Suboxone, Indivior’s best-selling opioid addiction treatment.
Indivior, though had denied the allegation, said its selling, general and administrative expenses in the quarter nearly tripled, as it increased litigation and antitrust provisions to $621 million from $438 million previously.
Jefferies analysts said the increase in legal provisions could signal progression in discussions with the U.S. Department of Justice, which the brokerage views “positively”.
The company’s shares were down nearly 6% at 47.6 pence by 1157 GMT amid a broader market selloff.
Its stock has dwindled in value in the past year over fears of cheaper competition to Suboxone, eroding its market share.
While Indivior has been shifting focus onto newer treatments such as its latest opioid treatment, Sublocade, and Perseris for schizophrenia, stay-at-home orders imposed to halt the spread of the coronavirus have made it difficult for patients to visit clinics and get their therapies.
“At the end of the quarter, we experienced an abrupt change in market conditions as the COVID-19 pandemic began to take effect,” said Chief Executive Shaun Thaxter, adding that the company was ensuring adequate supplies of its medicines and conserving cash to ride out the crisis.
Adjusted operating profit in three months to March fell to $3 million from $102 million a year ago. London-listed Indivior withdrew its 2020 forecast last month and on Thursday said it was still unable to provide guidance. (bit.ly/2yVe1KW)
Reporting by Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli