Scottish Daily Mail

In­di­v­ior hit by former owner’s £1.1bn law­suit

- By Francesca Washtell Business · Reckitt Benckiser · London · The Financial Times Share Index · MSCI Inc. · Joe Biden · JPMorgan Chase · Wizz Air · Ryanair · Indivior · Capita Group

I NDIVIOR’S mar­ket value plunged by a fifth af­ter its former owner kicked off a £1.1bn le­gal bat­tle against the opi­oid maker.

Reckitt Benckiser filed the law­suit in Lon­don’ s Com­mer­cial Court ear­lier this month, In­di­v­ior told the stock mar­ket yes­ter­day.

Though it added it has not yet been served.

Reckitt’s move could restart a cri­sis that has rocked In­di­v­ior for years over how the com­pany mar­keted its best-sell­ing opi­oid ad­dic­tion treat­ment, Subox­one.

US gov­ern­ment prose­cu­tors spent years ac­cus­ing In­di­v­ior of fraud­u­lently mar­ket­ing the block­buster drug and mak­ing mislead­ing safety claims to win en­dorse­ment from doc­tors.

In­di­v­ior has been fined hun­dreds of mil­lions of pounds and last month its former boss Shaun Thax­ter was sen­tenced to six months in a US jail.

That, sup­pos­edly, was the close of a scan­dal linked to an opi­oid epi­demic that has claimed hun­dreds of thou­sands of lives.

But con­sumer goods gi­ant Reckitt – which owns Nuro­fen, Cil­lit Bang and Det­tol – was also tar­geted by prose­cu­tors and had to cough up its own £1.1bn bill in 2019. In­di­v­ior was Reckitt’s phar­ma­ceu­ti­cals arm be­fore be­ing spun out as a listed com­pany in 2014.

Nei­ther Reckitt nor In­di­v­ior have given much away so far. But Reckitt’s le­gal bat­tle is thought to hinge around an agreement made dur­ing the de-merger that meant it would not have to accept li­a­bil­ity for claims against In­di­v­ior, be­fore and af­ter it was sep­a­rated.

News that the Subox­one saga is far from over sent In­di­v­ior share­hold­ers fleeing for the exit. Dur­ing trad­ing, shares fell by more than 40pc, but closed 19.8pc, or 24.65p, to 99.75p – wip­ing £180m off the com­pany’s value in the process.

Reckitt shares fell 1.3pc, or 86p, to 6516p.

It was a lack­lus­tre end to the week for the wider mar­ket, with the FTSE 100 ris­ing 0.1pc, or 4.65 points, to 6367.58, lag­ging be­hind and the FTSE 250 up by 0.3pc, or 66.37, to 19462.71.

The Foot­sie lagged be­hind Euro­pean peers – but global stocks on MSCI’s in­dex of de­vel­oped and emerg­ing mar­kets were on track for their best month on record fol­low­ing pos­i­tive Covid vac­cine up­dates and Joe Bi­den’s pres­i­den­tial elec­tion win. JP Mor­gan an­a­lysts yes­ter­day said the ‘hat­trick’ of break­throughs makes it even more likely that one of the worst-hit in­dus­tries dur­ing the pandemic will bounce back over the next few years.

Bud­get air­lines should be ‘back to nor­mal’ by 2023, the in­vest­ment bank said as it raised the tar­get prices on a string of com­pa­nies.

It bumped Easyjet (up 0.2pc, or 2.2p, to 838.8p) to 875p from 600p and re-eval­u­ated its tar­get price for Wizz Air (down 0.6pc, or 28p, to 4542p) to 585p from 395p.

Ryanair (up 0.4pc, or six cents, to €15.47) was raised to €18.50 from €13.

Con­trac­tor Capita re­ceived a damp re­sponse from in­vestors af­ter con­firm­ing it is in talks with pri­vate eq­uity group Mon­tagu to sell its Ed­u­ca­tion Soft­ware So­lu­tions arm. Thought to be worth around £500m, the di­vi­sion helps schools do ev­ery­thing from record­ing stu­dent at­ten­dance and man­ag­ing lunch pay­ments to keep­ing in touch with par­ents.

Shares fell 0.7pc, or 0.3p, to 44.6p, de­spite mak­ing progress with the sale, which it has been talk­ing about for sev­eral months.

Daily Mir­ror and Daily Ex­press pub­lisher Reach said it was per­form­ing bet­ter than ex­pected and that dig­i­tal rev­enues for the five months to Novem­ber 22 were up by 16.2pc.

Reach was one of the All-Share in­dex’s top ris­ers in early trad­ing – but it gave up gains through­out the day and closed down 9.1pc, or 14p, to 140p.

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