With a $3 billion lawsuit from the U.S. government hanging overhead and Suboxone generics on the march, things are looking grim for Indivior. And executives warned Thursday that sales will take a big dive this year, partly because of its legal troubles.
Indivior forecast (PDF) 2019 revenue nearly 50% lighter than last year’s total as the company struggles through a federal indictment, leveled in April, accusing the company of deceiving doctors about the benefits of its opioid dependence drug, Suboxone Film.
In a first-quarter earnings presentation Thursday, Indivior projected sales of $525 million to $575 million on the year—a steep decline from its $1.05 billion top line last year—specifically tied to federal scrutiny of Suboxone and the drug’s loss of exclusivity earlier this year.
“The Group recognizes that its stakeholders now face additional uncertainty arising from the Department of Justice’s action,” the company said. “The Indivior Board of Directors has been extensively advised by external legal counsel that it has strong defenses to the Department of Justice’s allegations.”
In early April, federal prosecutors accused Indivior of presenting misleading claims about the benefits of Suboxone Film, a newer version of the company’s pill. After developing the film in 2007, prosecutors said, Indivior began lying to doctors about the drug’s safety in an attempt to move patients to the film formulation and boost sales.
RELATED: Feds charge Indivior with fraud, citing $3B scheme to pump up Suboxone sales
But misstating the film’s benefits was only one tactic in the company’s fraudulent marketing scheme, prosecutors said, which also included pulling the Suboxone pill off the market in an attempt to deter generic competitors and launching a phone and internet network to connect patients to doctors prescribing Suboxone in a “careless and clinically unwarranted manner.”
In response to the indictment, Suboxone said it was disappointed by the decision and accused federal prosecutors of pursuing “self-serving headlines.”
RELATED: Indivior faces huge sales loss as Suboxone court loss puts generics on tap next week
The federal indictment came at a bad time for Indivior, which lost a key court battle in February. A U.S. Court of Appeals ruled in favor of Indian drugmaker Dr. Reddy’s Laboratories in an injunction battle with Indivior over the launch of its generic competitor to Suboxone, opening the floodgates for U.S. generics.
Immediately after the decision, analysts predicted the ruling could cut Indivior’s market share by 80% within weeks, sending the company’s share prices tumbling by 11% on a day and 70% on the year. As of Thursday, Indivior’s market cap had dropped nearly 74% year to date.
RELATED: Indivior faces suit by 35 states claiming it ‘illegally’ blocked Suboxone competitors
Indivior is one of a group of drugmakers recently stung by federal prosecutors for questionable marketing of opioid and opioid dependence meds.
The U.S. government has targeted Purdue Pharma and its opioid blockbuster Oxycontin in a suite of federal suits, and top executives from drugmaker Insys are currently on trial for claims they pumped sales of the company’s powerful opioid spray, Subsys.
