MARKET REPORT: Conclusion to US criminal investigation puts rocket under shares in pharmaceuticals group Indivior
The conclusion to a US criminal investigation put a rocket under shares in pharmaceuticals group Indivior.
The Slough firm agreed to pay £470m over seven years and said it had ordered a subsidiary to plead guilty in a trial over what prosecutors described as a ‘truly shameful scheme’ that put profits before the health of patients.
Indivior, the US government argued, had overseen a multi-billion pound fraud to drive up the sales of its opioid addiction treatment, suboxone.
In 2010 it launched a version to be placed under the tongue, where it would dissolve. It then marketed it to persuade doctors to stop prescribing tablets and replace them with the film version, which it claimed was safer.
The former FTSE 250-listed firm also set up a online and telephone scheme that put addicts in touch with doctors who the company knew were prescribing suboxone and other opioids at high rates and in suspect circumstances. The case struck a nerve in the US, which is battling an opioid epidemic, and had the ability to bankrupt the company.
It was expected to be required to pay a fine of at least £2.3billion if found guilty. But the agreement to pay £470m sent Indivior shares 37.9 per cent, or 32.85p, up to 119.6p.
The same bounce wasn’t demonstrated across the wider market.
In fact, global markets tumbled into the red as tensions ramped up between the US and China to their most dangerous levels in years. China demanded the US close its consulate in Chengdu, in the south-west of the country, in retaliation for a similar notice American authorities issued Chna’s mission in Houston earlier this week.
As the number of coronavirus cases continues to climb worldwide – surpassing 4m in the US alone – traders have been rattled by further strain between the two superpowers.
The FTSE 100 fell 1.4 per cent, or 87.62 points, to 6123.82 by last night’s close, while the FTSE 250 also dropped 1.3 per cent, or 224.61 points, to finish at 17,264.84.
The story was the same across Europe and Wall Street – France’s Cac 40 lost 1.6 per cent, Germany’s Dax 2 per cent and the Dow Jones 0.5 per cent. The Nasdaq, suffering from a profit-taking tech sell-off after a recent boom, fell by a more pronounced 2.3 per cent before rebounding.
Plumbing supplies and kitchen fittings seller Ferguson was a big winner, rising 1.7 per cent, or 118p, to 6992p. It said business had started recovering between May and July after a sharp drop in April.
The firm, previously known as Wolseley, is still looking to cut costs and is trying to encourage customers to buy online. A series of companies announced director changes in a Friday round of boardroom musical chairs.
Tushar Morzaria, the finance director of Barclays, which fell 2.5 per cent, or 2.9p, to 113.6p, is joining the board of BP – down 0.6 per cent, or 1.7p, to 298.1p – as a non-executive director.
He will be a member of the oil giant’s audit committee as it seeks to overhaul the organisation from being one of the world’s biggest fossil fuel companies to a green powerhouse under its newish boss Bernard Looney.
Over at brick maker Ibstock, the managing director of Ibstock Clay, Kate Tinsley, abruptly stepped down from her role. Shares fell 1 per cent, or 1.7p, to 167.5p.
And at struggling mums and babies retailer Mothercare – down 7.3 per cent, or 0.54p, to 6.82p – ‘boomerang boss’ Mark Newton-Jones stepped down as an executive director. He will continue to sit on the board as a non-executive director – a switch planned earlier this year when he stepped aside as chief executive.