Reckitt to pay $1.4 bln to end US opioid addiction treatment probes

Rakesh Kapoor chief executive officer of Reckitt Benckiser Group Plc pauses during a Bloomberg Television interview in London Feb. 19 2018

Rakesh Kapoor chief executive officer of Reckitt Benckiser Group Plc pauses during a Bloomberg Television interview in London Feb. 19 2018

Reckitt Benckiser Group PLC (LON:RB.) is to pay up to US$1.4bn to settle a long-running United States investigation into how it sold and marketed an opioid addiction treatment.

While Reckitt Benckiser denies all allegations that it engaged in any wrongful conduct, the board decided the agreement is in the best interests of the company and its shareholders.

It said the settlement would prevent uncertainty and distraction from continued investigations. 'As new CEO Laxman Narasimhan steps in (effective September 1), this clarifies the legal environment for RB and should allow the new management to focus on the RB 2.0 transformation, JP Morgan analysts wrote in a note.

Finsbury's Faeth Birch and Philip Walters rep RB. Indivior was spun off into a separate company from the RB Group in December 2014, but the exposure and looming litigation and probes related to Suboxone were still attached to the parent company.

Prosecutors also charged that Indivior promoted the company's "Here to Help" web and phone program as a resource for opioid-addiction patients, which they alleged was actually a method of connecting those patients to doctors the company knew were already prescribing Suboxone and other opioids "to more patients than allowed by federal law, at high doses, and in a careless and clinically unwarranted manner", the DOJ statement said.

The agreement announced on Thursday will fully resolve all federal investigations into Reckitt that are connected to the Indivior indictment, and protect the group's participation in any USA government schemes.

Gail Levine, a deputy director of the FTC's Bureau of Competition, said: "Buprenorphine products are approved for use in the treatment of Americans struggling to overcome opioid addiction, and, in the middle of the nation's opioid crisis, Reckitt allegedly sought to deny those consumers a lower-cost generic alternative to maintain its lucrative monopoly on the branded drug".

Arsenal want another centre-back despite sealing £27m Saliba
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Reckitt Benckiser shares rose 2.6% to 65.95 pounds at 0839 GMT on July 11.

In an effort to regain investor confidence after setbacks - including a safety scandal in South Korea, a failed product launch and a cyberattack - Reckitt's outgoing boss, Rakesh Kapoor, launched a plan to split the group into two business units - one for health and another for hygiene and home products.

Investors had feared the USA probes could hinder the transformation.

"The magnitude of the RB settlement is likely to be a focus, and in our view Indivior would be unlikely to afford this amount".

RB said the settlement would be funded through existing borrowing facilities and cash generation. 'The danger is that Narasimhan will be operating with one hand tied behind his back, he said.

Separately, Indivior's shares shot up 37.7% to 61p after it raised full year profit and sales guidance thanks to a better than expected first half showing from Suboxone. Its shares closed 6.73 percent higher on Thursday.

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