Reckitt and Indivior Surge as the opioid cloud rises by Investing.com

By Geoffrey Smith

Investing.com – The opioid shadow that hovers over the UK-based health and consumer group Reckitt Benckiser (LON 🙂 lifted Thursday as the company announced it would settle all US federal claims against it for $ 1.4 billion.

Reckitt grew by 2.6% at 16:45 (0845 GMT) on news, well ahead of the UK market where it only increased by 0.2%, as well as other European markets that all tended to increase. The US Federal Reserve said on Wednesday that a cut in US spending would be likely by the end of the month.

The settlement amount is impressive: more than twice the fine of $ 600 million paid by the manufacturer of OxyContin, Purdue Pharma, in 2007, which was to date the highest payment ever recorded at following the scandal of opioids in the United States. But from Reckitt's point of view, this is a price that is worth paying to isolate it from any additional costs that may arise if and when its former pharmaceutical unit Indivior – which was indicted in April by the federal government for fraudulent marketing of its anti-dependence product Suboxone – comes to trial.

"This avoids the cost, uncertainty and distraction badociated with ongoing investigations, litigation and risk of indictment at a time of profound transformation under RB 2.0 and during the CEO's transition," summed up Reckitt.

Shares in Indivior (LON :), which were fully derived from Reckitt in 2014, also surged Thursday, albeit for different reasons.

The outlook for revenue and earnings was noted this year, thanks to the strong performance of Suboxone Film.

Indivior shares, which had lost more than 90% over the past year as a result of the clarification of its legal problems in the United States, increased more than 35% at first, but reduced those gains to reach 27% increase in the middle of the morning.