Shares in FTSE 250 pharmaceuticals group Indivior jumped more than 12 per cent on Thursday morning, after the addiction specialist significantly upgraded its profit forecasts.
Indivior, which was spun out of Reckitt Benckiser in 2014, said it now expects full-year adjusted profits of between $265m and $285m, well above previous estimates of $200m to $220m.
Revenues in the first half of the year increased just 4 per cent, to $553m, but net income jumped by 43 per cent as a result of lower research and development and legal costs.
Indivior has been mired in a series of legal cases since before it was listed, including a federal criminal investigation related to its flagship addiction treatment Suboxone. A number of US states have also alleged that Indivior illegally tried to keep generic versions of the drug off the market after its exclusive patent expired.
The company has set aside $242m to deal with all of its legal cases. The latest figure includes an extra $25m after Indivior reached a settlement with generic drugmaker Amneal.
Litigation costs have weighed on the company’s share price in recent months, but today’s news sent them to their highest level in more than four months. At publication time they were up 11.8 per cent at 355p.
Shaun Thaxter, Indivior chief executive, said:
We have maintained good business momentum and executed well throughout H! 2017, as underlying market growth in our largest market remains strong.
This, combined with lower expenses, has allowed us to generate strong overall H1 2017 results and to raise our FY 2017 revenue and net income guidance. We are also pleased in the quarter to have conclusively resolved outstanding litigation with Amneal, which we believe is in the best interest of shareholders and is another step in resolving the legal risks to our business.