(Alliance News) - Indivior PLC still faces uncertainties, but Moody's Investors Service on Friday said the conclusion of a criminal case in the US was a step in the right direction.
The ratings agency affirmed the pharmaceutical firm's B3 corporate family rating and upgraded its probability of default rating to B3-PD from Caa1-PD.
The outlook on these ratings was lifted to stable from negative.
Indivior on Friday said it will part with USD600 million to resolve criminal charges in the US related to its Suboxone film to treat opioid dependence medication.
The company in April 2019 said a grand jury in the Western District of Virginia has issued an indictment of 28 felony counts against the company related to fraud.
The felonies, issued in connection with a federal criminal investigation initiated by the US Department of Justice in 2013, include one count of conspiracy to commit mail, wire and health care fraud; one count of health care fraud; four counts of mail fraud; and 22 counts of wire fraud.
Indivior could have faced USD3 billion in fines related to the matters.
"Moody's views the settlement a credit negative, as settlement payments will consume cash over several years. Partially offsetting these cash outflows related to the settlement is Indivior's significant cash balance of more than USD900 million," Moody's said.
"Supporting the outlook revision to stable is Moody's view that Indivior's DOJ settlement payments will be manageable with Indivior's significant cash balances. Moody's expects that Indivior's cash is sufficient to support strategic investments for the ongoing commercialisation of Sublocade and Perseris over the next 18 months, and a working capital unwind associated with sales rebates and returns within Medicaid."
Indivior still faces "key uncertainties to the future of its business", the ratings agency said.
"Successful uptake of its newer products, Sublocade and Perseris, is critical for more than offsetting erosion of its Suboxone Film product to generic competition. Commercial success in both of these products will require significant investment which risk EBITDA running negative over the next 12 to 18 months," Moody's added.
Indivior shares closed 38% higher at 119.60 pence each in London on Friday.
By Eric Cunha; ericcunha@alliancenews.com
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Indivior (INDV)