(Reuters) - Shares of Britain's Indivior PLC (L:INDV) slumped more than 16 percent on Wednesday after the maker of opioid addiction treatments said it may have to pay "materially" more than $220 million (£177 million) to settle anticompetitive lawsuits in the United States.
Indivior recorded $220 million, or nearly 21 percent of its 2016 revenue, in legal costs in the third quarter to defend itself in lawsuits brought by 35 U.S. states and the District of Columbia in September.
The lawsuits alleged Indivior took steps to keep generic versions of its drug, Suboxone, off the market and get patients to switch to a dissolvable oral strip version of Suboxone, used to treat patients addicted to heroin and other painkillers.
"The company cannot predict with any certainty whether it will be able to reach ultimate resolution with the Department of Justice or any or all of the other parties, or the ultimate cost of resolving all of the matters," said Indivior, which was spun off from Reckitt Benckiser (L:RB) in 2014.
Indivior's shares snapped a 16-session winning streak and fell 16.4 percent to a session-low of 308.9 pence on Wednesday. The stock pared some losses to trade down 8 percent at 339.8 pence at 1239 GMT.
Numis Securities analyst Paul Cuddon said the ongoing investigations and concerns about the settlement amount had made investors nervous.
Investors were also disappointed that the company's 2017 forecast wasn't a little stronger, given the strong market growth in 2016, Cuddon added.
Indivior's profit fell by about a third to $98 million for the year ended Dec. 31., hit by the $220 million charge. On an adjusted basis, its profit rose 2.7 percent to $387 million.
The company forecast 2017 net income of $200 million to $220 million.
Indivior's shares was among the worst performers on the FTSE 250 mid-cap index (FTMC) and the Euro Stoxx 600 index (STOXX).