Reckitt Benckiser CEO Rakesh Kapoor has been wanting someone to take a look at the books of its U.S.-based pharma operation, hoping to unload the unit as generic competition takes a stick to its key product. But he may have gotten more than he bargained for as federal agents carried boxes of documents out of the Reckitt Benckiser headquarters in Virginia.
According to a report by WWBT NBC 12, agents with the U.S. Office of Inspector General and the IRS descended on the Reckitt Benckiser Pharmaceutical headquarters in Richmond, VA, at the request of the U.S. Attorney for the Western District of Virginia. A call from FiercePharma to the U.S. Attorney was not returned. A statement from the company said, "We can confirm that federal officers from the U.S. government presented a search warrant at the offices of Reckitt Benckiser Pharmaceuticals, Inc. in Richmond, Virginia, USA on Tuesday morning. RB is cooperating fully with the investigation, but the officials did not disclose the purpose of the warrant."
The U.K.-based consumer goods company said in October it was weighing a sale of its pharma unit after its flagship drug, Suboxone, fell victim to generic competition. Analysts said the unit might fetch up to $3.2 billion. In February, the FDA rejected Reckitt's petition to block rival copies of the heroin addiction drug. Reckitt had sunk time and money into a study to support stricter packaging rules.
What the FDA did do was approve two Suboxone generics. And according to a recent story in The New York Times about the dangers of Suboxone, the FDA also suggested the Federal Trade Commission (FTC) look into possible anticompetitive business practices by the company.
With generics coming into the market, the company reported a 14% drop in third-quarter revenues for the drug. But some analysts had indicated there was still potential in the RB pharma unit that, in the right hands, it could live up to. Some have suggested that Shire ($SHPG), with its experience dealing with highly controlled drugs, might be a good fit. "There is definitely a lot of future potential in RB Pharma," Bernstein analyst Andrew Wood told Bloomberg in November. "There must be some pharma companies out there who think that they can do even better, and take it to the next level."
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