Shire share price: US regulator sues group's ViroPharma unit

Shire (LON:SHP) is facing a legal challenge in the US with the Federal Trade Commission (FTC) suing the group’s ViroPharma unit of abusing government processes to fight off generic competition to its antibiotic treatment Vancocin.

The news comes after the London-listed rare disease specialist recently agreed a $350-million settlement in the US over claims that it had used “kickbacks and other unlawful methods” to induce doctors to prescribe one of its drugs.

Shire’s share price has fallen deep into the red in London this morning, having shed 1.47 percent to 4,493.80p as of 08:16 GMT, and underperforming the benchmark FTSE 100 index which is currently 0.05 percent worse off at 7,182.33 points. The pharmco’s shares have gained some 28 percent over the past year, but are down by about four percent in the year-to-date.

The FTC announced in a statement yesterday that it had filed a complaint, charging ViroPharma with violating the antitrust laws by abusing government processes to delay generic competition to its branded prescription drug, Vancocin. The complaint alleges that as a result of the drugmaker’s actions, “consumers and other purchasers paid hundreds of millions of dollars more for their medication”.

Shire, which acquired ViroPharma in January 2014, said in a statement that it believed that the regulator’s challenge was “wholly without merit,” adding that it would “vigorously defend” the claims. The pharmco noted that it had divested Vancocin in August 2014.

The legal challenge comes after last month, Shire agreed to pay $350 million to US settle claims that it employed kickbacks and other unlawful methods to induce clinics and physicians to use or overuse its product ‘Dermagraft,’ a bioengineered human skin substitute approved or the treatment of diabetic foot ulcers. The Financial Times quoted the rare disease specialist as saying at the time that it had not “admitted wrongdoing of any kind” in the finalised settlement with the US Department of Justice.

Shire is scheduled to update investors on its full-year performance on February 16.