Concordia International Corp Stock Falls 25% Due To Proposed U.K. Legislation

On Friday, shares in Concordia fell 25 percent following the United Kingdom’s proposal for a new legislation to prevent drug firms from implementing excessive price increases.

The fall posed another holdup for the Oakville, Ontario-based company, which has lost 88 percent of its value in this year alone, benefiting short sellers, who have circled the pharmaceutical company.

Friday’s crash follows U.K Health Secretary Jeremy Hunt’s announcement that drug firms will very soon be prevented from increasing the prices of common drugs. He presented legislation that will stop dramatic price changes, recognized as the Health Service Medical Supplies Bill. It is expected to be enacted to next spring.

Concordia was pinpointed earlier this year for its price extortion by the U.K’s National Health Service, which covers costs for common drugs in the country. AMCo, Concordia’s U.K. division, owns some well-positioned generic medicines, which have not faced any competition from rivals. That gave it the chance increase the price of eye drops for bacterial conjunctivitis 14-fold.

The chief executive of Concordia, Mark Thompson, released a statement Friday, regarding the new legislation.

“Concordia is supportive of any action that provides patients with greater access to safe and efficacious medicines,” he said. “We anticipate that growth from our international segment, which includes the U.K. market, going forward will primarily come from new product launches. We are monitoring the bill and evaluating its timing and its impact, if any, on our business.”

The company reasserted its full-year guidance for 2016, stating that it believes that it has “access to sufficient financial resources to manage its liabilities.”

Concordia, which previously compared itself to rival Valeant Pharmaceuticals International Inc., has been struggling to change its business model as governments progressively target the price extortion strategies of drug firms. Previously this year, the firm changed its name from Concordia Healthcare Corp. to Concordia International Corp.

Analysts have grilled the company’s recent moves, not to mention a $4-million lawsuit Thompson launched against Marc Cohodes, an outspoken American short seller who has targeted the company.

On Friday morning, Concordia’s stock was trading at $6.50, a 25 percent decline. The shares last climaxed at slightly more than $110 on September 5^th, 2015.