Inotiv delays earnings report amid investigation
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West Lafayette-based Inotiv Inc. (Nasdaq: NOTV) is delaying the full release of its fiscal fourth quarter and full-year earnings that were scheduled for Monday. The pharmaceutical testing company said the move is the result of an investigation into illegal imports of non-human primates (NHPs) by its principal supplier.
Inotiv said it was made aware in mid-November that the U.S. Attorney’s Office for the Southern District of Florida had charged two employees of the supplier, along with two Cambodian officials, with conspiring to illegally import NHPs into the U.S. from December 2017 through January 2022.
Two of Inotiv’s subsidiaries, Orient BioResource Center and Envigo Global Services Inc., received grand jury subpoenas from the U.S. Attorney’s office to produce documents and information related to their imports of NHPs into the U.S.
Inotiv said it has been cooperating fully with the U.S. Attorney’s office and will continue to do so.
“Since learning of the issues related to the supplier, the company has been focused on attempting to obtain additional information, assessing the impact on its NHP sale activities, communicating with its customers and lenders, and exploring all potential avenues to address this situation,” Inotiv said in a news release.
Inotiv said it is not currently importing any NHPs from Cambodia since the country ceased exports. However, the company is importing NHPs from other countries.
The company did provide preliminary financial data for Fiscal Year 2022, including total revenue of $547.7 million, up from $89.6 million in FY 2021. Of that new total, about $140 million was from NHPs that were imported from Cambodia.
Inotiv adds while it has not been asked to refrain from selling its Cambodian NHPs, it will refrain from doing so for the time being “until the company’s staff and external experts can evaluate what additionally can be done to satisfy itself that the NHPs in inventory from Cambodia can be reasonably determined to be purpose-bred.”
Even though it was notified of the investigation after the end of the fiscal year, Inotiv said certain events can impact the reporting of fiscal matters.
“The company determined that it requires additional time for further evaluation of the relevant current conditions and events, considered in the aggregate, as well as management’s plans that are intended to mitigate those conditions and events,” Inotiv said.
Inotiv said it is cooperating with the relevant regulators regarding the situation. The company did not specify when it plans to issue its latest earnings report.
The move is the latest in a series of issues for Inotiv this year. In May, the company’s Indianapolis-based subsidiary, Envigo RMS, was the subject of a federal lawsuit regarding animal welfare violations at a Virginia facility used for breeding dogs.
The company reached a settlement with the U.S. Department of Justice and the U.S. Department of Agriculture in July that included relinquishing 4,000 beagles at the facility to the Humane Society of the United States. Inotiv had previously announced it would close its two Virginia facilities.
Last month, Inotiv announced it was also consolidating additional facilities in Indianapolis and Europe.