Net loss grows for Inotiv amid DOJ agreement
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West Lafayette-based Inotiv Inc. is reporting a fiscal second quarter net loss of $48.1 million, compared to a loss of just under $10 million during the same period last year.
The pharmaceutical testing company said Wednesday that it has also reached an “agreement in principle” with the U.S. Department of Justice to resolve an investigation into the company’s now-shuttered facility in Cumberland, Virginia.
In 2022, Inotiv reached a settlement with the DOJ and the U.S. Department of Agriculture following a lawsuit that was filed over an investigation into the Virginia dog breeding facility operated by Inotiv’s Indianapolis-based subsidiary, Envigo RMS.
Inspections of the facility found record-keeping issues related to the mortality of dogs, as well as live dogs housed in filthy conditions that had received inadequate medical care and insufficient food. At least 145 beagles found to be in “acute distress” were seized.
As part of that settlement, an additional 4,000 beagles were relinquished to the Humane Society of the United States.
Inotiv did not provide specific details of the agreement with the DOJ, noting that the deal must still be finalized. The company said it has accrued an estimated $26.5 million in costs related to the agreement through the first half of the fiscal year, and more costs could be incurred.
Total revenue for the quarter was $119 million, down from $151 million in the fiscal third quarter for 2023. Inotiv CEO Robert Leasure said the decrease was primarily driven by weak demand for non-human primates and a “decrease in early-stage discovery work and orders.”
“We also continue to near completion of our remaining site optimization project in the U.K.,” Leasure said in a news release. “Additionally, the transformation of Inotiv’s business in order to capture greater market share and growth in the long-run has been supported by a reduction in expenses while ramping sales and marketing efforts to grow revenue and margins. As we improved efficiencies and moved to right size our operations, we further reduced our workforce and other expenses.”
As part of the site optimization plan, Inotiv said it continues to lease back its Blackthorn U.K. facility until those operations are transferred to its Hillcrest, U.K. facility, which is expected to be complete by the end of September.
The Cumberland, Virginia site is under contract to be sold, though a timeline for closure of the sale is not yet known. Inotiv said it also completed the sale of its Haslett, Michigan facility last month, and is looking to sell 85 acres of undeveloped land in Pennsylvania.
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