Pacira Pharmaceuticals disclosed a subpoena from the Department of Justice and now the stock is getting crushed.
In a statement Thursday, the company said it has received a subpoena from the DoJ to produce documents related to how it marketed Exparel, a painkiller used after surgery.
In early afternoon trading, the stock was down by as much as 12% to near $US81 a share, the lowest its been since last June.
The company made $US188.5 million in net sales for the drug last year, which accounted for 95% of its revenues.
The Food and Drugs Administration had warned Pacira about how it advertised the drug last September. While it won approval for only 24-hour pain relief, the company said the drug worked for up to three days, according to FiercePharma.
The company said it intends to cooperate with the investigation. Pacira has a market cap of $US2.95 billion.
Here’s a chart showing the plunge in trading Thursday:
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