A clinical research company has agreed to pay a record $35 million fine for violations of the Animal Welfare Act (AWA) as part of a deal to resolve criminal charges stemming from the abuse of beagles bred for medical research.

In addition to Inotiv's fine, two of its subsidiaries pleaded guilty Monday to violations of the AWA and the Clean Water Act (CWA). Inotiv has also agreed to enhance its animal welfare standards and be subject to a compliance monitor under the plea agreements, Virginia federal prosecutors said.

Envigo To Pay Record $35M Fine in Welfare Case : Subsidiary Guilty Pleas

Envigo RMS LLC pleaded guilty to AWA violations, while Envigo Global Services Inc. pleaded guilty to CWA violations related to a dog breeding facility in Cumberland County. The U.S. Department of Justice confiscated over 4,000 beagles from the facility in 2022.

"Envigo promoted a business culture that prioritized profit and convenience over following the law," Western District of Virginia U.S. Attorney Christopher Kavanaugh said. "This callous approach led to dire consequences: the inhumane treatment of animals and the contamination of our waterway."

Inotiv's Response

Inotiv stated that "today's agreement will allow us to comprehensively resolve this matter, bringing to an end uncertainty around the investigation, and enabling the company to focus our full attention on providing our customers with the tools and solutions they need to conduct critical drug discovery and development efforts that are essential to saving human lives."

Envigo To Pay Record $35M Fine in Welfare Case : Detailed Violations

According to a criminal information, Envigo bred and sold animals for medical and scientific research and held the necessary permits to do so. The Cumberland County facility housed over 5,000 dogs and, in 2019, shipped 4,795 beagles for about $4.7 million in sales, prosecutors said.

Between July 2021 and May 2022, Envigo was cited around 60 times for noncompliance with the AWA.

In May 2022, multiple law enforcement agencies executed a search warrant at the facility, seizing 445 beagles suffering from "acute distress" requiring treatment for life-threatening conditions, according to the information.

Inadequate Veterinary Care

Prosecutors stated that Envigo hired an inadequate attending veterinarian, identified as "AV," despite internal concerns about AV's competence. After acquiring the facility, Envigo continued to employ AV despite ongoing employee complaints about AV's surgical skills, supervisory abilities, and attendance, according to the information.

Substandard Conditions

Prosecutors revealed that Envigo was aware the water provided to dogs at the Cumberland facility was unsuitable for drinking and provided bottled water for employees. The company violated AWA standards for housing the dogs, with inspectors finding as many as nine puppies in a 16-square-foot enclosure, the information said.

The facility's building and dog food were also infested with pests, including ants, flies, worms, and cockroaches, according to prosecutors.

Envigo To Pay Record $35M Fine in Welfare Case : Investor Lawsuit

Inotiv was sued by a proposed class of investors in June 2022 who claimed the company hadn't informed them that their subsidiaries were being investigated by the DOJ for animal welfare violations. In April, an Indiana federal judge declined to dismiss the case, ruling that the investors had made plausible allegations that Inotiv and some of its executives withheld information from shareholders when acquiring Envigo.

Envigo To Pay Record $35M Fine in Welfare Case : Legal Representation

The government is represented by Banu Rangarajan and Sarah Brown of the U.S. Department of Justice's Environmental Crimes Section, along with Randy Ramseyer, Corey Hall, Michelle Welch, and Carrie Macon of the U.S. Attorney's Office for the Western District of Virginia.

Inotiv is represented by Daniel Suleiman of Covington & Burling LLP. Envigo is represented by Jillian Feirson of Covington & Burling LLP.