Fallout for Investors
As these facts surfaced through corrective disclosures, Inotiv’s stock price collapsed—plummeting from $55.55 in September 2021 to $6.82 in November 2022, according to the complaint.
By 2024, Envigo subsidiaries pled guilty to Animal Welfare Act and Clean Water Act violations, cementing the DOJ’s case. In addition, federal prosecutors charged executives tied to Inotiv’s primate supplier, along with Cambodian officials, for conspiring to illegally import monkeys between 2017 and 2022.
Court’s Earlier Ruling and Proxy Statement Claims
U.S. District Judge Philip P. Simon previously declined to dismiss the case, finding that the investors had plausibly alleged Inotiv withheld critical facts. The suit also argues the company issued a misleading proxy statement during the merger, failing to note that Envigo was already under multiple government probes tied to animal welfare at its Cumberland, Virginia, facility.
Timeline of Disclosures
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June 2021: DOJ subpoenas hit Envigo and OBRC; an OBRC executive faced criminal charges soon after.
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May 2022: Inotiv disclosed the DOJ’s lawsuit against Envigo for mistreating thousands of beagles.
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November 2022: Inotiv revealed the primate-smuggling indictment tied to its supplier and Cambodian officials.
Despite knowing of these investigations months earlier, investors argue, Inotiv stayed silent, depriving shareholders of vital information.
