Indivior Provides Business Update; Conference
Call at 8:00 AM U.S. EDT
THIS
ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF
ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 (AS IT FORMS
PART OF DOMESTIC LAW IN THE UK BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018).
Richmond, VA, July
9, 2024 - Indivior PLC (Nasdaq/LSE: INDV) today announces a
business update encompassing the Group's outlook for Q2 and FY 2024
financial performance, its product portfolio and litigation.
Indivior is:
· Updating
Q2 net revenue (NR) expectations and FY 2024 guidance to reflect
continued adverse market dynamics impacting near-term SUBLOCADE NR
growth as well as the initial commercial adoption of OPVEE; At the
mid-point, the Group continues to expect strong YOY NR growth for
SUBLOCADE of 25% and YOY adjusted operating income growth of 12% in
FY 2024;
·
Reiterating its medium-term financial outlook for double-digit NR
growth and operating margin expansion, based on its confidence in
achieving its intermediate and peak NR goals for SUBLOCADE as well
as peak NR expectations for OPVEE;
·
Discontinuing sales and marketing for PERSERIS due to expected
adverse impacts from increased payor management of the category
that crystalized in Q2 and that are expected to make the product no
longer financially viable; and,
· Reaching
a settlement agreement with end payor plaintiffs in the Health Care
Services Corp (HCSC) consolidated cases to resolve the litigation
for $85m.
Comment by Mark Crossley, CEO of
Indivior PLC
"Despite positive early performance trends at the start of the
second quarter, SUBLOCADE net revenue (NR) has continued to be
impacted more than we expected by a combination of transitory
factors, primarily the elimination of COVID emergency measures
related to automatic Medicaid coverage renewals. Furthermore, as we
look to the second half of the year, the U.S. government has
extended renewal allowances for certain States which will further
delay the annualization of this significant headwind. We are
therefore reducing our FY 2024 guidance to reflect these impacts.
Importantly, despite the disproportionate disruption to our patient
base, we expect SUBLOCADE NR to grow by 25% at the mid-point of our
new guidance range, reflecting strong underlying
demand.
Looking beyond these transitory impacts, we remain firm in our
conviction that SUBLOCADE's unique profile to address high-powered
synthetic opioids, such as fentanyl, provides us with a tremendous
opportunity to meet the growing and changing needs of patients. As
a result, we continue to be confident that SUBLOCADE will achieve a
net revenue run rate of $1 billion as we exit 2025 and ultimately
meet our target of greater than $1.5 billion in peak annual net
revenue, underpinning the successful delivery of our medium-term
profitable growth ambitions.
Separately, we are taking decisive action that we believe is
in the best interest of shareholders in two areas. First, we are
creating greater certainty for all stakeholders by settling with
Plaintiffs ahead of our antitrust trial on July 15th.
Second, due to anticipated increased payor management of the
category that makes PERSERIS' future no longer financially viable,
we have determined to take the required actions to discontinue the
product. While we believe discontinuing PERSERIS is the right
business decision, unfortunately it will impact our people and
patients, and we will support them through this
transition."
Discontinuation of
PERSERIS Sales & Marketing:
The Group will immediately cease all sales and
marketing activities related to PERSERIS. The Group believes this
action is in the best interests of shareholders due to the highly
competitive market and impending changes that are expected to
intensify payor management in the treatment category in which
PERSERIS participates. Analysis of forthcoming changes suggests
that there is no longer a path forward for PERSERIS that is
financially viable. Indivior will continue to supply PERSERIS for
the foreseeable future to avoid disruption to patient care but will
no longer deploy a dedicated sales force. As a result, we expect to
reduce headcount by approximately 130 employees. Indivior does not
anticipate material impacts on its other marketed products because
of this decision.
Total expected charges related to this action are
expected to be approximately $65m, of which approximately $20m are
expected to be cash related to severance and termination of certain
agreements. These charges will be recognized in the second and
third quarters and excluded from adjusted earnings. Ongoing annual
operating expense savings are expected to be approximately $50m,
with $20m expected to be realized in H2 2024. The impact of this
decision on FY 2024 guidance is included in the updated guidance
set out below.
Preliminary Q2 Net
Revenue Expectations:
The Group is providing the below preliminary
expectations for key NR drivers for Q2 2024.
|
July 9,
2024
|
Net
Revenue (NR)
|
$295m to
$303m (+8% vs. Q2 2023 at the mid-point)
|
SUBLOCADE NR
|
$188m to
$196m (+24% vs. Q2 2023 at the
mid-point)
|
PERSERIS NR
|
$10m to
$13m
|
Continued transitory patient treatment disruptions
from ongoing Medicaid disenrollments that accelerated at the end of
the quarter have disproportionately impacted SUBLOCADE. Combined
with lower-than-expected stocking levels in key channels and
longer-than-expected activation times with new criminal justice
system accounts, SUBLOCADE NR was lower than expected in the second
quarter.
· Ongoing
Medicaid disenrollments in the second quarter continued to impact
new patient starts and refills. At the end of the second quarter,
Medicaid disenrollments stood at approximately 23
million1 versus approximately 19 million1 at
the end of the first quarter. The continued decline in Medicaid
patient levels in the second quarter combined with fewer patients
returning to treatment from first quarter Medicaid disenrollments
and the Change Healthcare cyber-attack disruption had a greater
than expected impact on NR performance in the second quarter. As a
result, despite early positive performance trends in the quarter,
overall new SUBLOCADE patient growth and refills were below
expectations. In addition, Medicaid renewal actions in some
instances are being permitted by Centers for Medicare &
Medicaid Services (CMS) to extend into the third quarter, likely
prolonging the period of SUBLOCADE patient disruption.
1 www.kff.org
· Stocking
in the second quarter was also lower than expected, as days of
SUBLOCADE inventory on-hand remained relatively unchanged at first
quarter levels of under two weeks, which is historically low. The
Group now believes its specialty pharmacy and specialty
distributors have made permanent one-off inventory adjustments to
take advantage of shortened lead times associated with supply
efficiencies to organized health and criminal justice system
customers.
· While
SUBLOCADE NR from the criminal justice system continued to grow
strongly in the second quarter, increasing approximately 85%
compared to the year-ago quarter, longer lead times to open new
criminal justice system accounts also impacted expectations for NR
in the second quarter. The Group remains confident this timing
issue does not undermine the potential for SUBLOCADE to address the
large unmet need in this important and growing new channel.
· Impact of
competitor activity was in line with expectations.
OPVEE NR in the second quarter was immaterial
(<$1m). The OPVEE experience program continues to increase trial
among target customers and user feedback remains overwhelmingly
positive. Expected adoption is, however, lagging expectations. The
Group continues to update standing orders and grant funding for all
opioid reversal medications. As a result, the Group expects that
OPVEE NR in FY 2024 will be driven predominantly by fulfilling the
first delivery of product under the 10-year contract with BARDA
(~$8m).
Updated FY 2024
Guidance1:
Considering the above factors and the cessation of
PERSERIS sales and marketing, the Group is updating FY 2024
guidance as set out below. The Group continues to expect solid
adjusted operating income growth and adjusted operating margin
expansion at the midpoint of approximately 100 basis points versus
FY 2023. Beyond 2024, the Group will no longer separately report
PERSERIS NR.
|
Updated (July 9,
2024)
|
May 23,
2024
|
Net
Revenue (NR)
|
$1,150m
to $1,215m
(+8% at
mid-point vs. FY 2023)
|
$1,240m
to $1,330m (+18% at mid-point vs. FY
2023)
|
SUBLOCADE NR
|
$765m to
$805m
(+25% at
mid-point vs. FY 2023)
|
$820m to
$880m (+35% at mid-point vs. FY 2023)
|
OPVEE NR
|
$9m to
$14m
Predominantly expected to come from fulfilling first delivery
as part of 10-year BARDA2 contract (~$8m)
|
$15m to
$25m
|
PERSERIS NR
|
$27m to
$33m
|
$55m to
$65m (+43% vs. at mid-point vs. FY 2023)
|
SUBOXONE Film Market Share3
|
No
change
|
Assumes
historic rate of share decline of 1 to 2 percentage points and the
potential impact from a fourth buprenorphine/naloxone sublingual
film generic in the U.S. market
|
Adjusted Gross Margin
|
No
change
|
Low to
mid 80% range
|
Adjusted SG&A
|
($550m)
to ($560m)
Reflecting discontinuation of the sales and marketing of
PERSERIS
|
($575m)
to ($590m)
|
R&D
|
No
change
|
($120m)
to ($130m)
|
Adjusted Operating Profit
|
$285m to
$320m
(approx.
100 bps of margin expansion vs. FY 2023)
|
$330m to
$380m
|
1 Guidance assumes no material
change in exchange rates for key currencies compared with FY 2023
average rates, notably USD/GBP and USD/EUR
2 Biomedical Advanced Research and
Development Authority
3 Reflecting underlying share
erosion at a similar rate to the last two years (approximately 2
share points p.a.)
Long-term Net
Revenue Targets Remain Unchanged:
The Group remains confident that given the scale of
the U.S. opioid epidemic, which is now being driven by misuse of
fentanyl and other synthetic opioids, its opportunity to help
patients and deliver value for shareholders remains intact. The
unique profile of SUBLOCADE's paradigm-shifting treatment gives the
Group confidence in delivering on its stated NR targets for
SUBLOCADE: exiting 2025 at a $1 billion NR run-rate and achieving
greater than $1.5 billion in peak annual NR.
Settlement with
Certain End Payors:
On July 8, 2024, Indivior Inc. and Indivior Solutions
Inc. reached an agreement via mediation with Blue Cross Blue Shield
of Massachusetts, Inc., Health Care Service Corp., Blue Cross and
Blue Shield of Florida, Inc., Molina Healthcare, Inc., Aetna, Inc.,
and certain of their affiliates (collectively, the "Plaintiffs") to
resolve consolidated antitrust litigation proceedings in Roanoke
County Circuit Court. These actions had been pending since 2020.
The agreement will terminate the trial that was scheduled to begin
on July 15, 2024.
As part of the agreement with the plaintiffs, Indivior
will pay $85 million and will take a charge of $85 million in the
second quarter, which will be excluded from adjusted earnings.
Payment will be funded from Indivior's existing cash balance.
Conference Call
Information:
Indivior will host a presentation
via live webcast at 1:00 p.m. London time (8:00 a.m. U.S. Eastern)
today. The webcast event can be accessed on the "Investors" section
of the Group's website at www.indivior.com before the event begins.
Participants may access the event
telephonically to ask a question by registering with the following
link:
https://register.vevent.com/register/BI07a0798620a745bca417b4b9d15d9fe2
(Registrants will have an option to be called
back directly immediately prior to the call or be provided a
call-in # with a unique pin code following their
registration)
The webcast link is:
https://edge.media-server.com/mmc/p/nga7b6nn
Important
Cautionary Note Regarding Forward-looking
Statements
This press release contains certain statements that
are forward-looking. Forward-looking statements include, among
other things, statements regarding financial guidance for 2024,
including sales expectations for SUBLOCADE, PERSERIS, and OPVEE,
expected growth in adjusted operating income and expected margin
expansion; expected medium term margin expansion and cash flow
generation; peak net revenue goals for SUBLOCADE and OPVEE, and a
$1 billion net revenue run rate for SUBLOCADE by the end of 2025;
our expectation that we will continue to grow and increase
shareholder value; our expectation that cessation of PERSERIS
marketing efforts will not impact sales of our other products;
expected costs and timing of costs, and related expense savings,
from no longer marketing PERSERIS; our expectation that the Court
will approve the settlement with the end payors; and other
statements containing the words "believe," "anticipate," "plan,"
"expect," "intend," "estimate," "forecast," "strategy," "target,"
"guidance," "outlook," "potential," "project," "priority," "may,"
"will," "should," "would," "could," "can," "outlook," "guidance,"
the negatives thereof, and variations thereon and similar
expressions. By their nature, such forward-looking statements
involve risks and uncertainties as they relate to events or
circumstances that may or may not occur in the future.
Actual results may differ materially from those
expressed or implied in these forward-looking statements due to a
number of factors, including: lower than expected future sales of
our other products; increased impacts from competition; failure to
achieve market acceptance of OPVEE; the possibility that the Court
will not approve the settlement, the possibility that the Court
will require changes to the settlement prior to approving it,
potential delays in obtaining Court approval of the settlement; and
those factors described in Indivior's Annual Report on Form 20-F
for the fiscal year 2023 and its other filings with the U.S.
Securities and Exchange Commission.
We have based the forward-looking statements in this
press release on our current expectations and beliefs concerning
future events. Forward-looking statements contained in this press
release apply only at the date of this press release, and we
undertake no obligation publicly to update or revise any
forward-looking statement, whether due to new information, future
developments or otherwise.
About Indivior
Indivior is a global pharmaceutical company working to
help change patients' lives by developing medicines to treat
substance use disorders (SUD) and serious mental illnesses. Our
vision is that all patients around the world will have access to
evidence-based treatment for the chronic conditions and
co-occurring disorders of SUD. Indivior is dedicated to
transforming SUD from a global human crisis to a recognized and
treated chronic disease. Building on its global portfolio of OUD
treatments, Indivior has a pipeline of product candidates designed
to both expand on its heritage in this category and potentially
address other chronic conditions and co-occurring disorders of SUD,
including alcohol use disorder and cannabis use disorder.
Headquartered in the United States in Richmond, VA, Indivior
employs more than 1,100 individuals globally and its portfolio of
products is available in 37 countries worldwide. Visit
www.indivior.com to learn more. Connect with Indivior on
LinkedIn by visiting
www.linkedin.com/ company/indivior.
This release is being made by Kathryn Hudson,
Company Secretary Indivior PLC.
Contact:
Jason Thompson
Vice President, Investor
Relations
Tel: 804-402-7123 or
jason.thompson@indivior.com
Tim Owens
Director, Investor
Relations
Tel: 804-263-3978 or
timothy.owens@indivior.com
###