REG - Indivior PLC - 3rd Quarter Results <Origin Href="QuoteRef">INDV.L</Origin> - Part 2

IndiviorAnnouncement

02/11/2017 11:06

- Part 2: For the preceding part double click  ID:nRSB3989Va 

Share-based payments                                  10               9                
 Impact from foreign exchange movements                6                5                
 (Increase) in trade and other receivables             (20)             (38)             
 (Increase)/decrease in inventories                    (5)              -                
 (Decrease)/increase in trade and other payables       (34)             72               
 Increase in provisions                                -                221              
 Cash generated from operations                        274              359              
 Net financing costs                                   (22)             (33)             
 Taxes paid                                            (19)             (46)             
 Net cash inflow from operating activities             233              280              
                                                                                         
 CASH FLOWS FROM INVESTING ACTIVITIES                                                    
 Purchase of property, plant and equipment             (24)             (23)             
 Purchase of intangible assets                         (14)             -                
 Net cash (outflow) from investing activities          (38)             (23)             
                                                                                         
 CASH FLOWS FROM FINANCING ACTIVITIES                                                    
 Cash movement in borrowings                           (86)             (69)             
 Dividends paid                                        -                (69)             
 Proceeds from issuance of ordinary shares             2                -                
 Net cash (outflow) from financing activities          (84)             (138)            
                                                                                         
 Net increase in cash and cash equivalents             111              119              
 Cash and cash equivalents at beginning of the period  692              467              
 Exchange differences                                  3                -                
 Cash and cash equivalents at end of the period        806              586              
 
 
The notes are an integral part of these condensed consolidated interim
financial statements. 
 
Notes to the condensed consolidated interim financial statements 
 
1.   BASIS OF PREPARATION AND ACCOUNTING POLICIES 
 
Indivior PLC (the 'Company') is a public limited company incorporated and
domiciled in the United Kingdom on September 26, 2014. In these condensed
consolidated interim financial statements ('Interim Financial Statements'),
reference to the 'Group' means the Company and all its subsidiaries. 
 
These Interim Financial Statements have been prepared in conformity with IAS
34 'Interim Financial Reporting'. The financial information herein has been
prepared in the basis of the accounting policies set out in the annual
accounts of the Group for the year ended December 31, 2016. The Group prepares
its annual accounts in accordance with International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee (IFRIC) interpretations as
adopted by the European Union and the Companies Act 2006 (the Act) applicable
to companies reporting under IFRS. In preparing these condensed consolidated
interim financial statements, the significant judgments made by management in
applying the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated financial
statements for the year ended December 31, 2016, with the exception of changes
in estimates that are required in determining the provision for income taxes
for interim periods. 
 
The Interim Financial Statements do not include all the information and
disclosures required in the annual financial statements, and should be read in
conjunction with the Group's annual financial statements as at December 31,
2016. These Interim Financial Statements have been reviewed and not audited.
These Interim Financial Statements have been approved for issue as at November
1st, 2017. 
 
As disclosed in Note 7, the Group carries a provision of $217m relating to the
Department of Justice and Federal Trade Commission investigations and
antitrust litigation. The final settlement amount may be materially higher
than this reserve. This could impact the Group's ability to operate, which
would be further adversely impacted should revenues decline and pipeline
products fail to obtain regulatory approval, all of which could mean the Group
could not continue in business without taking necessary measures to reduce its
cost base and improve its cash flow. As such, this indicates a material
uncertainty that may cast significant doubt on the Group's ability to continue
as a going concern. However, the Directors believe they have the ability to
carry out the measures that would be necessary and that the Group can continue
as a going concern for the foreseeable future. Accordingly, the Directors
continue to adopt the going concern basis for accounting in preparing these
financial statements, which do not include any adjustments that might result
from the outcome of this uncertainty. 
 
The financial information contained in this document does not constitute
statutory accounts as defined in section 434 and 435 of the Act. The auditors
issued an unqualified opinion and did not contain a statement under section
498 of the Act on the Group's statutory financial statements for the year
ended December 31, 2016. The Group's statutory financial statements for the
year ended December 31, 2016 were approved by the Board of Directors on March
7, 2017, and have been delivered to the Registrar of Companies. 
 
2.   SEGMENT INFORMATION 
 
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker ('CODM'). The CODM,
who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Chief Executive Officer (CEO).
The Indivior Group is engaged in a single business activity, which is the
development, manufacture and sale of buprenorphine-based prescription drugs
for treatment of opioid dependence. The CEO reviews financial information on a
geographic basis for evaluating financial performance and allocating
resources. The Group has a single reportable segment. 
 
Revenues 
 
Revenues are attributed to countries based on the country where the sale
originates. The following table represents revenue from continuing operations
attributed to countries based on the country where the sale originates and
non-current assets, net of accumulated depreciation and amortization, by
country. Non-current assets for this purpose consist of property, plant and
equipment, intangible assets, and other receivables. Revenues and non-current
assets for YTD 2017 and 2016 were as follows: 
 
Revenues from sale of goods: 
 
                Q32017$m  Q32016$m  YTD2017$m  YTD2016$m  
 United States  219       219       670        651        
 ROW            56        49        158        148        
 Total          275       268       828        799        
 
 
Non-current assets: 
 
                September 30, 2017$m  December 31,2016$m  
 United States  68                    64                  
 ROW            81                    46                  
 Total          149                   110                 
 
 
3.   OPERATING COSTS AND EXPENSES 
 
The table below sets out selected operating costs and expenses information: 
 
                                               Q32017$m  Q32016$m  YTD2017$m  YTD2016$m  
 Research and development expenses             (23)      (29)      (67)       (87)       
                                                                                         
 Marketing, selling and distribution expenses  (42)      (39)      (112)      (102)      
 Administrative expenses                       (113)     (294)     (255)      (439)      
 Depreciation and amortization                 (5)       (1)       (9)        (12)       
 Operating lease rentals                       (2)       (1)       (5)        (3)        
 Total                                         (162)     (335)     (381)      (556)      
 
 
Exceptional Items (Pre-tax) 
 
                          Q32017$m  Q32016$m  YTD2017$m  YTD2016$m  
 Cost of sales            -         (1)       -          (11)       
 Legal expenses           -         (220)     (25)       (220)      
 Consulting costs         -         (2)       -          (6)        
 Total exceptional items  -         (223)     (25)       (237)      
                                                                      
 
 
$25m of year to date 2017 pre-tax exceptional items are for a conclusive legal
settlement with Amneal Pharmaceuticals LLC in conjunction with anti-trust
litigation. $237m of pre-tax exceptional items in YTD 2016 include legal
provisions, write offs of manufacturing costs and legal and advisory costs
related to the exploration of strategic initiatives for the event of a
potential negative ANDA ruling. 
 
4.   TAXATION 
 
The Group calculates tax expense for interim periods using the expected full
year rates, considering the pre-tax income and statutory rates for each
jurisdiction. The resulting expense is allocated between current and deferred
taxes based upon the forecasted full year ratio. 
 
In YTD 2017, tax on total profits amounted to $71m (YTD 2016: $82m) and
represented a year to date effective tax rate of 26% (YTD 2016: 210%); $9m of
these relate to the tax effects of the exceptional items within operating
profit (YTD 2016: $5m); $3m relates to release of provisions for unresolved
tax matters, related primarily to favorable developments in an IRS position.
Prior YTD tax expense also included an exceptional benefit of $19m related to
the tax effect on the movement of assets within the Group and additional
provisions for unresolved tax matters. The reduction in deferred tax assets of
$24m relates primarily to temporary differences on unrealized profit on the
sale of inventory between Group entities. This reduction is expected to be
sustained. 
 
The decrease in the effective tax rate to 26% was primarily driven by the
relative contribution to pre-tax income by taxing jurisdiction in the third
quarter. Excluding exceptional items of $3m (Q3 2016: $16m), the tax rate was
13% (Q3 2016 adj: 21%) in the third quarter. 
 
The United Kingdom ('UK') decision to withdraw from the European Union ('EU')
could have a material effect on our taxes. The impact of the withdrawal will
not be known until both the EU and the UK develop the exit plan and the
related changes in tax laws are enacted. We will adjust our current and
deferred income taxes when tax law changes related to the UK withdrawal are
substantively enacted and/or when EU law ceases to apply in the UK. 
 
5.   EARNINGS PER SHARE 
 
                                      Q32017cents  Q32016cents  YTD2017cents  YTD2016cents  
                                                                                            
 Basic earnings per share             7            (21)         28            (6)           
 Diluted earnings per share           7            (20)         27            (6)           
                                                                                            
 Adjusted basic earnings per share    7            10           30            28            
 Adjusted diluted earnings per share  6            10           29            28            
 
 
Basic 
 
Basic earnings per share ("EPS") is calculated by dividing profit for the
period attributable to owners of the Company by the weighted average number of
ordinary shares in issue during the period. 
 
Diluted 
 
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The Company has dilutive potential ordinary shares
in the form of stock options. The weighted average number of shares is
adjusted for the number of shares granted assuming the exercise of stock
options. 
 
                                               2017Averagenumber ofshares  2016Averagenumber ofshares  
 On a basic basis                              721,011,124                 720,597,566                 
 Dilution for Long-Term Incentive Plan (LTIP)  26,627,518                  22,614,143                  
 Employee Sharesave Scheme                     1,050,182                   -                           
 On a diluted basis                            748,688,824                 743,211,709                 
 
 
Adjusted Earnings 
 
The Directors believe that diluted earnings per share, adjusted for the impact
of exceptional items after the appropriate tax amount, provides more
meaningful information on underlying trends to shareholders in respect of
earnings per ordinary share. A reconciliation of net income to adjusted net
income is as follows: 
 
                                    Q32017$m  Q32016$m  YTD2017$m  YTD2016$m  
 Net income                         50        (149)     203        (43)       
 Exceptional items                  -         223       25         237        
 Tax effect of exceptional items    -         -         (9)        (5)        
 Exceptional items within taxation  (3)       (3)       (3)        16         
 Adjusted net income                47        71        216        205        
 
 
6.   FINANCIAL LIABILITIES - BORROWINGS 
 
 Current     September 302017$m  December 312016$m  
                                                    
 Bank loans  (129)               (101)              
             (129)               (101)              
 
 
 Non-current  September 302017$m  December 312016$m  
                                                     
 Bank loans   (341)               (434)              
              (341)               (434)              
 
 
 Analysis of net cash       September 302017$m  December 312016$m  
 Cash and cash equivalents  806                 692                
 Borrowings*                (484)               (561)              
 Net cash at end of period  322                 131                
 
 
*Borrowings reflects the outstanding principal amount drawn, before debt
issuance costs of $14m and $26m, respectively. 
 
 Reconciliation of net cash/(debt)                        September 302017$m  December 312016$m  
 The movements in the period were as follows:                                                    
 Net cash/(debt) at beginning of period                   131                 (174)              
 Increase in cash and cash equivalents                    114                 225                
 Net repayment of/(increase in) borrowings and overdraft  86                  78                 
 Exchange adjustment                                      (9)                 2                  
 Net cash at end of period                                322                 131                
 
 
The net carrying value of current borrowings before issuance costs and cash at
bank, as well as trade receivables and trade payables are assumed to
approximate their fair values. The terms of the loan in effect at September
30, 2017 are as follows: 
 
                     Currency  Nominalinterestmargin  Maturity  Required annual repayments  Maximum leverage ratio  Minimum liquidity$m  
 Term loan facility  USD       Libor (1%) + 6%        2019      10%                         2.50                    150                  
 Term loan facility  EUR       Libor (1%) + 6%        2019      10%                         2.50                    150                  
                                                                                                                                           
 
 
• Nominal interest margin is calculated over 3m LIBOR, subject to a 1% floor. 
 
• The maximum leverage ratio is a financial covenant to maintain net secured
leverage below a specified maximum (Adjusted net debt to Adjusted EBITDA
ratio) which stepped down to 2.50x on June 30, 2017. 
 
• The minimum liquidity covenant requires the Group to maintain cash on hand
plus the undrawn amount available under the Group's $50 million revolving
credit facility of at least $150 million. 
 
• An annual cash sweep may be required depending on the Group's leverage
ratio. 
 
7.   CONTINGENT LIABILITIES 
 
The Group carries a provision of $217m for the investigative and antitrust
litigation matters noted below. The provision was reduced by $25m compared to
period ending Q2 2017, reflecting payment of previously reserved settlement
amount to Amneal Pharmaceuticals LLC (Amneal). Other than reducing by the
Amneal settlement amount, the Group has not changed the previously recorded
provision, as the other litigation and investigations are ongoing. The Group
continues in discussions with the Department of Justice about a possible
resolution to its investigation. The Group cannot predict with any certainty
whether it will reach an ultimate resolution with the Department of Justice or
any or all of the other parties, or the ultimate cost of resolving all of the
matters. The final cost may be materially higher than this provision. 
 
Department of Justice Investigation 
 
·      A U.S. federal criminal grand jury investigation of Indivior initiated
in December 2013 is continuing, and includes marketing and promotion
practices, pediatric safety claims, and overprescribing of medication by
certain physicians. The U.S. Attorney's Office for the Western District of
Virginia has served a number of subpoenas relating to SUBOXONE Film, SUBOXONE
Tablet, SUBUTEX Tablet, buprenorphine and our competitors, among other issues.
The Group continues in discussions with the Department of Justice about a
possible resolution to its investigation. It is not possible at this time to
predict with any certainty the potential impact of this investigation on us or
to quantify the ultimate cost of a resolution. We are cooperating fully with
the relevant agencies and prosecutors and will continue to do so. 
 
State Subpoenas 
 
·      On October 12th, 2016, Indivior was served with a subpoena for records
from the State of Connecticut Office of the Attorney General under its
Connecticut civil false claims act authority. The subpoena requests documents
related to the Group's marketing and promotion of SUBOXONE products and its
interactions with a non-profit third party organization. On November 16th,
2016, Indivior was served with a subpoena for records from the State of
California Department of Insurance under its California insurance code
authority. The subpoena requests documents related to SUBOXONE Film, SUBOXONE
Tablet, and SUBUTEX Tablet. The State has served additional deposition
subpoenas on Indivior in 2017. The Group is fully cooperating in these
investigations. 
 
FTC investigation and Antitrust Litigation 
 
·      The U.S. Federal Trade Commission's investigation remains pending.
Litigation regarding privilege claims has now been resolved. Indivior has
produced certain documents that it had previously withheld as privileged;
other such documents have not been produced. 
 
·      Fact discovery is continuing in the antitrust class action litigation.
Plaintiffs allege, among other things, that Indivior violated U.S. federal and
state antitrust laws in attempting to delay generic entry of alternatives to
SUBOXONE tablets, and plaintiffs further allege that Indivior unlawfully acted
to lower the market share of these products. 
 
·      Amneal Pharmaceuticals LLC (Amneal), a manufacturer of generic
buprenorphine / naloxone tablets, alleged antitrust violations similar in
nature to those alleged in the class action complaints, and Amneal also
alleged violations of the U.S. Lanham Act. The Company has settled the dispute
with Amneal, and Amneal has dismissed its claims against the Company with
prejudice. 
 
·      A group of states, now numbering 41, and the District of Columbia filed
suit against Indivior in the same district where the antitrust class action
litigation is pending. The States' complaint is similar to the other antitrust
complaints, and alleges violations of U.S. state and federal antitrust and
consumer protection laws. This lawsuit relates to the antitrust investigation
conducted by various states, as discussed in previous filings. Discovery has
been coordinated with the antitrust class action litigation, subject to
certain stays. 
 
ANDA Litigation and Inter Partes Review 
 
·      The ruling after trial against Actavis and Par in the lawsuit involving
the Orange Book-listed patents for SUBOXONE Film issued on June 3rd, 2016. The
ruling found the asserted claims of the '514 patent valid and infringed; the
asserted claims of the '150 patent valid but not infringed; and the asserted
claims of the '832 patent invalid, but found that certain claims would be
infringed if they were valid. In an August 31st, 2017 ruling, the Court denied
motions of Actavis and Par to reopen the June 2016 judgment. 
 
·      Based on the ruling as to the '514 patent, Actavis and Par are
currently enjoined from launching a generic product until April 2024.Par and
Actavis have appealed this ruling, and Indivior has filed notices of
cross-appeal. On October 24, 2017 Actavis received tentative approval from FDA
for at least its 8 mg/2 mg generic product under ANDA 204383. A tentative
approval does not allow the applicant to market the generic drug product and
postpones the final approval until all patent/exclusivity issues have been
resolved. Actavis therefore remains enjoined by the Delaware court ruling. 
 
·      Trial against Dr. Reddy's, Actavis and Par in the lawsuits involving
the process patent (U.S. Patent No. 8,900,497) took place on November 16th and
21st-23rd, 2016. Trial against Dr. Reddy's in the lawsuit involving two of the
Orange Book-listed patents for SUBOXONE Film (U.S. Patent Nos. 8,017,150 and
8,603,514) took place on November 7th, 16th, and 21st-23rd, 2016. The rulings
in these trials issued on August 31st, 2017. The rulings found the asserted
claims of the '497, '514, and '150 patents valid but not infringed. Teva had
filed a 505(b)(2) New Drug Application (NDA) for a 16 mg/4 mg strength of
buprenorphine/naloxone film. The parties had agreed that infringement by
Teva's 16 mg/4 mg dosage strength would be governed by the infringement ruling
as to Dr. Reddy's 8 mg/2 mg dosage strength that was the subject of the trial
in November 2016; therefore, the non-infringement ruling in the Dr. Reddy's
case means that the Teva 16 mg/4 mg dosage strength has been found not to
infringe. Indivior intends to appeal. 
 
·      Dr. Reddy's 30-month stay of FDA approval expired on April 17th, 2017.
So far as Indivior is aware, FDA to date has not granted tentative or final
marketing authorization to Dr. Reddy's generic SUBOXONE Film alternative. 
 
·      If FDA were to grant final approval to Dr. Reddy's (or Teva for the 16
mg / 4 mg strength of buprenorphine/naloxone film) this would enable them to
market a generic film alternative to SUBOXONE® Film in the U.S. However, any
market launch by Dr. Reddy's (or by Teva) before the court of appeals renders
its decision would be on an "at risk" basis because Indivior would have a
claim for damages against Dr. Reddy's (or Teva) if Indivior ultimately
prevails after any appeal. 
 
·      Trial against Alvogen in the lawsuit involving the '514 Orange
Book-listed patent and the '497 process patent for SUBOXONE Film took place on
September 26th-27th, 2017. Trial was limited to the issue of infringement
because Alvogen did not challenge the validity of either patent. The 30-month
stay of FDA approval of Alvogen's Abbreviated New Drug Application was set to
expire October 29th, 2017. Alvogen agreed not to launch until March 29th, 2018
or until it receives a favourable ruling from the District Court. That
agreement has been modified in light of a 3 week extension of the post-trial
briefing schedule, but the terms are currently under seal. 
 
·      By a Court order dated August 22nd, 2016, Indivior's SUBOXONE Film
patent litigation against Sandoz has been dismissed without prejudice because
Sandoz is no longer pursuing Paragraph IV certifications for its proposed
generic formulations of SUBOXONE Film. 
 
·      On September 25th, 2017, Indivior settled its SUBOXONE Film patent
litigation in District Court against Mylan. 
 
·      Mylan filed a petition seeking an inter partes review (IPR) of the '514
and '497 patents. On May 12th, 2017, the US Patent & Trademark Office decided
to institute the '514 IPR proceedings. On September 29th, 2017, Mylan and
MonoSol submitted joint motions to terminate the '514 and '497 IPRs in light
of the parties' settlement of their disputes in the District Court litigation.
On October 6th, 2017 the Patent Board terminated both the '514 and '497 IPR
proceedings as to MonoSol and Mylan. Dr. Reddy's and Par had filed petitions
and motions in June 2017 to join the Mylan '514 IPR proceeding. On October
20th, 2017 the Patent Board refused to institute IPR proceedings and dismissed
Dr. Reddy and Par's petitions. 
 
·      Since August 2017, Indivior received Paragraph IV Notice letters from
Actavis, Par, Alvogen, Mylan, and Dr. Reddy's for Indivior's recently granted
'454 patent. Indivior has filed suit against Alvogen, Dr. Reddy's, and Par in
the District of New Jersey; and against Actavis in the District of Utah.
Although a complaint against Mylan was filed in the District of West Virginia,
it was dismissed in light of the parties' settlement of their disputes in the
Delaware District Court litigation. Indivior has also filed suit against Teva
in the District of New Jersey, although a Paragraph IV Notice letter has not
been received yet. 
 
·      In the event that one or more of the generic companies are successful
in their patent challenges on a final non-appealable basis, and should there
be FDA approval of one or more of the ANDAs and subsequent commercial launch
of generic SUBOXONE Film, and the Group's pipeline products fail to obtain
regulatory approval, there is the likelihood that revenues and operating
profits of the Group will significantly decline. In these circumstances the
Directors believe they would be able to take the required steps to reduce the
cost base, however, this would result in a significant change to the structure
of the business. 
 
Rhodes Pharmaceuticals 
 
·      On December 23rd, 2016 Rhodes Pharmaceuticals filed a complaint against
Indivior in the District of Delaware, alleging that Indivior's sale of
SUBOXONE Film in the U.S. infringes one or more claims of a patent. The
asserted patent, which was issued in June 2016 traces back to an application
filed in August 2007. Indivior believes this claim is without merit and
intends to vigorously defend this action. 
 
Estate of John Bradley Allen 
 
·      On December 27th, 2016, the Estate of John Bradley Allen filed a civil
complaint against Indivior, among other parties, in the Northern District of
New York seeking relief under Connecticut's products liability and unfair
trade practices statutes for damages allegedly caused by SUBOXONE. Indivior
believes this lawsuit is without merit and intends to vigorously defend this
action. 
 
IRS Notice on Manufacturing Deductions 
 
In 2015, the IRS issued notices of a proposed adjustment for the disallowance
of certain manufacturing deductions claimed by the Group following its audit
of the 2010 to 2014 income tax years. The company has appealed the proposed
disallowance and as now completed its appeals process with the IRS.   The
Group has evaluated its positions with respect to the IRS closing agreement
and has provided $19m tax reserve for amounts claimed on all open periods as
its best estimate of its expected settlement position for this issue. 
 
8.   TRADE AND OTHER PAYABLES 
 
                                         September 302017$m  December 312016$m  
 Sales returns and rebates               (377)               (402)              
 Trade payables                          (41)                (33)               
 Accruals                                (194)               (212)              
 Other tax and social security payables  (18)                (11)               
 Total                                   (630)               (658)              
 
 
Sales return and rebate accruals, primarily in the US, are provided for by the
Group at the point of sale in respect of the estimated rebates, discounts or
allowances payable to direct and indirect customers. Accruals are made at the
time of sale but the actual amounts to be paid are based on claims made some
time after the initial recognition of the sale. The estimated amounts may not
fully reflect the final outcome and are subject to change dependent upon,
amongst other things, the payor channel (e.g. Medicaid, Medicare, Managed
Care, etc) and product mix. Accrual balances are reviewed and adjusted
quarterly in the light of historical experience of actual rebates, discounts
or allowances given and returns made and any changes in arrangements. Future
events could cause the assumptions on which the accruals are based to change,
which could affect the future results of the Group. 
 
9.   SHARE CAPITAL 
 
                          Equityordinaryshares  Nominalvalue$m  
 Issued and fully paid                                          
 At January 1, 2017       720,597,566           72              
 Allotments               865,167               -               
 At September 30, 2017    721,462,733           72              
 
 
                          Equityordinaryshares  Nominalvalue$m  
 Issued and fully paid                                          
 At January 1, 2016       718,577,618           72              
 Allotments               2,019,948             -               
 At September 30, 2016    720,597,566           72              
 
 
Allotment of ordinary shares 
 
During the period, 865,167 ordinary shares (2016: 2,019,948) were allotted to
satisfy vestings/exercises under the Group's Long-Term Incentive Plan and US
Employee Stock Purchase Plan. 
 
10. RELATED PARTIES 
 
Indivior's former parent, Reckitt Benckiser Group PLC, was a related party
through 2016 as a result of certain transition management agreements. During
YTD 2016, Indivior purchased certain services such as office space rental and
other operational services on commercial terms and on an arm's length basis.
The amount included within administrative expenses in respect of these
services was $5m. 
 
11. POST BALANCE SHEET EVENTS 
 
There have been no material post balance sheet events. 
 
DIRECTORS' RESPONSIBILITY STATEMENT 
 
The Directors declare that, to the best of their knowledge: 
 
·      This condensed set of interim financial statements, which have been
prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by
the European Union, gives a true and fair view of the assets, liabilities,
financial position, and profit or loss of Indivior; and 
 
·      The interim management report gives a fair review of the information
required pursuant to regulations 4.2.7 and 4.2.8 of the Disclosure Guidance
and Transparency Rules (DTR) 
 
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions. 
 
Indivior's Directors are listed in the Annual Report and Accounts for 2016.
There have been no changes in the period. 
 
Details of all current Directors are available on our website at
www.indivior.com 
 
By order of the Board 
 
 Shaun Thaxter            Mark Crossley            
 Chief Executive Officer  Chief Financial Officer  
 
 
November 1st, 2017 
 
Independent review report to Indivior PLC 
 
Report on the condensed consolidated interim financial statements 
 
Our conclusion 
 
We have reviewed Indivior PLC's condensed consolidated interim financial
statements (the "Interim Financial Statements") in the Q3 Financial Results of
Indivior PLC for the three and nine month periods ended 30 September 2017.
Based on our review, nothing has come to our attention that causes us to
believe that the Interim Financial Statements are not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. 
 
Emphasis of matter - Going concern 
 
In forming our conclusion on the Interim Financial Statements, which is not
modified, we have considered the adequacy of the disclosure made in note 1 to
the Interim Financial Statements concerning the Group's ability to continue as
a going concern. As more fully stated in note 7 the Group is involved in
investigations by the Department of Justice and the Federal Trade Commission
as well as antitrust litigation. An amount of $217 million has been
established as a provision for potential settlement for all of these matters.
The amount accepted in the final agreed settlement might be materially higher
than this provision. This could impact the Group's ability to operate, which
would be further adversely impacted should revenues decline and pipeline
products fail to obtain regulatory approval, all of which could mean the Group
cannot continue in business without taking necessary measures to reduce its
cost base and improve its cash flow. The Directors believe that they are able
to carry out the necessary measures and that the Group can continue as a going
concern for the foreseeable future. Accordingly, the Directors continue to
adopt the going concern basis for accounting in preparing these Interim
Financial Statements. These conditions, along with the other matters explained
in note 7 to the Interim Financial Statements, indicate the existence of a
material uncertainty which may cast significant doubt about the Group's
ability to continue as a going concern. The Interim Financial Statements do
not include the adjustments that would result if the Group was unable to
continue as a going concern. 
 
Emphasis of matter - Outcome of litigation 
 
In forming our conclusion on the Interim Financial Statements, which is not
modified, we draw your attention to note 7 that describes the uncertain
outcome of the ongoing ANDA patent litigation over Suboxone Film. In the event
that one or more of the generic companies are successful in their patent
challenges on a final non-appealable basis, and should there be FDA approval
of one or more of the ANDAs and subsequent commercial launch of generic
Suboxone Film, and if the Group's pipeline products fail to obtain regulatory
approval, there is the likelihood that revenues and operating profits of the
Group will significantly decline. In these circumstances, the Directors
believe they would be able to take the required steps to reduce the cost base.
However this would result in a significant change to the structure of the
business. As a result of this potential decline and the extent of its impact,
the Directors are prepared to change the structure of the business and to
reduce its cost base, as also described in note 7. 
 
What we have reviewed 
 
The Interim Financial Statements comprise: 
 
·      the Condensed consolidated interim balance sheet as at 30 September
2017; 
 
·      the Condensed consolidated interim income statement and Condensed
consolidated interim statement of comprehensive income for the period then
ended; 
 
·      the Condensed consolidated interim cash flow statement for the period
then ended; 
 
·      the Condensed consolidated interim statement of changes in equity for
the period then ended; and 
 
·      the explanatory notes to the Interim Financial Statements. 
 
The Interim Financial Statements included in the Q3 Financial Results have
been prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. 
 
As disclosed in note 1 to the Interim Financial Statements, the financial
reporting framework that has been applied in the preparation of the full
annual financial statements of the Group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union. 
 
Responsibilities for the interim financial statements and the review 
 
Our responsibilities and those of the directors 
 
The Q3 Financial Results, including the Interim Financial Statements, are the
responsibility of, and have been approved by, the Directors. The Directors are
responsible for preparing the Q3 Financial Results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. 
 
Our responsibility is to express a conclusion on the Interim Financial
Statements in the Q3 Financial Results based on our review. This report,
including the conclusion, has been prepared for and only for the company for
the purpose of complying with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and for no
other purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing. 
 
What a review of interim financial statements involves 
 
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. 
 
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion. 
 
We have read the other information contained in the Q3 Financial Results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the Interim Financial Statements. 
 
PricewaterhouseCoopers LLP Chartered Accountants London 
 
1 November 2017 
 
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