REG - Indivior PLC - 3rd Quarter Results
24/10/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241024:nRSX4053Ja&default-theme=true
RNS Number : 4053J Indivior PLC 24 October 2024
October 24, 2024
Q3 and YTD 2024 Financial Results
• Total Q3 2024 net revenue (NR) of $307m, +13% vs. Q3 2023
• SUBLOCADE® Q3 2024 NR of $191m, +14% vs. Q3 2023; YTD 2024 SUBLOCADE NR
of $562m, +24% vs. YTD 2023
• Expected settlement reached with certain end payors to resolve remaining
antitrust cases
Period to September 30th (Unaudited) Q3 Q3 % Change YTD YTD % Change
2024 2023 2024 2023
$m $m $m $m
Net Revenue 307 271 13% 889 800 11%
Operating Profit/(Loss) 4 (183) nm (64) (65) -2%
Net Income/(Loss) 4 (135) nm (57) (52) 10%
Diluted EPS ($) $0.03 $(0.98) nm $(0.42) $(0.38) 11%
Adjusted Basis
Adj. Operating Profit(1) 97 60 62% 245 202 21%
Adj. Net Income(1) 72 49 47% 182 162 12%
Adj. Diluted EPS(1) ($) $0.54 $0.34 59% $1.34 $1.14 18%
1 Adjusted Basis excludes the impact of exceptional items and other
adjustments as referenced and reconciled in the "Adjusted Results" appendix on
page 27. Adjusted results are not a substitute for, or superior to, reported
results presented in accordance with International Financial Reporting
Standards ("IFRS").
The "Company" refers to Indivior PLC and the "Group" refers to the Company and
its consolidated subsidiaries.
Comment by Mark Crossley, CEO of Indivior PLC
"Our third quarter results show solid double-digit top- and bottom-line growth
and are in line with the business update we issued on October 10th. The
general market conditions we highlighted at that time continue and are
reflected in our maintained FY 2024 outlook.
Despite these near-term competitive headwinds, we remain firm in our belief
that SUBLOCADE has a differentiated and optimal profile for opioid use
disorder patients, particularly with the ongoing proliferation of potent
synthetic opioids. Furthermore, as highlighted at our business update,
evidence among multiple co-prescribing cohorts since the competitor's launch
supports our belief that SUBLOCADE will retain a leadership position in the
long-acting injectable category, with SUBLOCADE share currently in the mid-60s
percent range across these cohorts. Looking ahead, with continued strong
execution supplemented by important potential FDA label updates, we expect to
move beyond this near-term period of market disruption to ultimately deliver
SUBLOCADE peak net revenue of greater than $1.5 billion.
To further support our goal, we are pursuing significant streamlining actions
across both G&A and R&D, including termination of pipeline activities
outside of OUD assets which are committed and underway. The savings from these
efforts will be used to fuel SUBLOCADE growth, fund year-over-year incremental
investment behind our two Phase 2 OUD assets and underpin our focus on
supporting Group margins. Taken together, we expect to deliver a net reduction
in overall operating expense in FY 2025 of $10 million to $20 million when
compared to the mid-point of FY 2024 operating expense guidance.
Lastly, we continue to address legacy litigation to create greater certainty
for all stakeholders. Our third quarter results include a $39 million
provision for the preliminary agreement related to the remaining parties in
the legacy antitrust litigation. While the parties must negotiate material
terms and conditions of the final settlement agreement, when finalized this
will close this legacy matter."
YTD/ Q3 2024 Financial Highlights
• YTD 2024 total net revenue (NR) of $889m increased 11% (YTD 2023:
$800m); Q3 2024 total NR of $307m increased 13% (Q3 2023: $271m).
• YTD 2024 reported operating loss was $64m (YTD 2023 operating
loss: $65m); Q3 2024 reported operating profit was $4m (Q3 2023 operating
loss: $183m). YTD 2024 adjusted operating profit of $245m increased 21%
(Adjusted YTD 2023: $202m). Q3 2024 adjusted operating profit of $97m
increased 62% (Adjusted Q3 2023: $60m).
• YTD 2024 reported net loss was $57m (YTD 2023 net loss: $52m); Q3
2024 reported net income was $4m (Q3 2023 net loss: $135m). YTD 2024 adjusted
net income of $182m increased 12% (Adjusted YTD 2023: $162m). Q3 2024 adjusted
net income of $72m increased 47% (Adjusted Q3 2023: $49m).
• Cash and investments totaled $344m at September 30, 2024
(including $26m investments restricted for self-insurance) (FY 2023: $451m).
The decrease was primarily due to the Group's litigation settlement payments
of $158m and share repurchases of $122m, partly offset by cash flow from
operating activities.
YTD/ Q3 2024 Product Highlights
• SUBLOCADE (buprenorphine extended release) Injection: YTD 2024 NR
of $562m (+24% vs. YTD 2023); Q3 2024 NR of $191m (+14% vs. Q3 2023 and (1)%
vs. Q2 2024). Year-over-year growth primarily reflects continued volume growth
in Organized Health System and Criminal Justice System channels in the U.S. Q3
2024 U.S. units dispensed were approx. 158,500 (+19% vs. Q3 2023 and +2% vs.
Q2 2024). Total U.S. patients on a 12-month rolling basis at the end of Q3
2024 were approximately 166,600 (+37% vs. Q3 2023 and +4% vs. Q2 2024).
• OPVEE® (nalmefene) nasal spray: Q3 2024 NR of $15m comprised of
two 100,000 unit orders from the U.S. Biomedical Advancement Research and
Development Authority (BARDA). Near-term launch focus is on supporting policy
changes to enable nalmefene opioid rescue treatment and increasing product
trial among targeted users.
• SUBOXONE® (buprenorphine/naloxone) Film: U.S. share in Q3 2024
averaged 15% (Q3 2023: 18%).
• PERSERIS® (risperidone) extended release injection: YTD 2024 NR
of $31m and Q3 2024 NR of $8m. As previously announced, sales and marketing of
PERSERIS have been discontinued.
• INDV-1000 (Alcohol Use Disorder): discontinuing development of
preclinical GABA-b Positive Allosteric Modulator.
FY 2024 Guidance
On October 10th, the Group updated its financial guidance for FY 2024 as
detailed below.
Guidance assumes no material change in exchange rates for key currencies
compared with FY 2023 average rates, notably USD/GBP and USD/EUR.
FY 2024
Net Revenue (NR) $1,125m to $1,165m
(+5% at midpoint vs. FY 2023)
SUBLOCADE NR $725m to $745m
(+17% at midpoint vs. FY 2023)
OPVEE NR Approximately $15m
PERSERIS NR(1) $32m to $37m
SUBOXONE Film Market Share Assumes historic rate of share decline in FY 2024 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 Low to mid-80s % range
Adjusted SG&A ($555m) to ($560m)
R&D ($115m) to ($120m)
Adjusted Operating Profit $260m to $280m
(midpoint flat vs. FY 2023)
(1)As previously announced, sales and marketing of PERSERIS have been
discontinued.
Share Repurchase Program
On July 25, 2024, Indivior announced a new non-discretionary $100m share
repurchase program that commenced on August 5, 2024. Through October 11, the
Group repurchased and canceled 4,862k Indivior ordinary shares as part of this
program, equivalent to approximately 4% of diluted shares outstanding, at a
daily weighted average purchase price of 839p. The cost was approximately
$53m, which includes directly attributable transaction cost. This program is
targeted to be completed by January 31, 2025.
Expected settlement reached with certain end payors to resolve remaining
antitrust cases
Indivior continues to address legacy litigation to create greater certainty
for all stakeholders. Today, the Group announces an expected settlement of the
last remaining antitrust litigation with (i) Humana, Inc. and certain of its
affiliates (collectively, "Humana") and (ii) with Centene Corporation,
Wellcare Healthcare Plans, Inc., New York Quality Healthcare Corp. (d/b/a
Fidelis Care), and Health Net, LLC (collectively, "Centene"). The Group has
recorded a provision of $39m reflecting the net present value (NPV) at the
risk-free rate of the agreed amounts to be paid in 2024 and 2025. The parties
to the settlement still must negotiate material terms and conditions of the
final settlement agreement, which Indivior expects to resolve shortly. Final
settlement, if reached, would resolve all of the Group's remaining legacy
antitrust litigation, including all claims in the Kentucky and Pennsylvania
state court actions filed by Humana, and all claims in the Virginia state
court action filed by Centene.
U.S. OUD Market Update
In Q3 2024, U.S. buprenorphine medication-assisted treatments (BMAT) grew in
mid-single digits in volume terms. The Group continues to expect long-term
U.S. growth to be sustained in the mid- to high-single digit percentage range
due to increased overall public awareness of the opioid epidemic and approved
treatments, together with regulatory and legislative actions.
Financial Performance in YTD/Q3 2024
Total NR in YTD 2024 increased 11% to $889m (YTD 2023: $800m) at actual
exchange rates (+11% at constant exchange rates(1)). In Q3 2024, total NR
increased 13% to $307m (Q3 2023: $271m) at actual exchange rates (+13% at
constant exchange rates(1)).
U.S. NR increased 14% in YTD 2024 to $755m (YTD 2023: $662m) and by 15% in Q3
2024 to $261m (Q3 2023: $227m). Double-digit year-over-year SUBLOCADE volume
growth and the fulfillment of OPVEE orders from BARDA primarily drove the
increases in NR in both periods. Q3 2024 NR also benefited from updates to
channel mix and trade spend estimations for both SUBLOCADE and SUBOXONE Film.
These benefits were partially offset by SUBLOCADE trade destocking versus
stocking in the year-ago quarter. Pricing was not material to NR growth.
Rest of World (ROW) NR decreased 3% at actual exchange rates in YTD 2024 to
$134m (YTD 2023: $138m) (-3% at constant exchange rates(1)). Positive
contributions from new products (SUBLOCADE / SUBUTEX® Prolonged Release and
SUBOXONE Film) were more than offset by the ongoing generic erosion of the
legacy tablet business and the timing of shipments. In Q3 2024, ROW NR
increased 5% at actual exchange rates to $46m (Q3 2023: $44m) (2% at constant
exchange rates(1)) mainly reflecting positive contributions from new products
that were partially offset by generic erosion of legacy tablet business. YTD
2024 SUBLOCADE / SUBUTEX Prolonged Release NR increased 27% to $38m (YTD 2023:
$30m) and in Q3 2024 increased 30% to $13m (Q3 2023: $10m), all at actual
exchange rates.
Gross margin as reported in YTD 2024 was 77% (YTD 2023: 83%) and 78% in Q3
2024 (Q3 2023: 83%). YTD 2024 and Q3 2024 included $51m and $10m,
respectively, of costs related to the discontinuation of sales and marketing
for PERSERIS. In addition, adjustments for amortization of acquired intangible
assets within cost of sales of $9m in YTD 2024 and $3m in Q3 2024 were also
included in the reported gross margin. Excluding these costs and adjustments,
adjusted gross margin was 83% and 82% in YTD 2024 and Q3 2024, respectively
(both YTD 2023 and Q3 2023: 84%). The decrease in adjusted gross margin in
both YTD period and quarter primarily reflects cost inflation and favorable
pricing on specified batches produced in Q3 2023 that did not repeat in Q3
2024 partially offset by a transitory benefit relating to the BARDA agreement
that will reverse in future periods and an improved product mix from the
continued growth of SUBLOCADE.
1 Net revenue at constant exchange rates is an alternative performance
measure used by management to evaluate underlying performance of the business
and is calculated by applying the prior year exchange rate to current year net
revenue in the currencies of the foreign entities.
SG&A expenses as reported in YTD 2024 were $665m (YTD 2023: $654m)
and $208m in Q3 2024 (Q3 2023: $390m). YTD 2024 and Q3 2024 included $244m
and $75m of exceptional items, respectively (YTD 2023 and Q3 2023: $262m and
$240m, respectively). See "Appendix" for adjusted results for details of
exceptional SG&A expenses for YTD and Q3 2024 and 2023.
Excluding exceptional items, YTD 2024 adjusted SG&A expense increased 7%
to $421m (Adjusted YTD 2023: $392m), reflecting increased sales and marketing
related to SUBLOCADE and the launch of OPVEE, as well as cost inflation; Q3
2024 adjusted SG&A expense decreased 11% to $133m (Adjusted Q3
2023: $150m), primarily reflecting lower expenses from the discontinuation of
PERSERIS, as well as lower legal and other administrative expenses.
R&D expenses in YTD 2024 and Q3 2024 were $76m and $22m, respectively (YTD
2023: $77m; Q3 2023: $18m), and represented a decrease of 1% and an increase
of 22%, respectively. The modest decrease in the YTD period was primarily due
to lower activity related to post-marketing studies for SUBLOCADE offset by
pipeline advancement activities principally related to Phase 2 studies for
INDV-2000 and INDV-6001. The increase in Q3 2024 primarily reflects the
aforementioned pipeline advancement activities for INDV-2000 and INDV-6001.
Operating loss as reported was $64m in YTD 2024 (YTD 2023 operating loss:
$65m). The change on a reported basis reflects higher NR and gross profit
offset by increased operating expenses. (See "Appendix" for adjusted results
details of exceptional expenses included in operating profit).
After excluding exceptional items and other adjustments of $309m and $267m in
YTD 2024 and YTD 2023, respectively, YTD 2024 adjusted operating profit
increased 21% to $245m (YTD 2023: $202m). The increase primarily reflects
higher total NR partially offset by increased SG&A expenses, primarily due
to increased sales and marketing related to SUBLOCADE and the launch of OPVEE.
Q3 2024 operating profit as reported was $4m (Q3 2023 operating loss: $183m).
On an adjusted basis, Q3 2024 operating profit increased 62% to $97m
(adjusted Q3 2023: $60m), excluding exceptional costs and other adjustments
of $93m (Q3 2023: $243m). The increase on an adjusted basis primarily
reflects higher total NR and lower SG&A expenses.
Net finance expense was $10m in YTD 2024 (YTD 2023: $4m income) reflecting a
decrease in interest income on lower cash and investment balances. Q3 2024 net
finance expense was $5m (Q3 2023: $2m income).
Reported tax benefit was $17m in YTD 2024 and the effective tax rate was 23%
(YTD 2023 tax expense/rate: $9m, 15%). YTD 2024 adjusted tax expense was $53m,
and the adjusted effective tax rate was 23% (YTD 2023 adjusted tax
expense/rate: $44m, 21%). The adjusted results exclude tax benefits on
exceptional items and other adjustments. The movement in the effective tax
rate on adjusted profits was impacted by an increase in the U.K. corporation
tax rate from 23.5% to 25%. The Q3 2024 reported tax benefit was $5m, and the
effective tax rate was not meaningful (Q3 2023: $46m, 25%). The tax expense on
Q3 2024 adjusted profits was $20m, and the adjusted effective tax rate was
22%. The tax expense on Q3 2023 adjusted profits amounted to $13m, for a
comparable adjusted effective tax rate of 21%.
Reported net loss in YTD 2024 was $57m and adjusted net income was $182m (YTD
2023 reported net loss: $52m, adjusted net income: $162m). The 12% increase in
net income on an adjusted basis primarily reflected higher NR partly offset by
an increase in operating expense. Q3 2024 net income on a reported basis was
$4m (Q3 2023: net loss $135m), and net income of $72m on an adjusted basis
excluding the net after-tax impact from exceptional items and other
adjustments (Adjusted Q3 2023: $49m). Higher Q3 2024 net income on an adjusted
basis was primarily due to an increase in NR.
Diluted (losses) earnings per share were $(0.42) on a reported basis and $1.34
on an adjusted basis in YTD 2024 (YTD 2023: $(0.38) diluted earnings per share
and $1.14 adjusted diluted earnings per share). In Q3 2024, diluted losses per
share and adjusted diluted earnings per share were $0.03 and $0.54,
respectively (Q3 2023: $(0.98) earnings per share on a diluted basis and $0.34
earnings per share adjusted diluted basis).
Balance Sheet & Cash Flow
Cash and investments totaled $344m at the end of Q3 2024, a decrease of $107m
versus the $451m position at the end of 2023. The decrease was primarily due
to the Group's litigation settlement payments of $158m and share repurchases
of $122m, partly offset by cash inflow from operating and investing
activities.
Net working capital, defined by management as inventory plus trade
receivables, less trade and other payables, was negative $386m on
September 30, 2024, versus negative $347m at the end of FY 2023, reflecting
increases in the balance of accruals rebates, discounts and returns due to the
timing of rebated invoicing.
Cash generated from operations in YTD 2024 was $94m (YTD 2023 cash used in
operations: $2m), reflecting ongoing operating performance partially offset by
litigation payments of $158m. Net cash flow from operating activities was $41m
in YTD 2024 (YTD 2023 cash outflow: $34m) primarily reflecting cash generated
from operations less tax payments.
Cash inflow from investing activities in YTD 2024 was $59m (YTD 2023 cash
outflow: $104m) reflecting investment maturities, partially offset by capital
expenditures. In the prior year period, the outflow from investing activities
primarily reflected the Opiant acquisition, net of cash assumed.
Cash outflow from financing activities in YTD 2024 was $129m (YTD 2023 cash
outflow: $25m) primarily reflecting shares repurchased and canceled. In the
prior-year period, the outflow from financing activities primarily reflected
shares repurchased and canceled and the extinguishment of debt assumed in the
Opiant acquisition.
Principal Risks Update
The principal risks facing the Group for the second half of 2024 are expected
to be consistent with those disclosed in the 2023 Annual Report and Accounts.
Exchange Rates
The average and period end exchange rates used for the translation of
currencies into U.S. dollars that have the most significant impacts on the
Group's results were:
9 Months to September 30, 9 Months to September 30,
2024
2023
GB £ period end 1.3410 1.2125
GB £ average rate 1.2765 1.2444
€ Euro period end 1.1169 1.0503
€ Euro average 1.0869 1.0835
Webcast Details
A live webcast presentation will be held on October 24, 2024, at 13:00 GMT
(8:00 am EDT) hosted by Mark Crossley, CEO. The details are below. All
materials will be available on the Group's website prior to the event at
www.indivior.com. Please copy and paste the below web links into your browser.
The webcast link: https://edge.media-server.com/mmc/p/ppm4ske8
Participants may access the presentation telephonically by registering with
the following link (please cut and paste into your browser):
https://register.vevent.com/register/BId4d5b45a6f3e4291ba42150c1620fc64
(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)
For Further Information
Investor Enquiries Jason Thompson VP, Investor Relations +1 804 402 7123
Indivior PLC jason.thompson@indivior.com (mailto:jason.thompson@indivior.com)
Tim Owens Director, Investor Relations Indivior PLC +1 804 263 3978
timothy.owens@indivior.com (mailto:timothy.owens@indivior.com)
Media Enquiries Jonathan Sibun Teneo +44 (0)20 7353 4200
U.S. Media Inquiries +1 804 594 0836
Indiviormediacontacts@indivior.com
Corporate Website www.indivior.com
This announcement does not constitute an offer to sell, or the solicitation of
an offer to subscribe for or otherwise acquire or dispose of shares in the
Group to any person in any jurisdiction to whom it is unlawful to make such
offer or solicitation.
The person responsible for making this announcement is Kathryn Hudson, Company
Secretary.
About Indivior
Indivior is a global pharmaceutical company working to help change patients'
lives by developing medicines to treat substance use disorders (SUD), overdose
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. Headquartered in the United States in Richmond, VA, Indivior employs over
1,000 individuals globally and its portfolio of products is available in over
30 countries worldwide. Visit www.indivior.com to learn more. Connect with
Indivior on LinkedIn by visiting www.linkedin.com/company/indivior.
Important Cautionary Note Regarding Forward-Looking Statements
This announcement contains certain statements that are forward-looking.
Forward-looking statements include, among other things, express and implied
statements regarding: the Indivior Group's financial guidance including
operating and profit margins for 2024 and its medium- and long-term growth
outlook; expected future growth and expectations for sales levels for
particular products (including without limitation SUBLOCADE); expectations
regarding the future impact of factors that have affected sales in the past;
assumptions regarding expected changes in share and expectations regarding the
extent and impact of competition; assumptions regarding future exchange rates;
strategic priorities, strategies for value creation, and operational goals;
our expectations regarding the expected final terms, scope, and timing of an
expected settlement related to the provision we recorded regarding claims (i)
in the opioid litigation (including the MDL) brought by certain municipalities
and tribal nations and (ii) by Humana, Centene, and their affiliates to settle
legacy antitrust claims; expected growth rates, growing normalization of
medically assisted treatment for opioid use disorder, and expanded access to
treatment; and other statements containing the words "believe," "anticipate,"
"plan," "expect," "expectations," "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, 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 products; greater than expected impacts from
competition; failure to achieve market acceptance of OPVEE; unanticipated
costs; whether we are able to identify efficiencies and fund additional
investments that we expect to generate increased revenues, and the timing of
such actions; and litigants who choose to "opt out" of proposed settlements or
with whom we are otherwise unable or unwilling to agree to final terms. For
information about some of the risks and important factors that could affect
our future results and financial condition, see "Risk Factors" 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, except as required by law, we undertake no obligation to
update or revise any forward-looking statement, whether due to new
information, future developments, or otherwise.
Unaudited condensed consolidated interim income statement
Q3 Q3 YTD YTD
2024
2023
2024 2023
For the three and nine months ended September 30 Notes $m $m $m $m
Net Revenue 2 307 271 889 800
Cost of sales (69) (46) (208) (135)
Gross Profit 238 225 681 665
Selling, general and administrative expenses 3 (208) (390) (665) (654)
Research and development expenses 3 (22) (18) (76) (77)
Net other operating income (4) - (4) 1
Operating Profit/(Loss) 4 (183) (64) (65)
Finance income 4 5 12 18 33
Finance expense 4 (10) (10) (28) (29)
Net Finance (Expense)/Income (5) 2 (10) 4
Loss Before Taxation (1) (181) (74) (61)
Income tax benefit 5 5 46 17 9
Net Income/(Loss) 4 (135) (57) (52)
Earnings per ordinary share (in dollars)
Basic earnings/(loss) per share 6 $0.03 $(0.98) $(0.42) $(0.38)
Diluted earnings/(loss) per share 6 $0.03 $(0.98) $(0.42) $(0.38)
Unaudited condensed consolidated interim statement of comprehensive income
Q3 Q3 YTD YTD
2024
2023
2024 2023
For the three and nine months ended September 30 $m $m $m $m
Net Income/(Loss) 4 (135) (57) (52)
Other comprehensive loss
Items that may be reclassified to profit or loss in subsequent years:
Foreign currency translation adjustment, net 6 (13) 4 (9)
Other comprehensive income/(loss) 6 (13) 4 (9)
Total comprehensive income/(loss) 10 (148) (53) (61)
The notes are an integral part of these unaudited condensed consolidated
interim financial statements.
Unaudited condensed consolidated interim balance sheet
Sep 30, 2024 Dec 31, 2023 (Retrospectively adjusted(1))
Notes $m $m
ASSETS
Non-current assets
Intangible assets 7 190 234
Property, plant and equipment 79 82
Right-of-use assets 37 33
Deferred tax assets 5 304 267
Investments 8 26 41
Other assets 9 29 28
665 685
Current assets
Inventories 178 142
Trade receivables 251 254
Other assets 9 32 457
Current tax receivable 5 20 -
Investments 8 30 94
Cash and cash equivalents 288 316
799 1,263
Total assets 1,464 1,948
LIABILITIES
Current liabilities
Borrowings 10 (3) (3)
Provisions 11 (48) (408)
Other liabilities 11 (76) (125)
Trade and other payables 14 (815) (743)
Lease liabilities (11) (9)
Current tax liabilities 5 (9) (18)
(962) (1,306)
Non-current liabilities
Borrowings 10 (235) (236)
Provisions 11 (84) (5)
Other liabilities 11 (315) (367)
Lease liabilities (35) (34)
(669) (642)
Total liabilities (1,631) (1,948)
Net liabilities (167) -
EQUITY
Capital and reserves
Share capital 15 65 68
Share premium 13 11
Capital redemption reserve 11 7
Other reserve (1,295) (1,295)
Foreign currency translation reserve (31) (35)
Retained earnings 1,070 1,244
Total equity (167) -
(1)The unaudited condensed consolidated interim balance sheet as of December
31, 2023 was retrospectively adjusted during Q1 2024 to reflect measurement
period adjustments related to the November 2023 acquisition of an aseptic
manufacturing facility. Refer to Note 1 and Note 17.
The notes are an integral part of these unaudited condensed consolidated
interim financial statements.
Unaudited condensed consolidated interim statement of changes in equity
Notes Share capital Share premium Capital redemption reserve Other reserve Foreign currency translation reserve Retained earnings Total equity
$m $m $m $m $m $m $m
Balance at January 1, 2023 68 8 6 (1,295) (39) 1,303 51
Comprehensive income
Net loss - - - - - (52) (52)
Other comprehensive loss - - - - (9) - (9)
Total comprehensive loss - - - - (9) (52) (61)
Transactions recognized directly in equity
Shares issued 1 3 - - - - 4
Share-based plans - - - - - 16 16
Settlement of tax on equity awards - - - - - (22) (22)
Shares repurchased and canceled - - - - - (11) (11)
Transfer to share repurchase liability - - - - - 9 9
Taxation on share-based plans - - - - - (10) (10)
Balance at September 30, 2023 69 11 6 (1,295) (48) 1,233 (24)
Balance at January 1, 2024 68 11 7 (1,295) (35) 1,244 -
Comprehensive income
Net loss - - - - - (57) (57)
Other comprehensive income - - - - 4 - 4
Total comprehensive income/(loss) - - - - 4 (57) (53)
Transactions recognized directly in equity
Shares issued 1 2 - - - (1) 2
Share-based plans - - - - - 18 18
Settlement of tax on equity awards - - - - - (20) (20)
Shares repurchased and canceled (4) - 4 - - (122) (122)
Transfer to share repurchase liability - - - - - (16) (16)
Transfer from share repurchase liability - - - - - 22 22
Taxation on share-based plans - - - - - 2 2
Balance at September 30, 2024 65 13 11 (1,295) (31) 1,070 (167)
The notes are an integral part of these unaudited condensed consolidated
interim financial statements.
Unaudited condensed consolidated interim cash flow statement
2024 2023
For the nine months ended September 30 $m $m
CASH FLOWS FROM OPERATING ACTIVITIES
Operating loss (64) (65)
Depreciation and amortization of property, plant and equipment and intangible 18 13
assets
Impairment of property, plant and equipment and intangible assets 45 -
Depreciation of right-of-use assets 6 6
Share-based payments 18 16
Settlement of tax on employee awards (20) (22)
Impact from foreign exchange movements 2 (11)
Unrealized loss on equity investment 6 -
Decrease/(increase) in trade receivables 3 (26)
Decrease/(increase) in current and non-current other assets(2) 422 (50)
Increase in inventories(1) (36) (26)
Increase in trade and other payables 72 91
(Decrease)/increase in provisions and other liabilities(2 3) (378) 72
Cash generated from/(used in) operations 94 (2)
Interest paid (25) (24)
Interest received 18 32
Taxes paid (46) (40)
Net cash inflow/(outflow) from operating activities 41 (34)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of assets, net of cash acquired - (124)
Purchase of property, plant and equipment (13) (4)
Purchase of investments (14) (40)
Maturity of investments 88 95
Purchase of intangible assets (2) (31)
Net cash inflow/(outflow) from investing activities 59 (104)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings (2) (12)
Principal elements of lease payments (7) (6)
Shares repurchased and canceled (122) (11)
Proceeds from the issuance of ordinary shares 2 4
Net cash outflow from financing activities (129) (25)
Exchange difference on cash and cash equivalents 1 (1)
Net decrease in cash and cash equivalents (28) (164)
Cash and cash equivalents at beginning of the period 316 774
Cash and cash equivalents at end of the period 288 610
(1) Discontinuation of PERSERIS sales and marketing (refer to Note 18)
resulted in impairment of inventory.
(2)Changes in the line items current and non-current other assets and
provisions and other liabilities for YTD 2024 include the settlement of the
Antitrust MDL liabilities (refer to Note 13) and release of related escrow
funding following final court approval.
(3)Changes in the line item provisions and other liabilities for YTD 2024 also
include litigation settlement payments totaling $158m (YTD 2023: $177m). $3m
of interest paid on the DOJ Resolution in YTD 2024 has been recorded in the
interest paid line item (YTD 2023: $3m).
The notes are an integral part of these unaudited condensed consolidated
interim financial statements.
Notes to the unaudited condensed consolidated interim financial statements
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Indivior PLC (the 'Company') is a public limited company incorporated on
September 26, 2014 and domiciled in the United Kingdom. In these unaudited
condensed consolidated interim financial statements ('Condensed Financial
Statements'), reference to the 'Group' means the Company and all its
subsidiaries.
The Condensed Financial Statements have been prepared in accordance with U.K.
adopted International Accounting Standard 34, Interim Financial Reporting. The
Condensed Financial Statements have been reviewed and are unaudited and do not
include all the information and disclosures required in the annual financial
statements. Therefore, the Condensed Financial Statements should be read in
conjunction with the Group's Annual Report and Accounts for the year ended
December 31, 2023, which were prepared in accordance with U.K. adopted
International Accounting Standards and in conformity with the Companies Act
2006 as applicable to companies reporting under those standards. These
Condensed Financial Statements were approved for issue on October 23, 2024.
In preparing these Condensed 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, 2023,
except for changes in estimates that are required in determining the provision
for income taxes and resolution of uncertainties for certain contingent
liabilities.
In 2023, the Group acquired an aseptic manufacturing facility which was
accounted for as a business combination. As the acquisition was completed in
late 2023, a provisional fair value of assets acquired and liabilities assumed
at the date of acquisition was disclosed in the consolidated financial
statements for the year ended December 31, 2023. In Q1 2024, based on new
information obtained about facts and circumstances that existed as of the
acquisition date, the Group adjusted the provisional fair values for acquired
property, plant and equipment and the assumed onerous contract provision, with
an adjustment to goodwill equal to the change in the net assets acquired.
These measurement period adjustments are reflected in the comparative period
presented in the Condensed Financial Statements in accordance with IFRS 3
Business Combinations. The effect on depreciation and other changes in the
related balances from the acquisition date to December 31, 2023 was
immaterial. Refer to Note 17 for a reconciliation of the previously reported
provisional fair value of net assets acquired to the adjusted provisional fair
value.
Effective January 1, 2024, the functional currency of Indivior U.K. Limited,
one of the Group's significant subsidiaries, changed from U.K. pound sterling
to U.S. dollar (USD). This was the result of a change in the primary economic
environment in which Indivior U.K. Limited operates, driven by growth of
USD-denominated net revenue combined with an increase in USD-denominated costs
and culminating with a shift in investing activities. The Group determined the
USD had become the dominant currency from January 2024.
The Directors have assessed the Group's ability to maintain sufficient
liquidity to fund its operations, fulfill financial and compliance obligations
as set out in Note 11, and comply with the minimum liquidity covenant in the
Group's term loan for the period to March 2026 (the going concern period). A
base case model was produced reflecting:
• Board reviewed financial plans for the period; and
• settlement of liabilities and provisions in line with contractual
terms.
The Directors also assessed a 'severe but plausible' downside scenario which
included the following key changes to the base case within the going concern
period:
• the risk that SUBLOCADE will not meet revenue growth expectations
by modeling a 15% decline on forecasts;
• an accelerated decline in U.S. SUBOXONE Film net revenue to
generic analogues; and
• a further decline in rest of world sublingual product net
revenues.
Under both the base case and the downside scenario and acknowledging the
Group's net liability position, sufficient liquidity exists and is generated
from operations such that all business and covenant requirements are met for
the going concern period. Additionally, no material legal cases are expected
to come to trial during the going concern period. As a result of the analysis
described above, the Directors reasonably expect the Group to have adequate
resources to continue in operational existence for at least one year from the
approval of these Condensed Financial Statements and therefore consider the
going concern basis to be appropriate for the accounting and preparation of
these Condensed Financial Statements.
The financial information contained in this document does not constitute
statutory accounts as defined in section 434 and 435 of the Companies Act
2006. The Group's statutory financial statements for the year ended
December 31, 2023, were approved by the Board of Directors on March 5, 2024
and were delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under section 498 of the
Companies Act 2006.
2. SEGMENT INFORMATION
The Group is engaged in a single business activity, which is predominantly the
development, manufacture, and sale of buprenorphine-based prescription drugs
for treatment of opioid dependence and related disorders. The CEO reviews
disaggregated net revenue on a geographical and product basis and allocates
resources on a functional basis between Commercial, Supply, Research and
Development, and other Group functions. Financial results are reviewed on a
consolidated basis for evaluating financial performance and allocating
resources. Accordingly, the Group operates in a single reportable segment.
Net revenue
Revenue is attributed geographically based on the country where the sale
originates. The following table represents net revenue by country:
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
United States 261 227 755 662
Rest of World 46 44 134 138
Total 307 271 889 800
On a disaggregated basis, the Group's net revenue by major product line:
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
SUBLOCADE® 191 167 562 454
OPVEE®(1) 15 - 15 -
Sublingual/other 93 93 281 316
PERSERIS®(2) 8 11 31 30
Total 307 271 889 800
(1)Net revenue for OPVEE® consists of two 100,000 unit product orders from
the U.S. Biomedical Advancement Research and Development Authority (BARDA).
(2) Marketing and promotion for PERSERIS® have been discontinued. Refer to
Note 18.
Non-current assets
The following table represents non-current assets, net of accumulated
depreciation, amortization and impairment, by country. Non-current assets for
this purpose consist of intangible assets, property, plant and equipment,
right-of-use assets, investments, and other assets.
Sep 30, Dec 31, 2023 (Retrospectively adjusted(1))
2024
$m $m
United States 203 209
Rest of World 158 209
Total 361 418
(1) The non-current asset balance in the United States as of December 31, 2023
was retrospectively adjusted in Q1 2024 to reflect measurement period
adjustments of $2m to property, plant and equipment and $3m to intangible
assets related to the November 2023 acquisition of an aseptic manufacturing
facility. Refer to Note 17.
3. OPERATING EXPENSES
The table below sets out selected operating costs and expense information:
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Research and development expenses (22) (18) (76) (77)
Selling and marketing expenses (54) (57) (186) (168)
Administrative and general expenses(1) (154) (333) (479) (486)
Selling, general, and administrative expenses (208) (390) (665) (654)
Depreciation and amortization(2) (3) (3) (11) (11)
(1) Administrative and general expenses in the 2024 periods include legal
settlement costs (see notes 11 and 13), impacts related to discontinuation of
sales and marketing for PERSERIS and the impairment of a product in
development (refer to note 7). Expenses in the 2023 periods include legal
settlement costs and the acquisition of Opiant Pharmaceuticals, Inc.
("Opiant", refer to note 16).
(2) Depreciation and amortization expense represents amounts included in
research and development and selling, general and administrative expenses. In
addition, depreciation and amortization expense in YTD 2024 of $30m (YTD 2023:
$8m) and Q3 2024 of $3m (Q3 2023: $3m) for intangible assets, certain plant
and equipment and right-of-use assets is included within cost of sales. YTD
2024 includes $17m related to the impairment of the Perseris marketed product
intangible and plant and equipment (refer to Note 18).
4. NET FINANCE (EXPENSE)/INCOME
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Finance income
Interest income on cash and cash equivalents/investments 5 12 17 33
Other finance income - - 1 -
Total finance income 5 12 18 33
Finance expense
Interest expense on borrowings (7) (8) (19) (21)
Interest expense on lease liabilities (1) (1) (2) (2)
Interest expense on legal matters, including the effect of discounting (1) (1) (4) (5)
Other interest expense (1) - (3) (1)
Total finance expense (10) (10) (28) (29)
Net finance (expense)/income (5) 2 (10) 4
5. 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. To the extent practicable, a separate estimated average annual
effective income tax rate is determined for each taxing jurisdiction and
applied individually to the interim period pre-tax income of each
jurisdiction. Similarly, if different income tax rates apply to different
categories of income (such as capital gains or income earned in particular
industries), to the extent practicable a separate rate is applied to each
individual category of interim period pre-tax income. The resulting expense is
allocated between current and deferred taxes based on actual movement in
deferred tax for the quarter, with the balance recorded to the current tax
accounts.
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Income tax benefit 5 46 17 9
Effective tax rate (%) nm 25 % 23 % 15 %
In the nine months ended September 30, 2024, the effective tax rate benefit
is higher as the amount of disallowed expenses are lower than in the prior
year. The prior year included higher disallowed executive compensation
relating to the U.S. listing and certain litigation expenses.
Sep 30, Dec 31, 2023 (Retrospectively adjusted(1))
2024
$m $m
Current tax receivable 20 -
Current tax liabilities (9) (18)
Deferred tax assets 304 267
(1) The deferred tax assets balance as of December 31, 2023 has been
retrospectively adjusted to reflect a measurement period adjustment related to
the November 2023 acquisition of an aseptic manufacturing facility. Refer to
Note 17.
The Group recognizes deferred tax assets to the extent that sufficient future
taxable profits are probable against which these future tax deductions can be
utilized. At September 30, 2024, the Group's net deferred tax assets of $304m
relate primarily to net operating loss carryforwards, inventory costs
capitalized for tax purposes, and litigation liabilities. Recognition of
deferred tax assets is reliant on forecast taxable profits arising in the
jurisdiction in which the deferred tax asset is recognized. The Group has
assessed recoverability of deferred tax assets using Group-level budgets and
forecasts consistent with those used for the assessment of viability and asset
impairments, particularly in relation to levels of future net revenues. These
forecasts are subject to similar uncertainties to those assessments. This is
reviewed each quarter and, to the extent required, an adjustment to the
recognized deferred tax asset may be made. With the exception of specific
assets that are not currently considered realizable, management have concluded
full recognition of deferred tax assets to be appropriate and do not believe a
significant risk of material change in their assessment exists in the next 12
months from the balance sheet date.
Other tax matters
The Group is subject to Pillar Two legislation effective January 1, 2024. As
such, the Group performed an assessment of the potential exposure to Pillar
Two income taxes including modeling of adjusted accounting data for the period
ended December 31, 2023 and a review of forecasts for the year ended December
31, 2024. Based on the assessment, the Group did not record any current tax
liability related to Pillar Two. The Group has applied the recent amendment to
IAS 12 which provides temporary relief to the recognition of deferred taxes
relating to top-up income taxes.
As a multinational group, tax uncertainties remain in relation to Group
financing, intercompany pricing, the location of taxable operations, and
certain non-recurring costs. Management have concluded tax provisions made to
be appropriate and do not believe a significant risk of material change to
uncertain tax positions exists in the next 12 months from the balance sheet
date. Including matters under audit, an estimate of reasonably possible
additional tax liabilities and interest that could arise in later periods on
resolution of these uncertainties is in the range from nil to $58m.
6. EARNINGS PER SHARE
The table below sets out basic and diluted earnings (loss) per share for each
period:
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $ $ $ $
Basic earnings/(loss) per share $0.03 $(0.98) $(0.42) $(0.38)
Diluted earnings/(loss) per share $0.03 $(0.98) $(0.42) $(0.38)
Weighted average number of shares
The weighted average number of ordinary shares outstanding (on a basic basis)
for YTD 2024 includes the favorable impact of 8,407k ordinary shares
repurchased in YTD 2024 and 1,413k ordinary shares repurchased from April to
December 2023. See Note 15 for further discussion. Conditional awards of
1,700k and 1,761k were granted under the Group's Long-Term Incentive Plan in
YTD 2024 and YTD 2023, respectively.
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 thousands thousands thousands thousands
Weighted average shares on a basic basis 132,103 137,694 134,222 137,299
Dilution from share awards and options 1,449 5,502 1,625 5,040
Weighted average shares on a diluted basis 133,552 143,196 135,847 142,339
7. INTANGIBLE ASSETS
Sep 30, Dec 31, 2023 (Retrospectively adjusted(1))
2024
Intangible assets, net of accumulated amortization and impairment $m $m
Products in development 51 79
Marketed products 135 150
Goodwill 2 2
Software 2 3
Total 190 234
(1) The goodwill balance as of December 31, 2023 was retrospectively adjusted
to reflect measurement period adjustments related to the November 2023
acquisition of an aseptic manufacturing facility. Refer to Note 17.
The decrease in products in development reflects the impairment of AEF0117 for
cannabis use disorder ($28m), as the clinical Phase 2B study announced in
September 2024 did not demonstrate the anticipated results.
The $15m decrease in marketed products relates to the discontinuation of
PERSERIS sales and marketing (refer to note 18), which resulted in impairment
of the related intangible asset of $9m, and ongoing amortization of other
products.
8. INVESTMENTS
Sep 30, Dec 31,
2024
2023
Current and non-current investments $m $m
Equity securities at FVPL 4 10
Debt securities held at amortized cost 26 84
Total investments, current 30 94
Debt securities held at amortized cost 26 41
Total investments, non-current 26 41
Total 56 135
The Group's investments in debt and equity securities do not create
significant credit risk, liquidity risk, or interest rate risk. Debt
securities held at amortized cost consist of investment-grade debt. As of
September 30, 2024, expected credit losses for the Group's investments held
at amortized cost are immaterial.
Fair value hierarchy
Fair value is the price that would be received to sell an asset or transfer a
liability in an orderly transaction between market participants at the
measurement date. The different levels have been defined as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets
or liabilities
• Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly
• Level 3: Unobservable inputs for the asset or liability
The Group's only financial instruments which are measured at fair value are
equity securities at FVPL. The fair value of equity securities at FVPL is
based on quoted market prices on the measurement date. The following table
categorizes the Group's financial assets measured at fair value by valuation
methodology used in determining their fair value:
At September 30, 2024 Level 1 Level 2 Level 3 Total
$m $m $m $m
Equity securities at FVPL 4 - - 4
At December 31, 2023 Level 1 Level 2 Level 3 Total
$m $m $m $m
Equity securities at FVPL 10 - - 10
The decrease in equity securities at FVPL reflects the change in market price
of Aelis Farma shares from the September 2024 announcement that study results
for their cannabis use disorder pipeline drug did not demonstrate the
anticipated results.
The Group also has certain financial instruments which are not measured at
fair value. The carrying value of cash and cash equivalents, trade
receivables, other assets, and trade and other payables is assumed to
approximate fair value due to their short-term nature. At September 30, 2024,
the carrying value of investments held at amortized cost approximated the fair
value. The fair value of investments held at amortized cost was calculated
based on quoted market prices which would be classified as Level 1 in the fair
value hierarchy above.
9. CURRENT AND NON-CURRENT OTHER ASSETS
Sep 30, Dec 31,
2024
2023
Current and non-current other assets $m $m
Current prepaid expenses 18 23
Other current assets 14 434
Total other current assets 32 457
Non-current prepaid expenses 17 19
Other non-current assets 12 9
Total other non-current assets 29 28
Total 61 485
The decrease in other current assets primarily relates to release of escrow
funding of $415m for the Antitrust MDL (direct purchaser and end payor class
settlements) since the courts provided final approval of the settlements
during Q1 2024. Refer to Note 13. Long-term prepaid expenses primarily relate
to payments for contract manufacturing capacity.
10. FINANCIAL LIABILITIES - BORROWINGS
The table below sets out the current and non-current portion obligation of the
Group's term loan:
Sep 30, Dec 31,
2024
2023
Term loan $m $m
Term loan - current (3) (3)
Term loan - non-current (235) (236)
Total term loan (238) (239)
*Total term loan borrowings reflect the principal amount drawn including debt
issuance costs of $4m (FY 2023: $5m).
At September 30, 2024, the term loan fair value was approximately 100% (FY
2023: 100%) of par value. The key terms of this loan in effect at September
30, 2024, are as follows:
Currency Nominal interest margin Maturity Required annual repayments Minimum
liquidity
Term loan facility USD SOFR + 0.11% + 5.25% 2026 1% Larger of $100m or 50% of loan balance
The term loan amounting to $242m (FY 2023: $244m) is secured against the
assets of certain subsidiaries of the Group in the form of guarantees issued
by respective subsidiaries.
• Nominal interest margin is monthly USD SOFR plus 0.11%, subject to a
floor of 0.75%, plus a credit spread adjustment of 5.25%.
• There are no revolving credit commitments.
11. PROVISIONS AND OTHER LIABILITIES
Provisions
Total Total
Current Non-Current Sep 30, 2024 Current Non-Current Dec 31, 2023 (Retrospectively adjusted(1))
Current and non-current provisions $m $m $m $m $m $m
Multi-district antitrust class and state claims - - - (385) - (385)
Other antitrust matters (20) (19) (39) - - -
Opioid litigation (15) (63) (78) - - -
Onerous contracts (13) - (13) (19) (3) (22)
False claims allegations - - - (4) - (4)
Other - (2) (2) - (2) (2)
Total provisions (48) (84) (132) (408) (5) (413)
(1) The provision for onerous contracts as of December 31, 2023 was
retrospectively adjusted during the first quarter of 2024 to reflect a
measurement period adjustment related to the November 2023 acquisition of an
aseptic manufacturing facility. Refer to Note 17.
Multi-district antitrust class and state claims
Settlement agreements were entered into during 2023 with three plaintiff
classes to fully resolve certain multi-district antitrust claims. Indivior has
no further obligations related to these matters.
Other antitrust matters
The provision of $39m at September 30, 2024 reflects the present value of the
agreed amount in an expected settlement of the last remaining antitrust
litigation with (i) Humana, Inc. and certain of its affiliates (collectively,
"Humana") and (ii) Centene Corporation, Wellcare Healthcare Plans, Inc., New
York Quality Healthcare Corp. (d/b/a Fidelis Care), and Health Net, LLC
(collectively, "Centene"). The $39m provision reflects the net present value
(NPV) at the risk-free rate of the agreed amounts to be paid in 2024 and 2025.
The parties to the settlement still must negotiate material terms and
conditions of the final settlement agreement, which Indivior expects to
resolve shortly (See Note 13). Final settlement, if reached, would resolve all
of the Group's remaining legacy antitrust litigation, including all claims in
the Kentucky and Pennsylvania state court actions filed by Humana, and all
claims in the Virginia state court action filed by Centene.
Opioid litigation
The provision of $78m at September 30, 2024 reflects the present value of the
agreed amount in a preliminary settlement between Indivior, the plaintiffs'
executive committee and certain state attorneys general covering certain
opioid litigation (including cases in the Opioid MDL) brought by
municipalities and tribes. The outflow of resources is expected to occur over
five years. The parties still must negotiate material terms and conditions of
the final settlement agreement, including structure, and scope of releases.
The provision is measured using a risk free rate and will be remeasured at a
risk-adjusted rate upon reaching a final settlement agreement, at which time
the Group expects to make a further disclosure. Refer to Note 13.
Onerous contracts
In November 2023, the Group acquired a business consisting of a manufacturing
facility, workforce, and supply contracts. The facility is obligated to
fulfill contracts that existed pre-acquisition for which the expected costs
are in excess of the consideration expected to be received. The Group recorded
a provision for these onerous contracts in the allocation of purchase price,
with a balance at the end of the quarter of $13m (FY 2023: $22m). During the
quarter, net operating losses attributable to the contracts of $2m were
recorded against the provision. Refer to Note 17. Manufacturing under the
onerous contracts is expected to be completed during Q1 2025 and the provision
is recorded at its discounted value, using a market rate at the time of the
transaction determined to be 7.6%.
False Claims Act allegations
During the quarter, the Group released a provision of $4m pertaining to an
outstanding False Claims Act allegation considering an updated probability
assessment at this early stage of litigation. No estimate of possible loss can
be made at this time. See Note 13.
Other
Other provisions of $2m (FY 2023: $2m) represent retirement benefit costs
which are not expected to be settled within one year.
Other liabilities
Total Total
Current Non-Current Sep 30, 2024 Current Non-Current Dec 31, 2023
Current and non-current other liabilities $m $m $m $m $m $m
DOJ resolution (52) (295) (347) (53) (344) (397)
Multi-district antitrust class and state claims - - - (30) - (30)
Other antitrust matters - - - - - -
Intellectual property related matters - - - (11) - (11)
RB indemnity settlement (8) (7) (15) (8) (15) (23)
Share repurchase (16) - (16) (23) - (23)
Other - (13) (13) - (8) (8)
Total other liabilities (76) (315) (391) (125) (367) (492)
DOJ Resolution Agreement
In July 2020, the Group settled criminal and civil liability with the United
States Department of Justice (DOJ), the U.S. Federal Trade Commission (FTC),
and U.S. state attorneys general. Pursuant to the resolution agreement,
aggregate payments of $263m (including interest) have been made through
September 30, 2024, including a payment of $53m in January 2024. Annual
installments of $50m plus interest are due every January 15 from 2025 to 2027,
with the final installment of $200m due in December 2027. The Group has the
option to prepay. Interest accrues at 1.25% on certain portions of the
resolution and will be paid with the installment payments. For
non-interest-bearing portions, the liability has been recorded at the net
present value based on timing of the estimated payments using a discount rate
equal to the interest rate on the interest-bearing portions. In YTD 2024, the
Group recorded interest expense totaling $3m (YTD 2023: $4m).
Multi-district antitrust class and state claims
Settlement agreements were entered into during 2023 with three plaintiff
classes to fully resolve certain multi-district antitrust claims. Indivior has
no further obligations related to this matter.
Other antitrust matters
Certain antitrust cases filed in Virginia state court by Health Care Service
Corp. (HCSC), Blue Cross Blue Shield of Massachusetts, Blue Cross Blue Shield
of Florida, Molina, and Aetna were settled and paid during the third quarter
by agreement of the parties for $85m and mutual releases of claims and
counterclaims. Refer to note 13.
IP related matters
Other liabilities for intellectual property related matters relate to the
settlement of litigation with DRL in June 2022. Under the settlement
agreement, the Group made a final payment to DRL of $12m during Q1 2024 and
has no further obligations related to this matter.
RB indemnity settlement
Under the RB indemnity settlement, the Group has paid $34m of the $50m
settlement agreement through September 30, 2024 including $8m paid in January
2024. Remaining annual installment payments of $8m are due in January 2025 and
2026. The Group carries a liability totaling $15m (FY 2023: $23m) related to
this settlement. This liability has been recorded at the net present value,
using a market interest rate at the time of the settlement determined to be
3.75%, considering the timing of payments and other factors.
Share repurchase
In August 2024, the Group commenced a share repurchase program of $100m. As of
September 30, 2024, the liability of $16m represents the amount to be spent
under the program through October 25, 2024, after which date the Company has
the ability to modify or terminate the program. As of December 31, 2023, the
current liability of $23m represented the amount to be spent under the
previous share repurchase program through February 23, 2024.
Other
Other liabilities primarily represent employee related liabilities which are
non-current as of September 30, 2024.
12. CONTINGENT LIABILITIES
The Group has assessed certain legal and other matters to be not probable
based upon current facts and circumstances, including any potential impact the
DOJ resolution could have on these matters. Where liabilities related to these
matters are determined to be possible, they represent contingent liabilities.
Except for those matters discussed in Note 13 under "Civil Opioid Litigation"
and "Antitrust Litigation and Consumer Protection," for which a provision has
been recognized, Note 13 sets out the details for legal and other disputes
which the Group has assessed as contingent liabilities. Where the Group
believes it is possible to reasonably estimate a range for the contingent
liability, this has been disclosed.
13. LEGAL PROCEEDINGS
Certain ongoing legal proceedings or threats of legal proceedings to which the
Group is a party, but in which the Group believes the possibility of an
adverse impact is remote, are not discussed in this Note.
Antitrust Litigation and Consumer Protection
• Beginning in 2020, cases by (1) Blue Cross and Blue Shield of
Massachusetts, Inc., Blue Cross and Blue Shield of Massachusetts HMO Blue,
Inc., (2) Health Care Service Corp., (3) Blue Cross and Blue Shield of
Florida, Inc., Health Options, Inc., (4) BCBSM, Inc. (d/b/a Blue Cross and
Blue Shield of Minnesota) and HMO Minnesota (d/b/a Blue Plus), (5) Molina
Healthcare, Inc., and (6) Aetna Inc. were filed in the Circuit Court for the
County of Roanoke, Virginia. See Health Care Services Corp. v. Indivior Inc.,
No. CL20-1474 (Lead Case) (Va. Cir. Ct.) (Roanoke Cnty) (collectively, the
"HCSC Consolidated Litigation"). In July 2023, Indivior Inc., BCBSM, Inc., and
HMO Minnesota agreed to mutual releases and settlement. The remaining
plaintiffs asserted claims under federal and state RICO statutes, state
antitrust statutes, state statutes prohibiting unfair and deceptive practices,
state statutes prohibiting insurance fraud, and common law fraud, negligent
misrepresentation, and unjust enrichment. On July 8, 2024, the parties reached
an agreement to settle all remaining claims and counterclaims in the HCSC
Consolidated Litigation for $85m.
• The Group reached agreement on the amount of a potential
settlement ("Humana/Centene Settlement") with Humana, Inc. and certain of its
affiliated entities (collectively, the "Humana Entities") and Centene
Corporation, Wellcare Healthcare Plans, Inc., New York Healthcare Corp (d/b/a
Fidels Care) and Healthnet, LLC (collectively, the "Centene Entities"). The
Group has recorded a related provision of $39m, reflecting the net present
value (NPV) of the agreed amount (See Note 11). The parties, however, still
must negotiate material terms and conditions of the final settlement
agreement, including the structure and scope of the release.
◦ As background, Humana, Inc. filed a complaint in state court in
Kentucky on August 20, 2021 with claims substantially similar to those
asserted by other end payors in the HCSC Consolidated Litigation. See Humana
Inc. v. Indivior Inc., No. 21-CI-004833 (Ky. Cir. Ct.) (Jefferson Cnty). The
court lifted a stay on October 30, 2023. Indivior moved to dismiss the
complaint in February 2024. A hearing on Indivior's motion to dismiss has been
set for December 9, 2024. This action would be dismissed if the Humana/Centene
Settlement is finalized.
◦ As further background, the Centene Entities filed a complaint on
January 13, 2023 in the Circuit Court for the County of Roanoke, Virginia
alleging similar claims as in the HCSC Consolidated Litigation. See Centene
Corp. v. Indivior Inc., No. CL23000054-00 (Va. Cir. Ct.) (Roanoke Cnty). This
action would be dismissed if the Humana/Centene Settlement is finalized.
◦ In 2013, Reckitt Benckiser Pharmaceuticals Inc., now known as
Indivior Inc. received notice that it and other companies were defendants in a
lawsuit initiated by writ in the Philadelphia County (Pennsylvania) Court of
Common Pleas. See Carefirst of Maryland, Inc. et al. v. Reckitt Benckiser
Inc., et al., Case. No. 2875, December Term 2013. The plaintiffs included
approximately 79 entities, most of which appeared to be insurance companies or
other providers of health benefits plans. The claims of all plaintiffs in the
Carefirst action except the Humana Entities were resolved in connection with
final approval of the end payor settlement in the Antitrust MDL, and
accordingly dismissed on February 14, 2024. The claims of the Humana Entities
in the Carefirst action remain pending, but would be dismissed if the
Humana/Centene Settlement is finalized.
• As previously disclosed in 2023, Indivior Inc. settled claims of
all plaintiff groups in the company's antitrust multi-district litigation
("Antitrust MDL") namely, (i) 41 states and the District of Columbia (the
"States"), (ii) end payors, and (iii) direct purchasers (collectively, the
"Plaintiffs"). Indivior Inc. reached a settlement with the States for $103m on
June 1, 2023. Indivior Inc. entered into a settlement agreement with the end
payor class for $30m on August 14, 2023 and received final court approval on
December 5, 2023. On October 22, 2023, Indivior Inc. entered into a settlement
agreement with the remaining direct purchaser class for $385m, which received
final court approval on February 27, 2024.
Civil Opioid Litigation
• The Group has been named as a defendant in more than 400 civil
lawsuits alleging that manufacturers, distributors, and retailers of opioids
engaged in a longstanding practice to market opioids as safe and effective for
the treatment of long-term chronic pain to increase the market for opioids and
their own market shares for opioids, or alleging individual personal injury
claims. Most of these cases have been consolidated and are pending in a
federal multi-district litigation in the U.S. District Court for the Northern
District of Ohio. See In re National Prescription Opiate Litigation, MDL No.
2804 (N.D. Ohio) (the "Opioid MDL"). Nearly two-thirds of the cases in the
Opioid MDL were filed by cities and counties, while nearly one-third of the
cases were filed by individual plaintiffs, most of whom assert claims relating
to neonatal abstinence syndrome ("NAS"). Litigation against the Group in the
Opioid MDL is stayed.
• Pursuant to mediation, the Group, the Plaintiffs' Executive
Committee in the Opioid MDL, Tribal Leadership Committee, and certain state
attorneys general reached agreement on the amount of a potential settlement.
The Group has recorded a related provision of $78m, reflecting the net present
value (NPV) of the agreed amount (See Note 11). The parties, however, still
must negotiate material terms and conditions of the final settlement
agreement, including the structure and scope of the release. The proposed
settlement does not include private plaintiffs.
• Separately, Indivior Inc. was named as one of numerous defendants
in civil opioid cases that are not part of the Opioid MDL:
◦ Indivior was named as one of numerous defendants in various other
federal and state court cases that are not in the Opioid MDL and were brought
by municipalities. These cases include, for example, 35 actions filed in New
York state court that were removed to federal court, as well as cases filed in
federal district courts sitting in Alabama, Florida, Georgia, and New Mexico.
On motion of the plaintiffs, the New York cases were remanded back to state
court. The plaintiffs in the case filed in the Northern District of Alabama
voluntarily dismissed their complaint, subject to certain tolling agreements.
The various other federal actions currently are stayed, except Indivior moved
to dismiss the complaint in San Miguel Hospital Corp. d/b/a Alta Vista
Regional Medical Center v. Johnson & Johnson, et al., No. 1:23-cv-00903
(D.N.M.) in May 2024. Indivior's motion to dismiss remains pending.
◦ Indivior Inc. was named as a defendant in five individual
complaints filed in West Virginia state court that were transferred to West
Virginia's Mass Litigation Panel. See In re Opioid Litigation, No. 22-C-9000
NAS (W.V. Kanawha Cnty. Cir. Ct.) ("WV MLP Action"). All five of Indivior
Inc.'s cases in the WV MLP Action involve claims related to NAS. Indivior Inc.
moved to dismiss all five complaints on January 30, 2023. By order dated April
17, 2023, the court granted Indivior's motions to dismiss. The plaintiffs
filed a notice of appeal on June 30, 2023, and the appellate court heard oral
argument on September 17, 2024. The appellate court has not yet ruled on the
appeal.
• Additionally, on May 23, 2024, the Consumer Protection Division of
the Office of the Attorney General of Maryland served on Indivior Inc. an
administrative subpoena related generally to opioid products marketed and sold
in Maryland. Indivior Inc.'s response to the subpoena remains ongoing.
• The Group has begun its evaluation of the claims, believes it has
meritorious defenses, and intends to vigorously defend itself in the private
plaintiff actions. Given the status and preliminary stage of litigation in the
separate federal and state court actions for the private plaintiff cases,
no estimate of possible loss in the opioid litigation for the private
plaintiffs can be made at this time.
False Claims Act Allegations
• In August 2018, the United States District Court for the Western
District of Virginia unsealed a declined qui tam complaint alleging causes of
action under the Federal and state False Claims Acts against certain entities
within the Group predicated on best price issues and claims of retaliation.
See United States ex rel. Miller v. Reckitt Benckiser Group PLC et al., Case
No. 1:15-cv-00017 (W.D. Va.). The suit also seeks reasonable attorneys' fees
and costs. The Group filed a Motion to Dismiss in June 2021, which was granted
in part and denied in part on October 17, 2023. The relator filed a sixth
amended complaint against only Indivior Inc. on December 7, 2023. Indivior
answered the sixth amended complaint on March 18, 2024. Discovery is ongoing.
Given the status and preliminary stage of the litigation, no estimate of
possible loss can be made at this time.
• In May 2018, Indivior Inc. received an informal request from the
United States Attorney's Office ("USAO") for the Southern District of New
York, seeking records relating to the SUBOXONE Film manufacturing process. The
Group provided the USAO certain information regarding allegations that the
government received regarding SUBOXONE Film. There has been no communication
regarding this matter with the USAO since 2022.
U.K. Shareholder Claims
• On September 21, 2022, certain shareholders issued representative
and multiparty claims against Indivior PLC in the High Court of Justice for
the Business and Property Courts of England and Wales, King's Bench Division.
On January 16, 2023, the representative served its Particular of Claims
setting forth in more detail the claims against the Group, while the same law
firm that represents the representative also sent its draft Particular of
Claims for the multiparty action. The claims made in both the representative
and multiparty actions generally allege that Indivior PLC violated the U.K.
Financial Services and Markets Act 2000 ("FSMA 2000") by making false or
misleading statements or material omissions in public disclosures, including
the 2014 Demerger Prospectus, regarding an alleged product-hopping scheme
regarding the switch from SUBOXONE Tablets to SUBOXONE Film. Indivior PLC
filed an application to strike out the representative action. On December 5,
2023, the court handed down a judgment allowing the Group's application to
strike out the representative action. The court subsequently awarded certain
costs to the Group. On January 23, 2024, the claimants requested permission to
appeal the decision to the court of appeals. The appellate court has indicated
that it will hear the appeal between December 10 and 12, 2024. The Group has
begun its evaluation of the claims, believes it has meritorious defenses, and
intends to vigorously defend itself. Given the status and preliminary stage of
the litigation, no estimate of possible loss can be made at this time.
U.S. Shareholder Claims
• A class action lawsuit was filed against Indivior PLC, Mark
Crossley (the CEO of the Group), and Ryan Preblick (the CFO of the Group) on
August 2, 2024, alleging violations of certain United States federal
securities laws. The putative class, as alleged, includes plaintiffs that
purchased or otherwise acquired Indivior securities between February 22, 2024
and July 8, 2024. The court entered an order appointing a lead plaintiff on
October 7, 2024. The lead plaintiff must file an amended complaint on or
before December 5, 2024, and the defendants must respond by January 10, 2025.
Given the status and preliminary stage of the litigation, no estimate of
possible loss can be made at this time.
Opiant Shareholder Claims
• On November 8, 2023, plaintiff James Litten filed a class action
complaint in the Delaware Court of Chancery alleging that former officers and
directors of Opiant Pharmaceuticals, Inc. ("Opiant") breached fiduciary duties
of care, loyalty, and good faith in connection with Indivior PLC's 2022
acquisition of Opiant. The defendants moved to dismiss the complaint on
January 26, 2024. On March 21, 2024, the plaintiff filed an amended complaint,
which added Lazard Freres & Co. LLC, which was Opiant's advisor in the
acquisition as a defendant. The defendants moved to dismiss the amended
complaint on June 21, 2024. The motion to dismiss remains pending. The Group
has begun its evaluation of the claims, believes it has meritorious defenses,
and intends to vigorously defend itself. Given the status and preliminary
stage of the litigation, no estimate of possible loss can be made at this
time.
Dental Allegations
• The Group has been named as a defendant in numerous lawsuits
alleging that Suboxone® Film was defectively designed and caused dental
injury, and that the Group failed to properly warn of the risks of such
injuries. The plaintiffs generally seek compensatory damages, as well as
punitive damages and attorneys' fees and costs. Plaintiffs and potential
plaintiffs related to these lawsuits generally can be grouped as follows:
▪ Dental MDL Plaintiffs: More than 675 of these cases have been
consolidated in multi-district litigation in the Northern District of Ohio.
See In Re Suboxone (Buprenorphine/Naloxone) Film Products Liability
Litigation, MDL No. 3092 (N.D. Oh.) (the "Dental MDL").
▪ Dental MDL Schedule A Plaintiffs: One complaint filed in the
Dental MDL on June 14, 2024 attached a schedule of nearly 10,000 plaintiffs
(the "Schedule A Plaintiffs"). The parties are in the process of negotiating a
tolling agreement for the Schedule A Plaintiffs that would permit plaintiffs'
counsel additional time to investigate issues such as whether and when the
Schedule A Plaintiffs used any Indivior product before determining whether to
file individual complaints that ultimately would be coordinated with the
Dental MDL. Plaintiffs indicated to the court they will dismiss more than
1,400 plaintiffs in the future, pursuant to a mechanism to be provided by the
court.
▪ State Court Plaintiffs: One complaint has been filed in New
Jersey state court, and the parties have agreed to toll the claims of more
than 850 other individuals in Delaware, New Jersey, and Virginia. Complaints
have not yet been filed on behalf of the tolled individuals.
• Product liability cases such as these typically involve issues
relating to medical causation, label warnings and reliance on those warnings,
scientific evidence and findings, actual/provable injury and other matters.
These cases are in their preliminary stages. These lawsuits and claims follow
a June 2022 required revision to the Prescribing Information and Patient
Medication Guide about dental problems reported in connection with
buprenorphine medicines dissolved in the mouth to treat opioid use disorder.
This revision was required by the FDA of all manufacturers of these products.
The Group has been informed by its primary insurance carrier that defense
costs for the Dental MDL should begin to be reimbursed now that the Group's
self-insurance retention has been exhausted. Additionally, the Group's primary
insurance carrier has issued a reservation of rights against payment of any
liability costs. In the event of a liability finding, various factors could
affect reimbursement or payment by insurers, if any, including (i) the scope
of the insurers' purported defenses and exclusions to avoid coverage, (ii) the
outcome of negotiations with insurers, (iii) delays in or avoidance of payment
by insurers and (iv) the extent to which insurers may become insolvent in the
future. The Group has begun its evaluation of the claims, believes it has
meritorious defenses, and intends to vigorously defend itself. Given the
status and preliminary stage of the litigation, no estimate of possible loss
can be made at this time.
• Applications to file class actions based on similar allegations as
in the Dental MDL were filed in Quebec and British Columbia against various
subsidiaries of the Group, among other defendants, in April 2024. The Group
has begun its evaluation of the claims, believes it has meritorious defenses,
and intends to vigorously defend itself. Given the status and preliminary
stage of the litigation, no estimate of possible loss can be made at this
time.
14. TRADE AND OTHER PAYABLES
Sep 30, Dec 31,
2024
2023
$m $m
Accrual for rebates, discounts and returns (564) (507)
Rebates payable (44) (28)
Accounts payable (50) (39)
Accruals and other payables (138) (150)
Other tax and social security payable (19) (19)
Total trade and other payables (815) (743)
15. SHARE CAPITAL
Equity ordinary shares (thousands) Nominal value paid per share Aggregate nominal value $m
Issued and fully paid
At January 1, 2024 136,526 $0.50 68
Ordinary shares issued 1,456 $0.50 1
Shares repurchased and canceled (8,407) $0.50 (4)
At September 30, 2024 129,575 65
Equity ordinary shares (thousands) Nominal value paid per share Aggregate nominal value $m
Issued and fully paid
At January 1, 2023 136,481 $0.50 68
Ordinary shares issued 1,943 $0.50 1
Shares repurchased and canceled (484) $0.50 -
At September 30, 2023 137,940 69
Ordinary shares issued
During the period, 1,456k ordinary shares at $0.50 each (YTD 2023: 1,943k at
$0.50 each) were issued to satisfy vesting/exercises under the Group's
Long-Term Incentive Plan, the Indivior U.K. Savings-Related Share Option
Scheme, and the U.S. Employee Stock Purchase Plan. In YTD 2024, net settlement
of tax on employee equity awards was $20m (YTD 2023: $22m).
Shares repurchased and canceled
On November 17, 2023, the Group commenced a share repurchase program for an
aggregate purchase price up to no more than $100m or 13,632k of ordinary
shares which concluded on August 2, 2024. During the period, the Group
repurchased and canceled a total of 4,532k of ordinary shares at $0.50 per
share under this program.
On August 5, 2024, the Group commenced a share repurchase program for an
aggregate purchase price of no more than $100m or 13,649k of ordinary shares
and ending no later than January 31, 2025. During the period, the Group
repurchased and canceled a total of 3,875k of ordinary shares at $0.50 per
share under this program.
The aggregate nominal value of shares repurchased during 2024 under the
November 2023 and August 2024 programs was $4m.
All ordinary shares repurchased during the period under share repurchase
programs were canceled resulting in a transfer of the aggregate nominal value
to a capital redemption reserve. The total cost of the purchases made under
the share repurchase program during the period, including directly
attributable transaction costs, was $122m (YTD 2023: $11m). A net repurchase
amount of $16m has been recorded as a financial liability and reduction of
retained earnings which represents the amount to be spent under the program
through October 24, 2024, after which date the Company has the ability to
modify or terminate the program. Total purchases under the share repurchase
program will be made out of distributable profits.
16. ACQUISITION OF OPIANT
On March 2, 2023, the Group acquired 100% of the share capital of Opiant for
upfront cash consideration of $146m and an additional maximum amount of $8.00
per share in Contingent Value Rights (CVR) to be potentially paid upon
achievement of net sales milestones. As a result of the acquisition, the Group
added OPVEE (nalmefene nasal spray), an opioid overdose treatment well-suited
to confront illicit synthetic opioids like fentanyl, to its addiction science
portfolio. OPVEE was approved by the FDA in May 2023 and launched in October
2023.
Since substantially all of the fair value of the gross assets acquired was
concentrated in the OPVEE in-process research and development, the Group
accounted for the transaction as an asset acquisition and recorded an
intangible asset of $126m.
The cash outflow for the acquisition was $124m in Q1 2023, net of cash
acquired, and inclusive of direct transaction costs. As part of the
acquisition, the Group assumed outstanding debt of $10m which was settled and
included as a cash outflow from financing activities.
Additional acquisition-related costs of $16m were incurred in 2023 and
included in selling, general, and administrative expenses, primarily relating
to severance, acceleration of vesting of Opiant employee share compensation,
and short-term retention accruals.
17. BUSINESS COMBINATION
On November 1, 2023, the Group acquired an aseptic manufacturing facility (the
"Facility") in the United States for upfront consideration of $5m in cash and
assumption of certain contract manufacturing obligations. The Facility will be
further developed to secure the long-term production and supply of SUBLOCADE.
The acquisition was accounted for as a business combination using the
acquisition method of accounting in accordance with IFRS 3 Business
Combinations. The assets acquired and liabilities assumed were recorded at
fair value, with the excess of the purchase price over the fair value of the
identifiable assets and liabilities recognized as goodwill. An onerous
contract provision was recorded at fair value to reflect the present value of
the expected losses from assumed contractual manufacturing obligations. Net
operating losses attributable to these contractual obligations will be
recorded against the onerous contract provision from the date of acquisition
through fulfillment of the contracts in early 2025.
As of September 30, 2024, committed capital spend for the Facility is
approximately $22m.
Identifiable assets acquired and liabilities assumed
As the acquisition was completed in late 2023, the provisional fair value of
assets acquired and liabilities assumed at the date of acquisition was
disclosed in the consolidated financial statements for the year ended December
31, 2023. During Q1 2024, based on new information obtained about facts and
circumstances that existed as of the acquisition date, the Group adjusted the
provisional fair values for acquired property, plant and equipment and the
assumed onerous contract provision, with an adjustment to goodwill equal to
the change in the net assets acquired. These measurement period adjustments
were reflected in the comparative period presented in the Condensed Financial
Statements in accordance with IFRS 3 Business Combinations. The following
table provides a reconciliation from the provisional fair values of assets
acquired and liabilities assumed at the date of acquisition as reported in the
2023 annual financial statements to the provisional fair values as adjusted
during Q1 2024:
Provisional values
As Previously Reported Measurement period adjustment As adjusted
Net assets acquired $m $m $m
Property, plant and equipment 28 (2) 26
Deferred tax assets 2 (1) 1
Trade and other payables (1) - (1)
Provisions (29) 6 (23)
Total net assets acquired - 3 3
Goodwill
Goodwill arising from the acquisition has been recognized as follows,
reflecting the Q1 2024 measurement period adjustments:
Provisional values
As Previously Reported Measurement period adjustment As adjusted
$m $m $m
Consideration transferred 5 - 5
Less: Fair value of net assets acquired - (3) (3)
Goodwill 5 (3) 2
The goodwill is primarily attributable to Indivior-specific synergies relating
to accelerated in-sourcing of SUBLOCADE production and the skills and
technical talent of the Facility's workforce.
18. DISCONTINUATION OF PERSERIS SALES & MARKETING
As announced in July 2024, the Group discontinued promotion and marketing
support for PERSERIS, resulting in a headcount reduction of approximately 130
employees and termination of related contract manufacturing agreements. The
decision was taken in consideration of regulatory changes announced during Q2
2024 which are expected to adversely intensify payor management of the
treatment category in which PERSERIS competes and would make PERSERIS no
longer financially viable. While the Group will continue to supply PERSERIS
for the foreseeable future, the expected adverse impacts represented an
impairment indicator for PERSERIS-related assets, resulting in year to date
impairment charges and other expenses as detailed below. Charges of $42m
recorded in Q2 included inventory provisions and impairment of tangible and
intangible assets. Charges of $21m recorded in Q3 included contract
termination costs and severance.
Q3 2024 YTD 2024
Impairment charges, write downs and other charges $m $m
Charged to cost of goods sold
Marketed product intangible - 9
Plant and equipment - 8
Inventory (2) 22
Contract termination fees 12 12
Sub-total: Cost of goods sold 10 51
Charged to SG&A:
Severance 7 7
Other expenses 4 5
Sub-total: SG&A 11 12
Total charges 21 63
19. SUBSEQUENT EVENTS
CT-102 Digital Therapeutic Product
Subsequent to September 30, 2024, as part of strategic streamlining actions,
the Group discontinued its collaboration agreement for the development and
commercialization of the prescription digital therapeutic product, CT-102. As
a result, contract termination fees of approximately $7m and a non-cash
impairment charge of approximately $8m will be incurred in Q4 2024.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors declare that, to the best of their knowledge, this set of
condensed consolidated interim financial statements, which have been prepared
in accordance with UK adopted International Accounting Standard 34, Interim
Financial Reporting, gives a true and fair view of the assets, liabilities,
financial position, and profit or loss of Indivior.
The Directors are responsible for the maintenance and integrity of the Group's
website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Details of Indivior PLC's Directors are available on our website at
www.indivior.com.
By order of the Board
Mark Crossley Ryan Preblick
Chief Executive Officer Chief Financial Officer
October 23, 2024
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 and YTD 2024
Financial Results of Indivior PLC for the three and nine month periods ended
30 September 2024.
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 UK adopted International Accounting
Standard 34, 'Interim Financial Reporting'.
The interim financial statements comprise:
• the Condensed consolidated interim balance sheet as at 30
September 2024;
• the Condensed consolidated interim income statement and Condensed
consolidated interim statement of comprehensive income for the three and nine
month periods then ended;
• the Condensed consolidated interim cash flow statement for the
nine month period then ended;
• the Condensed consolidated interim statement of changes in equity
for the nine month period then ended; and
• the explanatory notes to the interim financial statements.
The interim financial statements included in the Q3 and YTD 2024 Financial
Results of Indivior PLC have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). 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 and YTD 2024 Financial
Results and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the interim financial
statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Q3 and YTD 2024 Financial Results, including the interim financial
statements, is the responsibility of, and has been approved by the directors.
The directors are responsible for preparing the Q3 and YTD 2024 Financial
Results in accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. In preparing
the Q3 and YTD 2024 Financial Results, including the interim financial
statements, the directors are responsible for assessing the group's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease operations, or have
no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Q3 and YTD 2024 Financial Results based on our review. Our
conclusion, including our Conclusions relating to going concern, is based on
procedures that are less extensive than audit procedures, as described in the
Basis for conclusion paragraph of this report. 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.
PricewaterhouseCoopers LLP
Chartered Accountants
London
23 October 2024
APPENDIX: ADJUSTED RESULTS
Exceptional items and other adjustments
Exceptional items and other adjustments represent significant expenses or
income that do not reflect the Group's ongoing operations or the adjustment of
which may help with the comparison to prior periods. Exceptional items and
other adjustments are excluded from adjusted results consistent with the
internal reporting provided to management and the Directors. Examples of such
items could include income or restructuring and related expenses from the
reconfiguration of the Group's activities and/or capital structure,
amortization of acquired intangible assets, impairment of current and
non-current assets, gains and losses from the sale of intangible assets,
certain costs arising as a result of significant and non-recurring regulatory
and litigation matters, and certain tax related matters.
Adjusted results are not measures defined by IFRS and are not a substitute
for, or superior to, reported results presented in accordance with IFRS.
Adjusted results as presented by the Group are not necessarily comparable to
similarly titled measures used by other companies. As a result, these
performance measures should not be considered in isolation from, or as a
substitute analysis for, the Group's reported results presented in accordance
with IFRS. Management performs a quantitative and qualitative assessment to
determine if an item should be considered for adjustment. The table below sets
out exceptional items and other adjustments recorded in each period:
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Exceptional items and other adjustments within cost of sales
Amortization of acquired intangible assets(1) (3) (3) (9) (5)
Discontinuation of sales and marketing for PERSERIS(2) (10) - (51) -
Total exceptional items and other adjustments within cost of sales (13) (3) (60) (5)
Exceptional items and other adjustments within SG&A
Legal costs/provisions(3) (36) (240) (196) (240)
Discontinuation of sales and marketing for PERSERIS(2) (11) - (12) -
Impairment of products in development(4) (28) - (28) -
Acquisition-related costs(6) - - (4) (16)
U.S. listing costs(7) - - (4) (6)
Total exceptional items and other adjustments within SG&A (75) (240) (244) (262)
Exceptional items within other (losses)/gains, net
Mark-to-market on equity investments(5) (5) - (5) -
Total exceptional items within other (losses)/gains, net (5) - (5) -
Total exceptional items and other adjustments before taxes (93) (243) (309) (267)
Tax on exceptional items and other adjustments 25 59 70 61
Exceptional tax items(8) - - - (8)
Total exceptional items and other adjustments (68) (184) (239) (214)
1. The Group reported adjusted cost of sales to exclude
amortization of acquired intangible assets.
2. In Q3 2024 and YTD 2024 the Group recognized $21m and $63m of
exceptional costs related to the discontinuation of sales and marketing for
PERSERIS, including contractual fees, impairment of assets, inventory
provisions and severance.
3. In Q3 2024, the Group recognized exceptional costs of $39m
related to the expected settlement of certain antitrust legal matters. YTD
2024 also includes $85m related to the July 8, 2024 settlement of certain
antitrust legal matters and $75m related to the Opioid MDL (refer to Notes 11
and 13).
4. In Q3 2024, the Group impaired a product in development
resulting from a clinical study that did not demonstrate the anticipated
results.
5. In Q3 2024, a mark-to-market adjustment was recorded related to
the impact on the quoted market price of the ordinary shares of Aelis Farma of
the announcement that the clinical Phase 2B study with AEF0117 in participants
with cannabis use disorder did not demonstrate the anticipated results.
6. In YTD 2024, the Group recognized $4m of exceptional costs
related to the acquisition and integration of the aseptic manufacturing site
acquired in November 2023 (refer to note 17). In YTD 2023, the Group
recognized $16m of exceptional costs related to the acquisition of Opiant
(refer to Note 16).
7. The Group recognized exceptional costs related to listing
Indivior shares on NASDAQ as the primary listing of $4m in YTD 2024 and $2m in
Q3 2024 (YTD 2023: $6m).
8. Exceptional tax items in YTD 2023 are comprised of $5m write off
of deferred tax assets and tax expense due to limitation on the deduction of
executive compensation by U.S. publicly traded companies and $3m change in
estimate as to the tax benefit of legal provisions booked in the prior year.
Adjusted results
Management provides certain adjusted financial measures which may be useful to
investors. These adjusted financial measures exclude items which do not
reflect the Group's day-to-day operations and therefore may help with
comparisons to prior periods or among companies. Management may use these
financial measures to better understand trends in the business.
The tables below present the adjustments between reported and adjusted results
for both Q3/YTD 2024 and Q3/YTD 2023.
Reconciliation of gross profit to adjusted gross profit
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Gross profit 238 225 681 665
Exceptional items and other adjustments in cost of sales 13 3 60 5
Adjusted gross profit 251 228 741 670
We define adjusted gross margin as adjusted gross profit divided by net
revenue.
Reconciliation of selling, general and administrative expenses to adjusted
selling, general and administrative expenses
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Selling, general and administrative expenses (208) (390) (665) (654)
Exceptional items and other adjustments in selling, general and administrative 75 240 244 262
expenses
Adjusted selling, general and administrative expenses (133) (150) (421) (392)
Reconciliation of operating profit/(loss) to adjusted operating profit
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Operating profit/(loss) 4 (183) (64) (65)
Exceptional items and other adjustments in cost of sales 13 3 60 5
Exceptional items and other adjustments in selling, general and administrative 75 240 244 262
expenses
Exceptional items and other adjustments in net other operating income 5 - 5 -
Adjusted operating profit 97 60 245 202
We define adjusted operating margin as adjusted operating profit divided by
net revenue.
Reconciliation of loss before taxation to adjusted profit before taxation
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Loss before taxation (1) (181) (74) (61)
Exceptional items and other adjustments in cost of sales 13 3 60 5
Exceptional items and other adjustments in selling, general and administrative 75 240 244 262
expenses
Exceptional items and other adjustments in net other operating income 5 - 5 -
Adjusted profit before taxation 92 62 235 206
Reconciliation of tax expense to adjusted tax expense
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Tax benefit/(expense) 5 46 17 9
Tax on exceptional items and other adjustments (25) (59) (70) (61)
Exceptional tax items - - - 8
Adjusted tax (expense) (20) (13) (53) (44)
We define adjusted effective tax rate as adjusted tax expense divided by
adjusted profit before taxation.
Reconciliation of net loss to adjusted net income
Q3 Q3 YTD YTD
2024 2023 2024 2023
For the three and nine months ended September 30 $m $m $m $m
Net income/(loss) 4 (135) (57) (52)
Exceptional items and other adjustments in cost of sales 13 3 60 5
Exceptional items and other adjustments in selling, general and administrative 75 240 244 262
expenses
Exceptional items and other adjustments in net other operating income 5 - 5 -
Tax on exceptional items and other adjustments (25) (59) (70) (61)
Exceptional tax items - - - 8
Adjusted net income 72 49 182 162
Adjusted diluted earnings per share
Management believes that diluted earnings per share, adjusted for the impact
of exceptional items and other adjustments after the appropriate tax amount,
may provide meaningful information on underlying trends to shareholders in
respect of earnings per ordinary share. Weighted average shares used in
computing diluted earnings per share is included in Note 6. A reconciliation
of net income to adjusted net income is included above.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END QRTUOSORSNURUUARecent news on Indivior
See all newsREG - Indivior PLC - Total Voting Rights
AnnouncementREG - Indivior PLC - 1st Quarter Results
AnnouncementREG - Indivior PLC - Holding(s) in Company
AnnouncementREG - Indivior PLC - Notice of Results
AnnouncementREG - Indivior PLC - Holding(s) in Company
Announcement