REG - Indivior PLC - Half-year Report
25/07/2024 07:00
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RNS Number : 7418X Indivior PLC 25 July 2024
July 25, 2024
Q2 2024 Results In Line with Updated Guidance; $100m Share Buyback Announced
• Reports Q2 2024 SUBLOCADE® Net Revenue (NR) of $192m (+24% versus Q2
2023)
• Announces new $100m share repurchase program
• Announces expected settlement of certain opioid litigation (See Notes 11
and 13).
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 (AS IT FORMS PART OF DOMESTIC LAW IN
THE UK BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018)
Comment by Mark Crossley, CEO of Indivior PLC
"Our second quarter results are in line with our July 9th business update and
reflect +24% NR growth for SUBLOCADE (buprenorphine extended-release
injection). The underlying demand for this transformative treatment for
moderate-to-severe opioid use disorder (OUD) remains strong in a market that
continues to be heavily under-treated. As previously announced, SUBLOCADE's Q2
growth was adversely impacted by transitory items, including Medicaid patient
disenrollment dynamics, lower channel stocking and longer sales lead times for
new criminal justice system accounts. We incorporated these items into our FY
2024 guidance that we updated earlier this month. We remain confident that we
will deliver on our objectives for SUBLOCADE, which include achieving a NR run
rate of $1 billion as we exit 2025 and peak annual NR of greater than $1.5
billion.
Separately, we took the difficult decision earlier this month to end sales and
marketing of PERSERIS® due to impending market changes that would make the
product no longer financially viable.
While 2024 has proved to be a more challenging year than we had anticipated,
we remain highly confident in the underlying fundamentals of our business and
strategy, and that we are on a clear path to create substantial shareholder
value. Reflecting our confidence, we are today announcing a new $100m share
repurchase program which we intend to execute over an accelerated time frame."
Expected Settlement of Opioid Litigation
Indivior continues to address legacy litigation to create greater certainty
for all stakeholders. Today, the Group announces an expected settlement
related to opioid litigation, including certain parties in the opioid
multi-district litigation (MDL). The Group has recorded a related provision of
$75m, reflecting the net present value (NPV) at the risk-free rate of the
agreed amount with the plaintiffs' executive committee and certain state
attorneys general, expected to be paid over a five-year period. The parties to
the settlement still must negotiate material terms and conditions of the final
settlement agreement, which Indivior expects to resolve in due course. Upon
final settlement, the provision will be reclassified to a liability and the
NPV will be remeasured using a risk-adjusted rate and likely adjusted down to
approximately $65m, reflecting the Group's cost of debt versus the risk-free
rate used to record the provision (See Notes 11 and 13).
Period to June 30th (Unaudited) Q2 Q2 % Change H1 H1 % Change
2024 2023 2024 2023
$m $m $m $m
Net Revenue 299 276 8% 583 529 10%
Operating (Loss) / Profit (132) 61 NM (67) 118 NM
Net (Loss)/Income (107) 39 NM (60) 83 NM
Diluted EPS ($) $(0.79) $0.27 NM $(0.44) $0.59 NM
Adjusted Basis
Adj. Operating Profit(1) 79 71 11% 149 142 5%
Adj. Net Income(1) 60 56 7% 111 112 -1%
Adj. Diluted EPS(1) ($) $0.44 $0.39 13% $0.81 $0.79 3%
1 Adjusted Basis excludes the impact of exceptional items and other
adjustments as referenced and reconciled in the "Adjusted Results" appendix on
page 28. 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.
H1/ Q2 2024 Financial Highlights
• H1 2024 total net revenue (NR) of $583m increased 10% (H1 2023:
$529m); Q2 2024 total NR of $299m increased 8% (Q2 2023: $276m).
• H1 2024 reported operating loss was $67m (H1 2023 operating
profit: $118m); Q2 2024 reported operating loss was $132m (Q2 2023 operating
profit: $61m). H1 2024 adjusted operating profit of $149m increased 5%
(Adjusted H1 2023: $142m). Q2 2024 adjusted operating profit of $79m increased
11% (Adjusted Q2 2023: $71m).
• H1 2024 reported net loss was $60m (H1 2023 net income: $83m);
Q2 2024 reported net loss was $107m (Q2 2023 net income: $39m). H1 2024
adjusted net income was $111m (Adjusted H1 2023: $112m). Q2 2024 adjusted net
income of $60m increased 7% (Adjusted Q2 2023: $56m).
• Cash and investments totaled $405m at the end of H1 2024
(including $26m restricted for self-insurance) (FY 2023: $451m). The decrease
was primarily due to the Group's litigation settlement payments of $70m and
share repurchases of $70m, partly offset by cash inflow from operating
activities.
H1/ Q2 2024 Product Highlights
• SUBLOCADE: H1 2024 NR of $371m (+29% vs. H1 2023); Q2 2024 NR of
$192m (+24% vs. Q2 2023 and +7%vs. Q1 2024). Continued growth primarily
reflects further organized health system (OHS) and justice system channel
penetration in the U.S. resulting in increased new U.S. patient enrollments.
Q2 2024 U.S. units dispensed were approx. 155,700 (+25% vs. Q2 2023 and +5%
vs. Q1 2024). Total U.S. patients on a 12-month rolling basis at the end of Q2
2024 were approximately 160,400 (+49% vs. Q2 2023 and +7% vs. Q1 2024).
• OPVEE® (nalmefene) nasal spray: Q2 2024 NR was modest (under
$1m); near-term launch focus is on supporting policy changes to enable
nalmefene opioid rescue treatments, increasing product trial among targeted
users and readying supply for the U.S. Biomedical Advancement Research and
Development Authority (BARDA).
• PERSERIS (risperidone) extended release injection: H1 2024 NR of
$23m (+21% vs. H1 2023); Q2 2024 NR of $13m (+18% vs. Q2 2023 and +18% vs. Q1
2024). As previously announced, sales and marketing of PERSERIS have been
discontinued.
• SUBOXONE® (buprenorphine/naloxone) Film: U.S. share in Q2 2024
averaged 16% (Q2 2023: 19%).
FY 2024 Guidance
On July 9th, the Group updated its financial guidance for FY 2024 to reflect
continued near-term adverse market dynamics impacting SUBLOCADE NR growth as
well as the initial commercial adoption of OPVEE and the cessation of PERSERIS
sales and marketing. The guidance set out is unchanged from the July 9th
guidance. At the midpoint, the Group expects solid adjusted operating profit
growth of 12% and adjusted operating margin expansion of approximately 100
basis points.
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) $1,150m to $1,215m
(+8% at midpoint vs. FY 2023)
SUBLOCADE NR $765m to $805m
(+25% at midpoint vs. FY 2023)
OPVEE NR $9m to $14m(1)
PERSERIS NR $27m to $33m
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 ($550m) to ($560m)
R&D ($120m) to ($130m)
Adjusted Operating Profit $285m to $320m
(+12% at midpoint vs. FY 2023)
1 OPVEE NR guidance for FY 2024 includes approximately $8m as part of a
multi-year agreement with the U.S. Biomedical Advancement Research and
Development Authority (BARDA).
Primary U.S. Listing Complete
On June 27th 2024, Indivior transitioned its primary listing to the U.S. from
the U.K. with the transfer of the Group's listing category on the Official
List of the UK Financial Conduct Authority (FCA) from "Premium Listing
(commercial company)" to "Standard Listing (shares)." The Group believes a
primary U.S. listing is beneficial to Indivior stakeholders because it is
better aligned with its current and future growth opportunities, is expected
to attract more U.S. investors and analysts, permits inclusion in U.S. indices
over time and reflects the growing proportion of its share capital owned by
U.S. based investors. The Board intends to maintain Indivior's U.K. listing as
a secondary listing.
On July 11th, 2024, the FCA published its policy statement PS24/6 ("Primary
Markets Effectiveness Review: Feedback to CP23/31 and final UK Listing Rules")
setting out a series of final reforms to the FCA's Listing Rules to take
effect on July 29th, 2024, including the removal of the current "Premium" and
"Standard" listing categories and the introduction of new listing categories
in their place. Pursuant to these reforms, as an English-incorporated company
with an existing "Standard" listing, Indivior expects that it will be mapped
to the new "Equity Shares (Transition)" category on July 29th, 2024.
Indivior's inclusion in the new "Equity Shares (Transition)" category will not
impact the location of Indivior's primary listing in the U.S. and Indivior
expects that the overall burden of compliance for it under the new "Equity
Shares (Transition)" category will be substantially equivalent to that of the
current "Standard Listing (shares)" category.
Share Repurchase Programs
On November 17th, 2023, Indivior announced a share repurchase program of up to
$100m. Through July 12, 2024, the Group repurchased and canceled 5,499,528
Indivior ordinary shares, equivalent to approximately 4% of diluted shares
outstanding, at a daily weighted average purchase price of 1,357p. The cost
was approximately $95m, which includes directly attributable transaction
costs. The Group now expects to conclude this program by the end of July (see
today's separate announcement and Note 15).
The Group also announces today that the Board has approved a new
non-discretionary $100m share repurchase program that is expected to commence
immediately upon the conclusion of the Group's current $100m share repurchase
program. This new program will be executed over an accelerated time frame (see
today's separate announcement for more details).
U.S. OUD Market Update
In Q2 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, such as the late
2022 enactment of the Mainstreaming Addiction Treatment Act, that have
expanded OUD treatment funding and treatment capacity. The Group believes
these regulatory and legislative actions will help to normalize the view of
addiction as a chronic disease and expand access to evidence-based
buprenorphine treatment in the U.S. and supports these actions.
Financial Performance in H1/Q2 2024
Total NR in H1 2024 increased 10% to $583m (H1 2023: $529m) at actual exchange
rates (+10% at constant exchange rates(1)). In Q2 2024, total NR increased 8%
to $299m (Q2 2023: $276m) at actual exchange rates (+9% at constant exchange
rates).
U.S. NR increased 14% in H1 2024 to $494m (H1 2023: $435m) and by 12% in Q2
2024 to $254m (Q2 2023: $226m). Strong year-over-year SUBLOCADE volume growth
primarily drove the increases in NR in both periods. Pricing was not a
material factor in NR growth.
Rest of World (ROW) NR decreased 5% at actual exchange rates in H1 2024 to
$89m (H1 2023: $94m) (-5% at constant exchange rates(1)). In Q2 2024, ROW NR
decreased 10% at actual exchange rates to $45m (Q2 2023: $50m) (-8% at
constant exchange rates(1)). In both periods, positive contributions from new
products (SUBLOCADE / SUBUTEX® Prolonged Release and SUBOXONE Film) were more
than offset by the timing of shipments of certain legacy tablet products,
along with ongoing generic erosion of the legacy tablet business and elevated
stocking in Q2 2023. H1 2024 SUBLOCADE / SUBUTEX Prolonged Release NR in ROW
increased 25% to $25m (H1 2023: $20m) and in Q2 2024 NR increased 30% to $13m
(Q2 2023: $10m) at actual exchange rates.
Gross margin as reported in H1 2024 was 76% (H1 2023: 83%) and 69% in Q2 2024
(Q2 2023: 82%). H1 2024 and Q2 2024 included $41m of exceptional 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 $6m in H1 2024 and $3m in Q2 2024 were also included in the reported
gross margin. Excluding these exceptional costs and adjustments, adjusted
gross margin was 84% in both H1 2024 and Q2 2024 (H1 2023 and Q2 2023: 84% and
83%, respectively). The adjusted gross margin in H1 2024 primarily reflects
improved product mix from the continued growth of SUBLOCADE offset by cost
inflation. Additionally, both periods benefited from favorable manufacturing
variances.
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 H1 2024 were $457m (H1 2023: $264m) and $311m
in Q2 2024 (Q2 2023: $133m). H1 2024 and Q2 2024 included $169m and $167m of
exceptional items, respectively, (H1 2023 and Q2 2023: $22m and $8m,
respectively). See "Appendix" for adjusted results details of exceptional
SG&A expenses for H1 and Q2 2024 and 2023, which include expenses related
to completed and proposed legal settlements, the acquisition of Opiant
Pharmaceuticals, Inc. and the aseptic manufacturing site, the U.S. listing,
and the discontinuation of sales and marketing for PERSERIS.
Excluding exceptional items, H1 2024 adjusted SG&A expense increased 19%
to $288m (Adjusted H1 2023: $242m); Q2 2024 adjusted SG&A expense
increased 15% to $144m (Adjusted Q2 2023: $125m). The increases in both
periods primarily reflect greater sales and marketing investments primarily
related to SUBLOCADE, OPVEE launch expenses and cost inflation.
R&D expenses in H1 2024 and Q2 2024 were $54m and $27m, respectively (H1
2023: $59m; Q2 2023: $32m), and represented decreases of 8% and 16%,
respectively. The decreases in both periods were primarily due to phasing of
activity related to post-marketing studies for SUBLOCADE, partially offset by
investments to advance the Group's pipeline assets.
Operating loss as reported was $67m in H1 2024 (H1 2023 operating profit:
$118m). The change on a reported basis reflects higher NR offset by lower
gross margin and investments in sales and marketing primarily related to
SUBLOCADE.(see "Appendix" for adjusted results details of exceptional expenses
included in operating profit.)
After excluding exceptional items and other adjustments of $216m and $24m in
H1 2024 and H1 2023, respectively, H1 2024 adjusted operating profit increased
5% to $149m (H1 2023: $142m). The increase primarily reflects higher total NR
partially offset by increased SG&A expenses.
Q2 2024 operating loss as reported was $132m (Q2 2023 operating profit: $61m).
On an adjusted basis, Q2 2024 operating profit increased 11% to $79m (adjusted
Q2 2023: $71m), excluding exceptional costs and other adjustments of $211m (Q2
2023: $10m). The increase on an adjusted basis primarily reflected the same
factors as noted above.
Net finance expense was $5m in H1 2024 (H1 2023: $2m income) reflecting a
decrease in interest income on lower cash and investment balances.
Reported tax benefit was $12m in H1 2024 and the effective tax rate was 17%
(H1 2023 tax expense/rate: $37m, 31%). H1 2024 adjusted tax expense was $33m,
and the adjusted effective tax rate was 23% (H1 2023 adjusted tax
expense/rate: $32m, 22%). 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 Q2 2024 reported tax benefit was $28m, and the
effective tax rate was 21% (Q2 2023: $23m, 37%). The tax expense on Q2 2024
adjusted profits was $16m, and the adjusted effective tax rate was 21%. The
tax expense on Q2 2023 adjusted profits amounted to $16m, for a comparable
adjusted effective tax rate of 22%.
Reported net loss in H1 2024 was $60m and adjusted net income was $111m (H1
2023 reported net income: $83m, adjusted net income: $112m). The 1% decrease
in net income on an adjusted basis primarily reflected the increase in
operating expense, partly offset by higher total NR. Q2 2024 net loss on a
reported basis was $107m (Q2 2023: net income $39m), and net income of $60m on
an adjusted basis excluding the net after-tax impact from exceptional items
and other adjustments (Adjusted Q2 2023: $56m). Higher Q2 2024 net income on
an adjusted basis was primarily due to strong NR growth.
Diluted (losses) earnings per share were $(0.44) on a reported basis and $0.81
on an adjusted basis in H1 2024 (H1 2023: $0.59 diluted earnings per share and
$0.79 adjusted diluted earnings per share). In Q2 2024, diluted losses per
share and adjusted diluted earnings per share were $(0.79) and $0.44,
respectively (Q2 2023: $0.27 earnings per share on a diluted basis and $0.39
earnings per share adjusted diluted basis).
Balance Sheet & Cash Flow
Cash and investments totaled $405m at the end of Q2 2024, a decrease of $46m
versus the $451m position at the end of 2023. The decrease was primarily due
to the Group's litigation settlement payments of $70m and share repurchases of
$70m, partly offset by cash inflow from operating activities.
Net working capital, defined by management as inventory plus trade
receivables, less trade and other payables, was negative $379m on June 30,
2024, versus negative $347m at the end of FY 2023.
Cash generated from operations in H1 2024 was $82m (H1 2023 cash used in
operations: $26m), reflecting ongoing operating performance partially offset
by scheduled litigation payments. Excluding litigation settlement payments,
cash generated from operations in H1 2024 was $152m. The H1 2024 reported
operating outflow primarily relates to litigation settlements not yet paid.
Net cash flow from operating activities was $33m in H1 2024 (H1 2023 cash
outflow: $55m) primarily reflecting cash generated from operations less tax
payments.
Cash inflow from investing activities in H1 2024 was $27m (H1 2023 cash
outflow: $103m) reflecting the net reduction in invested liquidity, partially
offset by capital expenditure. In the prior year period, the outflow from
investing activities primarily reflected the Opiant acquisition, net of cash
assumed, partially offset by a net reduction in invested liquidity.
Cash outflow from financing activities in H1 2024 was $74m (H1 2023 cash
outflow: $24m) 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 most significant impact on the Group's
results were:
6 Months to June 30, 6 Months to June 30,
2024
2023
GB £ period end 1.2626 1.2648
GB £ average rate 1.2654 1.2329
€ Euro period end 1.0682 1.0911
€ Euro average 1.0815 1.0807
Webcast Details
A live webcast presentation will be held on July 25, 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/jpgy4cd9
Participants may access the presentation telephonically by registering with
the following link (please cut and paste into your browser):
https://register.vevent.com/register/BIdf08b662a5f24248bf5f8677f59ef713
(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
Tim Owens Director, Investor Relations Indivior PLC +1 804 263 3978
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, including alcohol use disorder and cannabis use disorder. Headquartered
in the United States in Richmond, VA, Indivior employs over 1,000 individuals
globally and its portfolio of products is available in 37 countries worldwide.
Visit www.indivior.com to learn more. Connect with Indivior on LinkedIn by
visiting www.linkedin.com/company/Indivior.
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, including the expected duration of factors affecting revenues
including Medicaid disenrollments, lower channel stocking, and longer sales
lead times for new criminal justice system accounts; our expectations
regarding the expected final terms, scope, and settlement related to the
provision we recorded regarding opioid litigation (including the MDL) brought
by certain municipalities and tribal nations; 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; expected
future growth and expectations for sales levels for particular products, and
expectations regarding the future impact of factors that have affected sales
in the past; expected growth rates, growing normalization of medically
assisted treatment for opioid use disorder, and expanded access to treatment;
our product development pipeline and potential future products, expectations
regarding regulatory approval of such product candidates, the timing of such
approvals, and the timing of commercial launch of such products or product
candidates, and eventual annual revenues of such future products; expectations
regarding future production at the Group's Raleigh, North Carolina
manufacturing facility; expected benefits of a primary U.S. listing and our
intention to retain a secondary listing on the London Stock Exchange; the
expected amount of shares the Group will repurchase, and the timing of such
repurchases; and other statements containing the words "believe,"
"anticipate," "plan," "expect," "intend," "estimate," "forecast," "strategy,"
"target," "guidance," "outlook," "potential," "project," "priority," "may,"
"will," "should," "would," "could," "can," "outlook," "guidance," the
negatives thereof, and variations thereon and similar expressions. By their
nature, 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 because they relate to future
events. Various factors may cause differences between Indivior's expectations
and actual results, including, among others, the material risks described in
the most recent Indivior PLC Annual Report and in subsequent releases; legal
and market restrictions that may limit how quickly we can repurchase our
shares; the substantial litigation and ongoing investigations to which we are
or may become a party; our reliance on third parties to manufacture commercial
supplies of most of our products, conduct our clinical trials and at times to
collaborate on products in our pipeline; our ability to comply with legal and
regulatory settlements, healthcare laws and regulations, requirements imposed
by regulatory agencies and payment and reporting obligations under government
pricing programs; risks related to the manufacture and distribution of our
products, most of which contain controlled substances; market acceptance of
our products as well as our ability to commercialize our products and compete
with other market participants; competition; the uncertainties related to the
development of new products, including through acquisitions, and the related
regulatory approval process; our dependence on third-party payors for the
reimbursement of our products and the increasing focus on pricing and
competition in our industry; unintended side effects caused by the clinical
study or commercial use of our products; our ability to successfully execute
acquisitions, partnerships, joint ventures, dispositions or other strategic
acquisitions; our ability to protect our intellectual property rights and the
substantial cost of litigation or other proceedings related to intellectual
property rights; the risks related to product liability claims or product
recalls; the significant amount of laws and regulations that we are subject
to, including due to the international nature of our business; macroeconomic
trends and other global developments such as armed conflicts and pandemics;
the terms of our debt instruments, changes in our credit ratings and our
ability to service our indebtedness and other obligations as they come due;
changes in applicable tax rate or tax rules, regulations or interpretations
and our ability to realize our deferred tax assets; and volatility in our
share price due to factors unrelated to our operating performance or that may
result from the potential move of our primary listing to the U.S.
Forward-looking statements speak only as of the date that they are made and
should be regarded solely as our current plans, estimates and beliefs. Except
as required by law, we do not undertake and specifically decline any
obligation to update, republish or revise forward-looking statements to
reflect future events or circumstances or to reflect the occurrences of
unanticipated events.
Unaudited condensed consolidated interim income statement
Q2 Q2 H1 H1
2024
2023
2024 2023
For the three and six months ended June 30 Notes $m $m $m $m
Net Revenue 2 299 276 583 529
Cost of sales (93) (50) (139) (89)
Gross Profit 206 226 444 440
Selling, general and administrative expenses 3 (311) (133) (457) (264)
Research and development expenses 3 (27) (32) (54) (59)
Net other operating income - - - 1
Operating (Loss)/Profit (132) 61 (67) 118
Finance income 4 6 11 13 21
Finance expense 4 (9) (10) (18) (19)
Net Finance (Expense)/Income (3) 1 (5) 2
(Loss)/Profit Before Taxation (135) 62 (72) 120
Income tax income/(expense) 5 28 (23) 12 (37)
Net (Loss)/Income (107) 39 (60) 83
Earnings per ordinary share (in dollars)
Basic (loss)/earnings per share 6 $(0.79) $0.28 $(0.44) $0.61
Diluted (loss)/earnings per share 6 $(0.79) $0.27 $(0.44) $0.59
Unaudited condensed consolidated interim statement of comprehensive income
Q2 Q2 2024 2023
2024 2023
For the three and six months ended June 30 $m $m $m $m
Net (loss)/income (107) 39 (60) 83
Other comprehensive loss
Items that may be reclassified to profit or loss in subsequent years:
Foreign currency translation adjustment, net 1 4 (2) 4
Other comprehensive (loss)/income 1 4 (2) 4
Total comprehensive (loss)/income (106) 43 (62) 87
The notes are an integral part of these unaudited condensed consolidated
interim financial statements.
Unaudited condensed consolidated interim balance sheet
Jun 30, 2024 Dec 31, 2023 (Retrospectively adjusted(1))
Notes $m $m
ASSETS
Non-current assets
Intangible assets 7 218 234
Property, plant and equipment 74 82
Right-of-use assets 33 33
Deferred tax assets 5 290 267
Investments 8 26 41
Other assets 9 30 28
671 685
Current assets
Inventories 171 142
Trade receivables 259 254
Other assets 9 33 457
Current tax receivable 5 22 -
Investments 8 77 94
Cash and cash equivalents 302 316
864 1,263
Total assets 1,535 1,948
LIABILITIES
Current liabilities
Borrowings 10 (3) (3)
Provisions 11 (34) (408)
Other liabilities 11 (148) (125)
Trade and other payables 14 (809) (743)
Lease liabilities (10) (9)
Current tax liabilities 5 (8) (18)
(1,012) (1,306)
Non-current liabilities
Borrowings 10 (235) (236)
Provisions 11 (62) (5)
Other liabilities 11 (314) (367)
Lease liabilities (33) (34)
(644) (642)
Total liabilities (1,656) (1,948)
Net liabilities (121) -
EQUITY
Capital and reserves
Share capital 15 67 68
Share premium 11 11
Capital redemption reserve 9 7
Other reserve (1,295) (1,295)
Foreign currency translation reserve (37) (35)
Retained earnings 1,124 1,244
Total equity (121) -
(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 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 income - - - - - 83 83
Other comprehensive loss - - - - 4 - 4
Total comprehensive income - - - - 4 83 87
Transactions recognized directly in equity
Shares issued 1 1 - - - - 2
Share-based plans - - - - - 11 11
Settlement of tax on equity awards - - - - - (21) (21)
Shares repurchased and canceled - - - - - (11) (11)
Transfer to share repurchase liability - - - - - 9 9
Taxation on share-based plans - - - - - (11) (11)
Balance at June 30, 2023 69 9 6 (1,295) (35) 1,363 117
Balance at January 1, 2024 68 11 7 (1,295) (35) 1,244 -
Comprehensive income
Net loss - - - - - (60) (60)
Other comprehensive loss - - - - (2) - (2)
Total comprehensive loss - - - - (2) (60) (62)
Transactions recognized directly in equity
Shares issued 1 - - - - - 1
Share-based plans - - - - - 11 11
Settlement of tax on equity awards - - - - - (20) (20)
Shares repurchased and canceled (2) - 2 - - (70) (70)
Transfer to share repurchase liability - - - - - (4) (4)
Transfer from share repurchase liability - - - - - 22 22
Taxation on share-based plans - - - - - 1 1
Balance at June 30, 2024 67 11 9 (1,295) (37) 1,124 (121)
The notes are an integral part of these unaudited condensed consolidated
interim financial statements.
Unaudited condensed consolidated cash flow statement
2024 2023
For the six months ended June 30 $m $m
CASH FLOWS FROM OPERATING ACTIVITIES
Operating (loss)/profit (67) 118
Depreciation and amortization of property, plant and equipment and intangible 30 7
assets(1)
Depreciation of right-of-use assets 4 5
Share-based payments 11 11
Impact from foreign exchange movements - 2
Unrealized gain on equity investment - (1)
Settlement of tax on employee awards (20) (21)
Decrease in trade receivables (6) (8)
Decrease/(increase) in current and non-current other assets(2) 421 (8)
Increase in inventories (29) (11)
Increase in trade and other payables 68 60
Decrease in provisions and other liabilities(2 3) (330) (180)
Cash generated from/(used in) operations 82 (26)
Interest paid (17) (17)
Interest received 12 21
Taxes paid (44) (33)
Net cash inflow/(outflow) from operating activities 33 (55)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of assets, net of cash acquired - (124)
Purchase of property, plant and equipment (6) (2)
Purchase of investments (9) (36)
Maturity of investments 42 64
Purchase of intangible asset - (5)
Net cash inflow/(outflow) from investing activities 27 (103)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings (1) (11)
Principal elements of lease payments (4) (4)
Shares repurchased and canceled (70) (11)
Proceeds from the issuance of ordinary shares 1 2
Net cash outflow from financing activities (74) (24)
Exchange difference on cash and cash equivalents - -
Net decrease in cash and cash equivalents (14) (182)
Cash and cash equivalents at beginning of the period 316 774
Cash and cash equivalents at end of the period 302 592
(1)Includes impairment and write down of intangible and tangible assets
related to the discontinuation of PERSERIS sales and marketing (refer to Note
18)
(2)Changes in the line items current and non-current other assets and
provisions and other liabilities for H1 2024 include the utilization 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 H1 2024 also
include litigation settlement payments totaling $70m (H1 2023: $177m). $3m of
interest paid on the DOJ Resolution in H1 2024 has been recorded in the
interest paid line item (H1 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 July 25, 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.
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 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 to USD securities. 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 December 2025 (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 10% 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, 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 will be delivered to the Registrar of Companies in due course. 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:
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
United States 254 226 494 435
Rest of World 45 50 89 94
Total 299 276 583 529
On a disaggregated basis, the Group's net revenue by major product line:
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
SUBLOCADE® 192 155 371 287
PERSERIS®(1) 13 11 23 19
Sublingual/other(2) 94 110 189 223
Total 299 276 583 529
(1)Sales and marketing for PERSERIS® have been discontinued. Refer to Note
18.
(2) Net revenue for OPVEE® was not material for the periods ended June 30,
2024 and has therefore been included within sublingual/other.
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.
Jun 30, Dec 31, 2023 (Retrospectively adjusted(1))
2024
$m $m
United States 200 209
Rest of World 181 209
Total 381 418
(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:
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Research and development expenses (27) (32) (54) (59)
Selling and marketing expenses (66) (58) (132) (111)
Administrative and general expenses(1) (245) (75) (325) (153)
Selling, general, and administrative expenses (311) (133) (457) (264)
Depreciation and amortization(2) (5) (3) (8) (7)
(1) Administrative and general expenses in the 2024 periods include costs
related to a legal settlement (see notes 11 and 13), the US primary listing,
the aseptic manufacturing site in Raleigh, NC (see note 17) and impacts
related to discontinuation of sales and marketing for PERSERIS. Expenses in
the 2023 periods include the acquisition of Opiant Pharmaceuticals, Inc.
("Opiant", Note 16) and the preparation of the additional listing of Indivior
shares on Nasdaq.
(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 H1 2024 of $27m (H1 2023:
$5m) and Q2 2024 of $21m (Q2 2023: $3m) for intangible assets and right-of-use
assets is included within cost of sales and includes the impact of the
discontinuation of sales and marketing for PERSERIS.
4. NET FINANCE (EXPENSE)/INCOME
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Finance income
Interest income on cash and cash equivalents/investments 6 11 12 21
Other finance income - - 1 -
Total finance income 6 11 13 21
Finance expense
Interest expense on borrowings (6) (7) (12) (13)
Interest expense on lease liabilities - - (1) (1)
Interest expense on legal matters, including the effect of discounting (2) (2) (3) (4)
Other interest expense (1) (1) (2) (1)
Total finance expense (9) (10) (18) (19)
Net finance (expense)/income (3) 1 (5) 2
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.
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Total tax benefit (expense) 28 (23) 12 (37)
Effective tax rate (%) 21 % 37 % 17 % 31 %
In the six months ended June 30, 2024, the decrease in the effective tax rate
was primarily driven by prior year disallowance of executive compensation and
higher litigation expenses.
Jun 30, Dec 31, 2023 (Retrospectively adjusted(1))
2024
$m $m
Current tax receivable 22 -
Current tax liabilities (8) (18)
Deferred tax assets 290 267
(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 June 30, 2024, the Group's net deferred tax assets of $290m
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 $56m.
6. EARNINGS PER SHARE
The table below sets out basic and diluted (loss) earnings per share for each
period:
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $ $ $ $
Basic (loss) earnings per share $(0.79) $0.28 $(0.44) $0.61
Diluted (loss) earnings per share $(0.79) $0.27 $(0.44) $0.59
Weighted average number of shares
The weighted average number of ordinary shares outstanding (on a basic basis)
for H1 2024 includes the favorable impact of 3,898k ordinary shares
repurchased in H1 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
H1 2024 and H1 2023, respectively.
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 thousands thousands thousands thousands
Weighted average shares on a basic basis 134,848 138,101 135,293 137,098
Dilution from share awards and options 2,442 4,629 2,394 4,531
Weighted average shares on a diluted basis 137,290 142,730 137,687 141,629
7. INTANGIBLE ASSETS
Jun 30, Dec 31, 2023 (Retrospectively adjusted(1))
2024
Intangible assets, net of accumulated amortization and impairment $m $m
Products in development 79 79
Marketed products 136 150
Goodwill 2 2
Software 1 3
Total 218 234
(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 $14m decrease in marketed products intangible assets primarily relates to
the discontinuation of PERSERIS sales and marketing (refer to Note 18) which
resulted in impairment of the related intangible asset of $9m.
8. INVESTMENTS
Jun 30, Dec 31,
2024
2023
Current and non-current investments $m $m
Equity securities at FVPL 9 10
Debt securities held at amortized cost 68 84
Total investments, current 77 94
Debt securities held at amortized cost 26 41
Total investments, non-current 26 41
Total 103 135
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
June 30, 2024, expected credit losses for the Group's investments held at
amortized cost are deemed to be 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 June 30, 2024 Level 1 Level 2 Level 3 Total
$m $m $m $m
Equity securities at FVPL 9 - - 9
At December 31, 2023 Level 1 Level 2 Level 3 Total
$m $m $m $m
Equity securities at FVPL 10 - - 10
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 June 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
Jun 30, Dec 31,
2024
2023
Current and non-current other assets $m $m
Current prepaid expenses 18 23
Other current assets 15 434
Total other current assets 33 457
Non-current prepaid expenses 18 19
Other non-current assets 12 9
Total other non-current assets 30 28
Total 63 485
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:
Jun 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 $5m (FY 2023: $5m).
At June 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 June 30, 2024,
are as follows:
Currency Nominal interest margin Maturity Required annual repayments Minimum
liquidity
Term loan facility USD SOFR + 0.26% + 5.25% 2026 1% Larger of $100m or 50% of loan balance
The term loan amounting to $243m (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 calculated as USD SOFR plus 26 bps, 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 Jun 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)
Opioid litigation (15) (60) (75) - - -
Onerous contracts (15) - (15) (19) (3) (22)
False claims allegations (4) - (4) (4) - (4)
Other - (2) (2) - (2) (2)
Total provisions (34) (62) (96) (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
As previously disclosed, 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.
Opioid litigation
A provision of $75m was recorded in Q2 2024, reflecting 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 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 $15m (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
The Group carries a provision of $4m (FY 2023: $4m) pertaining to an
outstanding False Claims Act allegation as discussed in Note 13. This matter
is expected to be settled within the next 12 months.
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 Jun 30, 2024 Current Non-Current Dec 31, 2023
Current and non-current other liabilities $m $m $m $m $m $m
DOJ resolution (51) (295) (346) (53) (344) (397)
Multi-district antitrust class and state claims - - - (30) - (30)
Other antitrust matters (85) - (85) - - -
Intellectual property related matters - - - (11) - (11)
RB indemnity settlement (8) (7) (15) (8) (15) (23)
Share repurchase (4) - (4) (23) - (23)
Other - (12) (12) - (8) (8)
Total other liabilities (148) (314) (462) (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
June 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 H1 2024, the
Group recorded interest expense totaling $2m (H1 2023: $3m).
Multi-district antitrust class and state claims
As previously disclosed, 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 by agreement of the parties on July
8, 2024 for $85m and mutual releases of claims and counterclaims. A liability
was recorded at June 30, 2024 and the settlement will be paid in July 2024.
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 June 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. In H1 2024, the
Group recorded nil of finance expense (H1 2023: nil) for time value of money
on the liability.
Share repurchase
In November 2023, the Group commenced a share repurchase program of $100m. As
of June 30, 2024, the liability of $4m represents the amount to be spent
under the program through July 26, 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 program
through February 23, 2024.
Other
Other liabilities primarily represent employee related liabilities which are
non-current as of June 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 "False Claims Act Allegations", for which provisions have 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
There are certain ongoing legal proceedings or threats of legal proceedings in
which the Group is a party, but in which the Group believes the possibility of
an adverse impact is remote and they 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). In July 2023,
Indivior Inc. and 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. The Group filed
demurrers, which the court sustained in part and overruled in part.
Separately, Indivior Inc. filed counterclaims against several plaintiffs
alleging violations of certain insurance fraud statutes. The plaintiffs
demurred. The court overruled HCSC's demurrer but sustained the demurrers of
the remaining plaintiffs named in Indivior Inc.'s counterclaims. A jury trial
on the merits was set for July 15, 2024 - August 15, 2024. The parties
participated in an in-person mediation session on June 11, 2024. On July 8,
2024, the parties reached an agreement to settle all claims and counterclaims
for $85m.
• 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. Indivior's motion 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.
• Centene Corporation, Wellcare Healthcare Plans, Inc., New York
Quality Healthcare Corp. (d/b/a Fidelis Care), and Health Net, LLC filed a
complaint in the Circuit Court for the County of Roanoke, Virginia alleging
similar claims on January 13, 2023. See Centene Corp. v. Indivior Inc., No.
CL23000054-00 (Va. Cir. Ct.) (Roanoke Cnty). Indivior demurred to the
complaint and asserted pleas in bar in early February 2024. In May 2024, the
court sustained in part and overruled in part Indivior's demurrers, and took
under advisement Indivior's demurrer on statute of limitations grounds. 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.
• 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.
• In 2013, Reckitt Benckiser Pharmaceuticals Inc. "RBPI," 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 Humana Inc. and certain of its
affiliates 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 Humana Inc. and certain of its affiliates in the Carefirst
action remain 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.
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, and certain state attorneys general reached
agreement on the amount of a potential settlement. The Group has recorded a
related provision of $75m, 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
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. Other named defendants have filed a notice of appeal regarding
the remand. 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. Oral argument on the appeal has
been set for September 17, 2024.
• 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.
• 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 both the Opioid MDL and 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.
• 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.
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.
▪ 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. To date, the primary insurance
carrier has reimbursed the Group for $0.1m in defense costs. 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
Jun 30, Dec 31,
2024
2023
$m $m
Accrual for rebates, discounts and returns (589) (507)
Rebates payable (2) (28)
Accounts payable (46) (39)
Accruals and other payables (155) (150)
Other tax and social security payable (17) (19)
Total trade and other payables (809) (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 1,356 $0.50 1
Shares repurchased and canceled (3,898) $0.50 (2)
At June 30, 2024 133,984 67
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 1,882 $0.50 1
Shares repurchased and canceled (484) $0.50 -
At June 30, 2023 137,879 69
Ordinary shares issued
During the period, 1,356k ordinary shares at $0.50 each (H1 2023: 1,882k 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 H1 2024, net settlement
of tax on employee equity awards was $20m (H1 2023: $21m).
Shares repurchased and canceled
On May 3, 2022, the Group commenced a share repurchase program for an
aggregate purchase price up to no more than $100m or 39,699k of ordinary
shares, (equivalent shares post share consolidation: 7,940k) which concluded
on February 28, 2023. During the prior period, the Company repurchased and
canceled 484k ordinary shares with a nominal value of $0.50 each.
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 and ending no later than August 30, 2024. During the period, the Group
repurchased and canceled a total of 3,898k ordinary shares at $0.50 per share
under this program for an aggregate nominal value of $2m.
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 $70m (H1 2023: $11m). A net repurchase
amount of $4m has been recorded as a financial liability and reduction of
retained earnings which represents the amount to be spent under the program
through July 26, 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 H1 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 June 30, 2024, committed capital spend for the Facility is approximately
$7m.
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 on July 9, 2024, the Group discontinued sales and marketing
support for PERSERIS. This decision was taken in consideration of guidance on
regulatory changes announced during Q2 2024 which are expected to intensify
payor management of the treatment category in which PERSERIS competes and
would make PERSERIS no longer financial 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
an impairment charge across the following asset classes:
Q2 2024
Impairment charges and write downs $m
Charged to cost of goods sold
Marketed product intangible 9
Plant and equipment 8
Inventory 24
Sub-total: Cost of goods sold 41
Charged to SG&A: Other assets 1
Total impairment charges 42
See also Note 19.
19. SUBSEQUENT EVENTS
In addition to the impairment charges recognized in the Condensed Financial
Statements discussed in Note 18, the decision to discontinue sales and
marketing of PERSERIS resulted in a headcount reduction of approximately 130
employees and decisions to terminate related contract manufacturing
agreements. As a result of these actions, the Group expects to recognize
severance and contract termination costs of approximately $23m during Q3 2024,
the bulk of which will be paid during H2 2024.
On July 23, 2024, the Company's Board of Directors approved a $100m share
repurchase program under its authority from the shareholder resolution
announced at the 2024 Annual General Meeting. This new program is expected to
commence immediately upon the conclusion of the Group's current $100m share
repurchase program.
DIRECTORS' RESPONSIBILITY STATEMENT
The directors confirm that these condensed interim financial statements have
been prepared in accordance with UK adopted International Accounting Standard
34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority and that
the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
• an indication of important events that have occurred during the
first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
• material related-party transactions in the first six months and
any material changes in the related-party transactions described in the last
annual report
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
July 24, 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 H1 and Q2 2024
Financial Results of Indivior PLC for the three and six month periods ended 30
June 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' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
• the Condensed consolidated interim balance sheet as at 30 June
2024;
• the Condensed consolidated interim income statement and
Condensed consolidated interim statement of comprehensive income for the three
and six month periods then ended;
• the Condensed consolidated interim cash flow statement for the
six month period then ended;
• the Condensed consolidated interim statement of changes in
equity for the six month period then ended; and
• the explanatory notes to the interim financial statements.
The interim financial statements included in the H1 and Q2 2024 Financial
Results of Indivior PLC have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting' and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
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 H1 and Q2 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 H1 and Q2 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 H1 and Q2 2024 Financial
Results in accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. In preparing
the H1 and Q2 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 H1 and Q2 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
24 July 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:
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Exceptional items and other adjustments within cost of sales
Amortization of acquired intangible assets(1) (3) (2) (6) (2)
Discontinuation of sales and marketing for PERSERIS(2) (41) - (41) -
Total exceptional items and other adjustments within cost of sales (44) (2) (47) (2)
Exceptional items and other adjustments within SG&A
Legal costs/provision(3) (160) - (160) -
Discontinuation of sales and marketing for PERSERIS(2) (1) - (1) -
Acquisition-related costs(4) (2) (4) (4) (16)
U.S. listing costs(5) (4) (4) (4) (6)
Total exceptional items and other adjustments within SG&A (167) (8) (169) (22)
Total exceptional items and other adjustments before taxes (211) (10) (216) (24)
Tax on exceptional items and other adjustments 44 1 45 3
Exceptional tax items(8) - (8) - (8)
Total exceptional items and other adjustments (167) (17) (171) (29)
1. The Group reported adjusted cost of sales to exclude
amortization of acquired intangible assets.
2. In H1 2024 and Q2 2024, the Group recognized $41m of
exceptional costs related to the discontinuation of sales and marketing for
PERSERIS.
3. In H1 and Q2 2024, the Group recognized exceptional costs of
$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 H1 2024 and Q2 2024, the Group recognized $4m and $2m,
respectively, of exceptional costs related to the acquisition and integration
of the aseptic manufacturing site acquired in November 2023 (refer to note
17). In H1 2023 and Q2 2023, the Group recognized $16m and $4m of exceptional
costs related to the acquisition of Opiant (refer to Note 16).
5. The Group recognized exceptional costs related to listing
Indivior shares on NASDAQ as the primary listing of $4m In H1 2024 and Q2 2024
(H1 2023: $6m and Q2 2023: $4m).
6. Exceptional tax items in H1 and Q2 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 Q2/H1 2024 and Q2/H1 2023.
Reconciliation of gross profit to adjusted gross profit
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Gross profit 206 226 444 440
Exceptional items and other adjustments in cost of sales 44 2 47 2
Adjusted gross profit 250 228 491 442
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
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Selling, general and administrative expenses (311) (133) (457) (264)
Exceptional items and other adjustments in selling, general and administrative 167 8 169 22
expenses
Adjusted selling, general and administrative expenses (144) (125) (288) (242)
Reconciliation of operating profit to adjusted operating profit
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Operating profit (132) 61 (67) 118
Exceptional items and other adjustments in cost of sales 44 2 47 2
Exceptional items and other adjustments in selling, general and administrative 167 8 169 22
expenses
Adjusted operating profit 79 71 149 142
We define adjusted operating margin as adjusted operating profit divided by
net revenue.
Reconciliation of profit before taxation to adjusted profit before taxation
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Profit before taxation (135) 62 (72) 120
Exceptional items and other adjustments in cost of sales 44 2 47 2
Exceptional items and other adjustments in selling, general and administrative 167 8 169 22
expenses
Adjusted profit before taxation 76 72 144 144
Reconciliation of tax expense to adjusted tax expense
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Tax expense 28 (23) 12 (37)
Tax on exceptional items and other adjustments (44) (1) (45) (3)
Exceptional tax items - 8 - 8
Adjusted tax expense (16) (16) (33) (32)
We define adjusted effective tax rate as adjusted tax expense divided by
adjusted profit before taxation.
Reconciliation of net income to adjusted net income
Q2 Q2 H1 H1
2024 2023 2024 2023
For the three and six months ended June 30 $m $m $m $m
Net income (107) 39 (60) 83
Exceptional items and other adjustments in cost of sales 44 2 47 2
Exceptional items and other adjustments in selling, general and administrative 167 8 169 22
expenses
Tax on exceptional items and other adjustments (44) (1) (45) (3)
Exceptional tax items - 8 - 8
Adjusted net income 60 56 111 112
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.
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