REG - Indivior PLC - Indivior Provides Business Update

IndiviorAnnouncement

09/07/2024 07:00

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RNS Number : 5881V  Indivior PLC  09 July 2024

Indivior Provides Business Update; Conference Call at 8:00 AM U.S. EDT

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 (AS IT FORMS PART OF DOMESTIC LAW IN
THE UK BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018).

 

Richmond, VA, July 9, 2024 - Indivior PLC (Nasdaq/LSE: INDV) today announces a
business update encompassing the Group's outlook for Q2 and FY 2024 financial
performance, its product portfolio and litigation. Indivior is:

·    Updating Q2 net revenue (NR) expectations and FY 2024 guidance to
reflect continued adverse market dynamics impacting near-term SUBLOCADE NR
growth as well as the initial commercial adoption of OPVEE; At the mid-point,
the Group continues to expect strong YOY NR growth for SUBLOCADE of 25% and
YOY adjusted operating income growth of 12% in FY 2024;

·    Reiterating its medium-term financial outlook for double-digit NR
growth and operating margin expansion, based on its confidence in achieving
its intermediate and peak NR goals for SUBLOCADE as well as peak NR
expectations for OPVEE;

·    Discontinuing sales and marketing for PERSERIS due to expected
adverse impacts from increased payor management of the category that
crystalized in Q2 and that are expected to make the product no longer
financially viable; and,

·    Reaching a settlement agreement with end payor plaintiffs in the
Health Care Services Corp (HCSC) consolidated cases to resolve the litigation
for $85m.

Comment by Mark Crossley, CEO of Indivior PLC

"Despite positive early performance trends at the start of the second quarter,
SUBLOCADE net revenue (NR) has continued to be impacted more than we expected
by a combination of transitory factors, primarily the elimination of COVID
emergency measures related to automatic Medicaid coverage renewals.
Furthermore, as we look to the second half of the year, the U.S. government
has extended renewal allowances for certain States which will further delay
the annualization of this significant headwind. We are therefore reducing our
FY 2024 guidance to reflect these impacts. Importantly, despite the
disproportionate disruption to our patient base, we expect SUBLOCADE NR to
grow by 25% at the mid-point of our new guidance range, reflecting strong
underlying demand.

Looking beyond these transitory impacts, we remain firm in our conviction that
SUBLOCADE's unique profile to address high-powered synthetic opioids, such as
fentanyl, provides us with a tremendous opportunity to meet the growing and
changing needs of patients. As a result, we continue to be confident that
SUBLOCADE will achieve a net revenue run rate of $1 billion as we exit 2025
and ultimately meet our target of greater than $1.5 billion in peak annual net
revenue, underpinning the successful delivery of our medium-term profitable
growth ambitions.

Separately, we are taking decisive action that we believe is in the best
interest of shareholders in two areas. First, we are creating greater
certainty for all stakeholders by settling with Plaintiffs ahead of our
antitrust trial on July 15(th). Second, due to anticipated increased payor
management of the category that makes PERSERIS' future no longer financially
viable, we have determined to take the required actions to discontinue the
product. While we believe discontinuing PERSERIS is the right business
decision, unfortunately it will impact our people and patients, and we will
support them through this transition."

 

Discontinuation of PERSERIS Sales & Marketing:

The Group will immediately cease all sales and marketing activities related to
PERSERIS. The Group believes this action is in the best interests of
shareholders due to the highly competitive market and impending changes that
are expected to intensify payor management in the treatment category in which
PERSERIS participates. Analysis of forthcoming changes suggests that there is
no longer a path forward for PERSERIS that is financially viable. Indivior
will continue to supply PERSERIS for the foreseeable future to avoid
disruption to patient care but will no longer deploy a dedicated sales force.
As a result, we expect to reduce headcount by approximately 130 employees.
Indivior does not anticipate material impacts on its other marketed products
because of this decision.

Total expected charges related to this action are expected to be approximately
$65m, of which approximately $20m are expected to be cash related to severance
and termination of certain agreements. These charges will be recognized in the
second and third quarters and excluded from adjusted earnings. Ongoing annual
operating expense savings are expected to be approximately $50m, with $20m
expected to be realized in H2 2024. The impact of this decision on FY 2024
guidance is included in the updated guidance set out below.

Preliminary Q2 Net Revenue Expectations:

The Group is providing the below preliminary expectations for key NR drivers
for Q2 2024.

                   July 9, 2024
 Net Revenue (NR)  $295m to $303m
                    (+8% vs. Q2 2023 at the mid-point)
 SUBLOCADE NR      $188m to $196m
                    (+24% vs. Q2 2023 at the mid-point)
 PERSERIS NR       $10m to $13m

 

Continued transitory patient treatment disruptions from ongoing Medicaid
disenrollments that accelerated at the end of the quarter have
disproportionately impacted SUBLOCADE. Combined with lower-than-expected
stocking levels in key channels and longer-than-expected activation times with
new criminal justice system accounts, SUBLOCADE NR was lower than expected in
the second quarter.

·    Ongoing Medicaid disenrollments in the second quarter continued to
impact new patient starts and refills. At the end of the second quarter,
Medicaid disenrollments stood at approximately 23 million(1) versus
approximately 19 million(1) at the end of the first quarter. The continued
decline in Medicaid patient levels in the second quarter combined with fewer
patients returning to treatment from first quarter Medicaid disenrollments and
the Change Healthcare cyber-attack disruption had a greater than expected
impact on NR performance in the second quarter. As a result, despite early
positive performance trends in the quarter, overall new SUBLOCADE patient
growth and refills were below expectations. In addition, Medicaid renewal
actions in some instances are being permitted by Centers for Medicare &
Medicaid Services (CMS) to extend into the third quarter, likely prolonging
the period of SUBLOCADE patient disruption.

(1) www.kff.org (http://www.kff.org)

 

·    Stocking in the second quarter was also lower than expected, as days
of SUBLOCADE inventory on-hand remained relatively unchanged at first quarter
levels of under two weeks, which is historically low. The Group now believes
its specialty pharmacy and specialty distributors have made permanent one-off
inventory adjustments to take advantage of shortened lead times associated
with supply efficiencies to organized health and criminal justice system
customers.

·    While SUBLOCADE NR from the criminal justice system continued to grow
strongly in the second quarter, increasing approximately 85% compared to the
year-ago quarter, longer lead times to open new criminal justice system
accounts also impacted expectations for NR in the second quarter. The Group
remains confident this timing issue does not undermine the potential for
SUBLOCADE to address the large unmet need in this important and growing new
channel.

·    Impact of competitor activity was in line with expectations.

OPVEE NR in the second quarter was immaterial (<$1m). The OPVEE experience
program continues to increase trial among target customers and user feedback
remains overwhelmingly positive. Expected adoption is, however, lagging
expectations. The Group continues to update standing orders and grant funding
for all opioid reversal medications. As a result, the Group expects that OPVEE
NR in FY 2024 will be driven predominantly by fulfilling the first delivery of
product under the 10-year contract with BARDA (~$8m).

Updated FY 2024 Guidance(1):

Considering the above factors and the cessation of PERSERIS sales and
marketing, the Group is updating FY 2024 guidance as set out below. The Group
continues to expect solid adjusted operating income growth and adjusted
operating margin expansion at the midpoint of approximately 100 basis points
versus FY 2023. Beyond 2024, the Group will no longer separately report
PERSERIS NR.

                                Updated (July 9, 2024)                                                     May 23, 2024
 Net Revenue (NR)               $1,150m to $1,215m                                                         $1,240m to $1,330m

                                                                           (+18% at mid-point vs. FY 2023)
                                (+8% at mid-point vs. FY 2023)
 SUBLOCADE NR                   $765m to $805m                                                             $820m to $880m

                                                                           (+35% at mid-point vs. FY 2023)
                                (+25% at mid-point vs. FY 2023)
 OPVEE NR                       $9m to $14m                                                                $15m to $25m

                                Predominantly expected to come from fulfilling first delivery as part of
                                10-year BARDA(2) contract (~$8m)
 PERSERIS NR                    $27m to $33m                                                               $55m to $65m
                                                                                                            (+43% vs. at mid-point vs. FY 2023)
 SUBOXONE Film Market Share(3)  No change                                                                  Assumes historic rate of share decline of 1 to 2 percentage points and the
                                                                                                           potential impact from a fourth buprenorphine/naloxone sublingual film generic
                                                                                                           in the U.S. market
 Adjusted Gross Margin          No change                                                                  Low to mid 80% range
 Adjusted SG&A                  ($550m) to ($560m)                                                         ($575m) to ($590m)

                                Reflecting discontinuation of the sales and marketing of PERSERIS
 R&D                            No change                                                                  ($120m) to ($130m)
 Adjusted Operating Profit      $285m to $320m                                                             $330m to $380m

                                (approx. 100 bps of margin expansion vs. FY 2023)

1 Guidance assumes no material change in exchange rates for key currencies
compared with FY 2023 average rates, notably USD/GBP and USD/EUR

2 Biomedical Advanced Research and Development Authority

3 Reflecting underlying share erosion at a similar rate to the last two years
(approximately 2 share points p.a.)

 

Long-term Net Revenue Targets Remain Unchanged:

The Group remains confident that given the scale of the U.S. opioid epidemic,
which is now being driven by misuse of fentanyl and other synthetic opioids,
its opportunity to help patients and deliver value for shareholders remains
intact. The unique profile of SUBLOCADE's paradigm-shifting treatment gives
the Group confidence in delivering on its stated NR targets for SUBLOCADE:
exiting 2025 at a $1 billion NR run-rate and achieving greater than $1.5
billion in peak annual NR.

Settlement with Certain End Payors:

On July 8, 2024, Indivior Inc. and Indivior Solutions Inc. reached an
agreement via mediation with Blue Cross Blue Shield of Massachusetts, Inc.,
Health Care Service Corp., Blue Cross and Blue Shield of Florida, Inc., Molina
Healthcare, Inc., Aetna, Inc., and certain of their affiliates (collectively,
the "Plaintiffs") to resolve consolidated antitrust litigation proceedings in
Roanoke County Circuit Court. These actions had been pending since 2020. The
agreement will terminate the trial that was scheduled to begin on July 15,
2024.

As part of the agreement with the plaintiffs, Indivior will pay $85 million
and will take a charge of $85 million in the second quarter, which will be
excluded from adjusted earnings. Payment will be funded from Indivior's
existing cash balance.

Conference Call Information:

Indivior will host a presentation via live webcast at 1:00 p.m. London time
(8:00 a.m. U.S. Eastern) today. The webcast event can be accessed on the
"Investors" section of the Group's website at www.indivior.com
(http://www.indivior.com) before the event begins.

Participants may access the event telephonically to ask a question by
registering with the following link:

https://register.vevent.com/register/BI07a0798620a745bca417b4b9d15d9fe2
(https://nam12.safelinks.protection.outlook.com/?url=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBI07a0798620a745bca417b4b9d15d9fe2&data=05%7C02%7Cjason.thompson%40Indivior.com%7C117214b7cdd447aea33208dc9ea21ee9%7Cbed52191489442999db948e4fb29646e%7C1%7C0%7C638559666351074377%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=e4aENUPELyjHJdfrlB3jg2xJsoPeNAJu12NwgLPAoAw%3D&reserved=0)

(Registrants will have an option to be called back directly immediately prior
to the call or be provided a call-in # with a unique pin code following their
registration)

The webcast link is: https://edge.media-server.com/mmc/p/nga7b6nn
(https://nam12.safelinks.protection.outlook.com/?url=https%3A%2F%2Fedge.media-server.com%2Fmmc%2Fp%2Fnga7b6nn&data=05%7C02%7Cjason.thompson%40Indivior.com%7C117214b7cdd447aea33208dc9ea21ee9%7Cbed52191489442999db948e4fb29646e%7C1%7C0%7C638559666351062827%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=HV318LTGmumQ6ckfUfBBMeDFavRVweFSmoCORAiiZxg%3D&reserved=0)

 

Important Cautionary Note Regarding Forward-looking Statements

This press release contains certain statements that are forward-looking.
Forward-looking statements include, among other things, statements regarding
financial guidance for 2024, including sales expectations for SUBLOCADE,
PERSERIS, and OPVEE, expected growth in adjusted operating income and expected
margin expansion; expected medium term margin expansion and cash flow
generation; peak net revenue goals for SUBLOCADE and OPVEE, and a $1 billion
net revenue run rate for SUBLOCADE by the end of 2025; our expectation that we
will continue to grow and increase shareholder value; our expectation that
cessation of PERSERIS marketing efforts will not impact sales of our other
products; expected costs and timing of costs, and related expense savings,
from no longer marketing PERSERIS; our expectation that the Court will approve
the settlement with the end payors; and other statements containing the words
"believe," "anticipate," "plan," "expect," "intend," "estimate," "forecast,"
"strategy," "target," "guidance," "outlook," "potential," "project,"
"priority," "may," "will," "should," "would," "could," "can," "outlook,"
"guidance," the negatives thereof, and variations thereon and similar
expressions. By their nature, such forward-looking statements involve risks
and uncertainties as they relate to events or circumstances that may or may
not occur in the future.

Actual results may differ materially from those expressed or implied in these
forward-looking statements due to a number of factors, including: lower than
expected future sales of our other products; increased impacts from
competition; failure to achieve market acceptance of OPVEE; the possibility
that the Court will not approve the settlement, the possibility that the Court
will require changes to the settlement prior to approving it, potential delays
in obtaining Court approval of the settlement; and those factors described in
Indivior's Annual Report on Form 20-F for the fiscal year 2023 and its other
filings with the U.S. Securities and Exchange Commission.

We have based the forward-looking statements in this press release on our
current expectations and beliefs concerning future events. Forward-looking
statements contained in this press release apply only at the date of this
press release, and we undertake no obligation publicly to update or revise any
forward-looking statement, whether due to new information, future developments
or otherwise.

 

 

 

 

About Indivior

Indivior is a global pharmaceutical company working to help change patients'
lives by developing medicines to treat substance use disorders (SUD) and
serious mental illnesses. Our vision is that all patients around the world
will have access to evidence-based treatment for the chronic conditions and
co-occurring disorders of SUD. Indivior is dedicated to transforming SUD from
a global human crisis to a recognized and treated chronic disease. Building on
its global portfolio of OUD treatments, Indivior has a pipeline of product
candidates designed to both expand on its heritage in this category and
potentially address other chronic conditions and co-occurring disorders of
SUD, including alcohol use disorder and cannabis use disorder. Headquartered
in the United States in Richmond, VA, Indivior employs more than 1,100
individuals globally and its portfolio of products is available in 37
countries worldwide. Visit www.indivior.com
(https://indiviorplc-my.sharepoint.com/personal/timothy_owens_indivior_com/Documents/Desktop/a.%20Quarters/j.%20Q124/Calendar%20invite/www.indivior.com)
to learn more. Connect with Indivior on LinkedIn by visiting www.linkedin.com/
company/indivior
(https://indiviorplc-my.sharepoint.com/personal/timothy_owens_indivior_com/Documents/Desktop/a.%20Quarters/j.%20Q124/Calendar%20invite/www.linkedin.com/%20company/indivior)
.

This release is being made by Kathryn Hudson, Company Secretary Indivior PLC.

Contact:

Jason Thompson

Vice President, Investor Relations

Tel: 804-402-7123 or jason.thompson@indivior.com
(mailto:jason.thompson@indivior.com)

 

Tim Owens

Director, Investor Relations

Tel: 804-263-3978 or timothy.owens@indivior.com
(mailto:timothy.owens@indivior.com)

 

###

 

 

 

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