TIDMINDV
RNS Number : 3055A
Indivior PLC
23 March 2017
Indivior PLC ('Indivior' or the 'Company')
Annual Report and Accounts for the year ended December 31, 2016
('Annual Report & Accounts 2016') and Annual General Meeting
2017 ('AGM')
The Company has today posted or made available to shareholders
the following documents:
-- Annual Report & Accounts 2016;
-- Notice of AGM; and
-- Form of Proxy for the AGM.
In accordance with LR 9.6.1, these documents have been submitted
to the National Storage Mechanism and will shortly be available for
inspection at www.morningstar.co.uk/uk/NSM.
The Annual Report & Accounts 2016 and Notice of AGM can also
be viewed on the Company's website at
www.indivior.com/investors/.
The AGM is scheduled to be held at 3.00pm on Wednesday, May 17,
2017 in the Wessex Ballroom, Renaissance London Heathrow, Bath
Road, Hounslow, Middlesex, TW6 2AQ.
A condensed set of Indivior's financial statements and
information on important events that have occurred during the
financial year ended December 31, 2016 and their impact on the
financial statements were included in Indivior's preliminary
results announcement released on February 22, 2017. That
information, together with the information set out in the Appendix
below, which is extracted from the Annual Report & Accounts
2016, constitute the material required by Disclosure Guidance and
Transparency Rule 6.3.5 which is required to be communicated to the
media in full unedited text through a Regulatory Information
Service. This announcement is not a substitute for reading the full
Annual Report & Accounts 2016. Page numbers and cross
references in the extracted information refer to page numbers and
cross references in the Annual Report & Accounts 2016.
March 23, 2017
Investor Contact
Jason Thompson
Vice President, Investor Relations
Indivior
Tel: +1 (804) 423 8916
jason.thompson@indivior.com
Forward-Looking Statements
The Annual Report & Accounts 2016 contains certain
statements that are forward--looking and which should be
considered, amongst other statutory provisions, in light of the
safe harbour provisions of the United States Private Securities
Litigation Reform Act of 1995. By their nature, forward--looking
statements involve risk and uncertainty as they relate to events or
circumstances that will or may occur in the future. Actual results
may differ materially from those expressed or implied in such
statements because they relate to future events. Forward--looking
statements include, among other things, statements regarding the
Indivior Group's financial guidance for 2017 and its medium-- and
long--term growth outlook, its operational goals, its product
development pipeline and statements regarding ongoing litigation.
Various factors may cause differences between Indivior's
expectations and actual results, including: factors affecting sales
of SUBOXONE(R) (buprenorphine and naloxone) Sublingual Tablets
(CIII), SUBOXONE(R) (buprenorphine and naloxone) Sublingual Film
(CIII), SUBUTEX(R) (buprenorphine) Sublingual Tablets (CIII) and
any future products; the outcome of research and development
activities; decisions by regulatory authorities regarding the
Indivior Group's drug applications; the speed with which regulatory
authorizations, pricing approvals and product launches may be
achieved; the outcome of post--approval clinical trials;
competitive developments; difficulties or delays in manufacturing;
the impact of existing and future legislation and regulatory
provisions on product exclusivity; trends toward managed care and
healthcare cost containment; legislation or regulatory action
affecting pharmaceutical product pricing, reimbursement or access;
claims and concerns that may arise regarding the safety or efficacy
of the Indivior Group's products and product candidates; risks
related to legal proceedings; the Indivior Group's ability to
protect its patents and other intellectual property; the outcome of
the SUBOXONE Film patent litigation relating to the ongoing ANDA
lawsuits; changes in governmental laws and regulations; issues
related to the outsourcing of certain operational and staff
functions to third parties; uncertainties related to general
economic, political, 13 business, industry, regulatory and market
conditions; and the impact of acquisitions, divestitures,
restructurings, internal reorganizations, product recalls and
withdrawals and other unusual items.
Any forward-looking statements that we make in the Annual Report
& Accounts 2016 speak only as of the date of the Annual Report
& Accounts 2016. We assume no obligation to update our
forward-looking statements whether as a result of new information,
future events or otherwise, after the date of the Annual Report
& Accounts 2016.
The Annual Report & Accounts 2016 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 Company to any person
in any jurisdiction to whom it is unlawful to make such offer or
solicitation.
APPIX
i. Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report,
the Directors' Remuneration Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance with
International Financial Reporting Standards ('IFRS'), as adopted by
the European Union, and the Parent Company financial statements in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101
"Reduced Disclosure Framework", and applicable law).
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Parent Company, and
of the profit or loss of the Group and parent Company for that
period. In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgments and accounting estimates that are reasonable
and prudent;
-- state whether IFRS as adopted by the European Union have been
followed for the Group financial statements and the United Kingdom
Accounting Standards, comprising FRS 101, have been followed for
the Company financial statements, subject to any material
departures disclosed and explained in the financial statements;
and
-- prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Group and Parent
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and
Parent Company's transactions, and disclose with reasonable
accuracy, at any time, the financial position of the Group and the
Parent Company, and enable them to ensure that the financial
statements and the Directors' Remuneration Report comply with the
Companies Act 2006 and, as regards the Group financial statements,
Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Parent Company and the Group and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Governance Statement
that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the Group and Parent Company's website. Legislation in the
United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
Responsibility statement of the Directors in respect of the
Annual Report
The Directors consider that the Annual Report and Accounts,
taken as a whole, are fair, balanced and understandable, and
provide the information necessary for shareholders to assess the
Group and Parent Company's position and performance, business model
and strategy.
Each of the Directors, whose names and functions are listed on
page 58, confirm that, to the best of their knowledge:
-- the Parent Company financial statements, which have been
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 "Reduced Disclosure Framework", and applicable
law) give a true and fair view of the assets, liabilities,
financial positions and profit of the Company;
-- the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group; and
-- the Directors' Report and Strategic Report, includes a fair
review of the development and performance of the business and the
position of the Group and Parent Company, together with a
description of the principal risks and uncertainties that it
faces.
ii. Risk Factors and Risk Management
The Board of Directors have carried out a robust assessment to
ensure that the principal risks, including those that would
threaten the Group's business model, future performance, solvency
or liquidity are effectively managed and/or mitigated to help
ensure the Group is viable. While the Group aims to identify and
manage such risks, no risk management strategy can provide absolute
assurance against loss.
Set out below are what the Group considers to be the principal
risks that could cause the Group's business model, future
performance and solvency or liquidity to differ materially from
expected and historical results, and how the risks relate to the
Group's strategic priorities. Additional risks, not listed here,
that the Group cannot presently identify or does not believe to be
equally significant, may materially and adversely affect the
business, results of operations and financial position. The
principal risk factors and uncertainties are not listed in order of
significance.
Principal risks
Business operations and business continuity
-- The Group's revenues are primarily derived from sales of
Suboxone(R) Film and any decrease in sales due to competition or
supply or quality issues could significantly affect the results of
operations and prospects.
-- Competition for qualified personnel in the biotechnology and
pharmaceutical industries is intense, and high-performing talent in
key positions is a business-critical requirement.
-- Failures or disruptions to the Group's systems, or the
systems of third parties on whom the Group relies, due to any
number of causes, particularly if prolonged, could result in a loss
of key data and/or affect operations.
-- The Group's systems, software and networks may be vulnerable
to unauthorized access, computer viruses or other malicious code or
cyber threats that could have a security impact. All of these could
be costly to remedy and we may be subject to litigation.
-- The Group has a single source of supply for buprenorphine, an
active ingredient in the Group's products including Suboxone(R)
Film, and any disruption to this source of supply could
significantly affect the Group's results, operations, and
prospects.
Specific risks How we manage Possible Link to strategic
we may face risk impacts priorities
------------------------ ------------------------ ------------------------ ------------------------
Dependence Continue Hinder patient Build resilience
on single to expand access to of our franchise.
product line. the market treatment. Expand global
Approval by expanding Loss of treatment.
and launch access to market share. Business development.
of generic treatment Loss of
or branded and working revenue and
products that with physicians profits,
compete with and payors which in
our products. to improve worst case
Generic manufacturers patient outcomes. scenarios
seeking approval Capitalize may require
to launch on international business
competing growth opportunities, restructure
products prior continued and recapitalization.
to expiry development Damage to
of existing of our pipeline reputation.
patents. and disciplined Exposure
Launch of acquisitions to litigation
branded products to enable and significant
that compete diversification. legal costs.
with our products. Obtain and
Claims that enforce product
our products patents and
infringe third other IP
-party patents. rights, and
Inability develop and
to deliver implement
continuous strategies,
supply of including
compliant new product(s),
finished product. to face both
Inability generic competition,
to retain if the outcome
or attract of patent
high-performing litigation
and high-potential is unfavorable,
staff could and new and
adversely existing
impact achievement branded competitors.
of Develop
Group objectives. and implement
Significant strategies
disruptions to ensure
of information freedom to
technology operate.
systems or Explore
breaches of settlement
data security opportunities.
could disable Continuity
critical systems planning
and cause for certain
loss of sensitive black swan
data. events to
Failure to secure business
protect and continuity
restrict access in worst
to critical case scenarios.
or sensitive Establish
computer systems and closely
or information. monitor stock
levels.
Ongoing
partnerships
with manufacturers
and packagers
to optimize
manufacturing
and Quality
Assurance
(QA) processes.
Continuously
review talent
retention
program with
focus on
identifying
key roles
and successors.
IT disaster
recovery
plans in
place to
support overall
business
continuity.
Systems in
place to
protect data
and devices.
Various
IT policies,
processes
and systems
in place
to provide
access control
and security
management
for Indivior-used
or owned
infrastructure
and applications,
now operating
independently
from RB.
Completed
initial and
continuing
ongoing End
User Cyber
Security
Awareness
training.
------------------------ ------------------------ ------------------------ ------------------------
Product liability, regulation and litigation
-- As an innovative pharmaceutical company, the Group seeks to
obtain appropriate intellectual property protection for its
products. Its ability to obtain and enforce patents and other
proprietary rights particularly for its products, drug formulation
and delivery technologies and associated manufacturing processes is
critical to business strategy and success. Specifically see
disclosures on pages 44 to 45 referring to the current status of
ANDA litigation and to the going concern statement on page 95
contained within the Statement of Directors' Responsibilities,
which discusses the risks associated with current ANDA litigation,
and the contingent liabilities disclosures in Note 20 of the
financial statements on page 126.
-- The manufacture of the Group's products is highly exacting
and complex, due in part to strict regulatory and manufacturing
requirements. Active Pharmaceutical Ingredients (API) in many of
the Group's products and product candidates are controlled
substances that are subject to extensive regulation in all the
countries in which the Group markets its products.
-- The testing, manufacturing, marketing, and sale of
pharmaceutical products are highly regulated and entail a risk of
product liability claims, product recalls, litigation, government
investigations and enforcement action, and associated adverse
publicity, each of which could have a material adverse impact on
the business, prospects, results of operations and financial
condition. Specifically, see disclosure on page 44 referring to the
current status of the DOJ investigation and other investigative and
antitrust litigation matters, and the contingent liabilities
disclosures in Note 20 of the financial statement on page 125.
Specific risks How we manage Possible impacts Link to strategic
we may face risk priorities
----------------------- --------------------- -------------------- ---------------------
Failure to Obtain and Loss of revenue Build resilience
obtain, maintain, enforce patents and profits. of our franchise.
and protect and other Adverse impact
patents and proprietary on the Group's
other proprietary rights. ability to
rights, including Suboxone(R) raise funds
potential Film in the necessary
invalidity US is covered to continue
or non- infringement by three Orange its operations.
findings in Book-listed
the current formulation
US Federal patents and
Court or US two process
Patent and patents, having
Trademark terms that
Office proceedings. run from 2022
Legal proceedings to 2030, which
related to are currently
product liability in litigation
claims, antitrust, in the US
government Federal Court
enforcement and/or US
and/or private Patent and
litigation Trademark
associated Office.
with the testing, Develop and
manufacturing, implement
marketing strategies,
and sale of including
our products. new product(s),
Potential to prepare
liability for generic
and/or additional competition
expenses associated in the event
with ongoing of adverse
regulatory outcomes in
obligations these proceedings.
and oversight. Quality,
product safety
and compliance
are embedded
in the Group's
processes
and culture
and monitor
and oversee
the Company's
activities.
Develop and
implement
strategies
to defend
against and
pursue appropriate
resolution
of these claims.
The Group
has instituted
policies,
systems, and
training programs
to ensure
adherence
to regulations
governing
product quality,
patient safety
and business
standards.
----------------------- --------------------- -------------------- ---------------------
Product development
-- The regulatory approval process for new pharmaceutical
products and expansion of existing pharmaceutical products is
expensive, time-consuming and uncertain.
-- Even if product candidates are approved, there is no
guarantee that they will be able to achieve expected market
acceptance.
Specific risks How we manage Possible impacts Link to strategic
we may face risk priorities
--------------------------- ------------------------ -------------------------- ------------------
Failure to Increased Potential Develop our
receive regulatory R&D investment delays or pipeline.
approval to to enhance inability Expand global
successfully clinical capabilities to develop treatment.
commercialize and support new products.
a pipeline the development Hinder patient
product. of pipeline access to
Failure of products. treatment.
third-party Thorough Loss of revenue
Clinical Research contract review and profits,
Organizations process in which in worst
to properly/successfully place to ensure case scenarios
perform their that third-party may require
legal, regulatory, vendors are business restructure
and contractual properly vetted, and recapitalization.
obligations. inherent risks Damage to
Inability are identified reputation.
of product and mitigated, Adverse impact
candidates, and deliverables to long-term
if approved, and obligations growth.
to achieve are clearly Adverse impact
expected market defined before on the Group's
acceptance. contracts ability to
are finalized. raise funds
Ongoing monitoring necessary
of the third-parties' to continue
activity and its operations.
performance
to ensure
that good
clinical practices
('GCP') are
being followed
and milestones
are met.
Financial
models and
external support
in place to
provide market
valuation
and due diligence
support.
--------------------------- ------------------------ -------------------------- ------------------
Commercial and governmental payor account, pricing and
reimbursement pressure
-- The Group's revenues are partly dependent on the availability
and level of coverage provided to the Group by private insurance
companies and governmental reimbursement schemes for pharmaceutical
products, such as Medicare and Medicaid in the US.
-- Changes to governmental policy or practices could adversely
affect the Group's revenues, financial condition and results of
operations. In addition, the reimbursement of treatment established
by healthcare providers, private health insurers and other
organizations may be reduced.
Specific risks How we manage Possible impacts Link to strategic
we may face risk priorities
--------------------------- --------------------- ------------------- ---------------------
Reduced reimbursement Continue Loss of revenue Build resilience
levels and to work with and profits. of our franchise.
increasing payors, commercial Hinder patient Expand global
pricing pressures. or governmental, access treatment.
(e.g. as a to ensure to treatment.
result of access to
increasing and coverage
competition). of our products.
Price reductions Establishment
as a result of health
of commercial economic business
and governmental case to justify
payor austerity existing pricing.
measures
(e.g. price
controls,
policy change,
or other price-setting
action).
--------------------------- --------------------- ------------------- ---------------------
Compliance with law and ethical behavior
-- Business practices in the pharmaceutical industry are subject
to increasing scrutiny by government authorities. Failure to comply
with applicable laws and rules and regulations in any jurisdiction
may result in fines, civil and/or criminal legal proceedings, each
of which could have a material adverse impact on the business,
prospects, results of operations and financial condition.
Specifically see disclosure on page 44 referring to the current
status of the DOJ investigation and other investigative and
antitrust litigation matters, and the contingent liabilities
disclosures in Note 20 of the financial statements on page 125.
Specific risks How we manage Possible impacts Link to strategic
we may face risk priorities
-------------------------- ----------------------- -------------------------- ---------------------
Non-compliance The Group Loss of revenue Build resilience
with anti- has enhanced, and profits, of our franchise.
corruption, and continues which in worst Expand global
healthcare, to enhance, case scenario treatment.
data privacy, its compliance may require
or local laws program and business restructure
could result compliance and recapitalization.
in business capabilities. Fines and/
interruption All employees or penalties.
or restructuring, required to Hinder patient
fines, loss complete a access to
of reimbursement, comprehensive treatment.
damage to compliance
reputation training program
and annually.
criminal penalties. Reviews and
Failure to controls put
comply with in place over
payment and government
reporting pricing and
obligations reporting.
under the Increased
US Medicaid oversight
Drug Rebate and monitoring
program or of controls
other governmental and procedures
pricing programs. in emerging
Restrictions markets.
on Group's The Group
ability to has enhanced,
sell products and continues
or product to enhance,
candidates its compliance
in certain program and
markets/ countries compliance
due to controlled capabilities.
substance Continued
legislation, cooperation
regulation, with the authorities
and/or classification. on ongoing
Government investigations,
investigations utilizing
of the Group's external counsel
business activities as needed.
alleged to
be improper.
-------------------------- ----------------------- -------------------------- ---------------------
Acquisitions and business development
-- The Group may seek to acquire businesses or products as part
of our strategy to enhance our current portfolio.
Specific risks How we manage Possible impacts Link to strategic
we may face risk priorities
------------------------ ----------------------- -------------------- ---------------------
Inability Board of Adverse impact Build resilience
to identify, Directors on Group's of our franchise.
acquire, close reviews all ability to Business
or integrate significant raise funds development.
acquisition transactions. necessary Expand global
targets successfully. Best Practice to continue treatment.
Acquisitions Management its operations. Develop our
and strategic Tools for Loss of revenue pipeline.
alliances, Diligence and profits.
including and Integration Damage to
distributor Planning and reputation.
collaboration, Execution
may be unsuccessful. have been
Inability developed.
to raise capital Acquisition
in order to Governance
finance acquisitions. Model agreed,
along with
identification
of SME required
for Acquisition
Integration
team.
Internal
and external
resources
in place to
ensure rigorous
due diligence
and integration
of acquisitions
and/or new
product initiatives.
Ongoing regular
appraisal
of debt and
equity capital
markets advisors
and counterparties.
------------------------ ----------------------- -------------------- ---------------------
Product safety
-- The pharmacovigilance process has been established to monitor
the safety of the Group's products in a comprehensive and thorough
manner. This includes capturing safety-related data from multiple
sources (e.g. Medical Information Unit (MIU), market research,
literature search and clinical trials) and entering all adverse
events received into a safety database. The Company reports to
health authorities across the globe within the required and
mandatory timelines and identifies safety signals with an
assessment of changes to benefit/risk profile and determines
actions needed to optimize the safe and effective use of our
products, including communicating any relevant changes to key
stakeholders.
Specific risks How we manage Possible impacts Link to strategic
we may face risk priorities
---------------------------- --------------------- ------------------ --------------------
Change in Quarterly Product recall. Build resilience
benefit-risk reviews performed Hinder patient of our franchise.
profile based by Global access of Expand global
on cumulative Signal detection treatment. treatment.
evidence internally team of all Significant
(from all potential legal cost.
Indivior cross-functional safety sources Adverse impact
departments) across Indivior on the Group's
and externally. organization ability to
and externally. raise funds
Recommended necessary
actions (e.g. to continue
Labelling its operations.
changes, Risk Loss of revenue
Management and profits.
Plan update, Damage to
Dear Dr. Letters, reputation.
Post-Authorization
Safety Studies)
approved by
the Global
Signal management
team to optimize
the safe and
effective
use of all
Indivior products.
---------------------------- --------------------- ------------------ --------------------
Risk management
To achieve our objective of being the leading pharmaceutical
company focused on the treatment of addiction, we recognize that we
must have a good understanding of the risks we face, those inherent
in our strategy and operations, and those presented by external
conditions. We take a systematic and robust approach, which aims to
continuously monitor those risks and internal control systems
accordingly.
Our approach
Our systematic risk management approach is designed to identify
risks that would threaten the Group's business model, future
performance, solvency or liquidity. Effective risk management is
fundamental to our ability to meet our operational and strategic
objectives. The competitive market in which we operate has
industry-specific risks, particularly those relating to new product
development, intellectual property enforcement and legal
proceedings, and compliance with laws and regulations. This
requires effective decision-making to ensure that the risks the
business takes are assessed and appropriately measured, whilst
ensuring that there is overall resilience to risks the business has
limited control over through disaster recovery and business
continuity procedures. Our overall risk management approach remains
to foster and embed a culture of risk management that is
responsive, forward-looking, consistent and accountable.
The Executive Committee helps to establish the risk agenda, for
the reporting and ongoing management of risks and for the
stewardship of the risk management approach. The Executive
Committee reviews the risk register on a quarterly basis and
identifies and assesses Indivior's principal risks on an ongoing
basis.
Risk control assurance
The Board has overall responsibility for the Group's risk
management framework. The Board reviews the Group's principal risks
with focus on the key risk areas framework. The Board's Committees
regularly review risks relevant to their area of focus; this
includes, but is not limited to, risks relating to legal, financial
and compliance matters. Assurance on risk controls is provided by
internal management information, internal audits, external audits
and Board oversight. There is also an externally supported
whistleblowing reporting system in place.
iii. Related party transactions
Subsequent to the demerger from former parent, RB, on December
23, 2014, Indivior continues to receive certain services like
office space rental and other operational services on commercial
terms and on an arm's length basis. Adrian Hennah, the RB CFO,
served on the Indivior PLC Board of Directors until the AGM on May
11, 2016. The amount included within SD&A in respect of these
services is $4m (2015: $9m).
Key management compensation is disclosed in Note 6a.
The subsidiary undertakings included in the consolidated
Financial Statements at December 31, 2016 are disclosed in Note 2
to the Parent Company Financial Statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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