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
/PRNewswire/ -- 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:
![Indivior (PRNewsfoto/Indivior) Indivior (PRNewsfoto/Indivior)](https://mma.prnewswire.com/media/1814851/Indivior_Logo.jpg)
- 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 15th. 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 million1 versus approximately 19 million1
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.
- 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 Guidance1:
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
(+8% at mid-point vs.
FY 2023)
|
$1,240m to
$1,330m (+18% at
mid-point vs. FY 2023)
|
SUBLOCADE
NR
|
$765m to
$805m
(+25% at mid-point vs.
FY 2023)
|
$820m to $880m
(+35% at mid-point vs. FY 2023)
|
OPVEE
NR
|
$9m to $14m
Predominantly expected
to come from
fulfilling first delivery as part of 10-year
BARDA2 contract (~$8m)
|
$15m to $25m
|
PERSERIS
NR
|
$27m to $33m
|
$55m to $65m
(+43% vs. at mid-point vs. FY 2023)
|
SUBOXONE Film Market
Share3
|
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)
Reflecting
discontinuation of the sales and
marketing of PERSERIS
|
($575m) to
($590m)
|
R&D
|
No change
|
($120m) to
($130m)
|
Adjusted Operating
Profit
|
$285m to
$320m
(approx. 100 bps of
margin expansion vs. FY 2023)
|
$330m to
$380m
|
|
|
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 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
(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
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 to
learn more. Connect with Indivior on LinkedIn by visiting
www.linkedin.com/company/indivior.
This release is being made by Kathryn
Hudson, Company Secretary Indivior PLC.
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SOURCE Indivior PLC