Indivior confident after strong third quarter
By Josh White
Date: Thursday 24 Oct 2024
(Sharecast News) - Addiction treatment specialist Indivior reported a strong third-quarter performance on Thursday, with total net revenue increasing 13% to $307m compared to the same period last year, after it recently updated its full-year guidance.
The company also posted a quarterly operating profit of $4m, swinging from a $183m loss in the third quarter of 2023.
That improvement marked a significant turnaround in Indivior's financial performance, which also saw net income of $4m compared to a net loss of $135m in the same quarter last year.
Indivior's flagship product, Sublocade, continued to perform well, with third quarter net revenue up 14% to $191m.
Year-to-date revenue for Sublocade reached $562m - a 24% increase compared to the same point in 2023.
The firm said its US market also showed strength, with 15% growth in net revenue, driven by double-digit volume growth for Sublocade and orders for the opioid rescue treatment Opvee from the US Biomedical Advancement Research and Development Authority (BARDA).
On an adjusted basis, third quarter operating profit rose 62% to $97m, while adjusted net income increased 47% to $72m.
Indivior also improved its earnings per share, with adjusted diluted earnings per share rising to 54 cents, up from 34 cents in the same quarter last year.
Despite the gains, cash and investments at the end of the third quarter fell to $344m, down from $451m at the end of 2023, largely due to litigation settlement payments of $158m and share repurchases of $122m.
Indivior said it was continuing to address legacy legal issues, and announced an expected settlement with certain payors to resolve the last remaining antitrust cases.
Looking ahead, Indivior updated its forecast for full-year net revenue to between $1.125bn and $1.165bn, and Sublocade revenue between $725m and $745m, reflecting confidence in continued growth.
"Our third quarter results show solid double-digit top- and bottom-line growth and are in line with the business update we issued on 10 October," said chief executive officer Mark Crossley.
"The general market conditions we highlighted at that time continue and are reflected in our maintained 2024 outlook.
"Despite these near-term competitive headwinds, we remain firm in our belief that Sublocade has a differentiated and optimal profile for opioid use disorder patients, particularly with the ongoing proliferation of potent synthetic opioids."
Crossley added that, as the company highlighted at its business update, evidence among multiple co-prescribing cohorts since the competitor's launch supported Indivior's belief that Sublocade would retain a leadership position in the long-acting injectable category, with Sublocade share currently in the mid-60s percent range across those cohorts.
"Looking ahead, with continued strong execution supplemented by important potential FDA label updates, we expect to move beyond this near-term period of market disruption to ultimately deliver Sublocade peak net revenue of greater than $1.5bn.
"To further support our goal, we are pursuing significant streamlining actions across both general and administrative, and research and development, including termination of pipeline activities outside of OUD assets which are committed and underway.
"The savings from these efforts will be used to fuel Sublocade growth, fund year-over-year incremental investment behind our two phase two OUD assets and underpin our focus on supporting group margins."
Taken together, Mark Crossley said the firm expected to deliver a net reduction in overall operating expenses in the 2025 financial year of $10m to $20m, when compared to the mid-point of its 2024 operating expense guidance.
"Lastly, we continue to address legacy litigation to create greater certainty for all stakeholders.
"Our third quarter results include a $39m provision for the preliminary agreement related to the remaining parties in the legacy antitrust litigation.
"While the parties must negotiate material terms and conditions of the final settlement agreement, when finalised this will close this legacy matter."
At 0901 BST, shares in Indivior were up 9.49% at 709p.
Reporting by Josh White for Sharecast.com.
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