NASDAQ:INDV Indivior Q3 2023 Earnings Report $11.70 -0.20 (-1.68%) Closing price 04:00 PM EasternExtended Trading$11.80 +0.10 (+0.85%) As of 07:53 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Indivior EPS ResultsActual EPS$0.34Consensus EPS $0.30Beat/MissBeat by +$0.04One Year Ago EPSN/AIndivior Revenue ResultsActual Revenue$271.00 millionExpected Revenue$265.00 millionBeat/MissBeat by +$6.00 millionYoY Revenue GrowthN/AIndivior Announcement DetailsQuarterQ3 2023Date11/9/2023TimeN/AConference Call DateThursday, November 9, 2023Conference Call Time8:00AM ETUpcoming EarningsIndivior's Q2 2025 earnings is scheduled for Thursday, July 24, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Indivior Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 9, 2023 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Good day, Speaker 100:00:00and thank you for standing by. Welcome to the Indivior Plc Q3 Results 2023 Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Jason Thompson. Speaker 100:00:36Please go ahead. Speaker 200:00:37Thanks, Sandra, and good morning, everyone, and welcome to our call to discuss our Q3 results. Before we begin, I need to remind you that today's comments include forward looking statements and that actual results may differ materially. Those factors that may cause actual results to differ are detailed on Slide 2 of our presentation, which is available on the Investor Relations portion of our website at www.indivior.com. Also, we will discuss adjusted financial measures. You can find a reconciliation of those measures to the reported amounts in the appendix of the presentation. Speaker 200:01:16With that, I'll now turn the call over to our CEO, Mark Crossley. Speaker 300:01:21Thank you, Jason, and good morning and good afternoon, everyone, and thanks for joining us. With me today to discuss our Q3 results are Ryan Preblec, our Chief Financial Officer and Doctor. Christian Heidbreder, our Chief Scientific Officer. For today's call, I'll provide an overview of the strategic progress after which Ryan will detail our financial performance and our 2023 guidance And then we'll move on to a question and answer period. Turning to Slide 4, it was another quarter of strong Double digit top line performance. Speaker 300:01:52Led by SUBLOCADE, 3rd quarter net revenues grew 17% year over year to $271,000,000 Adjusted operating profit of $60,000,000 which was modest up modestly versus the year ago quarter reflects the incremental operating expenses we've absorbed from adding the Opioid business, including launch costs for Opdiv this quarter. Based on our Q3 and year to date performance, we are confident that our teams will deliver another strong year of results in 2023, consistent with the attractive medium term profitable growth framework we set out last December. Importantly, we've narrowed our full year 2023 SUBLOCADE net revenue expectations to $610,000,000 to 630,000,000 which is the upper half of our previous range. At the midpoint, this would represent a 52% increase versus 2022. As you may have also seen in our updated guidance included in our announcement, we have evaluated and decided to make incremental investments behind SUBLOCADE To fuel its growth, our updated adjusted SG and A expectations for the full year reflect this. Speaker 300:03:02I'll cover these investments in more detail in a moment. In addition to continuing to progress and invest behind SUBLOCADE toward our peak net revenue goal of greater than $1,500,000,000 We took several actions aligned with our strategic priorities to strengthen Indivior's long term outlook. 1st and foremost was the settlement with the final class of the antitrust multi district litigants for $385,000,000 on October 23. In doing so, we've created more certainty for all stakeholders and avoided potentially costly and protracted litigation. With this legacy matter now behind us, we've gained greater focus on serving patient needs and on realizing the tremendous prospects we see ahead for Indivior. Speaker 300:03:492nd, we launched OTBI at the beginning of October and subsequently secured a multiyear partnership with the U. S. Biomedical Advanced Research and Development Authority, BARDA. The contract includes funding for additional post marketing and real world evidence and shelf life studies as well as procurement agreement for finished and packaged OT V product. Turning to Slide 5, during the quarter we also executed on a number of strategic initiatives that we believe will Strengthen our foundation for long term profitable growth. Speaker 300:04:24First, we acquired an aseptic manufacturing facility in Raleigh, North Carolina that will provide Indivior a secure long term source of supply for SUBLOCADE and PERSERIS. Ryan will have more detail on this acquisition in a moment, But this wholly owned facility is a strong signal of our confidence in delivering on our long term net revenue ambitions. 2nd, we acquired 2 important R and D assets to help address unmet patient needs for those suffering from opioid use disorder. We've taken full ownership of INDV2000, an oral Oryxin 1 from our partner C4xDiscovery. And most recently, we secured the global rights to Allaah Pharmaceuticals buprenorphine based long acting injectables portfolio. Speaker 300:05:12This includes LR's lead asset ALA1000, which has the potential to be the 1st long acting injectable for opioid use disorder delivered once every 3 months. In a disease space where adherence is one of the top challenges for patients, ALA1000 has the potential to provide an option for patients seeking a less frequent maintenance therapy regimen. Turning to our strategic priorities report card, beginning with SUBLOCADE. The strong net revenue performance was driven by our momentum in the organized health systems channel, which is now generating approximately 80% of SUBLOCADE's growth. As we indicated in our last quarterly call, We've taken the opportunity to evaluate incremental commercial investments as we approach the 4th year of our successful ecosystem operating model. Speaker 300:06:03We believe that these investments will strengthen SUBLOCADE's trajectory and generate positive long term returns with the expansion of our traditional field force and our Justice System teams. First, the expansion of our traditional field force by over 40 associates will enable broader reach and increased frequency across the organized health systems channel as well as increased capacity to call on independent practices. Following elimination of the DADA 2000 waiver, we believe that these smaller office based independent practices can now benefit from patient access to alternate sites of care, which eliminates the administrative burden associated with specialty products. Toward that end, our partnership with Albertsons, the large U. S. Speaker 300:06:48Food and drug retailer is delivering encouraging results and strengthens our belief in the opportunity to increase adoption among our legacy prescribing base, where previously the logistics and handling Challenges with SUBLOCADE post barriers to prescribing for these smaller practices. Along with our increased capacity to call on independent practices, We're also resourcing efforts to expand the alternate sites of care network to improve treatment access for providers and their patients. In addition, the Justice system continues to be our fastest growing OHS sub channel. Approximately 300 unique Justice We're actively ordering SUBLOCADE in the Q3. As a result, the Justice System sub channel is approaching 20% of SUBLOCADE's net revenue. Speaker 300:07:36The focus of our incremental commercial investments will also be on continuing to grow SUBLOCADE's access across all levels of the Justice System. The additional cost of these commercial investments is reflected in the modest increase in our SG and A guidance for the full year. On an annualized basis, we expect these investments will amount to approximately $20,000,000 If I turn to revenue diversification, I'm pleased to report another quarter of net revenue growth for our business outside the U. S. Driven by SUBLOCADE and SUBOXONE Film. Speaker 300:08:08Net revenue for SUBLOCADE in international markets was $30,000,000 year to date And we've successfully launched SUBLOCADE in Germany. For PERSERIS, we saw year over year growth of 38% in the quarter. On a sequential basis, net revenue was unchanged reflecting intensified competition from a new launch from a competitor. Despite this short term impact, we maintain our peak net revenue expectation for PERSERIS of $200,000,000 to 300,000,000 This reflects our strong belief in the growing opportunity for LAIs and schizophrenia where penetration remains low And we also believe in the attractive differentiated therapeutic profile of our product, which continues to resonate well with physicians. Finally, turning to Opvie, we launched on October 2nd and continue to believe that Opvie has the ideal profile to address the epidemic of overdoses Caused by fentanyl and other synthetic opioids, which are now the leading cause of death for people aged 18 to 45. Speaker 300:09:10Our OpV commercial strategy includes an approved experience program for states that are allowed to trial OpV within their population. We're also leveraging our government affairs team to ensure that state standing orders, grants and emergency medical service protocols are updated to include Opdiv as an overdose rescue treatment. And as I mentioned earlier, we're pleased to secure the potentially valuable multi year partnership with BARDA. Regarding our pipeline, Christian is here to answer any questions you may have. That said, I can report we continue to make good progress All of our key assets and post marketing studies. Speaker 300:09:45Last week, we held a positive end of Phase 1 meeting with the FDA for INDV2000 for opioid use disorder and we're still expecting Phase 2 data on INDV4002 for alcohol use disorder by the end of the year. Finally, on our operating model, we're maintaining our consistent approach to capital allocation in the near term. We continue to focus on prudent cash management that enables us to reinvest in the business while also continuing to meet our obligations to stakeholders. Lastly, we made tremendous progress in securing the capacity we need for delivering our long term net revenue ambitions for SUBLOCADE and PERSERIS. I've already mentioned the newly acquired plant in Raleigh, which combined with the validation of our 2nd contract manufacturing site this quarter will provide sufficient capacity for SUBLOCADE and BRICERIS. Speaker 300:10:36To summarize, this was a strong quarter of execution and delivery against our strategic priorities, highlighted by the strong momentum of SUBLOCADE, the settlement of legacy litigation and several important business development transactions that will help secure our future. With that, I'd like to now hand over to Ryan to take you through the results in more detail. Speaker 400:10:55Thanks, Mark, and good morning and good afternoon to everyone. Overall, I'm pleased to report another good quarter of execution and business momentum. We delivered strong top line growth driven by SUBLOCADE and we grew our adjusted operating income versus the prior year, absorbing another quarter's worth of Opiant expenses, including OpV launch expenses. Looking at the 3rd quarter results in more detail, starting with the top line. Total net revenue of $271,000,000 reflected growth of 17% versus the year ago quarter on a reported basis And 16% excluding the impact of FX. Speaker 400:11:36By geography, total U. S. Net revenue in the 3rd quarter grew by 20% versus the year ago quarter. Rest of the world was up 2% versus the prior year quarter and unchanged excluding the impact of FX. Positive contributions from new products continue to more than offset the ongoing competitive pressure on our legacy tablet products. Speaker 400:11:58SUBLOCADE net revenue outside of the U. S. In the Q3 grew 43% year over year to $10,000,000 Total SUBLOCADE net revenue of $167,000,000 for the Q3 of 2023 was up 55% versus the prior year and 8% sequentially. U. S. Speaker 400:12:19Dispensers were up 7% sequentially in the quarter and aligned with net revenue adjusting for modest stocking impact in the quarter. Moving to PERSERIS, Reported net revenue of $11,000,000 was up 38% versus the prior year and flat sequentially. Quarterly results were impacted by the near term competitive pressure that Mark mentioned. We remain confident in reaching our peak net revenue guidance of $200,000,000 to 300,000,000 Turning to SUBOXONE Film in the U. S. Speaker 400:12:52The average share of approximately 18% in the 3rd quarter was down about 1 percentage point versus both the 2nd quarter and the year ago quarter. Net revenue in the quarter was impacted By normal quarterly rebate accrual valuations, which in Q3 resulted in a true up in the low double digit range. As a reminder, we do not promote SUBOXONE Film in the U. S. Moving down to P and L. Speaker 400:13:18Our 3rd quarter adjusted gross margin of 84% was up 1 percentage point versus the prior year quarter, reflecting improved product mix, partially offset by cost inflation. Adjusted SG and A expenses were $150,000,000 in the quarter, up 33% versus Q3 of last year. The increase reflects higher legal activity related to the settled antitrust MDL, the addition of the Opiant business, including launch expenses for Opdiv and incremental SUBLOCADE commercial investments and ongoing year over year inflationary impacts. R and D expenses were $18,000,000 in the quarter, a decrease of 10% versus Q3 of last year, Benefiting from a high single digit credit from previously expensed process validation activities related to the LAI capacity expansion, which will not repeat. Our strong NRR performance helped to absorb the Opiant And Op Read launch expenses with adjusted operating income increasing to $60,000,000 in the 3rd quarter, up 3% versus $58,000,000 in the prior year on the same basis. Speaker 400:14:32We continue to expect the Opiant transaction to be accretive to earnings after the 2nd full year following Opdiv's October launch this year. Lastly on the P and L, Our adjusted net income of $49,000,000 grew 14% in the Q3 versus last year reflecting improvement in net finance income in addition to the dynamics I just highlighted. Quickly touching on the balance sheet and our capital position. We ended the Q3 with gross cash and investments of $774,000,000 before taking into account our term debt and other future payment obligations and liabilities as discussed in our results released earlier today. Considering the settlement payments related to the antitrust MDL, We still expect to end the year with good flexibility. Speaker 400:15:23This will allow us to continue to execute on our disciplined capital allocation strategy, which in the near term remains focused on reinvesting to fuel our base business towards our net revenue goals and meeting our stakeholder obligations. If there is excess cash, we will look at it in partnership with the Board for opportunities in business development and potential shareholder returns. Lastly, with a little less than 2 months remaining in the year, we are making some refinements to some of our full year guidance elements. We are maintaining total company full year 2023 net revenue guidance of $1,030,000,000 to $1,090,000,000 which we increased from $970,000,000 to $1,040,000,000 at the half year. However, For SUBLOCADE, based on current performance trends, we are narrowing our full year 2023 SUBLOCADE net revenue expectations to $610,000,000 to $630,000,000 which is the upper half of our previous range of 5.90 to $630,000,000 This represents a growth rate of 52% at this new midpoint compared to full year 2022. Speaker 400:16:39For VERSERIS, given the short term competitive pressure with the new entrant in the space, We now expect full year net revenue to be at the lower end of the $45,000,000 to $55,000,000 range. For U. S. Film, our previous view assumed an accelerated rate of share loss in the Q4 with the entry of the 4th generic in the U. S. Speaker 400:17:01As this new generic has now entered the market and while the impact has been modest so far, we are expecting additional share loss in the remaining month or so of the Q4. For SG and A, we are bringing up the full year 2023 range by $10,000,000 to $540,000,000 to 550,000,000 to reflect the targeted SUBLOCADE commercial investments that Mark detailed. Overall, our strong results continue to absorb Opiant and OpV launch And we are maintaining our view that adjusted operating income will be higher than last year's performance of $212,000,000 Finally, as Mark mentioned, we also took a further strategic step in establishing long term supply security for SUBLOCADE and PERSERIS And potentially other Indivior products with the purchase of an approximate 80,000 square foot multi use sterile manufacturing site in Raleigh, North Carolina from Seigent Pharmaceuticals. Total upfront consideration for the site include a cash payment of $5,500,000 plus assumed contractual obligations of approximately $30,000,000 through 2025. This acquisition also brings on board approximately 60 experienced manufacturing associates to the Indivior team. Speaker 400:18:20Over the next few years, the facility will continue to manufacture product for existing customers while tech transfer activities enabling the manufacturing of SUBLOCADE and PERSERIS take place. Total capital investment is estimated to be approximately $45,000,000 to 55,000,000 with the majority occurring next year. We also expect to absorb modest annual adjusted operating losses beginning this year and through 2025 with expected savings beginning in 2027. Before turning to questions, let me close by saying we are pleased with our execution and our financial results for the quarter. We believe year to date performance puts us solidly on track to deliver strong results for full year 2023. Speaker 400:19:09I will now turn the call back over to Mark. Speaker 300:19:12Thank you, Ryan. Just to summarize one more time, this is a strong quarter of execution by the team against Our strategic priorities highlighted by the upgrading guidance for SUBLOCADE, the settlement of the legacy litigation and several important business development transactions that will help secure our future. With that, I'll hand over to Sandra to help facilitate the Q and A session. Sandra? Speaker 100:19:35Thank you. We will now take the first question from the line of James Baines Tempus from Jefferies International Limited. Please go ahead. Speaker 500:20:09Yes. Hi. Thanks for taking my questions. A few if I may, please. Firstly, just wondering, are you seeing any pricing pressure with Brixardi? Speaker 500:20:17And also how much of the incremental SG and A investments you're making in Q4 reflect to this new entrant? And Second question also on SG and A. Just wondering if you could have a little bit more detail and particularly around the legal expenses. Just wondering whether they've been front end loaded into 9 months of this year and how we should think about those going into next year, especially if the trial was Canceled and what that might have made for this year as well. And then thirdly, just on the manufacturing side, you've given a little bit more detail I think in terms of What is it going to cost? Speaker 500:20:50But I guess just to take a step back, you mainly used contract manufacturers before. I was just kind of curious of the decision to sort of Establish a facility and you talk about mild operating losses until there can be expected savings by 20 27, but just wondering whether you can Triangulate this a little bit more quantitatively. Thank you. Speaker 300:21:11Thanks, James. Appreciate the questions. Let me go ahead and Start if I could with the pricing. Listen, I think we're in the market. We're not experiencing out of the ordinary pricing We believe on a net prices and a usage basis that it's a quite competitive versus other LAIs in the segment. Speaker 300:21:29Our access remains extremely strong with 90% of lives covered. And as everyone knows, we have a co pay program that brings out of pocket patient cost to 0. A few reminders with regards to this category. In relation to other specialty pharmacy sort of products, this category is at the very low end of pricing that enables a Unique supply chain that includes a closed distribution system for our controlled substance that is these long acting buprenorphine products. We focused on maintaining responsible pricing with annual sort of gross increases of about 5%, net of about 2% to 3%, which have either offset or recently partially offset the inflation and we intend to continue this responsible approach in 2024 and beyond. Speaker 300:22:15Additionally from a pricing standpoint, in this disease system, it's been marked by stigma, significant barriers treatment that result in less than 2 in 10 patients actually receiving treatment, our position on the category is that it should provide access All medications that gives the HCP and the patient choices for their best therapy for their individual journey. For this reason, when we work with formularies, we work on open access formulary Versus restrictive one of one formularies that impact choice for patients. And that's the approach we've It's always taken and will continue to take moving forward from a pricing standpoint. I'm going to handle the factoring site and then we'll move to the SG and A if you're okay with that James. I think from a new site standpoint, We continue to actively manage the risks on behalf of shareholders and the Raleigh site is about securing supply capacity For a greater than $1,500,000,000 sales of SUBLOCADE as well as PERSERIS in partnership with the partners and CMO sites that you've talked about. Speaker 300:23:25Over recent years, we've seen numerous parties have disruption in supply due to production and or site issues associated with sterile manufacturing. For us, Adding this site, it provides redundancy and flexibility to address potential issues. For me, The acquisition provides a very unique opportunity to acquire an FDA approved site designed specifically for sterile manufacturing as well as a team with experience That currently produces sterile manufacturing products. So it's the fastest and lowest risk pathway to having an incremental site up and running. And while it is for BCP purposes and continuity of supply, the modest losses in the short term are more than offset by cost savings Once we have commercial supply, it is an attractive NPV. Speaker 300:24:13So that's the supply. For the SG and A side, maybe I'll talk about The new entrant as it deals with the expansion and then I'll let Ryan talk about legal expenses and your the second half of your question. The expansion of the sales team has nothing to do with competitive entrants. This is an opportunity for us where we're entering year 4 And we have expanded into further organized health systems and now with the elimination of DADA2000, We have the opportunity to call on these independent physicians where SUBLOCADE hasn't been an option due to the administrative burden. So this is about expanding SUBLOCADE reach so that it's open for more patients and continuing the strong growth trajectory. Speaker 300:24:58So we're really excited about adding Approximately 40 incremental field facing people in the traditional sales channel and about another 8 or so on the criminal justice side to continue that access and that growth and having SUBLOCADE available to more patients. Ryan, do you want to handle the little bit broader SG and A question? Yes. Speaker 400:25:18Good morning, James. So on the first part of your question about SG and A and how it's impacting this year and the balance of the year, certainly to Mark's point, There will be a slight step up due to this expansion as we begin the hiring of the resources In Q4 to really ensure that we have a strong start to 2024 as well as some of these pipeline assets That Mark discussed as well and hence the reason why we did have to adjust our guidance a little bit. And just to give you a little more color on a full year basis, We're projecting roughly a $20,000,000 full year impact of this entire field sales force optimization, Which includes field sales force, CGS and also some additional heads to MSLs. In regards to legal expense, Yes. The bolus of the legal for the antitrust was incurred during the 1st 9 months of the year. Speaker 400:26:16Please keep in mind though that we still have some work to do in Q4. There are some other cases that we're in. So we will still have some legal spend Recurring for the balance of the year. Without getting into guidance for next year, there will certainly be some savings In the low double digits, I would say, going into next year due to some of these cases going away, but that will have to be factored into next year's cost projections And to see what type of legal situation we have to handle next year as well. But overall, we are excited about these investments. Speaker 400:26:50They are point on with our strategic priorities and we continue to reinforce our objective to have margin expansion Over the medium term as we committed at Capital Markets Day. Speaker 500:27:04Thanks very much all. Thanks, James. Speaker 100:27:07Thank you. We will now take the next question. One moment please. From the line of Thibault Fotheraine from Morgan Stanley. Please go ahead. Operator00:27:24Yes, thank you. So my first question is on the assumptions for generic Suboxone in the Q4. You exited the Q3 with 19% share. It's flat year on year. It looks like the new generic is not having A lot of impact so far, and we are today well into November. Operator00:27:45So I just wanted to know if this guidance is for the acceleration of decline in market share Is it based on something you are seeing on the market or if it's mostly being conservative? 2nd question on the Criminal Justice System. I mean, you mentioned the 300 units that you that have ordered already. What is the result in terms of penetration of the total CJS system? How far are you in terms of penetrating this channel? Operator00:28:15And then the third question on your cost base. So you have integrated Opiant. You are investing Can you give us a sense of how mature your sales and marketing infrastructure is for your current portfolio and how much more you feel like you have to invest. So So this is not a number, but just an indication of where you are in building the commercial structure? Thank you. Speaker 300:28:42Thanks, Thibault. Maybe what I'll do is I'll handle the CGS and cost question and then hand to Ryan to talk about the generic Suboxone entrant. With regards to CGS, again, really excited about the trajectory of this sub channel within organized health systems. And it's approaching 20% of the overall net revenue profile. And as I mentioned in my comments, we're in 300 Unique facilities that are actively prescribing and that's across over 30 states across the United States. Speaker 300:29:15There's over 5,000 Justice facilities across the U. S. And in the short term we're targeting the top 1,000. It doesn't preclude us from going to the 5,000, but that's what we're targeting with the sales team and we think the addition of these 8 incremental folks will help accelerate that journey of making SUBLOCADE an option With regards to the maturity of the go to market platform, I think this expansion and the nature of it, I think really sets us up for continued margin expansion as we move forward this leverageable platform. It resets so that we can have greater reach and frequency within organized health systems. Speaker 300:30:03It allows us to reach these independent physicians offices where SUBLOCADE hasn't been an option and gives us a nice stable platform moving forward in our go to market model entering year 4 of the ecosystem model. So with that, I'm going to hand over to Ryan to talk through the guide for the rest of the year on Generics Operator00:30:23about that. Speaker 400:30:23Thanks for the question. Yes, the film share has remained relatively flat at the 18% With the 4th generic in the market now, we have not seen any material impact just yet either on volume nor price. We still are projecting that there will be share erosion to our business this quarter. That is factored into the guidance that we shared this morning And it's been a consistent approach that we've taken over the last couple of years. Just want to remind everyone that we do not promote the film product, But I would say that the cash that it does generate is certainly a great benefit that we do value for the business. Operator00:31:09Thank you. Thank you. Speaker 100:31:11Thank you. We will now take the next question Operator00:31:23from the Speaker 100:31:23line of Max Herrmann from Stifel. Please go ahead. Speaker 600:31:27Great. Thanks, gentlemen, and congratulations on resolving The litigation on the antitrust, a number of questions, if I may. I'm trying to understand the sort of channels distribution channels for SUBLOCADE, obviously, you have the criminal justice system and you have the organized health system. We're seeing a slowdown in The prescription trends at least in the organized health system, I know you reported around 7% prescription growth quarter on quarter in the Q3 just now. So question is really, how big a opportunity is the, if you want to call it, the community Channel, the outside, the organized health system and criminal justice system channel, which was the bedrock of SUBOXONE in the past. Speaker 600:32:22I wonder if you know kind of how much of Suboxone prescriptions currently Suboxone film and Suboxone generics Going through that channel, what proportion versus the organized health system? That'll be my first question. Speaker 300:32:38Thanks for that Max. Listen, I think when it comes to SUBLOCADE, again, I can't emphasize enough How pleased I am with the tremendous progress the team's made executing against the OHS strategy. The ecosystem go to market model It's perfect for that strategy and the focus is on increasing the number of facilities actively dispensing, adding new physicians And increasing the number of patients per HCP. And now OHS represents 80% of the growth and the revenue. And While I do notice the quarter over quarter deceleration of growth, on a year over year basis, we're Still at over 50% growth in the quarter versus 2022 a year ago. Speaker 300:33:19So still extremely strong growth year over year And great momentum, as we look to close out the year. And it's that momentum that has really given us the confidence to go to increase our guidance To the upper half of the range $610,000,000 to $630,000,000 And I think more importantly, if we look at it from a patient lens, We're now helping over 120,000 patients, which is well on our way to the 270,000 patients required to hit the 1,500,000,000 Net revenue waypoint with regards to that we shared at Capital Markets Day. As I think about how large Well, the potential be for the alternate sites of care in the independent physicians, Max. I think first I'd like to start by applauding Albertsons for taking this step in their role to help the opioid epidemic. They are on the front On the leading foot of this really, really making this happen. Speaker 300:34:18And then I just want to remind everyone we're in the very early stages of this journey. Albertsons is the first one to set up this alternate sites of care. They started with 700 sites And now have expanded to 1,000, which can allow these physicians to now open up SUBLOCADE. But that's An early days of creating a national network, which we'll focus on. And then you also have to have, people in the field To pull through those and engage with the HCPs with regards to SUBLOCADE and those incremental sales people will only be in the field starting in Q1 2020.4. Speaker 300:34:56So this is This is the early stages of a very important sort of build. We think the predominant amount of volume and revenue opportunity is in Organized health systems, but this independent physicians is we expect to be a high return on investment. Speaker 600:35:13Great. Thank you. Second question is just a bit more color on, I mean, obviously, you got the BARDA grant for further R and D with Opdiva. Obviously, you're now just over a month into its launch. How's contracting going with the first responders? Speaker 300:35:31Yes. It's a good question, Max. And listen, we're excited. We had the product on time at the very Start of Q4, and we said Q4, a reminder as you're leading to 90% of the volume does flow through The public interest marks, the 1st responders, community action groups. As we've talked since we've acquired Opiant and gotten approval, The 1st year of launch is about building strong access via enabling the choices of stakeholders and that requires it requires standing orders at the state level, Funding approval for use of FDA approved funds for all rescue medications and then updating of EMS protocols for Opdiv. Speaker 300:36:14So we're Working on that foundational element to open up the markets, we're also adding in an experience program to help drive adoption Of Opdiv's real world patient outcomes as they're witnessed firsthand by the public interest markets and as that foundation is in place, we can drive larger scale demand. So still early days on contracting with the EMSs having only been available for about a month, but that foundation is the pure focus right now. Speaker 600:36:43And then a couple more questions, one on Subutadex U. S. You've obviously mentioned your launch in Germany. We've seen obviously with Camrys having upgrades on their performance ex U. S. Speaker 600:36:58With Bovedale, I wondered what your kind of experience has been ex, I guess, Canada, which is the market that You have a loan as well as with the U. S, but just kind of how you're performing in other markets, Germany, The Nordics and I think places like Australia. Speaker 300:37:22Yes, Max. Listen, we continue To be pleased with the progress we're making $30,000,000 of revenue year to date. Obviously, we're second to market in these markets Ex the U. S. And ex Canada, but making very good progress. Speaker 300:37:40Obviously, in Australia, outside of the one province where we have limited access, we have Strong share and growth equal to a follower in the market somewhere between 30% 45%. And in Finland, we're making Good inroads in the early days of launch, which just started this year. In Germany, of course, we've just launched Within the quarter. So we'll be reporting out on that as in the quarters to come. Speaker 600:38:13All right. And then final kind of more financial question, Maybe for Ryan, it's just can you give us a bit more color on the scale of the SUBOXONE Film rebate true up, If I understood it correctly. Speaker 400:38:28Sure. Yes, I would so first of all, I just want I'll remind everyone that this is a normal process that we do every quarter to take a look At our balance sheet accruals, we have to evaluate that we have the right liability on there for all the accruals and rebates for past quarters. And for this quarter, there was an adjustment that needed to be made. I would say, it was in the Low double digits in regards to the true up, but it is something that when you take a look at the business itself, We expect in our guidance that film would begin to erode again in Q4 in regards to share, But this is nothing that is abnormal in regards to the process, but still it's the right thing to do for us. Speaker 600:39:20I guess I'm trying to understand quantitatively, I think you reported working back Calculating at sort of $59,000,000 of SUBOXONE Film sales in the U. S, which was Down quite significantly from the Q2 despite kind of not seeing much difference in terms of prescription volumes. So That seems to be masked by the rebating change. And I wondered whether you're able to give us an idea of what the Back adjustment was for the rebating, is it you're talking high single digit millions or any ability to give us any kind of steer on that? Speaker 400:40:02Yes. And I think to your point just now, the film share has remained relatively flat in Q1 and Q2 and you saw what we booked in those quarters. So I think if you take what was our base underlying performance at that share and see what we booked in Q3, that kind of gives you the difference of what I just mentioned. Operator00:40:21Okay. Speaker 300:40:21Double Speaker 400:40:21digits in regards to the impact. Speaker 600:40:24Great. That's very helpful. Thank you. Thank you, Max. Speaker 100:40:30Thank If you wish to ask a Operator00:40:44question. Speaker 100:40:53There are no further questions at this time. I would like to hand back over the conference sorry, there is one more question, if that's okay. One moment please. And the question is from Thibault Boudin from Morgan Stanley. Please go ahead. Operator00:41:15Yes. Thanks for the follow-up. Maybe the first one coming back to the dynamics in the injectable The kind of early dynamics in terms of competition, do you see your competitor more kind of trying to grow their own prescriber base? Are they going after your business and trying to go after your own press release? First question. Operator00:41:392nd question, just want to maybe talk about a little bit about the carve out litigation with the payers that exited the MDL. I think you mentioned a trial in July next year. Just wanted to know if you could give us an idea of the next steps in terms of Proceeding here. And is the settlement something you would explore? And maybe just a third question on the OB contract. Operator00:42:06If you could Give us a bit more details on the economics and the meaning of the $32,000,000 value. So it's right to understand that this is mostly a commitment Of basically funding R and D plus some initial orders. So basically in terms of P and L impact, it's a bit of sales and then an offset to R and D next year? Thank you. Speaker 300:42:27Thanks, Tivo, for the follow ups. When it comes to Brixotti, I think we should ask their management team about their launch But when you're talking about long acting, typically those are new patients in the treatment that people are trying to get on versus trying to encourage switching So I think that's key. I think for me, I think there's such a huge unmet need in this category. I just want to with less than 2 in 10 patients in treatment And adherence such a need, I think there's plenty of room for 2 players here. And we continue to focus in both management and the sales team on the differentiated profile that SUBLOCADE provides and I think it's especially well suited for the U. Speaker 300:43:07S. Where the illicit supply chain has been overtaken by synthetic opioids. SUBLOCADE is backed by 5 years of HCP and patient experience and a wealth of real world evidence. And Just to remind you Thibault, I know you know, but I mean, SUBLOCADE has a very differentiated product profile. It has an immediate boost of therapeutic levels within 4 to 8 hours. Speaker 300:43:28Therapeutic levels are maintained the entire month, no on top or booster dosing in the label, very important when you're talking about adherence. And especially in the face of synthetic opioids, our maintenance dosing, it provides blockade effect of euphoric effects, whether it's the 2 nanogram per ml, 100 And maintenance or whether it's the 5 to 6 nanogram per ml, 300 milligram maintenance. So essentially it protects patients in their moments of weakness because the medications there at the therapeutic level. So we're focused on that differentiated profile that we don't see from other long actings with regards to our approach to the market. As let's go to the BARDA contract and then I'll come back to the unpayers. Speaker 300:44:11Listen, the BARDA contract, first I want to just start, there's been a long history of Support for OTVI and the nalmefene molecule as a next generation product to help with stronger faster acting synthetic opioids such And reminder both NIDA, BARDA supported Opdiv's product development. And now that we're post approval, we're excited to partner with BARDA even further. And the way I think about the current partnership is there is about $23,000,000 or so that's in support of post marketing commitments. These are pediatric clinicals, real world evidence as well as stability studies. And then there's about 9,000,000 Of commitment for about 100,000 units as well as inventory management of those 100 units. Speaker 300:44:57And then there's that accounts for the 32,000,000 Commitment and then there's option value up to $110,000,000 with the options of those 100,000 units for years 2 through 10. So that's The summary of the BARDA contract and we're excited about that and that they see this as the next standard of care to help with these synthetic opioids. Lastly, on the end payer opt outs, really the next step is trial is set For about the half year, and because the early focus has been on the proceeding that just happened with regards to statute of limitations, There'll be a number of sort of procedural things and learnings on the merits of the case between now and then, but it's relatively still relatively early stage On those opt outs. Operator00:45:48Thank you, Jessica. Thank you very much. Thank you, Tivo. Speaker 100:45:53Thank you. I would now like to turn the conference back to Mark Crosley, CEO for closing remarks. Speaker 300:46:00Yes. I'd like to thank everyone for their continued interest in Indivior. And in closing, I do want to thank the entire Indivior team for their continued hard work and dedication to our patients. Another strong quarter of growth in the business along with a number of strategic actions that set the business up for sustained and long term value creation. We look forward to closing out the year with momentum as we enter 2024. Speaker 300:46:24Thank you very much for your continued support. Speaker 100:46:27This concludes today's conference call. Thank you for participating. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallIndivior Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim report Indivior Earnings HeadlinesFY2025 EPS Estimates for Indivior Lifted by Northland CapmkApril 29, 2025 | americanbankingnews.comIndivior PLC Just Beat Analyst Forecasts, And Analysts Have Been Updating Their PredictionsApril 28, 2025 | finance.yahoo.comBlackrock’s Sending THIS Crypto Higher on PurposeWhile everyone's distracted by Bitcoin's moves, a stealth revolution is underway. One altcoin is quietly positioning itself to overthrow the entire banking system.May 6, 2025 | Crypto 101 Media (Ad)Indivior: Trying To Break AddictionApril 28, 2025 | seekingalpha.comIndivior (NASDAQ:INDV) Stock Price Up 5.6% on Earnings BeatApril 27, 2025 | americanbankingnews.comQ3 Earnings Forecast for Indivior Issued By Northland CapmkApril 26, 2025 | americanbankingnews.comSee More Indivior Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Indivior? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Indivior and other key companies, straight to your email. Email Address About IndiviorIndivior (NASDAQ:INDV), together with its subsidiaries, engages in the development, manufacture, and sale of buprenorphine-based prescription drugs for the treatment of opioid dependence and co-occurring disorders in the United States, the United Kingdom, and internationally. The company develops medicines to treat substance use disorders, serious mental illnesses, and opioid overdose. Its core marketed products include SUBLOCADE and SUBUTEX PRO buprenorphine extended-release monthly injections; SUBOXONE, a buprenorphine and naloxone sublingual film; SUBOXONE, a buprenorphine and naloxone sublingual tablet; and SUBUTEX, a buprenorphine sublingual tablet for the treatment of opioid use disorder. The company also offers OPVEE nasal spray for opioid overdose reversal; and PERSERIS extended-release injectable suspension for the treatment of schizophrenia in adults. In addition, it is developing INDV-2000, a selective orexin-1 receptor antagonist that completed phase 1 clinical trial for the treatment of opioid use disorder (OUD); INDV-1000, a selective GABAb positive allosteric modulator, which is in pre-clinical development phase for the treatment of alcohol use disorder in collaboration with ADDEX therapeutics; INDV-6001, a buprenorphine-based long-acting injectable for the treatment of OUD in collaboration with Alar Pharmaceuticals Inc.; and CT-102, a digital therapeutic for the treatment of OUD in collaboration with Click Therapeutics. Further, the company is developing INDV-5004, a drinabant injection to treat acute cannabinoid overdose. It has a strategic partnership with Aelis Farma to develop AEF0117, a synthetic CB1 specific signaling inhibitor that is in phase 2B clinical trial for the treatment of cannabis use disorder. The company was incorporated in 2014 and is headquartered in North Chesterfield, Virginia.View Indivior ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Palantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2 Upcoming Earnings ARM (5/7/2025)AppLovin (5/7/2025)Fortinet (5/7/2025)MercadoLibre (5/7/2025)Cencora (5/7/2025)Carvana (5/7/2025)Walt Disney (5/7/2025)Emerson Electric (5/7/2025)Johnson Controls International (5/7/2025)Lloyds Banking Group (5/7/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Good day, Speaker 100:00:00and thank you for standing by. Welcome to the Indivior Plc Q3 Results 2023 Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Jason Thompson. Speaker 100:00:36Please go ahead. Speaker 200:00:37Thanks, Sandra, and good morning, everyone, and welcome to our call to discuss our Q3 results. Before we begin, I need to remind you that today's comments include forward looking statements and that actual results may differ materially. Those factors that may cause actual results to differ are detailed on Slide 2 of our presentation, which is available on the Investor Relations portion of our website at www.indivior.com. Also, we will discuss adjusted financial measures. You can find a reconciliation of those measures to the reported amounts in the appendix of the presentation. Speaker 200:01:16With that, I'll now turn the call over to our CEO, Mark Crossley. Speaker 300:01:21Thank you, Jason, and good morning and good afternoon, everyone, and thanks for joining us. With me today to discuss our Q3 results are Ryan Preblec, our Chief Financial Officer and Doctor. Christian Heidbreder, our Chief Scientific Officer. For today's call, I'll provide an overview of the strategic progress after which Ryan will detail our financial performance and our 2023 guidance And then we'll move on to a question and answer period. Turning to Slide 4, it was another quarter of strong Double digit top line performance. Speaker 300:01:52Led by SUBLOCADE, 3rd quarter net revenues grew 17% year over year to $271,000,000 Adjusted operating profit of $60,000,000 which was modest up modestly versus the year ago quarter reflects the incremental operating expenses we've absorbed from adding the Opioid business, including launch costs for Opdiv this quarter. Based on our Q3 and year to date performance, we are confident that our teams will deliver another strong year of results in 2023, consistent with the attractive medium term profitable growth framework we set out last December. Importantly, we've narrowed our full year 2023 SUBLOCADE net revenue expectations to $610,000,000 to 630,000,000 which is the upper half of our previous range. At the midpoint, this would represent a 52% increase versus 2022. As you may have also seen in our updated guidance included in our announcement, we have evaluated and decided to make incremental investments behind SUBLOCADE To fuel its growth, our updated adjusted SG and A expectations for the full year reflect this. Speaker 300:03:02I'll cover these investments in more detail in a moment. In addition to continuing to progress and invest behind SUBLOCADE toward our peak net revenue goal of greater than $1,500,000,000 We took several actions aligned with our strategic priorities to strengthen Indivior's long term outlook. 1st and foremost was the settlement with the final class of the antitrust multi district litigants for $385,000,000 on October 23. In doing so, we've created more certainty for all stakeholders and avoided potentially costly and protracted litigation. With this legacy matter now behind us, we've gained greater focus on serving patient needs and on realizing the tremendous prospects we see ahead for Indivior. Speaker 300:03:492nd, we launched OTBI at the beginning of October and subsequently secured a multiyear partnership with the U. S. Biomedical Advanced Research and Development Authority, BARDA. The contract includes funding for additional post marketing and real world evidence and shelf life studies as well as procurement agreement for finished and packaged OT V product. Turning to Slide 5, during the quarter we also executed on a number of strategic initiatives that we believe will Strengthen our foundation for long term profitable growth. Speaker 300:04:24First, we acquired an aseptic manufacturing facility in Raleigh, North Carolina that will provide Indivior a secure long term source of supply for SUBLOCADE and PERSERIS. Ryan will have more detail on this acquisition in a moment, But this wholly owned facility is a strong signal of our confidence in delivering on our long term net revenue ambitions. 2nd, we acquired 2 important R and D assets to help address unmet patient needs for those suffering from opioid use disorder. We've taken full ownership of INDV2000, an oral Oryxin 1 from our partner C4xDiscovery. And most recently, we secured the global rights to Allaah Pharmaceuticals buprenorphine based long acting injectables portfolio. Speaker 300:05:12This includes LR's lead asset ALA1000, which has the potential to be the 1st long acting injectable for opioid use disorder delivered once every 3 months. In a disease space where adherence is one of the top challenges for patients, ALA1000 has the potential to provide an option for patients seeking a less frequent maintenance therapy regimen. Turning to our strategic priorities report card, beginning with SUBLOCADE. The strong net revenue performance was driven by our momentum in the organized health systems channel, which is now generating approximately 80% of SUBLOCADE's growth. As we indicated in our last quarterly call, We've taken the opportunity to evaluate incremental commercial investments as we approach the 4th year of our successful ecosystem operating model. Speaker 300:06:03We believe that these investments will strengthen SUBLOCADE's trajectory and generate positive long term returns with the expansion of our traditional field force and our Justice System teams. First, the expansion of our traditional field force by over 40 associates will enable broader reach and increased frequency across the organized health systems channel as well as increased capacity to call on independent practices. Following elimination of the DADA 2000 waiver, we believe that these smaller office based independent practices can now benefit from patient access to alternate sites of care, which eliminates the administrative burden associated with specialty products. Toward that end, our partnership with Albertsons, the large U. S. Speaker 300:06:48Food and drug retailer is delivering encouraging results and strengthens our belief in the opportunity to increase adoption among our legacy prescribing base, where previously the logistics and handling Challenges with SUBLOCADE post barriers to prescribing for these smaller practices. Along with our increased capacity to call on independent practices, We're also resourcing efforts to expand the alternate sites of care network to improve treatment access for providers and their patients. In addition, the Justice system continues to be our fastest growing OHS sub channel. Approximately 300 unique Justice We're actively ordering SUBLOCADE in the Q3. As a result, the Justice System sub channel is approaching 20% of SUBLOCADE's net revenue. Speaker 300:07:36The focus of our incremental commercial investments will also be on continuing to grow SUBLOCADE's access across all levels of the Justice System. The additional cost of these commercial investments is reflected in the modest increase in our SG and A guidance for the full year. On an annualized basis, we expect these investments will amount to approximately $20,000,000 If I turn to revenue diversification, I'm pleased to report another quarter of net revenue growth for our business outside the U. S. Driven by SUBLOCADE and SUBOXONE Film. Speaker 300:08:08Net revenue for SUBLOCADE in international markets was $30,000,000 year to date And we've successfully launched SUBLOCADE in Germany. For PERSERIS, we saw year over year growth of 38% in the quarter. On a sequential basis, net revenue was unchanged reflecting intensified competition from a new launch from a competitor. Despite this short term impact, we maintain our peak net revenue expectation for PERSERIS of $200,000,000 to 300,000,000 This reflects our strong belief in the growing opportunity for LAIs and schizophrenia where penetration remains low And we also believe in the attractive differentiated therapeutic profile of our product, which continues to resonate well with physicians. Finally, turning to Opvie, we launched on October 2nd and continue to believe that Opvie has the ideal profile to address the epidemic of overdoses Caused by fentanyl and other synthetic opioids, which are now the leading cause of death for people aged 18 to 45. Speaker 300:09:10Our OpV commercial strategy includes an approved experience program for states that are allowed to trial OpV within their population. We're also leveraging our government affairs team to ensure that state standing orders, grants and emergency medical service protocols are updated to include Opdiv as an overdose rescue treatment. And as I mentioned earlier, we're pleased to secure the potentially valuable multi year partnership with BARDA. Regarding our pipeline, Christian is here to answer any questions you may have. That said, I can report we continue to make good progress All of our key assets and post marketing studies. Speaker 300:09:45Last week, we held a positive end of Phase 1 meeting with the FDA for INDV2000 for opioid use disorder and we're still expecting Phase 2 data on INDV4002 for alcohol use disorder by the end of the year. Finally, on our operating model, we're maintaining our consistent approach to capital allocation in the near term. We continue to focus on prudent cash management that enables us to reinvest in the business while also continuing to meet our obligations to stakeholders. Lastly, we made tremendous progress in securing the capacity we need for delivering our long term net revenue ambitions for SUBLOCADE and PERSERIS. I've already mentioned the newly acquired plant in Raleigh, which combined with the validation of our 2nd contract manufacturing site this quarter will provide sufficient capacity for SUBLOCADE and BRICERIS. Speaker 300:10:36To summarize, this was a strong quarter of execution and delivery against our strategic priorities, highlighted by the strong momentum of SUBLOCADE, the settlement of legacy litigation and several important business development transactions that will help secure our future. With that, I'd like to now hand over to Ryan to take you through the results in more detail. Speaker 400:10:55Thanks, Mark, and good morning and good afternoon to everyone. Overall, I'm pleased to report another good quarter of execution and business momentum. We delivered strong top line growth driven by SUBLOCADE and we grew our adjusted operating income versus the prior year, absorbing another quarter's worth of Opiant expenses, including OpV launch expenses. Looking at the 3rd quarter results in more detail, starting with the top line. Total net revenue of $271,000,000 reflected growth of 17% versus the year ago quarter on a reported basis And 16% excluding the impact of FX. Speaker 400:11:36By geography, total U. S. Net revenue in the 3rd quarter grew by 20% versus the year ago quarter. Rest of the world was up 2% versus the prior year quarter and unchanged excluding the impact of FX. Positive contributions from new products continue to more than offset the ongoing competitive pressure on our legacy tablet products. Speaker 400:11:58SUBLOCADE net revenue outside of the U. S. In the Q3 grew 43% year over year to $10,000,000 Total SUBLOCADE net revenue of $167,000,000 for the Q3 of 2023 was up 55% versus the prior year and 8% sequentially. U. S. Speaker 400:12:19Dispensers were up 7% sequentially in the quarter and aligned with net revenue adjusting for modest stocking impact in the quarter. Moving to PERSERIS, Reported net revenue of $11,000,000 was up 38% versus the prior year and flat sequentially. Quarterly results were impacted by the near term competitive pressure that Mark mentioned. We remain confident in reaching our peak net revenue guidance of $200,000,000 to 300,000,000 Turning to SUBOXONE Film in the U. S. Speaker 400:12:52The average share of approximately 18% in the 3rd quarter was down about 1 percentage point versus both the 2nd quarter and the year ago quarter. Net revenue in the quarter was impacted By normal quarterly rebate accrual valuations, which in Q3 resulted in a true up in the low double digit range. As a reminder, we do not promote SUBOXONE Film in the U. S. Moving down to P and L. Speaker 400:13:18Our 3rd quarter adjusted gross margin of 84% was up 1 percentage point versus the prior year quarter, reflecting improved product mix, partially offset by cost inflation. Adjusted SG and A expenses were $150,000,000 in the quarter, up 33% versus Q3 of last year. The increase reflects higher legal activity related to the settled antitrust MDL, the addition of the Opiant business, including launch expenses for Opdiv and incremental SUBLOCADE commercial investments and ongoing year over year inflationary impacts. R and D expenses were $18,000,000 in the quarter, a decrease of 10% versus Q3 of last year, Benefiting from a high single digit credit from previously expensed process validation activities related to the LAI capacity expansion, which will not repeat. Our strong NRR performance helped to absorb the Opiant And Op Read launch expenses with adjusted operating income increasing to $60,000,000 in the 3rd quarter, up 3% versus $58,000,000 in the prior year on the same basis. Speaker 400:14:32We continue to expect the Opiant transaction to be accretive to earnings after the 2nd full year following Opdiv's October launch this year. Lastly on the P and L, Our adjusted net income of $49,000,000 grew 14% in the Q3 versus last year reflecting improvement in net finance income in addition to the dynamics I just highlighted. Quickly touching on the balance sheet and our capital position. We ended the Q3 with gross cash and investments of $774,000,000 before taking into account our term debt and other future payment obligations and liabilities as discussed in our results released earlier today. Considering the settlement payments related to the antitrust MDL, We still expect to end the year with good flexibility. Speaker 400:15:23This will allow us to continue to execute on our disciplined capital allocation strategy, which in the near term remains focused on reinvesting to fuel our base business towards our net revenue goals and meeting our stakeholder obligations. If there is excess cash, we will look at it in partnership with the Board for opportunities in business development and potential shareholder returns. Lastly, with a little less than 2 months remaining in the year, we are making some refinements to some of our full year guidance elements. We are maintaining total company full year 2023 net revenue guidance of $1,030,000,000 to $1,090,000,000 which we increased from $970,000,000 to $1,040,000,000 at the half year. However, For SUBLOCADE, based on current performance trends, we are narrowing our full year 2023 SUBLOCADE net revenue expectations to $610,000,000 to $630,000,000 which is the upper half of our previous range of 5.90 to $630,000,000 This represents a growth rate of 52% at this new midpoint compared to full year 2022. Speaker 400:16:39For VERSERIS, given the short term competitive pressure with the new entrant in the space, We now expect full year net revenue to be at the lower end of the $45,000,000 to $55,000,000 range. For U. S. Film, our previous view assumed an accelerated rate of share loss in the Q4 with the entry of the 4th generic in the U. S. Speaker 400:17:01As this new generic has now entered the market and while the impact has been modest so far, we are expecting additional share loss in the remaining month or so of the Q4. For SG and A, we are bringing up the full year 2023 range by $10,000,000 to $540,000,000 to 550,000,000 to reflect the targeted SUBLOCADE commercial investments that Mark detailed. Overall, our strong results continue to absorb Opiant and OpV launch And we are maintaining our view that adjusted operating income will be higher than last year's performance of $212,000,000 Finally, as Mark mentioned, we also took a further strategic step in establishing long term supply security for SUBLOCADE and PERSERIS And potentially other Indivior products with the purchase of an approximate 80,000 square foot multi use sterile manufacturing site in Raleigh, North Carolina from Seigent Pharmaceuticals. Total upfront consideration for the site include a cash payment of $5,500,000 plus assumed contractual obligations of approximately $30,000,000 through 2025. This acquisition also brings on board approximately 60 experienced manufacturing associates to the Indivior team. Speaker 400:18:20Over the next few years, the facility will continue to manufacture product for existing customers while tech transfer activities enabling the manufacturing of SUBLOCADE and PERSERIS take place. Total capital investment is estimated to be approximately $45,000,000 to 55,000,000 with the majority occurring next year. We also expect to absorb modest annual adjusted operating losses beginning this year and through 2025 with expected savings beginning in 2027. Before turning to questions, let me close by saying we are pleased with our execution and our financial results for the quarter. We believe year to date performance puts us solidly on track to deliver strong results for full year 2023. Speaker 400:19:09I will now turn the call back over to Mark. Speaker 300:19:12Thank you, Ryan. Just to summarize one more time, this is a strong quarter of execution by the team against Our strategic priorities highlighted by the upgrading guidance for SUBLOCADE, the settlement of the legacy litigation and several important business development transactions that will help secure our future. With that, I'll hand over to Sandra to help facilitate the Q and A session. Sandra? Speaker 100:19:35Thank you. We will now take the first question from the line of James Baines Tempus from Jefferies International Limited. Please go ahead. Speaker 500:20:09Yes. Hi. Thanks for taking my questions. A few if I may, please. Firstly, just wondering, are you seeing any pricing pressure with Brixardi? Speaker 500:20:17And also how much of the incremental SG and A investments you're making in Q4 reflect to this new entrant? And Second question also on SG and A. Just wondering if you could have a little bit more detail and particularly around the legal expenses. Just wondering whether they've been front end loaded into 9 months of this year and how we should think about those going into next year, especially if the trial was Canceled and what that might have made for this year as well. And then thirdly, just on the manufacturing side, you've given a little bit more detail I think in terms of What is it going to cost? Speaker 500:20:50But I guess just to take a step back, you mainly used contract manufacturers before. I was just kind of curious of the decision to sort of Establish a facility and you talk about mild operating losses until there can be expected savings by 20 27, but just wondering whether you can Triangulate this a little bit more quantitatively. Thank you. Speaker 300:21:11Thanks, James. Appreciate the questions. Let me go ahead and Start if I could with the pricing. Listen, I think we're in the market. We're not experiencing out of the ordinary pricing We believe on a net prices and a usage basis that it's a quite competitive versus other LAIs in the segment. Speaker 300:21:29Our access remains extremely strong with 90% of lives covered. And as everyone knows, we have a co pay program that brings out of pocket patient cost to 0. A few reminders with regards to this category. In relation to other specialty pharmacy sort of products, this category is at the very low end of pricing that enables a Unique supply chain that includes a closed distribution system for our controlled substance that is these long acting buprenorphine products. We focused on maintaining responsible pricing with annual sort of gross increases of about 5%, net of about 2% to 3%, which have either offset or recently partially offset the inflation and we intend to continue this responsible approach in 2024 and beyond. Speaker 300:22:15Additionally from a pricing standpoint, in this disease system, it's been marked by stigma, significant barriers treatment that result in less than 2 in 10 patients actually receiving treatment, our position on the category is that it should provide access All medications that gives the HCP and the patient choices for their best therapy for their individual journey. For this reason, when we work with formularies, we work on open access formulary Versus restrictive one of one formularies that impact choice for patients. And that's the approach we've It's always taken and will continue to take moving forward from a pricing standpoint. I'm going to handle the factoring site and then we'll move to the SG and A if you're okay with that James. I think from a new site standpoint, We continue to actively manage the risks on behalf of shareholders and the Raleigh site is about securing supply capacity For a greater than $1,500,000,000 sales of SUBLOCADE as well as PERSERIS in partnership with the partners and CMO sites that you've talked about. Speaker 300:23:25Over recent years, we've seen numerous parties have disruption in supply due to production and or site issues associated with sterile manufacturing. For us, Adding this site, it provides redundancy and flexibility to address potential issues. For me, The acquisition provides a very unique opportunity to acquire an FDA approved site designed specifically for sterile manufacturing as well as a team with experience That currently produces sterile manufacturing products. So it's the fastest and lowest risk pathway to having an incremental site up and running. And while it is for BCP purposes and continuity of supply, the modest losses in the short term are more than offset by cost savings Once we have commercial supply, it is an attractive NPV. Speaker 300:24:13So that's the supply. For the SG and A side, maybe I'll talk about The new entrant as it deals with the expansion and then I'll let Ryan talk about legal expenses and your the second half of your question. The expansion of the sales team has nothing to do with competitive entrants. This is an opportunity for us where we're entering year 4 And we have expanded into further organized health systems and now with the elimination of DADA2000, We have the opportunity to call on these independent physicians where SUBLOCADE hasn't been an option due to the administrative burden. So this is about expanding SUBLOCADE reach so that it's open for more patients and continuing the strong growth trajectory. Speaker 300:24:58So we're really excited about adding Approximately 40 incremental field facing people in the traditional sales channel and about another 8 or so on the criminal justice side to continue that access and that growth and having SUBLOCADE available to more patients. Ryan, do you want to handle the little bit broader SG and A question? Yes. Speaker 400:25:18Good morning, James. So on the first part of your question about SG and A and how it's impacting this year and the balance of the year, certainly to Mark's point, There will be a slight step up due to this expansion as we begin the hiring of the resources In Q4 to really ensure that we have a strong start to 2024 as well as some of these pipeline assets That Mark discussed as well and hence the reason why we did have to adjust our guidance a little bit. And just to give you a little more color on a full year basis, We're projecting roughly a $20,000,000 full year impact of this entire field sales force optimization, Which includes field sales force, CGS and also some additional heads to MSLs. In regards to legal expense, Yes. The bolus of the legal for the antitrust was incurred during the 1st 9 months of the year. Speaker 400:26:16Please keep in mind though that we still have some work to do in Q4. There are some other cases that we're in. So we will still have some legal spend Recurring for the balance of the year. Without getting into guidance for next year, there will certainly be some savings In the low double digits, I would say, going into next year due to some of these cases going away, but that will have to be factored into next year's cost projections And to see what type of legal situation we have to handle next year as well. But overall, we are excited about these investments. Speaker 400:26:50They are point on with our strategic priorities and we continue to reinforce our objective to have margin expansion Over the medium term as we committed at Capital Markets Day. Speaker 500:27:04Thanks very much all. Thanks, James. Speaker 100:27:07Thank you. We will now take the next question. One moment please. From the line of Thibault Fotheraine from Morgan Stanley. Please go ahead. Operator00:27:24Yes, thank you. So my first question is on the assumptions for generic Suboxone in the Q4. You exited the Q3 with 19% share. It's flat year on year. It looks like the new generic is not having A lot of impact so far, and we are today well into November. Operator00:27:45So I just wanted to know if this guidance is for the acceleration of decline in market share Is it based on something you are seeing on the market or if it's mostly being conservative? 2nd question on the Criminal Justice System. I mean, you mentioned the 300 units that you that have ordered already. What is the result in terms of penetration of the total CJS system? How far are you in terms of penetrating this channel? Operator00:28:15And then the third question on your cost base. So you have integrated Opiant. You are investing Can you give us a sense of how mature your sales and marketing infrastructure is for your current portfolio and how much more you feel like you have to invest. So So this is not a number, but just an indication of where you are in building the commercial structure? Thank you. Speaker 300:28:42Thanks, Thibault. Maybe what I'll do is I'll handle the CGS and cost question and then hand to Ryan to talk about the generic Suboxone entrant. With regards to CGS, again, really excited about the trajectory of this sub channel within organized health systems. And it's approaching 20% of the overall net revenue profile. And as I mentioned in my comments, we're in 300 Unique facilities that are actively prescribing and that's across over 30 states across the United States. Speaker 300:29:15There's over 5,000 Justice facilities across the U. S. And in the short term we're targeting the top 1,000. It doesn't preclude us from going to the 5,000, but that's what we're targeting with the sales team and we think the addition of these 8 incremental folks will help accelerate that journey of making SUBLOCADE an option With regards to the maturity of the go to market platform, I think this expansion and the nature of it, I think really sets us up for continued margin expansion as we move forward this leverageable platform. It resets so that we can have greater reach and frequency within organized health systems. Speaker 300:30:03It allows us to reach these independent physicians offices where SUBLOCADE hasn't been an option and gives us a nice stable platform moving forward in our go to market model entering year 4 of the ecosystem model. So with that, I'm going to hand over to Ryan to talk through the guide for the rest of the year on Generics Operator00:30:23about that. Speaker 400:30:23Thanks for the question. Yes, the film share has remained relatively flat at the 18% With the 4th generic in the market now, we have not seen any material impact just yet either on volume nor price. We still are projecting that there will be share erosion to our business this quarter. That is factored into the guidance that we shared this morning And it's been a consistent approach that we've taken over the last couple of years. Just want to remind everyone that we do not promote the film product, But I would say that the cash that it does generate is certainly a great benefit that we do value for the business. Operator00:31:09Thank you. Thank you. Speaker 100:31:11Thank you. We will now take the next question Operator00:31:23from the Speaker 100:31:23line of Max Herrmann from Stifel. Please go ahead. Speaker 600:31:27Great. Thanks, gentlemen, and congratulations on resolving The litigation on the antitrust, a number of questions, if I may. I'm trying to understand the sort of channels distribution channels for SUBLOCADE, obviously, you have the criminal justice system and you have the organized health system. We're seeing a slowdown in The prescription trends at least in the organized health system, I know you reported around 7% prescription growth quarter on quarter in the Q3 just now. So question is really, how big a opportunity is the, if you want to call it, the community Channel, the outside, the organized health system and criminal justice system channel, which was the bedrock of SUBOXONE in the past. Speaker 600:32:22I wonder if you know kind of how much of Suboxone prescriptions currently Suboxone film and Suboxone generics Going through that channel, what proportion versus the organized health system? That'll be my first question. Speaker 300:32:38Thanks for that Max. Listen, I think when it comes to SUBLOCADE, again, I can't emphasize enough How pleased I am with the tremendous progress the team's made executing against the OHS strategy. The ecosystem go to market model It's perfect for that strategy and the focus is on increasing the number of facilities actively dispensing, adding new physicians And increasing the number of patients per HCP. And now OHS represents 80% of the growth and the revenue. And While I do notice the quarter over quarter deceleration of growth, on a year over year basis, we're Still at over 50% growth in the quarter versus 2022 a year ago. Speaker 300:33:19So still extremely strong growth year over year And great momentum, as we look to close out the year. And it's that momentum that has really given us the confidence to go to increase our guidance To the upper half of the range $610,000,000 to $630,000,000 And I think more importantly, if we look at it from a patient lens, We're now helping over 120,000 patients, which is well on our way to the 270,000 patients required to hit the 1,500,000,000 Net revenue waypoint with regards to that we shared at Capital Markets Day. As I think about how large Well, the potential be for the alternate sites of care in the independent physicians, Max. I think first I'd like to start by applauding Albertsons for taking this step in their role to help the opioid epidemic. They are on the front On the leading foot of this really, really making this happen. Speaker 300:34:18And then I just want to remind everyone we're in the very early stages of this journey. Albertsons is the first one to set up this alternate sites of care. They started with 700 sites And now have expanded to 1,000, which can allow these physicians to now open up SUBLOCADE. But that's An early days of creating a national network, which we'll focus on. And then you also have to have, people in the field To pull through those and engage with the HCPs with regards to SUBLOCADE and those incremental sales people will only be in the field starting in Q1 2020.4. Speaker 300:34:56So this is This is the early stages of a very important sort of build. We think the predominant amount of volume and revenue opportunity is in Organized health systems, but this independent physicians is we expect to be a high return on investment. Speaker 600:35:13Great. Thank you. Second question is just a bit more color on, I mean, obviously, you got the BARDA grant for further R and D with Opdiva. Obviously, you're now just over a month into its launch. How's contracting going with the first responders? Speaker 300:35:31Yes. It's a good question, Max. And listen, we're excited. We had the product on time at the very Start of Q4, and we said Q4, a reminder as you're leading to 90% of the volume does flow through The public interest marks, the 1st responders, community action groups. As we've talked since we've acquired Opiant and gotten approval, The 1st year of launch is about building strong access via enabling the choices of stakeholders and that requires it requires standing orders at the state level, Funding approval for use of FDA approved funds for all rescue medications and then updating of EMS protocols for Opdiv. Speaker 300:36:14So we're Working on that foundational element to open up the markets, we're also adding in an experience program to help drive adoption Of Opdiv's real world patient outcomes as they're witnessed firsthand by the public interest markets and as that foundation is in place, we can drive larger scale demand. So still early days on contracting with the EMSs having only been available for about a month, but that foundation is the pure focus right now. Speaker 600:36:43And then a couple more questions, one on Subutadex U. S. You've obviously mentioned your launch in Germany. We've seen obviously with Camrys having upgrades on their performance ex U. S. Speaker 600:36:58With Bovedale, I wondered what your kind of experience has been ex, I guess, Canada, which is the market that You have a loan as well as with the U. S, but just kind of how you're performing in other markets, Germany, The Nordics and I think places like Australia. Speaker 300:37:22Yes, Max. Listen, we continue To be pleased with the progress we're making $30,000,000 of revenue year to date. Obviously, we're second to market in these markets Ex the U. S. And ex Canada, but making very good progress. Speaker 300:37:40Obviously, in Australia, outside of the one province where we have limited access, we have Strong share and growth equal to a follower in the market somewhere between 30% 45%. And in Finland, we're making Good inroads in the early days of launch, which just started this year. In Germany, of course, we've just launched Within the quarter. So we'll be reporting out on that as in the quarters to come. Speaker 600:38:13All right. And then final kind of more financial question, Maybe for Ryan, it's just can you give us a bit more color on the scale of the SUBOXONE Film rebate true up, If I understood it correctly. Speaker 400:38:28Sure. Yes, I would so first of all, I just want I'll remind everyone that this is a normal process that we do every quarter to take a look At our balance sheet accruals, we have to evaluate that we have the right liability on there for all the accruals and rebates for past quarters. And for this quarter, there was an adjustment that needed to be made. I would say, it was in the Low double digits in regards to the true up, but it is something that when you take a look at the business itself, We expect in our guidance that film would begin to erode again in Q4 in regards to share, But this is nothing that is abnormal in regards to the process, but still it's the right thing to do for us. Speaker 600:39:20I guess I'm trying to understand quantitatively, I think you reported working back Calculating at sort of $59,000,000 of SUBOXONE Film sales in the U. S, which was Down quite significantly from the Q2 despite kind of not seeing much difference in terms of prescription volumes. So That seems to be masked by the rebating change. And I wondered whether you're able to give us an idea of what the Back adjustment was for the rebating, is it you're talking high single digit millions or any ability to give us any kind of steer on that? Speaker 400:40:02Yes. And I think to your point just now, the film share has remained relatively flat in Q1 and Q2 and you saw what we booked in those quarters. So I think if you take what was our base underlying performance at that share and see what we booked in Q3, that kind of gives you the difference of what I just mentioned. Operator00:40:21Okay. Speaker 300:40:21Double Speaker 400:40:21digits in regards to the impact. Speaker 600:40:24Great. That's very helpful. Thank you. Thank you, Max. Speaker 100:40:30Thank If you wish to ask a Operator00:40:44question. Speaker 100:40:53There are no further questions at this time. I would like to hand back over the conference sorry, there is one more question, if that's okay. One moment please. And the question is from Thibault Boudin from Morgan Stanley. Please go ahead. Operator00:41:15Yes. Thanks for the follow-up. Maybe the first one coming back to the dynamics in the injectable The kind of early dynamics in terms of competition, do you see your competitor more kind of trying to grow their own prescriber base? Are they going after your business and trying to go after your own press release? First question. Operator00:41:392nd question, just want to maybe talk about a little bit about the carve out litigation with the payers that exited the MDL. I think you mentioned a trial in July next year. Just wanted to know if you could give us an idea of the next steps in terms of Proceeding here. And is the settlement something you would explore? And maybe just a third question on the OB contract. Operator00:42:06If you could Give us a bit more details on the economics and the meaning of the $32,000,000 value. So it's right to understand that this is mostly a commitment Of basically funding R and D plus some initial orders. So basically in terms of P and L impact, it's a bit of sales and then an offset to R and D next year? Thank you. Speaker 300:42:27Thanks, Tivo, for the follow ups. When it comes to Brixotti, I think we should ask their management team about their launch But when you're talking about long acting, typically those are new patients in the treatment that people are trying to get on versus trying to encourage switching So I think that's key. I think for me, I think there's such a huge unmet need in this category. I just want to with less than 2 in 10 patients in treatment And adherence such a need, I think there's plenty of room for 2 players here. And we continue to focus in both management and the sales team on the differentiated profile that SUBLOCADE provides and I think it's especially well suited for the U. Speaker 300:43:07S. Where the illicit supply chain has been overtaken by synthetic opioids. SUBLOCADE is backed by 5 years of HCP and patient experience and a wealth of real world evidence. And Just to remind you Thibault, I know you know, but I mean, SUBLOCADE has a very differentiated product profile. It has an immediate boost of therapeutic levels within 4 to 8 hours. Speaker 300:43:28Therapeutic levels are maintained the entire month, no on top or booster dosing in the label, very important when you're talking about adherence. And especially in the face of synthetic opioids, our maintenance dosing, it provides blockade effect of euphoric effects, whether it's the 2 nanogram per ml, 100 And maintenance or whether it's the 5 to 6 nanogram per ml, 300 milligram maintenance. So essentially it protects patients in their moments of weakness because the medications there at the therapeutic level. So we're focused on that differentiated profile that we don't see from other long actings with regards to our approach to the market. As let's go to the BARDA contract and then I'll come back to the unpayers. Speaker 300:44:11Listen, the BARDA contract, first I want to just start, there's been a long history of Support for OTVI and the nalmefene molecule as a next generation product to help with stronger faster acting synthetic opioids such And reminder both NIDA, BARDA supported Opdiv's product development. And now that we're post approval, we're excited to partner with BARDA even further. And the way I think about the current partnership is there is about $23,000,000 or so that's in support of post marketing commitments. These are pediatric clinicals, real world evidence as well as stability studies. And then there's about 9,000,000 Of commitment for about 100,000 units as well as inventory management of those 100 units. Speaker 300:44:57And then there's that accounts for the 32,000,000 Commitment and then there's option value up to $110,000,000 with the options of those 100,000 units for years 2 through 10. So that's The summary of the BARDA contract and we're excited about that and that they see this as the next standard of care to help with these synthetic opioids. Lastly, on the end payer opt outs, really the next step is trial is set For about the half year, and because the early focus has been on the proceeding that just happened with regards to statute of limitations, There'll be a number of sort of procedural things and learnings on the merits of the case between now and then, but it's relatively still relatively early stage On those opt outs. Operator00:45:48Thank you, Jessica. Thank you very much. Thank you, Tivo. Speaker 100:45:53Thank you. I would now like to turn the conference back to Mark Crosley, CEO for closing remarks. Speaker 300:46:00Yes. I'd like to thank everyone for their continued interest in Indivior. And in closing, I do want to thank the entire Indivior team for their continued hard work and dedication to our patients. Another strong quarter of growth in the business along with a number of strategic actions that set the business up for sustained and long term value creation. We look forward to closing out the year with momentum as we enter 2024. Speaker 300:46:24Thank you very much for your continued support. Speaker 100:46:27This concludes today's conference call. Thank you for participating. You may now disconnect.Read morePowered by