Indivior Q1 2025 Earnings Report

Indivior EPS Results

• Actual EPS: $0.41
• Consensus EPS: $0.22
• Beat/Miss: Beat by +$0.19
• One Year Ago EPS: N/A

Indivior Revenue Results

• Actual Revenue: $266.00 million
• Expected Revenue: $240.13 million
• Beat/Miss: Beat by +$25.87 million
• YoY Revenue Growth: N/A

Indivior Announcement Details

• Quarter: Q1 2025
• Date: 4/24/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, April 24, 2025
• Conference Call Time: 8:00AM ET

Indivior (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.

Indivior Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Indivia plc Q1 twenty twenty five Financial Results Conference Call. After the speakers' presentation, there will be a question and answer session. 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.

[Operator]

Please go ahead.

[Jason Thompson, Vice President of Investor Relations at Indivior]

Thanks, Heidi, and good morning and good afternoon, everyone. Before we begin, I need to remind everyone that on today's call, we may make forward looking statements that are subject to risks and uncertainties and that actual results may differ materially. We list the factors that may cause our results to be materially different on slide two of this presentation. We also may refer to non GAAP measures, the reconciliations for which may also be found in the appendix to the presentation that is now posted on our website indivior.com. I'll now turn the call over to Mark Crossley, our CEO.

[Mark Crossley, CEO & Executive Director at Indivior]

Thanks, Jason. Good morning and good afternoon, everyone. Thanks for joining us on this call to discuss our financial and business performance during the first quarter of twenty twenty five. I'll start with a brief overview of the quarter before handing it over to Ryan, our Chief Financial Officer to discuss the financials. We'll then conclude with a Q and A session during which we'll be joined by Christian Heidbreeder, our Chief Scientific Officer.

[Mark Crossley, CEO & Executive Director at Indivior]

Turning to slide four, overall results in the first quarter were in line with our expectations and consistent with our full year 2025 outlook. Total net revenue in the quarter declined by 6% year on year. The results primarily reflects intensified competition from the generic film providers that resulted in lower Suboxone film pricing as well as the discontinuation of PERSERIS. This total net revenue performance was in line with our full year net revenue outlook as was a modest 2% year over year decline in SUBLOCADE net revenue in the quarter. As expected, SUBLOCADE net revenue performance in the quarter was primarily impacted by near term justice system funding challenges.

[Mark Crossley, CEO & Executive Director at Indivior]

These impacts were partially offset by net revenue growth for SUBLOCADE in the organized health system channel. We ended the first quarter having treated approximately 170,700 patients in the prior twelve month period in The US, which is a 14% increase year over year. Looking at patient dynamics, our analysis indicates that The US LAI category is continuing to stabilize with SUBLOCADE maintaining expected share levels. Setting aside the justice system, SUBLOCADE's new patient share averaged over 70% in the quarter and has been stable for three quarters. Furthermore, our cohort analysis indicates that SUBLOCADE share among experienced dual prescribers has remained stable at approximately 65%.

[Mark Crossley, CEO & Executive Director at Indivior]

Our belief is that this stabilization of share reflects SUBLOCADE's unique product profile. Looking ahead, we continue to expect SUBLOCADE net revenue performance to improve in the second half of the year from the commercial investments we're making and from the important label updates that we believe will further improve the patient and physician experience. Turning to non GAAP adjusted operating profit. This increased by 10% versus the year ago quarter, primarily reflecting lower expenses partially offsetting the reduction in total net revenue. Set against this, we've made good progress in our efforts to streamline our cost base and drive gross savings of over $100,000,000 in 2025.

[Mark Crossley, CEO & Executive Director at Indivior]

Ryan will share more details on our streamlining progress in a moment. As we previously indicated, we're reinvesting approximately $50,000,000 of these gross savings behind SUBLOCADE in our pipeline, while the balance of over $50,000,000 will be used to protect our profit and drop to the bottom line. Taken together, we're on track to deliver our full year 2025 guidance. Lastly, as you're aware, I'll be stepping down as CEO of Indivior with anticipated effect from our AGM in May. It's been an immense privilege to lead Indivior over the past five years and I'm proud of what we've achieved together.

[Mark Crossley, CEO & Executive Director at Indivior]

We've grown SUBLOCADE into an important treatment for opioid use disorder and in doing so we've helped many hundreds of thousands of patients on their path to recovery. Through our tireless efforts and advocacy, we've been on the front line of combating one of the biggest health epidemics of our times and we've made great progress in de risking Indivior by clearing legacy issues so that we can fulfill our mission and vision unencumbered. With this strong foundation in place, I'm confident that our team under Joe's leadership will deliver on the next chapter of growth and value creation for Indivior and its stakeholders. I'd now like to hand the call over to Ryan.

[Ryan Preblick, CFO at Indivior]

Thanks, Mark, and good morning and good afternoon to everyone. Overall, as Mark mentioned, this quarter's financial performance aligned with our expectations we communicated in late February. Looking at the first quarter results in more detail, starting with the top line. Total net revenue of $266,000,000 declined 6% versus the year ago quarter, driven by the expected competitive pressure in Suboxone film and our decision to discontinue PERSERIS last July. By geography, total U.

[Ryan Preblick, CFO at Indivior]

S. Net revenue in the first quarter declined by 8% versus the year ago quarter driven by these same dynamics. Rest of World was up 3% on a reported and 1% on a constant currency basis. The Rest of World Q1 of last year was negatively impacted by shipment timing as we had mentioned last year. Overall, SUBLOCADE's performance in Q1 was in line with our expectations.

[Ryan Preblick, CFO at Indivior]

Total SUBLOCADE net revenue declined 2% in the first quarter versus the same year ago quarter. We continue to see good growth from SUBLOCADE outside The U. S. With net revenue up 8% to $13,000,000 SUBLOCADE's US performance reflected solid dispense volume growth in the OHS channel that was partially offset by near term funding challenges among certain justice system accounts that resulted in significantly lower dispense volume from this channel. Lower pricing from higher rebating activity and unfavorable channel mix resulted in modestly lower net revenue year over year.

[Ryan Preblick, CFO at Indivior]

On a sequential basis, SUBLOCADE's U. S. Net revenue declined 9%, reflecting a 6% decline in dispense volume, coupled with destocking in the quarter. This performance, coupled with our updated cohort and new patient share data, reinforced the midpoint of our full year guidance for SUBLOCADE net revenue of $725,000,000 to $765,000,000 which we are confirming today. Opti net revenue was immaterial in the first quarter as we continue to roll out trialing programs and work to ensure that medicine is included in standing orders across all states.

[Ryan Preblick, CFO at Indivior]

We continue to expect full year net revenue of $10,000,000 to $15,000,000 including an $8,000,000 product order from BARDA. Turning to the SUBOXONE Film in The US, the average share of approximately 15% in the first quarter was in line with our planning expectations and down approximately three percentage points versus the same year ago quarter. The current quarter did benefit from a prior quarter trade spend release in the mid single digit millions. As we mentioned in February in our 2025 guide discussion, the generic film price eroded at the end of full year 2024, and we took the appropriate actions to maintain formulary access in Q1. Our full year 2025 guidance still assumes further price erosion throughout the year.

[Ryan Preblick, CFO at Indivior]

As a reminder, we do not promote Suboxone film in The US. Moving down to P and L, our first quarter gross margin of 83% was down versus the prior year quarter. Q1 twenty twenty four included the benefit of saleable process validation batches of SUBLOCADE from our expanded production capacity by our contract manufacturer. I do want to briefly discuss a topic on most investors' minds these days, tariffs. We are closely monitoring the evolving landscape, mindful that these things change daily.

[Ryan Preblick, CFO at Indivior]

As the landscape currently stands and based upon the geographical makeup of our primarily U. S. Cost of goods sold and manufacturing activities, we believe the potential tariff impacts are manageable and within our non GAAP gross margin guidance range of a low to mid 80% for the full year. Moving on to operating expenses, non GAAP adjusted SG and A expenses were $130,000,000 in the quarter, down 8% versus Q1 of last year. The decrease primarily reflects our streamlining actions, the discontinuation of PERSERIS and an accrual release in the low to mid single digits related to the mandated IRS Pharma branded fee, which still may have to be adjusted later in the year upon final invoicing.

[Ryan Preblick, CFO at Indivior]

R and D expenses were $22,000,000 in the quarter, a decrease of 19% versus Q1 of last year. This decrease reflects the reprioritization of pipeline activities solely to our Phase two OUD assets and the previously mentioned cost savings. Our first quarter non GAAP adjusted operating income of $69,000,000 was down 10% from Q1 of last year, due primarily to the Suboxone film and PERSERIS net revenue dynamics, partially offset by the streamlining activities on our cost basis. Non GAAP adjusted net income of $51,000,000 decreased 11% versus Q1 of last year, reflecting the dynamics I just highlighted in addition to an increase in net finance expenses. Our effective tax rate for Q1 was 19%, primarily benefiting from certain UK deductions.

[Ryan Preblick, CFO at Indivior]

For the full year, we are still expecting an effective tax rate of 22% to 25%. Lastly on our P and L, our non GAAP adjusted earnings per share decreased 2% to $0.41 reflecting a lower non GAAP adjusted net income, partially offset by an approximate 9% lower diluted share count. Quickly touching on the balance sheet, our capital position, we ended the first quarter with gross cash and investments of $400,000,000 higher than expected due to a decrease in net working capital from delayed Medicaid billing of approximately $100,000,000 in the quarter. Material cash outflows during Q1 included scheduled annual settlement payments of $65,000,000 to the DOJ, RB, and Humana and Centene. Looking ahead, we expect to maintain good financial flexibility and to continue our disciplined capital allocation strategy.

[Ryan Preblick, CFO at Indivior]

In the near term, as we discussed in February, this remains focused on reinvesting to fuel our base business towards our net revenue goals and meeting our stakeholder obligations. Moving to Slide eight, at this point in the year and with the visibility we have in trends for the balance of the year, we remain confident we are on track to deliver the financial results we articulated in February. Before concluding, we now expect to file our 10 Q early next week, which will contain relevant litigation developments. I'll simply note at this time that earlier this week, the court granted our motion to dismiss The US Shareholder claims against us, although the court granted the plaintiffs thirty days to amend their complaint. Also, continue to make progress towards a definitive opioid MDL settlement consistent with our existing accrual.

[Ryan Preblick, CFO at Indivior]

Beyond that, there are no other major litigation updates worth noting. I will now turn the call back over to Mark.

[Mark Crossley, CEO & Executive Director at Indivior]

Thank you, Ryan. So in summary, we delivered a first quarter performance that was in line with our planning assumptions and puts us on track to deliver on our 2025 commitments. With that, I'll open up the call to Q and A.

[Operator]

Thank We will take our first question. And the first question comes from the line of Karl Burns from Northland Capital Markets. Please go ahead. Your line is open.

[Carl Byrnes, Managing Director at Northland Capital Markets]

Thanks for the question and congratulations on the quarter. I'm wondering if there are any proposals regarding Medicaid funding that might change your outlook. Thanks.

[Mark Crossley, CEO & Executive Director at Indivior]

Thanks for that, Karl. Listen, similar to the tariffs and things that are going on there, this is an evolving sort of situation that continues to change kind of day to day. So we're keeping a close eye on it. I think one of the positives we see is this continues to be a bipartisan issue. And when you look at the health agenda for the administration, one of the top six is both rescue and treatment for opioid use disorder.

[Mark Crossley, CEO & Executive Director at Indivior]

So we a strong signal from the administration with their affinity for helping with the opioid epidemic.

[Carl Byrnes, Managing Director at Northland Capital Markets]

Got it, great. Thank you. Thank you.

[Operator]

We will take our next question. Your next question comes from the line of David Amsellem from Piper Sandler. Please go ahead. Your line is open.

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

Thanks. So I guess a couple for me. Number one is, can you talk about when you think you'll start to see a return to growth for SUBLOCADE? And I guess where I'm going with this is how are you thinking about the competitive landscape, stabilization in terms of the mix between your competitor and SUBLOCADE in terms of new starts? How are you thinking about an eventual return to growth or or just a better footprint in the criminal justice system, which you cited as being a, you know, an important driver?

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

And then sort of with new leadership coming in, when are we going to start to get a better flavor for what you might do differently regarding your commercial strategy? I know there's a lot there, but I wanted to hit all the high notes. Thank you.

[Mark Crossley, CEO & Executive Director at Indivior]

No, there is a lot to unpack there, David. Let me start with your second question first because I think it's the easiest. Listen, I won't speak for Joe at all with regards to his initial impressions. What I will say is he has been active in his onboarding and assuming things get shareholder approval at the AGM, he will come in immediately as CEO and I'll leave him to speak about his impressions and his near term actions. As it goes to the growth of SUBLOCADE, I think the guidance has been pretty clear with regards to we have this initial impact that really started right from the beginning of the first quarter with regards to the CGS funding issues, which has disproportionately impacted that.

[Mark Crossley, CEO & Executive Director at Indivior]

We talked about about a 30% impact. We see with our marketing initiatives, with our label enhancements which enhance both the HCP and the patient experience, we see growth on organized health system accelerating through the year as those new initiatives take hold. So very excited about that moving forward and that's further reinforced by what we're continuing to see in the dynamics in the disease space. And David, you talked about new patient share. We've seen new patient share stabilize over the last three quarters, seventy two percent for SUBLOCADE in 3Q, '70 '1 percent in Q4, '70 '2 percent in Q1.

[Mark Crossley, CEO & Executive Director at Indivior]

So very, very stabilized with regards to that. We're seeing the new cohorts, or excuse me, the experienced dual prescribing cohorts which are remaining stable at sixty fivethirty five for SUBLOCADE. So we're seeing a very stable environment where the disease space has adjusted to the two players with SUBLOCADE as a clear leader in a heavily dominated synthetic opioid choice of an abuse substance. So that for us is very positive. We do expect that there are a number of providers that have not tried the competitive product yet.

[Mark Crossley, CEO & Executive Director at Indivior]

We expect that trial to continue through the year. So at that point we'd expect the market to be stabilized out based on the two players and to be a little bit more status quo in '26 and beyond, where you really are totally focused on category growth, getting more people into long acting injectables and on their road to recovery.

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

Okay. Appreciate it. Thank you.

[Mark Crossley, CEO & Executive Director at Indivior]

Thank you, David.

[Operator]

Thank you. We will take our next question. Your next question comes from the line of Christian Glennie from Stifel. Please go ahead. Your line is open.

[Christian Glennie, Director - Healthcare at Stifel Institutional]

Yes. Good morning, guys. Thanks for taking the questions. First one then please, just to touch on CGS dynamic and expectations for the rest of the year. It showed an accelerating decline in that as you had guided versus sort of the previous quarters.

[Christian Glennie, Director - Healthcare at Stifel Institutional]

But does this sort of set then a new base for that business that when you talk about sequential potential growth stabilization for SUBLOCADE overall that it could also be the same scenario in the CGS part of the market? And then related to that, is there anything that sort of particularly changed the dynamic in terms of funding in this part of the market that you can see or something that sort of improves the funding as we step through the rest of this year on the CGS? Thanks.

[Mark Crossley, CEO & Executive Director at Indivior]

Christian, thanks for holding me accountable on that question from David, because I didn't specifically address criminal justice. We did see the budget implications hit right from the start in Q1, and most of that has hit and will a little bit more pull through in Q2. So we expect growth in criminal justice through on a quarter over quarter basis through the balance of the year as we add new systems and bring on new accounts. With regards to the overall funding environment, really there's we think these are short term implications, albeit it can be a bit lumpy with regards to account to account implications as they come. You've got really three interventions that can happen as justice systems move forward to get more funding.

[Mark Crossley, CEO & Executive Director at Indivior]

The first is they can ask to move budgets from operations over to their pharma, right? And so they save resources on daily dosing and they can shift that over to the pharma side. So that's one place they can do that. That's obviously a much longer burn because many of these are government accounts and their budget cycles are quite long. The second is they can apply for abatement funds and grants to help fund and those are also longer cycle.

[Mark Crossley, CEO & Executive Director at Indivior]

The abatement funds are starting to work their way through the system a bit so they can get those. And for me, most importantly, the last development is the Medicaid eleven fifteen waivers. What we're seeing here is we have 19 states that have had approval for these waivers. For me, it's a really strong sort of voice from the states with regards to their desire to fund and help patients that get into recovery while they're in the justice system. And we know sixty percent of our patients are in the justice system.

[Mark Crossley, CEO & Executive Director at Indivior]

And interestingly, in the 19 states that have received approval that still have to operationalize, we expect to start in 2026, over 60% of the LAI category sort of volume is covered in those 19 states. So you've got really concentrated sort of space there in those 19. And then we know we've got another nine states that have applied for eleven fifteen waivers that still have to seek approval. So you could end up very soon in a spot where almost 30 states have received those eleven fifteen waivers, are working to operationalize and relieving some of that budget pressure moving forward. So hope that's helpful perspective on the CGS, Christian.

[Christian Glennie, Director - Healthcare at Stifel Institutional]

Yep, thank you. That's helpful. And then just to clarify on the Q1, whether there's any notable impact as it relates to pricing and or destocking for SUBLOCADE in the first quarter?

[Ryan Preblick, CFO at Indivior]

Yeah. Hi, Christian. Good morning. No, really it was a fairly quiet quarter. There was some destocking in Q1 in the mid single digits, so that reversed out the stocking that we saw in fourth quarter, but overall beyond that pricing was quiet.

[Christian Glennie, Director - Healthcare at Stifel Institutional]

Okay. Thank you. And then maybe just one final thing. I mean, you obviously, you've got this sort of 50,000,000 to deploy. You've got the new label.

[Christian Glennie, Director - Healthcare at Stifel Institutional]

You've got this 50,000,000 to deploy in terms of marketing, market awareness and marketing. What should be the expectations around or how do you assess what the success looks like as a result of that marketing campaign and the new label? I mean, just to get a better sense for how far you're into that. Obviously, label was fairly recently done. I don't know how aggressively you've pushed the button on that 50,000,000 budget.

[Christian Glennie, Director - Healthcare at Stifel Institutional]

Just a better understanding of how things might play out as it relates to some of these sort of potential things that may be more in your favor on the competitive front.

[Mark Crossley, CEO & Executive Director at Indivior]

Yeah, thanks for that question, Christian. And it is a major initiative. Mean, listen, with only two in ten patients in treatment at any point in time for opioid use disorder and only one point eight getting treatment over a twelve month period, And then even worse, only seven to eight percent of those getting an LAI. There's a tremendous opportunity here for awareness and pull through of long acting and specifically SUBLOCADE, which is why we think the label enhancement for rapid induction, for alternate sites of injection and for an incremental dose, a second dose on day eight to accelerate the journey to therapeutic levels, combined with the HCP and patient marketing is going to help us achieve our guidance where we do have increased growth throughout the back half of the year because it takes time for those initiatives to take place. I think the good thing is we are seeing some leading indicators with regards to digital impressions and brand searches, which are indicating that the campaign is impactful.

[Mark Crossley, CEO & Executive Director at Indivior]

But what's really gonna be how we measure this is gonna be net revenue moving forward and growth of the long acting category and SUBLOCADE specifically.

[Christian Glennie, Director - Healthcare at Stifel Institutional]

Okay, thank you.

[Mark Crossley, CEO & Executive Director at Indivior]

Thank you, Christian.

[Operator]

Thank you. We will take our next question. And your next question comes from the line of Chase Knickerbocker from Craig Hallum. Please go ahead. Your line is open.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

Good morning. Thanks for the questions. Maybe just to start on Suboxone. So you guys lost 40 basis points of share only sequentially. And it certainly seems even with that kind of mid single digit million benefit that pricing held up certainly better than we had expected.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

Can you kind of walk us through what your guidance assumes from here? Obviously, no change to that guidance. But should we be thinking about additional pricing pressure from here? Or is all the kind of incremental decline from here based on the entrance of a fifth generic? Thanks.

[Mark Crossley, CEO & Executive Director at Indivior]

Brian?

[Ryan Preblick, CFO at Indivior]

Hey, Chase. Good morning. Just to remind everyone happened here in a film environment. With the fourth generic coming in the marketplace late twenty twenty three, fourth player, Ingenist, really started to drive price decay in the market, especially at the end of the year 2024.

[Ryan Preblick, CFO at Indivior]

They dropped their price close to 15%. So what you're seeing so far, Q1 played out as expected. We did take a price reduction to ensure strong formulary position, but we are projecting in our guidance that that price erosion will continue even with the four generics in the marketplace. If Teva does launch, that could factor in at some level, but at this point, with the four in there and the way they're operating, our assumption is the price will continue. And then the balance of the year over year net revenue decline is due to the share assumptions.

[Ryan Preblick, CFO at Indivior]

Typically on a year over year basis, we lose about three share points. So that's factored in as well.

[Mark Crossley, CEO & Executive Director at Indivior]

I think just beyond doubt on this Chase, think a lot of folks are having Teva be the driver of the price decline. What we saw through last year was there's continuing pricing pressure through the year that accelerated in the fourth quarter. So with the four players today, there's pricing pressure in the market and we've built that into our guidance that that would continue.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

Has there been further pricing pressure since that price action that you guys took in Q1? Has there been additional declines? Or is that pricing now consistent at least so far through Q2?

[Ryan Preblick, CFO at Indivior]

What happens typically and we look past or look back in a couple of years, Q1 tends to be a little quiet as the contracts get stabilized across all the players and then we typically see the pricing activity pick up between Q2 and Q4 again.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

Got it. Thanks. And then maybe just last for me. Obviously, over a year since the Opie launch at this point, can you just kind of walk investors through what we should be watching as kind of the clearing events for this starting to be a material asset for you guys? I mean, obviously kind of knocking down state by state, but there's a number of states that do have standing orders.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

And so can you just kind of walk us through what you see as the clearing event to make up the kind of the asset that thought it was going to be?

[Mark Crossley, CEO & Executive Director at Indivior]

Yeah, thanks for that, Chase. Listen, not much has changed since we discussed this at the fiscal year end results. We thought we'd be further along at this point, given the significantly differentiated profile rescue medication specifically recognizing the label for effectiveness against synthetic opioids like fentanyl. As we talked at the year, the harm reduction voice has been louder and stronger and this fear of precipitated withdrawal is only going to be alleviated when we get real world evidence. So 2025 into 2026, the major focus is on creating that bolus of real world evidence so that we can use that to put forward potential impacts of precipitated withdrawal.

[Mark Crossley, CEO & Executive Director at Indivior]

In the meantime, we'll continue to engage with state and local policy makers, key medical personnel to deliver on continued uptick in our experience program where we have over 170 municipalities that have taken on. In addition, we continue to be proud of that partnership with BARDA. They've made two one hundred thousand unit orders. We expect another one in 2025 and obviously we have that ten year contract of over $100,000,000 So this year is really, it's an evidence generation sort of year of which we can step forward and that's what's implied in the guidance we gave at fiscal year end.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

Thanks, Mark.

[Mark Crossley, CEO & Executive Director at Indivior]

Thank you, Chase.

[Operator]

Thank you. We will take our next question. Your next question comes from the line of Thibault Bodhran from Morgan Stanley. Please go ahead, your line is open.

[Thibault Boutherin, Equity Research - Executive Director at Morgan Stanley]

Yes. Thank you very much. I got a few, so maybe in town. But starting just with SUBLOCADE price and mix, if you could just clarify because I think the release is talking about a sort of price mix impact in Q1. I think you mentioned sort of CGS being lower in the mix and as well as for the rebate.

[Thibault Boutherin, Equity Research - Executive Director at Morgan Stanley]

But I think you just said Q1 was more quiet in terms of pricing. So just trying to kind of clarify here if can start here.

[Mark Crossley, CEO & Executive Director at Indivior]

Ryan, would you like to talk about the price mix?

[Ryan Preblick, CFO at Indivior]

I would say, listen, the base volumes were strong in terms of the dispenses, but what we did have to call out was some pricing and mix as you're referencing. We lost some of the CGS business, which was quite profitable, that does impact our mix at some level. And then as we progress on our journey with SUBLOCADE, the state Medicaid mix grows as a percentage of our business as well, so that's what you're seeing in there. And then as I mentioned earlier, Q1 did include some destocking after there was some stocking in Q4 of last year.

[Mark Crossley, CEO & Executive Director at Indivior]

Yeah, so I think price across different channels is relatively stable, and what you're seeing is more mix across the different channels, and that's what's causing your if you're doing a units by per revenue, that's what's causing that deviation primarily, Thibault.

[Thibault Boutherin, Equity Research - Executive Director at Morgan Stanley]

Okay. Thank thank you for the clarification. And and then I just want to come back on the situation and and just understand what's happening here. Because if we sort of back out everything, you know, it looks like sort of 100,000,000 coming from in '24, sort of EUR 140,000,000, EUR 1 hundred 50 million, 2 20 5 million. I think the comments for this year suggest sort of back to EUR hundred million.

[Thibault Boutherin, Equity Research - Executive Director at Morgan Stanley]

And I understand there is a funding sort of challenge headwind in 2025. But how in the first place were you able to grow so much in '24? And what has totally changed, you know, since then that that explains the sort of, you know, coming back to 2023 levels? Yeah. Just trying to understand the dynamic and what has fundamentally changed in in the budget or funding or whatever that explains the start of step forward and step back.

[Mark Crossley, CEO & Executive Director at Indivior]

No, it's a fair question. And just to rewind the clock back to the fiscal year end results, what's happened is there's a handful of accounts, very large accounts, that were unable to increase their budgets in the short term to be able to treat all patients and had to make a choice of do I move to orals and treat all my patients with buprenorphine treatment or do I do long acting for a subset based on what's there? And they shifted over to orals because they wanted to be able to say they could treat all their patients suffering from opioid use disorder. For clarity, they're not moving to the competition, they're just moving to orals in the short term while they try and work through their budget issues, which we think in the short to medium term through the abatement funds, through potential in the next budget cycle, reallocation of funds from operations to pharma and through the eleven fifteen waivers, we think that will eventually be alleviated. But that was the main impetus that drove the drop in our fiscal year guidance of about 30% that Ryan spoke to in February.

[Thibault Boutherin, Equity Research - Executive Director at Morgan Stanley]

Thank you. And just a very last one from me. I think there was a topic around decoupling prescription from administration of SUBLOCADE and having partnership with specialty pharmacies to do the administration separately from the prescription. And that's something we haven't talked about in some time. So just wanted to know if what was the progress here, if it's maybe a bit slower than expected, if it's part of your growth expectations for H2?

[Thibault Boutherin, Equity Research - Executive Director at Morgan Stanley]

So just a general update on that would be helpful.

[Mark Crossley, CEO & Executive Director at Indivior]

Yes, we continue to make progress on the alternate sites of care, which really have a couple of vectors that they help that we've talked. One is the independent physicians you know, that don't want to deal with the administrative sort of nature of having the product on-site and things like that. And the other is the digital sort of side of things where, you know, within a digital medium, they obviously need to be able to send the patient somewhere else. We now have about eight partners. The initial one was Albertsons, we've built that up to eight.

[Mark Crossley, CEO & Executive Director at Indivior]

We're over at about 1,500 sites across The US. We continue to look for more foundational partners with large, either regional or major national sort of scope to round out this. We want this to be as frictionless as a retail experience or as close to that as it can be. So we'll continue to work with those partners in discussing the opportunity to have these alternate sites of care moving forward.

[Thibault Boutherin, Equity Research - Executive Director at Morgan Stanley]

Okay, thank you very much.

[Mark Crossley, CEO & Executive Director at Indivior]

Thank you, Tebow, appreciate it.

[Operator]

Thank you. We will take our next question. Your next question comes from the line of Paul Cuddon from Deutsche Numis. Please go ahead. Your line is open.

[Paul Cuddon, Director - Healthcare Equity Research at Deutsche Numis]

Yep. Thank you very much and good morning, guys. I've got two questions, please. Firstly, I know it's early, but I mean, you seen any impact, on dual prescribing physicians with the kind of label change that sort of came earlier this year? And then secondly on Obvi, to what extent has emergent higher solutions licensing of Cluxado kind of created an even stronger kind of market leader that you're going to find it increasingly challenged to get share from?

[Mark Crossley, CEO & Executive Director at Indivior]

So I'll start with the first one, Paul. Listen, I think the impact of the label on dual prescribers, I think it's just too early. We're getting some subjective feedback that it's very positive. Having the only once monthly that can induct immediately, have being able to induct in all of the alternate sites, where the competitor can't do that in the back of the arm and having this dose which accelerates getting to therapeutic levels in an area where you have synthetic opioids out there, where if a patient relapses, they could die from synthetic opioids. We've heard subjectively it's there and people really like the label update and the enhancements there.

[Mark Crossley, CEO & Executive Director at Indivior]

With OpV and Emergent, it's an interesting one that they've licensed in this higher dose naloxone because it's counter to some of the harm reduction sort of things that say we want the lowest dose possible. And the fact that the people that have the market leading product there are getting a higher dose product, to me says higher dose products certainly have a role in this market. And for me, it just further reinforces OpV's role as we move forward. Now that will take real world evidence to deal and have data to deal with precipitated withdrawal, but the move to me further enhances the need for OpV in this space.

[Paul Cuddon, Director - Healthcare Equity Research at Deutsche Numis]

Superb. And so I just have one more. I mean, just focusing a little bit on your net cash position and the kind of looming litigation payments through to January 2027. I mean, how are you thinking about your cash generation capability with regard to those kind of looming litigation outflows?

[Ryan Preblick, CFO at Indivior]

Yes, good question, thanks. So certainly feel confident that as the business progresses, it's gonna generate strong cash flows year over year. We certainly do have to factor in these known obligations. Those are the three of them. There's the balance of the DOJ that's spread for the balance of the next two to three years and concluding in 2027.

[Ryan Preblick, CFO at Indivior]

We settled a lot of the antitrust programs last year. So all that's remaining right now is $85,000,000 for the opioid MDL that I mentioned, and then a small portion left of the Humana Centene. So when you look at it all together, some of those are on the back end of it, and our growing business will generate strong cash moving forward.

[Paul Cuddon, Director - Healthcare Equity Research at Deutsche Numis]

Excellent, thank you.

[Mark Crossley, CEO & Executive Director at Indivior]

Thank you, Paul.

[Operator]

Thank you. This concludes today's question and answer session. I'll now hand the call back to Mark Rosley for closing remarks.

[Mark Crossley, CEO & Executive Director at Indivior]

Thank you, Heidi. And before I close the call, I'd like to add my thanks for your continuing interest in Indivior, Our mission to make meaningful recovery from addiction humanly possible is as critical as ever and I look forward to the next exciting chapter for the company under Joe's leadership. If you have any follow-up questions, please reach out to Jason and the IR team. Thank you very much and have a great day.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Jason Thompson, Vice President of Investor Relations
• Mark Crossley, CEO & Executive Director
• Ryan Preblick, CFO

Analysts

• Carl Byrnes, Managing Director at Northland Capital Markets
• David Amsellem, Sr. Research Analyst at Piper Sandler Companies
• Christian Glennie, Director - Healthcare at Stifel Institutional
• Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC
• Thibault Boutherin, Equity Research - Executive Director at Morgan Stanley
• Paul Cuddon, Director - Healthcare Equity Research at Deutsche Numis