- Legacy Suboxone cases settled for $385 million
- Company to book a $228 million charge in Q3
- Year to date sales up 21% and adjusted operating profit up 17%
Leading addiction treatment company Indivior (INDV) provided good news for investors on Monday in an otherwise weak market after settling a US Multi-District Litigation case for $385 million.
The trial which was due to start on 30 October will now be cancelled. The agreement resolves claims brought by direct purchasers that the firm suppressed competition for its opioid addition treatment Suboxone.
Indivior has previously announced settlement agreements with two other classes of claimant which means today’s settlement, once approved will mark the conclusion of the Multi-District Litigation cases.
The shares gained 5.5% to £15.62 taking them towards the top of the FTSE 250 leaderboard. They remain below the £19.50 level at which they traded before news of the legacy litigation cases emerged in February 2023.
WHY DID THE SHARES JUMP?
CEO Mark Crossly explained: ‘The resolution of this litigation, which was filed over a decade ago, provides greater certainty for all Indivior stakeholders and allows us to continue focusing on our important work for patients suffering from opioid use disorder and mental health illnesses around the world.’
Indivior will take a charge of $228 million in the third quarter ended 30 September representing the amount above the current remaining provision on the books of $157 million.
Once the agreement is approved by the court Indivior expects to pay the $385 million in November from existing cash resources. At the half year stage, the company had cash and investments of $782 million.
WHAT IT MEANS FOR THE FUTURE
The court approval means an existing ‘material uncertainty’ notice related to Indivior’s going concern basis of accounting can be removed, providing investors with greater long-term visibility.
An unqualified going concern notice from a company’s auditor means a company is more likely than not to meet its financial obligations over the coming year.
Indivior also disclosed preliminary third quarter and year to date numbers which show net revenues trending 21% higher than the prior year at between $797 million and $802 million.
Meanwhile, adjusted operating profit is running 17% ahead at between $197 million and $207 million.
At the half year results Indivior said it expected full year adjusted profit to be ahead of 2022’s outcome of $212 million which now looks conservative against the $202 million achieved in the first nine months.
