Shares in Indivior PLC plunged on Tuesday after it flagged lower than expected sales of its opioid treatment, Sublocade, and said it expects to take a charge relating to schizophrenia drug, Perseris.
In a wide-ranging trading update, the Richmond, Virginia-based specialty pharmaceuticals business, split off from Reckitt Benckiser PLC in 2014, said it would discontinue Perseris and announced the settlement of a litigation which was scheduled to proceed to trial next week.
The news sent shares in Indivior down by 42% to 688.10 pence each on Tuesday morning.
Indivior now expects 2024 net revenue between $1.15 billion to $1.22 billion, down from prior guidance of $1.24 billion to $1.33 billion.
Sales of Sublocade are seen between $765 million to $805 million, down from $820 million from $880 million.
Guidance for adjusted operating profit was lowered to between $285 million to $320 million from $330 million from $380 million before.
For the second quarter, net revenue is forecast between $295 million to $303 million, with Sublocade sales of $188 million to $196 million.
‘Despite positive early performance trends at the start of the second quarter, Sublocade net revenue has continued to be impacted more than we expected by a combination of transitory factors, primarily the elimination of Covid emergency measures related to automatic Medicaid coverage renewals,’ Chief Executive Mark Crossley said.
At the end of the second quarter, Medicaid disenrollments stood at around 23 million versus around 19 million at the end of the first quarter.
In addition, Crossley noted the US government has extended renewal allowances for certain States which will further delay the annualisation of what he termed this ‘significant headwind’.
Indivior said it had decided to discontinue sales and marketing for Perseris due to expected adverse impacts from increased payor management that crystalised in the second quarter.
This is expected to make the product no longer ‘financially viable’, Indivior said.
‘While we believe discontinuing Perseris is the right business decision, unfortunately it will impact our people and patients, and we will support them through this transition,’ Crossley said.
Indivior expects to take a $65 million charge, of which around $20 million is expected to be cash related to severance and termination of certain agreements. Around 130 jobs will be lost.
These charges will be taken in the second and third quarters, the company noted.
Ongoing annual operating expense savings are expected to be around $50 million, with $20 million expected to be realised in the second half.
Indivior also said it had, on Monday, settled a litigation with plaintiffs in the Health Care Services Corp.
Indivior has paid $85 million to settle the case, which has been pending since 2020, which had been set to go to trial next week. Payment will be funded from Indivior’s existing cash balance.
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