- Unexpected $290m charge pushes company into loss
- Underlying business performing as hoped
- US listing planned this Spring
Opioid-use disorder treatment company Indivior (INDV) booked a $290 million exceptional provision for potential damages relating to legacy antitrust litigation cases, pushing it to a full year net loss of $183 million for 2022.
The surprise news sent the shares down 11% to £17.33, reversing strong gains of 33% seen over the last year driven by positive momentum in sales of lead opioid drug Sublocade.
WHY IS THE COMPANY MAKING A PROVISION?
The company said initial mediation meetings in late January provided new information on the ‘previously disclosed contingent liability’.
‘Because these matters are in various stages, Indivior cannot predict with any certainty how these matters will ultimately be resolved, or the costs, or timing of such resolution.
‘In particular, any final aggregate costs of these matters, whether resolved by settlement or trial, may be materially different from this provision.’
The reason today’s announcement caught investors off-guard is Indivior agreed a settlement with the US Department of Justice in July 2020 to pay $607 million including interest over seven years to conclude certain civil and criminal proceedings.
HOW DID THE BUSINESS ITSELF PERFORM ?
Sales grew 9% in the final quarter, which pushed full-year sales up 14% to $901 million. Sales of fast-growing Sublocade were up 67% to $408 million and the company confirmed the treatment is on track to achieve peak sales of more than $1.5 billion.
Indivior’s extended-release schizophrenia drug Perseris grew sales by 65% to $28 million. The company expects Perseris to reach peak sales of between $200 million to $300 million.
Adjusted operating profit was 13% higher to $212 million, while net profit was 21% higher at $169 million. Both sales and net profit were above market expectations.
The company ended the period with cash and investments of $991 million, slightly down from $1.1 billion in the prior year.
In May 2022, Indivior embarked on a second $100 million share buyback and subsequently purchased and cancelled 4.8 million shares equivalent to 3% of outstanding shares.
WHAT DID THE COMPANY SAY?
Chief executive Mark Crossley commented: ‘We saw excellent momentum from our increased efforts to access the millions of opioid-use disorder (OUD) patients in Organized Health Systems (OHS) and the U.S. Justice System. This helped SUBLOCADE® (buprenorphine extended-release) injection become our largest selling product.
‘As a proven leader in addiction treatment and science, Indivior is well-positioned to deliver for patients and drive long-term value creation for all our stakeholders. I believe our prospects have never been brighter’
The company confirmed plans for a secondary US listing on Nasdaq which is expected to happen in the Spring.
