Indivior PLC(INDV) - 2025 Q1 - Quarterly Results

Indivior Q1 2025 Earnings Release The company reports Q1 2025 results, strategic updates, and reaffirms full-year guidance amid market challenges and pipeline developments Financial & Operational Highlights Q1 2025 net revenue declined 6% to $266 million due to generic competition and temporary SUBLOCADE headwinds Q1 2025 Financial Summary (vs. Q1 2024) | Unaudited, $m | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue | 266 | 284 | (6)% | | Operating Income | 66 | 75 | (12)% | | Net Income | 47 | 61 | (23)% | | Diluted EPS ($) | $ 0.38 | $ 0.45 | (15)% | | Non-GAAP Operating Income | 69 | 76 | (10)% | | Non-GAAP Net Income | 51 | 57 | (11)% | | Non-GAAP Diluted EPS ($) | $ 0.41 | $ 0.42 | (2)% | - SUBLOCADE net revenue declined modestly by 2% YoY to $176m, attributed to dispense volume decline in the justice system channel from near-term funding gaps, which offset solid growth in the organized health system (OHS) channel[3] - U.S. SUBOXONE Film net revenue declined due to intensified competition from generic film providers, with its share of the oral buprenorphine market falling to 14.8% in Q1 2025 from 17.5% in Q1 2024[10] - CEO Mark Crossley announced he will be stepping down in the upcoming month, with Joe Ciaffoni set to lead the company's next chapter[2] Business & Strategic Updates The company advanced SUBLOCADE with FDA label changes but faced a pipeline delay for INDV-2000 - The FDA approved key label changes for SUBLOCADE in February 2025 to improve treatment flexibility and experience[7] - - Rapid Initiation Protocol: Allows SUBLOCADE initiation after a single transmucosal buprenorphine dose and a one-hour observation period - - Alternative Injection Sites: Administration is now approved for the abdomen, thigh, buttock, or back of the upper arm[10] - - INDV-2000 (OREXIN-1 Antagonist): The estimated last subject visit for the Phase 2 study is now expected in H1 2026, a delay from the previous Q4 2025 estimate, due to slower-than-expected subject enrollment - - INDV-6001 (3-Month Buprenorphine LAI): The Phase 2 PK study is on track, with the last subject visit expected in Q4 2025[10] - The fourth $100m share repurchase program was completed on January 31, 2025, under which 9,415,726 ordinary shares were repurchased and canceled[7] FY 2025 Financial Guidance The company reaffirms its full-year 2025 guidance, projecting net revenue of $955 million to $1,025 million - The Company's guidance for FY 2025 under U.S. GAAP remains unchanged[8] FY 2025 Guidance | Metric | FY 2025 Guidance | | :--- | :--- | | Net Revenue (NR) | $955m to $1,025m | | SUBLOCADE NR | $725m to $765m | | OPVEE NR | $10m to $15m | | Non-GAAP Gross Margin | Low to mid-80s % range | | Non-GAAP SG&A | ($525m) to ($535m) | | Non-GAAP R&D | ($85m) to ($90m) | | Non-GAAP Operating Income | $185m to $225m | - Guidance assumes no material changes to Medicaid eligibility, federal funding levels, or significant impacts from U.S. or retaliatory tariffs[9] Q1 2025 Financial Performance Review Q1 net revenue fell 6% to $266 million, with lower gross margin partially offset by reduced operating expenses Net Revenue Total net revenue declined 6% to $266 million, driven by an 8% drop in U.S. revenue from competitive pressures Q1 2025 Net Revenue Breakdown ($m) | Region/Product | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total U.S. | 222 | 241 | | SUBLOCADE (U.S.) | 163 | 168 | | PERSERIS | 4 | 11 | | Rest of World | 44 | 42 | | Total Net Revenue | 266 | 284 | - The decrease in U.S. NR was primarily driven by the decline in SUBOXONE Film due to intensified generic competition and the discontinuation of PERSERIS promotion in July 2024[14] Profitability and Expenses Gross margin fell to 83% while SG&A and R&D expenses decreased, resulting in a net income of $47 million - Gross margin declined to 83% from 87% YoY, primarily due to favorable manufacturing variances for SUBLOCADE inventory sold in Q1 2024[16] - Non-GAAP SG&A expense decreased 8% to $130m, reflecting benefits from streamlining actions, including the discontinuation of PERSERIS[17] - R&D expense decreased 19% to $22m, reflecting actions to refocus the development pipeline on Phase 2 OUD assets[18] - Net interest expense increased to $7m from $2m in Q1 2024, reflecting new borrowing secured in Q4 2024[20] Balance Sheet and Cash Flow Cash and investments rose to $400 million, boosted by strong operating cash flow from a temporary rebate delay - Cash and investments increased by $53m during the quarter to a total of $400m at March 31, 2025[25] - The cash increase was primarily due to cash from operations and a c. $100m reduction in net working capital from the late receipt of government rebate invoices, partially offset by $65m in litigation settlement payments[25] - Cash provided by operating activities was $75m in Q1 2025, a significant improvement from the $37m cash used in operating activities in Q1 2024[26] Revision to Previously Issued Financial Statements The company corrected its accrual methodology for the U.S. Branded Fee, revising prior SG&A expense figures - The company revised its financial statements to correct the accrual methodology for the U.S. 'Branded Fee'[28] - This resulted in correcting an immaterial overstatement of SG&A by $6m in 2024, $4m in 2023, $4m in 2022, and $2m before 2022, with a cumulative impact of $16m to Accounts Payable and Accrued Expenses at Dec 31, 2024[28] Consolidated Financial Statements (Unaudited) This section presents the unaudited Q1 2025 statements of operations, balance sheets, and cash flows Consolidated Statements of Operations Consolidated Statements of Operations (Three Months Ended March 31) | (In millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $ 266 | $ 284 | | Gross profit | 221 | 246 | | Operating income | 66 | 75 | | Income before income taxes | 59 | 73 | | Net income | $ 47 | $ 61 | | Diluted EPS | $ 0.38 | $ 0.45 | Consolidated Balance Sheets Consolidated Balance Sheets (in millions) | | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $ 883 | $ 827 | | Total assets | $ 1,375 | $ 1,316 | | Total current liabilities | $ 1,005 | $ 924 | | Total liabilities | $ 1,660 | $ 1,652 | | Total shareholders' deficit | $ (285) | $ (337) | Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows (Three Months Ended March 31, in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $ 75 | $ (37) | | Net cash (used in) provided by investing activities | $ (5) | $ 25 | | Net cash used in financing activities | $ (17) | $ (56) | | Net increase (decrease) in cash and cash equivalents | $ 53 | $ (68) | | Cash and cash equivalents at end of period | $ 372 | $ 248 | Selected Revenue and Expense Information Q1 Net Revenue by Product ($m) | Three Months Ended March 31, | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | US: | | | | SUBLOCADE | $ 163 | $ 168 | | Sublingual & other | 54 | 63 | | PERSERIS | 4 | 11 | | Total U.S. | 222 | 241 | | Rest of World | 44 | 42 | | Net revenue | $ 266 | $ 284 | Reconciliation of GAAP to non-GAAP Financial Information GAAP to Non-GAAP Reconciliation Summary (Q1 2025, $m) | Measure | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Income | $66 | $3 | $69 | | Net Income | $47 | $3 | $51 | | Diluted EPS | $0.38 | | $0.41 | Appendix This section provides supplementary details, including investor contacts, non-GAAP definitions, and safe harbor statements