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Indivior PLC(INDV) - 2024 Q2 - Earnings Call Transcript
INDVIndivior PLC(INDV)2024-07-25 18:54
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Financial Data and Key Metrics - Total net revenue for Q2 2024 was 299million,reflectingan8299 million, reflecting an 8% growth year-over-year [66] - Adjusted net income grew 7% in Q2 to 60 million [11] - Adjusted gross margin was 84% in Q2, slightly up from the prior year [67] - Gross cash and investments stood at 405millionattheendofQ2[11]−AdjustedoperatingincomeforQ2was405 million at the end of Q2 [11] - Adjusted operating income for Q2 was 79 million, up 11% year-over-year [85] - Full-year 2024 net revenue guidance revised to 1.15billionto1.15 billion to 1.215 billion, representing 8% year-over-year growth at the midpoint [28] Business Line Performance - SUBLOCADE net revenue grew 24% year-over-year to 192millioninQ2[60]−SUBLOCADEdispensesincreased25192 million in Q2 [60] - SUBLOCADE dispenses increased 25% year-over-year and 5% sequentially to 155,700 [22] - SUBLOCADE patients and treatments grew 49% year-over-year to 160,400 at the end of Q2 [22] - SUBLOCADE net revenue outside the US grew 30% year-over-year to 13 million in Q2 [84] - SUBOXONE film's average market share was approximately 16% in Q2, down from Q1 and the year-ago quarter [10] - OPVEE net revenue for FY 2024 is expected to be 9millionto9 million to 14 million, with 8millionfromtheBARDAcontract[86]MarketPerformance−USnetrevenuegrew128 million from the BARDA contract [86] Market Performance - US net revenue grew 12% in Q2, while the rest of the world business declined 10% (8% excluding FX) [26] - Ex-US sales of SUBLOCADE grew 25% year-over-year in H1 to 25 million, led by Canada and the Nordics [23] - SUBLOCADE dispensing HCPs increased to over 7,200 from approximately 6,700 at the end of FY 2023 [21] - Over 700 justice system accounts were activated in 2024, with 120 new CGS facilities added [21] Strategy and Industry Competition - The company aims to achieve a 1billionnetrevenuerunrateforSUBLOCADEbytheendof2025andexceed1 billion net revenue run rate for SUBLOCADE by the end of 2025 and exceed 1.5 billion in peak annual net revenue [4] - The company is focusing on increasing awareness of SUBLOCADE among healthcare providers and patients, with 4 out of 5 new patients choosing SUBLOCADE [31] - The company is building a funding trial and experience environment for OPVEE to accelerate adoption [6] - The company discontinued INDV 5004 (Drinabant) due to limited market opportunity [24] Management Commentary on Operating Environment and Future Outlook - The company expects transitory headwinds affecting SUBLOCADE to ease in H2 2024 and into 2025 [60] - Management remains confident in the underlying fundamentals of the business and the strategy to generate shareholder value [87] - The company is transitioning to US GAAP reporting starting with the 2025 Form 10-K filing to support US index inclusion [62] - The company is provisioning 75millionforanexpectedsettlementrelatedtoopioidlitigation,withthefinaltermsstillundernegotiation[20][34]OtherImportantInformation−Thecompanyannouncedanew75 million for an expected settlement related to opioid litigation, with the final terms still under negotiation [20][34] Other Important Information - The company announced a new 100 million share repurchase program, reflecting confidence in the business [79] - A 65millionchargewasrecognizedinQ2relatedtothecessationofPERSERISsalesandmarketing,withanadditional65 million charge was recognized in Q2 related to the cessation of PERSERIS sales and marketing, with an additional 23 million expected in Q3 [9] - The company expects to save approximately 50millionannuallyfromthecessationofPERSERIS,with50 million annually from the cessation of PERSERIS, with 20 million included in the revised SG&A guidance for FY 2024 [66] Q&A Session Summary Questions and Answers - Question: What is the competitive dynamic with Brixadi, and how does it impact SUBLOCADE's guidance? [88] - Answer: The company sees SUBLOCADE as a paradigm shift in treatment and remains confident in its guidance, which includes competitive pressures [71][31] - Question: What is the impact of Medicaid disenrollment on SUBLOCADE? [115] - Answer: Medicaid disenrollment has impacted retention curves, contributing to a 30millionreductioninSUBLOCADErevenue,butthecompanyexpectsgrowthtonormalize[117]−∗∗Question:∗∗Whataretheexpectationsforthecannabisusedisorder(AEF0117)phaseIIBresults?[49]−∗∗Answer:∗∗Top−lineresultsareexpectedinSeptember,andthecompanywillevaluatethedataandFDAfeedbackbeforedecidingonphaseIIIdevelopment[50][64]−∗∗Question:∗∗Whatisthestatusoftheopioidlitigationsettlement?[99]−∗∗Answer:∗∗The30 million reduction in SUBLOCADE revenue, but the company expects growth to normalize [117] - **Question:** What are the expectations for the cannabis use disorder (AEF 0117) phase IIB results? [49] - **Answer:** Top-line results are expected in September, and the company will evaluate the data and FDA feedback before deciding on phase III development [50][64] - **Question:** What is the status of the opioid litigation settlement? [99] - **Answer:** The 75 million provision is for a preliminary settlement with municipalities and tribal nations, with final terms still under negotiation [20][34] - Question: How is the company addressing pushback from harm reduction advocates for OPVEE? [100] - Answer: The company is engaging with advocates through science and real-world evidence to accelerate adoption [6][101] - Question: What are the technical constraints for the share buyback program? [105] - Answer: The company plans to front-load the buyback program, adhering to trading rules, such as halting purchases if the share price exceeds the 5-day average by 5% [136]