April 25, 2024
|
|
|
|
|
|
|
Delivered Double-Digit Net
Revenue Growth in Q1 2024; FY 2024 Guidance
Reconfirmed
• Total net revenue (NR) of $284m
(+12% versus Q1 2023); SUBLOCADE® NR of $179m (+36% versus Q1
2023)
• FY 2024 guidance reconfirmed - NR
and adjusted operating profit expected to accelerate through the
year
• Board confirms intention to seek
shareholder approval in May 2024 to facilitate a primary listing in
the U.S.
|
2023
Comment by Mark Crossley, CEO of Indivior
PLC
"Our first quarter results reflect
continued double-digit top-line momentum led by SUBLOCADE
(buprenorphine extended-release). The underlying demand for this
transformative treatment for moderate-to-severe opioid use disorder
(OUD) remains strong and our strategy to expand prescribing in the
justice system is delivering excellent results. SUBLOCADE's
reported growth was, however, adversely impacted by transitory
items, including accelerating Medicaid patient disenrollments, a
cyberattack on the largest U.S. medical claims processor and
abnormal trade destocking. We fully expect these items to resolve
as the year progresses and, combined with the benefits of recent
commercial investments behind SUBLOCADE, we anticipate an
acceleration in our top- and bottom-line growth over the remainder
of 2024, particularly in the second half. We therefore reconfirm
our 2024 guidance, including SUBLOCADE net revenue of $820m to
$880m and approximately 300 basis points of margin expansion at the
mid-points of our guidance range.
Lastly, after receiving strong
indications of support from our shareholders, we are confirming our
intention to seek shareholder approval in May 2024 to facilitate a
primary listing in the U.S. while maintaining a secondary listing
in the U.K."
Quarter to March 31 (Unaudited)
|
2024
$m
|
2023
$m
|
% Change
|
Net Revenue
|
284
|
253
|
12%
|
Operating Profit
|
65
|
57
|
14%
|
Net Income
|
47
|
44
|
7%
|
Diluted EPS ($)
|
$0.34
|
$0.31
|
10%
|
Adjusted Basis
|
|
|
|
Adj. Operating
Profit1
|
70
|
71
|
-1%
|
Adj. Net
Income1
|
51
|
56
|
-9%
|
Adj. Diluted EPS1
($)
|
$0.37
|
$0.40
|
-8%
|
1 Adjusted Basis excludes the impact
of exceptional items and other adjustments as referenced and
reconciled in the "Adjusted Results" appendix on page 24. Adjusted
results are not a substitute for, or superior to, reported results
presented in accordance with International Financial Reporting
Standards ("IFRS").
The "Company" refers to Indivior PLC and the "Group" refers to
the Company and its consolidated subsidiaries.
Q1 2024 Financial
Highlights
•
Q1 2024 total net revenue (NR) of
$284m increased 12%
(Q1 2023: $253m).
•
Q1 2024 reported operating profit was
$65m (Q1 2023:
$57m). Q1 2024
adjusted operating profit of $70m
represented a decrease of 1% (Adjusted
Q1 2023: $71m).
•
Q1 2024 reported net income was
$47m (Q1 2023:
$44m). Q1 2024
adjusted net income of $51m represented a
decrease of 9% (Adjusted Q1 2023: $56m).
• Cash
and investments totaled $356m at the end of
Q1 2024 (including $27m restricted for self-insurance) (FY 2023: $451m), primarily
reflecting the Q1 2024 net cash outflows related
to scheduled litigation settlement payments, shares repurchased and
canceled, and taxes paid.
Q1 2024 Product
Highlights
•
SUBLOCADE: Q1 2024 NR of $179m (+36% vs. Q1 2023; +2%vs. Q4 2023). Continued growth primarily reflects further
organized health system (OHS) and justice system channel
penetration in the U.S. and increased new U.S. patient enrollments.
Q1 2024 U.S. units dispensed were approx.
148,600 (+38% vs. Q1 2023 and +4% vs.
Q4 2023). Total U.S. patients on a 12-month
rolling basis at the end of Q1 2024 were
approximately 150,300 (+59% vs. Q1 2023 and
+10% vs. Q4 2023).
• OPVEE®: Q1 2024 NR was modest
(under $1m), as expected; near-term launch focus is on supporting
foundational policy changes to enable nalmefene opioid rescue
treatments.
• PERSERIS®: Q1 2024
NR of $11m (+38% vs.
Q1 2023; -8% vs.
Q4 2023) reflects
increasing awareness of the treatment across the U.S. healthcare
system versus last year.
•
SUBOXONE®
(buprenorphine/naloxone) Film: U.S.
share in Q1 2024 averaged 17%
(Q1 2023: 19%).
FY 2024
Guidance
The Group reconfirms its financial
guidance for 2024, as set forth in its press release dated February
22, 2024.
Pursuing Shareholder Approval
for a Primary Listing in the U.S. in the Summer of
2024
On February 22, 2024, Indivior
announced the commencement of shareholder consultations to effect a
primary listing in the U.S. in the summer of 2024. The Group
believes a primary U.S. listing could be beneficial to Indivior
stakeholders as it would better align with the Group's current and
future growth opportunities, attract more U.S. investors and
analysts, allow for inclusion in U.S. indices over time and better
reflect the growing proportion of the Group's share capital owned
by U.S. based investors.
Since the February 22, 2024
announcement, the Group has consulted extensively with shareholders
and, together with its advisers, has carefully considered the
shareholder feedback received. Having largely completed this
consultation process, the Board confirms its intention to seek
shareholder approval in May 2024 to facilitate a shift to a primary
listing in the U.S., which would be expected to take place in the
summer of 2024.
The Board intends to maintain
Indivior's U.K. listing as a secondary listing following the
transition to a primary U.S. listing.
Share Repurchase
Program
On November 17, 2023, Indivior
announced a third share repurchase program of up to $100m. Through
April 19, 2024, the Group repurchased and canceled 3,761,052
Indivior ordinary shares, equivalent to approximately 3% of diluted
shares outstanding, at a daily weighted average purchase price of
1,373p. The cost was approximately $66m, which
includes directly attributable transaction costs. The program is
expected to conclude no later than August 30, 2024. Refer to Note
15 for further discussion.
U.S. OUD Market
Update
In Q1 2024, U.S. buprenorphine
medication-assisted treatments (BMAT) grew in mid-single digits in volume terms. The Group continues
to expect long-term U.S. growth to be sustained in the mid- to
high-single digit percentage range due to increased overall public
awareness of the opioid epidemic and approved treatments, together
with regulatory and legislative actions, such as the late 2022
enactment of the Mainstreaming Addiction Treatment Act, that have
expanded OUD treatment funding and treatment capacity. The Group
believes these regulatory and legislative actions will help to
normalize the view of addiction as a chronic disease and expand
access to evidence-based buprenorphine treatment in the U.S. and
supports these actions.
Financial Performance in Q1
2024
Total net revenue in
Q1 2024 increased 12% to $284m (Q1 2023: $253m) at actual
exchange rates (+12% at constant exchange
rates1).
U.S. net revenue increased
15% in Q1 2024 to
$241m (Q1 2023:
$209m). Strong year-over-year SUBLOCADE
volume growth primarily drove the net revenue increase. Pricing was
not a material factor in revenue growth.
Rest of World (ROW) net revenue decreased 2% at actual exchange rates
in Q1 2024 to $43m
(Q1 2023: $44m)
(-2% at constant exchange rates1). In the period,
positive contributions from new products (SUBLOCADE /
SUBUTEX® Prolonged Release and SUBOXONE
Film) were more than offset primarily by the timing of shipments of
certain products as well as ongoing generic erosion of the legacy
tablet business. Q1 2024 SUBLOCADE /
SUBUTEX Prolonged Release net revenue in ROW
was $12m (Q1
2023: $9m) at
actual exchange rates.
[1] Net
revenue at constant exchange rates is an alternative performance
measure used by management to evaluate underlying performance of
the business and is calculated by applying the prior year exchange
rate to net revenue in the currencies of the foreign
entities.
Gross margin as reported in
Q1 2024 was 84%
(Q1 2023: 85%).
Excluding $3m of other adjustments for
amortization of acquired intangible assets within cost of sales
primarily related to the acquisition of Opiant, adjusted gross
margin in Q1 2024 was 85%. There were no adjustments to Q1
2023 gross margin. The adjusted gross margin in Q1
2024 primarily reflects an improved product
mix from the continued growth of SUBLOCADE offset by cost
inflation. Additionally, both periods benefited from favorable
manufacturing variances.
SG&A expenses as reported
in Q1 2024 were $145m (Q1 2023:
$131m). Q1 2024 included
$2m of exceptional integration
costs related to the aseptic manufacturing site in
Raleigh, NC acquired in November 2023. The Group
expects to incur approximately $3m
in additional pre-tax integration related costs in
FY 2024 which would be recorded as exceptional. Q1
2023 included $14m of
exceptional items related to non-recurring costs associated with
the acquisition of Opiant ($12m) and the
additional U.S. listing ($2m).
Excluding exceptional items, Q1 2024
adjusted SG&A expense increased 22% to $143m (Adjusted Q1 2023: $117m). The increase
in Q1 2024 reflects increased sales
and marketing investments primarily related to SUBLOCADE, the addition of the Opiant business, OPVEE launch
expenses and cost inflation.
R&D expenses in Q1 2024
were $28m (Q1 2023: $27m), an increase of 4%. The increase was
primarily due to the progression of pipeline assets partially
offset by a reduction in activity related to post-marketing studies
for SUBLOCADE.
Net
other operating income in Q1 2024
was nil (Q1 2023: $1m).
Operating profit as reported
was $65m in Q1 2024
(Q1 2023:
$57m). The change on a
reported basis reflects higher NR and gross margin as described
above, offset by investments in sales and marketing primarily
related to SUBLOCADE. The Q1 2023 period included exceptional administrative costs relating to
the Opiant acquisition.
Q1 2024 adjusted operating profit
decreased 1% to $70m (Q1
2023: $71m),
excluding exceptional items and other adjustments
of $5m and $14m in Q1 2024 and
Q1 2023, respectively. The
decrease primarily reflects increased SG&A expenses, as
described above, partly offset by higher total NR and gross margin
from an improved product mix.
Net
finance expense was $2m in Q1 2024
(Q1 2023:
$1m income) reflecting a
decrease in interest income on lower cash and investment
balances.
Reported tax expense was
$16m in Q1 2024 and
the effective tax rate was 25%
(Q1 2023 tax expense/rate: $14m, 24%). Q1
2024 adjusted tax expense was $17m,
and the adjusted effective tax rate was 25%
(Q1 2023 adjusted tax expense/rate:
$16m, 22%). The
adjusted results exclude tax benefit on exceptional items and other
adjustments. The movement in the effective tax
rate on adjusted profits is impacted by an increase in the U.K.
corporation tax rate from 23.5% to 25%.
Reported net income in
Q1 2024 was $47m
and adjusted net income was $51m
(Q1 2023 reported net income: $44m; Q1 2023 adjusted net
income: $56m). The 9%
decrease in net income on an adjusted basis primarily reflected the
increase in operating expense, partly offset by higher total
NR.
Diluted earnings per share were
$0.34 on a reported basis and $0.37 on an adjusted basis in Q1
2024 (Q1 2023: $0.31 diluted earnings per share and $0.40 adjusted diluted earnings per share).
Balance Sheet & Cash
Flow
Cash and investments totaled
$356m at the end of Q1
2024, a decrease of $95m versus the
$451m position at the end of 2023. The
decrease was primarily due to the Group's
litigation settlement payments of $70m for the Department of
Justice (DOJ), Reckitt Benckiser (RB) and Dr. Reddy's Laboratories
(DRL) matters.
Net
working capital, defined by
management as inventory plus trade receivables, less trade and
other payables, was negative $342m on
March 31, 2024, versus negative $347m at the end of FY
2023.
Cash used in operations in
Q1 2024 was $25m
(Q1 2023 cash used in operations:
$16m), primarily due to litigation settlement payments, partially offset by
income from operations. Before these litigation settlement payments, cash generated from operations in
the current period was $45m. Net cash
outflow from operating activities was $55m
in Q1 2024 (Q1 2023
cash outflow: $36m) reflecting tax payments
and interest paid on the Group's term loan facility and settlement
payments, partially offset by interest received on
investments.
Cash inflow from investing activities
was $25m (Q1 2023 cash outflow: $127m)
reflecting the reduction in invested liquidity. In the prior year
period, the outflow from investing activities primarily reflected
the Opiant acquisition, net of cash assumed.
Cash outflow from financing activities
was $38m (Q1 2023 cash outflow: $22m)
reflecting shares repurchased and canceled, the principal portion
of lease payments and quarterly amortization of the Group's term
loan facility, partially offset by proceeds received from the
issuance of shares for employee compensation agreements. In the
prior year period, the outflow from financing activities primarily
reflected shares repurchased and canceled and the extinguishment of
debt assumed in the Opiant acquisition.
Principal Risks
Update
The Board of Directors oversees the
approach to risk management so that the principal risks, including
those that would threaten the Group's business model, future
performance or viability, are effectively managed and/or mitigated.
While the Group aims to identify and manage such risks, no risk
management strategy can provide absolute assurance against loss.
The principal risks facing the Group have not significantly changed
over the period and are set out in the Group's Annual Report for
the 2023 financial year.
Exchange
Rates
The average and period end exchange
rates used for the translation of currencies into U.S. dollars that
have most significant impact on the Group's results
were:
|
Q1 2024
|
Q1 2023
|
GB £ period end
|
1.2627
|
1.2309
|
GB £ average rate
|
1.2683
|
1.2149
|
|
|
|
€ Euro period end
|
1.0830
|
1.0828
|
€ Euro average
|
1.0859
|
1.0726
|
Webcast
Details
A live webcast presentation will be
held on April 25, 2024, at 13:00 GMT (8:00 am EDT) hosted by Mark
Crossley, CEO. The details are below. All materials will be
available on the Group's website prior to the event at www.indivior.com.
Please copy and paste the below web links into your
browser.
The webcast link: https://edge.media-server.com/mmc/p/hktzzit4
Participants may access the
presentation telephonically by registering with the following link
(please cut and paste into your browser):
https://register.vevent.com/register/BI2351ee9819db40d1a28c31f75cece519
(Registrants will have an option to be called
back directly immediately prior to the call or be provided a
call-in # with a unique pin code following their
registration)
For Further
Information
Investor Enquiries
|
Jason Thompson
|
VP, Investor Relations
Indivior PLC
|
+1 804 402 7123
jason.thompson@indivior.com
|
|
Tim Owens
|
Director, Investor Relations
Indivior PLC
|
+1 804 263 3978
timothy.owens@indivior.com
|
Media Enquiries
|
Jonathan Sibun
|
Teneo
U.S. Media Inquiries
|
+44 (0)20 7353 4200
+1 804 594 0836
Indiviormediacontacts@indivior.com
|
Corporate
Website
www.indivior.com
This announcement does not
constitute an offer to sell, or the solicitation of an offer to
subscribe for or otherwise acquire or dispose of shares in the
Group to any person in any jurisdiction to whom it is unlawful to
make such offer or solicitation.
About
Indivior
Indivior is a global pharmaceutical
company working to help change patients' lives by developing
medicines to treat substance use disorders (SUD) and serious mental
illnesses. Our vision is that all patients around the world will
have access to evidence-based treatment for the chronic conditions
and co-occurring disorders of SUD. Indivior is dedicated to
transforming SUD from a global human crisis to a recognized and
treated chronic disease. Building on its global portfolio of OUD
treatments, Indivior has a pipeline of product candidates designed
to both expand on its heritage in this category and potentially
address other chronic conditions and co-occurring disorders of SUD,
including alcohol use disorder and cannabis use disorder.
Headquartered in the United States in Richmond, VA, Indivior
employs more than 1,000 individuals globally and its portfolio of
products is available in 37 countries worldwide. Visit www.indivior.com to learn
more. Connect with Indivior on LinkedIn by visiting www.linkedin.com/company/indivior .
Important Cautionary Note
Regarding Forward-Looking Statements
This announcement contains certain statements that are forward-looking.
Forward-looking statements include, among other things, statements
regarding: the Indivior Group's financial guidance including
operating and profit margins for 2024 and its medium- and long-term
growth outlook; assumptions regarding expected changes in share and
expectations regarding the extent and impact of competition;
assumptions regarding future exchange rates; strategic priorities,
strategies for value creation, and operational goals; expected
future growth and expectations for sales levels for particular
products, and expectations regarding the future impact of factors
that have affected sales in the past; expected growth rates,
growing normalization of medically assisted treatment for opioid
use disorder, and expanded access to treatment; our product
development pipeline and potential future products, expectations
regarding regulatory approval of such product candidates, the
timing of such approvals, and the timing of commercial launch of
such products or product candidates, and eventual annual revenues
of such future products; expectations regarding future production
at the Group's Raleigh, North Carolina manufacturing facility; our
intention to seek shareholder approval in May 2024 to facilitate a
primary listing in the U.S. while maintaining a secondary listing
in the U.K., and the expected timing and potential benefits of such
listing; and other statements containing the words "believe,"
"anticipate," "plan," "expect," "intend," "estimate," "forecast,"
"strategy," "target," "guidance," "outlook," "potential,"
"project," "priority," "may," "will," "should," "would," "could,"
"can," "outlook," "guidance," the negatives thereof, and variations
thereon and similar expressions. By their nature, forward-looking
statements involve risks and uncertainties as they relate to events
or circumstances that may or may not occur in the
future.
Actual results may differ materially
from those expressed or implied in such statements because they
relate to future events. Various factors may cause differences
between Indivior's expectations and actual results, including,
among others, the material risks described in the most recent
Indivior PLC Annual Report and in subsequent releases; the
substantial litigation and ongoing investigations to which we are
or may become a party; our reliance on third parties to manufacture
commercial supplies of most of our products, conduct our clinical
trials and at times to collaborate on products in our pipeline; our
ability to comply with legal and regulatory settlements, healthcare
laws and regulations, requirements imposed by regulatory agencies
and payment and reporting obligations under government pricing
programs; risks related to the manufacture and distribution of our
products, most of which contain controlled substances; market
acceptance of our products as well as our ability to commercialize
our products and compete with other market participants;
competition; the uncertainties related to the development of new
products, including through acquisitions, and the related
regulatory approval process; our dependence on third-party payors
for the reimbursement of our products and the increasing focus on
pricing and competition in our industry; unintended side effects
caused by the clinical study or commercial use of our products; our
ability to successfully execute acquisitions, partnerships, joint
ventures, dispositions or other strategic acquisitions; our ability
to protect our intellectual property rights and the substantial
cost of litigation or other proceedings related to intellectual
property rights; the risks related to product liability claims or
product recalls; the significant amount of laws and regulations
that we are subject to, including due to the international nature
of our business; macroeconomic trends and other global developments
such as armed conflicts and pandemics; the terms of our debt
instruments, changes in our credit ratings and our ability to
service our indebtedness and other obligations as they come due;
changes in applicable tax rate or tax rules, regulations or
interpretations and our ability to realize our deferred tax assets;
and volatility in our share price due to factors unrelated to our
operating performance or that may result from the potential move of
our primary listing to the U.S.
Forward-looking statements speak
only as of the date that they are made and should be regarded
solely as our current plans, estimates and beliefs. Except as
required by law, we do not undertake and specifically decline any
obligation to update, republish or revise forward-looking
statements to reflect future events or circumstances or to reflect
the occurrences of unanticipated events.
Unaudited condensed consolidated interim income
statement
|
|
2024
|
2023
|
For
the three months ended March 31
|
Notes
|
$m
|
$m
|
Net
Revenue
|
2
|
284
|
253
|
Cost of sales
|
|
(46)
|
(39)
|
Gross Profit
|
|
238
|
214
|
Selling, general and administrative
expenses
|
3
|
(145)
|
(131)
|
Research and development
expenses
|
3
|
(28)
|
(27)
|
Net other operating
income
|
|
-
|
1
|
Operating Profit
|
|
65
|
57
|
Finance income
|
4
|
7
|
11
|
Finance expense
|
4
|
(9)
|
(10)
|
Net
Finance (Expense)/Income
|
|
(2)
|
1
|
Profit Before Taxation
|
|
63
|
58
|
Income tax expense
|
5
|
(16)
|
(14)
|
Net
Income
|
|
47
|
44
|
|
|
|
|
Earnings per ordinary share (in dollars)
|
|
|
|
Basic earnings per share
|
6
|
$0.35
|
$0.32
|
Diluted earnings per
share
|
6
|
$0.34
|
$0.31
|
Unaudited condensed consolidated interim statement of
comprehensive income
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Net income
|
47
|
44
|
Other comprehensive loss
|
|
|
Items that may be reclassified to profit or loss in subsequent
years:
|
|
|
Foreign currency translation
adjustment, net
|
(3)
|
-
|
Other comprehensive loss
|
(3)
|
-
|
Total comprehensive income
|
44
|
44
|
The notes
are an integral part of these unaudited condensed consolidated
interim financial statements.
Unaudited condensed consolidated interim balance
sheet
|
|
Mar 31,
2024
|
Dec 31,
2023 (Retrospectively
adjusted1)
|
|
Notes
|
$m
|
$m
|
ASSETS
|
|
|
|
Non-current assets
|
|
|
|
Intangible assets
|
7
|
230
|
234
|
Property, plant and
equipment
|
|
81
|
82
|
Right-of-use assets
|
|
31
|
33
|
Deferred tax assets
|
5
|
260
|
267
|
Investments
|
8
|
26
|
41
|
Other assets
|
9
|
29
|
28
|
|
|
657
|
685
|
Current assets
|
|
|
|
Inventories
|
|
163
|
142
|
Trade receivables
|
|
249
|
254
|
Other assets
|
9
|
45
|
457
|
Current tax receivable
|
5
|
9
|
-
|
Investments
|
8
|
82
|
94
|
Cash and cash equivalents
|
|
248
|
316
|
|
|
796
|
1,263
|
Total assets
|
|
1,453
|
1,948
|
|
|
|
|
LIABILITIES
|
|
|
|
Current liabilities
|
|
|
|
Borrowings
|
10
|
(3)
|
(3)
|
Provisions
|
11
|
(21)
|
(408)
|
Other liabilities
|
11
|
(67)
|
(125)
|
Trade and other payables
|
14
|
(754)
|
(743)
|
Lease liabilities
|
|
(9)
|
(9)
|
Current tax liabilities
|
5
|
(7)
|
(18)
|
|
|
(861)
|
(1,306)
|
Non-current liabilities
|
|
|
|
Borrowings
|
10
|
(235)
|
(236)
|
Provisions
|
11
|
(2)
|
(5)
|
Other liabilities
|
11
|
(313)
|
(367)
|
Lease liabilities
|
|
(32)
|
(34)
|
|
|
(582)
|
(642)
|
Total liabilities
|
|
(1,443)
|
(1,948)
|
Net
assets
|
|
10
|
-
|
|
|
|
|
EQUITY
|
|
|
|
Capital and reserves
|
|
|
|
Share capital
|
15
|
68
|
68
|
Share premium
|
|
11
|
11
|
Capital redemption
reserve
|
|
8
|
7
|
Other reserve
|
|
(1,295)
|
(1,295)
|
Foreign currency translation
reserve
|
|
(38)
|
(35)
|
Retained earnings
|
|
1,256
|
1,244
|
Total equity
|
|
10
|
-
|
1The unaudited condensed consolidated interim balance sheet as
of December 31, 2023 has been retrospectively adjusted to reflect
measurement period adjustments related to the November 2023
acquisition of an aseptic manufacturing facility. Refer to Note 1
and Note 17.
The notes
are an integral part of these unaudited condensed consolidated
interim financial statements.
Unaudited condensed consolidated statement of changes in
equity
|
Notes
|
Share
capital
|
Share
premium
|
Capital
redemption reserve
|
Other
reserve
|
Foreign
currency translation reserve
|
Retained
earnings
|
Total
equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Balance at January 1, 2023
|
|
68
|
8
|
6
|
(1,295)
|
(39)
|
1,303
|
51
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Net income
|
|
-
|
-
|
-
|
-
|
-
|
44
|
44
|
Other comprehensive loss
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total comprehensive income
|
|
-
|
-
|
-
|
-
|
-
|
44
|
44
|
Transactions recognized directly in equity
|
|
|
|
|
|
|
|
|
Shares issued
|
|
1
|
1
|
-
|
-
|
-
|
-
|
2
|
Share-based plans
|
|
-
|
-
|
-
|
-
|
-
|
5
|
5
|
Settlement of tax on equity
awards
|
|
-
|
-
|
-
|
-
|
-
|
(21)
|
(21)
|
Shares repurchased and
canceled
|
|
-
|
-
|
-
|
-
|
-
|
(11)
|
(11)
|
Transfer to share repurchase
liability
|
|
-
|
-
|
-
|
-
|
-
|
9
|
9
|
Taxation on share-based
plans
|
|
-
|
-
|
-
|
-
|
-
|
(7)
|
(7)
|
Balance at March 31, 2023
|
|
69
|
9
|
6
|
(1,295)
|
(39)
|
1,322
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2024
|
|
68
|
11
|
7
|
(1,295)
|
(35)
|
1,244
|
-
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Net income
|
|
-
|
-
|
-
|
-
|
-
|
47
|
47
|
Other comprehensive loss
|
|
-
|
-
|
-
|
-
|
(3)
|
-
|
(3)
|
Total comprehensive income
|
|
-
|
-
|
-
|
-
|
(3)
|
47
|
44
|
Transactions recognized directly in equity
|
|
|
|
|
|
|
|
|
Shares issued
|
|
1
|
-
|
-
|
-
|
-
|
-
|
1
|
Share-based plans
|
|
-
|
-
|
-
|
-
|
-
|
5
|
5
|
Settlement of tax on equity
awards
|
|
-
|
-
|
-
|
-
|
-
|
(20)
|
(20)
|
Shares repurchased and
canceled
|
|
(1)
|
-
|
1
|
-
|
-
|
(36)
|
(36)
|
Transfer to share repurchase
liability
|
|
-
|
-
|
-
|
-
|
-
|
(9)
|
(9)
|
Transfer from share repurchase
liability
|
|
-
|
-
|
-
|
-
|
-
|
23
|
23
|
Taxation on share-based
plans
|
|
-
|
-
|
-
|
-
|
-
|
2
|
2
|
Balance at March 31, 2024
|
|
68
|
11
|
8
|
(1,295)
|
(38)
|
1,256
|
10
|
The notes
are an integral part of these unaudited condensed consolidated
interim financial statements.
Unaudited condensed consolidated cash flow
statement
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
Operating Profit
|
65
|
57
|
Depreciation and amortization of
property, plant and equipment and intangible assets
|
7
|
4
|
Depreciation of right-of-use
assets
|
2
|
2
|
Share-based payments
|
5
|
5
|
Impact from foreign exchange
movements
|
(3)
|
-
|
Unrealized gain on equity
investment
|
-
|
(1)
|
Settlement of tax on employee
awards
|
(20)
|
(21)
|
Decrease in trade
receivables
|
5
|
7
|
Decrease/(increase) in current and
non-current other assets1
|
408
|
(23)
|
Increase in inventories
|
(21)
|
(5)
|
Increase in trade and other
payables
|
13
|
30
|
Decrease in provisions and other
liabilities1 2
|
(486)
|
(71)
|
Cash used in operations
|
(25)
|
(16)
|
Interest paid
|
(11)
|
(10)
|
Interest received
|
8
|
11
|
Taxes paid
|
(27)
|
(21)
|
Net
cash outflow from operating activities
|
(55)
|
(36)
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
Acquisition of assets, net of cash
acquired
|
-
|
(124)
|
Purchase of property, plant and
equipment
|
(2)
|
(1)
|
Purchase of investments
|
(4)
|
(33)
|
Maturity of investments
|
31
|
36
|
Purchase of intangible
asset
|
-
|
(5)
|
Net
cash inflow/(outflow) from investing activities
|
25
|
(127)
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
Repayment of borrowings
|
(1)
|
(11)
|
Principal elements of lease
payments
|
(2)
|
(2)
|
Shares repurchased and
canceled
|
(36)
|
(11)
|
Proceeds from the issuance of
ordinary shares
|
1
|
2
|
Net
cash outflow from financing activities
|
(38)
|
(22)
|
|
|
|
Exchange difference on cash and cash
equivalents
|
-
|
(1)
|
|
|
|
Net
decrease in cash and cash equivalents
|
(68)
|
(186)
|
Cash and cash equivalents at
beginning of the period
|
316
|
774
|
Cash and cash equivalents at end of the
period
|
248
|
588
|
1Changes in the line items current and non-current other assets
and provisions and other liabilities for Q1
2024 include the utilization of the
Antitrust MDL liabilities (refer to Note 13) and release of related
escrow funding following final court approval.
2Changes in the line item provisions and other liabilities for
Q1 2024 also
include litigation settlement payments totaling $70m (Q1 2023: $74m). $3m of interest paid on the DOJ Resolution in
Q1 2024 has been
recorded in the interest paid line item (Q1
2023: $3m).
The notes
are an integral part of these unaudited condensed consolidated
interim financial statements.
Notes to the unaudited condensed consolidated interim
financial statements
1.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
Indivior PLC (the 'Company') is a
public limited company incorporated on September 26, 2014 and
domiciled in the United Kingdom. In these unaudited condensed
consolidated financial statements ('Condensed Financial
Statements'), reference to the 'Group' means the Company and all
its subsidiaries.
The Condensed Financial Statements
have been prepared in accordance with U.K. adopted International
Accounting Standard 34, Interim
Financial Reporting. The Condensed Financial Statements have
been reviewed and are unaudited and do not include all the
information and disclosures required in the annual financial
statements. Therefore, the Condensed Financial Statements should be
read in conjunction with the Group's Annual Report and Accounts for
the year ended December 31, 2023, which were prepared in
accordance with U.K. adopted International Accounting Standards and
in conformity with the Companies Act 2006
as applicable to companies reporting under those standards. These
Condensed Financial Statements were approved for issue on
April 24, 2024.
In preparing these
Condensed Financial Statements, the significant judgments made by
management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those that
applied to the consolidated financial statements for the year ended
December 31, 2023, except for changes in estimates that
are required in determining the provision for income taxes.
In 2023, the Group acquired an
aseptic manufacturing facility which was accounted for as a
business combination. As the acquisition was completed in late
2023, a provisional fair value of assets acquired and liabilities
assumed at the date of acquisition was disclosed in the
consolidated financial statements for the year ended December 31,
2023. In 2024, based on new information obtained about facts and
circumstances that existed as of the acquisition date, the Group
adjusted the provisional fair values for acquired property, plant
and equipment and the assumed onerous contract provision, with an
adjustment to goodwill equal to the change in the net assets
acquired. These measurement period adjustments have been reflected
in the comparative period presented in the Condensed Financial
Statements in accordance with IFRS 3 Business Combinations. The effect on
depreciation and other changes in the related balances from the
acquisition date to December 31, 2023 was immaterial. Refer to Note
17 for a reconciliation of the previously reported provisional fair
value of net assets acquired to the adjusted provisional fair
value.
Effective January 1, 2024, the
functional currency of Indivior U.K. Limited, one of the Group's
significant subsidiaries, changed from pound sterling to U.S.
dollar (USD). This was the result of a change in the primary
economic environment in which Indivior U.K. Limited operates,
driven by growth of USD-denominated net revenue combined with an
increase in USD-denominated costs and culminating with a shift in
investing activities to USD securities. The Group determined the
USD had become the dominant currency from January 2024.
The Directors have assessed the Group's ability to maintain sufficient
liquidity to fund its operations, fulfill financial and compliance
obligations as set out in Note 11, and comply with the minimum
liquidity covenant in the Group's term loan for the period to
September 2025 (the going concern period). A base case model was
produced reflecting:
•
Board reviewed financial plans for the period; and
•
settlement of liabilities and provisions in line with contractual
terms.
The Directors also assessed a
'severe but plausible' downside scenario which included the
following key changes to the base case within the going concern
period:
• the
risk that SUBLOCADE will not meet revenue growth expectations by
modeling a 10% decline on forecasts;
• an
accelerated decline in U.S. SUBOXONE Film net revenue to generic
analogues; and
• a
further decline in rest of world sublingual product net
revenues.
Under both the base case and the
downside scenario, sufficient liquidity exists and is generated
from operations such that all business and covenant requirements
are met for the going concern period. As a result of the analysis
described above, the Directors reasonably expect the Group to have
adequate resources to continue in operational existence for at
least one year from the approval of these Condensed Financial
Statements and therefore consider the going concern basis to be
appropriate for the accounting and preparation of these Condensed
Financial Statements.
The financial information contained
in this document does not constitute statutory accounts as defined
in section 434 and 435 of the Companies Act 2006. The Group's
statutory financial statements for the year ended December 31,
2023, were approved by the Board of Directors on March 5, 2024 and
will be delivered to the Registrar of Companies in due course. The
auditor's report on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any
statement under section 498 of the Companies Act 2006.
2.
SEGMENT INFORMATION
The Group is engaged in a single
business activity, which is predominantly the development,
manufacture, and sale of buprenorphine-based prescription drugs for
treatment of opioid dependence and related disorders. The CEO
reviews disaggregated net revenue on a geographical and product
basis and allocates resources on a functional basis between
Commercial, Supply, Research and Development, and other Group
functions. Financial results are reviewed on a consolidated basis
for evaluating financial performance and allocating resources.
Accordingly, the Group operates in a single reportable
segment.
Net
revenue
Revenue is attributed geographically
based on the country where the sale originates. The following table
represents net revenue by country:
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
United States
|
241
|
209
|
Rest of World
|
43
|
44
|
Total
|
284
|
253
|
On a disaggregated basis,
the Group's net revenue by major product
line:
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
SUBLOCADE®
|
179
|
132
|
PERSERIS®
|
11
|
8
|
Sublingual/other1
|
94
|
113
|
Total
|
284
|
253
|
1 Net revenue for OPVEE® was not material for the period ended
March 31, 2024 and has therefore been included within
sublingual/other.
Non-current assets
The following table represents
non-current assets, net of accumulated depreciation, amortization
and impairment, by country. Non-current assets for this purpose
consist of intangible assets, property, plant and equipment,
right-of-use assets, investments, and other assets.
|
Mar 31,
2024
|
Dec 31,
2023 (Retrospectively
adjusted1)
|
|
$m
|
$m
|
United States
|
206
|
209
|
Rest of World
|
191
|
209
|
Total
|
397
|
418
|
1 The non-current asset balance in the United States as of
December 31, 2023 has been retrospectively adjusted to reflect
measurement period adjustments of $2m to property, plant and
equipment and $3m to intangible assets related to the November 2023
acquisition of an aseptic manufacturing facility. Refer to Note
17.
3.
OPERATING EXPENSES
The table below sets out selected
operating costs and expense information:
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Research and development expenses
|
(28)
|
(27)
|
|
|
|
Selling and marketing
expenses
|
(66)
|
(53)
|
Administrative and general
expenses1
|
(79)
|
(78)
|
Selling, general, and administrative
expenses
|
(145)
|
(131)
|
|
|
|
Depreciation and
amortization2
|
(3)
|
(4)
|
1 Administrative and general expenses include
acquisition-related costs of $12m in
Q1 2023 related to
the acquisition of Opiant Pharmaceuticals, Inc. ("Opiant"). Refer
to Note 16.
2 Depreciation and amortization expense represents amounts
included in research and development and selling, general and
administrative expenses. In addition, depreciation and amortization
expense in Q1 2024
of $6m (Q1
2023: $2m) for
intangible assets and right-of-use assets is included within cost
of sales.
4.
NET FINANCE (EXPENSE)/INCOME
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Finance income
|
|
|
Interest income on cash and cash
equivalents/investments
|
6
|
11
|
Other finance income
|
1
|
-
|
Total finance income
|
7
|
11
|
Finance expense
|
|
|
Interest expense on
borrowings
|
(6)
|
(7)
|
Interest expense on lease
liabilities
|
(1)
|
(1)
|
Interest expense on legal matters,
including the effect of discounting
|
(1)
|
(2)
|
Other interest expense
|
(1)
|
-
|
Total finance expense
|
(9)
|
(10)
|
Net
finance (expense)/income
|
(2)
|
1
|
5.
TAXATION
The Group calculates tax expense for
interim periods using the expected full year rates, considering the
pre-tax income and statutory rates for each jurisdiction. To the
extent practicable, a separate estimated average annual effective
income tax rate is determined for each taxing jurisdiction and
applied individually to the interim period pre-tax income of each
jurisdiction. Similarly, if different income tax rates apply to
different categories of income (such as capital gains or income
earned in particular industries), to the extent practicable a
separate rate is applied to each individual category of interim
period pre-tax income. The resulting expense is allocated between
current and deferred taxes based on actual movement in deferred tax
for the quarter, with the balance recorded to the current tax
accounts.
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Total tax expense
|
(16)
|
(14)
|
Effective tax rate (%)
|
25%
|
24%
|
In the three
months ended March 31, 2024, the
effective tax rate was primarily driven by statutory tax.
In the three months ended March 31, 2023, the
effective tax rate was primarily driven by an increase in the U.K.
tax rate from 19% to 23.5%, and the temporary reduction in
innovation incentives due to 2022 losses.
|
Mar 31,
2024
|
Dec 31,
2023 (Retrospectively
adjusted1)
|
|
$m
|
$m
|
Current tax receivable
|
9
|
-
|
Current tax liabilities
|
(7)
|
(18)
|
Deferred tax assets
|
260
|
267
|
1 The deferred tax assets balance as of December 31, 2023 has
been retrospectively adjusted to reflect a measurement period
adjustment related to the November 2023 acquisition of an aseptic
manufacturing facility. Refer to Note 17.
The Group recognizes deferred tax
assets to the extent that sufficient future taxable profits are
probable against which these future tax deductions can be utilized.
At March 31, 2024, the Group's net
deferred tax assets of $260m relate
primarily to net operating loss carryforwards, inventory costs
capitalized for tax purposes, and litigation liabilities.
Recognition of deferred tax assets is reliant on forecast taxable
profits arising in the jurisdiction in which the deferred tax asset
is recognized. The Group has assessed recoverability of deferred
tax assets using Group-level budgets and forecasts consistent with
those used for the assessment of viability and asset impairments,
particularly in relation to levels of future net revenues. These
forecasts are subject to similar uncertainties to those
assessments. This is reviewed each quarter and, to the extent
required, an adjustment to the recognized deferred tax asset may be
made. With the exception of specific assets that are not currently
considered realizable, management have concluded full recognition
of deferred tax assets to be appropriate and do not believe a
significant risk of material change in their assessment exists in
the next 12 months from the balance sheet date.
Other tax matters
The Group is subject to Pillar Two
legislation effective January 1, 2024. As such, the Group performed
an assessment of the potential exposure to Pillar Two income taxes
including modeling of adjusted accounting data for the period ended
December 31, 2023 and a review of forecasts for the year ended
December 31, 2024. Based on the assessment, the Group did not
record any current tax liability related to Pillar Two. The Group
has applied the recent amendment to IAS 12 which provides temporary
relief to the recognition of deferred taxes relating to top-up
income taxes.
As a multinational group, tax
uncertainties remain in relation to Group financing, intercompany
pricing, the location of taxable operations, and certain
non-recurring costs. Management have concluded tax provisions made
to be appropriate and do not believe a significant risk of material
change to uncertain tax positions exists in the next 12 months from
the balance sheet date. Including matters under audit, an estimate
of reasonably possible additional tax liabilities that could arise
in later periods on resolution of these uncertainties is in the
range from nil to $38m.
6.
EARNINGS PER SHARE
The table below sets out basic and
diluted earnings per share for each period:
|
2024
|
2023
|
For
the three months ended March 31
|
$
|
$
|
Basic earnings per share
|
$0.35
|
$0.32
|
Diluted earnings per
share
|
$0.34
|
$0.31
|
Weighted average number of shares
The weighted average number of
ordinary shares outstanding (on a basic basis) for Q1 2024 includes the favorable
impact of 1,988k ordinary shares
repurchased in Q1 2024 and 1,413k ordinary shares
repurchased from April to December 2023.
See Note 15 for further discussion. Conditional awards of
1,700k and 1,761k
were granted under the Group's Long-Term Incentive Plan in
Q1 2024 and
Q1 2023,
respectively.
|
2024
|
2023
|
For
the three months ended March 31
|
thousands
|
thousands
|
Weighted average shares on a basic
basis
|
135,737
|
136,536
|
Dilution from share awards and
options
|
2,973
|
4,452
|
Weighted average shares on a diluted
basis
|
138,710
|
140,988
|
7.
INTANGIBLE ASSETS
|
Mar 31,
2024
|
Dec 31,
2023 (Retrospectively
adjusted1)
|
Intangible assets, net of accumulated amortization and
impairment
|
$m
|
$m
|
Products in development
|
79
|
79
|
Marketed products
|
147
|
150
|
Goodwill
|
2
|
2
|
Software
|
2
|
3
|
Total
|
230
|
234
|
1 The goodwill balance as of December 31, 2023 was
retrospectively adjusted to reflect measurement period adjustments
related to the November 2023 acquisition of an aseptic
manufacturing facility. Refer to Note 17.
8.
INVESTMENTS
|
Mar 31,
2024
|
Dec
31,
2023
|
Current and non-current investments
|
$m
|
$m
|
Equity securities at FVPL
|
10
|
10
|
Debt securities held at amortized
cost
|
72
|
84
|
Total investments, current
|
82
|
94
|
Debt securities held at amortized
cost
|
26
|
41
|
Total investments, non-current
|
26
|
41
|
Total
|
108
|
135
|
The Group's investments in debt and
equity securities do not create significant credit risk, liquidity
risk, or interest rate risk. Debt
securities held at amortized cost consist of investment-grade debt.
As of March 31, 2024, expected credit
losses for the Group's investments held at amortized cost are
deemed to be immaterial.
Fair value hierarchy
Fair value is the price that would
be received to sell an asset or transfer a liability in an orderly
transaction between market participants at the measurement date.
The different levels have been defined as follows:
• Level 1: Quoted prices
(unadjusted) in active markets for identical assets or
liabilities
• Level 2: Inputs other than quoted
prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly
• Level 3: Unobservable inputs for
the asset or liability
The Group's only financial
instruments which are measured at fair value are equity securities
at FVPL. The fair value of equity securities at FVPL is based on
quoted market prices on the measurement date. The following table
categorizes the Group's financial assets measured at fair value by
valuation methodology used in determining their fair
value:
At
March 31, 2024
|
Level
1
$m
|
Level
2
$m
|
Level
3
$m
|
Total
$m
|
Equity securities at FVPL
|
10
|
-
|
-
|
10
|
At December 31, 2023
|
Level
1
$m
|
Level
2
$m
|
Level
3
$m
|
Total
$m
|
Equity securities at FVPL
|
10
|
-
|
-
|
10
|
The Group also has certain financial
instruments which are not measured at fair value. The carrying
value of cash and cash equivalents, trade receivables, other
assets, and trade and other payables is assumed to approximate fair
value due to their short-term nature. At March 31, 2024, the carrying value of investments
held at amortized cost approximated the fair value. The fair value
of investments held at amortized cost was calculated based on
quoted market prices which would be classified as Level 1 in the
fair value hierarchy above.
9.
CURRENT AND NON-CURRENT OTHER ASSETS
|
Mar 31,
2024
|
Dec
31,
2023
|
Current and non-current other assets
|
$m
|
$m
|
Current prepaid expenses
|
31
|
23
|
Other current assets
|
14
|
434
|
Total other current assets
|
45
|
457
|
Non-current prepaid
expenses
|
18
|
19
|
Other non-current assets
|
11
|
9
|
Total other non-current assets
|
29
|
28
|
Total
|
74
|
485
|
The decrease in other current assets
primarily relates to release of escrow funding of $415m for the
Antitrust MDL (direct purchaser and end payor class settlements)
since the courts have provided final approval of the settlements.
Refer to Note 13. Long-term prepaid expenses primarily relate to
payments for contract manufacturing capacity.
10.
FINANCIAL LIABILITIES - BORROWINGS
The table below sets out the current
and non-current portion obligation of the Group's term
loan:
|
Mar 31,
2024
|
Dec
31,
2023
|
Term loan
|
$m
|
$m
|
Term loan - current
|
(3)
|
(3)
|
Term loan - non-current
|
(235)
|
(236)
|
Total term loan
|
(238)
|
(239)
|
*Total term loan borrowings reflect
the principal amount drawn including debt issuance costs of $5m (FY 2023:
$5m).
At March 31,
2024, the term loan fair value was approximately 100% (FY 2023: 100%) of par value. The key terms of this loan in
effect at March 31, 2024, are as
follows:
|
|
Currency
|
Nominal interest
margin
|
Maturity
|
Required annual
repayments
|
Minimum
liquidity
|
Term loan facility
|
|
USD
|
SOFR +
0.26% + 5.25%
|
2026
|
1%
|
Larger of
$100m or 50% of loan balance
|
The term loan amounting to
$243m (FY 2023:
$244m) is secured against the assets of
certain subsidiaries of the Group in the form of guarantees issued
by respective subsidiaries.
• Nominal interest margin is
calculated as USD SOFR plus 26 bps, subject
to a floor of 0.75%, plus a credit spread
adjustment of 5.25%.
• There are no revolving credit commitments.
11.
PROVISIONS AND OTHER LIABILITIES
Provisions
|
|
|
Total
|
|
|
Total
|
|
Current
|
Non-Current
|
Mar 31,
2024
|
Current
|
Non-Current
|
Dec 31, 2023
(Retrospectively
adjusted1)
|
Current and non-current provisions
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Multi-district antitrust class and
state claims
|
-
|
-
|
-
|
(385)
|
-
|
(385)
|
Onerous contracts
|
(17)
|
-
|
(17)
|
(19)
|
(3)
|
(22)
|
False claims allegations
|
(4)
|
-
|
(4)
|
(4)
|
-
|
(4)
|
Other
|
-
|
(2)
|
(2)
|
-
|
(2)
|
(2)
|
Total provisions
|
(21)
|
(2)
|
(23)
|
(408)
|
(5)
|
(413)
|
1 The provision for onerous contracts as of December 31, 2023
has been retrospectively adjusted to reflect a measurement period
adjustment related to the November 2023 acquisition of an aseptic
manufacturing facility. Refer to Note 17.
Multi-district antitrust class and state
claims
As previously disclosed, settlement
agreements were entered into during 2023 with three plaintiff
classes to fully resolve certain multi-district antitrust claims.
The $385m direct purchaser class settlement received final court
approval during the quarter. The provision and related other escrow
settlement asset have been offset and Indivior has no further
obligations related to this matter.
Onerous contracts
In November 2023, the Group acquired
a business consisting of a manufacturing facility, workforce, and
supply contracts. The facility is obligated to fulfill contracts
that existed pre-acquisition for which the expected costs are in
excess of the consideration expected to be received. The Group
recorded a provision for these onerous contracts in the allocation
of purchase price, with a balance at the end of the quarter of
$17m (FY 2023: $22m).
During the quarter, net operating losses attributable to the
contracts of $6m were recorded against the provision. A measurement
period adjustment to this provision as of the acquisition date was
recorded during the quarter and the reported December 31, 2023
provision has been adjusted accordingly. Refer to Note 17, Business
Combination for additional details on this measurement period
adjustment. Product manufacturing under the onerous
contracts is expected to be completed prior to March 2025 and the
provision is recorded at its discounted value, using a market rate
at the time of the transaction determined to be 7.6%.
False Claims Act allegations
The Group carries a
provision of $4m (FY 2023: $4m) pertaining to all outstanding False
Claims Act allegations as discussed in Note 13. These matters are
expected to be settled within the next 12 months.
Other
Other provisions of $2m (FY 2023: $2m) represent retirement benefit costs which are not
expected to be settled within one year.
Other liabilities
|
|
|
Total
|
|
|
Total
|
|
Current
|
Non-Current
|
Mar 31,
2024
|
Current
|
Non-Current
|
Dec 31,
2023
|
Current and non-current other liabilities
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
DOJ resolution
|
(50)
|
(295)
|
(345)
|
(53)
|
(344)
|
(397)
|
Multi-district antitrust class and
state claims
|
-
|
-
|
-
|
(30)
|
-
|
(30)
|
Intellectual property related
matters
|
-
|
-
|
-
|
(11)
|
-
|
(11)
|
RB indemnity settlement
|
(8)
|
(7)
|
(15)
|
(8)
|
(15)
|
(23)
|
Share repurchase
|
(9)
|
-
|
(9)
|
(23)
|
-
|
(23)
|
Other
|
-
|
(11)
|
(11)
|
-
|
(8)
|
(8)
|
Total other liabilities
|
(67)
|
(313)
|
(380)
|
(125)
|
(367)
|
(492)
|
DOJ
Resolution Agreement
In July 2020, the Group settled
criminal and civil liability with the United States Department of
Justice (DOJ), the U.S. Federal Trade Commission (FTC), and U.S.
state attorneys general. Pursuant to the resolution agreement,
aggregate payments of $263m (including
interest) have been made through March 31,
2024, including a payment of $53m in
January 2024. Annual installments of $50m plus interest are due
every January 15 from 2025 to 2027, with
the final installment of $200m due in December 2027. The Group has
the option to prepay. Interest accrues at 1.25% on certain portions of the resolution and will be
paid with the annual installment payments. For non-interest-bearing
portions, the liability has been recorded at the net present value
based on timing of the estimated payments using a discount rate
equal to the interest rate on the interest-bearing portions. In
Q1 2024, the Group
recorded interest expense totaling $1m
(Q1 2023:
$1m).
Multi-district antitrust class and state
claims
As noted above, certain
multi-district antitrust claims were resolved during 2023 through
settlement agreements entered into with three classes of
plaintiffs. The $30m end payor liability and related other escrow
settlement asset have been offset since final court approval was
received and Indivior has no further obligations related to this
matter.
IP
related matters
Other liabilities for intellectual
property related matters relate to the settlement of litigation
with DRL in June 2022. Under the settlement agreement, the Group
made a final payment to DRL of $12m during the quarter and has no
further obligations related to this matter.
RB
indemnity settlement
Under the RB indemnity settlement,
the Group has paid $34m of the $50m
settlement agreement through March 31,
2024 including $8m paid in January 2024. Remaining annual
installment payments of $8m are due in January 2025 and 2026. The Group carries a liability totaling
$15m (FY 2023:
$23m) related to this settlement. This
liability has been recorded at the net present value, using a
market interest rate at the time of the settlement determined to be
3.75%, considering the timing of payments and other factors. In
Q1 2024, the Group
recorded nil of finance expense
(Q1 2023:
nil) for time value of money on the
liability.
Share repurchase
In November 2023, the Group
commenced a share repurchase program of $100m. As of March 31, 2024, the liability of $9m represents the amount to be spent under the program
through April 26, 2024, after which date the Company has the
ability to modify or terminate the program. As of December 31,
2023, the current liability of $23m
represented the amount to be spent under the program through
February 23, 2024.
Other
Other liabilities primarily
represent employee related liabilities which are non-current as of
March 31, 2024.
12.
CONTINGENT LIABILITIES
The Group has assessed certain legal
and other matters to be not probable based upon current facts and
circumstances, including any potential impact the DOJ resolution
could have on these matters. Where liabilities related to these
matters are determined to be possible, they represent contingent
liabilities. Except for those matters discussed in Note 13 under
"False Claims Act allegations", for which provisions have been
recognized, Note 13 sets out the details for legal and other
disputes for which the Group has assessed as contingent
liabilities. Where the Group believes that it is possible to
reasonably estimate a range for the contingent liability this has
been disclosed.
13.
LEGAL PROCEEDINGS
There are certain ongoing legal
proceedings or threats of legal proceedings in which the Group is a
party, but in which the Group believes the possibility of an
adverse impact is remote and they are not discussed in this
Note.
Antitrust Litigation and Consumer Protection
• Cases filed by (1) Blue Cross and Blue Shield of
Massachusetts, Inc., Blue Cross and Blue Shield of Massachusetts
HMO Blue, Inc., (2) Health Care Service Corp., (3) Blue Cross and
Blue Shield of Florida, Inc., Health Options, Inc., (4) BCBSM, Inc.
(d/b/a Blue Cross and Blue Shield of Minnesota) and HMO Minnesota
(d/b/a Blue Plus), (5) Molina Healthcare, Inc., and (6) Aetna Inc.
were filed in the Circuit Court for the County of Roanoke,
Virginia. See Health Care
Services Corp. v. Indivior Inc., No. CL20-1474 (Lead Case)
(Va. Cir. Ct.) (Roanoke Cnty). In July
2023, Indivior Inc. and BCBSM, Inc. and HMO Minnesota agreed to
mutual releases and settlement. The remaining
plaintiffs asserted claims under federal and state RICO statutes,
state antitrust statutes, state statutes prohibiting unfair and
deceptive practices, state statutes prohibiting insurance fraud,
and common law fraud, negligent misrepresentation, and unjust
enrichment. The Group filed demurrers, which the court sustained in
part and overruled in part. Separately, Indivior Inc. filed
counterclaims against several plaintiffs alleging violations of
certain insurance fraud statutes. The plaintiffs demurred. The
court overruled HCSC's demurrer but sustained the demurrers of the
remaining plaintiffs named in Indivior Inc.'s counterclaims. A jury
trial on the Group's pleas in bar to the remaining plaintiffs'
fraud claims was held on October 30 - November 3, 2023. The jury
rendered a verdict finding that the plaintiffs' fraud claims are
not barred by the statute of limitations. A jury trial on the
merits has been set for July 15, 2024 - August 15, 2024. The Group
is still in the process of evaluating the claims, believes it has
meritorious defenses, and intends to defend itself. No estimate of
the range of potential loss can be made at
this time.
•
Humana, Inc. filed a Complaint in state court in Kentucky on August
20, 2021 with claims substantially similar to those asserted by
other end payors in the HCSC consolidated litigation. See Humana Inc. v. Indivior Inc., No.
21-CI-004833 (Ky. Cir. Ct.) (Jefferson Cnty). The court lifted a
stay on October 30, 2023. Indivior moved to dismiss the complaint
in February 2024. The Group has begun its evaluation of the claims,
believes it has meritorious defenses, and intends to vigorously
defend itself. Given the status and preliminary stage of the
litigation, no estimate of possible loss can be made at this
time.
•
Centene Corporation, Wellcare Healthcare Plans, Inc., New York
Quality Healthcare Corp. (d/b/a Fidelis Care), and Health Net, LLC
filed a complaint in the Circuit Court for the County of Roanoke,
Virginia alleging similar claims on January 13, 2023. See Centene Corp. v. Indivior Inc.,
No. CL23000054-00 (Va. Cir. Ct.) (Roanoke Cnty). Indivior demurred
to the complaint and asserted pleas in bar in early February 2024.
The Group has begun its evaluation of the claims, believes it has
meritorious defenses, and intends to vigorously defend itself.
Given the status and preliminary stage of the litigation,
no estimate of possible loss can be made at this
time.
• As
previously disclosed in 2023, Indivior Inc. settled claims of all
plaintiff groups in the company's antitrust multi-district
litigation ("Antitrust MDL") namely, (i) 41 states
and the District of Columbia (the "States"), (ii) end payors, and
(iii) direct purchasers (collectively, the "Plaintiffs").
Indivior Inc. reached a settlement with the States for $103m on
June 1, 2023. Indivior Inc. entered into a settlement agreement
with the end payor class for $30m on August 14, 2023 and received
final court approval on December 5, 2023. On October 22, 2023,
Indivior Inc. entered into a settlement agreement with the
remaining direct purchaser class for $385m, which received final
court approval on February 27, 2024.
• In 2013, Reckitt Benckiser Pharmaceuticals Inc. "RBPI," now
known as Indivior Inc. received notice that it and other companies
were defendants in a lawsuit initiated by writ in the Philadelphia
County (Pennsylvania) Court of Common Pleas. See Carefirst of Maryland, Inc. et al. v. Reckitt
Benckiser Inc., et al., Case. No. 2875, December Term 2013.
The plaintiffs included approximately 79 entities, most of which
appeared to be insurance companies or other providers of health
benefits plans. The claims of all plaintiffs in the Carefirst action except Humana Inc.
and certain of its affiliates were resolved in connection with
final approval of the end payor settlement in the Antitrust MDL,
and accordingly dismissed on February 14, 2024. The claims of
Humana Inc. and certain of its affiliates in the Carefirst action remain pending. The
Group has begun its evaluation of the claims, believes it has
meritorious defenses, and intends to vigorously defend itself.
Given the status and preliminary stage of the litigation,
no estimate of possible loss can be made at this
time.
Civil Opioid Litigation
• The
Group has been named as a defendant in more than 400 civil lawsuits
alleging that manufacturers, distributors, and retailers of opioids
engaged in a longstanding practice to market opioids as safe and
effective for the treatment of long-term chronic pain to increase
the market for opioids and their own market shares for opioids, or
alleging individual personal injury claims. Most of these cases
have been consolidated and are pending in a federal multi-district
litigation ("the Opioid MDL") in the U.S. District Court for the
Northern District of Ohio. See In
re National Prescription Opiate Litigation, MDL No. 2804
(N.D. Ohio). Nearly two-thirds of the cases in the Opioid MDL were
filed by cities and counties, while nearly one-third of the cases
were filed by individual plaintiffs, most of whom assert claims
relating to neonatal abstinence syndrome ("NAS"). Litigation
against the Group in the Opioid MDL is stayed.
• The
court in the Opioid MDL has indicated that it does not intend to
set additional bellwether trials for Tier 2 and Tier 3 manufacturer
and distributor defendants, provided that those defendants remain
actively engaged in mediation.
•
Separately, Indivior Inc. was named as one of numerous defendants
in civil opioid cases that are not part of the Opioid
MDL:
◦ In 2017, Indivior Inc.
was named as one of numerous defendants in International Brotherhood of Electrical
Workers Local 728 Family Healthcare Plan v. Allergan, PLC et
al., Case ID: 190303872 (C.P. Phila. Cnty). That case was
consolidated with Lead Case No. 2017-008095 in Delaware County and
stayed, remanded back to the Philadelphia Court by order dated
December 29, 2023, and ultimately dismissed with prejudice as to
Indivior Inc. by agreement of the parties on March 27,
2024.
◦ Indivior also was named as one of numerous defendants in
various other federal and state court cases that are not in the
Opioid MDL and were brought by municipalities. These cases include,
for example, 35 actions filed in New York state court that were
removed to federal court, as well as cases filed in federal
district courts sitting in Alabama, Florida, Georgia, and New
Mexico. The plaintiffs filed motions to remand the New York cases,
which remain pending. The plaintiffs in the case filed in the
Northern District of Alabama have voluntarily dismissed their
complaint, subject to certain tolling agreements. The various other
federal actions currently are stayed, except Indivior's
response to the complaint in San
Miguel Hospital Corp. d/b/a Alta Vista Regional Medical Center v.
Johnson & Johnson, et al., No. 1:23-cv-00903 (D.N.M.) is
due May 2, 2024.
◦ Indivior Inc. was named as a defendant in five individual
complaints filed in West Virginia state court that were transferred
to West Virginia's Mass Litigation Panel. See In re Opioid
Litigation, No. 22-C-9000 NAS (W.V.
Kanawha Cnty. Cir. Ct.) ("WV MLP Action"). All five of Indivior
Inc.'s cases in the WV MLP Action involved claims related to NAS.
Indivior Inc. moved to dismiss all five complaints on January 30, 2023. By order dated April 17, 2023, the court
granted Indivior's motions to dismiss. The plaintiffs filed a
notice of appeal on June 30, 2023. Appellate briefing in various
cases, including the cases involving Indivior, was stayed in view
of Rite-Aid's bankruptcy. However, on April 16, 2024, the court of
appeals granted the plaintiffs' motion to sever Rite-Aid and lift
the stay. Plaintiffs have until May 7, 2024 to perfect their
appeal, and the Defendants' response is due by June 21,
2024.
•
Given the status and preliminary stage of litigation in both the
Opioid MDL and the separate federal and state court actions,
no estimate of possible loss in the opioid litigation can be
made at this time.
False Claims Act Allegations
• In
August 2018, the United States District Court for the Western
District of Virginia unsealed a declined qui tam complaint alleging causes of
action under the Federal and state False Claims Acts against
certain entities within the Group predicated on best price issues
and claims of retaliation. See United States ex rel. Miller v. Reckitt
Benckiser Group PLC et al., Case No. 1:15-cv-00017 (W.D.
Va.). The suit also seeks reasonable attorneys' fees and costs. The
Group filed a Motion to Dismiss in June 2021, which was granted in
part and denied in part on October 17, 2023. The relator filed a
sixth amended complaint against only Indivior Inc. on December 7,
2023. Indivior answered the sixth amended complaint on March 18,
2024.
• In
May 2018, Indivior Inc. received an informal request from the
United States Attorney's Office ("USAO") for the Southern District
of New York, seeking records relating to the SUBOXONE Film
manufacturing process. The Group provided the USAO certain
information regarding allegations that the government received
regarding SUBOXONE Film. There has been no communication regarding
this matter with the USAO since 2022.
U.K. Shareholder Claims
• On
September 21, 2022, certain shareholders issued representative and
multiparty claims against Indivior PLC in the High Court of Justice
for the Business and Property Courts of England and Wales, King's
Bench Division. On January 16, 2023, the representative served its
Particular of Claims setting forth in more detail the claims
against the Group, while the same law firm that represents the
representative also sent its draft Particular of Claims for the
multiparty action. The claims made in both the representative and
multiparty actions generally allege that Indivior PLC violated the
U.K. Financial Services and Markets Act 2000 ("FSMA 2000") by
making false or misleading statements or material omissions in
public disclosures, including the 2014 Demerger Prospectus,
regarding an alleged product-hopping scheme regarding the switch
from SUBOXONE Tablets to SUBOXONE Film. Indivior PLC filed an
application to strike out the representative action. On December 5,
2023, the court handed down a judgment allowing the Group's
application to strike out the representative action. The court
subsequently awarded certain costs to the Group. On January 23,
2024, the claimants requested permission to appeal the decision to
the court of appeals. The Group has begun its
evaluation of the claims, believes it has meritorious defenses, and
intends to vigorously defend itself. Given the status and
preliminary stage of the litigation, no estimate of possible
loss can be made at this time.
Dental Allegations
• The
Group has been named as a defendant in more than 325 lawsuits that
have been consolidated into a multi-district litigation in the
Northern District of Ohio ("Dental MDL"). See In Re Suboxone (Buprenorphine/Naloxone)
Film Products Liability Litigation, MDL No. 3092 (N.D. Oh.).
The plaintiffs generally allege that the Group failed to properly
warn physicians of the risk of dental injury, and further allege
that SUBOXONE products were defectively designed. The plaintiffs
generally seek compensatory damages, as well as punitive damages
and attorneys' fees and costs. Product liability cases such as
these typically involve issues relating to medical causation, label
warnings and reliance on those warnings, scientific evidence and
findings, actual, provable injury and other matters. These cases
are in their preliminary stages. The Group is evaluating the claims
and its defenses, believes it has meritorious defenses, and intends
to defend itself. No estimate of the range of potential loss can be
made at this time. These lawsuits follow a June 2022 required
revision to the Prescribing Information and Patient Medication
Guide about dental problems reported in connection with
buprenorphine medicines dissolved in the mouth to treat opioid use
disorder. This revision was required by the FDA of all
manufacturers of these products. The Group has been informed by its
primary insurance carrier that defense costs for the Dental MDL
should begin to be reimbursed now that the Group's self-insurance
retention has been exhausted. To date, no such reimbursement has
occurred. Additionally, the Group's insurance carrier has issued a
reservation of rights against payment of any finding of liability
costs. The Group has begun its evaluation of the claims, believes
it has meritorious defenses, and intends to vigorously defend
itself. Given the status and preliminary stage of the litigation,
no estimate of possible loss can be made at this
time.
•
Applications to file class actions based on
similar allegations as in the Dental MDL were filed in Quebec and
British Columbia against various subsidiaries of the Group, among
other defendants, in April 2024. The Group has begun its evaluation
of the claims, believes it has meritorious defenses, and intends to
vigorously defend itself. Given the status and preliminary stage of
the litigation, no estimate of possible loss can be made at this
time.
14.
TRADE AND OTHER PAYABLES
|
Mar 31,
2024
|
Dec
31,
2023
|
|
$m
|
$m
|
Accrual for rebates, discounts and
returns
|
(556)
|
(507)
|
Rebates payable
|
(4)
|
(28)
|
Accounts payable
|
(40)
|
(39)
|
Accruals and other
payables
|
(129)
|
(150)
|
Other tax and social security
payable
|
(25)
|
(19)
|
Total trade and other
payables
|
(754)
|
(743)
|
15.
SHARE CAPITAL
|
Equity ordinary shares
(thousands)
|
Nominal value paid per
share
|
Aggregate nominal value
$m
|
Issued and fully paid
|
|
|
|
At
January 1, 2024
|
136,526
|
$0.50
|
68
|
Ordinary shares issued
|
1,356
|
$0.50
|
1
|
Shares repurchased and
canceled
|
(1,988)
|
$0.50
|
(1)
|
At
March 31, 2024
|
135,894
|
|
68
|
|
Equity
ordinary shares (thousands)
|
Nominal
value paid per share
|
Aggregate
nominal value $m
|
Issued and fully paid
|
|
|
|
At January 1, 2023
|
136,481
|
$0.50
|
68
|
Ordinary shares issued
|
1,878
|
$0.50
|
1
|
Shares repurchased and
canceled
|
(484)
|
$0.50
|
-
|
At March 31, 2023
|
137,875
|
|
69
|
Ordinary shares issued
During the period, 1,356k ordinary shares at $0.50
each (Q1 2023:
1,878k at $0.50
each) were issued to satisfy vesting/exercises under the Group's
Long-Term Incentive Plan, the Indivior U.K. Savings-Related Share
Option Scheme, and the U.S. Employee Stock Purchase Plan. In
Q1 2024, net settlement of tax on employee
equity awards was $20m (Q1 2023: $21m).
Shares repurchased and canceled
On May 3, 2022, the Group commenced
a share repurchase program for an aggregate purchase price up to no
more than $100m or 39,699k of ordinary shares, (equivalent shares
post share consolidation: 7,940k) which concluded on February 28,
2023. During the prior period, the Company repurchased and
canceled 484k
ordinary shares with a nominal value of $0.50 each.
On November 17, 2023, the Group
commenced a share repurchase program for an aggregate purchase
price up to no more than $100m or 13,632k of ordinary shares and
ending no later than August 30, 2024. During the period, the Group
repurchased and canceled a total of 1,988k ordinary shares at $0.50
per share under this program for an
aggregate nominal value of $1m.
All ordinary shares repurchased
during the period under share repurchase programs were canceled
resulting in a transfer of the aggregate nominal value to a capital
redemption reserve. The total cost of the purchases made under the
share repurchase program during the period, including directly
attributable transaction costs, was $36m
(FY 2023: $33m). A
net repurchase amount of $9m has been
recorded as a financial liability and reduction of retained
earnings which represents the amount to be spent under the program
through April 26, 2024, after which date the Company has the
ability to modify or terminate the program. Total
purchases under the share repurchase program will be made out of
distributable profits.
16.
ACQUISITION OF OPIANT
On March 2, 2023, the Group acquired
100% of the share capital of Opiant
for upfront cash consideration of $146m and an
additional maximum amount of $8.00 per share in Contingent
Value Rights (CVR) to be potentially paid upon
achievement of net sales milestones. As a result of the
acquisition, the Group added OPVEE (nalmefene nasal
spray), an opioid overdose treatment well-suited
to confront illicit synthetic opioids like fentanyl, to its
addiction science portfolio. OPVEE was
approved by the FDA in May 2023 and launched in October
2023.
Since substantially all of the fair
value of the gross assets acquired was concentrated in the OPVEE
in-process research and development, the Group accounted for the
transaction as an asset acquisition and recorded an intangible
asset of $126m.
The cash outflow for the acquisition
was $124m in Q1 2023, net of cash acquired, and inclusive of direct
transaction costs. As part of the acquisition, the Group assumed
outstanding debt of $10m which was settled and included as a cash
outflow from financing activities.
Additional acquisition-related costs
of $12m were incurred in Q1 2023 and included in selling, general,
and administrative expenses, primarily relating to severance,
acceleration of vesting of Opiant employee share compensation, and
short-term retention accruals.
17.
BUSINESS COMBINATION
On November 1, 2023, the Group
acquired an aseptic manufacturing facility (the "Facility") in the
United States for upfront consideration of $5m in cash and
assumption of certain contract manufacturing obligations. The
Facility will be further developed to secure the long-term
production and supply of SUBLOCADE and PERSERIS.
The acquisition was accounted for as
a business combination using the acquisition method of accounting
in accordance with IFRS 3 Business Combinations. The assets
acquired and liabilities assumed were recorded at fair value, with
the excess of the purchase price over the fair value of the
identifiable assets and liabilities recognized as goodwill. An
onerous contract provision was recorded at fair value to reflect
the present value of the expected losses from assumed contractual
manufacturing obligations. Net operating losses attributable to
these contractual obligations will be recorded against the onerous
contract provision from the date of acquisition through fulfillment
of the contracts in early 2025.
As of March 31, 2024, committed capital spend for the Facility is
approximately $7m.
Identifiable assets acquired and liabilities
assumed
As the acquisition was completed in
late 2023, the provisional fair value of assets acquired and
liabilities assumed at the date of acquisition was disclosed in the
consolidated financial statements for the year ended December 31,
2023. In 2024, based on new information obtained about facts and
circumstances that existed as of the acquisition date, the Group
adjusted the provisional fair values for acquired property, plant
and equipment and the assumed onerous contract provision, with an
adjustment to goodwill equal to the change in the net assets
acquired. These measurement period adjustments have been reflected
in the comparative period presented in the Condensed Financial
Statements in accordance with IFRS 3 Business Combinations. The following
table provides a reconciliation from the
provisional fair values of assets acquired and liabilities assumed
at the date of acquisition as reported in the 2023 annual financial
statements to the provisional fair values as adjusted during the
quarter:
|
Provisional
values
|
|
As Previously
Reported
|
Measurement period
adjustment
|
As adjusted
|
Net
assets acquired
|
$m
|
$m
|
$m
|
Property, plant and
equipment
|
28
|
(2)
|
26
|
Deferred tax assets
|
2
|
(1)
|
1
|
Trade and other payables
|
(1)
|
-
|
(1)
|
Provisions
|
(29)
|
6
|
(23)
|
Total net assets acquired
|
-
|
3
|
3
|
Goodwill
Goodwill arising from the
acquisition has been recognized as follows, reflecting the
measurement period adjustments:
|
Provisional
values
|
|
As Previously
Reported
|
Measurement period
adjustment
|
As adjusted
|
|
$m
|
$m
|
$m
|
Consideration transferred
|
5
|
-
|
5
|
Less: Fair value of net assets
acquired
|
-
|
(3)
|
(3)
|
Goodwill
|
5
|
(3)
|
2
|
The goodwill is primarily
attributable to Indivior-specific synergies relating to accelerated
in-sourcing of SUBLOCADE production and the skills and technical
talent of the Facility's workforce.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors declare that, to the
best of their knowledge:
• This
set of condensed consolidated interim financial statements, which
have been prepared in accordance with U.K. adopted International
Accounting Standard 34, Interim
Financial Reporting, gives a true and fair view of the
assets, liabilities, financial position, and profit or loss of
Indivior; and
• The
interim management report gives a fair review of the information in
line with regulations 4.2.7 and 4.2.8 of the Disclosure Guidance
and Transparency Rules.
The Directors are responsible for
the maintenance and integrity of the Group's website. Legislation
in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other
jurisdictions.
Details of Indivior PLC's Directors
are available on our website at www.indivior.com
By order of the Board
Mark Crossley
|
Ryan Preblick
|
Chief Executive Officer
|
Chief Financial Officer
|
April 24, 2024
Independent review report to Indivior PLC
Report on the condensed consolidated interim financial
statements
We have reviewed Indivior PLC's
condensed consolidated interim financial statements (the "interim
financial statements") in the Q1 2024 Financial
Results of Indivior PLC for the three month period ended 31 March
2024 (the "period").
Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting'.
The interim financial statements
comprise:
• the
Condensed consolidated interim balance sheet as at 31 March
2024;
• the
Condensed consolidated interim income statement and Condensed
consolidated interim statement of comprehensive income for the
three month period then ended;
• the
Condensed consolidated interim cash flow statement for the three
month period then ended;
• the
Condensed consolidated interim statement in changes in equity for
the three month period then ended; and
• the
explanatory notes to the interim financial statements.
The interim financial statements
included in the Q1 2024 Financial Results of Indivior PLC have been
prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting'.
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom ("ISRE (UK) 2410").
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information
contained in the Q1 2024 Financial Results and considered whether
it contains any apparent misstatements or material inconsistencies
with the information in the interim financial
statements.
Conclusions relating to going concern
|
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern.
Responsibilities for the interim financial statements and the
review
|
Our
responsibilities and those of the directors
|
The Q1 2024 Financial Results,
including the interim financial statements, is the responsibility
of, and has been approved by the directors. The directors are
responsible for preparing the Q1 2024 Financial Results in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting'. In preparing the Q1 2024 Financial
Results, including the interim financial statements, the directors
are responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do
so.
Our responsibility is to express a
conclusion on the interim financial statements in the Q1 2024
Financial Results based on our review. Our conclusion, including
our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the
Basis for conclusion paragraph of this report. This report,
including the conclusion, has been prepared for and only for the
company for the purpose of complying with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and for no
other purpose. We do not, in giving this conclusion, accept or
assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers
LLP
Chartered Accountants
London
24 April
2024
APPENDIX: ADJUSTED RESULTS
Exceptional items and other adjustments
Exceptional items and other
adjustments represent significant expenses or income that do not
reflect the Group's ongoing operations or the adjustment of which
may help with the comparison to prior periods. Exceptional items
and other adjustments are excluded from adjusted results consistent
with the internal reporting provided to management and the
Directors. Examples of such items could include income or
restructuring and related expenses from the reconfiguration of the
Group's activities and/or capital structure, amortization of
acquired intangible assets, impairment of current and non-current
assets, gains and losses from the sale of intangible assets,
certain costs arising as a result of significant and non-recurring
regulatory and litigation matters, and certain tax related
matters.
Adjusted results are not measures
defined by IFRS and are not a substitute for, or superior to,
reported results presented in accordance with IFRS. Adjusted
results as presented by the Group are not necessarily comparable to
similarly titled measures used by other companies. As a result,
these performance measures should not be considered in isolation
from, or as a substitute analysis for, the Group's reported results
presented in accordance with IFRS. Management performs a
quantitative and qualitative assessment to determine if an item
should be considered for adjustment. The table below sets out
exceptional items and other adjustments recorded in each
period:
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Exceptional items and other
adjustments within cost of sales
|
|
|
Amortization of acquired intangible
assets1
|
(3)
|
-
|
Total exceptional items and other
adjustments within cost of sales
|
(3)
|
-
|
|
|
|
Exceptional items and other
adjustments within SG&A
|
|
|
Acquisition-related
costs2
|
(2)
|
(12)
|
U.S. listing
costs3
|
-
|
(2)
|
Total exceptional items and other
adjustments within SG&A
|
(2)
|
(14)
|
|
|
|
Total exceptional items and other adjustments before
taxes
|
(5)
|
(14)
|
Tax on exceptional items and other
adjustments
|
1
|
2
|
Total exceptional items and other
adjustments
|
(4)
|
(12)
|
1. The Group
reported adjusted cost of sales to exclude amortization of acquired
intangible assets.
2. In Q1 2024, the Group recognized
$2m of exceptional costs related to the
acquisition and integration of the aseptic manufacturing site
acquired in November 2023. In Q1 2023, the
Group recognized $12m of exceptional costs
related to the acquisition of Opiant.
3. In Q1 2023, the Group recognized $2m of exceptional costs in preparation for an
additional listing of Indivior shares on a major U.S.
exchange.
Adjusted results
Management provides certain adjusted
financial measures which may be useful to investors. These adjusted
financial measures exclude items which do not reflect the Group's
day-to-day operations and therefore may help with comparisons to
prior periods or among companies. Management may use these
financial measures to better understand trends in the
business.
The tables below present the
adjustments between reported and adjusted results for both
Q1 2024 and
Q1 2023.
Reconciliation of gross profit to adjusted gross
profit
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Gross profit
|
238
|
214
|
Exceptional items and other
adjustments in cost of sales
|
3
|
-
|
Adjusted gross profit
|
241
|
214
|
We define adjusted gross margin as
adjusted gross profit divided by net revenue.
Reconciliation of selling, general and administrative expenses
to adjusted selling, general and administrative
expenses
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Selling, general and administrative expenses
|
(145)
|
(131)
|
Exceptional items and other
adjustments in selling, general and administrative
expenses
|
2
|
14
|
Adjusted selling, general and administrative
expenses
|
(143)
|
(117)
|
Reconciliation of operating profit to adjusted operating
profit
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Operating profit
|
65
|
57
|
Exceptional items and other
adjustments in cost of sales
|
3
|
-
|
Exceptional items and other
adjustments in selling, general and administrative
expenses
|
2
|
14
|
Adjusted operating profit
|
70
|
71
|
We define adjusted operating margin
as adjusted operating profit divided by net revenue.
Reconciliation of profit before taxation to adjusted profit
before taxation
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Profit before taxation
|
63
|
58
|
Exceptional items and other
adjustments in cost of sales
|
3
|
-
|
Exceptional items and other
adjustments in selling, general and administrative
expenses
|
2
|
14
|
Adjusted profit before taxation
|
68
|
72
|
Reconciliation of tax expense to adjusted tax
expense
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Tax
expense
|
(16)
|
(14)
|
Tax on exceptional items and other
adjustments
|
(1)
|
(2)
|
Adjusted tax expense
|
(17)
|
(16)
|
We define adjusted effective tax
rate as adjusted tax expense divided by adjusted profit before
taxation.
Reconciliation of net income to adjusted net
income
|
2024
|
2023
|
For
the three months ended March 31
|
$m
|
$m
|
Net
income
|
47
|
44
|
Exceptional items and other
adjustments in cost of sales
|
3
|
-
|
Exceptional items and other
adjustments in selling, general and administrative
expenses
|
2
|
14
|
Tax on exceptional items and other
adjustments
|
(1)
|
(2)
|
Adjusted net income
|
51
|
56
|
Adjusted diluted earnings per share
Management believes that diluted
earnings per share, adjusted for the impact of exceptional items
and other adjustments after the appropriate tax amount, may provide
meaningful information on underlying trends to shareholders in
respect of earnings per ordinary share. Weighted average shares
used in computing diluted earnings per share is included in Note 6.
A reconciliation of net income to adjusted net income is included
above.